Roundup of Work Comp Bills Filed in the Texas Legislature -- Part 1

Saturday, March 10, 2007 | 0

By Steven W. Nichols

The 80th Texas Legislature convened on January 9, 2007 and will be in session until May 28, 2007. To date, legislators have filed 47 workers' compensation bills. The legislation addresses issues ranging from prohibiting payments or one concerning other inducements regarding a workers' compensation claim to the eligibility for and computation of workers' compensation benefits for members of the Texas State Guard. The Insurance Council of Texas (ICT) is not a lobby organization and does not have a position for or against the legislation summarized in this workers' compensation bulletin. This bulletin has been prepared to provide our members with an overview of the workers' compensation legislation filed to date during the legislative session and should not be construed as a statement of position on the legislation by ICT.

First Bill Filed by the Author of 2005 Workers' Compensation Reform Legislation -- House Bill 7 Rep. Burt Solomons (R-Carrolton) pre-filed HB 34 on November 13, 2006. Solomons said his workers' compensation bill would addresses fraud in the workers' compensation system between adjusters and other vested interests.

"I have heard from system participants, as well as injured workers of kickbacks being arranged for peer reviews, case management and attorney assistance," Solomons said. "This is fraud which only adds costs to the system for employers and uses medical care for injured workers as a pawn."

The legislation will make it an administrative violation for a person who has authority to request the performance of a service regarding the management of a workers' compensation claim to pay, allow, give, directly or indirectly a fee, rebate or other consideration not authorized for services. Solomons said he has heard of exchanges of cash and tickets to sporting events for a referral of services.

Other Workers' Compensation Legislation Filed The following additional workers' compensation legislation has been filed as of February 27, 2007: HB 471, relating to the cost of obtaining copies of an injured employee's medical records for use by an ombudsman under the office of injured employee counsel's ombudsman program, has been filed by Rep. Burt Solomons, R-Carrolton.

HB 471 proposes an amendment of the Texas Labor Code to allow Office of Injured Employee ombudsmen assisting an injured employee to obtain medical records form a health care provider at no cost.

HB 472, relating to the regulation of third-party administrators, including administrators with delegated duties in the workers' compensation system of this state, has been filed by Rep. Burt Solomons (R-Carrolton). The legislation would provide for the regulation of third-party administrators, including administrators with delegated duties in the workers' compensation system by the Texas Department of Insurance.

HB 473, relating to the application of certain fee guidelines to health care provided under the workers' compensation systems, has been filed by Rep. Burt Solomons (R-Carrolton).

This legislation would amend the Texas Labor Code to provide that insurance carriers may pay fees to a health care provider that exceed the fees adopted by the division under the fee guidelines if access to medically necessary and reasonable treatment for the injured employees is hindered by the application of the fee guidelines adopted by the division and the insurance carrier or a network has a contract with the health care provider and that contract includes a specific fee schedule. The bill would prohibit the use of fee discount agreements and networks by insurance carriers and their agents.

HB 672, relating to the Texas Mutual Insurance Company and the application of certain statutes -- the Texas Public Information Act -- to the Texas Mutual Insurance Company, has been filed by Rep. David Swinford (R-Amarillo). The legislation would make Texas Mutual exempt from the requirements of the Texas Public Information and Open Meeting Acts.

HB 724, relating to resolution of certain disputes regarding workers' compensation claims for medical benefits, has been filed by Rep. Burt Solomons (R-Carrolton).

This legislation would amend Section 413.031 of the Texas Labor Code that governs medical dispute resolutions to allow a disputing party to have a contested case hearing to appeal a medical dispute resolution decision of the Division of Workers' Compensation (DWC) or the decision of an informal review organization without the prerequisite benefit review conference. The legislation is a response to a Travis County district court decision that found the elimination of an administrative law hearing prior to proceeding to district court unconstitutional.

HB 886, relating to an optional preauthorization plan for the workers' compensation return-to-work pilot program for small employers, has been filed by Rep. Helen Giddings (D-De Soto).

The legislation would provide small employers who wish to participate in the DWC's pilot return-to-work pilot program with the ability to obtain preauthorization of and payment for the worksite modifications they wish to pay for to assist in the return of an injured employee to work.

HB 888, relating to the cost of obtaining copies of an injured employee's medical records for use by an ombudsman under the office of injured employee counsel's ombudsman program, has been filed by Rep. Helen Giddings (D-De Soto). The bill, which is similar to the Rep. Solomons' HB 471, would amend the Texas Labor Code to allow Office of Injured Employee ombudsmen assisting an injured employee to obtain medical records form a health care provider at no cost.

HB 1003, relating to professional licensing requirements for independent review of certain medical decisions regarding workers' compensation claims, has been filed by Rep. Helen Giddings (D-De Soto). The legislation would require that doctors who perform review of medical necessity disputes for independent review organizations as provided for by Sec. 413.031 of the Texas Labor Code to be licensed in the State of Texas.

HB 1004, relating to the right of an injured employee to time off from work for treatment of a compensable injury, has been filed by Rep. Helen Giddings (D-De Soto). This legislation would require employers to allow injured employees time off work to obtain health care treatment related to a compensable injury. HB 1004 provides that an employer may require an injured employee to use accrued sick leave or similar leave when taking time off from work to obtain health care treatment. The legislation also provides that an employer may require an employee to provide documentation that the time off of work was for the purpose of obtaining health care treatment.

HB 1005, relating to the timely submission of a claim for payment by a workers' compensation health care provider, has been filed by Rep. Helen Giddings (D-De Soto). The legislation would provide that a health care provider who erroneously submits a medical bill to either a group accident or health insurer or to the wrong workers' compensation insurer does not forfeit their right to payment if the erroneous submission of the bill results in the bill being filed in an untimely manner with the workers' compensation insurer.

HB 1006, relating to physician licensing requirements for utilization review of medical decisions regarding workers' compensation claims, has been filed by Rep. Helen Giddings (D-De Soto).

This legislation would amend Sec. 408.023(h) of the Texas Labor Code to require utilization review agents to use Texas licensed doctors who perform utilization review. Sec. 408.023(h) of the Texas Labor Code currently allows utilization review agents to use doctors licensed by another state so long as they are working under the direction of a doctor licensed in Texas.

HB 1152, relating to the enforcement of certain insurance provisions in and related to construction contracts, has been filed by Rep. Craig Eiland (D-Galveston). This bill would prohibit the inclusion of provisions in construction insurance contracts that require workers' compensation policies to include a subrogation waiver.

HB 1152 is similar to Senate Bill 346 filed by Sen. Robert Duncan (R-Lubbock).

HB 1247, relating to workers' compensation subrogation claims, has been filed by Rep. Larry Taylor (R-League City). The legislation would allow group health insurers to seek reimbursement of health care paid under an injured employee's group health insurance policy as a sub-claimant. The bill would provide the Division of Workers' Compensation with the authority to order workers' compensation insurers to reimburse the sub-claimant for health care expenses paid by the group health insurer who later determines that the health care was related to a workers' compensation claim.

The bill provides that it is not a defense to a request by a sub-claimant for reimbursement in a contested case hearing that the sub-claimant has not sought reimbursement from a health care provider or the injured employee, the health care provider did not seek pre-authorization under Section 413.014 of the Texas Labor Code or rules adopted under that section, or the health care provider did not bill the workers' compensation insurance carrier before the 95th day after the date of services as provided by Section 408.027 of the Texas Labor Code.

HB 1247 also provides that these types of disputes on claims that are compensable would proceed to arbitration without a Contested Case Hearing or a Benefit Review Conference being held. Rep. Taylor has also filed similar legislation that provides for this type of dispute to proceed directly to a Contested Case Hearing. See HB 1306. HB 1285, relating to accreditation for certain workers' compensation insurers and self-insurers, has been filed by Rep. William Zedler (R-Arlington).

The legislation would require insurers that establish or contract with a network certified to provide health care services under the Texas Workers' Compensation Act must present evidence satisfactory to the commissioner of insurance that the carrier is URAC-accredited or accredited by a similar national organization recognized by the commissioner.

HB 1301, relating to relating to the appointment of an attorney for a workers' compensation claimant in certain judicial review proceedings initiated by a workers' compensation insurance carrier, has been filed by Rep. William Zedler (R-Arlington). This legislation would provide that when an insurer files a lawsuit, the injured employee can request and the court shall appoint an attorney to represent the injured employee before the court.

An insurer would be liable for the attorney's reasonable and necessary fees in accordance with Section 408.221(c) of the Texas Labor Code on any issue on which the claimant prevails. The legislation provides that the subsequent injury fund is liable for the attorney's reasonable and necessary fees on any issue on which the insurance carrier prevails. This bill is a companion bill to Senate Bill 287 filed by Sen. Eduardo A. "Eddie" Lucio (D-Brownsville).

HB 1306, relating to workers' compensation sub-claims, has been filed by Rep. Larry Taylor (R-League City). The legislation would allow group health insurers to seek reimbursement of health care paid under an injured employee's group health insurance policy as a sub-claimant. The bill would provide the Division of Workers' Compensation with the authority to order workers' compensation insurers to reimburse sub-claimants for health care expenses paid by a group health insurer who later determines that the health care was related to a workers' compensation claim.

The bill provides that it is not a defense to a request by a sub-claimant for reimbursement in a contested case hearing that the sub-claimant has not sought reimbursement from a health care provider or the injured employee, the health care provider did not seek pre-authorization under Section 413.014 of the Texas Labor Code or rules adopted under that section, or the health care provider did not bill the workers' compensation insurance carrier before the 95th day after the date of services as provided by Section 408.027 of the Texas Labor Code.

HB 1306 also provides that on claims that are compensable would proceed to a Contested Case Hearing without a Benefit Review Conference being held. Rep. Taylor has also filed similar legislation that provides for this type of dispute to proceed to Arbitration as provided for by Texas Labor Code. See HB 1247.

HB 1464, relating to peer reviews of health care services performed under the workers' compensation system, has been filed by Rep. William Zedler (R-Arlington). The legislation would amend Section 408.023(h) of the Texas Labor Code to require utilization review agents to use doctors professionally licensed in Texas to perform reviews of health care services.

HB 1465, relating to the payment of benefits under an interlocutory order under the workers' compensation system, has been filed by Rep. William Zedler (R-Arlington). The bill would require a benefit review officer who presides over a benefit review conference to consider and act upon a written or verbal request for an interlocutory order for the payment of benefits. The legislation also provides that benefit review officer shall issue an interlocutory order no later than the third day after the date of receipt of the request if the benefit review officer determines that issuance of an interlocutory order is appropriate. The interlocutory issued by the benefit review officer could address accrued benefits, future benefits, or both accrued benefits and future benefits.

HB 1593, relating to creation and operation of a pilot program for certain voluntary alternative agreements regarding compensable injuries, has been filed by Rep. Michael Villarreal (D-San Antonio).

This legislation would provide for a pilot project for voluntary alternative workers' compensation coverage agreements between certified self-insurers, individually insured employers, or employers engaged in construction, construction maintenance, or construction inspection and labor organizations that is the recognized or certified exclusive representative for employees employed by such a self-insurer or employer. This bill would provide that the agreement must be filed with the Texas Department of Insurance and would be valid and binding on the parties to the agreement if the agreement establishes or adopts: an alternative dispute resolution system, which may include provisions for conciliation, mediation, and arbitration that supplement, modify, or replace the provisions of Subchapter C of the Texas Labor Code;

* an agreed-on list of health care providers for medical treatment as the exclusive source of all medical treatment provided under this subtitle;

* a limited list of physicians to conduct independent medical examinations that the parties may agree is the exclusive source of independent medical examiners under this subtitle;

* a case management, patient advocate, utilization review, or similar program or combination of programs intended to improve the quality and control the cost of medical and related treatment and care;

* a light-duty, modified-job, or return-to-work program; or

* a vocational rehabilitation or retraining program that uses an agreed-on list of providers of rehabilitation services as the exclusive source of providers of rehabilitation services under this subtitle.

The bill provides that a voluntary alternative agreement may include a provision for arbitration that:

* is binding on the parties; or

* is subject to review in the same manner as a final decision issued by a hearing officer under Subchapter D.

The legislation provides that a voluntary alternative agreement may not include provisions that:

* diminishes an employee's entitlement to benefits for total or partial disability, vocational rehabilitation, or medical treatment that are fully paid by the employee's employer or as otherwise provided by this subtitle; or

* denies an employee the right to legal representation at each stage of the alternative dispute resolution process under this chapter. The bill would require that an annual report based on aggregate voluntary alternative agreement data be prepared and submitted not later than September 30, 2008, and annually thereafter, to the lieutenant governor, the speaker of the house of representatives, and the legislature.

The pilot program would be abolished September 1, 2017.

HB 1664, relating to the designated doctor's examination under the workers' compensation system, has been filed by Rep. William Zedler (R-Arlington). The legislation would allow an employee required to be examined by a designated doctor to request a medical examination to determine maximum medical improvement and the employee's impairment rating from the treating doctor or from another doctor to whom the employee is referred by the treating doctor if:

* the designated doctor's opinion is the employee's first evaluation of maximum medical improvement and impairment rating; and

* the employee is not satisfied with the designated doctor's opinion.

The bill would require the commissioner to provide the insurance carrier and the employee with reasonable time to obtain and present the opinion of the designated doctor to the Division of Workers' Compensation prior to a decision being rendered on the merits of the maximum medical improvement and/or impairment rating issue.

HB 1730, relating to the enforceability of certain contracts between an employer who does not have workers' compensation coverage and an employee of the employer, has been filed by Rep. David McQuade Leibowitz (D-San Antonio).

HB 1730 provides that a contract between an employer who does not have workers' compensation coverage and an employee is unconscionable and unenforceable if the contract:

* affects a procedural or substantive right of the employee to recover damages for personal injury or death sustained by the employee in the course and scope of the employee's employment; and

* is entered into before the 10th day after the date the cause of action against the employer arises.

HB 1731, relating to reporting requirements for employers not covered by workers' compensation insurance, has been filed by Rep. David McQuade Leibowitz (D-San Antonio).

The legislation would require employers who do not obtain or otherwise provide workers' compensation insurance coverage to report to the Division of Workers' Compensation (DWC) each work-related injury sustained by an employee of the employer during the preceding year that resulted in the employee being absent from one or more days of work, a modification of the employee's work assignment, a medical diagnosis of a significant occupational injury or disease, or required medical treatment beyond first aid. The bill requires that the employer shall report to the DWC:

* the total cost of medical treatment,

* the portion of the cost of medical treatment paid for or provided by the employer,

* the number of days the employee was absent from work,

* the amount of any salary replacement paid by the employer, and

* the amount of any other settlement paid by the employer.

HB 1731 would require the Commissioner of Workers' Compensation to:

* adopt rules for the administration of this proposed reporting requirement, and

* prescribe forms to be used for the report that would be required.

HB 1772, relating to reporting requirements for employers not covered by workers' compensation insurance; providing administrative penalties, has been filed by Rep. Michael Villarreal (D-San Antonio).

The legislation would require each employer who does not obtain or otherwise provide workers' compensation insurance coverage to report, on a calendar basis, data to the Division of Workers' Compensation (DWC) for each work-related injury sustained by an employee of the employer during the preceding year that resulted in the employee being absent from one or more days of work; a modification of the employee's work assignment; a medical diagnosis of a significant occupational injury or disease, and/or required medical treatment beyond first aid. Non-subscriber employers will be required to report specific data to the DWC.

HB 1911, relating to workers' compensation fee guidelines, has been filed by Rep. Gary Elkins (R-Houston). The bill would amend Section 413.011(d) of the Texas Labor Code by deleting the sentence "The commissioner shall consider the increased security of payment afforded by this subtitle in establishing the fee guidelines." The current fee schedule uses Medicare charges as its basis.

On Feb. 27, 2007, WorkCompCentral.Com published an article that said the intent of the measure was to make certain that the "standard of living" is used for comparison with other employed individuals to determine what the basis of the fee guideline should be, whereas the current fee schedule comparison involves comparison to individuals who are covered by Medicare. HB 1914, relating to certain information reporting requirements regarding workers' compensation claims, has been filed by Craig Eiland (D-Texas City).

The legislation would amend Sections 2053.151(a) through (c) of the Texas Insurance Code by providing that the insurance commissioner by rule shall prescribe the information that must be reported on each workers' compensation claim.

HB 1914 would also provide the insurance commissioner with the authority to reduce or eliminate reporting requirements for insurance companies whose workers' compensation insurance business falls below a specific minimum premium volume established by the commissioner by rule.

HB 1940, relating to the resolution of certain medical disputes regarding workers' compensation claims, has been filed by Rep. William "Bill" Zedler (R-Arlington).

The legislation would amend Subsection (k) of Section 413.031 of the Texas Labor Code and add new Subsections (k-1), (k-2), and (k-3) to that section of the statue and provide for the appeal of a medical dispute resolution decision to the State Office of Administrative Hearings. The bill provides that the hearing must be conducted in the manner provided for a contested case under Chapter 2001 of the Texas Government Code. The bill also provides that an insurance carrier found, after judicial review to have wrongfully or negligently contested a payment for a health care service is liable for the costs of the litigation, including attorney's fees.

HB 1970, relating to workers' compensation fee guidelines and payment adjustment factors used in conjunction with those guidelines for certain health care services, has been filed by Zedler.

This legislation would amend Section 413.011 of the Texas Labor Code by amending Subsections (a) and (b) and by adding Subsections (a-1) and (b-1) to provide that the commissioner of workers' compensation must adopt health care reimbursement policies and guidelines that reflect the standardized reimbursement structures found in other health care delivery systems, including group health insurance plans, with minimal modifications to those reimbursement methodologies as necessary to meet occupational injury requirements.

The bill would require the commissioner of workers' compensation to adopt the following payment adjustment factors to the Medicare-based hospital fee guidelines:

(1) 165 percent for inpatient care;

(2) 250 percent for outpatient care; and

(3) a stop-loss threshold of $50,000.

HB 1970 would also require the commission to adopt hospital fee guidelines with the following carve out payments:

(1) blood;

(2) hyperbaric oxygen;

(3) high-cost pharmaceuticals;

(4) air ambulance services;

(5) implantables; and

(6) orthotics and prosthetics.

HB 2004, relating to requiring that a doctor who reviews a workers' compensation case be certified in a professional specialty appropriate to the care received by the injured employee, has been filed by Giddings.

The legislation would amend Subchapter A, Chapter 408 of the Texas Labor Code by adding Sections 408.0043 through 408.0046. These new sections would require peer reviews, utilization review, including retrospective review of health care, and independent reviews by an independent review organization doctor to be performed by a doctor who holds a professional certification in a health care specialty appropriate to the type of health care the injured employee is receiving. The bill would also impose the same professional certification requirement on doctors who act as designated doctors, required medical examination doctors, and perform reviews under the auspices of the Division of Workers' Compensation's Medical Quality Review Panel.

HB 2166, relating to creation and operation of a pilot program for certain voluntary alternative agreements regarding compensable injuries, has been filed by Rep. Kevin Bailey (D-Houston).

This legislation would provide for a pilot project for voluntary alternative workers' compensation coverage agreements between certified self-insurers, individually insured employers, or employers engaged in construction, construction maintenance, or construction inspection and labor organizations that is the recognized or certified exclusive representative for employees employed by such a self-insurer or employer.

The bill is similar to HB 1593 filed by Villarreal.

HB 2192, relating to venue in civil actions brought under the federal Employers' Liability Act or the Jones Act, has been filed by Rep. Craig Eiland (D-Texas City). The legislation would amend Section 15.018(b) of the Texas Civil Practice and Remedies Code and provide for the filing of a lawsuit in a county in a coastal area, as defined by Section 33.004(5), Natural Resources Code.

HB 2262, relating to indemnification provisions in construction contracts, has been filed by Eiland.

This legislation would amend the Civil Practice and Remedies Code by adding Title 10 and providing that a covenant, promise, or understanding contained in a construction contract, or in an agreement collateral to or affecting a construction contract, is void and unenforceable if it purports to indemnify, hold harmless, or defend a person against loss or liability for damage that is caused by or results from the breach of contract or warranty by the indemnitee, the sole or concurrent negligence of the indemnitee, or a fine, penalty, administrative action, or other action assessed by a governmental entity directly against the indemnitee. The bill provides that an indemnitee includes the indemnitee's agent or employee or an independent contractor, other than the indemnitor, directly responsible to the indemnitee.

The bill also provides that proposed new Title 10 of the Civil Practice and Remedies Code does not otherwise affect the validity and enforceability of an insurance contract, the benefits or protections under the workers' compensation laws of this state, or a waiver of subrogation between contractors or between a principal and a contractor for coverage provided by a consolidated insurance program. This legislation also provides that the provisions of the proposed new Title 10 may not be waived by contract or otherwise. Any waiver of a provision of the proposed new Title 10 would be void and unenforceable.

HB 2298, relating to prohibiting discrimination against certain employees who sustain an injury in the course and scope of employment, has been filed by Rep. David McQuade Leibowitz (D-San Antonio). This legislation would amend Section 451.001 of the Texas Labor Code by providing that an injured employee whose employer does not have workers' compensation insurance coverage may not be discharged or in any other manner discriminated against because the employee has instituted or caused to be instituted a good faith proceeding under common law relating to an injury sustained by the employee in the course and scope of the employee's employment or has testified or is about to testify in a proceeding related to an injury sustained by the employee in the course and scope of the employee's employment.

HB 2423, relating to certain requirements for employers not covered by workers' compensation insurance, has been filed by Rep. David McQuade Leibowitz (D-San Antonio).

This legislation would amend Section 406.004(a) of the Texas Labor Code by requiring an employer who does not obtain workers' compensation insurance coverage to provide to the Division of Workers' Compensation, in conjunction with the statutory required notification that the employer elects not to obtain coverage, data relating to each work-related injury sustained by an employee of the employer and any related benefits paid to the employee by the employer and certification that the employer will not, before the 10th day after the date of the accrual of an employee's cause of action against the employer to recover damages for personal injury or death sustained by the employee in the course and scope of the employee's employment, enter into a contract with the employee that affects a procedural or substantive right of the employee to recover damages in that action.

Steven W. Nichols is the manager of Workers' Compensation Services for the Insurance Council of Texas.

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