Perspectives | New Texas Workers Compensation Rules — HB 2600

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New Texas Workers Compensation Rules — HB 2600

Douglas H. Hartman, ARM

October 17, 2003 - The Woodlands Resort and Conference Center, Houston. Annual Fall Conference sponsored by the Houston Chapter of the Risk and Insurance Management Society. Moderator: Pam Chavez, Jacobs Engineering Group.

The theme of this year's conference was "Manage Risk Better." We attended three presentations on the topic of HB 2600.

Dean G. Pappas of Dean G. Pappas & Associates, P.C. gave a detailed account of the Implementation of HB 2600, the first major legislative revision of the 1989 Texas workers compensation act. HB 2600 was enacted in June of 2001. However, some parts became effective immediately and the rest were to become effective when approved according to a schedule of deadlines. As a result, there is some confusion as to what the rules are.

We thought Mr. Pappas did a great job of summarizing a topic that took 20 pages of single space text to address. What was troubling to us were all of the deadlines that were being missed. For example, by the end of August all treating physicians and healthcare providers were supposed to have signed up to be on a new Approved Doctors List. Thus far only 1,300 physicians and healthcare providers have received approval. The old list had 43,000 physicians on it. Other than emergency room physicians, who are exempt, which doctors are going to care for hurt workers?

Another missed deadline was the creation of Regional Healthcare Delivery Networks, which was supposed to have been done by the end of last year. Additionally, HB 2600 changed the rules governing payment of pharmacy bills, the calculation of the average weekly wage, return to work and preauthorization of surgery,among other revisions.

The next presenter was Stephen T. Smith, Smith & Carr, P.C. His topic was the Bona Fide Offer of Employment "BFOE". In a nutshell, unless an employer gives the injured employee a BFOE, the injured employee's indemnity benefits are tied to 70% of whatever his or her pre-injury wages were. If after the injury the employee accepts a job at a lower wage, the employer must make up the difference. On the other hand, if a BFOE is extended to the employee post-injury, and the employee stays out on comp., the employer only owes 70% of the wages of the BFOE.

In other words, the BFOE can be an effective incentive to get employees back to their original jobs — and to discourage malingering and long periods of TTD. On the other hand, extending the BFOE requires an understanding of the complex rules.

 

 

 

 

The third presenter was Tom Dolan, Workers Compensation Manager for the Houston Independent School District. His topic was HB 2600, too, but his major contribution was Coordination of Workers Compensation and Family Medical Leave.

Here's how it works.

Employees who have worked 1,250 hours in the prior 12 months are eligible for Family Medical Leave under Public Law 103-3. When their Family Medical Leave runs out, the employee is placed on a Medical Leave of Absence. Their position is lost and they are eligible for COBRA benefits. Of course, the employee can continue to receive comp. indemnity benefits. However, facing loss of their former job position, they are more likely to find a way to return to work before their Family Medial Leave runs out.

Here are other techniques the Houston Independent School District is using with success:

  1. They published "Employees Guides to Workers' Compensation" booklets tailored to each location.
  2. They created an Employee Injury and Treatment Form that features a nifty tear out that looks like a pharmacy claim ID card.
  3. They furnish maps to help employees locate medical vendors.
  4. They are challenging physicians to provide objective baseline measurements.
  5. They are requiring Demonstrated Abilities Evaluations for all employees who have had three or more claims or an impairment rating in excess of 10% or who have been off work over 60 days.

Results: A steep drop in the average days off work and number of lost time claims incurred since 2001.

Analysis, Strategy and Advice = Solution

Part of every Diagnostic Review or Claim Improvement we perform, we look into changes in workers compensation rules that can have an impact on your risk financing strategies. Also, we look for changes that can lead to improvements in claim handling effectiveness. While we perhaps dwelled on the negatives and complexities of HB 2600, the main objective of the new rules is to control medical costs, eliminate abuse and malingering and save employers money.