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