Florida Insurance Commissioner hikes workers’ compensation premiums by nearly 8.9 percent

The following article was published in The Florida Current on October 24, 2011:

Insurance Commissioner hikes workers comp premiums by nearly 8.9 percent

By Christine Jordan Sexton

Insurance Commissioner Kevin McCarty on Monday approved an average  8.9 percent increase in workers’ compensation rates and reiterated his support for prescription drug packaging changes in the upcoming legislative session.

So did representatives of the state’s largest business groups, which  have made the drug dispensing process in the workers’ comp system one of their top priorities of the 2012 session.

McCarty said drug dispensing  “has become a critical cost driver in the workers’ compensation insurance marketplace. It is imperative that the Florida Legislature address this issue during the upcoming legislative session.”

The National Federation of Independent Business Florida, Florida Chamber of Commerce and Associated Industries of Florida chimed in with similar remarks.

“Closing the loophole on drug repackaging contracts that are inflating the price of medication and responsible for nearly one-third of the 8.9 percent increase is a priority for the Florida Chamber of Commerce,” said spokeswoman Edie Ousley. Bill Herrle, executive director of NFIB Florida said,  “No legislator in Tallahassee can say that they are focused on job creation and not be ready to address this issue at their earliest opportunity.”

AIF’s Jose  Gonzalez said his group will “diligently seek the Legislature’s intervention to close this loophole during the 2012 session and allow Florida employers to use those millions of dollars to create new jobs rather than line the pockets of those who unfairly manipulate the system for their own gain.”

The dispensing issue has been a point of contention between Florida’s physicians and the state’s business groups, which would like to cap how much physicians are reimbursed for dispensing drugs to injured workers. Medical practitioners can charge more for the prescription drugs than pharmacies. The Legislature in 2010 included the issue — which pits the doctors and drug manufacturers against business groups — in the state budget but then-Gov. Charlie Crist vetoed it.

There have been attempts by the business industry to have the issue addressed again in subsequent special and regular legislative sessions but the Legislature hasn’t acted.

Florida Medical Association spokeswoman Erin Van Sickle said the association supports physicians’ ability to dispense repackaged medications. “It is an important part of the workers’ comp system and encourages patient compliance, which can ultimately save money in the long run by helping people get back to work more quickly,” she wrote in an email.

Meanwhile, despite the increase, McCarty stated in a news release that the state’s workers’ comp rates still are some of  the lowest rates among the largest states and are a cumulative 58.6 percent lower than the rates employers paid before the Legislature made sweeping changes to the program in 2003. The  premium increases take effect Jan. 1.

 The  8.9 percent increase matches what the National Council on Compensation Insurance recommended in its proposed filing. But the office says it technically denied the NCCI’s request because it didn’t agree with all the NCCI’s assumptions.

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