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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 providers from the department's provider list. A retrospective rating plan employer or group may authorize fees that exceed the department's medical fee or other fee schedules but the employer or group must be required to pay the difference;

(b) Authorization to initiate vocational and other rehabilitation services and select providers from the department's contracted provider list or use department providers. Vocational and other 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 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 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 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. 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 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.

(c) 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) "Coverage period" means a one-year period beginning the first day of any calendar quarter.