Delaware OKs Bill Aimed at Lowering Workers’ Comp Costs

Delaware lawmakers last month approved legislation aimed at lowering the state’s workers’ compensation insurance costs.

Delaware House Bill 373 (“An Act to Amend Titles 18 and 19 of the Delaware Code Relating to Workers’ Compensation Insurance”) won the state Senate’s approval on June 25 after passing the state House on June 6.

Gov. Jack Markell, who has been a supporter of House Bill 373, plans to sign it into law in the near future, a spokesperson from the Office of Governor told Insurance Journal on July 11.

The bill was developed by incorporating recommendations of Delaware’s Workers’ Compensation Task Force over the last 18 months. The task force was created in January 2013 by the state’s General Assembly and the governor to address double-digit hikes in average workers’ comp rates over the past two years.

Officials said the task force’s recommendations for House Bill 373 focused almost exclusively on medical costs, as they make up 65 percent to 70 percent of every dollar spent on workers’ comp premiums in Delaware and make up 100 percent of the increase in premiums.

The bill calls for a 33 percent reduction in medical costs for workers’ comp cases, to be phased in over a three-year period.

It would also limit the maximum reimbursement for workers’ comp treatment to no more than 200 percent of the Medicare reimbursement, though higher reimbursements would be available for certain treatments involving radiology and surgery.

The task force said that reimbursements for treatment of workers’ comp patients in Delaware has evolved to be among the highest in the country – in some cases three, four, or even five times the reimbursement for exactly the same procedure than what is allowed in other states.