Comp in the Capitol: Mostly Quiet, Group Fund Measure Moves on to Senate

Last week, the comp adjuster licensing bill (SB 266) moved favorably out of Committee, as did the group self-insurance fund financials measure (HB 280) in its second hearing. Further, the subrogation bill aimed at reducing comp premiums for employers moved favorably out of Senate Labor. This week, few comp-related bills are moving. HB 280 passed the House Wednesday and will move onto the Senate.

Stick with Louisiana Comp Blog for full coverage of all comp-related legislative happenings until the Session ends on June 6th.

The summaries below are for the original versions of each piece of legislation. “Comp in the Capitol,” posted  weekly, will address any changes as each measure moves through the process.

 

 

HB 221 – Representative Marcus Hunter

  • repeals the prohibition of the receipt of workers’ comp benefits while incarcerated
  • Current status: Opposed at WCAC meeting 3/24. First appeared in the Interim Calendar on 3/4/2016 after being provisionally referred to the Committee on Labor and Industrial Relations

 

HB 725 – Representative Chris Broadwater

  • mandates the adoption of a closed pharmacy formulary for workers’ compensation by July 1st, 2017, and the promulgation of related rules
  • the potential closed pharmacy formulary under this legislation would be developed with specialized input from workers’ comp system stakeholders
  • the bill as written mandates that the closed formulary in question “shall be the most recent version of the Workers’ Compensation Formulary of the Official Disability Guidelines Appendix A; treatment in worker’ comp, published by the Work Loss Data Institute
  • unlike the medical treatment guidelines, which are updated by statute every two years by the Medical Director, the formulary updates under this bill would automatically proceed pursuant to the ODG’s published updates
  • however, the bill provides for the Medical Advisory Council to request not to adopt a section or part of the automatic ODG updates, which the Director of the OWCA would take under advisement and then promulgate a rule in order to state that it is not accepted
  • Current status: Opposed at (2 in favor) WCAC meeting 3/24. First appeared in the Interim Calendar on 3/4/2016 after being provisionally referred to the Committee on Labor and Industrial Relations

 

HB 345 – Representative Chris Broadwater

  • concerns private info and medical records for a workers’ comp claimant and who can have have access to them
  • present law requires that all of an employee’s medical records, records of payment of compensation and rehabilitation be kept confidential – police, attorneys representing the claimant, insurance fraud investigation and the attorney general are provided an exclusion to the confidentiality doctrine
  • current law also does not for the disclosure of the identities of all members of a particular carrier or group fund, or for the disclosure of dates for coverage for a specific employer or group
  • this legislation would extend the exception and make the same private info available to certain third parties “providing insurance support organization services for workers’ compensation compliance, monitoring, reporting, enforcement and fraud identification”
  • Current status: Opposed at WCAC meeting 3/24 (2 votes no decision). First appeared in the Interim Calendar on 3/4/2016 after being provisionally referred to the Committee on Labor and Industrial Relations

 

HB 280 – Representative Chris Broadwater

  • concerns group self-insurance funds and rules surrounding financial status of funds
  • changes the definition of “hazardous financial condition”
  • extends additional powers to the Department of Insurance including:
  • allowing a cease and desist order to include a prohibition on the fund from writing or incurring any new business or renewing prior business
  • allowing the Dept. to levy a fine of up to $4,000 for issues for which a fine was previously levied
  • giving the Dept. authority to place a find on a corrective action plan and to fix compliance and financial problems
  • allowing the Insurance Commissioner to establish protocol for the corrective action plan including mandatory training, monitoring and supervision, progress reports, or other measures designed to generate monies for the fund to continue operation
  • proposed law would also allow the Commissioner to impose fines, penalties, or revocation of certification for noncompliance with the corrective action plan
  • proposed law would allow provide for procedures for delinquency proceedings in instances in which a fund is insolvent, operating in hazardous financial condition, etc. and further provides for insolvency/hazardous financial condition penalties including supervision, conservation, rehabilitation, or liquidation
  • measure delineates a procedure and requirements for the dissolution of a fund which include applying for such status, ensuring a lack of outstanding liabilities, and coverage/irrevocable commitment from a licensed insurer that will provide payment of any outstanding liabilities
  • finally, proposed law would require that all remaining assets after dissolution be paid to participants in the fund
  • Current status: Finally passed House floor on 05/04/2016, 98 yeas 0 nays, awaiting Senate hearing. Reported favorably from House and Governmental Affairs Committee hearing 4/27/16. Reported favorably from House Labor and Industrial Relations Committee on 4/14/16. Reported favorably by Council at WCAC meeting 3/24. Appeared on Interim Calendar on 3/4/2016 after being provisionally referred to the Committee on Labor and Industrial Relations

 

HB 575  –  Representative Chris Broadwater

  • Constitutional Amendment: provides relative to civil service status of workers’ compensation judges
  • this amendment would reclassify workers’ comp judges appointed after January 1st, 2017 to as unclassified service persons, to be voted on in the statewide election November 8th, 2016
  • Current status: Deferred at House and Governmental Affairs Committee hearing 4/20/16. Reported favorably at WCAC meeting 3/24 (3 opposed). Read by title, under the rules, referred to the Committee on House and Governmental Affairs

 

HB 623 – Representative H. Bernard LeBas

  • eliminates restrictions on the performance of physical therapy services without a prescription or referral
  • companion measure: SB 291
  • The measure allows patients to seek physical therapy without a referral but explicitly states that the receipt of such treatment shall not be construed as either: mandating coverage for physical therapy services under any healthcare or workers’ comp plan or circumventing any requirement for preauthorization of services in accordance with a healthcare, workers’ comp or other insurance plan
  • Current status: Opposed at WCAC meeting 3/24 (1 in favor). Read by title, under the rules, referred to the Committee on Health and Welfare.

 

SB 44 – Senator Ryan Gatti

  • concerns subrogation by an insurer or group fund when a claimant pursues a third party for damages associated with his/her injury
  • proposed law retains currents statute’s rules for the employer/insurer’s recovery from the third party but provides that if a suit or claim results in a settlement or judgment whereby the employer’s workers’ comp insurer/fund recoups at least 40 percent of their statutory lien from the third party, it must:
  • adjust the employer’s premium rating so that more premium is not paid due to an accident caused by a third party AND
  • refund all increased premium dollars paid by the employer as a result of the accident caused by the third party within 30 days of the receipt of recouped funds by the insurer/fund
  • in order to enforce this retroactive reduced premium rating, if an insurer/fund fails to return the pre-accident premium funds to the employer within the 30 period, the insurer/fund suffers a penalty of 1.5 times the amount of the statutory lien proceeds from the third party suit plus any attorney’s fees
  • to further enforce this 30 day period, failure to return to the employer a refund of all increased premiums paid as a result of the accident within 30 days of receipt of recouped funds shall result in penalties equal to 1.5 times the amount of the premiums paid by the employer, which are attributable to the accident, for the time period not to exceed 3 years prior to the third party settlement, plus any attorney’s fees incurred by the employer
  • Current status: Reported favorably from Senate Labor and Industrial Relations Committee 4/28/16. Approved at WCAC meeting 4/20/16. One amendment adopted in Senate Committee on Labor and Industrial Relations 3/31/16, voluntarily deferred pending additional amendments. Unanimously opposed at WCAC meeting 3/24. Prefiled and under the rules provisionally referred to the Committee on Labor and Industrial Relations

 

SB 266 – Senator Gerald Long

  • repeals the exception of licensure for workers’ compensation adjusters in Louisiana, effective August 1st, 2017
  • this bill would also remove the exemption for licensed out of state adjusters to bypass an examination to become licensed in Louisiana, with some exception for adjusters in good standing who secure a certification from their home state’s Insurance Commissioner within the current 90 day application period for a Louisiana license
  • however, proposed law permits the Commissioner to waive the workers’ compensation examination requirement for an individual who has three years of verifiable experience adjusting workers’ compensation claims within the preceding five years, provided the application is received on or before August 1st, 2017
  • this measure also contains changes to punishable/unethical actions in Title 22 and changes language regarding the leadership of independent adjusting companies
  • Current status: Reported favorably from House Insurance Committee 4/27/16. Passed Senate. Considered in first Senate Insurance Committee meeting 3/22/16, reported favorably. WCAC retroactively reported favorably at meeting 3/24.

 

HB 665 – Representative Patricia Smith

  • provides for an increase in administrative penalties related to the misclassification of employees
  • present law allows only for written warning, no fines, for the first offense of employer misclassification as long as there is no evidence of intent on the part of the accused employer
  • this measure deletes present law and provides for a penalty of up to $5,000 per relevant employee if evidence of intent to misclassify is found
  • further, the bill ups the penalty for the second offense (currently set at a maximum of $250 per employee) to up to $10,000 per employee, in addition to the contributions, interest and penalties owed
  • for third and subsequent offenses, the employer will be subject to a fine of up to $25,000, plus other contributions, interest and penalties
  • a House amendment in the current version of the bill also prohibit an employer caught misclassifying two or more times from collecting any state tax rebates
  • this issue, and this bill, were the subject of a Lee Zurik investigation on Fox 8, watch here.
  • Current Status: Failed House final passage (34 yeas, 58 nays)

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