Wise, officials tackle workers' comp abuses

May 30, 2003|By CANDICE BOSELY

Shoplifting is a concept everyone can understand, while the workers' compensation situation is more complicated.

Del. Bob Tabb, D-Jefferson, compared the two, saying that in both cases, those who legitimately pay also pay for those who do not.

Tabb, who owns a small business, was one of several people who sat down with Gov. Bob Wise and other state officials in the board room of City Hospital in Martinsburg Thursday afternoon.

Wise and Greg Burton, executive director of workers' compensation, explained the problems facing the system and outlined possible solutions.

First, the basics.

Some 40,000 companies in the state, ranging from large corporations to small businesses, pay into the workers' compensation system. When a worker is injured, money from the fund is paid out.


A problem is that $600 million is collected each year, but $800 million is paid out in benefits and another $70 million is needed for administrative costs, Burton said.

If something is not done soon, the system could be bankrupt by the year 2006, Burton said.

Should the system fail, injured workers would no longer receive checks. An unstable fund would hurt businesses and every taxpayer would have to pay more if the state's bonds are downgraded by Wall Street, Wise said.

Sometimes, too much is paid out in benefits because of fraud and abuse, Burton said.

As examples, he listed businesses that have not paid their premiums, doctors or hospitals that double-billed for services, overcharged for services or billed for more treatment than necessary.

People who were injured at home lie and say it happened at work, or family members continue to collect disability payments for deceased relatives, Burton said.

Despite hundreds of phone calls from people reporting suspected abuse, only about 10 cases a year are prosecuted, Burton said.

Reducing the abuse is important. New software, which details how long someone should be off work after a specific injury, will be installed soon at the workers' compensation office, Burton said.

Around 55,000 claims are filed a year. If an employer believes a worker is trying to get over on the system, Burton encouraged them to demand a hearing. Then, a doctor would have to say under oath that, for example, a person could mow their lawn or play basketball, but not work.

Every business in the state pays an across-the-board premium rate to workers' compensation, plus another rate based on the number of past claims. The base rate will be increased by 15 percent, a concession Wise said he agreed to only because of the promise that the rate will not be increased for two years afterward.

That increase will bring in around $85 million and shore up some of the fund's $225 million shortfall, Wise said. Without the rate hike, the shortfall would increase to $480 million over three years, Wise said.

Neither a rate hike alone nor decreased benefits would solve the problem. Legislation will be crafted soon, and Wise says he hopes legislators will meet for a special session at the end of June to address the problem.

The workers' compensation office should be made a separate body and no longer be under the Bureau of Employment Programs, Wise said. Privatization is possible in the future, he said.

Along with the shortfall, the fund also has $3.6 billion in unfunded liability. A "paper number," that figure represents what the state would need if every single claim came due today. Because that's not going to happen, tackling that problem is not as crucial as addressing the shortfall, Burton said.

After Wise said everybody has their "fingerprints" on the problem, Del. Craig Blair asked how small businesses can be blamed. Blair, R-Berkeley, owns Sunset Water Services, a Hedgesville, W.Va.-based small business.

Wise answered that he has a list of 800 businesses that have never paid workers' compensation premiums, including some small businesses. Deflecting the notion that he is picking on small businesses, Wise said that when he first came to office, he sued coal companies and recovered some $70 million in unpaid premiums.

Ultimately the goal of workers' compensation is to get injured workers the help they need, then get them back to work, Burton said.

He emphasized that the problem is a complicated one and asked for patience.

"The system is not going to be fixed overnight," Burton said.

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