Democratic Gov. Phil Bredesen urged priority action by the legislature, where his party has a majority in both houses, in a speech last month delivered to the Tennessee Industrial Development Council.

Mr. Bredesen called on the state's Lt. Gov. John Wilder and Assembly Speaker Jimmy Naifeh, D-Covington, to convene the General Assembly's ad hoc committee on workers' comp. to quickly put together a reform package this year.

"Let me be clear, I don't want this to be just another blue-ribbon panel," said Mr. Bredesen. "This is an issue that I want addressed in short order this year. If we're serious about creating jobs, we need to act on something by the end of this legislative session. Bottom line, let's sign a bill into law this year."

State Sen. Joe Haynes, D-Goodlettsville, the senior ad hoc committee member, said there will be a meeting of the legislative leadership to discuss how to proceed with the ad hoc committee. The Senate Commerce Committee already is holding fact-finding hearings on the matter.

"We will look at [workers' comp.] and find out what needs to be changed and correct any inequities that we feel exist," said Mr. Haynes.

A bill may come out by the end of the legislative session, but Mr. Haynes said that its timing is "difficult to say."

"I suspect if the governor recommends something that there must be a reason," he added.

The governor in addressing what he sees as problems with the system has mentioned that Tennessee is the only state in the Southeast that does not require some form of an administrative review of claims: it has a "confusing and inconsistent method for determining disability benefits; there is no fee schedule to help contain costs; the per-worker costs are the highest in the region; and, claimants are not paid in a timely manner."

David Reddick, Tennessee state affairs manager for the National Association of Mutual Insurance Companies, said in a statement, "The state's workers' compensation system is unlike any other in the country."

He cited a study finding, by the Cambridge, Mass.-based Workers' Compensation Research Institute, that the state has one of the highest average medical payments per claim in the nation.

The WCRI study, "The Anatomy of Workers' Compensation Medical Costs and Utilization: Trends And Interstate Comparisons, 1996-2000," examined 12 large states that account for 50 percent of the nation's benefit payments.

The report found that Tennessee was second to Texas in average medical payment per claim for claims with more than 7 days of lost time. The state claim average was $7,218, behind Texas at $8,048. Massachusetts was the lowest at $2,762.

Tennessee was the highest in average price per service for claims of more than 7 days at $128. Both Wisconsin and Indiana were second at $126. California was the lowest at $57.

NAMIC said it would like the state to develop a better system for reviewing workers' compensation claims, a more orderly system for determining disability benefits and a medical fee schedule to help contain costs.

"It is certainly time for Tennessee to adopt reforms more in line with the rest of the country," Mr. Reddick added. "We look forward to working with state legislators to help create a system that makes Tennessee competitive with neighboring states."

Because of the workers' comp. cost to companies, Tennessee is having trouble attracting new business to the state, the governor said. He mentioned that two companies had recently decided to add jobs or locate facilities in neighboring states specifically because of Tennessee high worker's comp. costs.

"If we're serious about staying competitive with our neighboring states, we need to at least be in the same ballpark when it comes to workers' comp," Mr. Bredesen said. "I'm absolutely convinced of this."