Les Knapp, MACo Legal and Policy Counsel, testified in opposition of HB 504, Workers’ Compensation – Permanent Partial Disability Compensation – Reversal or Modification of Award, to the House Economic Matters Committee on February 16, 2016.

This bill states that if a workers’ compensation award for permanent partial disability compensation is reversed or modified by the Workers’ Compensation Commission (WCC) or a court of appeal, the payment of any new compensation awarded shall be subject to a monetary credit for compensation previously awarded and paid.

From the MACo testimony,

HB 504 would create a potentially significant new liability for counties and their insurers for cases that are reopened by the WCC. The Maryland Court of Appeals has already held in 2014 that a reopened case due to worsening of condition is a different situation than a modification on appeal and should be treated differently in terms of how credits are handled.

Large self-insured counties like Prince George’s or Montgomery face dozens of these claims every year. The bill’s fiscal note advises that hundreds of “worsened condition” cases are paid out annually – not including settlements.

With the costs of even a single case easily reaching into tens of thousands of dollars (even more if the revision includes a change in the tier of the award), the aggregate effect of this change could be very substantial, even if hard to pinpoint. Whether through feeling the direct effect of a new assessment, or increased premiums due to insurer costs, the new cost scheme under HB 504 would surely prove costly to counties and taxpayers.

MACo opposed an identical cross-filed bill, SB 186, which was heard on February 9 in the Senate.

For more on 2016 MACo legislation, visit the Legislative Database.