Summary of Workers’ Compensation Coalition Bill Final Draft

Defines “accident” to exclude toxic exposure including fungus and mold unless there is clear and convincing evidence that the exposure to the specific substance involved, at the levels to which the employee was exposed, can cause the injury or disease sustained by the employee. Section 1. s. 440.02(1).

Defines “construction industry” to mean any business that carries out certain construction activities. Current law requires them to be “for profit” activities. Additionally, provides “construction” does not mean a landowner’s act of construction on his own premises, provided that the premises are not intended to be sold, resold, or leased by the owner within one year after the commencement of construction. Current law does not have the one-year “no-sale or resale” provision. Section 1. s. 440.02(8).

Defines “employee” to mean persons who receive remuneration from an employer for the performance of work or services or for the providing of goods or services. Current law provides “engaged in any employment” a more vague term. Section 1. s. 440.02(15)(a).

Allows for the exemption of up to three construction industry officers but only if they own at least ten percent each of the corporation. “Affiliated” is tightly defined. Current law has no ownership requirement for an exemption. Section 1. s. 440.02(15)(b)(2).

Defines “employee” to include subcontractors in construction. The intent is to eliminate the construction exemptions for entities, including subcontractors, independent contractors, more than three corporate officers/shareholders, partners and sole proprietors and requiring these entities to have coverage. Protects the “Mom and Pops” in the construction industry by allowing incorporation and allowing officers/owners of l0% or more of the corporation to opt out. That is the only exemption allowed. All others in the construction industry would have to have workers compensation coverage. Section 1. s. 440.02(l5)(b) & (c) 1.

Tightens up the corporate officer exemption process by requiring that each officer seeking an exemption must be on file with the Secretary of State as a corporate officer at the time the exemption is sought. Further, if the corporation has not been in existence long enough to have filed with the IRS, then the officers cannot be exempt. Finally, a separate exemption must be obtained each time the person is employed by a different corporation. Each officer/shareholder must have a stock certificate to evidence their ownership. All construction industry certificates of election to be exempt in effect as of October 1, 2003 shall expire no later than December 31, 2003, Section 2. s. 440.05(3), (13); Section 3. s. 440.06; and Section 4. s. 440.077.

Establishes statutory distinction between employees and independent contractors outside the construction industry. Independent contractors must meet at least four of six objective definitions set out in statute. If the independent contractor does not meet the criteria, there is a presumption in favor of an independent contractor unless the independent contractor satisfies any one of seven additional subjective conditions set out in statute. The burden of proof is on the independent contractor. Section 1. s. 440.02(l5)(d).

Eliminates all amendments to construction exemption created in SB 108. (2002)

Requires contractors to require subcontractors to provide evidence of workers’ compensation insurance and clarifies that any corporate officer/shareholder who is exempt, must present proof of the exemption to the contractor. Section 4. S. 440.10(1)(c )

Eliminates the social security language from the definition of “catastrophic injury” so that the social security criteria is not used to determine permanent total disability. In s. 440.15(l), new language is proposed that allows JCC’s to use discretion when determining permanent total disability. Section 1. S. 440.02 (37)(f).

Defines specificity that is required by the current statute for every Petition filed. Section 1. S. 440.02 (41).

Tightens definitions of “occupational disease” and “repetitive trauma” by requiring the claimant show, by clear and convincing evidence, both causation and sufficient exposure to support causation. Partially addresses United States Sugar v. G. J. Henson. Section 5. s. 440.09 (1).

In order to be considered “a major contributing cause”, the work related accident must be more than 50 percent responsible for the injury and subsequent disability. Overturns Closet Maid v. Sykes. Section 5. s. 440.09 (1)(a), (b).

Removes the one year limitation when a plaintiff in a civil action cannot recover damages if that plaintiff is shown by the defendant to have been in violation of sections 440.10, 440.l05 or 440.38 at any time. Section 7. S 440.104.

Strengthens the exclusive remedy provision of the law by stating that an employer who provides workers’ compensation for his employees is exempt from tort suit unless the employer acts with actual intent to cause injury or death. It also provides a tight definition of “intent” and how that intent must be proven. Partially addresses Turner v. PCR. Inc. Section 8. s. 440.11 (1).

Should the injured worker get a civil judgement, the workers’ compensation carrier (or the employer, if self-insured) is allowed an offset against compensation benefits to be paid (minus attorney fees and costs) to eliminate double dipping caused by Turner v. PCR, Inc. Section 8. s. 440.11 (1).

Tightens the definition of “medical necessity” to require an authorized treating physician to recommend in writing to the employer/carrier any care needed for the employee. Eliminates shot gun claims and doctor shopping. Section 9. s. 440.13(1)(m).

Deletes current statutory exception that allows Agency for Health Care Administration (AHCA) to approve experimental, investigative, or research services as medically necessary. Section 9. s. 440.13(1)(m).

Provides that the employer/carrier is not responsible for attendant care prior to receipt of written request from the authorized treating physician setting out the time periods, level of care and nature of assistance prescribed. Section 9. s. 440.13(2)(b).

When authorized, payment for attendant care furnished by a family member is limited to the per-hour value of such care in the community. Eliminates the loop hole in calculation of average weekly wage when a family member provides attendant care but remains employed. The statute already addresses what is paid when the family member is not working or quits to provide the care. Section 9. s. 440.13(2)(b)(3).

Clarifies that a carrier must respond by telephone or in writing to request for authorization for medical care within 3 business days when the request is from an authorized health care provider. Section 9. s. 440.13(3)(d).

Eliminates the employee’s ability to choose his own pharmacist. Section 9. s. 440.13(3)(j)

Limits carrier responsibility for paying independent medical examinations (IMEs) by providing the carrier pays for the first one but then subsequent IMEs are paid for by the party requesting it. Provides that only those IMEs that are expressly relied upon by the Judge of Compensation Claims are taxable costs against the employer/carrier. Provides that a party can only put into evidence one IME per specialty. Eliminates the requirement that the employer/carrier must set the claimant’s IME. Also provides that an IME may not provide follow up care unless both parties agree. Section 9. s. 440.13(5)(a).

Limits medical evidence involving occupational disease or repetitive trauma to those based on reliable scientific principles sufficiently established to have gained general acceptance in the area of specialty (i.e. no junk science). Addresses United States Sugar v. G. J. Henson. Section 6. s. 440.13(5)(e).

Until December 31, 2003 , allows all compensable charges for inpatient and outpatient hospital care to be reimbursed at current rates, up to a total cost $75,000 per hospital visit and above such threshold at 75% of usual and customary charges in effect on January 1, 2003 and thereafter. Section 9. s. 440.13(12)(b).

Reconstitutes the 3 member panel relating to medical fee schedule to a 5 member panel and adds a licensed physician and an insurer actuary. Section 9. s. 440.13(12).

Utilization review has to be in accordance with standards established by the Utilization Review Accreditation Agency for Workers Compensation (URAC). Section 9. s. 440.13(1)(u).

Bills, invoices, and other claims for payment are currently reviewed by carriers to identify overutilization and billing errors. New language is added to make it optional for carriers to hire peer review consultants who must be accredited by URAC. They may identify overutilization, billing errors, conduct reviews and IMEs to determine if overutilization or billing errors exist. Section 9. s. 440.13(6).

Adopts payment policies related to coding, billing, and reporting adopted by Federal Centers for Medicare and Medicaid Services for use in Florida . Section 9. s. 440.13(12)(c).

Effective January 1, 2004 , limits maximum reimbursement allowances for inpatient hospital care, outpatient surgical services and ambulatory surgical care to the uniform schedule for reimbursement allowance as finalized for Federal Medicare and Medicaid, subject to the application of modification factors for Florida . Section 9. s. 440.13(12)(c).

Effective January 1, 2004 , provides outpatient medical treatment performed at hospital or other outpatient facility to be paid at lesser of the workers compensation uniform schedule of maximum reimbursement allowance, 75% of usual and customary charges, an amount mutually negotiated between the provider and the employer and insurer, or the amount billed to the employer by the provider. Section 9. s. 440.13(12)(d).

Requires that for the two years following January 1, 2004 , the reimbursement schedules established by the 5 Member Panel must result in a 15% reduction of hospital reimbursements to be applied to and a 25% increase from the Medicare schedule to physicians. Section 9. s. 440.13(12)(e).

Requires the 5 Member Panel to update all uniform reimbursement schedules at least every two years. Section 9. 440.13 (12)(h).

Prohibits balance billing to the injured worker. Section 9. s. 440.13(12)(g).

Reduces prescription prices from wholesale price of 1.2 times plus $4.18 to only $2.00 for a dispensing fee. Section 9. s. 440.13(12)(b).

Gives the Department jurisdiction to resolve a dispute between a health service provider and an insurer or self-insured employer, over reasonableness of fee charged. The parties are bound to the Department’s determination. Requires Department to adopt rules governing the fee dispute resolution process. Section 9. s. 440.13(15)

Grievance defined as being in writing, but not in a Petition, when expressing dissatisfaction of the refusal to provide or dissatisfaction with medical care. Section 10. s. 440.134(1)(d).

Defines wages to be determined from the date of accident and bases compensation on actual wages earned during the 13 calendar weeks prior to the injury excluding the week of accident at not less than 75 percent rather than 90 percent of hours actually worked. Section 11. s. 440.14(1)(a)

Strengthens the definition of permanent total disability by eliminating the social security test. Redefines permanent total disability to be determined when an employee is not able to be engaged in any work, including sheltered employment. The employee must prove he is unable to work even part time work if such work is available within a 50 mile radius of his residence. Ceases permanent total disability at age 70 or after 5 years from the date following the determination of permanent total disability, whichever is later. Section 12. s. 440.15(1)(b).

Corrects Burger King Corp. v. Moreno and Wilkins v. Broward County School Board, and stops supplemental permanent total benefits for those who become permanently and totally disabled after age 65, when they are eligible for social security. Supplemental benefits are already eliminated under current law for those who become permanently and totally disabled before age 62 and for every PTD between ages 62 to 65. Section 12. s. 440.15(1)(f)1.

Corrects Winter Haven Hospital v. Nevius and clarifies that temporary total catastrophic benefits are paid only for the first 6 months after the accident, but only to those who are not eligible for or have not been determined to be permanently and totally disabled. Returns statute to original intent since 1974 The First DCA re-interpreted this statute in Nevius. Section 12. s. 440.15(2).

Changes the formula for impairment benefits from 50 percent of the employee’s compensation rate to 100 percent (subject to the maximum compensation rate under 440.12), i.e., doubles the benefit. Section 12. s. 440.15(3)(a)3.

Limits psychiatric impairment to 1 percent for the calculation of permanent impairment and requires impairment must be proven to be work related. Section 12. s. 440.15(3)(a)3.(b).

Impairment benefits cannot be paid for a pre-existing mental, psychological or emotional condition and cannot be due to chronic pain which cannot be substantiated by objective medical findings. Section 12. s. 440.15(3)(a)3.

Makes two very important changes relating to occupational diseases. First, for an occupational disease to be covered, both causation and sufficient exposure to support causation must be proven by clear and convincing evidence. Second, in addition to any other restrictions, to be considered a covered occupational disease, there must be an epidemiological study showing that exposure to the specific substance involved, at the levels to which the employee was exposed, can cause the precise disease sustained by the employee. Addresses U.S. Sugar v. G. J. Henson. Section 13. s. 440.151(1)(e), (2).

Tightens up the claims process by strengthening specificity in petitions including, if the employee is under the care of a physician for an injury, a copy of the physician’s request for authorization or recommendation for treatment or attendance must be attached to the Petition. Section 14. s. 440.192(2)(i)

Allows the carrier 30 days to pay benefits or file a response to the petition. Current law gives the carrier only 14 days after the receipt of a petition for benefits, to either pay or file a response to the petition. The current law does not allow attorneys’ fees to be paid by the carrier for the first 30 days. Section 14. s. 440.192(8).

Clarifies that motions to dismiss for lack of specificity may be filed within 60 days rather than the current 30 days in that the parties today have 30 days to pay the petition or deny same before attorneys’ fees attach against the employer/carrier. Also clarifies that if the response to petition raises the lack of specificity issue within 60 days, then that defense is preserved. Section 14. s 440.192(5).

Eliminates the 120 days to pay while investigating compensability of an injury in that the time limitations conflict with current statute that requires mediation be held prior to 90 days from the filing of a Petition. Section 14. s. 440.192(8).

Current law requires a Judge of Compensation Claims to consider, at the time of settlement, whether the settlement allocation provides for the appropriate recovery of child support arrearages. The bill makes it clear that neither the employer nor carrier has the duty to investigate or collect information regarding child support arrearages. Section 15. s. 440.20(11)(d)1.

Clarifies the current statute that parties have 30 days to resolve any petition and that a mediation is not ordered until up to the 40th day after receipt of petition. This creates a 10 day window for the Judge of Compensation Claims to either schedule state mediation or order private mediation. The manner in which current language has been interpreted does not allow the parties the time to resolve their differences before mediation is scheduled. The old Request for Assistance allowed sufficient time to resolve differences without litigation. Rather than decrease litigation, the interpretation of this statute passed in 2002 has increased litigation. Section 16. s. 440.25(1).

Allows continuances of final hearings in very, very limited circumstances after 210 days. Section 16. s. 440.25(1)(d).

Allows independent medical examiners’ reports to be placed into evidence without the need for taking the deposition of the IME physician. Section 18. s 440.29(4).

Eliminates hourly rates and requires attorneys’ fees to be paid on a contingency fee basis except for one medical only claim, per accident. Then the statute would allow for an additional $l,000 based on hours should the JCC find such additional fee is warranted. Current law allows a contingency fee or an hourly rate, which ever is greater. Fees are based on benefits secured and are subject to a fee schedule. However, by case law, the judge in his discretion may award an hourly rate that is greater than the fee schedule. In the case of a “wash-out”, the claimant will pay the attorneys’ fee, which current law requires, but increases the fee not to exceed 15 percent of the settlement amount. The Judge is prohibited from approving any settlement, compensation order, joint stipulation or any agreement relating to fees in excess of the statutory amount. Section 19. s. 440.315.

If the claimant has already received medical treatment, but the health care provider has not been paid, usually because the medical provider delays in submitting charges on the proper form, the employer/carrier will not be responsible for the attorney’s fees in collecting payment of the bill. Current law does not allow the health care provider to bill an injured worker for workers’ compensation bills. Section 19. s. 440.315 (6).

Allows the workers’ compensation carrier subrogation rights against the employer paid uninsured motorist/underinsured motorist coverage under a commercial auto policy. Section 20. s. 440.39(2)(b).

Clarifies that if an injured employee has not placed the employer on notice within sixty days after an injury that the claimant wishes the employer to preserve evidence relating to a third-party action, the employer has no duty to preserve such evidence. There is no duty for a carrier to preserve evidence relating to third-party actions. Section 20. s. 440.39(8) and (9).

Creates Workers’ Compensation Appeal Commission to hear all workers’ compensation appeals from the Judges of Compensation Claims. Appointment of the 5 Commissioners by the Governor from a list submitted to the Governor recommended by the Judges from each of the respective five District Courts of Appeal. Section 22. s. 440.4416(1)(a)(1)

Requires appeals from the Workers’ Compensation Appeals Commission to all 5 District Courts of Appeal. Current law requires appeal from the Judge of Compensation Claims only to the First District Court of Appeal. Section 22. s. 440.4416(1)(a)(1).

The effective date is 10/1/03 . Section 25.

Summary of Workers’ Compensation Coalition Bill Final Draft

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