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The 2011 Washington State legislative session was a busy one for workers' compensation.  Following is our initial review of the comp-related bills that passed.

 

SB 5801                     Statewide Provider Network/ COHE Expansion

Governor Signed 3/14/11.  Law Effective 7/1/11

This bill was the result of a negotiated agreement between business and labor as part of a larger effort requested by the Governor to reform workers’ compensation in Washington State. 

The primary features of the law are the creation of a Statewide Provider Network and the expansion of the already existing COHE program.  (Centers for Occupational Health & Education). The two key features to this bill are:

Statewide Provider Network:

 The law establishes a statewide health care provider network that seeks to improve patient outcomes by:

Minimum Standards:  Providers must credentialed and meet certain past performance standards such as no history of licensing actions or loss of privileges.

Participation by Contract:   Providers will sign an agreement that is subject to non-renewal if performance falls below minimum standards.

Preferred Provider Tier:  Incentives will be developed for providers who provide excellent care within the network.

COHE Expansion

COHE best practice model to be statewide by 2015.

The COHE best practice model will be used to research and develop best practices in the Statewide Provider Network.

 

HB 2123                  Settlement Option, Return-to-work Incentives, Disability System Changes

Governor to sign on 6/15/11         Law Effective

This was the hard fought compromise bill that caught a lot of media attention at the end of session. It is in part a reflection of the concepts developed during the negotiations between business and labor that produced SB 5801.  It does bring some significant change to Washington’s worker’s compensation system in several areas:

                  Limited Claim Settlement Option

                  This was the hot issue.  It introduces a very limited settlement option.  Currently Washington is one of just a few states that have no “compromise and release” option to resolve claims.  Initially this new settlement option is only available to workers 55 and older.  Over the next several years that age declines and by 1/1/16 this settlement option is available to workers 50 years and over.

                  All aspects of a claim may be settled except medical benefits.   The settlement cannot be paid in single lump sum amounts but must be paid on a structured settlement basis within a range based on a percentage of the State Average Wage.

                  Protections are built in to the law to protect the injured worker from unfair settlements and ultimately all settlements must be approved by the Board of Industrial Insurance Appeals.

                  Other interesting features of the new law include worker protections from an employer’s improper use of a settlement to harass or coerce a worker.  There are also limits on workers’ attorney fees to 15% of the settlement amount. (Note that in non-settlement cases, workers’ attorneys may earn 30% of the worker’s benefits obtained through the attorney’s efforts.)

                  Washington Stay-at-Work Program

                  This is an amendment to the Return-to-Work Statute RCW 51.32.090(4) and is modeled after a similar program in Oregon.   It only applies to State Fund employers.  It will pay up to 50% of a worker's wages brought back to light duty work.  There is also limited reimbursement available for training, clothing, tools or equipment needed to assist in the return-to-work process.

The program is paid for by a new premium assessment, ½ of which can be paid by the workers.  It is important to note that the employer’s experience rating is not impacted by using the benefit.

                  Occupational Disease Study Established

                  Authorizes a researcher to study the impact of occupational disease claims on long term disability and pension rates.  The report must be completed by 12/1/12.

                  COLA Adjustments Suspended for 2012

                  No COLA adjustment on 7/1/11. 

No catch up of the unpaid COLA the following year.

Delays when the first COLA payment would be made to an injured worker to the second July 1st following the injury.

                  Prior Disability Award Offset

                  All prior PPD benefits paid may be offset against a future pension award.

                  No interest is paid on PPD award paid out over time.

                  Rainy Day Fund Established

                  DLI assets that exceed 110% of liabilities are transferred to the rainy day fund.  The fund is to be used to reduce rate increases, provide business with premium relief during economic downturns and cure Department insolvency.

 

                  Fraud Initiative

                  The initiative is designed to combat employer, worker and provider fraud.  In addition, pension recipients’ continued disability and employability will be evaluated periodically.        

                 Performance Audit: Claims

JLARC is directed to perform an audit of the state fund claims management process. Retrospective rating vs. non-retrospective rating management is to be compared as well.

                  Safety Grants

                  Medical aid funds to be used to provide grants for various injury prevention and early-return-to-work programs.

 

HB 1725                  Workers Compensation Efficiencies

Governor signed 5/10/11               Law Effective 7/22/11

At the employer’s request, this new law allows electronic communication of all notice and orders to the employer, except claim closing orders.   Communication date for jurisdictional purposes is date the order is sent by the Department.

The law also directs the Department to provide the legislature with statutory changes necessary to allow retro employers to pay for direct primary care services without disqualification from retro.

 

HB 1726                  Fixes to Vocational Pilot Program

Governor signed 5/10/11               Law Effective 7/22/11

The law makes several “fixes” felt necessary by the Vocational Improvement Pilot committee to deal with unanticipated problems and BIIA decisions.   The new law clarifies that an individual electing Option 2 vocational benefits is not, thereafter, entitled to further time loss or a pension absent a showing of a worsened  claim-related medical condition.   Claims closed under Option 2 cannot be reopened solely for the purposes of allowing the worker to seek vocational services.  The law also provides some additional time and flexibility for the employer to make a bona fide job offer and for the worker to make an Option 2 election.

 

SB 5278                     Rate Notice Transparency

Governor signed 4/27/11               Law Effective 7/22/11

Under this new law, when the Department issues a state fund or self insured rate notice the agency must give employers an accounting that “clearly identifies all programs and services that are financed in whole or in part by state fund premiums or self-insurer’s administrative assessments.”