LOUISIANA WORKERS COMPENSATION LAW CHANGES 2012

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1 LOUISIANA WORKERS COMPENSATION LAW CHANGES 2012 The following is a summary of the 2012 legislative amendments to the Louisiana Workers Compensation Act. The major law changes were at the urging of the business community. The OWC also sponsored several changes related to the medical treatment guidelines and electronic billing for medical services. The claimant s bar and labor were able to pass an amendment to the prescription for developmental injuries but we were able to limit the indemnity exposure for this change to no more than six months of TTD. The major criticism that we faced when pressing our legislation (SB 763 and several other bills that did not make it through the process) was that these bills were either not presented to the Workers Compensation Advisory Council or were not approved by the Council. The Council I composed of individuals appointed by the Governor to represent various stakeholders in the workers compensation system (Denis Juge represents the defense attorneys). To have Council approval of any measure requires a vote of. Although the Council has been able to agree on difficult issues such as the medical treatment guidelines, the current makeup of the Council would not support the major changes that business felt was needed. Thus, it was necessary for us to seek legislative approval of our reform bills without the support of the Council. IMMEDIATE ATTENTION NEEDED: Two of the law changes will require procedure adjustments in your claims department. 1. The waiting period for paying the first week of TTD as of 8/1/12 is now after two weeks of TTD instead of six weeks. Your payment system must be changed to reflect this shorter waiting period to avoid assessment of penalties and attorney fees for late payment of the first week of TTD [ 1224]; 2. The notice that the employer is required to send to the employee regarding his right to an IME has been changed to require this notice after the first request by the employee for authorization for medical treatment AND you are now also required to include in this notice information regarding the procedures for appealing any denial of treatment [ 1203E]. SUMMARY Preamble Act 860 [R.S. 23:1020.1] Effective 8/1/12 This is a new provision in the act which states that the general purpose of the workers compensation act. The significance of this provision is the statement that the act is not to be liberally interpreted by the courts in favor of the employee or the employer. 1

2 This is intended to overrule the case law that has declared that the act is to be liberally construed in favor of the employee. AWW Calculation Penalties and Attorney Fees Act 860 [R.S. 23:1201H] Effective 2/1/12 One of the major goals of the business sponsored legislation was to address the costs associated with the awards of penalties and attorney fees for late payments of benefits or miscalculation of the average weekly wage. While we were not able to get legislative approval for all of our law changes in this area, we were able to establish a procedure for an employee to challenge the employer s calculation of the AWW and permit the employer to correct any errors without being subject to penalties and attorney fees: The amendment to 1201 establishes a procedure for the payor (insurer or selfinsured employer) to send a notice of payment form to the employee or his representative (as well as the OWC) and upon receipt of a written notice from the claimant that the compensation rate is wrong the payor has five business days to either send the correct amount or file a request for a preliminary determination by the workers compensation judge. The preliminary determination hearing must occur within fifteen days of the request. The hearing is by telephone and the judge may order the parties to produce relevant records (such as wages and records of hours worked). No later than thirty days from the filing of the request for the preliminary determination the judge is to render a recommendation. The payor is then given ten calendar days from receipt of the recommendation to either pay the recommended amount or notify the employee and his representative in writing that does not accept the recommendation. At that point litigation can be filed on the AWW issue and if the payor is found to have made an error in the calculation penalties and attorney fees may be awarded. However, a payor who accepts the recommendation or agrees to pay in accordance with the recommendation but files a dispute with the OWC to controvert the recommendation will NOT be subject to penalties or attorney fees on that issue alone. Burial Expenses Act 860 [R.S. 23:1210] Effective 8/1/12 Increases benefits for burial expenses from $7,500 to $8,500 SEB Payments Act 860 [R.S. 23:1221(3)] Effective 8/1/12 The amendment to 1221(3) recognizes that SEB should normally be paid monthly when you have a claimant who is either working and earning wages which can be used to calculate the monthly SEB or the employer has established the claimant s earning capacity (with a vocational expert) and the SEB is paid monthly based on the claimant s earning capacity. In those cases in which the claimant is no longer TTD AND is not working AND the employer has not, as yet, established earning capacity the claimant will be paid SEB at his full TTD rate either weekly or bi-weekly as he had received his TTD benefits. primary purpose is to reduce litigation and awards of penalties and attorney fees over the question of when SEB is to be paid. Current law provides for the calculation of SEB by comparing the claimant s preaccident average monthly wage to his post-accident average monthly wage. This assumes that the claimant is actually working but earning less than pre-accident wages. However, a 2

3 common situation is that the claimant has reached MMI but is not earning any wages. The current law does not give any guidance on how to pay SEB in those circumstances. Do you pay the full TTD rate on a weekly or bi-weekly basis but call it SEB OR do you pay the equivalent of one month of the TTD rate at the end of each month. The employers have not been uniform in dealing with these circumstances and have frequently been faced with penalties and attorney fees either because they made the payment monthly or simply because they changed the description of the payment from TTD to SEB. Hence, as per the amendment to Section 1221(3), use of the LDOL Form 1020 and MONTHLY payment of SEB applies in circumstances when the employee has actually returned to work, OR the employer has established a wage earning capacity for the injured worker. However, in all cases in which the employee has reached MMI and has been medically declared capable of returning to employment, but has not actually returned to work OR the employer has not identified a wage earning capacity, the SEB shall be paid IN THE SAME MANNER IN WHICH THE EMPLOYER/CARRIER HAS BEEN PAYING either weekly or biweekly. TTD Payment Waiting Period Act 860 [R.S. 23:1224] Effective 8/1/12 Shortens period to pay for the first week of TTD from six weeks of temporary disability to two weeks. Catastrophic Injuries Act 860 [R.S. 23:1221(4)(s) Effective 8/1/12 Increases the lump sum one time payment (in addition to any other benefits owed) from $30,000 to $50,000. Subsection (s) (i) is amended to increase the amount of the payment. It should be noted that this payment only applies to injuries described in subsection (s) (iii) [paraplegia, quadriplegia, total loss of both hands, and both arms, or either feet etc., or third degree burns of 40% or more of the total body surface.] Prematurity Act 860 [R.S. 23:1314] Effective 8/1/12 Clarifies that the workers compensation act permits the employer to initiate litigation by filing a Form Although the current statute clearly recognizes the right of an employer to controvert the employee s workers compensation claim, the courts of appeal have interpreted the prematurity statute to deny the claim filed by an employer. Two issues are addressed with this amendment. First it is made clear that no suit can be filed in the OWC over medical treatment issues unless a decision has been rendered by the medical director as provided in the guidelines statute ( ). This is needed to avoid any effort to bring medical treatment issues before the WC judges if the issue has not been considered by the medical director. The second provision in this amendment clarifies the right of the employer to file a dispute in those circumstances in which the WC act recognizes the right of the employer to seek judicial action. Prescription for Developmental Injuries Act 783 [R.S. 23:1209] Effective 8/1/12 Amends the act to extend the time limit for filing a claim for developmental injuries; for claims filed more than two years from the accident but less than three years the employee would be entitled to TTD benefits not to exceed six months. The amendment 3

4 further states that the payment of the TTD benefits does not interrupt prescription for any additional indemnity benefit. Death Benefits Act 99 and Act 793[R.S. 23:1231 B] Effective 8/1/12 Two bills on the same subject but slightly different wording were enacted concerning the award of death benefits to children who are over the age of majority if there are no other legal dependants. The sum of $75,000 is to be divided equally among the children. If there are no legal dependants and no surviving children over the age of majority then the parents are to be paid $75,000 each. Time for Payment of Medical Benefits Act 652 [R.S. 23:1201E(1) and ] Effective 7/1/13 This act authorizes the director of the OWC to establish rules for collection of medical billing and payment data. The act also provides that after this procedure is established (on or after 7/1/13) the time limit for paying medical provider bills will be 30 days (not 60) if the provider sends the bill electronically and as per the billing rules established by the director. Medical Treatment Guidelines Statutory Cleanup Act 235 [R.S. 23:1123; 1142; 1203 and 1307] Effective 8/1/12 Several statutes were amended to clarify the circumstances for litigation involving treatment issues: 1123 Disputes as to the condition or capacity of employee to work This statute was amended to remove the current provision that gave the director authority to appoint an IME regarding medical treatment issues. These disputes are now governed by the medical guidelines and the UR rules Approval of health care provider fees This statute was amended to recognize the involvement of the employer s Utilization Review company in assisting the payor with the issue of authorization of nonemergency treatment in excess of $750. The statute also states that the decision of the UR should only require a review of the employee s medical records and shall NOT require an medical examination of the employee. 1203E Duty to furnish medical benefits This amendment addresses the requirement for the employer to give notice to the employee regarding his right to an IME. The statute was amended to also require that after the first receipt of a request for authorization of medical treatment (prior law was upon first payment of a medical bill) the employer is to give the employee notice of his right to an IME AND to advise the employee of the procedures for appealing any denial of medical treatment Information from the OWC to Injured Employee 4

5 This statute was amended to require the OWC to include in its notice to an employee (when a notice of injury is filed) his right to an IME and the procedures for appealing the denial of medical treatment. Case Manager/Vocational Rehabilitation Counselor Release of Information Act 76 [R.S. 23:1127 C (3)] Effective 8/1/12 Amendment to the act to permit the case manager or vocational rehabilitation counselor to send a summary of any verbal communications with the health care provider by electronic mail if the employee or his representative (attorney) consents in writing to such method. Medical Advisory Council and WC Advisory Council Immunity Act 573 [R.S. 23:1203.1] Effective 8/1/12 New provision in the act that states that no member of the Medical Advisory Council (MAC) or the WC Advisory Council shall be liable for any policy recommendations or actions and shall not be subject to civil or administrative subpoena for their recommendation as member of the Council nor shall they be required to testify in any civil proceedings. This was enacted in response to litigation that was filed against the OWC regarding the medical treatment guidelines. Access to Payor s Records Fraud Identification Act 88 [R.S.23:1291.2] Effective 8/1/12 and rule to be in place 3/1/13 This is new provision which requires payors to maintain claim and payment data and make them available to the OWC in order to verify that employers and employees are not engaging in fraudulent activities. Such information shall be confidential and not subject to discovery or subpoena. Employer Reports Act 141 [R.S. 23:1306] Mandatory as of 12/31/13 permitted after 12/31/12 Insurer or TPA is required to submit the First Report of injury to the OWC in electronic data interchange or EDI format. Any questions please call Denis Paul Juge at or send to djuge@wcdefense.com 5