The Texas Senate passed a similar measure last month, but set up a new smaller agency to handle workers' compensation matters.

Bonnie Bruce, legislative director for Mr. Solomons, said that the two most contentious issues are provisions calling for rate hearings in the future to determine if companies are passing along savings that the changes would create, and the effort of the Texas Medical Association to put a clause in the bill allowing medical treatment by "any willing provider."

While the bill proposes a closed network of medical providers, Ms. Bruce said three exceptions will be made for patients to use their own doctors in the case of terminal and acute illnesses and surgery.

"Workers' compensation insurance needs to operate more like group health insurance, which does a better job of containing costs and achieving better health outcomes," Mr. Solomons said.

Ms. Bruce said the proposed legislation calls for hearings to be held beginning in 2008 to ensure that companies are passing on the benefits of reforms to their customers.

Joe Woods, assistant vice president for the Property Casualty Insurers Association of America, said the insurance industry opposed the hearing provision for the most part.

"We would rather let the market work as it has since 1991, but we recognize the reality that the legislature will demand a provision like this," he said. Fourteen years ago the state went from a promulgated rate system to the market file and use system currently in force today, Mr. Woods noted.

Ms. Bruce said that lawmakers from both chambers will work over the next several weeks to iron out differences in the two bills.