By Chris Davie, vice president of corporate policy and external affairs
Despite having to break new ground, and despite facing a large budget deficit, the 2011 legislative session ended on time with a balanced budget, and, for the first time in decades, the Legislature agreed on a plan to redraw legislative and congressional district boundaries. The number of bills introduced was below average, and the number of new laws enacted was the lowest in a decade.
Legislation
Workers’ compensation bills followed a similar pattern. The half-a-dozen bills that became law comprised the lowest haul since the original reforms were passed in 1990. None of these bills make significant changes to the system, and most will go unnoticed by the majority of stakeholders.
House Bill 2093 will give the Workers’ Compensation Division (WCD) additional authority to issue cease-and-desist orders and to sanction unregulated medical management companies and other entities that attempt to exert a level of control over treatment that is not permitted under existing law. This bill does not affect managed care organizations (MCO), which are specifically authorized and regulated by statute to establish provider networks and set standards for the delivery of care and resolution of treatment disputes.
House Bill 2094 affects WCD’s administrative review (known as “reconsideration”) when a party appeals an order closing a claim. Existing law establishes deadlines by which the reconsideration must be completed. This bill allows the deadline to be extended for an additional 45 days, if both parties request additional time to resolve the issue by settlement.
Senate Bill 173 applies to the distribution of settlement proceeds when a denied claim has been settled. Current law requires a portion of the proceeds to be allocated to pay outstanding medical bills. If the settlement does not have enough dollars to pay all the outstanding bills, medical providers can take action against the worker to collect the billed amount that remained unpaid (not subject to any fee schedule). Under SB 173, the worker can elect to allocate additional dollars to settle medical bills, and the medical providers must accept the workers’ compensation fee schedule amount as full payment of the outstanding bills.
House Bill 2743 gives podiatrists full “attending physician” status (equivalent to an MD or DO). Podiatrists’ scope of practice is limited by statute to the foot and ankle.
Senate Bill 43 will increase the percentage of certain benefits that can be subject to garnishment by order of the Department of Justice to meet child and spousal support obligations. With the exception of ongoing time-loss benefits, the percentage of indemnity benefits subject to enforcement orders will increase from 25 percent to 50 percent.
Each of the bills listed above will take effect on January 1, 2012. There is one additional bill that may indirectly affect the purchase of workers’ compensation policies.
Senate Bill 961, relating to waivers of subrogation in construction contracts, took effect on June 23, 2011. The bill states that construction contracts cannot require either party to waive a right of subrogation for injuries caused by another person.
Although there is no general exemption for workers’ compensation claims, this new law will not apply to “wrap-up” policies, where all contractors on very large construction projects are covered by a single policy.
Waiver of subrogation endorsements to workers’ compensation policies continue to be available to policyholders; employers will have to decide whether or not the passage of this bill affects their need for
this endorsement.
Management-Labor Advisory Committee
Once again, the Workers’ Compensation Management-Labor Advisory Committee (MLAC) exerted a positive influence over the legislative process. The members spent many hours taking detailed testimony on proposed changes to the system and rejected several.
A bill to extend the permitted duration of treatment by nurse practitioners was voted down by the committee, but the proponents attempted to move the bill forward at the Legislature over MLAC’s opposition. Ultimately, the co-chairs of the House Business and Labor Committee declined to approve this amendment, citing their strong support of the MLAC review process.
The online version of this story contains links to take you directly to the bills mentioned above. If you have additional questions, please contact Chris Davie at 503.373.8006 or chrdav@saif.com.
This article is from the fall 2011 issue of Comp News. See other articles from this publication.