March WCAC Meeting Centers Around Pending Legislation, Introduction of New Medical Director

The March meeting of the Workers’ Compensation Advisory Council (WCAC) took place last Thursday at the Department of Insurance in Baton Rouge. Office of Workers’ Compensation Administration (OWCA) Director Sheral Kellar guided the Council and the public through several key pieces of business, including the appointment and introduction of the new Medical Director. Representative Chris Broadwater (pictured) gave presentations on a variety of bills he has filed for the 2016 Legislative Session, currently in its third week, and members voted on whether or not to recommend both his and several other pending instruments to the appropriate Committees.

Read on for details on the discussion and voting on the more controversial instruments. Check out our “Comp in the Capitol” series for running updates on the bills we’re tracking.

New Medical Director

Dr. Jason Picard, an Internist formerly in a private practice based in New Roads, is the new Medical Director for the OWCA and will guide the updates to the Medical Treatment Guidelines as well as rendering decisions on MTG compliance. Director Kellar clarified that Dr. Picard will be the only physician serving in the office, stating that the OWCA decided that another full-time hire was not necessary. Three other doctors are currently under contract to handle medical disputes and will continue to do so in the near term while the backlog of cases is cleared.

Dr. Picard told the Council that he is “currently making very good progress” on that backlog, which has manifested in the absence of a full time Medical Director over the last several months. Director Kellar indicated that she expects the review process to be back on track by early Summer.

HB 623 – Physical therapy

House Bill 623, a measure allowing the performance of physical therapy without a referral/prescription, was presented to the Council by Representative H. Bernard Lebas, who highlighted the fact that the bill applies only to workers’ comp in a roundabout way, and that the intent is to expand access to the PT, especially for underserved populations.

However, nearly all Council members were unconvinced, questioning the motivations behind the bill and whether or not workers’ comp payers could be driven to a spending spiral in cases where a claimant never receives a diagnosis from an actual physician.

Dr. Dan Gallagher, an orthopedic surgeon and physician representative on the WCAC, was particularly skeptical of the bill. “It makes no sense to move a case to someone who is less trained than a physician to diagnose someone. And since physical therapists can’t diagnose under the law, then the diagnosis is delayed,” Gallagher explained. “The people who are really pushing this is actually a small group of physical therapists and trial lawyers […] looking to boost settlement values.”  Representative Lebas stated in response to Dr. Gallagher’s criticism that he had not spoken to any attorneys about the legislation.

All Council members with exception of one voted to oppose the bill (two members were absent at the time of the vote).

SB 266 – Workers’ comp adjuster licensing

The WCAC members also retroactively considered Senate Bill 266 later on in the meeting. The Senate Insurance Committee already considered the bill and reported it favorably on the 22nd of March. The measure, sponsored by Senator Gerald Long, repeals the exemption workers’ comp claims adjusters currently hold, requiring them to be licensed in order to practice in the state of Louisiana. There is a grandfather clause in the bill that allows adjusters who have been adjusting comp claims for three of the last five years to apply to the Commissioner of Insurance for licensure without having to sit for an exam. The exam would have to be created and administered by August 2017. The majority of present WCAC members voted in favor of the bill, however, Denis Juge raised concerns about the language in the grandfather clause, saying that he would prefer “shall” over “may” so that the Commissioner has a duty to grant licenses to grandfathered adjusters. SB 266 is set for the the third reading and final passage on March 28th and is not expected to face any opposition.

HB 280 – Group self-insurance funds’ financial stability

House Bill 280, one of several comp-focused bills sponsored by and presented in person by Representative Chris Broadwater (who is also a former Director of the OWCA), would change the statute to provide further oversight powers to the Insurance Department regarding group self-insurance funds and their financial stability. The bill is popularly considered to be a reaction to several high-profile fund failures in recent years, including the recent bankruptcy of The Timbermen Fund in 2015.

Representative Broadwater, in presenting the bill, explained, “Frankly, the group funds that do their job well see these failures as a problem too, because it gives a black eye to them. So [well-managed funds] are working with the Commissioner to make sure that he has the necessary authority to collaborate and ensure the health of these programs. I filed this bill at their request and at the Commissioner’s request. That’s the intent here.”

Michael Morris, Administrator of the Homebuilders SIF, chimed in on his role in the drafting of the legislation, saying that he expects some minor amendments in the the near future but that the bill has been well-received. Upon the voting, all present WCAC members voted to report the bill favorably to the Insurance Committee ahead of that body’s hearing.

HB 575 – Civil service status of workers’ comp judges

Workers’ comp judges’ status as classified members of the civil service was the next major issue. House Bill 575, also filed by Representative Broadwater, is a constitutional amendment seeking to change the status of workers’ comp judges from classified to unclassified. He delineated three major reasons why this change is essential:

First, Representative Broadwater explained, “The law says now that a workers’ comp judge will be appointed for a five year term, and can serve additional terms, but must reapply like all other applicants. Now, there were amendments to the Constitution to create that workers’ compensation system, however, one of the amendments that never occurred was the article in the Constitution that addresses classified and unclassified civil service. The classified service does not have a five year job appointment, they have a four year job appointment.” This makes the term of a comp judge facially unconstitutional, and this amendment would remedy that.

Second, Representative Broadwater urged the Council to consider the difficulty of attracting qualified talent for workers’ compensation judgeships under the pay scale to which the Office is beholden under the classified civil service rules. “One of the biggest frustrations I had as Director [of the OWCA] was that in order to even be able to compete for the candidates that I felt were most qualified, I had to go to the maximum of the third quartile, which is the highest I can go under civil service rules – and that got you to about $90,000 a year […] To find someone seasoned enough, with enough experience – it’s every hard to compete for that person at $90,000,” Broadwater said.

The third reason Representative Broadwater gave in support of his bill was related to the level of confidence system participants have (or do not have) in the impartiality of workers’ comp judges. “There have been occurrences over the years when both sides of the system have voiced concerns about the way they were treated by workers’ comp judges. That is the greatest concern I have for the Office, that someone – whether it’s an injured worker or an attorney – loses and does not feel that they were treated fairly when they lost. People can deal with losing when they understand the reasons,” he continued.

According to Representative Broadwater, moving judges to the unclassified service would force them to face the imminent possibility of reappointment, which, due to the five year (rather than four year) term limit, means that every potential re-appointment would fall under a new and unknown gubernatorial administration. He also stressed that the bill would not affect any existing comp judge, only future ones.

Council members responded generally positively to Representative Broadwater’s presentation of the bill, but questioned whether the five year limit actually serves to de-politicize the bench. Further, Clark Cossé, WCAC member representing hospital interests, said that he would like to see an amendment addressing the dismissal of workers’ comp judges only for cause, which the bill in current form does not contain.

Despite these concerns, the measure was reported favorably by majority vote, with three members opposed.

HB 725 – ODG formulary

The final big ticket item of the day was the formulary measure, House Bill 725. Representative Broadwater framed the filing of this measure, which would mandate the implementation of the Work Loss Institute’s “Official Disability Guidelines” closed prescription drug formulary for workers’ comp, in terms of the opioid epidemic.

“[The opioid epidemic] is impacting those trying to represent injured workers, it is impacting those trying to treat injured workers, and it’s impacting those who are paying the bills for that treatment. But most of all, it’s impacting the injured worker that falls into the trap of abuse,” Broadwater said. “It’s incumbent upon this body to find a way to mitigate this kind of abuse […] this is one proposal to do it. What I would encourage under the [House Labor and Industrial Relations] Chairman’s directive is to reach consensus on something. If you all don’t like this proposal, tell me what you can agree on and I’ll be glad to move forward on that instead. It’s a problem, and it would be an embarrassment for the entire system if we sit here knowing it’s a problem and don’t address it.”

All but two present WCAC members voted against the ODG formulary bill in its current form, but several spoke up to acknowledge the issue and re-convene the formulary task force that existed last year when a different formulary bill came under discussion.

The next WCAC meeting is scheduled for April 28th at 9:30 AM at the Department of Insurance.

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