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Workers' Compensation

Prior to 2005, the status of the Workers’ Compensation System in Texas was grim. Employers were faced with eye-popping premiums, providers were fleeing and injured workers were caught in a failing system.

In 2004, only 23 percent of doctors were willing to accept new workers’ compensation patients. After a massive revamp of the Workers’ Compensation System during the 79th legislative session, the outlook has dramatically improved.

While many of the reforms are in place, the Division of Workers’ Compensation (DWC) is in its last phase of implementation so it is still not possible to fully assess all the changes made in 2005.

Despite that fact, we can assess some areas. Texas has seen significant improvements. According to a study by the Workers’ Compensation Research Institute (WCRI) medical costs per claim are down, income benefit levels have increased significantly over a five-year period, and return-to-work rates have dramatically improved. WCRI did also report though that Texas’ medical containment costs per claim have continued to climb. In fact, Texas had the highest medical cost containment expenses per claim among the study states—37 percent higher than typical. Simply put, the regulations put in place to reform the system have come at a cost. While these reforms were necessary, the Texas Legislature should ensure that the workers’ compensation is not bogged down with additional regulatory requirements and should instead seek solutions that lessen the regulatory burden on employers.

The DWC is undergoing a Sunset Review which we believe is an opportunity to streamline processes at the Division. The Sunset Commission and staff have done a great job to limiting the review to the function of DWC, but we believe as we have seen in the past, there is a high risk of the Sunset Bill becoming a vehicle for anti-business, job killing legislation that has failed to pass in its’ appropriate committees. TAB will work with the Sunset Commission members and the Texas Legislature to pass a “clean” bill that focuses only on the function of the agency.

The Workers’ Compensation System is improving, but TAB and the business community must stay vigilant to protect the reforms already in place and streamline any identified processes

Accountability of Providers. Support accountability measures for providers within the workers’ compensation system. Monitor provider usage and compliance with adopted evidence-based medical treatment guidelines.

Administrative simplification. Support legislation to reduce unnecessary administrative burdens in the workers’ compensation system on employers, insurance carriers, injured workers, and health care providers. Ease guideline requirements by allowing providers and payers to use a single guideline for medical treatment and return to work

Arbitration. Oppose any efforts to disallow or negatively impact arbitration, which allows disputes to be resolved in a timely manner. Oppose additional restrictions on arbitration.

Employer responsibilities. Support efforts to streamline the statutory process in which an employer is required to notify its employees about any change to its workers’ compensation program relating to networks.

Exemplary damage caps. Oppose legislation to remove caps on exemplary damages in workers’ compensation claims.

Fraud: monitoring, detection and prosecution. Support legislation that increases the Texas Department of Insurance focus on identifying and prosecuting fraud and abuse within the workers’ compensation system. Also, support incentives for identification and successful prosecution of workers’ compensation fraud.

Health and safety. Support cost-effective health and safety measures.

Indemnity Benefits. Ensure that indemnity benefit changes are based on reliable data vetted by the employer and insurer community and that changes do not negatively impact return-to-work initiatives.

Illegal drug use. Support legislation encouraging zero tolerance for the presence of alcohol or illegal drugs on the job. Support efforts to make the intoxication defense stronger.

Impairment ratings. Maintain the objectivity of the workers’ compensation system by ensuring that adopted medical impairment guidelines do not raise impairment benefit amounts. Oppose efforts to lower the impairment rating threshold for an injured worker to receive supplemental income benefits. Also, support continued monitoring of the income benefits system.

Mandatory Workers’ Compensation. Oppose legislative efforts to mandate workers’ compensation coverage.

Mental health. Oppose legislation designed to expand mental health treatment guidelines, or the inclusion of psychologists as authorized treating physicians.

Opinion of chosen doctor. Support legislation to clarify that claimants may not appeal the opinions of their treating doctor in the areas of medical treatment, impairment and dispute process.

Over-burdensome laws. Oppose legislation that imposes new laws or regulations on employers that are non-subscribers to workers’ compensation.

Public use data files. Support requiring the Texas Department of Insurance to make available a public use data file (PUDF) that protects the confidentiality of claimants and employers, but identifies health care providers and insurance carriers. Support all changes in the confidentiality provisions of the Texas Workers’ Compensation Act necessary to allow distribution of the PUDF and to allow publication of medical disputes, appeals panel and the State Office of Administrative Hearings decisions with protection only of claimant and employer confidentiality.

Recoupment of Overpaid Benefits. Encourage the prompt payment of benefits to injured workers and reduce financial pressure on the Subsequent Injury Fund by supporting legislation that permits an insurance carrier to recoup any overpayment of income benefits from future income benefits payable to an injured worker.

Reduction of unnecessary laws. Support legislation to reduce unnecessary administrative and legal burdens on all employers.

Regulatory efficiency. Support measures to increase efficiency in the operation and administration of the Texas Department of Insurance.

Retaliatory discharge. Support legislation to limit damages and restrict the scope of action filed by a terminated employee for workers’ compensation retaliatory discharge.

Settlements. Oppose legislation that attempts to reintroduce lump sum settlements, including medical lifetime benefits, into the Texas workers’ compensation system.

Statutory employer. Support and preserve the current regulatory structure that prevents lawsuits against employers and property owners who provide workers’ compensation insurance.

Subrogation Rights. Maintain subrogation rights of employers and insurers in recouping money paid to claimants for third party actions.

Subsequent injury fund. Support legislation to secure the solvency of the subsequent injury fund that does not require an increase in the maintenance tax.

Treating physicians. Support legislation that strengthens the role of treating physicians to ensure quality medical care and effective management of care for injured workers. Also support clarifying current law regarding the authorization for treating doctor.

Utilization review. Support legislation to promote utilization review as a method of cost containment and quality improvement.

Waiver. Support legislation to specify that the defense of “No compensable injury” cannot be waived regardless of any time constraints.