BILL REQ. #:  H-1469.2 

Read first time 02/17/2005.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to industrial insurance, but only with respect to providing for an ombudsprogram and revising the self-insurance program; amending RCW 51.14.120, 51.14.130, 51.32.055, 51.32.055, 51.14.080, 51.14.140, 51.28.070, 51.48.017, 51.48.025, 51.48.080, and 51.44.150; adding new sections to chapter 51.04 RCW; adding new sections to chapter 51.14 RCW; adding new sections to chapter 51.48 RCW; creating a new section; recodifying RCW 51.32.190, 51.32.195, and 51.32.200; prescribing penalties; providing an effective date; and providing an expiration date.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 51.04 RCW to read as follows:
     (1) The workers' compensation ombudsprogram is created to facilitate the early and successful resolution of industrial insurance claims in an informal and cooperative environment which benefits the injured worker, the employer, and the department. To carry out its purpose, the ombudsprogram shall:
     (a) Provide accurate, timely, and objective information without charge to injured workers and employers covered under this title, including providing counseling on workers' and employers' rights and responsibilities and individual counseling on specific claims under this title. At the request of an injured worker, the ombudsprogram shall assist the injured worker in every phase of the industrial insurance process, from claim filing to claim closure, but shall not assist an injured worker before the board of industrial insurance appeals or the courts. The assistance that may be offered shall include intervention on behalf of injured workers with the department and/or the employer. Such intervention shall include filing protest letters, providing voluntary mediation, advising workers of rights and entitlements under this title, and assisting the worker in every phase of an industrial insurance claim;
     (b) Work with the department to develop and implement solutions to common, recurring problems identified in the course of providing individual counseling under (a) of this subsection;
     (c) Provide workshops and education programs for workers' compensation practitioners, worker representatives, employers, and other interested parties, covering issues such as proper claims filing procedures, workers' and employers' rights and responsibilities, and return-to-work requirements;
     (d) As requested by labor or management, encourage and facilitate labor/management cooperation that promotes higher safety awareness, expedites return to work options, and reduces barriers between labor and management;
     (e) Support department initiatives and programs designed to facilitate effective communication and conflict resolution for workers and employers;
     (f) Maintain a tracking system, approved by the director or director's designee, that records the number and geographic location of claimants served, the issues encountered, and any other data identified by the ombudsperson;
     (g) Develop and provide the director and the ombudsprogram advisory committee with an annual plan for completing the program's activities;
     (h) Make reports on the program's activities to the director and the ombudsprogram advisory committee, as requested; and
     (i) Make recommendations to the governor and director based on the program's activities and findings that address systemic and pervasive problems within the industrial insurance system. The department must review and report its response to the recommendations to the governor, legislature, ombudsprogram advisory committee, and workers' compensation advisory committee.
     (2)(a) The governor shall appoint an ombudsperson responsible for administering the ombudsprogram from a list of at least three nominations submitted by an organization, statewide in scope, which through its affiliates represents a cross section and a majority of the organized labor of this state. The person appointed as ombudsperson shall hold office for a term of five years and shall continue to hold office until reappointed or until his or her successor is appointed. The governor may remove the ombudsperson only for neglect of duty, misconduct, or inability to perform his or her duties. Any vacancy must be filled by similar appointment for the remainder of the unexpired term.
     (b)(i) The ombudsperson may hire such staff as he or she deems necessary to carry out the mission of the ombudsprogram, including hiring qualified claims adjudicators, hiring or contracting for access to legal counsel, and hiring support staff to respond to inquiries and claim specific issues.
     (ii) In any fiscal year, the level of full-time equivalent employees authorized for the ombudsprogram must be at a level that permits the ombudsprogram to maintain staffing levels that are, on a per claim basis, no less than the staffing levels generally found in the organizations that provide claims management functions for self-insurers. The director shall make determinations of the full-time equivalent levels required by this subsection and report such determinations to the office of financial management in department budget submittals.
     (3) The director shall appoint an ombudsprogram advisory committee composed of members representing the following: Three members representing the department; two members representing labor; and two members representing business. The advisory committee must meet at least quarterly. The advisory committee will review the program's performance and advise the department and the program on issues that may arise regarding the program or program performance.
     (4) The department shall maintain at least two department staff liaisons to the ombudsprogram, one a senior level claims adjudicator and one from the self-insurance section.
     (5) The ombudsprogram shall be funded equally from the medical aid fund and the accident fund, with an assessment imposed on and collected from self-insurers to pay their pro rata share of the program's administrative costs.

NEW SECTION.  Sec. 2   A new section is added to chapter 51.14 RCW to read as follows:
     (1) A self-insurer is authorized to issue the following orders subject to the requirements of this section:
     (a) Claims allowance orders. Any order denying a claim or regarding segregation of conditions unrelated to the industrial injury or occupational disease may be issued only by the department;
     (b) Claims closure orders as authorized in RCW 51.32.055. If the self-insurer issues a closing order that includes an award for permanent partial disability, the self-insurer must pay the permanent partial disability award within fourteen days after the date on which the order was communicated to the worker;
     (c) Wage orders pursuant to RCW 51.08.178; and
     (d) Orders terminating temporary total disability benefits or denying medical treatment. A self-insurer is not authorized to terminate temporary total disability payments or deny medical treatment until the self-insurer issues an order complying with this section.
     (2)(a) When a self-insurer issues an order under subsection (1)(a), (c), or (d) of this section, the order must be communicated to both the claimant and the department self-insurance section. Copies of all documents, including any calculations, used or relied on by the self-insurer in issuing the order must be enclosed with the order. The claimant must also receive a standardized pamphlet approved by the department that sets forth the claimant's protest and appeals rights under this title, with a detachable postcard addressed to the department which may be used by the claimant to file a protest.
     (b) If the claimant files a protest with the department under this section:
     (i) Within five days after the protest is filed, the department must notify the self-insurer and, within ten days after the date on which the notice was communicated to the self-insurer, the self-insurer must forward a complete copy of the claimant's claim file to the department;
     (ii) The self-insurer's order must be held in abeyance. The department shall review the order and, within forty-five days after the date the protest was filed, enter a further determinative order as provided for in RCW 51.52.050. However, this forty-five day limitation on the review period may be waived by the claimant, and, if waived, the department must enter the further determinative order within seventy-five days after the date that the protest was filed; and
     (iii) If the department vacates or modifies the self-insurer's order, the self-insurer must comply with the department's order within ten days after the date on which the vacation or modification order was communicated to the self-insurer. If a self-insurer files an appeal of the department order with the board of industrial insurance appeals, the appeal shall not act as a stay, and the self-insurer must pay all benefits ordered by the department pending a final determination by the board or a court. If the self-insurer prevails in its appeal, the benefits paid may be recouped pursuant to RCW 51.32.240.
     (c) If no protest or appeal to the self-insurer's order is timely filed under this title, the order becomes final and has the same force and effect as a department order that has become final under RCW 51.52.050.
     (3)(a) If a self-insurer is assessed two or more penalties under section 10 of this act in any individual claim under this title, the self-insurer shall lose its right to adjudicate that claim, and the department must promptly intervene and administer the claim.
     (b) If a self-insurer is assessed a penalty for a level two violation or, within one year, penalties for two level one violations under section 10 of this act, the self-insurer may not issue orders under this section for a period of twenty-four consecutive months beginning on the date the department determines, and the department must promptly intervene and administer the claims during that period.

Sec. 3   RCW 51.14.120 and 2001 c 152 s 1 are each amended to read as follows:
     (1) The self-insurer shall provide, when authorized under RCW 51.28.070, a copy of the employee's claim file at no cost within fifteen days of receipt of a request by the employee or the employee's representative, and shall provide the physician performing an examination with all relevant medical records from the worker's claim file, but only to the extent required of the department under RCW 51.36.070. If the self-insured employer determines that release of the claim file to an unrepresented worker in whole or in part, may not be in the worker's best interests, the employer must submit a request for denial with an explanation along with a copy of that portion of the claim file not previously provided within twenty days after the request from the worker. In the case of second or subsequent requests, a reasonable charge for copying may be made. The self-insurer shall provide the entire contents of the claim file unless the request is for only a particular portion of the file. Any new material added to the claim file after the initial request shall be provided under the same terms and conditions as the initial request.
     (2) The self-insurer shall transmit notice to the department of any protest or appeal by an employee relating to the administration of an industrial injury or occupational disease claim under this chapter within five working days of receipt. The date that the protest or appeal is received by the self-insurer shall be deemed to be the date the protest is received by the department for the purpose of RCW 51.52.050.
     (3) The self-insurer shall submit a medical report with the request for closure of a claim, if the self-insurer makes a request for claim closure under this chapter.

Sec. 4   RCW 51.14.130 and 1993 c 122 s 3 are each amended to read as follows:
     The self-insurer shall request allowance, or issue an order allowing a claim, or request denial of a claim within ((sixty)) thirty days from the date that the claim is filed. If the self-insurer fails to act within ((sixty)) thirty days, the department shall promptly intervene and adjudicate the claim.

Sec. 5   RCW 51.32.055 and 2004 c 65 s 8 are each amended to read as follows:
     (1) One purpose of this title is to restore the injured worker as nearly as possible to the condition of self-support as an able-bodied worker. Benefits for permanent disability shall be determined under the director's supervision, except as otherwise authorized in subsection (9) or (10) of this section, only after the injured worker's condition becomes fixed.
     (2) All determinations of permanent disabilities shall be made by the department, except as otherwise authorized in subsection (9) or (10) of this section. Either the worker, employer, or self-insurer may make a request or the inquiry may be initiated by the director or, as authorized in subsection (9) or (10) of this section, by the self-insurer on the director or the self-insurer's own motion. Determinations shall be required in every instance where permanent disability is likely to be present. All medical reports and other pertinent information in the possession of or under the control of the employer or, if the self-insurer has made a request to the department, in the possession of or under the control of the self-insurer shall be forwarded to the director with the request.
     (3) A request for determination of permanent disability shall be examined by the department or, if authorized in subsection (9) or (10) of this section, the self-insurer, and the department shall issue an order in accordance with RCW 51.52.050 or, in the case of a self-insured employer, the self-insurer may: (a) Enter a written order, communicated to the worker and the department self-insurance section in accordance with subsection (9) or (10) of this section, as applicable; or (b) request the department to issue an order in accordance with RCW 51.52.050.
     (4) The department or, in cases authorized in subsection (9) or (10) of this section, the self-insurer may require that the worker present himself or herself for a special medical examination by a physician or physicians selected by the department, and the department or, in cases authorized in subsection (9) or (10) of this section, the self-insurer may require that the worker present himself or herself for a personal interview. The costs of the examination or interview, including payment of any reasonable travel expenses, shall be paid by the department or self-insurer, as the case may be.
     (5) The director may establish a medical bureau within the department to perform medical examinations under this section. Physicians hired or retained for this purpose shall be grounded in industrial medicine and in the assessment of industrial physical impairment. Self-insurers shall bear a proportionate share of the cost of the medical bureau in a manner to be determined by the department.
     (6) Where a dispute arises from the handling of any claim before the condition of the injured worker becomes fixed, the worker, employer, or self-insurer may request the department to resolve the dispute or the director may initiate an inquiry on his or her own motion. In these cases, the department shall proceed as provided in this section and an order shall issue in accordance with RCW 51.52.050.
     (7)(a) If a claim (i) is accepted by a self-insurer after June 30, 1986, and before August 1, 1997, (ii) involves only medical treatment and the payment of temporary disability compensation under RCW 51.32.090 or only the payment of temporary disability compensation under RCW 51.32.090, (iii) at the time medical treatment is concluded does not involve permanent disability, (iv) is one with respect to which the department has not intervened under subsection (6) of this section, and (v) the injured worker has returned to work with the self-insured employer of record, whether at the worker's previous job or at a job that has comparable wages and benefits, the claim may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW.
     (b) All determinations of permanent disability for claims accepted under this subsection (7) by self-insurers shall be made by the self-insured section of the department under subsections (1) through (4) of this section.
     (c) Upon closure of a claim under (a) of this subsection, the self-insurer shall enter a written order, communicated to the worker and the department self-insurance section, 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 with the self-insured employer. 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 must protest in writing to the department of labor and industries, self-insurance section, within sixty days of the date you received this order."
     (8)(a) If a claim (i) is accepted by a self-insurer after June 30, 1990, and before August 1, 1997, (ii) involves only medical treatment, (iii) does not involve payment of temporary disability compensation under RCW 51.32.090, and (iv) at the time medical treatment is concluded does not involve permanent disability, the claim may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW. Upon closure of a claim, the self-insurer shall enter a written order, communicated to the worker, 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 only, as provided. If for any reason you disagree with this closure, you must protest in writing to the Department of Labor and Industries, Olympia, within 60 days of the date you received this order. The department will then review your claim and enter a further determinative order."
     (b) All determinations of permanent disability for claims accepted under this subsection (8) by self-insurers shall be made by the self-insured section of the department under subsections (1) through (4) of this section.
     (9)(a) If a claim: (i) Is accepted by a self-insurer after July 31, 1997, and before the effective date of this section; (ii)(A) involves only medical treatment, or medical treatment and the payment of temporary disability compensation under RCW 51.32.090, and a determination of permanent partial disability, if applicable, has been made by the self-insurer as authorized in this subsection; or (B) involves only the payment of temporary disability compensation under RCW 51.32.090 and a determination of permanent partial disability, if applicable, has been made by the self-insurer as authorized in this subsection; (iii) is one with respect to which the department has not intervened under subsection (6) of this section; and (iv) concerns an injured worker who has returned to work with the self-insured employer of record, whether at the worker's previous job or at a job that has comparable wages and benefits, the claim may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW.
     (b) If a physician or licensed advanced registered nurse practitioner submits a report to the self-insurer that concludes that the worker's condition is fixed and stable and supports payment of a permanent partial disability award, and if within fourteen days from the date the self-insurer mailed the report to the attending or treating physician or licensed advanced registered nurse practitioner, the worker's attending or treating physician or licensed advanced registered nurse practitioner disagrees in writing that the worker's condition is fixed and stable, the self-insurer must get a supplemental medical opinion from a provider on the department's approved examiner's list before closing the claim. In the alternative, the self-insurer may forward the claim to the department, which must review the claim and enter a final order as provided for in RCW 51.52.050.
     (c) Upon closure of a claim under this subsection (9), the self-insurer shall enter a written order, communicated to the worker and the department self-insurance section, which contains the following statement clearly set forth in bold-face type: "This order constitutes notification that your claim is being closed with such medical benefits and temporary disability compensation as provided to date and with such award for permanent partial disability, if any, as set forth below, and with the condition that you have returned to work with the self-insured employer. If for any reason you disagree with the conditions or duration of your return to work or the medical benefits, temporary disability compensation provided, or permanent partial disability that has been awarded, you must protest in writing to the Department of Labor and Industries, Self-Insurance Section, within sixty days of the date you received this order. If you do not protest this order to the department, this order will become final."
     (d) All determinations of permanent partial disability for claims accepted by self-insurers under this subsection (9) may be made by the self-insurer or the self-insurer may request a determination by the self-insured section of the department. All determinations shall be made under subsections (1) through (4) of this section.
     (10)(a) A claim that is accepted by a self-insurer on or after the effective date of this section may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW.
     (b)(i) Upon closure of a claim under this subsection (10), the self-insurer shall enter a written order, communicated to the worker and the department self-insurance section, that contains the following statement clearly set forth in bold-face type: "This order constitutes notification that your claim is being closed with such medical benefits and temporary disability compensation as provided to date and with such award for permanent partial disability, if any, as set forth below. If for any reason you disagree with the medical benefits or temporary disability compensation provided, or permanent partial disability that has been awarded, you must protest in writing to the Department of Labor and Industries, Self-Insurance Section, within sixty days of the date you received this order. If you do not protest this order to the department, this order will become final."
     (ii) Copies of all documents, including any calculations, used or relied on by the self-insurer in issuing the order must be enclosed with the order. The claimant must also receive a standardized pamphlet approved by the department that sets forth the claimant's protest and appeals rights under this title, with a detachable postcard addressed to the department that may be used by the claimant to file a protest.
     (c) All determinations of permanent partial disability for claims accepted by self-insurers under this subsection (10) may be made by the self-insurer, or the self-insurer may request a determination by the self-insured section of the department. All determinations shall be made under subsections (1) through (4) of this section.
     (11)(a)(i) If the department receives a protest of an order issued by a self-insurer under subsections (7) through (((9))) (10) of this section, the self-insurer's closure order must be held in abeyance. The department shall review the claim closure action and, within forty-five days after the date the protest was filed, enter a further determinative order as provided for in RCW 51.52.050. However, this forty-five day limitation on the review period may be waived by the claimant, and, if waived, the department must enter the further determinative order within seventy-five days after the date that the protest was filed.
     (ii) If the department vacates or modifies the self-insurer's order, the self-insurer must comply with the department's order within ten days after the date on which the vacation or modification order was communicated to the self-insurer. If a self-insurer files an appeal of the department's order with the board of industrial insurance appeals, the appeal shall not act as a stay, and the self-insurer must pay all benefits ordered by the department pending a final determination by the board or a court. If the self-insurer prevails in its appeal, the benefits paid may be recouped pursuant to RCW 51.32.240.
     (b) If no protest is timely filed, the closing order issued by the self-insurer shall become final and shall have the same force and effect as a department order that has become final under RCW 51.52.050.
     (((11))) (12) If within two years of claim closure under subsections (7) through (((9))) (10) of this section, the department determines that the self-insurer has made payment of benefits because of clerical error, mistake of identity, or innocent misrepresentation or the department discovers a violation of the conditions of claim closure, the department may require the self-insurer to correct the benefits paid or payable. This subsection (((11))) does not limit in any way the application of RCW 51.32.240.
     (((12))) (13) For the purposes of this section, "comparable wages and benefits" means wages and benefits that are at least ninety-five percent of the wages and benefits received by the worker at the time of injury.

Sec. 6   RCW 51.32.055 and 1997 c 416 s 1 are each amended to read as follows:
     (1) One purpose of this title is to restore the injured worker as nearly as possible to the condition of self-support as an able-bodied worker. Benefits for permanent disability shall be determined under the director's supervision, except as otherwise authorized in subsection (9) or (10) of this section, only after the injured worker's condition becomes fixed.
     (2) All determinations of permanent disabilities shall be made by the department, except as otherwise authorized in subsection (9) or (10) of this section. Either the worker, employer, or self-insurer may make a request or the inquiry may be initiated by the director or, as authorized in subsection (9) or (10) of this section, by the self-insurer on the director or the self-insurer's own motion. Determinations shall be required in every instance where permanent disability is likely to be present. All medical reports and other pertinent information in the possession of or under the control of the employer or, if the self-insurer has made a request to the department, in the possession of or under the control of the self-insurer shall be forwarded to the director with the request.
     (3) A request for determination of permanent disability shall be examined by the department or, if authorized in subsection (9) or (10) of this section, the self-insurer, and the department shall issue an order in accordance with RCW 51.52.050 or, in the case of a self-insured employer, the self-insurer may: (a) Enter a written order, communicated to the worker and the department self-insurance section in accordance with subsection (9) or (10) of this section, as applicable; or (b) request the department to issue an order in accordance with RCW 51.52.050.
     (4) The department or, in cases authorized in subsection (9) or (10) of this section, the self-insurer may require that the worker present himself or herself for a special medical examination by a physician or physicians selected by the department, and the department or, in cases authorized in subsection (9) or (10) of this section, the self-insurer may require that the worker present himself or herself for a personal interview. The costs of the examination or interview, including payment of any reasonable travel expenses, shall be paid by the department or self-insurer, as the case may be.
     (5) The director may establish a medical bureau within the department to perform medical examinations under this section. Physicians hired or retained for this purpose shall be grounded in industrial medicine and in the assessment of industrial physical impairment. Self-insurers shall bear a proportionate share of the cost of the medical bureau in a manner to be determined by the department.
     (6) Where a dispute arises from the handling of any claim before the condition of the injured worker becomes fixed, the worker, employer, or self-insurer may request the department to resolve the dispute or the director may initiate an inquiry on his or her own motion. In these cases, the department shall proceed as provided in this section and an order shall issue in accordance with RCW 51.52.050.
     (7)(a) If a claim (i) is accepted by a self-insurer after June 30, 1986, and before August 1, 1997, (ii) involves only medical treatment and the payment of temporary disability compensation under RCW 51.32.090 or only the payment of temporary disability compensation under RCW 51.32.090, (iii) at the time medical treatment is concluded does not involve permanent disability, (iv) is one with respect to which the department has not intervened under subsection (6) of this section, and (v) the injured worker has returned to work with the self-insured employer of record, whether at the worker's previous job or at a job that has comparable wages and benefits, the claim may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW.
     (b) All determinations of permanent disability for claims accepted under this subsection (7) by self-insurers shall be made by the self-insured section of the department under subsections (1) through (4) of this section.
     (c) Upon closure of a claim under (a) of this subsection, the self-insurer shall enter a written order, communicated to the worker and the department self-insurance section, 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 with the self-insured employer. 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 must protest in writing to the department of labor and industries, self-insurance section, within sixty days of the date you received this order."
     (8)(a) If a claim (i) is accepted by a self-insurer after June 30, 1990, and before August 1, 1997, (ii) involves only medical treatment, (iii) does not involve payment of temporary disability compensation under RCW 51.32.090, and (iv) at the time medical treatment is concluded does not involve permanent disability, the claim may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW. Upon closure of a claim, the self-insurer shall enter a written order, communicated to the worker, 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 only, as provided. If for any reason you disagree with this closure, you must protest in writing to the Department of Labor and Industries, Olympia, within 60 days of the date you received this order. The department will then review your claim and enter a further determinative order."
     (b) All determinations of permanent disability for claims accepted under this subsection (8) by self-insurers shall be made by the self-insured section of the department under subsections (1) through (4) of this section.
     (9)(a) If a claim: (i) Is accepted by a self-insurer after July 31, 1997, and before the effective date of this section; (ii)(A) involves only medical treatment, or medical treatment and the payment of temporary disability compensation under RCW 51.32.090, and a determination of permanent partial disability, if applicable, has been made by the self-insurer as authorized in this subsection; or (B) involves only the payment of temporary disability compensation under RCW 51.32.090 and a determination of permanent partial disability, if applicable, has been made by the self-insurer as authorized in this subsection; (iii) is one with respect to which the department has not intervened under subsection (6) of this section; and (iv) concerns an injured worker who has returned to work with the self-insured employer of record, whether at the worker's previous job or at a job that has comparable wages and benefits, the claim may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW.
     (b) If a physician submits a report to the self-insurer that concludes that the worker's condition is fixed and stable and supports payment of a permanent partial disability award, and if within fourteen days from the date the self-insurer mailed the report to the attending or treating physician, the worker's attending or treating physician disagrees in writing that the worker's condition is fixed and stable, the self-insurer must get a supplemental medical opinion from a provider on the department's approved examiner's list before closing the claim. In the alternative, the self-insurer may forward the claim to the department, which must review the claim and enter a final order as provided for in RCW 51.52.050.
     (c) Upon closure of a claim under this subsection (9), the self-insurer shall enter a written order, communicated to the worker and the department self-insurance section, which contains the following statement clearly set forth in bold-face type: "This order constitutes notification that your claim is being closed with such medical benefits and temporary disability compensation as provided to date and with such award for permanent partial disability, if any, as set forth below, and with the condition that you have returned to work with the self-insured employer. If for any reason you disagree with the conditions or duration of your return to work or the medical benefits, temporary disability compensation provided, or permanent partial disability that has been awarded, you must protest in writing to the Department of Labor and Industries, Self-Insurance Section, within sixty days of the date you received this order. If you do not protest this order to the department, this order will become final."
     (d) All determinations of permanent partial disability for claims accepted by self-insurers under this subsection (9) may be made by the self-insurer or the self-insurer may request a determination by the self-insured section of the department. All determinations shall be made under subsections (1) through (4) of this section.
     (10)(a) A claim that is accepted by a self-insurer on or after the effective date of this section may be closed by the self-insurer, subject to reporting of claims to the department in a manner prescribed by department rules adopted under chapter 34.05 RCW.
     (b)(i) Upon closure of a claim under this subsection (10), the self-insurer shall enter a written order, communicated to the worker and the department self-insurance section, that contains the following statement clearly set forth in bold-face type: "This order constitutes notification that your claim is being closed with such medical benefits and temporary disability compensation as provided to date and with such award for permanent partial disability, if any, as set forth below. If for any reason you disagree with the medical benefits or temporary disability compensation provided, or permanent partial disability that has been awarded, you must protest in writing to the Department of Labor and Industries, Self-Insurance Section, within sixty days of the date you received this order. If you do not protest this order to the department, this order will become final."
     (ii) Copies of all documents, including any calculations, used or relied on by the self-insurer in issuing the order must be enclosed with the order. The claimant must also receive a standardized pamphlet approved by the department that sets forth the claimant's protest and appeals rights under this title, with a detachable postcard addressed to the department that may be used by the claimant to file a protest.
     (c) All determinations of permanent partial disability for claims accepted by self-insurers under this subsection (10) may be made by the self-insurer, or the self-insurer may request a determination by the self-insured section of the department. All determinations shall be made under subsections (1) through (4) of this section.
     (11)(a)(i) If the department receives a protest of an order issued by a self-insurer under subsections (7) through (((9))) (10) of this section, the self-insurer's closure order must be held in abeyance. The department shall review the claim closure action and, within forty-five days after the date the protest was filed, enter a further determinative order as provided for in RCW 51.52.050. However, this forty-five day limitation on the review period may be waived by the claimant, and, if waived, the department must enter the further determinative order within seventy-five days after the date that the protest was filed.
     (ii) If the department vacates or modifies the self-insurer's order, the self-insurer must comply with the department's order within ten days after the date on which the vacation or modification order was communicated to the self-insurer. If a self-insurer files an appeal of the department's order with the board of industrial insurance appeals, the appeal shall not act as a stay, and the self-insurer must pay all benefits ordered by the department pending a final determination by the board or a court. If the self-insurer prevails in its appeal, the benefits paid may be recouped pursuant to RCW 51.32.240.
     (b) If no protest is timely filed, the closing order issued by the self-insurer shall become final and shall have the same force and effect as a department order that has become final under RCW 51.52.050.
     (((11))) (12) If within two years of claim closure under subsections (7) through (((9))) (10) of this section, the department determines that the self-insurer has made payment of benefits because of clerical error, mistake of identity, or innocent misrepresentation or the department discovers a violation of the conditions of claim closure, the department may require the self-insurer to correct the benefits paid or payable. This subsection (((11))) does not limit in any way the application of RCW 51.32.240.
     (((12))) (13) For the purposes of this section, "comparable wages and benefits" means wages and benefits that are at least ninety-five percent of the wages and benefits received by the worker at the time of injury.

Sec. 7   RCW 51.14.080 and 1986 c 57 s 7 are each amended to read as follows:
     Certification of a self-insurer shall be withdrawn for the minimum period required under RCW 51.14.020 by the director upon one or more of the following grounds:
     (1) The employer no longer meets the requirements of a self-insurer; ((or))
     (2) The self-insurer's deposit is insufficient; ((or))
     (3) The self-insurer intentionally or repeatedly induces employees to fail to report injuries, induces claimants to treat injuries in the course of employment as off-the-job injuries, persuades claimants to accept less than the compensation due, or unreasonably makes it necessary for claimants to resort to proceedings against the employer to obtain compensation; ((or))
     (4) The self-insurer habitually fails to comply with rules and regulations of the director regarding reports or other requirements necessary to carry out the purposes of this title; ((or))
     (5) The self-insurer habitually engages in a practice of arbitrarily or unreasonably refusing employment to applicants for employment or discharging employees because of nondisabling bodily conditions; ((or))
     (6) The self-insurer fails to pay an insolvency assessment under the procedures established pursuant to RCW 51.14.077; or
     (7) The self-insurer has been assessed penalties for the following:
     (a) A level three violation under section 10 of this act;
     (b) Two or more level two violations under section 10 of this act within one year;
     (c) Three or more level three violations under section 10 of this act within one year; or
     (d) Violations under this title that resulted in penalties assessed against the self-insurer of more than twenty-five thousand dollars within one year.

Sec. 8   RCW 51.14.140 and 1993 c 122 s 4 are each amended to read as follows:
     (1) Failure of a self-insurer to comply with RCW 51.14.120 ((and)), 51.14.130, 51.14.130, 51.32.055 (7) through (10), 51.32.195 (as recodified by this act), or section 2 of this act shall subject the self-insurer to a penalty under RCW 51.48.080, which shall accrue for the benefit of the employee. Each day of failure to comply with RCW 51.14.120, 51.32.055 (7) through (10), 51.32.195 (as recodified by this act), or section 2 of this act is a separate violation.
     (2) The director shall issue an order conforming with RCW 51.52.050 determining whether a violation has occurred under this section within thirty days of a request by an employee.

Sec. 9   RCW 51.28.070 and 1990 c 209 s 2 are each amended to read as follows:
     (1)(a) Except as provided in this subsection, information contained in the claim files and records of injured workers, under the provisions of this title, shall be deemed confidential and shall not be open to public inspection (other than to public employees in the performance of their official duties)((, but)).
     (b) Representatives of a claimant, be it an individual or an organization, may review a claim file or receive specific information therefrom upon the presentation of the signed authorization of the claimant. A claimant may review his or her claim file if the director determines, pursuant to criteria adopted by rule, that the review is in the claimant's interest.
     (c) Employers or their duly authorized representatives may review any files of their own injured workers in connection with any pending claims.
     (d) Physicians treating or examining workers claiming benefits under this title, or physicians giving medical advice to the department regarding any claim may, at the discretion of the department, inspect the claim files and records of injured workers((, and other persons may make such inspection, at the department's discretion, when such)).
     (e) Persons who are rendering assistance to the department at any stage of the proceedings on any matter pertaining to the administration of this title may, in the department's discretion, inspect the claim files and records of injured workers.
     (f) The ombudsperson appointed under section 2 of this act may inspect the claim files and records of an injured worker when rendering assistance to the injured worker pursuant to section 2 of this act.
     (2) It is a violation of this section if a self-insured employer obtains or discloses information unrelated to the claim of its injured worker or, in violation of department rules, discloses information in a claim file or record of its injured worker. Such violation is subject to a penalty as provided in section 10 of this act.

NEW SECTION.  Sec. 10   A new section is added to chapter 51.48 RCW to read as follows:
     (1) In addition to any other penalties imposed under this title, a self-insurer is subject to the following penalties for each day that a violation occurs:
     (a) For a level one violation, a penalty of five hundred dollars;
     (b) For a level two violation, a penalty of one thousand dollars; or
     (c) For a level three violation, a penalty of five thousand dollars.
     (2)(a) The director shall issue an order determining whether there was a violation within thirty days after the request of the claimant. Such an order shall conform to the requirements of RCW 51.52.050.
     (b) Penalties assessed under this section shall accrue for the benefit of the claimant and shall be paid to him or her. The director may not waive or reduce a penalty assessed under this section.
     (3) For the purposes of this section:
     (a) "Level one violation" means:
     (i) Failing to comply with RCW 51.14.120, 51.14.130, 51.32.055 (7) through (10), 51.32.195 (as recodified by this act), or section 2 of this act;
     (ii) Inducing an employee to fail to report an injury or occupational disease when the failure does not result in the claim being denied under RCW 51.28.050 or 51.28.055; or
     (iii) Obtaining or disclosing claim files or records in violation of RCW 51.28.070.
     (b) "Level two violation" means:
     (i) Unreasonably or negligently failing to comply with RCW 51.14.120, 51.14.130, 51.32.055 (7) through (10), 51.32.195 (as recodified by this act), or section 2 of this act;
     (ii) Unreasonably or negligently inducing an employee to fail to report an injury or occupational disease when the failure does not result in the claim being denied under RCW 51.28.050 or 51.28.055;
     (iii) Willfully making it unreasonably necessary for a claimant to resort to proceedings against the employer to obtain any right, benefit, or privilege under this title; or
     (iv) Unreasonably or negligently disclosing claim files or records in violation of RCW 51.28.070.
     (c) "Level three violation" means:
     (i) Willfully inducing an employee to fail to report an injury or occupational disease when the failure results in the claim being denied under RCW 51.28.050 or 51.28.055;
     (ii) Willfully inducing a claimant to treat an injury or occupational disease in the course of employment as an off-the-job injury or disease; or
     (iii) Willfully persuading a claimant to accept less than the compensation due under this title.
     (d) "Willful" means a conscious or deliberate false statement, misrepresentation, omission, or concealment of a material fact with the specific intent of preventing or reducing the award of benefits under this title.
     (4) The department must track the penalties that are assessed under this section and report at least annually on the types and amount of penalties to the workers' compensation advisory committee.

Sec. 11   RCW 51.48.017 and 1985 c 347 s 3 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 dollars for each day of delay or refusal 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.
     (2) 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.
     (3) The director may not waive or reduce a penalty assessed under this section.

Sec. 12   RCW 51.48.025 and 1985 c 347 s 8 are each amended to read as follows:
     (1) No employer may discharge or in any manner discriminate against any employee because such employee: (a) Has filed or communicated to the employer an intent to file a claim for compensation; (b) makes a complaint against a self-insured employer that could result in subjecting the employer to penalties under this title; or (c) exercises any rights provided under this title. However, nothing in this section prevents an employer from taking any action against a worker for other reasons including, but not limited to, the worker's failure to observe health or safety standards adopted by the employer, or the frequency or nature of the worker's job-related accidents.
     (2) Any employee who believes that he or she has been discharged or otherwise discriminated against by an employer in violation of this section may file a complaint with the director alleging discrimination within ninety days of the date of the alleged violation. Upon receipt of such complaint, the director shall cause an investigation to be made as the director deems appropriate. Within ninety days of the receipt of a complaint filed under this section, the director shall notify the complainant of his or her determination. If upon such investigation, it is determined that this section has been violated, the director shall bring an action in the superior court of the county in which the violation is alleged to have occurred.
     (3) If the director determines that this section has not been violated, the employee may institute the action on his or her own behalf.
     (4) In any action brought under this section, the superior court shall have jurisdiction, for cause shown, to restrain violations of subsection (1) of this section and to order all appropriate relief including rehiring or reinstatement of the employee with back pay.

Sec. 13   RCW 51.48.080 and 1985 c 347 s 7 are each amended to read as follows:
     (1) Every person, firm, or corporation, other than a self-insurer under this title, who violates or fails to obey, observe, or comply with any rule of the department ((promulgated)) adopted under ((authority of)) this title((, shall be)) is subject to a penalty ((of)) not to exceed five hundred dollars.
     (2) A self-insurer who violates or fails to obey, observe, or comply with any rule of the department adopted under this title is subject to a penalty of five hundred dollars. This penalty applies in addition to any other penalty imposed under this title, and the director may not waive or reduce a penalty assessed under this subsection.

NEW SECTION.  Sec. 14   A new section is added to chapter 51.48 RCW to read as follows:
     In an action to collect penalties assessed against a self-insurer under this title, the court shall award reasonable attorneys' fees and reasonable costs of litigation to the prevailing plaintiff.

Sec. 15   RCW 51.44.150 and 1971 ex.s. c 289 s 59 are each amended to read as follows:
     (1) The director shall impose and collect assessments each fiscal year upon all self-insurers in the amount of the estimated costs of administering their portion of this title during such fiscal year. The time and manner of imposing and collecting assessments due to the department shall be set forth in ((regulations promulgated)) rules adopted by the director in accordance with chapter 34.05 RCW.
     (2)(a) In any fiscal year, the level of full-time equivalent claims adjudication employees authorized for the department's self-insurance section must be at a level that results in an average case load per claims adjudicator that is no less than the average case load per employee adjudicating claims on behalf of self-insured employers. With respect to the department's self-insurance section employees engaged in auditing functions, the level of full-time equivalent employees for this position must be at a level that permits the department to complete an audit of each self-insurer at least every three years.
     (b) The director shall make determinations of the full-time equivalent levels required by subsection (1) of this section and report such determinations to the office of financial management in department budget submittals.

NEW SECTION.  Sec. 16   A new section is added to chapter 51.04 RCW to read as follows:
     The director of labor and industries may adopt such rules as are necessary to implement this act.

NEW SECTION.  Sec. 17   RCW 51.32.190, 51.32.195, and 51.32.200 are each recodified as sections in chapter 51.14 RCW.

NEW SECTION.  Sec. 18   Part headings used in this act are not any part of the law.

NEW SECTION.  Sec. 19   (1) Section 5 of this act expires June 30, 2007.
     (2) Section 6 of this act takes effect June 30, 2007.