Caught in a backlog of contested claims, applicants for workers' compensation in Maryland are finding themselves squeezed financially while they wait months for their cases to be decided.

The state Workers' Compensation Commission has been making efforts to reduce the backlog by increasing the number of cases heard by the 10 commissioners and having state employees work overtime to speed up claims processing.

During the last year, the commission has been able to reduce the waiting time from about 10 or 12 months to four months.

But the commission wants to cut the waiting time even further, and has proposed that the General Assembly approve the appointment of an 11th commissioner to hear more cases. Without that and other improvements in computer technology, the waiting time cannot be shortened further, the agency says.

"I think we are right at max. We can't increase the docket further," says R. Rex Brookshire 2nd, the director of administration for the Workers' Compensation Commission.

Under Maryland's workers' compensation system, an employee injured on the job is entitled to compensation from either the employer's workers' compensation insurer or the employer itself, it is self-insured. In most cases, there is no dispute over the facts of the case and payments are started promptly. The waiting begins if the either party disagrees and requests a hearing.

Such waits can be devastating to people who are unable to work and may not qualify for other benefits.

One such case involved Gordon Callison, 53, a worker in a battery factory who dislocated his spine and hip at work on Feb. 2, 1990. The insurance company for the employer disputed that there had been an accident and Callison had to wait nearly a year for a hearing.

Even though the commission found in the insurance company's favor, Callison received a settlement from the insurance company a few months afterward. He believes the settlement would have come faster had the hearing been held earlier.

"I would have gotten money in my pocket," he says. Instead, during that year wait, he and his wife lived a hand-to-mouth existence. "If it hadn't been for my church giving us food every week, I don't know what we would have done," he says.

The commission gets about 15 to 20 calls a day from people seeking emergency hearings, which means they bump ahead of the other claimants waiting for hearings, Brookshire says. But

these requests are granted only for such matters as a critical need for surgery, an imminent threat of eviction or the loss of utility services.

Brookshire says that the commission tries to steer the person to appropriate social agencies.

The claims filed with the commission have remained steady at about 3,000 a month for the last several years, Brookshire says. But the number of contested cases has shot up.

Since the beginning of 1988, the number of cases waiting to be heard by the commission has more than tripled, increasing from a backlog of about 2,800 cases to 10,245 in October. Delays in hearing cases reached a peak about a year ago, when some claimants would have to wait up to a year for a case to be heard, Brookshire says. Since then, the waiting time has been reduced to four months.

The waiting time was decreased by boosting the number of cases heard each day by commissioners from an average of 13 to more than 20, Brookshire says. Nine of the commissioners hear cases full time, while the chairman of the commission has other administrative duties.

The number of contested cases was reduced also by speeding up the initial processing of claims in order to give the insurance companies more time to consider a case. In the past, some insurers would contest a claim that they received only within days of the statutory deadline for response, Brookshire says.

About 65 percent of the disputed cases involve either questions of the injury's coverage under workers' compensation law or the level where permanent disability should be set. In both types of cases, workers can go for months with receiving bene

fits, Brookshire says.

The exact cause of the increase in contested cases is not known. But the rise coincides with the enactment of a 1987 law that provides a lower amount of benefits for partially disabled workers whose injuries were determined to be minor. This additional tier of benefits may have sparked more disputes between injured workers and insurance companies, Brookshire says.

But, whatever the cause, Brookshire is intent on trying to reduce the waiting time to two months, the minimum amount of time needed to process a case and give notice to the participants.

The commission has submitted proposed legislation to Gov. William Donald Schaefer to create another commissioner's position along with the necessary support staff. That will cost about $250,000 a year, Brookshire says.

If the governor consents to the measure, it will be submitted to the next session of the General Assembly as an administration bill.

The commission also is working on upgrading its computer system. The agency is authorized to spend $5.4 million during the next five years for a new system. The first request for proposals will be issued this month and Brookshire hopes to have some of the new equipment in place by March or April.

While other state agencies are facing possible cutbacks, the commission's funding is more secure because it comes from a special assessment on workers' compensation insurers. Any increase in the agency's $7.2 million budget would come from the insurers and not the general taxpayers, Brookshire says.

However, because the assessment on insurance companies passes through the state's general fund, the independent commission is sometimes subjected to the same cutbacks as other state agencies. For instance, the commission had to terminate three workers this fiscal year and its preliminary budget for next year was reduced by 12.3 percent, though it was subsequently restored to its original level, Brookshire says.

The companies that pay for the operation of the commission have voiced no complaints about the way the commission uses its money, Brookshire says. "We have not had a single complaint from an insurer or self-insurer," he says.

To clarify its status, the commission is also proposing a bill that would set up a special fund, to be known as the Workers' Compensation Commission Operating Fund.