Roundup of Work Comp Bills Filed in the Texas Legislature -- Part 2

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.

Workers' Compensation Legislation Filed

HB 2430, relating to a discount on workers' compensation insurance premiums for employers who elect to implement substance abuse testing of employees, has been filed by Rep. Jessica Farrar (D-Houston). This bill would amend Subtitle A, Title 5 of the Texas Labor Code by adding Chapter 420 and providing for definitions of the terms employee, employer, job applicant, post-accident testing, substance, and substance abuse test. The bill would not require an employer to conduct substance abuse testing of employees but would provide that an employer may establish policies that are supplemental to and not inconsistent with the proposed Chapter 420.

The legislation would not prevent the negotiation of collective bargaining agreements that provide greater protection to employees than the protections provided by proposed Chapter 420 and may not be construed to limit the rights, privileges, or remedies of any employee or collective bargaining representative under any other state or federal law or regulation or under any collective bargaining agreement or employment contract.

This bill is not intended to prevent an employer from requiring or performing medical examinations of employees as permitted by law or from conducting medical screenings to monitor exposure to toxic or other harmful substances in the workplace if those examinations or screenings are not used to avoid the requirements of the proposed new chapter.

The legislation is also not intended to prevent an employer from adopting rules related to the possession or use of a controlled substance by an employee, including rules relating to the consequences of a conviction for a related offense, or from taking an action based on a violation of those rules, including termination of employment. The bill will not restrict an employer's authority to prohibit the use or possession of alcohol or other drugs during work hours. This bill will not prevent an employer from establishing reasonable work rules relating to employee manufacture, sale, distribution, possession, or use of alcohol or other drugs, including convictions for drug-related offenses, and taking action based on a violation of any of those.

The legislation would also amend Chapter 2053 of the Texas Insurance Code by adding Subchapter G and Sec. 420.033 to provide for the certification of an employer as having a drug-free workplace.

The bill would require that the Division of Workers' Compensation (DWC) issue a certificate to each employer determined by the DWC, after an investigation, to have implemented a written policy statement explaining the employer's policies on alcohol and drug abuse as applicable to employees and job applicants, substance abuse testing for job applicants after an offer of employment, random substance abuse testing of employees, and post-accident substance abuse testing of employees. This legislation provides that a drug free workplace certificate would be valid for one year from the date of issuance and may be renewed by the employer on application to and after investigation by the DWC.

The bill would also amend Chapter 2053 of the Texas Insurance Code by adding Subchapter G that would provide for a workers' compensation insurance premium discount for employers with drug-free workplaces.

The legislation requires the insurance commissioner to adopt a plan under which each insurer shall grant a discount to an employer who obtains workers' compensation insurance coverage from that insurer and applies for the discount in the manner prescribed by the commissioner. The insurer would be required to grant a discount in a percentage set by the commissioner by rule based upon the amount of the employer's workers' compensation premium. The bill provides that the percentage set by the commissioner must not be greater than five percent. The premium discount would be valid for the term of the policy or contract of insurance. An employer would be required to reapply for the discount on renewal of the policy or contract.

HB 2509, relating to fraudulent workers' compensation insurance acts; providing an election of prosecution provision, has been filed by Rep. Armando "Mando" Martinez (D-Weslaco).

This legislation would amend Chapter 418 of the Texas Labor Code by adding new Section 418.003 and providing that a person who commits an offense under this chapter may be prosecuted under this new chapter or any other Texas law under which he or she may be prosecuted.

HB 2515, relating to the continuation and functions of the State Office of Risk Management (SORM), has been filed by Rep. Ruth Jones McClendon (D-San Antonio). The bill continues SORM until September 1, 2019.

The legislation also requires SORM to work with each state agency to develop an agency-level business continuity plan, provide each state agency with return-to-work coordination services that includes case management as necessary to facilitate an injured employee's return to employment, adopt rules as necessary to collect data on lost time and return-to-work outcomes of each state agency to allow full evaluations of successes and of barriers to achieving timely return to work after an injury, collect and analyze data from each state agency regarding lost time, including sick leave and annual leave used by an injured employee, identify state agencies that need additional training or case management services related to return-to-work services, modify as necessary the office's assessment computation to encourage state agencies to effectively reduce workers' compensation costs, incorporate as necessary return-to-work goals developed by the division of workers' compensation, work with the workers' compensation research and evaluation group to develop analytical tools to assist the office with its duties under this section, require state agencies to report information in a standardized format, monitor the information reported by each state agency, evaluate the information provided under this section to determine outcomes over time for each state agency, and to study options to prepare state agencies for catastrophic claims.

The bill would also require SORM to make electronic payment of indemnity benefit payments for injured employees who are entitled to such benefits. SORM would be required to adopt rules to facilitate the use of electronic funds transfer as the preferred method of payment. This provision of the amended statute would expire on September 2, 2008.

HB 2519, relating to transition-to-work benefits under the workers' compensation system for certain employees who have incurred a compensable injury, has been filed by Rep. Yvonne Davis (D-Dallas).

This legislation would amend Chapter 408 of the Texas Labor Code by adding Subchapter M and providing that the commissioner of workers' compensation may award transition-to-work income benefits to injured employees who have exhausted their eligibility for supplemental income benefits provided that the injured employee demonstrates an active effort to obtain employment.

The bill requires the commissioner of workers' compensation to establish work search compliance standards by rule.

An employee would be entitled to transition-to-work income benefits only if the employee has received supplemental income benefits, ceases to be eligible for those benefits or for re-initiation of those benefits under Section 408.146 of the Texas Labor Code, has an impairment rating of 15 percent or more, has not returned to work or has returned to work earning less than 80 percent of the employee's average weekly wage as a direct result of the employee's impairment, has not elected to commute a portion of the impairment income benefit under Section 408.128 of the Texas Labor Code, and has complied with the work search compliance standards be set by the commissioner of workers' compensation. An insurance carrier would be required to pay transition-to-work income benefits beginning not later than the seventh day after the date of the commissioner's order and be required to continue to pay the benefits in a timely manner.

The bill provides that the transition-to-work income benefits shall be computed in the manner prescribed by Section 408.144(b) of the Texas Labor Code for supplemental income benefits and must be computed quarterly and paid monthly. Eligibility for benefits under the proposed new subchapter terminates after a determination is made by the commissioner of workers' compensation that the benefit recipient no longer meets the requirements prescribed under Section 408.304(a) of the Texas Labor Code.

This legislation provides that an insurance carrier may request a benefit review conference to contest an employee's entitlement to transition-to-work income benefits or the amount of transition-to-work income benefits.

If an insurance carrier fails to make a request for a benefit review conference not later than the 10th day after the date of the commissioner's order, the insurance carrier would waive the right to contest entitlement to transition-to-work income benefits and the amount of transition-to-work income benefits.

HB 2579, relating to the provision of health care services to an employee who sustains a compensable injury, has been filed by Rep. Garnet F. Coleman (R-Houston).

The bill would amend Section 408.0042(d) of the Texas Labor Code and provide that an insurance carrier may not deny payment based on compensability if the insurance carrier has preauthorized the treatment and the treatment is rendered. The legislation also provides that if the insurance carrier denies preauthorization because the treatment is for an injury or diagnosis unrelated to the compensable injury, the injured employee may seek a prompt evaluation by an appropriate health care provider.

The statute currently provides that the injured employee or affected health care provider may file an extent of injury dispute.

The bill requires that a dispute under this subsection must be heard by the Division of Workers' Compensation not later than the seventh day after the date preauthorization is denied.

The legislation also amends Section 408.0231(b) of the Texas Labor Code by requiring a memorandum of understanding between the commissioner of workers' compensation and the commissioner of insurance if the commissioner of workers' compensation establishes criteria by rule for increased or reduced utilization review and preauthorization controls on a doctor.

The bill would also amend Section 408.027(a) of the Texas Labor Code and provide that a health care provider must submit a claim for payment to the insurance carrier not later than the 180th day after the date on which the health care services are provided to the injured employee. The statute currently provides that the health care provider must submit their claim for payment to the insurance carrier not later than the 95th day after the date on which the health care services are provided to the injured employee. The legislation would also amend Section 408.0271(a) of the Texas Labor Code to provide that if the health care services provided to an injured employee are determined by the insurance carrier to be inappropriate, the insurance carrier shall, not later than the 180th day after the date of the insurance carrier's receipt of the claim, notify the health care provider in writing of the carrier's decision and demand a refund by the health care provider of the portion of payment on the claim that was received by the health care provider for the inappropriate services.

The bill would also amend Section 413.016 of the Texas Labor Code by adding Subsection (c) and providing that a health care provider does not commit a violation and is not subject to an administrative penalty under Section 415.003(4) of the Texas Labor Code solely on the basis that the health care provider has billed his or her usual charges for the service provided.

The legislation would also amend Section 413.031(d) of the Texas Labor Code by striking the sentence that provides that it is a defense for the insurance carrier if the carrier timely complies with the decision of the independent review organization.

SB 192, relating to the Texas Mutual Insurance Company and the application of certain statutes to the Texas Mutual Insurance Company, has been filed by Sen. Kenneth "Kim" Brimer (R-Fort Worth).

This legislation would amend Section 2054.007 of the Texas Insurance Code and provide that the Texas Open Meetings and open records laws of Texas do not apply to the Texas Mutual Insurance Company. The bill would also amend Section 2054.008(d) of the Texas Insurance Code to provide that the investigation files of the Texas Mutual Insurance Company are confidential.

SB 287, 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 Sen. Eduardo A. "Eddie" Lucio (D-Brownsville).

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 HB 1301 filed by Rep. William "Bill" Zedler (R-Arlington).

SB 346, relating to indemnification provisions in construction contracts, has been filed by Sen. Robert Duncan (R-Lubbock) The legislation would amend the Civil Practice and Remedies Code is amended by adding Title 10, Additional Miscellaneous Provisions that includes definitions for the terms "additional insured" and "construction contract."

The bill would make specific covenants, promises, or understandings contained in a construction contract, or in an agreement collateral to or affecting a construction contract, void and unenforceable if it indemnifies, holds harmless, or defends a person against loss or liability for damage that is caused by the breach of contract or warranty by the indemnitee, the sole or concurrent negligence of the indemnitee, a fine, penalty, administrative action, or other action assessed by a governmental entity directly against the indemnitee.

SB 346 would also make a covenant, promise, agreement, or understanding contained in a construction contract, or in an agreement collateral to or affecting a construction contract, void and unenforceable if the covenant, promise, agreement, or understanding requires a person to provide insurance coverage or does provide insurance coverage to the extent that it requires contractual liability coverage that exceeds the limitations of theindemnity obligations, requires a person to be an additional insured for that additional insured person's own negligence, or requires a workers' compensation insurance policy to be endorsed to provide a waiver of subrogation.

SB 458, relating to workers' compensation medical benefits for certain prosthetic or orthotic devices, has been filed by Sen. Kirk Watson (D-Austin).

This legislation would amend Section 401.011(19)(F) of the Texas Labor Code by changing the definition of the term "health care" and provide that a prosthetic or orthotic device and fitting of, change, or repair of those devices are health care.

The bill would also add definitions for the terms "orthotic device" and "prosthethic device.

The bill analysis for this legislation noted that currently, all workers' compensation carriers do not treat artificial limbs as a physical structure of the body. The analysis also noted that an accident resulting in a broken leg would be treatable under workers' compensation, but the same accident causing injury to an artificial leg would not cover repair or replacement of the artificial leg.

SB 471, relating to certain information reporting requirements regarding workers' compensation claims, has been filed by Sen. Kenneth "Kim" Brimer (R-Fort Worth). The legislation would require the commissioner of insurance to establish, by rule, reporting requirements for insurance companies regarding workers' compensation claims.

The bill would allow the commissioner of insurance to reduce or eliminate reporting requirements for insurance companies whose workers' compensation insurance business falls below a specific minimum premium volume established by rule.

SB 518, relating to eligibility for and computation of workers' compensation benefits for certain members of the state military, has been filed by Sen. Rodney Ellis (D-Houston). The legislation would amend Section 431.104 of the Texas Government Code and provide that a member of the state military forces who is killed or disabled while engaged in authorized training or duty is entitled to receive compensation under Chapter 501, Labor Code, regardless of whether the member is a United States citizen.

The bill would cap income benefits at 100 percent of the state average weekly wage and death benefits would be capped at 400 percent of the state average weekly wage as determined under Section 408.047 of the Texas Labor Code. SB 929, relating to the resolution of certain medical disputes regarding workers' compensation claims, has been filed by Sen. Mike Jackson (R-Pasadena).

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 that is found after judicial review to have wrongfully or negligently contested a payment to a health care provider for a health care service would be liable for the costs of the litigation, including attorney's fees.

SB 929 is a companion bill to HB 1040 that has been filed by Rep. William "Bill" Zedler (R-Arlington).

SB 1169, relating to the reimbursement of an insurance carrier for the overpayment of certain workers' compensation benefits, has been filed by Sen. Kyle Janek (R-Houston). This legislation would amend Section 408.0041 of the Texas Labor Code by adding Subsection (f-1) to provide that the subsequent injury fund shall reimburse an insurance carrier for any overpayment of benefits made by the insurance carrier under Subsection (f) based on an opinion rendered by a designated doctor if that opinion is reversed or modified by a final arbitration award or a final order or decision of the commissioner or a court.

The bill would require that the commissioner of workers' compensation adopt rules to provide for a periodic reimbursement schedule and providing for reimbursement at least annually.

Legislation to Regulate Physician Discount Agreements and Establish a Public Integrity Unit in the Office of the Attorney General While not workers' compensation legislation, HB 839, relating to regulation of the secondary market in certain physician discounts has been filed by Rep. Craig Eiland (D-Galveston) and Rep. Patrick Rose (D-Dripping Springs).

The legislation provides for the regulation of the use of physician fee discount agreements and would require contracting agents to register with the Texas Department of Insurance. The bill could have an impact on the Texas workers' compensation system if the legislation passed is expanded to include the regulation of the Texas workers' compensation system.

Another bill that could have an impact on the Texas system is SB 630. SB 630, relating to the creation of a public integrity unit in the office of the attorney general to prosecute offenses against public administration, including ethics offenses, and offenses involving insurance fraud has been filed by Sen. Dan Patrick (R-Houston).

This legislation would create a public integrity unit in the office of the attorney general to prosecute offenses against public administration, including ethics offenses, and offenses involving insurance fraud. The Travis County district attorney currently has the authority to prosecute these types of offenses.

SJR 26, proposing a constitutional amendment to permit the attorney general to prosecute offenses against public administration, including ethics offenses, and offenses involving insurance fraud, has been filed by Sen. Dan Patrick (R-Houston).

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

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