Briefing, Wednesday, November 27, 1996

Governor Patton Briefs Reporters on Workers' Compensation

Briefing for reporters , Capitol 9:30 a.m. Parentheses denote reporter asking questions.

(DO YOU HAVE A BILL READY?)

WE HAVE PRETTY CLOSE TO A BILL. WE WILL HAVE A FINAL BILL READY TO TURN OVER TO THE LRC SATURDAY MORNING. WE WILL PROBABLY CONTINUE TO WORK ON IT FRIDAY ONCE WE GET THIS LATEST DRAFT WHICH WE HOPE TO BE FINISHED SOMETIME TODAY OR TONIGHT. AND THEN WE'LL READ IT FOR ADDITIONAL ERRORS AND CHANGES, THEN FINALIZE IT AT PROBABLY 5PM FRIDAY BUT WE WILL HAVE A BILL FOR LRC SATURDAY MORNING.

(WILL THERE BE ANY SUBSTANTIAL CHANGES?)

NOT IN THE BASIC BIG FUNDAMENTAL THINGS. BUT YES I THINK THEIR WILL BE SOME IMPORTANT CHANGES, IMPROVEMENTS PROBABLY THAT FIRST DRAFT.

(CAN YOU DISCUSS WHAT THOSE ARE?)

WELL WE'RE CONTINUING TO REFINE THE RIB BENEFIT. EXACTLY HOW THAT WILL WORK. I'LL THINK OF SOME OF THEM. I THINK THAT WILL BE AVAILABLE SOMETIME TONIGHT OR IN THE MORNING.

(ANYTHING ON FRAUD?)

NOTHING SUBSTANTIAL, WALT TURNER HAS BEEN WORKING ON THAT. I HAVEN'T BEEN WORKING ON THAT PERSONALLY AND I THINK THERE WILL PROBABLY BE SOME CHANGES BUT I DON'T THINK IT WILL BE SUBSTANTIAL.

(LAWYERS FEES?)

NO, I THINK WE HAVE CLARIFIED THE FACT THAT THE ORIGINAL 1,000 DOLLAR FEE WOULD BE AN ADDITION TO THE 10,000 FEE. I BELIEVE WHAT WE ENDED UP WITH.

(IT HAS BEEN SPECULATED GOVERNOR THAT THE 1,000 FEE IS OPENING BID?)

NOPE. WELL WE THINK WE CAN PROVIDE THAT SERVICE FOR SEVERAL HUNDRED, THREE HUNDRED DOLLARS. SO I THINK IT'S A CLERICAL, BASICALLY CLERICAL, SERVICE. WE THINK THAT IS MORE THAN GENEROUS FOR THE WORK THAT WILL NEEDED.

(YOU SAID THERE WOULD BE SOME CHANGES. IN TERMS OF THE ESSENTIAL ELEMENTS OF MAKING THE SYSTEM LESS OBJECTIVE, LESS ADVERSARIAL, GETTING DOWN THE AMOUNT OF MONEY A LAWYER OR DOCTOR WILL MAKE OFF IN THE SYSTEM AND REDEFINING WHAT CONSTITUTES AN INJURY, ARE THOSE THINGS NOT GOING TO CHANGE?)

NO CHANGE IN THE DEFINITION OF INJURY AS IT WAS ORIGINALLY PUT IN. THOSE FUNDAMENTAL PRINCIPLES ARE TO HAVE INJURY BASED ON OBJECTIVE MEDICAL EVIDENCE. AS DETERMINED BY NEUTRAL EVALUATORS IT IS CLEANED UP TO SAY WE ARE DEALING WITH ONLY UNIVERSITY OF KENTUCKY AND UNIVERSITY OF LOUISVILLE. THAT IS THE CLEAN UP AND THEN USING THE SAME MODIFIED SCALE, WHICH HAS NOT BEEN CHANGED, TO DETERMINE THE OCCUPATIONAL DISABILITY AN THE PERMANENT/PARTIAL AWARD. THAT'S FUNDAMENTAL. THAT IS THE FUNDAMENTAL PART OF THE REFORM. THAT IS NOT CHANGED. IT IS A THREE LEGGED STOOL. THAT IT CANNOT LIVE WITHOUT ANY ONE OF THE THREE LEGS.

(CAN YOU GUARANTEE EMPLOYERS THAT THEIR PREMIUMS WILL DROP?)

YES, THE PREMIUMS WILL DROP NOT ONLY FROM WHERE THEY ARE TODAY BUT WHERE THEY WOULD BE IF NOTHING IS DONE. WE ARE STILL WORKING, I TALKED WITH CONSULTANTS THIS MORNING WHO ARE STILL REFINING THOSE NUMBERS. HOPE THAT WE WILL HAVE MORE DEFINITE NUMBERS BY MONDAY. IT IS MY BELIEF THAT THERE WILL BE A VERY MINIMUM OF A 20% DROP FROM WHERE THEY WOULD BE FOR GENERAL INDUSTRY IF NOTHING IS DONE. FOR COAL I THINK THEY ARE DEALING IN THE NUMBERS OF 25% OF WHERE THEY ARE WHICH WOULD BE 50% BELOW WHERE THERE ARE GOING TO BE IF NOTHING IS DONE.

(HOW LONG UNTIL THE PREMIUMS COME DOWN?)

WE'RE WORKING WITH THE INSURANCE DEPARTMENT TO COME UP WITH SOME LANGUAGE TO REQUIRE THEM TO FILE SOMETHING, THE MODIFIERS OR WHATEVER IT IS, PRETTY QUICKLY SO THAT WE CAN AT LEAST SEE WHERE THEY ARE GOING. OBVIOUSLY THE FREE MARKETS GOT TO WORK WE TALKED ABOUT MANDATORY ROLLBACKS IN RATES WE THINK THAT'S IMPRACTICAL. BUT IF THERE WILL BE AN INCREASED OVERSIGHT BY THE INSURANCE DEPARTMENT GEORGE NICHOLS COULD PROBABLY EXPLAIN THAT BETTER THAN I. THAT LANGUAGE IS BEING DRAFTED AND WILL BE IN THIS DRAFT THAT COMES OUT TODAY OR TOMORROW.

(NOW, IN A LOT OF DIFFERENT AREAS, FROM SEATBELT LEGISLATION TO OTHER STUFF PEOPLE HAVE TALKED ABOUT THIS WILL BE A DECREASE IN THE INSURANCE RATE. WHICH IN PRACTICE RARELY, IF EVER SHOW UP, WHAT KINDS OF OVERSIGHT WILL THERE BE?)

WELL, AGAIN, I'LL LET GEORGE TALK ABOUT THAT MORE SPECIFICALLY. HE IS WORKING ON THE LANGUAGE THAT WILL GIVE HIM MORE ABILITY TO LET US KNOW WHAT THE RATES OUGHT TO BE. I THINK IT HAS TO DO WITH ASKING THE NCCI FILE COST-LOST RATIOS PRETTY QUICKLY BASED ON THIS NEW LEGISLATION. AND THEN USE THAT TO SEE WHAT THE RATES OUGHT TO BE.

(ARE THERE ANY LEGISLATORS INVOLVED IN THIS DRAFT PROCESS?)

RUNNING ALL THIS BY THE LRC AS IT IS PUT IN THE BILL, IF WE GET A STRONG OBJECTION FROM THE LEGISLATIVE LEADERSHIP OBVIOUSLY WE'LL TAKE THAT INTO ACCOUNT.

(YOU SAID RUNNING IT BY THE LRC, ARE YOU RUNNING IT BY THE LEGISLATIVE LEADERSHIP?)

WE'RE DOING IT THE WAY THE LEADERSHIP WANTED IT DONE. RUNNING IT THROUGH STAFF. ECK ROSE IS ON VACATION. BUT WE'RE RUNNING IT BY THEIR STAFF AND I GUESS THEIR COMMUNICATING WITH THE LEGISLATORS. LEGISLATIVE LEADERSHIP.

(DO YOU KNOW WHERE YOU ARE IN THE ABILITY TO PASS WHAT WAS PROPOSED? DO YOU HAVE ENOUGH VOTES?)

WELL I'VE GOT, I THINK, STRONG SUPPORT AMONG BOTH PARTIES LEGISLATIVE LEADERSHIP. NOW IT IS IMPOSSIBLE AND YOU CAN'T EXPECT ANY LEGISLATOR TO MAKE AN IRONCLAD COMMITMENT UNTIL THEY SEE THE WHOLE PRODUCT AND HEAR SOME OF THE DEBATE. WE THINK THERE IS CERTAINLY MAJORITY SUPPORT IN BOTH HOUSES FOR MAJOR CHANGE OF THIS SORT. BUT AS FAR AS COMMITMENT ON THIS BILL OR COMMITMENTS AGAINST THIS BILL. IT'S NOT FAIR TO ASK SOMEONE TO MAKE AN IRONCLAD COMMITMENT WHEN THEY HAVE NOT SEEN THE TOTAL AND FINAL BILL AND HAVE NOT HAD THE BENEFIT OF DEBATE. WHICH IS AN ESSENTIAL PART OF THIS PROCESS.

(WHAT ABOUT YOUR MEETING WITH THE MOUNTAIN CAUCUS. HAVE YOU HAD ANY FURTHER DISCUSSION WITH THEM?)

I'VE TALKED TO MANY OF THE MOUNTAIN CAUCUS. HERBIE, AS THE CHAIRMAN, DIDN'T WANT A MEETING. WE'LL KEEP THEM INFORMED HOWEVER THEY WANT. THESE WERE COURTESIES TO THE VARIOUS MEMBERS TO TRY TO THEM THE OPPORTUNITY TO LEARN MORE ABOUT IT. THAT PROCESS WILL GO ON RIGHT ON THROUGH NEXT WEEK. WE WILL BE AVAILABLE TO EXPLAIN TO ANY LEGISLATOR WHATEVER THEY WANT. SO NEXT WEEK WILL BE A LEARNING WEEK. I THINK BY THE END OF NEXT WEEK PEOPLE WILL BE ABLE TO GET A FEEL FOR THIS LEGISLATION.

(YOU SAID YOU THINK THERE IS MAJORITY SUPPORT FOR THIS KIND OF MAJOR REFORM. DO YOU THINK THERE IS MAJORITY SUPPORT IN BOTH CHAMBERS TO NARROW DEFINITIONS, THEREBY LIMIT THE NUMBER OF PEOPLE THAT CAN COME INTO THIS SYSTEM TO GET COMPENSATED?)

I THINK THEIR IS MAJORITY SUPPORT FOR TRYING TO MAKE THIS SYSTEM MORE FAIR. AND I BELIEVE THAT THIS SYSTEM DOES THAT. I BELIEVE IT WILL MORE FAIRLY COMPENSATE PEOPLE WHO ARE SERIOUSLY INJURED AND HOPEFULLY IT WILL REMOVE ANYONE FROM THE SYSTEM THAT HAS BEEN GETTING AWARDS TO WHICH THEY WEREN'T ENTITLED. THE CONSULTANTS HAVE A REAL DIFFICULTY PUTTING A NUMBER ON THAT. THEIR NUMBERS DO NOT REFLECT A SUBSTANTIALLY REDUCTION IN UTILIZATION AND THEREFORE I DON'T THINK THAT IS SOMETHING WE CAN DETERMINE UNTIL WE ACTUALLY SEE WHAT HAPPENS. I THINK EVERYBODY IS OF THE OPINION THAT THERE ARE SOME PEOPLE WHO GET AWARDS THAT THEY ARE NOT ENTITLED TO. BUT I DON'T THINK ANYBODY, YOU KNOW ONE PERSON THAT GOT AN AWARD THEY WEREN'T ENTITLED TO, BUT HOW DO YOU QUANTIFY THAT. HOW MANY OF THOSE ARE THERE? AND WE DON'T KNOW.

(DO YOU KNOW HOW MUCH IT WILL DROP? FOR EXAMPLE, HOW MANY BLACK LUNG AWARDS THERE HAVE BEEN THAT WOULDN'T BE THERE?)

WE THINK THAT WILL BE SUBSTANTIAL IN THE AREA OF BLACK LUNG THERE WILL BE SUBSTANTIAL REDUCTION IN THE SYSTEM. AND THAT HAS TO HAPPEN. IF THAT DOESN'T HAPPEN THEN THE COAL INDUSTRY IS GONE BECAUSE THIS BILL PUTS ALL THE BURDEN ON THE COAL INDUSTRY. TAKE OUT COAL, THE NUMBERS THAT THE ACTUARIES ARE USING, AS FAR AS THE TOTAL AMOUNT OF MONEY THAT WILL BE AWARDED IS NOT SUBSTANTIALLY REDUCED. AND THEN WHEN YOU FIGURE THERE WILL BE AN SUBSTANTIAL REDUCTION IN THE NEED TO PAY ATTORNEY FEES AND ADDITIONAL MEDICAL EXPENSES THEN THE AMOUNT OF MONEY THAT THEY ARE USING THAT ACTUALLY GOES TO THE INJURED WORKER IS NOT GOING TO BE SUBSTANTIALLY REDUCED.

(THE REDUCTION THEN COMES FROM THE OTHER SIDE, AS THERE ARE FEWER WORKERS WHO GET AWARDS. IS THAT CORRECT?)

NO THEY'RE NOT FIGURING IN SUBSTANTIAL LESS NUMBERS OF UTILIZATION . BUT THAT WILL BE ON THE LOW END. THERE MAY STILL BE A LOT OF SMALL AWARDS IN 5 % CATEGORY THAT WON'T BE AS EXPENSIVE AS THEY ARE NOW. BUT THEN THERE'S GOING TO BE AWARDS IN THE SERIOUS CATEGORY THAT WILL BE MORE HIGHLY COMPENSATED THAN THEY ARE NOW. AND BY NEXT WEEK WE WILL HAVE A MORE DEFINITE HANDLE ON THAT.

(AS A RECALL A COUPLE OF WEEKS AGO YOU SAID THE PROBLEM SEEMS TO BE IN UTILIZATION. THAT THE NUMBERS WERE SOMEWHERE UP AROUND 10,000 AND YOU SAID YOU THOUGHT THEY SHOULD BE SOMEWHERE AROUND 6 OR 7,000 OR SO. YOU WERE SAYING THAT A COUPLE WEEKS AGO. IS THAT NOT NOW THE CASE?)

I THINK THERE WILL BE, WE DO NOT KNOW EXACTLY WHAT THE UTILIZATION WILL BE BUT ON THAT THOSE WILL PROBABLY BE SMALLER AWARDS. THAT EXTRA THREE OR FOUR THOUSAND WILL PROBABLY BE SMALLER. BUT THEN SOME OF THE MORE SERIOUS AWARDS WILL BE LARGER.

(ANY CHANGE ON THE SEVERANCE TAX PROVISIONS? )

NO. WE CLARIFIED THAT. WE MADE IT A LOT MORE PLAIN. TAKEN A LOT OF GARBAGE OUT OF THE LAW BUT NO CHANGE.

(YOU EARMARK CERTAIN PORTIONS OF THIS COAL SEVERANCE WHICH ON IT'S FACE SEEMS EQUITABLE TO DEALING WITH THE COAL INDUSTRY. BUT THE FACT IS THAT STILL COMES OUT OF THE GENERAL FUND. WHAT IS THE JUSTIFICATION FOR USING GENERAL FUND TAX MONEY TO UNDERWRITE THE WORKERS' COMPENSATION SYSTEM IN GENERALLY AND THE COAL INDUSTRIES OBLIGATION TO IT SPECIFICALLY?)

WE'RE TALKING ABOUT THE EXISTING LIABILITY. WHICH IS A LIABILITY TO THE PEOPLE OF KENTUCKY BECAUSE THE PEOPLE OF KENTUCKY PASSED THIS LAW. THE COAL INDUSTRY DIDN'T SUPPORT THIS SYSTEM. BUT IT WAS IMPOSED UPON THEM. THEY HAVE REALLY NO MORE OBLIGATION TO PAY FOR THE EXISTING LIABILITY THEN ANYBODY ELSE. THAT IS AN OBLIGATION OF THE PEOPLE. NOW, HOW YOU CHOSE TO PAY FOR THAT YOU COULD HAVE A LOT OF DIFFERENT THEORIES. BUT I HAVE ELECTED TO LEAVE THE CURRENT ASSESSMENT IN PLACE AND THAT IS ABOUT 88 MILLION DOLLARS. THAT IS NOT ENOUGH TO PAY OFF THE TOTAL LIABILITY OF THE EXISTING SPECIAL FUND. AND CONTINUE TO PAY THE OPERATING EXPENSES OF THE CABINET THAT ARE BEING PAID FOR OUT OF THE SPECIAL FUND. SO WHERE ARE YOU GOING TO GET THE EXTRA MONEY? I HAVE ELECTED TO TAKE IT FROM THE COAL SEVERANCE TAX. THAT DOES IMPACT THE GENERAL FUND. TOTAL 19 MILLION DOLLARS AND ABOUT 14-15 MILLION DOLLARS WILL COME FROM STATE RESOURCES AND ABOUT 5 MILLION WILL COME THE MONEY NOW BEING ALLOCATED THE COUNTIES FOR ECONOMIC ASSISTANCE AND ECONOMIC DEVELOPMENT.

(WHAT HAVE THE FOLKS FROM THE LABOR SIDE OF THIS TOLD YOU SPECIFICALLY THAT THEY DON'T LIKE ABOUT THIS?)

EVIDENTLY THEY OPTED TO DROP OUT OF THE PROCESS AGAIN. LAST THING THEY REALLY SAID WAS THAT WE DON'T LIKE ANYTHING ABOUT THIS BILL.

(THEY DIDN'T SAY ANYTHING SPECIFICALLY?)

AGAIN, SATURDAY, SUNDAY MORNING I GUESS WHEN WE STARTED WORKING ON THIS. MORGAN BAYLESS AND JOHN TURNER- WE HAD A GOOD TWO HOUR DISCUSSION AND THEN MORGAN AND JOHN SAID LET US GO OUT AND TALK. THEY WENT OUT IN THE HALL AND THEY TALKED. THEY CAME BACK IN AND SAID WELL WE'LL GET TOGETHER MONDAY EVENING AT FOUR O'CLOCK. THAT WAS THEM GOING TO GET TOGETHER THEMSELVES. IT IS MY UNDERSTANDING THAT MEETING DID NOT TAKE PLACE. AND I HAVE NOT HAD ANY OTHER COMMUNICATIONS WITH LABOR SINCE SUNDAY.

(BUT AT THE POINT THEY LEFT, THEY JUST SAID WE DON'T LIKE THE BILL?)

WELL, LAST WEEK WHEN THIS THING REALLY BROKE DOWN, ON WHAT TUESDAY OR WEDNESDAY OF LAST WEEK, THEY SAID WE DON'T LIKE ANYTHING ABOUT THE BILL. AND THEN WE GOT THEM BACK IN SUNDAY AND I THOUGHT WE HAD A GOOD TWO HOUR MEETING WHERE JOHN TURNER AND MORGAN BAYLESS WORKED WITH OUT GROUP. NOW I THOUGHT THINGS WERE BACK ON TRACK. I THOUGHT THEY WERE GOING TO GET TOGETHER AT FOUR O'CLOCK MONDAY. THAT MEETING DIDN'T TAKE PLACE AND I HAVE NOT HEARD FROM LABOR SINCE THEN. I AM VERY DISAPPOINTED I THINK THEY ARE CERTAINLY NOT LOOKING OUT FOR THE BEST INTEREST OF THE WORKER. THEY HAVE LEFT ME TO BE THE ONLY PERSON LEFT AT THE TABLE LOOKING OUT FOR THE WORKER. I AM GOING TO CONTINUE TO DO THAT. CONTINUE TO PUT IN PROVISIONS LAST NIGHT, PARTICULARLY OF THE RETRAINING BENEFIT FOR MINERS THAT PROTECTS THE MINERS. FOR INSTANCE, UNDER THE CURRENT LAW THEY CAN'T FILE FOR A CLAIM WHILE STILL WORKING. WE HAVE CHANGED THAT TO SAY THEY CAN'T DRAW A CLAIM WHILE STILL WORKING BUT THEY CAN FILE. I CAN SEE A CONDITION WHERE A MINER IS WORKING AND FEELS LIKE THEY'VE GOT A RESPIRATORY PROBLEM AND FEELS LIKE THEY SHOULD GET OUT OF THE MINES. BUT I DON'T THINK WE SHOULD FORCE THEM TO QUIT BEFORE THEY KNOW THAT THEY CAN GET RETRAINING. WELL UNDER OUR PROVISION THEY CAN FILE AND THEN IF THEY WIN THE RETRAINING AWARD THEY WILL HAVE LIKE SIX MONTHS TO ENROLL IN A PROGRAM, THEN THEIR TWO YEAR RETRAINING PROGRAM STARTS. THERE ARE LOTS OF PEOPLE, PROBABLY, IF THEY FEEL LIKE IF THEY ARE HURTING THEMSELVES, FEEL LIKE THEY OUGHT TO GET OUT OF THE MINDS, BUT IF THEY COULDN'T THEY WOULD GO ON WORKING. SO WE ARE GOING TO GIVE THEM THAT OPTION. AND SO I AM THE ONLY PERSON AT THE TABLE THAT IS LOOKING OUT FOR THE WORKER'S INTEREST. AND I HAVE AND I WILL CONTINUE TO DO THIS. THIS IS A BILL TO PROTECT THE WORKERS OF KENTUCKY.

(WHAT DO YOU THINK ABOUT SOME OF THE POLITICAL THREATS THAT LABOR HAS BEEN MAKING?)

WELL I THINK I MADE IT PLAIN TO EVERYBODY THAT POLITICAL THREATS WOULD HAVE NO IMPACT ON ME. I CAN TELL YOU THAT THERE ARE NO SPECIAL INTEREST SECTIONS OF THIS BILL. THERE IS NOTHING THAT HAS BEEN PUT IN THIS BILL TO SATISFY ANY SPECIAL INTEREST GROUPS IN ORDER TO GET THEIR SUPPORT.

(WHAT EFFECT DO YOU THINK IT WILL HAVE ON LEGISLATORS THOUGH?)

WELL I CAN'T SPEAK FOR THEM. BUT I WILL DO WHAT IS RIGHT FOR THE WORKERS OF KENTUCKY AND I WILL TRUST THE PEOPLE OF KENTUCKY TO UNDERSTAND THAT.

(ARE YOU GOING TO MAKE ANY ATTEMPT REACH OUT TO BAYLESS AND LABOR TO GET THEM BACK IN HERE OR DO YOU THINK THAT'S THEIR MOVE?)

I HAVE ASKED SKIPPER TO CALL THEM ASK THEM IF THEY WANT TO HAVE ANY INPUT IN THIS LAST VERSION. I WOULD HAVE THAT THEY WOULD HAVE AT LEAST STAYED AT THE TABLE. BUT THEY HAVE LEFT ME TO BE THE ONLY PERSON TO PROTECT THE INTEREST OF THE WORKERS. AND I'M CONTINUING TO DO THAT.

ANYTHING ELSE REAL PRESSING?

(FAKE LIENS ON THE SPECIAL SESSION?)

I THINK WE'RE MEETING MONDAY MORNING ON THAT. THAT WILL BE UP TO LEADERSHIP. I AM NOT GOING TO ALLOW ANYTHING TO INTERFERE WITH WORKERS' COMP. IF LEADERSHIP WANTS TO DO IT, I'LL DO IT, BUT IT WILL BE UP TO THEM.

(ANY OTHER SUBJECTS YOU ARE CONSIDERING ADDING?)

NO.

(SPOKE TO ANYONE?)

HAVEN'T YET.

THANK YOU ALL.