BILL REQ. #:  H-0757.1 

Read first time 02/04/11.   Referred to Committee on Labor & Workforce Development.

     AN ACT Relating to workers' compensation payments and records; amending RCW 51.32.220 and 51.48.017; adding new sections to chapter 51.32 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 51.32 RCW to read as follows:
     (1) Every self-insured employer shall maintain a place of business in this state where the employer shall keep complete records of all claims for compensation, administered by the employer under this chapter. A self-insured employer may, under procedures established by the department, keep such records in this state at places operated by service companies. The records must be retained in, and may be removed from, this state or disposed of, in accordance with rules established by the director. Such records must be available to the director for examination and audit at all reasonable times upon notice by the director to the employer.
     (2) With the permission of the director, a self-insured employer may keep all claims records and process claims from a location outside of the state. The director shall by rule prescribe the conditions and procedure for obtaining permission of the director. At a minimum these rules require that the employer shall make the files available for inspection, within five days, within the state at a location requested by the department, the injured worker or their beneficiary, or their representatives. The expense of producing these records must be borne by the employer. The director may revoke permission for failure of the employer to comply with the rules. Such revocation must comply with RCW 51.52.050. If the permission of an employer is revoked by the director, the employer shall be allowed sixty days after the issuance of the order to comply with subsection (1) of this section. The expenses of examining and auditing the records of a self-insured employer outside of this state must be paid by the employer.
     (3) Notwithstanding subsection (1) of this section, a self-insured employer may not have at any one time more than three locations where claims are processed or records are maintained.

NEW SECTION.  Sec. 2   A new section is added to chapter 51.32 RCW to read as follows:
     The director must assess against a self-insured employer who fails to comply with section 1 of this act a penalty of five hundred dollars per day for each day such failure continues. Where the failure to comply is in reference to the request of an injured worker or their beneficiary to inspect the file, such penalty must be awarded to the injured worker or beneficiary.

NEW SECTION.  Sec. 3   A new section is added to chapter 51.32 RCW to read as follows:
     An employer must establish proof with the director that the employer:
     (1) Has an adequate staff qualified to process claims promptly and has the financial ability to make certain the prompt payment of all compensation and other payments that may become due to the director under this chapter.
     (2) Where a service company is retained to administer claims on behalf of a self-insured employer, the self-insured employer shall demonstrate proof that the administrator the employer has retained has an adequate staff qualified to process claims promptly.

NEW SECTION.  Sec. 4   A new section is added to chapter 51.32 RCW to read as follows:
     When an employer or its representatives or agents requests a report or other information in writing, or conducts an oral conversation with a medical provider, the employer shall provide to the claimant a copy of a written report from, or a memorandum describing any oral conversation with a medical provider, within five days of the receipt for the report or the communication with the medical provider, whichever is shorter. This information must be provided regardless of the source of the information, any claim of privilege or attorney work product.

Sec. 5   RCW 51.32.220 and 2007 c 255 s 1 are each amended to read as follows:
     (1) For persons receiving compensation for temporary or permanent total disability pursuant to the provisions of this chapter, such compensation shall be reduced by an amount equal to the benefits payable under the federal old-age, survivors, and disability insurance act as now or hereafter amended not to exceed the amount of the reduction established pursuant to 42 U.S.C. Sec. 424a. However, such reduction shall not apply when the combined compensation provided pursuant to this chapter and the federal old-age, survivors, and disability insurance act is less than the total benefits to which the federal reduction would apply, pursuant to 42 U.S.C. 424a. Where any person described in this section refuses to authorize the release of information concerning the amount of benefits payable under said federal act the department's estimate of said amount shall be deemed to be correct unless and until the actual amount is established and no adjustment shall be made for any period of time covered by any such refusal.
     (2) Any reduction under subsection (1) of this section shall be effective the month following the month in which the department or self-insurer is notified by the federal social security administration that the person is receiving disability benefits under the federal old-age, survivors, and disability insurance act: PROVIDED, That in the event of an overpayment of benefits the department or self-insurer may not recover more than the overpayments for the six months immediately preceding the date the department or self-insurer notifies the worker that an overpayment has occurred: PROVIDED FURTHER, That upon determining that there has been an overpayment, the department or self-insurer shall immediately notify the person who received the overpayment that he or she shall be required to make repayment pursuant to this section and RCW 51.32.230.
     (3) Recovery of any overpayment must be taken from future temporary or permanent total disability benefits or permanent partial disability benefits provided by this title. In the case of temporary or permanent total disability benefits, the recovery shall not exceed twenty-five percent of the monthly amount due from the department or self-insurer or one-sixth of the total overpayment, whichever is the lesser.
     (4) No reduction may be made unless the worker receives notice of the reduction prior to the month in which the reduction is made.
     (5) In no event shall the reduction reduce total benefits to less than the greater amount the worker may be entitled to under this title or the federal old-age, survivors, and disability insurance act.
     (6) The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.05 RCW, may exercise his or her discretion to waive, in whole or in part, the amount of any overpayment where the recovery would be against equity and good conscience.
     (7) Subsection (1) of this section applies to:
     (a) Workers under the age of sixty-two whose effective entitlement to total disability compensation begins before January 2, 1983;
     (b) Workers under the age of sixty-five whose effective entitlement to total disability compensation begins after January 1, 1983; and
     (c) Workers who will become sixty-five years of age on or after June 10, 2004.
     (8)(a) If the federal social security administration makes a retroactive reduction in the federal social security disability benefit entitlement of a worker for periods of temporary total, temporary partial, or total permanent disability for which the department or self-insurer also reduced the worker's benefit amounts under this section, the department or self-insurer, as the case may be, shall make adjustments in the calculation of benefits and pay the additional benefits to the worker as appropriate. However, the department or self-insurer shall not make changes in the calculation or pay additional benefits unless the worker submits a written request, along with documentation satisfactory to the director of an overpayment assessment by the social security administration, to the department or self-insurer, as the case may be.
     (b) Additional benefits paid under this subsection:
     (i) Are paid without interest and without regard to whether the worker's claim under this title is closed; and
     (ii) Do not affect the status or the date of the claim's closure.
     (c) This subsection does not apply to requests on claims for which a determination on the request has been made and is not subject to further appeal.
     (9) If the department or self-insured employer issues an order which results in an overpayment to the claimant, the department or the self-insured employer, as the case may be, must itemize each overpayment which will accrue as a result of the order. Any overpayment not identified in the original order is deemed waived. This subsection (9) does not apply to RCW 51.32.225. The order is subject to the provisions of RCW 51.52.050.

Sec. 6   RCW 51.48.017 and 2010 c 8 s 14011 are each amended to read as follows:
     (1) If a self-insurer unreasonably delays or refuses to pay benefits as they become due there shall be paid by the self-insurer upon order of the director an additional amount equal to five ((hundred)) thousand dollars or twenty-five percent of the amount then due, whichever is greater, which shall accrue for the benefit of the claimant and shall be paid to him or her with the benefits which may be assessed under this title. The reasonableness of the conduct must be based on the totality of circumstances.
     (2) Benefits include, but are not limited to, total temporary disability or loss of earning power benefits, authorizing of treatment or payment of medical bills, reimbursement for travel or other allowed expenses, and permanent partial disability benefits. Unless otherwise provided in this statute, an employer is required to respond to a request for information, authorization, or payment within forty-eight hours of the request, regardless of whether the request is oral, electronic or in writing. Failure to timely respond to a request for information is a violation of this section. Failure to comply with a department order, within ten days of the issuance of that order, is a violation of this section.
     (3) The director shall issue an order determining whether there was an unreasonable delay or refusal to pay benefits within thirty days upon the request of the claimant. Such an order shall conform to the requirements of RCW 51.52.050.
     (4) A claimant is entitled to attorneys' fees and all reasonable costs incurred before the department, the board of industrial insurance appeals, or any appellate court, including but not limited to, expert witness fees, for establishing entitlement under this section.