AN ACT Relating to expanding claims management authority for industrial insurance retrospective rating programs; and adding a new section to chapter 51.16 RCW.

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

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 qualified groups of employers. The plan must be available on a voluntary basis for one coverage period and may be renewed at the end of the coverage period. The retrospective rating plan must be consistent with recognized insurance principles and must be administered according to rules, schedules, and factors adopted by the department.

(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 are authorized to assist the department in the processing of claims that have a date of injury on or after January 1, 1998. The department shall adopt rules detailing the authority of retrospective rating plan employers and groups, which authority must be comprehensive and include, but not be limited to, the following:

(a) Authorization to schedule medical examinations and consultations, as long as scheduling is only with the attending physician or providers who have been qualified by the department as approved providers under department rules. A retrospective rating plan employer or group may authorize fees for medical examinations and consultations that exceed the department's medical fee or other fee schedules but the employer or group must be required to pay the difference. When scheduling an independent medical examination, the employer or group must select an examiner or examiners from a rotating list provided by the department of not more than five names for each specialty, except that:

(i) If the list is not provided by the department within three working days of the department's receipt of a written request for the list, the employer or group may select any provider qualified by the department as an approved provider; or

(ii) The employer or group may select an examiner or examiners without regard to the rotating list if, under rules adopted by the department, special circumstances exist in which the employer or group is permitted, with the concurrence of the attending doctor, to schedule the examination with any provider qualified by the department as an approved provider;

(b) Authorization to initiate vocational services and select providers from the department's contracted provider list or use department providers. Vocational 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 authorized claims administrators may close claims as authorized in this subsection. A claim having a date of injury on or after January 1, 1998, may be closed by the retrospective rating plan employer or group, subject to reporting of claims to the department in a manner prescribed by department rules, if the claim (i) involves medical treatment or the payment, for a period of one hundred and twenty days or less, of temporary disability compensation under RCW 51.32.090, or both, (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) involves an injured worker who 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.

(b) Upon closure of a claim under this subsection, the retrospective rating plan employer or group must enter a written order, communicated to the worker, the attending physician, and the department, which contains one of the following statements, as applicable, clearly set forth in at least ten-point bold face type: (i) For claims involving only medical treatment: "This order constitutes notification that your claim is being closed with medical benefits only as provided. If for any reason you disagree with the closure of your claim, you may protest in writing to the Department of Labor and Industries, Division of Insurance Services, Olympia, Washington 98504, within sixty days of the date you received this order."; or (ii) for claims involving the payment of temporary disability compensation: "This order constitutes notification that your claim is being closed with medical benefits and temporary disability compensation only as provided, and with the condition that you have returned to work at your previous job or at a job that has comparable wages and benefits. If for any reason you disagree with the closure of your claim, you may protest in writing to the Department of Labor of Industries, Division of Insurance Services, Olympia, Washington 98504, within sixty days of the date you received this order." If the department receives a protest, the closure must be held in abeyance. The department shall review the claim closure action and enter a determination order as provided for in RCW 51.52.050.

(4) If a dispute arises from the handling of a claim under this section before the condition of the injured worker becomes fixed, the worker or employer may request the department to resolve the dispute or the director, or his or her designee, may initiate an inquiry on his or her own motion.

(5)(a) If the department determines that a retrospective rating employer or group may have violated the authority granted in this section, the department shall notify the retrospective rating employer or group in writing outlining the violation and the corrective action required. The notice must specify a reasonable period of time for corrective action. Except as provided in (b) of this subsection, the employer or group is subject to penalties under this subsection only if (i) the employer or group fails to take the required corrective action within the specified period, or (ii) the employer or group is determined to have committed a second violation of a similar nature, in which case penalties may be imposed for the second and subsequent similar violations.

(b) If the department determines that a retrospective rating employer's or group's violation of the authority granted in this section resulted or could have resulted in a loss of a worker's rights or benefits under this title, or other similar serious violation, the employer or group is subject to penalties without regard to the limitation of (a)(i) or (ii) of this subsection (5).

(c) If the department finds a pattern of improper claims closure or other violations of the authority granted in subsection (2) or (3) of this section, the director, or his or her designee, may suspend the retrospective rating employer or group's authority to assist the department in the processing of claims under this section for a period of up to two years. The department shall issue an order and notice under RCW 51.52.050 which states the grounds for the suspension. As provided in chapter 51.52 RCW, the order becomes final within sixty days from the date the order is communicated to the employer or group unless a written request for reconsideration is filed with the department or an appeal is filed with the board of industrial insurance appeals.

(d) Except as otherwise provided in this section, this subsection does not limit the department's authority to impose penalties under chapter 51.48 RCW.

(6)(a) The director shall adopt under chapter 34.05 RCW all necessary rules governing the administration of this section. The rules should encourage broad participation in retrospective rating plans by employers and groups of employers consistent with insurance principles. The retrospective rating plan employer's or group's exercise of authority under this section may require prior notification to the department, but the rules must minimize the department's need to respond and must ensure that a failure to respond or a delay in response by the department does not impede the timely administration of the claim.

(b) The department shall adopt rules establishing qualifications for authorized claims administrators. The rules must require an authorized claims administrator to demonstrate, in a manner satisfactory to the department, a thorough knowledge of the industrial insurance laws, including the department rules applying to retrospective rating plans, and an expertise in processing claims as authorized under this section. The rules must also establish procedures for approval and disapproval of authorized claims administrators.

(7) For purposes of this section:

(a) "Authorized claims administrator" means a person who is approved by the department as meeting the qualifications established by rule under subsection (6)(b) of this section.

(b) "Comparable wages and benefits" means that the wages and benefits received in the new job do not exceed a five percent loss in comparison to those received in the previous job held by the worker at the time of the industrial injury.