Delaware enacts major workers comp system reform package

Lawmakers and Gov. Minner moved quickly, hoping DaimlerChrysler gets the message and keeps its plant open

The Delaware Senate and House moved swiftly earlier this month to pass a bill containing major reforms of the state’s workers’ compensation system. Gov. Ruth Ann Minner immediately signed the reforms into law.

Lawmakers hope the new law (SB1) will mean more than $30 million in rate relief for employers. Some estimates project savings could reach up to $43 million annually.

Lawmakers and Minner acted quickly in part to send a message to auto manufacturer DaimlerChrysler, which is considering whether to close a plant in the state that employs about 4,500 workers.

The new law promises to control workers’ compensation costs by imposing fee schedules on physicians and placing some restrictions on lawyers’ fees. It also promises to encourage certain best practices guidelines for treatments as well as standardize some of the health care forms used by employers, insurers and medical providers.

Under the new payment system, doctors could receive up to 90 percent of the most common charges for medical services while surgery charges by hospitals could be cut by 15 percent.

Attorneys for injured workers will have to have written fee agreements with their clients. The law attempts to limit when a lawyer can collect a percentage of a client’s weekly benefit check.

In an effort to streamline payments to workers, the law authorizes an insurance carrier to make payments of indemnity benefits or health care benefits to a worker without affecting the insurer’s right to later contest the employer’s claim. Insurers woud be able to halt benefits to any persons jailed due to a criminal conviction.

The reform law also requires insurance carriers to notify the Department of Labor of cancellation of coverage on a business and enhances penalties for employers violating the state’s mandatory coverage provisions.

The legislation mandates that the state hire a firm, Ingenix, to assist the Health Care Advisory Panel in developing the medical fee schedules and treatment guidelines.

The legislation was developed by bill sponsors, Rep. William Oberle Jr., R-Newark, and Sen. Anthony DeLuca, D-Wilmington, who credited the cooperation of labor, medical and insurance representatives.

Minner tried but failed to enact workers’ compensation legislation reforms last year.