1911-S AMS HEAV S5717.2

1911-S AMS HEAV S5717.2

SHB 1911 - S AMD - 250

By Senators Heavey, Prentice and Pelz

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. A new section is added to chapter 51.16 RCW to read as follows:

(1) The department shall offer a retrospective rating plan to qualified employers and groups of employers. The plan shall be available on a voluntary basis for the period of one coverage period and may be renewed at the end of the year. The retrospective rating plan shall be consistent with recognized insurance principles and shall be administered according to rules, schedules, and factors adopted by the department. Rules adopted under this section should encourage the broadest possible participation by employers and groups consistent with insurance principles. The director is authorized to establish and adopt all necessary rules governing the administration of this section.

(2) In addition to those general powers and rights deemed appropriate by the department, retrospective rating plan employers and groups who administer their plans with an authorized claims administrator shall have the authority to assist the department in the processing of claims with the date of injury on or after January 1, 1997. The authority shall include implementation of administrative functions that are necessary to the timely management of a claim. The department shall adopt rules detailing such authority, which shall be comprehensive and include, but not be limited to, the following:

(a) Authorization to schedule medical examinations and consultations, using only qualified persons from a rotating list supplied by the department.

(b) Authorization to initiate any rehabilitation services and select vocational rehabilitation providers from the department's contracted provider list or use department providers. The three thousand dollar expenditure limitation in any fifty-two week period established in RCW 51.32.095 shall not apply to the provision of vocational rehabilitation approved by a retrospective rating plan employer or group, and the supervisor of industrial insurance may at any time, in the supervisor's sole discretion, authorize the expenditure of a sum not to exceed six thousand dollars in any fifty-two week period for the costs of vocational rehabilitation. Up to fifty-two additional weeks and up to six thousand additional dollars may be authorized by the supervisor for vocational rehabilitation approved by a retrospective rating plan employer or group. If consistent with the discretion of the supervisor and department rules regarding vocational rehabilitation services, when both the employer or group and the worker sign an agreement for vocational rehabilitation services, the agreement is deemed approved. Vocational rehabilitation services may include job placement services, skill enhancement services, vocational rehabilitation plans, or other accepted services.

(3)(a) Retrospective rating plan employers and groups who administer their plans with an authorized claims administrator shall have the authority to close claims as authorized in this subsection. If a claim with the date of injury on or after January 1, 1997, (i) involves only medical treatment and/or the payment of temporary disability compensation under RCW 51.32.090 for a period of thirty days or less, (ii) at the time medical treatment is concluded, does not involve permanent disability, (iii) is one with respect to which the department has not intervened under subsection (4) of this section, and (iv) the injured worker has returned to work with the retrospective rating plan employer or group at the worker's previous job or at a job that has comparable wages and benefits, the claim may be closed by the retrospective rating plan employer or group, subject to reporting of claims to the department in a manner prescribed by the department rules adopted under chapter 34.05 RCW.

(b) Upon closure of a claim under this subsection, the retrospective rating plan employer or group shall enter a written order, communicated to the worker, the attending physician, and the department, which contains the following statement clearly set forth in bold face type: "This order constitutes notification that your claim is being closed with medical benefits and temporary disability compensation only as provided, and with the condition you have returned to work. If for any reason you disagree with the conditions or duration of your return to work or the medical benefits or the temporary disability compensation that has been provided, you may protest in writing to the department of labor and industries within sixty days of the date you received this order." If the department receives such a protest, the closure order shall be held in abeyance. The department shall review the claim closure action and enter a determinative order within thirty days of receipt of the protest, as provided for in RCW 51.52.050.

(c) If a worker protests closure of a claim involving medical treatment, any medical benefits being received by the worker prior to closure shall continue until the department closes the claim.

(d) If within two years of claim closure the department determines that a violation of the conditions of claim closure have occurred, the department may correct the benefits paid or payable. This subsection does not limit in any way the application of RCW 51.32.240.

(e) Retrospective rating plan employers and groups have a duty of good faith and fair dealing to their employees. No retrospective rating plan employer or group may (i) encourage the nonreporting of a workplace accident or the nonfiling of a workers' compensation claim; or (ii) interfere in any way with the reporting of an accident or the filing of a claim. Any employer or group that violates the prohibition of this subsection (3)(e) shall not be eligible to participate in a retrospective rating plan for five years from the quarter in which the employer or group engaged in the prohibited activity. If a retrospective rating plan employer or group unreasonably delays or refuses to pay benefits as they become due there shall be paid by the employer or group upon order of the director an additional amount equal to five hundred 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 the claimant with the benefits which may be assessed under this title. 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) If a dispute arises from the handling of any claim under this section before the condition of the injured worker becomes fixed, the department shall intervene to resolve any dispute.

(5) Exercise of any authority authorized by this section may require prior notification to the department, but rules adopted under this section shall minimize the department's need to respond and ensure that a failure to respond or delay in response by the department does not impede the timely administration of the claim. A retrospective rating plan employer or group may exceed department medical fee or other fee schedules but shall be required to pay any difference.

(6) The department shall conduct a study of all retrospective rating plan employers or groups who exercise the authority authorized under subsections (2) and (3) of this section and report to the legislature by December 1, 1999. The study plan shall be approved by the workers' compensation advisory committee and shall include, but not be limited to, examination of injured worker vocational outcomes, worker complaints, litigation rates, and employer claims management problems with the department. The study shall also include a review of return-to-work and long-term wage replacement outcomes for workers of the employers in the study compared with workers of state fund employers in similar risk classifications.

(7) For purposes of this section, "authorized claims administrator" means a person who meets department qualifications as defined by rules adopted by the department. The department shall also establish by rule procedures for approval and disapproval of authorized claims administrators.

(8) If the outcome of the study under subsection (6) of this section demonstrates that retrospective rating plan employers or groups who exercise the authority authorized under subsections (2) and (3) of this section are not achieving better overall injured worker outcomes than their state fund counterparts, this section shall expire on July 1, 2000.

Sec. 2. RCW 51.16.140 and 1989 c 385 s 3 are each amended to read as follows:

(1) Every employer who is not a self-insurer shall deduct from the pay of each of his or her workers one-half of the amount he or she is required to pay, for medical benefits within each risk classification. Such amount shall be periodically determined by the director and reported by him or her to all employers under this title: PROVIDED, That the state governmental unit shall pay the entire amount into the medical aid fund for volunteers, as defined in RCW 51.12.035, and the state apprenticeship council shall pay the entire amount into the medical aid fund for registered apprentices or trainees, for the purposes of RCW 51.12.130. For employers eligible to participate in the department's retrospective rating program authorized by section 1 of this act, the amount deducted from a worker's pay under this section shall not exceed one-half of the base rate within each risk classification that the worker reports. The deduction under this section is not authorized for premiums assessed under RCW 51.16.210.

(2) It shall be unlawful for the employer, unless specifically authorized by this title, to deduct or obtain any part of the premium or other costs required to be by him or her paid from the wages or earnings of any of his or her workers, and the making of or attempt to make any such deduction shall be a gross misdemeanor."

SHB 1911 - S AMD - 250

By Senators Heavey, Prentice and Pelz

On page 1, line 2 of the title, after "plans;" strike the remainder of the title and insert "amending RCW 51.16.140; adding a new section to chapter 51.16 RCW; and providing a contingent expiration date."