WSR 14-17-086
PROPOSED RULES
DEPARTMENT OF
LABOR AND INDUSTRIES
[Filed August 19, 2014, 7:34 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 13-23-077.
Title of Rule and Other Identifying Information: Chapter 296-15 WAC, Workers' compensation self-insurance rules and regulations: WAC 296-15-266 Penalties.
Hearing Location(s): Department of Labor and Industries, 7273 Linderson Way, Auditorium, Tumwater, WA 98501, on September 30, 2014, at 1:30 p.m.
Date of Intended Adoption: October 21, 2014
Submit Written Comments to: Steve Reinmuth or Mike Ratko, Department of Labor and Industries, P.O. Box 44100, Olympia, WA 98504-4100, e-mail steve.reinmuth@lni.wa.gov or michael.ratko@lni.wa.gov, fax (360) 902-4474, by September 30, 2014.
Assistance for Persons with Disabilities: Contact office of information and assistance by September 23, 2014, TTY (360) 902-5797.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The self-insurance section within the department of labor and industries is proposing amendments to WAC 296-15-266. The proposal will define the circumstances under which the department will consider assessing a penalty for an unreasonable delay of benefits, and the process of this penalty request.
This rule is proposed to establish general guidance and procedures as well as necessary clarifications on requesting and assessing penalties against self-insured employers for unreasonable delay of benefits, all of which are originated or required by the industrial insurance law under Title 51 RCW. The board of industrial insurance appeals in its 2012 decision expanded the definition of benefits which may lead to a penalty if medical benefits are delayed. (In re James Coston, BIIA Dec. 11 12310 (2012).
Reasons Supporting Proposal: The rule will help create a level playing field for all other employers and discourage noncompliant behaviors. It will also benefit injured workers in that more timely benefit payments can be ensured for those who are entitled, which is critical for them and their families. The procedures and guidance established by this rule will help eliminate ambiguity that the department may encounter when the situation arises in the future.
Statutory Authority for Adoption: RCW 51.04.020 and 51.48.017.
Statute Being Implemented: RCW 51.48.017.
Rule is not necessitated by federal law, federal or state court decision.
Name of Agency Personnel Responsible for Drafting,Implementation, and Enforcement: Steve Reinmuth, Tumwater, Washington, (360) 902-6275.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
Small Business Economic Impact Statement
The self-insurance section within the department of labor and industries is proposing rule changes to chapter 296-15 WAC, Workers' compensation self-insurance rules and regulations. The proposed changes will define the circumstances under which the department will consider assessing a penalty for an unreasonable delay of benefits, and the process of this penalty request. Pursuant to the Regulatory Fairness Act (chapter 19.85 RCW), the department shall prepare a small business economic impact statement (SBEIS) if: (a) The proposed rule will impose more than minor costs on businesses in an industry; or (b) requested to do so by a majority vote of the joint administrative rules review committee within forty-five days of receiving the notice of proposed rule making under RCW 34.05.320.
To help determine whether the first condition applies to a proposed rule, the Regulatory Fairness Act also defines (1) small business: Any business entity that is owned and operated independently from all other businesses, and that has fifty or fewer employees; (2) minor cost: A cost per business that is less than three-tenths of one percent of annual revenue or income, or one hundred dollars, whichever is greater, or one percent of annual payroll. It should be noted that for the purpose of SBEIS analysis, the estimated cost of a rule is interpreted and practically captured as the one that only occurs as a result of this proposed rule. Therefore, any current or potential costs resulting from the compliance with the existing statutory requirements or standards will not be taken into consideration, even if they appear, in some cases, substantial or significant from employers' perspectives.
As to the proposed rule changes to WAC 296-15-266, condition (b) does not apply. In addition, as stated in the cost-benefit analysis, this proposal will not impose more than minor costs on average on affected businesses. The rule is intended to establish general guidance and procedures as well as necessary clarifications on requesting and assessing penalties against a self-insured employer for an unreasonable delay of benefits, all of which are originated or required by the industrial insurance law under Title 51 RCW. In light of this, the proposed rule does not create any new requirements that are above and beyond what have already been in place under the law. Furthermore, all self-insured businesses are large businesses based on the definition above, so the proposed rule will not affect the small business community. For these reasons, condition (a) does not apply either. Therefore, the department is not required to prepare an SBEIS for this rule-making project.
A copy of the statement may be obtained by contacting Suchi Sharma, Department of Labor and Industries, P.O. Box 44001, Tumwater, WA 98504-4001, phone (360) 902-6744, fax (360) 902-4204, e-mail suchi.sharma@lni.wa.gov.
A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Suchi Sharma, Department of Labor and Industries, P.O. Box 44001, Tumwater, WA 98504-4001, phone (360) 902-6744, fax (360) 902-4204, e-mail suchi.sharma@lni.wa.gov.
August 19, 2014
Joel Sacks
Director
AMENDATORY SECTION (Amending WSR 06-06-066, filed 2/28/06, effective 4/1/06)
WAC 296-15-266 Penalties.
((What must a self-insurer do when the department issues an order assessing a penalty? The self-insurer must make payment of the penalty assessment on or before the date the order becomes final.)) (1) Under what circumstances will the department consider assessing a penalty for an unreasonable delay of benefits, when requested by a worker? Upon a worker's request, the department will consider assessment of an unreasonable delay of benefits penalty for:
(a) Time loss compensation and loss of earning power: The department will issue an unreasonable delay order, and assess associated penalties based on the department's calculation of the time loss or loss-of-earning-power benefits, if a self-insurer:
(i) Has written medical certification that the claimant is unable to work because of the industrial injury or occupational disease; and
(ii) Fails to make the first time loss or loss-of-earning-power payment to the claimant within fourteen calendar days of notice that there is a claim*, or fails to continue time loss or loss-of-earning-power payments on regular intervals as required by RCW 51.32.190(3); and
(iii) Fails to request, with supporting medical evidence and within thirty days of receiving notice of the claim, that the department settle a dispute about the covered conditions or eligibility for time loss compensation or loss-of-earning-power benefits as required by RCW 51.32.190(1).
*
Notice of claim is provided to the self-insured employer when all the elements of a claim are met. The elements of a claim are:
 
• Description of incident. Examples: Self-Insurance Form 2 (SIF-2), physician's initial report (PIR), employer incident report, or other employer records.
 
• Diagnosis of the medical condition. Examples: PIR, on-site medical facility records if supervised by provider qualified to diagnose, or other medical records.
 
• Treatment provided or treatment recommendations. Examples: PIR, on-site medical facility records if supervised by provider qualified to treat, or other medical records.
 
• Application for benefits. Examples: SIF-2, PIR, or other signed written communication that evinces intent to apply.
(b) Payment of medical treatment benefits: The department will issue an unreasonable delay order, and assess associated penalties based on the department's fee schedule, order, and accrued principal and interest, if a self-insurer fails to pay all fees and medical charges within sixty days of receiving a proper billing, as defined in WAC 296-20-125 through 296-20-17004.
(i) If the self-insurer believes that it should not pay the billing, or if there is a dispute regarding whether the treatment is for a related condition, the self-insurer must, within sixty calendar days of receiving a billing, clearly state in writing to the worker, the medical provider, and the department why the payment is denied.
(ii) The department will review the reasons provided by the self-insurer and will make a decision by legal order within thirty days.
(c) Authorization of emergent or life-saving medical treatment benefits: The department will issue an unreasonable delay order, and assess associated penalties, based on the department's fee schedule, order, and accrued principal and interest, if a self-insurer fails to respond to requests to authorize emergent or life-saving treatment, by either allowing or denying the request within thirty business days of the worker's discharge, or fourteen days after receiving notice of the request for treatment, whichever happens first.
(i) If the request is denied, the self-insured employer must clearly tell the medical provider, the claimant and the department, in writing, why the request is being denied.
(ii) If the medical provider or claimant disagrees with the self-insurer's decision, either of them may file a dispute with the department.
(d) Refusal to pay benefits without cause: The department will issue an order determining an unreasonable refusal to pay benefits, and assess associated penalties, based on the department's calculation of benefits or fee schedule, if a self-insurer denies a benefit such as time loss compensation, loss-of-earning-power compensation, or medical treatment if a self-insurer's denial fails to contain genuine medical, vocational, or legal doubt about whether the self-insurer should pay the benefit. Accrued principal and interest will apply to nonpayment of medical benefits.
(e) Paying benefits during an appeal to the board of industrial insurance appeals: The department will issue an unreasonable delay order, and assess associated penalties, based on the department's calculation of benefits or fee schedule, if a self-insurer appeals a department order to the board of industrial insurance appeals, and fails to provide the benefits required by the order on appeal within fourteen calendar days, unless the board of industrial insurance appeals grants a stay of the department order. Accrued principal and interest will apply to nonpayment of medical benefits.
(2) How is a penalty request created and processed?
(a) An injured worker may request a penalty against his or her self-insured employer by:
(i) Completing the appropriate self-insurance form or sending a written request providing the reasons for requesting the penalty;
(ii) Attaching supporting documents (optional).
(b) Within ten days of receipt of a certified request, the self-insured employer must send its claim file to the department. Failure to timely respond may subject the self-insured employer to a rule violations penalty under RCW 51.48.080. The employer may attach supporting documents. If the employer fails to timely respond to the penalty request, the department will issue an order in response to the injured worker's request based on the available information.
(c) The department will issue an order on all written penalty requests completed per (a) of this subsection. The department's review during the thirty-day period for responding to the injured worker's request will include only the claim file records and supporting documents provided by the worker and the employer per (a) and (b) of this subsection.
(d) In deciding whether to assess a penalty, the department will consider only the underlying record and supporting documents at the time of the request which will include documents listed in (a) and (b) of this subsection, if timely available, to determine if the alleged untimely benefit was appropriately requested and if the employer timely responded.
(e) The department order issued under (c) of this subsection is subject to request for reconsideration or appeal under the provisions of RCW 51.52.050 and 51.52.060.