Otto von Bismarck is attributed with the famous quote, “Laws are like sausages, it is better not to see them being made."
Although the legislative process may not always be pretty, this year the legislature got it right when it passed House Bill 316, which will start the process of bringing Alaska workers’ compensation medical costs, and hence premium rates, under control. Alaskan businesses and public entities pay the highest workers’ compensation rates in the country, rates driven by the highest medical fees paid for such claims in the US. This bill, if approved by the governor, will create a fee schedule for medical services rendered in workers’ compensation cases. Basically, the amount a medical provider will be able to charge for services will be based on the amount set by the federal government in Medicare cases, adjusted by a “conversion factor” to make the amount reasonable for Alaska providers. This system will be developed and put in place by July 1, 2015.
This bill was sponsored by Representative Kurt Olsen, who deserves the thanks of all APEI members. This bill has been a priority for Alaska school districts, municipalities, native corporations, and the State Chamber of Commerce, who all have recognized the need to bring some rationality to skyrocketing workers’ compensation costs.
As I’m sure we all know, this session was an unusual one, with the legislature going into extra innings to complete the state’s business. This bill passed during the extra time. Although overall the process may have resembled the making of sausage, I am very pleased with the quality of the final product, and I am optimistic that this important piece of legislation will, over time, be a significant benefit to all APEI members.