Delaware panel seeks change in workers' compensation oversight

A task force charged with formulating plans to limit future increases in Delaware workers’ compensation insurance rates has recommended freezing some fees that insurers can charge for injured worker care and more closely scrutinizing requests for rate hikes made by insurance companies. Lt. Gov. Matt Denn, who chaired the panel, released the recommendations Monday. The General Assembly acted to form the group in January, a month after state insurance regulators approved a 15 percent increase in the workers’ compensation rates paid by businesses. According to the task force, the rates have risen by 34 percent in the last two years. “We have asked for and reviewed hundreds of pages of medical cost information from the insurance industry,” Denn said. “We think there is still work to do, and one of our recommendations is that our task force keep on meeting.” The report includes 18 ideas to improve the system in Delaware, many of which build on measures enacted in 2006 and 2007, when Denn was insurance commissioner. Half of the recommendations relate to the fees that insurers can charge for medical services provided to injured workers, including a plan for a two-year freeze on increases in hospital reimbursement payments based on inflation. Proposals also call for revised fee schedules for lab tests, price controls for prescription drugs and caps on the number of drug tests conducted on patients. Five recommendations would make vetting of rate increase requests more rigorous. Denn said the task force found about half of last year’s approved rate increase was attributable to rising medical costs. The rest, he said, was for insurance companies to replenish reserves. The task force suggests the Department of Insurance hire an attorney to serve as a ratepayer advocate. It also wants the insurance office’s existing review committees to more closely monitor medical costs. Senate President Pro Tem Patricia Blevins, D-Elsmere, said the recommendations would be molded into legislation that she hoped to pass by the close of this year’s legislative session on June 30. “The recommendations are very specific, they’re not vague, and they’ll actually have an impact,” Blevins said. Business groups praised the task force report. However, the response was mixed from the Delaware Compensation Rating Bureau, which sets workers’ compensation rates on behalf of the state’s insurance companies. In a dissenting document, the DCRB warned of additional costs to implement the proposed changes and expressed concern about handing greater oversight to committees within the insurance department. The DCRB said empowering a ratepayer advocate with the ability to solicit facts and data from it would be “an unlawful delegation of authority.”