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Forum Editorial: North Dakota workers’ compensation should be regulated, like any other insurance

A huge financial conflict of interest lies at the heart of workers' compensation in North Dakota: the state's responsibility to maintain a financially healthy fund clashes with its obligation to provide "sure and certain relief" for injured workers.

Editorial FSA
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A committee of the North Dakota Legislature just took two big backward steps when it voted to recommend discarding a pair of measures that provided modest oversight of the state’s workers’ compensation program.

The Workers’ Compensation Review Committee, which voted to disband, provided a forum for injured workers who have exhausted their appeals to appear and present their cases in the hope of improving the system.

Since its establishment in 2005, based on workers’ comments, the committee put forward multiple recommendations that were passed into law, helping to make beneficial changes for workers.

Committee members who voted to kill the committee said it was hearing from a declining number of aggrieved workers and questioned whether the panel was accomplishing anything.

With less discussion, the committee also voted to eliminate a requirement that Workforce Safety and Insurance be subjected to a performance evaluation every four years to ensure that it is properly administering benefits and performing well.

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Taken together, the two actions are a slap in the face of workers. They have no choice but to file claims for work-related injuries and illnesses with workers’ compensation. In exchange for giving up the right to sue their employers, employees are supposed to be guaranteed “sure and certain relief.”

That’s the bedrock principle of workers’ compensation law. Instead of having to defend against lawsuits, employers pay into an insurance fund that is supposed to pay workers’ medical bills and disability benefits.

But there’s a huge financial conflict of interest at the heart of North Dakota’s workers’ compensation program.

Unlike almost all other states, North Dakota maintains the insurance fund and also controls workers’ ability to get relief from the fund through the laws it passes and implements. The state has a built-in bias to be zealous about maintaining the financial health of the fund — which has a surplus of $1.1 billion — even though that can mean being stingy about awarding benefits that workers are owed.

Almost 30% of workers’ medical claims and almost 25% of their disability claims are being denied — and because of the lack of oversight, we can’t say with confidence that those denials are justified.

It’s a classic case of the fox guarding the henhouse. It’s deeply unfair, and helps to explain the grievances that the legislative review committee and performance audits were designed to address and prevent.

The system, which is overseen by an employer-dominated board, is skewed on behalf of employers in fundamental ways. One is that lawyers representing workers are only paid if they prevail, while private lawyers representing the fund are paid, win or lose.

As a result, only two or three lawyers in North Dakota are willing to take injured workers’ cases. Think about that and ask yourself if that sounds like a fair system. That’s a question that Gov. Doug Burgum, who has control of the agency, though it is chiefly overseen by the board, should be asking.

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We have a simple solution that would help to enforce fairness in the system. Workforce Safety and Insurance, now essentially unregulated, should be placed under the purview of the North Dakota Department of Insurance.

Insurance regulators, as they do for private health insurers as well as property and casualty insurers, would have the authority to ensure that benefits are administered fairly and the fund is financially sound.

Why can’t a system that works for other forms of insurance not be made to work for injured workers?

North Dakota must go further to ensure that “sure and certain relief” is a promise that’s being uniformly kept.

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