HOUSE BILL REPORT

ESB 6740

BYSenator Matson

Regulating medical treatment under the industrial insurance retrospective rating program.

House Committe on Commerce & Labor

Majority Report:  Do pass as amended.  (6)

      Signed by Representatives Vekich, Chair; Smith, Ranking Republican Member; R. King, Leonard, O'Brien and Prentice.

Minority Report:  Do not pass.  (5)

      Signed by Representatives Cole, Vice Chair; Forner, Jones, Walker and Wolfe.

House Staff:Chris Cordes (786-7117)

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR FEBRUARY 23, 1990

BACKGROUND:

Employers may insure their workers' compensation obligations through the industrial insurance retrospective rating program.  The retrospective rating plan allows adjustment of the employer's premium after the coverage period, based on the claims costs incurred during that period.

At the request of the Department of Labor and Industries or a self-insured employer, injured workers are required to submit to medical examinations at a place reasonably convenient for the worker.  The authority to request examinations does not extend to retrospective rating employers.  The industrial insurance law does not limit the number of examinations that may be requested.  If a worker refuses, without good cause, to attend an examination, persists in injurious practices that retard recovery, refuses treatment that is reasonably essential to recovery, or refuses to cooperate in vocational rehabilitation, action on the worker's claim may be suspended and the worker's benefits may be suspended or reduced.

SUMMARY:

BILL AS AMENDED:  The Department of Labor and Industries is directed to evaluate proposals that would permit employers participating in retrospective rating programs to request, in consultation with the department, medical examinations for their injured workers.  The department may study the factors that are deemed appropriate, including: (1) whether legislation or rules are needed to establish criteria for the program; (2) whether physicians must be pre-approved; (3) the number of examinations that may be required; and (4) the penalties and/or compensation that may be required if the worker fails to appear or the physician fails to conduct the examination as scheduled.  The department must report to the Legislature by December 1, 1990.

AMENDED BILL COMPARED TO ENGROSSED BILL:  The striking amendment removes all of the provisions of the engrossed bill, including provisions that would have (1) authorized employers participating in retrospective rating programs to request a certain number of medical examinations; (2) provided penalties for workers who failed to attend a scheduled examination; and (3) required the Department of Labor and Industries to reject medical bills that did not conform to department rules.  The amendment provides for a study by the Department of Labor and Industries to evaluate the proposal for granting retrospective rating employers authority to request medical examinations for their injured workers.

Fiscal Note:      Requested February 23, 1990.

House Committee ‑ Testified For:    (Original bill)  Randy Durham, Washington Retail Association; Shannon Williams,  Medical Consultants Northwest; Clif Finch, Association of Washington Business; Brent Kohler, Interface, Inc.; and Rick Slunaker, Associated General Contractors.

House Committee - Testified Against:      (Original bill)  Bob McCallister and Janet Morris, Department of Labor and Industries; Kevin Kilduff, Washington State Labor Council; and Wayne Lieb, Washington State Trial Lawyers.

House Committee - Testimony For:    (Original bill) The industrial insurance retrospective rating program needs attention in several areas.  Employers have accepted the financial risk associated with industrial insurance claims, but the department has been slow to respond to the employers' suggestions for taking on more claim responsibility.  Without some participation in claims management, there is no incentive for the employers to participate in the retrospective rating program.  The bill addresses several important reforms that are seen as strengthening the program by cutting through agency delay and reducing costs caused by inefficiency.

House Committee - Testimony Against:      (Original bill) The requirement in the bill for rejecting all nonconforming medical bills will have a large fiscal impact on the Department of Labor and Industries.  Even bills that only have technical flaws would have to be rejected.  While it is necessary to encourage employer cooperation in managing claims, providing rigid rules for scheduling examinations and penalizing the parties will be counterproductive.  Legislation is not necessary to address the problem of injured workers not appearing for examinations or the number of examinations that may be allowed.  The department has authority under current law to resolve these issues.