HBA-DMD H.B. 2511 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2511
By: Giddings
Business & Industry
3/11/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, the amount of paperwork that must be processed within the
Workers' Compensation system lengthens the time required to process
workers' compensation claims and disputes.  The Texas Workers' Compensation
Commission (commission) staff sometimes has difficulty in obtaining or
verifying workers' compensation coverage and claims information from
employers, certified self-insurers, and political subdivisions.  The
commission currently utilizes more than 100 full-time employees to enter
data into a database.  The volume of information processed in this manner
is too large to allow for effective quality control, and thus errors are
made during data entry, which makes later analysis difficult. Additionally,
in some cases employers will send reports of injury to the commission
instead of the insurance carrier which causes delays in the delivery of
medical care to injured workers. 

H.B. 2511 permits the commission, by rule, to allow or require electronic
transmission of information to be used in lieu of transmitting information
via paper form. This bill authorizes the commission to consult a data
collection agent to fulfill the data collection requirements and adopt
rules necessary to implement the data collection requirements.  This bill
also requires the executive director of the commission to develop a plan
and appoint a task force to incorporate electronic reporting, information,
and financial exchanges between parties in the workers' compensation
system. The commission is authorized to adopt rules to establish the
coverage and claim administration contact information. H.B. 2511 requires a
certified self-insurer and political subdivision to file notice of the
coverage and claim administration contact information with the commission.
This bill also prohibits the employer from transferring the obligation to
report injuries to the insurance carrier. 

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 SECTION 1 (Section 401.024, Labor Code), SECTION 2 (Section
406.006, Labor Code), and SECTION 3 (Section 406.009, Labor Code) of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 401.024, Labor Code, as follows:

Sec. 401.024.  TRANSMISSION OF INFORMATION.  (a) Authorizes the Texas
Workers' Compensation Commission (commission), by rule, to allow or require
electronic transmission to be used in lieu of the specified form, manner or
procedure, notwithstanding other provisions in this Act that specify the
form.  Defines "electronic transmission." Provides that if electronic
transmission of specific information is not authorized or required by
commission rule, transmission of that information is governed by any
applicable statutory or rule requirements for form, manner or procedure
including but not limited to standards as promulgated by the Department of
Information Resources.  Authorizes the commission to designate and contract
with a data collection agent in order to fulfill the data collection
requirements of this subtitle. 

(b)  Authorizes the executive director of the commission (executive
director) to prescribe  the form, manner, and procedure for transmission of
any authorized or required electronic transmissions, including but not
limited to requirements related to security, confidentiality, accuracy, and
accountability.  

(c)  Requires the executive director, to develop and publish a plan to
incorporate electronic reporting, information, and financial exchanges
between the parties in the workers' compensation system by July 1, 2000.
Requires the plan to describe options for the public to access
non-confidential statistical or reference information including medical
billings and payments; medical services billings, payments, reports, and
fund transfer transactions; employer coverage and carrier claim
administration contact information; and other public access information and
transactions that can feasibly be accessed electronically.  Requires the
executive director to identify a task force of knowledgeable system
participants which will include the Texas Health Care Information Council,
hold public hearings, and conduct studies that are necessary to develop a
comprehensive electronic information exchange plan with specific dates for
conversion of specific workers' compensation information to electronic
exchange.  Provides that the plan should be designed to achieve at least a
30 percent reduction in the paper usage for communication requirements by
January 1, 2002, and an additional 30 percent reduction, from the current
requirements, by January 1, 2003.  

SECTION 2.  Amends Section 406.006, Labor Code, as follows:

Sec. 406.006.  New Title:  INSURANCE COVERAGE AND CLAIM ADMINISTRATION
INFORMATION REPORTING REQUIREMENTS; ADMINISTRATIVE VIOLATION. (a) Requires
a certified self-insurer and a political subdivision as defined in Chapter
504 (Workers' Compensation Insurance Coverage for Employees of Political
Subdivisions), Subtitle C (Workers' Compensation Insurance Coverage For
Certain Government Employees) of Title 5 (Workers' Compensation), Labor
Code, to file notice of the coverage and claim administration contact
information with the commission no later than 10 days after the coverage or
claim administration agreement takes effect, unless the commission, by
rule, establishes a later date for filing.  Provides that coverage takes
effect on the date on which a binder is issued or at a later date and time
which is agreed to by the parties, on the date provided by the Certificate
of Self-Insurance, or on the date provided in an interlocal agreement that
provides for self-insurance.  Authorizes the commission to adopt rules in
order to establish the coverage and claim administration contact
information required under this section. 

(b) Makes no change.

(c) Sets forth that an employer, insurance company, certified self-insurer,
or political subdivision commits a violation if the entity, rather than
company, fails to file notice with the commission as provided by this
section. 

SECTION 3.  Amends Section 406.009(a), Labor Code, as follows:

(a) Authorizes the commission to designate a data collection agent,
implement an electronic reporting and public information access program,
and adopt rules necessary to implement the data collection requirements of
this subchapter.  Authorizes the executive director to establish the form,
manner, and procedure for the transmission of information to the commission
as provided by Section 402.042(b)(11) (General Powers and Duties of
Executive Director).  

(b) Authorizes the commission to require an employer or insurance carrier
subject to this title to identify or confirm an employer's coverage status
and claim administration contact information as necessary to achieve the
purposes of this title. 

SECTION 4.  Amends Section 406.051(c), Labor Code, to prohibit the employer
from transferring the obligation to report injuries to the insurance
carrier, rather than commission, under Section 409.005 (Report of Injury;
Administrative Violation). 
 
SECTION 5.  Amends Section 408.003(e), Labor Code, to make a conforming
change. 

SECTION 6.  Amends Section 504.002(a), Labor Code, to provide that Sections
406.006 (Insurance Company Notice; Administrative Violation), 406.007
(Termination of Coverage by Employer; Notice), 406.008 (Cancellation or
Nonrenewal of Coverage by Insurance Company; Notice), 406.009 (Collecting
and Maintaining Information; Monitoring and Enforcing Compliance), and
Subchapter A (Coverage Election; Security Procedures), Chapter 406
(Workers' Compensation Insurance Coverage), apply to and are included in
this chapter except to the extent that they are inconsistent with this
chapter. 

SECTION 7.Effective date: September 1, 1999.
Provides that certified self-insurers and political subdivisions, not
required to file notice of coverage prior to the effective date of this
Act, must file information in accordance with the requirements of this Act
and commission rules by January 1, 2000, and thereafter as required by the
Texas Workers' Compensation Act and commission rules.  

SECTION 8.Emergency clause.