The controversial insurance program for injured workers in the District of Columbia is virtually certain to undergo changes that will cut its price tag to employers by more than 25 percent under a censensus emerging among business and labor groups.
The insurance program, called workers' compensation, is under heavy fire from business leaders who say its skyrocketing cost -- $20 million to $140 million in seven years -- is driving industry from the city. Insurance rates to cover workers injuries in the District are often twice as high as rates in Maryland or Virginia.
The City Council is scheduled to debate tonight workers' compensation reform proposals offered by business and labor.
The cost of the injury insurance is reflected in every product and service in the city. Since 1972 the maximum weekly benefit to an injured worker has grown from $70 to a week to $426 today.
The D.C. program pays benefits to about 10,000 Washington area workers who have been injured on the job. From the office worker who falls off a chair and is injured, to the construction worker who falls off a scaffold, workers' compensation insures every worker here.
Though there are still sharp differences between business- and labor-backed proposals before the City Council, a staff analysis prepared for Mayor Marion Barry shows that both groups agree on basic cost-cutting provisions.
Barry's legislative staff, headed by Barbara C. Washington, has recommended that Barry go along with these provisions:
Offsetting workers' compensation benefits with Social Security benefits where they apply. This item alone, according to industry estimates, will chop 20 percent off employers' costs.
Rolling back the maximum benefit to $396 and freezing it there until the average D.C. wage (currently $240) catches up to that level. That would take about five years.
Placing a ceiling on the yearly adjustment of benefits for inflation. Business is backing a 3 percent ceiling, labor 9 percent and the mayor's staff has tentatively proposed a 6 percent cap.
Limiting injured workers' benefits to 80 percent of normal take-home pay to provide an incentive to return to work.
The City Council fight matches Willie J. Hardy (D-Ward 7), who first introduced legislation a year ago that was developed in tandem with the Greater Washington Board of Trade and Wilhelmina J. Rolark (D-Ward 8), who last month offered an alternative bill supported by organized labor.
Rolark said, "What my bill saves in costs and what her [Hardy's] bill saves in costs are just about the same." A letter from the National Council on Compensation Insurance (NCCI), an industry rate-making organization, supports this, Rolark added. The Feb. 13 letter estimated that the Rolark bill would cut insurance costs by 27.3 percent.
Meanwhile, Hardy had earlier pointed out to her fellow council members that her bill, according to an NCCI estimate would cut insurance costs by 28.2 percent.
The recommendations of Barry's staff seem to compromise between the two bills. Barry himself has not acted on the staff recommendations. Barry's chief political assistant, Ivanhoe Donaldson, said the mayor's position would be arrived at "carefully."
The mayor's 101-page staff report, a copy of which was provided to The Washington Post, sides with business interests on a key issue, that of weakening the presumption in the current law that injuries are job-related unless there is "substantial evidence" to the contrary.
However, on the question of how injured workers seek medical care, the mayor's staff rejected the requirement of the Hardy bill that workers choose from a panel of physicians selected by the employer.
Employers have complained that some workers have taken advantage of the current freedom of choice for workers in the selection of a physician. Business officials claim that some workers shop for a physician who will provide a diagnosis most favorable to the worker and thereby encourage malingering and more costly insurance claims.
Barry's staff rejected this, saying it would be unfair for employers to select a worker's physician and that the allegations of so-called "doctor shopping" have not been documented.
Barry's late entry into the legislative fight apparently has ranked business lobbyists who have been working closely with Hardy for passage of her bill.
"This bill was put in the hopper last February or March," said John R. Tydings, executive vice president of the Board of Trade. "Why did he [Barry] wait until the last minute?"
Even though the insurance industry has said that the economic impact of the Hardy and Rolark bills would be about the same, Tydings said that the features not directly related to cost in the Hardy bill make it more attractive to business.
One is the choice of physicians, Tydings said. "There are certain things that are not quantifiable," he said.
Barry's staff was particularly critical of an unusual proposal in the Hardy measure calling for criminal penalties for lawyers.
The purpose of this proposal was to prevent injured workers from retaining lawyers before their insurance claim is formally contested by their employer.
The staff report said Hardy's proposal also conceivably could "subject a physician to criminal penalty if he provided medical services for pay to an injured employe. . . ."
Instead, the mayor's staff supported Rolark's proposal that acknowledges freedom to seek legal council at any time and requires employers to pay legal fees when they contest an injured workers' claim and lose. The staff also supported a ceiling on legal fees equal to 20 percent of a final compensation award to an injured worker.
Lawyers generally receive up to a third of the final award as legal fees.
Rolark won the support of the mayor's staff in recommending that penalties be included in the law to discourage employers from discriminating against workers who file injury claims.
Hardy's bill carries no penalties for such discrimination.
Finally, the mayor's staff would restore to both bills provisions requiring employers to maintain safe working environments.The staff said that in the absence of a locally enacted occupational safety and health law patterned after the federal law, these requirements would help to promote saftey and reduce worker injuries.