HBA-NIK, ATS H.B. 2510 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2510 By: Dukes Business & Industry 9/20/1999 Enrolled BACKGROUND AND PURPOSE This bill addresses several miscellaneous workers' compensation issues. Prior to the 76th Legislature, the interest rate applicable to late benefit payments was based on the auction rate for 52-week U.S. treasury bills. H.B. 2510 increases the statutory interest and discount rate used under the Texas Workers' Compensation Act by adding 3.5 percent to the auction rate quoted on a discount basis for the 52-week U.S. treasury bills. The Texas Workers' Compensation Commission (commission) is composed of six members who serve on a part-time basis. Prior to the 76th Legislature, members were entitled to be reimbursed for lost wages for attending a commission meeting, not to exceed one day in each calendar quarter. Some members had to use their annual/vacation leave to attend to commission business, including commission hearings. A member did not lose pay when leave benefits were used. Consequently, reimbursement could not be claimed. H.B. 2510 includes the use of leave benefits, in addition to actual lost wages, as the two occurrences for which a member of the commission is entitled to reimbursement for attendance at specified meetings. In addition, this bill includes attendance at commission hearings among the events for which a member is entitled to receive reimbursement, and deletes the condition that commission meetings and hearings attended by a member are not to exceed one day in each calendar quarter. Additionally, this bill decreases from $12,000 to $5,000 the yearly maximum amount of reimbursement a member is entitled to receive. Prior to the 76th Legislature, the law protected only the identity of injured workers who participated in research projects conducted by the Research and Oversight Council on Workers' Compensation (council). No such protection was afforded to other survey respondents. The public availability of the identity of some survey participants may have impacted the ability of the council to conduct objective surveys of those persons participating in the Texas workers' compensation system. H.B. 2510 provides that the identity of an individual or entity selected to participate in a council survey or who participates in such a survey is confidential and is not subject to public disclosure under the Government Code. Prior to the 76th Legislature, health care facilities were required, upon request, to provide medical records to insurance carriers or injured workers and their attorneys. This requirement did not apply to health care providers. This caused problems when a health care provider refused to provide an insurance carrier or injured worker or their representative with records pertaining to an injury. H.B. 2510 gives health care providers the same guidelines as health care facilities in providing medical records to an injured worker, an injured worker's attorney, or an insurance carrier. Prior to the 76th Legislature, the law contained conflicting provisions pertaining to how much an insurance carrier should have paid a health care provider for treatments or services provided to an injured worker. Some sections of the law stated that an insurance carrier should have based reimbursements on the lesser of the amount billed and the commission's fee guideline, while another section of the law stated that a carrier should have paid the fee charged by a health care provider. H.B. 2510 clarifies that an insurance carrier should reimburse a health care provider at the level allowed by the commission's guidelines and the statute, rather than the amount billed by the health care provider. The Medical Advisory Committee (MAC) is a statutory advisory body to the commission's Medical Review Division. The MAC assists the commission with medical rule and guideline development. Prior to the 76th Legislature, the MAC consisted of 15 people: 11 health care provider representatives; one employer representative; one employee representative; and two representatives of the general public. The MAC did not have a representative from the insurance industry. H.B. 2510 adds an insurance carrier representative to the mandatory list of members composing the commission's Medical Advisory Committee. Prior to the 76th Legislature, the Insurance Code required insurance carriers to submit an audited annual report showing year-end loss, expense, and unearned premium reserves. In the past, the Texas Department of Insurance (TDI) had used this report to determine if a carrier's reserves were sufficient to pay its claims. However, this information was available from other sources. H.B. 2510 deletes provisions in the Insurance Code that require a carrier to submit an audited annual report showing year-end loss, expense, and unearned premium reserves to TDI. H.B. 2510 also addresses income benefits. Under this bill, an employee is not entitled to temporary income benefits and an insurance carrier is authorized to suspend temporary income benefits during and for the period in which the employee fails to submit to a medical examination unless good cause exists, as determined by the commission, in which case the commission is authorized to order temporary income benefits to be paid for that period. An insurance carrier is authorized to suspend or reduce the payment of temporary income benefits two weeks after it files a notice of suspension with the commission if a report from a doctor selected by an insurance carrier indicates that an employee can return to work immediately or has reached maximum medical improvement. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Workers' Compensation Commission in SECTIONS 8 (Section 408.004, Labor Code), 11 (Section 408.081, Labor Code), 12 (Section 408.124, Labor Code), and 15 (Section 408.181, Labor Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 401.013(a), Labor Code, to redefine the term "intoxication" in the Texas Workers' Compensation Act. SECTION 2. Amends Section 401.023(b), Labor Code, to increase the statutory interest and discount rate used under the Texas Workers' Compensation Act by adding 3.5 percent to the auction rate quoted on a discount basis for the 52-week U.S. treasury bills. SECTION 3. Amends Sections 402.011(b) and (c), Labor Code, as follows: (b) Provides that a member of the Texas Workers' Compensation Commission (commission) is entitled to reimbursement for the use of leave benefits in addition to actual lost wages. Includes attendance at commission hearings among the events for which a member is entitled to receive reimbursement. Deletes the condition that commission meetings and hearings attended by a member are not to exceed one day in each calendar quarter. (c) Decreases from $12,000 to $5,000 the yearly maximum amount of reimbursement a member is entitled to receive. SECTION 4. Amends Section 402.062, Labor Code, as follows: Sec. 402.062. ACCEPTANCE OF GIFTS, GRANTS, AND DONATIONS. (a) Creates this subsection from existing text. (b) Authorizes the commission to accept a grant paid from the Texas Workers' Compensation Insurance Fund to implement specific steps to control and lower medical costs in the workers' compensation system and to ensure the delivery of quality medical care. Sets forth that the commission must publish the name of the grantor and the purpose and condition of the grant and provide for a public comment period before the commission is authorized to accept the grant. Requires the commission to acknowledge acceptance of the grant at a public meeting, at which minutes must be kept that include information that identifies the grantor, the grant, and the purposes for the use of the grant. SECTION 5. Amends Section 402.085(a), Labor Code, to provide that the commission is required to release information on a claim to the Research and Oversight Council on Workers' Compensation, rather than the research center, for research purposes. Deletes an entity that provides child support services under repealed Chapter 76, Human Resources Code, from the list of entities which receive information on a claim. SECTION 6. Amends Section 404.007(a), Labor Code, to delete receiving testimony and reports from the Texas workers' compensation insurance facility from the duties required of the board of directors of the Research and Oversight Council on Workers' Compensation (board). Replaces the office of the attorney general with the State Office of Risk Management as an entity from which the board is required to receive testimony and reports. Makes conforming changes. SECTION 7. Amends Section 404.010, Labor Code, by amending Subsection (a) and adding Subsection (d), as follows: (a) Removes the Texas workers' compensation insurance facility from the list of entities whose files and records the Research and Oversight Council on Workers' Compensation (council) is entitled to access. Makes conforming changes. (d) Provides that the identity of an individual or entity selected to participate in a council survey or who participates in such a survey is confidential and is not subject to public disclosure under Chapter 552 (Public Information), Government Code. SECTION 8. Amends Sections 408.004(e) and (f), as follows: (e) Provides that an employee commits a Class D administrative violation for failing or refusing to appear at the time scheduled for a medical examination without good cause, as determined by the commission. Provides that an employee is not entitled to temporary income benefits and authorizes an insurance carrier to suspend temporary income benefits during and for the period in which the employee fails to submit to the medical examination unless good cause exists, as determined by the commission, in which case the commission is authorized to order temporary income benefits to be paid for that period. Requires the commission, by rule, to ensure that an employee receives reasonable notice of an examination and of the insurance carrier's basis for suspension of payment, and that the employee is provided a reasonable opportunity to reschedule an examination missed by the employee for good cause. Deletes the requirement that the commission schedule a benefit review conference (review conference) if a report from a doctor selected by an insurance carrier indicates that an employee can return to work. Deletes the prohibition against an insurance carrier from suspending medical or income benefits payments pending the review conference. (f) Authorizes an insurance carrier to suspend or reduce the payment of temporary income benefits two weeks after it files a notice of suspension with the commission if a report from a doctor selected by an insurance carrier indicates that an employee can return to work immediately or has reached maximum medical improvement. Requires the commission to hold an expedited benefit review conference within ten days after it has received notice of suspension. Sets forth that, if a review conference is not held within two weeks after the commission receives the suspension notice, an interlocutory order is automatically entered for the continuation of temporary income benefits, and the insurance carrier is eligible for reimbursement for any overpayment of benefits. Provides that the commission is not required to schedule a contested case hearing if a review conference is scheduled under this subsection. Authorizes the commission to enter an interlocutory order if a review conference is held not later than the 14th day. Provides that an insurance carrier is eligible for any reimbursement for any overpayments of benefits if a review conference is held not later than the 14th day. Requires the commission to adopt rules as necessary for the implementation of the following: the requirement that an insurance carrier notify the employee and the treating doctor of the suspension of benefits by certified mail or another verifiable delivery method; the obligation for the commission to attempt reasonably to obtain the treating doctor's opinion before it determines whether to issue an interlocutory order; and, the authorization the commission is granted to allow abbreviated contested case hearings by personal appearance or telephone to consider issues relating to overpayment of benefits. SECTION 9. Amends Section 408.025(d), Labor Code, to require a health care provider, rather than a health care facility, to furnish records for treatment or hospitalization if requested by an injured employee, the employee's attorney, or the employee's insurance carrier. Makes a conforming change. SECTION 10. Amends Section 408.027(a), Labor Code, to require an insurance carrier to pay the fee allowed under Section 413.011 (Guidelines and Medical Policies), rather than the fee charged for services rendered by a health care provider. SECTION 11. Amends Section 408.081, Labor Code, as follows: Sec. 408.081. INCOME BENEFITS. (a) Makes no change. (b) Includes an exception in this section to the requirement that income benefits be paid weekly and when they accrue without order of the commission. Requires interest on accrued but unpaid benefits to be paid, without the commission's order, at the time the accrued benefits are paid. (c) Requires the commission, by rule, to establish requirements for agreements under which income benefits may be paid monthly. Authorizes the payment of monthly payments only on the request of the employee and the agreement of the employee and the insurance carrier, and in compliance with the requirements adopted by the commission. (d) Creates this subsection from existing text. SECTION 12. Amends Section 408.124, Labor Code, by amending Subsection (b) and adding Subsection (c), to make a nonsubstantive change and to authorize the commission, by rule, to adopt the fourth edition of the "Guides to the Evaluation of Permanent Impairment" for determining the existence and degree of an employee's impairment. SECTION 13. Amends Section 408.150(b), Labor Code, to make a nonsubstantive change. SECTION 14. Amends Section 408.161, Labor Code, by adding Subsection (d), to authorize an insurance carrier to pay lifetime income benefits through an annuity if the agreement satisfies the standards adopted by the commission by rule. Sets forth that the establishment of the annuity does not relieve the insurance carrier from liability for ensuring that the benefits are paid. SECTION 15. Amends Section 408.181, Labor Code, by adding Subsections (c) and (d), as follows: (c) Requires the commission, by rule, to establish requirements for agreements under which death benefits may be paid monthly. Authorizes the payment of monthly payments only on the request of the legal beneficiary and the agreement of the legal beneficiary and the insurance carrier, and in compliance with the requirements adopted by the commission. (d) Authorizes an insurance carrier to pay death benefits through an annuity if the agreement satisfies the standards adopted by the commission by rule. Sets forth that the establishment of the annuity does not relieve the insurance carrier from liability for ensuring that the benefits are paid. SECTION 16. Amends Section 408.186(a), Labor Code, to increase from $2,500 to $6,000 the amount of one of two options, the lesser of which is required to be paid by an insurance carrier to the person who incurred the liability for the costs of burying an employee who died as a result of a compensable injury. SECTION 17. Amends Section 413.005(b), Labor Code, to include a representative of an insurance carrier among the parties appointed as members of the medical advisory committee. Makes a conforming change. SECTION 18. Amends Section 504.012(a), Labor Code, to authorize the governing body of a political subdivision to elect to provide compensation payments to volunteer fire fighters, police officers, emergency medical personnel, and other volunteers that are specifically named that are greater than the minimum benefits provided under this title. SECTION 19. Amends Article 5.61, Insurance Code, to require the reserves maintained by each workers' compensation insurer to be computed in accordance with any rules adopted, rather than approved, by the commissioner of insurance, rather than the State Board of Insurance (board). Deletes the provision regulating the submission to the board of required reserve reports compiled by each workers' compensation insurer. Makes conforming changes. SECTION 20. Amends Section 13, Article 5.76-3, Insurance Code, by adding Subsection (l), to authorize the fund to issue grants to the commission. Sets forth that the amount of the grant is not to exceed $2.2 million for the period beginning September 1, 1999, and ending September 1, 2003. Provides that this subsection expires September 1, 2003. SECTION 21. (a) Effective date: September 1, 1999, except as otherwise provided. (b) Makes application of Section 401.013(a) prospective. (c) Effective date for Section 401.023(b): October 1, 1999. (d) Effective date for Section 408.004: January 1, 2000. Makes application of Section 408.004 prospective. (e) Effective date for Sections 408.081, 408.161, and 408.181: September 1, 1999. Makes application of Sections 408.081, 408.161, and 408.181 prospective. (f) Makes application of Section 408.186(a) prospective. SECTION 22. Emergency clause.