HOUSE BILL REPORT

SSB 5280

BYSenate Committee on Commerce & Labor (originally sponsored by Senators Tanner, Deccio, Vognild, Smitherman and Newhouse)

Changing provisions relating to reduction, suspension, or denial of workers' compensation.

House Committe on Commerce & Labor

Majority Report:  Do pass with amendments.  (10)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, R. King, O'Brien, Patrick, Sanders, Sayan, C. Smith and Walker.

Minority Report:  Do not pass.  (1)

      Signed by Representative Fisch.

House Staff:Chris Cordes (786-7117)

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR APRIL 3, 1987

BACKGROUND:

With prior approval from the Department of Labor and Industries and notice to the worker, a self-insured employer may suspend any further action on an industrial insurance claim or deny compensation for as long as a worker refuses to cooperate in rehabilitation, essential medical treatment or examination.  However, action may not be suspended or compensation denied if a worker has good cause for refusing to cooperate in treatment or rehabilitation.

There is no provision in the workers' compensation law for determining responsibility for a claim in a dispute between the department and a self-insurer.

SUMMARY:

BILL AS AMENDED:  The requirement is deleted that any suspension or reduction of benefits by a self-insured employer for worker noncooperation must first be approved by the Department of Labor and Industries. However, to reduce or suspend benefits, the self-insurer must provide specified notice to the worker and the department. Before suspension or reduction of benefits may occur, the worker must be notified in writing of the consequences of noncooperation and be given the opportunity to comply with the required treatment or rehabilitation.  If suspension is ordered by the self-insurer, the worker must be notified of the right to protest to the director of the department.  If a self- insurer is found to have ordered an improper suspension or reduction of benefits, a penalty of the greater of five hundred dollars or the amount of the benefits otherwise due must be paid to the worker.

If a determination must be made on whether an accepted claim should be reopened or whether the claim should be allowed as a new claim, the department will make the determination in a single order. Pending entry of the order, benefits must be paid by either the self-insured employer or the department, as determined by the department.  If, after final determination, the entity that paid benefits is held not to be responsible, that entity will be reimbursed.  If it is determined that neither the department nor the self-insurer is responsible, then the recipient of the benefits must repay the benefits and recoupment may be made against future benefits, unless repayment is waived by the director.

AMENDED BILL COMPARED TO SUBSTITUTE:  It is clarified that any penalty charged to a self-insurer for wrongfully suspending benefits will be paid to the worker.  The authority of the Board of Industrial Insurance Appeals to initially determine claim responsibility in disputes between the Department of Labor and Industries and a self-insurer is deleted.  Provisions are added for determination of claim responsibility between the department and a self-insurer by departmental order and for reimbursement and recoupment of payments in appropriate cases.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Brett Buckley, Department of Labor and Industries; Melanie Stewart-Gerla, Washington Self-Insurers Association.

House Committee - Testified Against:      Rick Brock, Western Pulp and Paper Workers Association;  Jeff Johnson, Washington State Labor Council.

House Committee - Testimony For:    Self-insured employers should have greater ability to manage their workers' compensation claims by providing them with authority to make initial determinations on suspending benefits for worker noncooperation.  The authority should include stringent notice provisions and penalties for wrongful suspension of benefits.

House Committee - Testimony Against:      Oversight of self-insurers' claims management by the Department of Labor and Industries should continue until more information about the self-insurers' management practices has been reported by the department.