Texas must combat fraud in workers’ compensation

Photo by John Jordan

I recall some dark days in Texas, when employers and employees faced a workers’ compensation system that failed to deliver the coverage, protections and access to quality care we all deserved.

That’s why I’m disappointed with a series of ill-informed news articles that have painted in a negative light the very successful fraud-fighting efforts in the workers’ compensation system, and in particular, a Travis County prosecution unit funded, at the direction of Texas lawmakers, by Texas Mutual Insurance.

In the late 1980s and early 1990s, the workers’ compensation system in Texas was grim. At the heart of the problem was rampant fraud and excessive lawsuit abuse.

Medical costs for workers’ compensation were higher than the same treatments and procedures outside of the system. Claim disputes were most typically resolved in the courts and trial lawyers were involved in nearly half of all claims. Employers were forced to either pay exorbitant premiums or go without coverage.  

With injured workers caught in a failing system, employers facing eye-popping premiums and health care providers closing their doors to these patients, something had to change. 

I know this because I experienced it first hand as a small business owner in Dallas, and I worked to address it during my tenure in the Texas House of Representatives. Those early reforms that I worked to pass back in 1989, including laying the foundation for what would become Texas Mutual Insurance, paved the way for a far more balanced and stable system.

Legal challenges and the need for additional reforms slowed the full recovery, but we got there. It took nearly two decades of bipartisan work and fending off aggressive attacks by entrenched special interests who had profited for far too long under a failed system.

The reforms flat-out worked. Today, we have a robust and competitive workers’ compensation insurance market, which is critical since workers’ compensation is voluntary for most private sector employers. Medical costs have also stabilized, and medical disputes have declined or been resolved far more quickly.

Still, we must contend with fraud, waste and abuse in the workers’ compensation system.

Zero tolerance for fraud and abuse should be at the heart of every business and every government enterprise. A well-run system requires compliance, and that’s what the present system delivers.

We deserve better than a series of poorly informed articles critical of Texas’ fraud-fighting arrangement, because the reforms Texas made to our workers’ compensation system are nothing short of miraculous. We’ve turned a failed system around and it’s important we maintain the key elements of our successful reforms, including the ability to aggressively fight fraud.

The state of Texas has every reason to fully support and fully fund the ability of local and state officials to aggressively investigate and prosecute fraud and abuse in the workers’ compensation system. How the Texas Legislature chooses to do that — and more importantly, who should pay for it — is a decision for our state leaders to consider. But let’s be clear: The current system has been highly successful in rooting out fraud and cannot afford to be dismantled.  

We must continue to dedicate resources — be it public or private —  to go after those who commit fraud and drive up costs for everyone. Any attempt to roll back reforms and open the system to greater fraud and abuse is wrong-headed and serves no one well.

You may not remember the dark days of that clouded Texas workers’ compensation system some three decades ago. But I can assure you, having lived it, Texas doesn’t want to go back there.

Disclosure: The Texas Association of Business was a corporate sponsor of The Texas Tribune in 2012. A complete list of Tribune donors and sponsors can be viewed here.

Bill Hammond

Chief strategist, Texas Smart-On-Crime Coalition

@texashammond