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MONTANA SELF INSURERS' ASSOCIATION

MSIA Update / Leg. Week 10

  • NCCI - 0% Change in Overall Loss Costs; MSF -5% Rate Change
  • WCRI Annual Meeting Report – Part 1
  • Healthcare Policy & the 2024 Election
  • Threats to Healthcare Access in Rural America
  • MSF Annual Medical Conference – Whitefish May 14 -16
  • Legislature Back from Break Next Week
  • Seven Bills of Interest Set for Hearing

NCCI - 0% Change in Overall Loss Costs; MSF -5% Rate Change

As MSIA shared last week, NCCI originally filed for a 0.5% increase in overall loss costs in early February. Based on some concerns expressed by the MT Commissioner of Securities and Insurance (CSI), they amended their filing to be a 0% overall average change. MSIA has access to the public documents associated with the NCCI filing, and if you would like them, please contact our office.

The MSF Board Committees met on Thursday 3/6 and the full Board met to approve their recommended positions on Friday 3/7. MSF is proposing to decrease overall rates by 5% to their book of business. They will be making a filing to adopt these changes to CSI. Montana is a ‘file and use’ state, meaning that absent objections, filings made to CSI are deemed to be approved 30 days after filing, unless there are questions raised by CSI. Then the ’30-day deemer’ period starts again with the receipt of the responses. CSI can ‘approve’ the filing before the 30 days has expired.

Starting in 2016, MSF has to go through the same regulatory review process for their loss costs as all other carriers. MSIA will seek to get access to the public documents supporting the MSF filing as well when they become available.

The NCCI changes are ‘loss cost’ changes – not rate changes, although often enough they are the same thing. Loss costs are the costs to pay claims, on average, in the Montana system by class code and the expenses associated with paying those claims. When I teach workers’ compensation, I identify the costs to print and mail benefit checks as an example of the expenses to pay claims although it is a bit more detailed than that. Rates are those costs, and each individual carrier provides information to CSI on their other expenses, taxes, licenses and fees and profit margin in a ‘loss cost multiplier’ (LCM) to identify the class code rates. For example, an LCM of 1.25 means that carrier’s rates are 125% of the loss cost.

A 0% change does not mean that individual class codes stay the same – it means that on average, across all class codes, the change is 0. The same will hold true for the MSF filing – not all class codes will decrease by 5% - the overall average of changes will be -5%.

These changes are set to go into effect for new and renewal policies effective July 1, 2025. MSIA is in conversations with NCCI to provide a Webinar on their perspectives on the Montana system results as reflected in this filing in June. 

WCRI Annual Meeting Report - - Part 1

These two keynote presentations alone, in my opinion, was worth the price of admission to the 2025 Workers’ Compensation Research Institute (WCRI) Annual Conference. The speakers were extra-ordinarily intelligent and were able to deliver complex messages in clear language. Dr. Lanhee Chen of Stanford provided the Day 1 Keynote and kicked us off into a day of intellectual exploration and search for solutions. Dr. Mark Holmes of the University of North Carolina was equally impressive in his Day 2 Keynote presentation documenting the access and financial challenges in providing healthcare in rural America.

Healthcare Policy and the 2024 Election

Dr. Lanhee J. Chen's keynote address at the 2025 Workers Compensation Research Institute (WCRI) Issues & Research Conference provided attendees with a nuanced analysis of the current state and future trajectory of U.S. healthcare policy in his presentation, “The US Healthcare System in 2025, Where We’ve Been, Where We Are, and What’s to Come” attached. Chen is the David and Diane Steffy Fellow in American Public Policy Studies at the Hoover Institution and Director of Domestic Policy Studies at Stanford University. As a result, I thought he brought a wealth of expertise and insight to the discussion.

In his presentation, Dr. Chen posited that after a decade of significant transformations, the American healthcare system is entering a phase characterized by incremental changes rather than comprehensive reforms. He observed that despite ongoing political debates, including Republican efforts to repeal the Affordable Care Act (ACA), the law has gained substantial public support, with approval ratings between 65% and 70%. In his words, the efforts to repeal the ACA have left the station and are not an issue anymore.

Chen’s assessment of the current US Healthcare system identified: 

  • Costs are a major concern – though not a surprise; ​
  • Outcomes lag behind peer countries, but the system is highly innovative; ​
  • Uninsurance remains an issue – with the number of people who simply refuse to be insured surprisingly stable at about 25 million; ​
  • Provider market consolidation leads to higher prices – which WCRI has documented in their studies; ​
  • We have a shortage of providers and facilities, especially in rural areas; and ​
  • Not at all surprising is that Medicaid and Medicare face significant strain. ​

In Chen’s opinion, here’s what we can expect in 2025: ​

  • Legislation/regulation for Pharmacy Benefit Managers (PBMs) – we have seen those efforts this session here in Montana. Similar efforts are being undertaken in other states; ​
  • Medicare Advantage and drug pricing;
  • ACA reforms, including subsidies and waiver authority; ​
  • Competition issues, especially vertical consolidation; ​
  • Tax code reforms, such as Health Savings Account (HSA) enhancements; ​​
  • Public health and institutional reforms – what is happening at the federal program levels is already creating some upheaval; and ​
  • Cultural/social issues like abortion and transgender care.

Specifically, Chen pointed out that we’re likely to see Medicaid reform proposals. At the federal level, the goal is a $2 trillion reduction in mandatory spending (over 10 years). Options include reducing matching rates, establishing spending caps, cutting improper payments, and establishing work requirements, all of which will impact state Medicaid programs.

MSIA shared that the legislature passed Medicaid expansion continuation and now, the bill is on the Governor’s desk, where he is expected to sign it. However – the big unknown, is what will the federal government do regarding picking up what has been their traditional share of 90% of the costs. Simply put, if they reduce that percentage, continued Medicaid expansion could end, just based on budget actions.

One particularly interesting point I thought he made was our immigration policy impacts healthcare. He used his own family’s story to highlight what he meant. Chen’s father was a physician who immigrated to the US from Taiwan in the 60s based on a program which provided a pathway to citizenship for physicians willing to come to the US and serve in more rural areas. That program is gone now. I have to ask, why?

 

Threats to Healthcare Access in Rural America

The Day 2 Keynote, delivered by Dr. Mark Holmes, a professor at the University of North Carolina's Gillings School of Global Public Health and director of the Cecil G. Sheps Center for Health Services Research was titled, "Threats to Healthcare Access in Rural America," and was concerning in that there are no clear answers, right now. This presentation is also attached.

Holmes highlighted the unique healthcare challenges faced by rural communities. While Holmes lent some focus to how these issues impact workers' compensation

systems, the issue is broader than just workers’ compensation. He discussed disparities in healthcare access, including provider shortages and hospital closures, which

contribute to higher rates of preventable admissions and trauma-related deaths in these areas:  

  1. Access Issues: Rural communities have lower access to healthcare due to fewer nearby providers, transportation challenges, affordability issues, and cultural barriers; ​
  2. Financial Stress: Rural healthcare providers are under significant financial stress, with lower margins compared to urban hospitals. ​ Government support, like CARES Act provisions, has been crucial to keep these hospitals operational; ​
  3. Trends: There are notable trends in rural healthcare delivery, such as the increasing reliance on urban hospitals for inpatient care and the rise of Rural Emergency Hospitals (REH) which offer limited inpatient services but fully staffed emergency departments; ​
  4. Implications of Hospital Closures: Rural hospital closures lead to longer EMS response times, more admissions for preventable conditions, economic downturns, and decreased healthcare usage due to longer travel distances; and ​
  5. Future Changes: There is uncertainty about future federal healthcare payment and delivery approaches. ​ Potential changes in Medicaid and Medicare could impact rural healthcare providers significantly. ​ 

The last point I found particularly significant – the future of rural healthcare is uncertain. Again, we have to ask, what is the federal government going to be doing? 

MSF Annual Medical Conference / Whitefish May 14–16 

Challenges and Innovations: Solutions for a Changing Workers' Comp World

The MSF Annual Medical Conference brings together some of the country's top medical minds working in workers’ compensation to Montana to speak with claims professionals, Montana based medical providers and others. It is a unique opportunity to hear from leaders from across the country here in Montana. Registration information is here: Montana State Fund 23rd Annual Medical Conference.  

Since it features some of the top medical voices in the country, it’s not a surprise the Conference also features three MSIA members. Here is the current lineup of speakers:

  • Kelly Stokes, Injured Employee, Montana State Fund
  • Dr. Lisa Fitzpatrick, DrOT, CHT, CAE, CEAS, President/CEO, XcelABLE – an MSIA Member
  • Jonathan Lindsey, Claims Manager, CIGA
  • Terri Harrison, Director of Claims, CIGA
  • Kathleen Collins, Senior Clinical Pharmacist, Craig Hospital – an MSIA Member
  • Kurt Hegmann, MD, MPH, Center Director, RMCOEH
  • Jan A. Saunders, CPO, LPO, Clinical Director, Prosthetics, Paradigm Care at Home – an MSIA Member
  • Dean Blackaby, Attorney at Law, Montana Work Comp Solutions
  • Honorable Judge Lee Bruner, Montana Workers’ Compensation Court
  • Marcos Iglesias, MD, MMM, FAAFP, FACOEM, Chief Medical Director, Accident Fund Group
  • Legislature Back from Break Next Week
  • Seven Bills of Interest Set for Hearing

We have talked about the issues in the Senate and its’ dysfunction this session. They continue – and I swear you cannot make this stuff up!

To briefly review, the session started with nine Republicans teaming with the minority Democrats to change the rules, on the first day of session. Senate leadership seemed unsure of how to proceed after that. They then uncovered a contract signed by last sessions’ Senate President (one of the leaders of ‘the Nine’) for legislative review work to be done by a colleague of his and started an investigation. That investigation resulted in an Ethics Committee meeting. Then ‘the Nine’ again teamed up with the Democrats to terminate the Ethics Committee work and send the investigation to the Attorney General’s office – surprising the Attorney General. And, they then changed Committee membership and forced the assignment of bills to committee that leadership had not taken action on.

 

Still with me? Wait, there’s more.

 

The latest is an allegation that the current Senate President, starting when he was Speaker of the House last session, had hired an attorney to advise him (and presumably the majority) on legislative issues. He then continued that contract this session, as Senate President. Nothing wrong with that, I suppose, had he gotten permission from either the House last session, or the Senate this session, to do so. And even more interestingly, he tried to pass a bill last session to provide that specific permission, but it did not pass. So, the Legislative Auditor is now investigating the current Senate President.

In the meantime, the Senate seemed unable to get on track for about four weeks and then jammed everything into the last two weeks prior to Transmittal Day. That day is significant because bills that fail to pass their originating Chamber are dead-ish (assume nothing is really dead until at least two days after session ends). The legislature makes their rules, they can change their rules. However, this has been a pretty standard, standard for some time and is a significant date. It was last Friday, 3/7 – which is why last week’s UPDATE was so long. As well, it is reasonable to assume that any bill title request (LC # bill) that has not at least been introduced, is dead. It is really tough to bring up a title that hasn’t even been drafted yet. As a result, I have eliminated the LC # bills from this week’s spreadsheet. Next week, I will likely eliminate those bills that are dead (enough) based on original chamber actions. For example, an important bill to us, SB 295 (A. Olsen D-MSO) – Employee Choice of Provider, passed out of committee (for the first time since the Employer Choice of Provider was enacted in 2011) and was defeated on the floor. Then the motion to reconsider the defeat, was also defeated. That means it’s pretty dead.

You might get the idea that I still am uncomfortable with the idea that the Senate has figured things out. You might be right. It seems we are all waiting for the other – or the other, other shoe to drop.

Particularly in this work, I assume nothing is free and there will be a cost for the Dems teaming up with ‘the Nine’ to change the rules, make committee membership assignments and assign bills to committees. I also assume we have already seen some of that cost -with the passage of SB 295 – Employee Choice of Provider – from Senate Business & Labor 10-2 to the floor, where it was defeated (with four of the Committee members changing their votes). I make the same assumptions about other bills that Committee has passed to the floor, specifically, SB 308 (Harvey D-BTE) – Eliminating the Cap on Benefits and SB 394 (Neumann (D-BZN) – PTSD for First Responders. Those bills have been re-assigned to Senate Finance & Claims and are set for a hearing there next week (3/19). The Finance & Claims Committee is more concerned with the cost of proposals, than the merits of the proposals. As a result, these bills may die there - - or maybe not. Three members of ‘the Nine’ are on the Committee, and if they vote with the 8 Dems, the bills pass that 21 member committee to the floor.

What I don’t yet know is how this may impact the bills we have requested, SB 345 (Hertz R-Polson) – Eliminating the Treating Provider Deference and Making IMEs Easier To Get, nor what the impact may be on HB 367 (Buttrey R-GTF) – WC Coverage for Employer Provided Transportation. As you can see below, all four of those bills, SB 308, 394, 345 and HB 367 are up for hearings next week (the first three in Senate Finance & Claims).  

  • HB 367 – the MSIA transportation bill is up in Sen Bus & Labor on 3/18 – MSIA Supports this Bill     
  • HB 428 – the DOLI clean up bill is up also on 3/18 in Sen Bus & Labor – MSIA Supports this Bill
  • SB 345 – the MSIA proposal to eliminate the treating provider deference and make IMEs easier is up in Sen Finance & Claims on 3/19 - MSIA Supports this bill
  • SB 308 – eliminating the cap on benefits is up in Sen Finance & Claims on 3/19 - MSIA Opposes this Bill
  • SB 394 – PTSD for first responders is up in Sen Finance & Claims on 3/19 - MSIA Opposes this Bill
  • SB 109 – PTs as Treating Providers is up on 3/20 in House Bus & Labor – MSIA Opposes this Bill
  • SB 338 – the Guardian ad Litem bill is up on 3/20 in House Bus & Labor – MSIA Supports this Bill

I have been informed the Senate Finance & Claims Committee is not particularly interested in the merits of the issues regarding the bills they are hearing but focused on the costs. As a result, I am hoping we can stop SB 308 & 394 and have SB 345 pass the Committee. Despite not being passed by the originating chamber by Transmittal Day, the chambers have an agreement regarding general bills that pass second reading and are assigned to either Senate Finance & Claims or House Appropriations committees to be treated as revenue or expenditure bills, which have a different transmittal deadline (4/4 for revenue bills, 4/7 for appropriation bills).

For a full list of legislation we are following – see the attached spreadsheet for more details and access to links to the language, fiscal notes or amendments.