Senate committee backs plan to reduce workers' comp costs without fee schedule

Economic Indicators Associated Press

A key Senate policy committee is backing a workers' compensation reform bill that it says will reduce costs by 7.5 percent without imposing a price-fixing mechanism backed by business groups.

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"This agreement will bring real savings to New Hampshire businesses, making it more affordable to create new jobs," Senate Majority Leader Jeb Bradley, the sponsor of the proposal, said in a statement.

The full Senate will take up the bill next week. If adopted, the bill would require providers to cut their workers' compensation charges by 15 percent, based on 2014 charges, for the next three years. In the meantime, a commission would meet and begin collecting data to assess whether New Hampshire needs a fee schedule. The bill also deletes a portion of state law that says insurers must cover 100 percent of workers' compensation claims and puts the burden on providers to justify high charges.

Employers are required to provide workers' compensation costs for on-the-job injuries, and treating those costs in New Hampshire can cost more than double that of non-work-related injuries, according to data from the state's insurance department. A 2012 study found the state was the ninth most expensive in the nation for workers' compensation coverage. There is near-unanimous agreement from providers, businesses and lawmakers that New Hampshire's workers' compensation costs are too high, but a solution to lower them has been elusive for years.

Business groups, led by the New Hampshire Auto Dealers Association, want a fee schedule that caps prices, which is done in 44 other states. But doctors, hospitals and workers say price fixing could discourage providers from taking workers' compensation patients and lower choices for injured workers.

Republican Sen. Gary Daniels plans to introduce a competing proposal next week that would implement a fee schedule.

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The New Hampshire Hospital Association called Bradley's proposal a good "first step."

"It maintains free market principles, and we think that's where this ought to go," said Steve Ahnen, president of the hospital association. "And we believe at the end of this two- to three-year period that we will have seen a significant reduction (in costs) and we think that's a good thing."

But the auto dealers association says the three-year plan delays a real solution.

"Forty-four other states have a solution that's proven to be workable," President Peter McNamara said, referring to states with fee schedules. "This one, it's a shot in the dark."