By: Ogden S.B. No. 1696

A BILL TO BE ENTITLED

AN ACT

relating to workers' compensation compensability disputes, examinations to define the compensable injury and notifications to health care providers regarding compensability disputes.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 408.0042, Labor Code is amended by amending Subsection (a) to read as follows:

(a) The division shall require an injured employee to submit to a single medical examination to define the compensable injury on request by the insurance carrier or injured employee.

SECTION 2. Section 408.027, Labor Code is amended by adding Subsection (c-1) to read as follows:

(c-1) An insurance carrier shall notify a health care provider in writing if the carrier contests the compensability of the injury for which the provider provides health care services. A carrier may not deny payment for health care services provided by the health care provider or preauthorized by the carrier before the written notification on the grounds that the injury was not compensable. An explanation of benefits or a notice of determination under Chapter 4202, Insurance Code, does not constitute written notice under this subsection. Payment for medically necessary health care services provided or preauthorized prior to the written notification of a compensability denial is not subject to denial, recoupment, or refund from a health care provider based on compensability. If the insurance carrier successfully contests compensability, the insurance carrier is liable for all health care provided prior to the issuance of the notification required by this subsection, up to a maximum of $7,000. The commissioner may adopt rules as necessary to implement the provisions of this subsection.

SECTION 3. Section 409.021, Labor Code, is amended by amending Subsections (a), (a-1) and (e) and adding Subsection (c-1) to read as follows to read as follows:

Section 409.021. INITIATION OF BENEFITS; INSURANCE CARRIER'S REFUSAL; ADMINISTRATIVE VIOLATION. (a) An insurance carrier shall initiate compensation under this subtitle promptly. Not later than the 15th day after the date on which an insurance carrier receives written notice of an injury, the insurance carrier shall:

(1) begin the payment of income or death benefits as required by this subtitle; or

(2) notify the division and the employee in writing of its refusal to pay and advise the employee of:

(A) the right to request a benefit review conference; and

(B) the means to obtain additional information from the division.

(a-1) An insurance carrier that fails to comply with Subsection (a) or Section 408.027, Subsection (c-1) does not waive the carrier's right to contest the compensability of the injury as provided by Subsection (c) or (c-1) but commits an administrative violation subject to Subsection (e).

(a-2) An insurance carrier is not required to comply with Subsections (a) if the insurance carrier has accepted the claim as a compensable injury and income or death benefits have not yet accrued but will be paid by the insurance carrier when the benefits accrue and are due.

(b) An insurance carrier shall notify the division in writing of the initiation of income or death benefit payments in the manner prescribed by commissioner rules.

(c) If an insurance carrier does not contest the compensability of an injury on or before the 60th day after the date on which the insurance carrier is notified of the injury, the insurance carrier waives its right to contest compensability. The initiation of payments by an insurance carrier does not affect the right of the insurance carrier to continue to investigate or deny the compensability of an injury during the 60-day period.

(c-1) Notwithstanding Subsection (c), if the insurance carrier receives written notice from the injured employee's treating doctor, which clearly describes the injury or clearly describes how a new manifestation of the original injury, additional injury, or additional diagnosis is related to the compensable injury and the insurance carrier does not contest the compensability of the injury or diagnosis on or before the 60th day after the date on which it receives the notice described by this subsection, the insurance carrier waives its right to contest compensability of the injury or diagnosis described in the written notice under this subsection. Submission of a medical bill, medical documentation, or a request for preauthorization does not constitute written notice under this subsection. The commissioner may adopt rules as necessary to implement the provisions of this subsection. This subsection cannot be construed as limiting:

(1) an injured employee's entitlement to medical benefits in accordance with Section 408.021;

(2) an insurance carrier's or an injured employee's ability to request a medical examination by the treating doctor to define the compensable injury under Section 408.0042; or

(3) an insurance carrier's or an injured employee's ability to request a designated doctor examination under Section 408.0041.

(d) An insurance carrier may reopen the issue of the compensability of an injury if there is a finding of evidence that could not reasonably have been discovered earlier.

(e) An insurance carrier commits a violation if the insurance carrier does not initiate income or death benefit payments or file a notice of refusal as required by this section or Section 408.027 (c-1). A violation under this subsection shall be assessed in accordance with Chapter 415 of this subtitle[at $500 if the carrier initiates compensation or files a notice of refusal within five working days of the date required by Subsection (a), $1,500 if the carrier initiates compensation or files a notice of refusal more than five and less than 16 working days of the date required by Subsection (a), $2,500 if the carrier initiates compensation or files a notice of refusal more than 15 and less than 31 working days of the date required by Subsection (a), or $5,000 if the carrier initiates compensation or files a notice of refusal more than 30 days after the date required by Subsection (a). The administrative penalties are not cumulative].

SECTION 4. Section 409.022, Labor Code, is amended by amending Subsections (a) to read as follows to read as follows:

Section 409.022. REFUSAL TO PAY BENEFITS; NOTICE; ADMINISTRATIVE VIOLATION. (a) An insurance carrier's notice of refusal to pay benefits under Section 409.021 or Section 408.027 (c-1) must specify the grounds for the refusal.

(b) The grounds for the refusal specified in the notice constitute the only basis for the insurance carrier's defense on the issue of compensability in a subsequent proceeding, unless the defense is based on newly discovered evidence that could not reasonably have been discovered at an earlier date.

(c) An insurance carrier commits an administrative violation if the insurance carrier does not have reasonable grounds for a refusal to pay benefits, as determined by the commissioner.

SECTION 5. Section 410.209, Labor Code is amended to read as follows:

Section 410.209. REIMBURSEMENT FOR OVERPAYMENT. The subsequent injury fund shall reimburse an insurance carrier for any overpayments of benefits made under an interlocutory order or decision if that order or decision is reversed or modified by final arbitration, order, or decision of the commissioner or court. The commissioner shall adopt rules to provide for a periodic reimbursement schedule, providing for reimbursement at least annually. Notwithstanding this section, payment of medical benefits in accordance with Section 408.027 (c-1) of this subtitle and Section 1305.153 (e), Insurance Code is not reimburseable from the subsequent injury fund.

SECTION 6. EFFECTIVE DATE. This Act takes effect September 1, 2009.