There is an old saying that you should never put lipstick on a pig, as it does not make it beautiful, and it just annoys the pig. However, after this week's unexpected potential setback for Opt Out supporters in Tennessee, me thinks that hog could be headed for a complete makeover. I wouldn't be surprised if they even employ some major plastic surgery.

There is just one thing we need to remember, any changes are likely to be only cosmetic in nature. When it once again returns to traverse the Tennessee legislative hurdles; it will probably still be a secretive Opt Out scheme.

And no matter how much lipstick you put on a pig, at the end of the day it will still be a pig.

I reported yesterday that the Tennessee Legislature removed HB997, a bill designed to allow employers to opt out of workers' compensation, from the legislative calendar. To numerous people on the ground there, this effectively killed its chance for passage this year. While it still may make a surprise return during this session, the feeling is that the effort has lost momentum and support, and it will not be returning this year. As I noted, sources close to the legislature indicated that there was some last minute maneuvering to save the bill, but a promised “significant amendment” by Monday did not materialize. They also indicated that “the sentiment toward the concept has been shifting away from opt out for several months.  As the positive effects of the 2013 reforms began to become more apparent and the concerns about the real effect of opt out received more publicity, legislators became wary or definitely opposed.”

It probably doesn’t help matters that the House co-sponsor, Representative Jeremy Durham, is on an approved leave of absence after being accused of inappropriate text messages by three women in the state. The Governor has called for the 32 year old politician to resign, questioning his ability to adequately serve his constituents. He has already resigned as House majority whip, as well as from the House Republican Caucus.

It also turns out that the threat of Federal oversight may be an issue with this particular bill. Another source informed me that some legislators have become worried about concerns of business that “the opt out plans didn’t cover workers like regular comp, and they were fearful of Medicare coming down on them for shifting the burden to SSDI and to Medicare and Medicaid”. That, in my view, is a legitimate concern.

And the blogosphere has been providing ample warning to that end.

Fellow blogger Jennifer Jordan has addressed this concept directly, both in her MedVal blog and in a recent article published by LexisNexis. Both are excellent reads that I highly recommend. In her treatises, Jordan effectively demystifies the persistent Opt Out promotional chatter, and succinctly ties the so called “responsible alternatives” to a direct abdication of financial responsibilities to both Medicare and SSDI, and by extension, the taxpayer. She cleverly posits to those proponents; “Rather than the attempts at writing arbitrary benefit limits into the state laws or opt out plans that harm only those truly in need of lifetime care, simply own your responsibilities to those same injured workers without CMS involvement and come up with other creative ways to provide for post-settlement medical care.”

Clearly she understands that Oklahoma style Opt Out, on which these bills are based, is a creative way to avoid post-settlement medical care, not provide for it.

Placing those long term obligation concerns aside, the biggest unexpected obstacle Opt Out promoters may have encountered is simply the publicity it has received. As I indicated one source said, as “the real effect of opt out received more publicity, legislators became wary or definitely opposed”. Tennessee has been seeing a fair amount of opposition in its local press, and various national blogs, legal activists and ProPublica have been working to expose negative elements of the Opt Out system.

Open information can be a pesky problem to a system designed to operate in total anonymity. And to be clear, Opt Out legislation is specifically designed to create a system that operates with no oversight or reporting responsibilities. As Jordan pointed out, this even extends to MSA obligations and CMS. An employer never need be concerned with meeting Set-Aside requirements if liability caps and convenient denials remove their responsibility to begin with. Those are the annoying details that make legislators take a second look at what they are voting for.

And in this case, it might not just be the publication of facts that interferes with the growth of Opt Out, but rather the lack of facts available about what is really happening within these plans.

Opt Out may be down, but it is certainly not out. South Carolina is still considering similar legislation, and Tennessee could surprise us with an unexpected return for consideration. Either way, they will be back. The effort is well funded by parties with a distinct financial interest in a positive legislative outcome. What it really needs in order to eliminate the opposition it is receiving is a truly transparent audit mechanism that will allow everyone a look inside – a glimpse beyond the magician's curtain.

That is very unlikely to occur, as Opt Out promoters have been keenly invested in keeping as closed a system as they can. And as we all know, no matter how thin you slice your bacon, you still cannot see through it.

Leave a Reply

Your email address will not be published. Required fields are marked *