Coalition's Workers' Compensation Bill
A Bill Entitled an Act of Relating to Worker's Compensation
February 18, 2003

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A bill to be entitled An act relating to workers' compensation;

     Be It Enacted by the Legislature of the State of Florida :

     Section 1. Subsection (1), paragraph (b) of subsection

(14), and subsection (37) of section 440.02, Florida Statutes, are amended to read:

     440.02 Definitions.--When used in this chapter, unless the context clearly requires otherwise, the following terms shall have the following meanings:

     (1) "Accident" means only an unexpected or unusual event or result that happens suddenly. A mental or nervous injury due to stress, fright, or excitement only, or disability or death due to the accidental acceleration or aggravation of a venereal disease or of a disease due to the habitual use of alcohol or controlled substances or narcotic drugs, or a disease that manifests itself in the fear of or dislike for an individual because of the individual's race, color, religion, sex, national origin, age, or handicap is not an injury by accident arising out of the employment. If a preexisting disease or anomaly is accelerated or aggravated by an accident arising out of and in the course of

employment, only acceleration of death or acceleration or aggravation of the preexisting condition reasonably attributable to the accident is compensable, with respect to death or permanent impairment. An injury or exposure caused by exposure to a toxic substance, including but not limited to fungus and mold, is not an injury by accident arising out of the employment unless there is clear and convincing evidence establishing that 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.

(8)  "Construction industry" means any business that carries out for-profit activities involving the carrying out of any building, clearing, filling, excavation, or substantial improvement in the size or use of any structure or the appearance of any land. When appropriate to the context, "construction" refers to the act of construction or the result of construction. However, the term "construction" does shall not mean a landowner's act of construction or the result of a construction upon his or her own premises, provided such premises are not intended to be sold or resold, or leased by the owner within one year after the commencement of the construction.  The division may, by rule, establish those standard industrial classification codes and their definitions which meet the criteria of the term “construction industry” as set forth in this section.

(15)(a)  "Employee" means any person who receives remuneration from an employer for the performance of any work or service, whether by engaged in any employment under any appointment or contract for of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes, but is not limited to, aliens and minors.

(15) (b) 2.  As to officers of a corporation who are engaged in the construction industry, no more than three officers of a corporation, or of any group of affiliated corporations may elect to be exempt from this chapter by filing written notice of the election with the department as provided in s. 440.05. Officers must be shareholders each owning at least ten percent of the stock of such corporation and be listed as an officer of such corporation with the Department of State, Division of Corporations at the time of requesting an exemption, in order to elect exemptions under this chapter. However, any exemption obtained by a corporate officer of a corporation actively engaged in the construction industry is not applicable with respect to any commercial building project estimated to be valued at $250,000 or greater.

Services are presumed to have been rendered to the corporation if the officer is compensated by other than dividends upon shares of stock of the corporation which the officer owns.  The term “affiliated” means and includes one or more corporations or entities, any one of which is a corporation actively engaged in the construction industry, under the same or substantially the same control of a group of business entities which are connected or associated so that one entity controls or has the power to control each of the other business entities.  The term “affiliated” includes the officers, directors, executives, shareholders active in management, employees, and agents of the affiliated corporation.  The ownership by one business entity of a controlling interest in another business entity or a pooling of equipment or income among business entities shall be prima facie evidence that one business is affiliated with the other. 

(c)1.  "Employee" includes: a sole proprietor or a partner who devotes full time to the proprietorship or partnership and, except as provided in this paragraph, elects to be included in the definition of employee by filing notice thereof as provided in s. 440.05. Partners or sole proprietors actively engaged in the construction industry are considered employees unless they elect to be excluded from the definition of employee by filing written notice of the election with the department as provided in s. 440.05. However, no more than three partners in a partnership that is actively engaged in the construction industry may elect to be excluded. A sole proprietor or partner who is actively engaged in the construction industry and who elects to be exempt from this chapter by filing a written notice of the election with the department as provided in s. 440.05 is not an employee. For purposes of this chapter, an independent contractor is an employee unless he or she meets all of the conditions set forth in subparagraph (d)1.

a.           A sole proprietor or partner who is not engaged in the construction industry, who devotes full time to the proprietorship or partnership and, elects to be included in the definition of “employee” by filing notice thereof as provided in s. 440.05.

b.           All persons who are being paid by a construction contractor as a subcontractor, unless the subcontractor has validly elected an exemption as permitted by this chapter, or has otherwise secured the payment of compensation covering the subcontractor consistent with section 440.10, for work performed by or as a sub-contractor.

c.           An independent contractor working or performing services in the construction industry.

d.           A sole proprietor who engages in the construction industry and a partner or partnership that is engaged in the construction industry.

2.  Notwithstanding the provisions of subparagraph 1., the term "employee" includes a sole proprietor or partner actively engaged in the construction industry with respect to any commercial building project estimated to be valued at $250,000 or greater. Any exemption obtained is not applicable, with respect to work performed at such a commercial building project.

(d)  "Employee" does not include:

1. An independent contractor, if: that is not engaged in the construction industry.

a.    In order to meet the definition of “independent contractor,” at least four of the following criteria must be met:

(1) The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;

(2) The independent contractor holds or has applied for a federal employer identification number unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal regulations;

(3) The independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than an individual

(4) The independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business and/or other expenses related to services rendered or work performed for compensation;

(5) The independent contract performs work or is able to perform work for any entity in addition to or besides the employer at his own election without the necessity of completing an employment application and/or process; or

(6) The independent contractor receives compensation for work or services rendered on a competitive-bid basis or completion of a task or set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exists.

     b. If four of the above factors do not exist, an individual may still be presumed to be an independent contractor and not an employee based on full consideration of the nature of the individual situation in light of consideration of the following conditions:

           (1) The independent contractor performs or agrees to perform specific services or work for specific amount of money and controls the means of performing the services or work;

           (2) The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform;

           (3) The independent contract is responsible for the satisfactory completion of the work or services that he or she performs or agrees to perform;

           (4) The independent contractor receives compensation for work for services performed for a commission or on a per-job basis and not on any other basis;

           (5) The independent contractor may realize a profit or suffer a loss in connection with performing work or services;

           (6)  The independent contractor has continuing or recurring business liabilities or obligations; and

           (7) The success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures.

     Notwithstanding anything to the contrary herein, an individual claiming to be an independent contractor has the burden to prove that he or she is an independent contractor for purposes of this act.

a.  The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;

b.  The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal requirements;

c.  The independent contractor performs or agrees to perform specific services or work for specific amounts of money and controls the means of performing the services or work;

d.  The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform;

e.  The independent contractor is responsible for the satisfactory completion of work or services that he or she performs or agrees to perform and is or could be held liable for a failure to complete the work or services;

f.  The independent contractor receives compensation for work or services performed for a commission or on a per-job or competitive-bid basis and not on any other basis;

g.  The independent contractor may realize a profit or suffer a loss in connection with performing work or services;

h.  The independent contractor has continuing or recurring business liabilities or obligations; and

i.  The success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures.

However, the determination as to whether an individual included in the Standard Industrial Classification Manual of 1987, Industry Numbers 0711, 0721, 0722, 0751, 0761, 0762, 0781, 0782, 0783, 0811, 0831, 0851, 2411, 2421, 2435, 2436, 2448, or 2449, or a newspaper delivery person, is an independent contractor is governed not by the criteria in this paragraph but by common-law principles, giving due consideration to the business activity of the individual. Notwithstanding the provisions of this paragraph or any other provision of this chapter, with respect to any commercial building project estimated to be valued at $250,000 or greater, a person who is actively engaged in the construction industry is not an independent contractor and is either an employer or an employee who may not be exempt from the coverage requirements of this chapter.

7.  Unless otherwise prohibited by this chapter, any officer of a corporation who elects to be exempt from this chapter.

8.  An sole proprietor or officer of a corporation who actively engages in the construction industry, and a partner in a partnership that is actively engaged in the construction industry, who elects to be exempt from the provisions of this chapter, as otherwise permitted by this chapter.  Such sole proprietor, officer, or partner is not an employee for any reason until the notice of revocation of election filed pursuant to s. 440.05 is effective.

 (16) (a) "Employer" means the state and all political subdivisions thereof, all public and quasi-public corporations therein, every person carrying on any employment, and the legal representative of a deceased person or the receiver or trustees of any person. If the employer is a corporation, parties in actual control of the corporation, including, but not limited to, the president, officers who exercise broad corporate powers, directors, and all shareholders who directly or indirectly own a controlling interest in the corporation, are considered the employer for the purposes of ss. 440.105 and 440.106.

 (c)  "Employment" does not include service performed by or as:

4.  Persons performing Llabor under a sentence of a court to perform community services as provided in s. 316.193.

     (38) "Catastrophic injury" means a permanent impairment constituted by:

     (a) Spinal cord injury involving severe paralysis of an arm, a leg, or the trunk;

     (b) Amputation of an arm, a hand, a foot, or a leg involving the effective loss of use of that appendage;

     (c) Severe brain or closed-head injury as evidenced by:

           1. Severe sensory or motor disturbances;

           2. Severe communication disturbances;

           3. Severe complex integrated disturbances of

cerebral function;

           4. Severe episodic neurological disorders; or

           5. Other severe brain and closed-head injury

conditions at least as severe in nature as any condition provided in subparagraphs 1.-4.;

     (d) Second-degree or third-degree burns of 25 percent or more of the total body surface or third-degree burns of 5 percent or more to the face and hands; or

     (e) Total or industrial blindness; or

     (f) Any other injury that would otherwise qualify under this chapter of a nature and severity that would qualify an employee to receive disability income benefits under Title II or supplemental security income benefits under Title XVI of the federal Social Security Act as the Social Security Act existed on July 1, 1992, without regard to any time limitations provided under that act.

 (41) “Specificity” means information on the Petition For Benefits sufficient to put the employer or carrier on notice of the exact statutory classification and outstanding time period of benefits being requested and a detailed explanation of any benefits received that should be increased, decreased, changed, or otherwise modified.  If for medical benefits, the specific details as to why such benefit is being requested; why such benefit is medically necessary, and why current treatment, if any, is not sufficient;

(41)  "Commercial building" means any building or structure intended for commercial or industrial use, or any building or structure intended for multifamily use of more than four dwelling units, as well as any accessory use structures constructed in conjunction with the principal structure. The term, "commercial building," does not include the conversion of any existing residential building to a commercial building.

(42)  "Residential building" means any building or structure intended for residential use containing four or fewer dwelling units and any structures intended as an accessory use to the residential structure.

Section 2.  Section 440.05 Florida Statutes is amended to read:

440.05 Election of exemption; revocation of election; notice; certification.—

(3)  Each sole proprietor, partner, or officer of a corporation who is actively engaged in the construction industry and who elects an exemption from this chapter or who, after electing such exemption, revokes that exemption, must mail a written notice to such effect to the department on a form prescribed by the department. The notice of election to be exempt from the provisions of this chapter must be notarized and under oath. The notice of election to be exempt which is submitted to the department by the sole proprietor, partner, or officer of a corporation where such officer is allowed to claim an exemption as provided by this chapter must list the name, federal tax identification number, social security number, all certified or registered licenses issued pursuant to chapter 489 held by the person seeking the exemption, a copy of relevant documentation as to employment status filed with the Internal Revenue Service as specified by the department, a copy of the relevant occupational license in the primary jurisdiction of the business, and, for corporate officers and partners, the registration number of the corporation or partnership filed with the Division of Corporations of the Department of State along with a copy of the stock certificate evidencing the required ownership under this chapter. The notice of election to be exempt must identify each sole proprietorship, partnership, or corporation that employs the person electing the exemption and must list the social security number or federal tax identification number of each such employer and the additional documentation required by this section. In addition, the notice of election to be exempt must provide that the sole proprietor, partner, or officer electing an exemption is not entitled to benefits under this chapter, must provide that the election does not exceed exemption limits for officers and partnerships provided in s. 440.02, and must certify that any employees of the sole proprietor, partner, or corporation whose officer is electing an exemption are covered by workers' compensation insurance. Upon receipt of the notice of the election to be exempt, receipt of all application fees, and a determination by the department that the notice meets the requirements of this subsection, the department shall issue a certification of the election to the sole proprietor, partner, or officer, unless the department determines that the information contained in the notice is invalid. The department shall revoke a certificate of election to be exempt from coverage upon a determination by the department that the person does not meet the requirements for exemption or that the information contained in the notice of election to be exempt is invalid. The certificate of election must list the names of the sole proprietorship, partnership, or corporation listed in the request for exemption. A new certificate of election must be obtained each time the person is employed by a new sole proprietorship, partnership, or different corporation that is not listed on the certificate of election. A copy of the certificate of election must be sent to each workers' compensation carrier identified in the request for exemption. Upon filing a notice of revocation of election, a sole proprietor, partner, or an officer who is a subcontractor or an officer of a corporate subcontractor must notify her or his contractor. Upon revocation of a certificate of election of exemption by the department, the department shall notify the workers' compensation carriers identified in the request for exemption.

(6)  A construction industry certificate of election to be exempt which is issued in accordance with this section shall be valid for 2 years after the effective date stated thereon. Both the effective date and the expiration date must be listed on the face of the certificate by the department. The construction industry certificate must expire at midnight , 2 years from its issue date, as noted on the face of the exemption certificate. All construction industry certificates of election to be exempt in effect as of October 1, 2003 shall expire no later than December 31, 2003.  Any person who has received from the division a construction industry certificate of election to be exempt which is in effect on December 31, 2003 1998, shall file a new notice of election to be exempt where permitted by this chapter by the last day in his or her birth month following December 1, 1998 before January 1, 2004. A construction industry certificate of election to be exempt may be revoked before its expiration by the sole proprietor, partner, or officer for whom it was issued or by the department for the reasons stated in this section. At least 60 days prior to the expiration date of a construction industry certificate of exemption issued after December 1, 1998, By July 1, 2003, the department shall send notice of the expiration date, changes in law for election of exemption, and an application for renewal to the certificate-holder at the address on the certificate.

(10)  Each sole proprietor, partner, or officer of a corporation who is actively engaged in the construction industry and who elects an exemption from this chapter shall maintain business records as specified by the division by rule, which rules must include the provision that any corporation with exempt officers and any partnership actively engaged in the construction industry with exempt partners must maintain written statements of those exempted persons affirmatively acknowledging each such individual's exempt status.

(13)  Any corporate officer permitted by this chapter to claiming an exemption under this section must be listed on the records of this state's Secretary of State, Division of Corporations, as a corporate officer. If the person who claims an exemption as a corporate officer is not so listed on the records of the Secretary of State, the individual must provide to the ¹division, upon request by the division, a notarized affidavit stating that the individual is a bona fide officer of the corporation and stating the date his or her appointment or election as a corporate officer became or will become effective. The statement must be signed under oath by both the officer and the president or chief operating officer of the corporation and must be notarized. The division shall issue a stop-work order under s. 440.107(1) to any corporation who employs a person who claims to be exempt as a corporate officer but who fails or refuses to produce the documents required under this subsection to the division within 3 business days after the request is made.

     Section 3. Section 440.06, Florida Statutes, is amended to read:

     440.06 Failure to secure compensation; effect.—

Every employer who fails to secure the payment of compensation, as provided in s. 440.10, by failing to meet the requirements of under this chapter as provided in s. 440.38 may not, in any suit brought against him or her by an employee subject to this chapter to recover damages for injury or death, defend such a suit on the grounds that the injury was caused by the negligence of a fellow servant, that the employee assumed the risk of his or her employment, or that the injury was due to the comparative negligence of the employee.

Section 4. Section 440.077, Florida Statutes, is amended to read:

440.077 When a sole proprietor, partner, or corporate officer rejects chapter, effect. –

An sole proprietor, partner, or officer of a corporation, who is permitted to elect an exemption under this chapter, actively engaged in the construction industry and who elects to be exempt from the provisions of this chapter may not recover benefits under this chapter.

     Section 5. Subsection (1) of section 440.09, Florida

Statutes, is amended, and subsection (9) is added to said

section, to read:

     440.09 Coverage.--

     (1) The employer shall pay compensation or furnish

benefits required by this chapter if the employee suffers an

accidental compensable injury or death arising out of work performed in the course and the scope of employment. The injury, its occupational cause, and any resulting manifestations or disability shall be established to a reasonable degree of medical certainty and by objective medical findings. Mental or nervous injuries occurring as a manifestation of an injury compensable under this section shall be demonstrated by clear and convincing evidence. In cases involving occupational disease or repetitive exposure, both causation and sufficient exposure to support causation shall be proven by clear and convincing evidence.

     (a) This chapter does not require any compensation or

benefits for any subsequent injury the employee suffers as a

result of an original injury arising out of and in the course

of employment unless the original injury is the major  contributing cause of the subsequent injury. The work related accident must be more than 50% responsible for the injury and subsequent disability or need for treatment in order for it to be the major contributing cause.

     (b) If an injury arising out of and in the course of employment combines with a preexisting disease or condition to cause or prolong disability or need for treatment, the employer must pay compensation or benefits required by this chapter only to the extent that the injury arising out of and in the course of employment is and remains more than 50% responsible for the injury and therefore remains the major contributing cause of the disability or need for treatment.

     (c) Death resulting from an operation by a surgeon furnished by the employer for the cure of hernia as required in s.440.15(6) shall for the purpose of this chapter be considered to be a death resulting from the accident causing the hernia.

     (d) If an accident happens while the employee is employed elsewhere than in this state, which would entitle the employee or his or her dependents to compensation if it had happened in this state, the employee or his or her dependents are entitled to compensation if the contract of employment was made in this state, or the employment was principally localized in this state. However, if an employee receives compensation or damages under the laws of any other state, the total compensation for the injury may not be greater than is provided in this chapter.

     Section 6. Paragraph (a) of subsection (1) of section      440.10, Florida Statutes, is amended to read:

     440.10 Liability for compensation.—

(1)(a)  Every employer coming within the provisions of this chapter, including any brought within the chapter by waiver of exclusion or of exemption, shall be liable for, and shall secure, the payment to his or her employees, or any physician, surgeon, or pharmacist providing services under the provisions of s. 440.13, of the compensation payable under ss. 440.13, 440.15, and 440.16. Any contractor or subcontractor who engages in any public or private construction in the state shall secure and maintain compensation for his or her employees under this chapter as provided in s. 440.38.

(c)  A contractor may shall require a subcontractor to provide evidence of workers' compensation insurance or a copy of his or her certificate of election. A subcontractor that is a corporation, electing to be exempt as a sole proprietor, partner, or and that has an officer of a that corporation electing to be exempt, as permitted under this chapter shall provide a copy of his or her certificate of election of exemption to the contractor.

2.  If a contractor or third-party payor becomes liable for the payment of compensation to the employee corporate officer of a subcontractor who is actively engaged in the construction industry and has elected to be exempt from the provisions of this chapter, but whose election is invalid, the contractor or third-party payor may recover from the claimant, partnership, or corporation all benefits paid or payable plus interest, unless the contractor and the subcontractor have agreed in writing that the contractor will provide coverage.

(g)  For purposes of this section, a person is conclusively presumed to be an independent contractor if:

1.  The independent contractor provides the general contractor with an affidavit stating that he or she meets all the requirements of s. 440.02; and

2.  The independent contractor provides the general contractor with a valid certificate of workers' compensation insurance or a valid certificate of exemption issued by the department.
A sole proprietor, partner, or An officer of a corporation who elects exemption from this chapter by filing a certificate of election under s. 440.05 may not recover benefits or compensation under this chapter. An independent contractor who provides the general contractor with both an affidavit stating that he or she meets the requirements of s. 440.02 and a certificate of exemption is not an employee under s. 440.02 and may not recover benefits under this chapter. For purposes of determining the appropriate premium for workers' compensation coverage, carriers may not consider any officer of a corporation who validly meets the requirements of this paragraph to be an employee.

Section 7. Section 440.104, Florida Statutes is amended to read:

440.104 COMPETITIVE BIDDER; CIVIL ACTIONS—

(6)  A person may not recover any amounts under this section if the defendant in the action establishes by a preponderance of the evidence that the plaintiff:

(a)  W was in violation of s. 440.10, s. 440.105, or s. 440.38 at the time of making the bid on the contract; or

(b)  Was in violation of s. 440.10, s. 440.105, or s. 440.38 with respect to any contract performed by the plaintiff within 1 year before making the bid on the contract.                                                                                                              

     Section 8. Subsection (1) of section 440.11, Florida

Statutes, is amended to read:

     440.11 Exclusiveness of liability.--

     (1) Except if an employer acts with the intent to

cause injury or death, the liability of an employer prescribed in s. 440.10 shall be exclusive and in place of all other liability, including any vicarious liability, of such employer to any third-party tortfeasor and to the employee, the legal representative thereof, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death, except that if an employer fails to secure payment of compensation in

accordance with s. 440.38 as required by this chapter, an injured employee, or the legal representative thereof in case death results from the injury, may elect to claim compensation under this chapter or to maintain an action at law or in admiralty for damages on account of such injury or death. In such action the defendant may not plead as a defense that the injury was caused by negligence of a fellow employee, that the employee assumed the risk of the employment, or that the injury was due to the comparative negligence of the employee. The same immunities from

liability enjoyed by an employer shall extend as well to each employee of the employer when such employee is acting in furtherance of the employer's business and the injured employee is entitled to receive benefits under this chapter.

Such fellow-employee immunities shall not be applicable to an

employee who acts, with respect to a fellow employee, with

willful and wanton disregard or unprovoked physical aggression or with gross negligence when such acts result in injury or death or such acts proximately cause such injury or death. Nor shall such immunities be applicable to employees of the same employer when each is operating in the furtherance of the employer's business but they are assigned primarily to unrelated works within private or public employment. The same immunity provisions enjoyed by an employer shall also apply to any sole proprietor, partner, corporate officer or director, supervisor, or other person who in the course and scope of his or her duties acts in a managerial or policymaking capacity and the conduct which caused the alleged injury arose within the course and scope of said managerial or policymaking duties and was not a violation of a law, whether or not a violation was charged, for which the maximum penalty which may be imposed does not exceed 60 days' imprisonment as set forth in s. 775.082. The immunity from liability provided in this subsection extends to county governments with respect to employees of county constitutional officers whose offices are funded by the board of county commissioners.  Intent includes only those actions or conduct of the employer where the employer actually intended that the consequences of its actions or conduct would be injury or death.  Proof of intent shall include only evidence of a deliberate and knowing intent to harm.  In the event that an employee recovers damages from an employer either by judgment or settlement under this subsection, the workers’ compensation carrier for the employer or the employer, if self-insured, shall have an offset against any workers’ compensation benefits to which the employee would be entitled under this chapter and a lien against recovery for any benefits paid prior to the recovery pursuant to Chapter 440 after deduction for attorneys fees and taxable costs expended by the employee in the prosecution of the claim against the employer.

Section 9.  Section 440.13, Florida Statutes, is amended to read:

440.13                      Medical services and supplies; penalty for violations;

limitations.—

(1)  DEFINITIONS.--As used in this section, the term:

(m)  "Medically  necessity" means any medical service or medical supply which is used to identify or treat an illness or injury, is appropriate to the patient's diagnosis and status of recovery, recommended to the self-insured employer or carrier in writing by an authorized treating physician, and is consistent with the location of service, the level of care provided, and the utilization review requirements consistent with this section applicable practice parameters. The service should be widely accepted among practicing health care providers, based on scientific criteria, and determined to be reasonably safe. The service must not be of an experimental, investigative, or research in nature. ,except in those instances in which prior approval of the Agency for Health Care Administration has been obtained.  The Agency for Health Care Administration shall adopt rules providing for such approval on a case by case basis when the service or supply is show to have significant benefits to the recovery and well being of the patient.

 (u)  "Utilization review" means the evaluation of the appropriateness of both the level and the quality of health care and health services provided to a patient, including, but not limited to, evaluation of the appropriateness of treatment, hospitalization, or office visits based on medically accepted standards. Such evaluation must be accomplished by means of a system that identifies the utilization of medical services based on medically accepted standards as established by medical consultants with qualification similar to those providing the care under review, and that refers patterns and practices of overutilization to the agency.  and that is accredited under the Utilization Review Accreditation Commission (URAC) for Workers Compensation Management Standards.

(2)  MEDICAL TREATMENT; DUTY OF EMPLOYER TO FURNISH.--

(b)  The employer shall provide appropriate professional or nonprofessional attendant care performed only at the direction and control of a physician when such care is medically necessary.  The physician shall prescribe such care in writing.  The employer/carrier is not responsible for attendant care until the time as such prescription for attendant care containing specific time periods for care, the level of care required and the type of assistance required, has been received in writing from the authorized treating physician by the self insured employer or carrier.  The value of nonprofessional attendant care provided by a family member must be determined as follows:

1.   If the family member is not employed, the per-hour value equals the federal minimum hourly wage.

2.  If the family member is employed and elects to leave that employment to provide attendant or custodial care, the per-hour value of that care equals the per-hour value of the family member's former employment, not to exceed the per-hour value of such care available in the community at large. A family member or a combination of family members providing nonprofessional attendant care under this paragraph may not be compensated for more than a total of 12 hours per day.

3.  If the family member remains employed while providing attendant or custodial care, the per-hour value of that care equals the per-hour value of the family member’s employment, not to exceed the per-hour value of such care available in the community at large.

(3)  PROVIDER ELIGIBILITY; AUTHORIZATION.--

(d)  A carrier must respond, by telephone or in writing, to a request for authorization from an authorized healthcare provider by the close of the third business day after receipt of the request. A carrier who fails to respond to a written request for authorization for referral for medical treatment by the close of the third business day after receipt of the request consents to the medical necessity for such treatment. All such requests must be made to the carrier, from the authorized healthcare provider. Notice to the carrier does not include notice to the employer.

(j)  Notwithstanding anything in this chapter to the contrary, a sick or injured employee shall be entitled, at all times, to free, full, and absolute choice in the selection of the pharmacy or pharmacist dispensing and filling prescriptions for medicines required under this chapter. It is expressly forbidden for the agency, an employer, or a carrier, or any agent or representative of the agency, an employer, or a carrier to select the pharmacy or pharmacist which the sick or injured employee must use; condition coverage or payment on the basis of the pharmacy or pharmacist utilized; or to otherwise interfere in the selection by the sick or injured employee of a pharmacy or pharmacist.

(5)  INDEPENDENT MEDICAL EXAMINATIONS.--

(a)  In any dispute concerning overutilization, medical benefits, compensability, or disability under this chapter, the carrier or the employee may select an independent medical examiner. If the parties agree, Tthe examiner may be a health care provider treating or providing other care to the employee. An independent medical examiner may not render an opinion outside his or her area of expertise, as demonstrated by licensure and applicable practice parameters.  The independent medical examiner may not provide follow up care unless both parties agree, when such recommendation for care is found to be medically necessary.  Upon the written request of the employee for an employee independent medical examination, the carrier shall pay the cost of only one independent medical examination per accident.  The cost of any additional independent medical examination shall be borne by the party requesting the additional independent medical examination.  Only the costs of independent medical examinations and the costs of such depositions expressly relied upon by the judge of compensation claims to award benefits in the final compensation order shall be taxable under s. 440.315.

(b)  Each party is bound by his or her selection of an independent medical examiner and is entitled to an alternate examiner only if:

1.  The examiner is not qualified to render an opinion upon an aspect of the employee's illness or injury which is material to the claim or petition for benefits;

2.  The examiner ceases to practice in the specialty relevant to the employee's condition;

3.  The examiner is unavailable due to injury, death, or relocation outside a reasonably accessible geographic area; or

4.  The parties agree to an alternate examiner.
Any party may request, or a judge of compensation claims may require, designation of an agency medical advisor as an independent medical examiner. The opinion of the advisors acting as examiners shall not be afforded the presumption set forth in paragraph (9)(c).

(c)  The carrier may, at its election, contact the claimant directly to schedule a reasonable time for an independent medical examination. The carrier must confirm the scheduling agreement in writing within 5 days and notify claimant's counsel, if any, at least 7 days before the date upon which the independent medical examination is scheduled to occur. An attorney representing a claimant is not authorized to schedule independent medical evaluations under this subsection.

(e)  No medical opinion other than the opinion of a medical advisor appointed by the judge of compensation claims or agency, an independent medical examiner, or an authorized treating provider is admissible in proceedings before the judges of compensation claims.  The employee and the carrier may each submit into evidence, and the judge of compensation claims shall admit, the medical opinion of no more than one qualified independent medical examiner per specialty.  In cases involving occupational disease or repetitive trauma, medical opinions are not admissible unless based on reliable scientific principles sufficiently established to have gained general acceptance in the pertinent area of specialty.

 (6)  UTILIZATION REVIEW.--

Carriers shall review all bills, invoices, and other claims for payment submitted by health care providers in order to identify overutilization and billing errors, and or may hire peer review consultants accredited by the Utilization Review Accredited Commission (URAC) for Workers Compensation to identify overutilization, billing errors, conduct prospective and retrospective reviews and conduct independent medical examinations and other recognized forms of utilization review. or conduct independent medical evaluations. Such consultants, including peer review organizations, are immune from liability in the execution of their functions under this subsection to the extent provided in s. 766.101. If a carrier finds that overutilization of medical services or a billing error has occurred, it must disallow or adjust payment for such services or error without order of a judge of compensation claims or the agency, if the carrier, in making its determination, has complied with this section and rules adopted by the agency.

(7)  UTILIZATION AND REIMBURSEMENT DISPUTES.--

(a)  Any health care provider, carrier, or employer who elects to contest the disallowance or adjustment of treatment or payment by a carrier under subsection (6) must, within 30 days after receipt of notice of disallowance or adjustment of treatment or payment, petition the agency to resolve the dispute. The petitioner must serve a copy of the petition on the carrier and on all affected parties by certified mail. The petition must be accompanied by all documents and records that support the allegations contained in the petition. Failure of a petitioner to submit such documentation to the agency results in dismissal of the petition.

(b)  The carrier must submit to the agency within 10 days after receipt of the petition all documentation substantiating the carrier's disallowance or adjustment regarding utilization. Failure of the carrier to submit the requested documentation to the agency within 10 days constitutes a waiver of all objections to the petition.

(d)  If the agency finds an improper disallowance or improper adjustment as a result of utilization review as defined herein of treatment or payment by an insurer, the insurer shall reimburse the health care provider, facility, insurer, or employer within 30 days, subject to the penalties provided in this subsection.

(e)  The agency shall adopt rules to carry out this subsection that are consistent with this section. The rules may include but are not limited to provisions for consolidating petitions filed by a petitioner and expanding the timetable for rendering a determination upon a consolidated petition.

(8)  PATTERN OR PRACTICE OF OVERUTILIZATION

(a)  Carriers must report to the agency all instances of overutilization including, but not limited to, all instances in which the carrier disallows or adjusts payment. The agency shall determine whether a pattern or practice of overutilization exists.

Subsection (12) is substantially revised as follows:

(12)   CREATION OF THREE FIVE-MEMBER PANEL; GUIDES OF MAXIMUM REIMBURSEMENT ALLOWANCES.--

(a)  A five-member panel is created, consisting of the Insurance Commissioner, or the Insurance Commissioner's designee, and four members to be appointed by the Governor, subject to confirmation by the Senate, one member who, on account of present or previous vocation, employment, or affiliation, shall be classified as a representative of employers; the second member who, on account of previous vocation, employment, or affiliation, shall be classified as a representative of employees; effective September 1, 2003, the third member who shall be a Florida licensed physician and the fourth member, who shall be an accredited insurer actuary, the latter two both being experienced in the delivery of workers compensation medical services. The panel shall determine statewide schedules of maximum reimbursement allowances for medically necessary treatment, care, and attendance provided by any and all providers of medical services, including, but not limited to, chiropractors, physicians, hospitals, ambulatory surgical centers, as well as work-hardening programs, pain programs, and durable medical equipment providers.

(b)  As of the effective date of this act through December 31, 2003, all compensable charges for hospital inpatient and outpatient care must be reimbursed at the current reimbursement rates published in the 1999 edition of the Florida Workers Compensation Reimbursement Manual for Hospitals, up to a total cost per hospital visit of $75,000 and above such threshold shall be reimbursed based on 75% of the usual and customary hospital charges as such charges were in effect on January 1, 2003.

(c)  Effective January 1, 2004, the maximum reimbursement allowances for inpatient hospital care, outpatient surgical services and ambulatory surgical care shall be based on the most current reimbursement methodologies, models and values or weights used by the Federal Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration) with minimal modifications to those reimbursement methodologies as necessary to meet occupational injury requirements. The Panel shall adopt the corresponding federal adopted applicable payment policies relating to coding, billing and reporting and may modify documentation requirements as necessary to comply with this section. In determining appropriate fees, the Panel shall also develop conversion factors or other adjustment factors on the most current reimbursement methodologies, models and values or weights used by the Federal Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration). Nothing herein shall limit the ability of an employer or insurer to negotiate and contract with any medical provider or hospital compensation rates less than those provided in the federal uniform maximum reimbursement allowances.

     (d)  Effective January 1, 2004, all outpatient medical treatment, performed at a hospital or other outpatient facility shall be paid at the lesser of (1) the workers compensation uniform schedule of maximum allowance reimbursement allowance, (2) 75% of the usual and customary charges, (3) an amount mutually negotiated between the hospital or outpatient facility and the employer or insurer, or (4) the amount billed by the health care provider.

(e)           Effective January 1, 2004, the five-member panel shall

revise the uniform schedules of maximum reimbursement allowance applicable to physicians, and other health care providers. The uniform schedule shall include, but not be limited to office visits for evaluation and management services, inpatient or outpatient care in a hospital or ambulatory surgical center, physical therapy, work-hardening, and pain programs provided in an office, hospital outpatient or ambulatory setting; provided however that the health care provider and the employer or its insurer may contract with each other to pay an amount less than at the fee schedule amount. It is the intention and mandate of the Legislature that the health care provider professional fee for service reimbursements be raised, using the savings produced by a no less than a mandated 15% overall net reduction in costs from the hospital per diem schedule in effect on December 31, 2002. This statutorily mandated revision shall be applicable only to hospital and health care provider fee for service schedules to be effective on January 1, 2004, and shall continue in effect until and through December 31, 2005.

(f)  Notwithstanding any provision in this subsection, hospital and medical services shall be billed by the provider to the insurer or employer using the provider's usual, customary, and reasonable charges, although reimbursement shall be limited to the uniform schedule as determined by this subsection or at a lesser amount mutually negotiated between the provider and the employer or insurer. Each health care provider, health care facility, ambulatory surgical center, work-hardening program, or pain program receiving workers' compensation payments shall maintain and disclose upon request records verifying its usual and customary charges.

(g)  The provider of any services, treatment, care instruction, training, or durable medical equipment for which an employer is responsible for payment mandated by this subsection agrees to be bound by the uniform schedule of maximum reimbursement allowances, and any dispute regarding the reasonableness of such allowance shall be resolved in accordance with paragraph 15 of this subsection. Neither the provider nor any employer nor insurance carrier may seek payment from the employee if the employer is responsible for payment under this subsection.

(h)  Every two years at minimum after January 1, 2004, the five-member panel shall review, revise and adopt changes to schedules of maximum reimbursement allowance, based upon the most current reimbursement methodologies, models, and values or weight used by the Federal Medicare and Medicaid services consistent with subsection (c) of this section. The revisions shall take effect no later than June 1 of that biannual year and shall be published at least three months prior to the effective date.

(i)  As to reimbursement for a prescription medication, the reimbursement amount for a prescription shall be the average wholesale price plus $2.00 for the dispensing fee, except where the carrier has contracted for a lower amount. Fees for pharmaceuticals and pharmaceutical services shall be reimbursable at the applicable fee schedule amount. Where the employer or carrier has contracted for such services and the employee elects to obtain them through a provider not a party to the contract, the carrier shall reimburse at the schedule, negotiated, or contract price, whichever is lowest.

(a)  A three-member panel is created, consisting of the Insurance Commissioner, or the Insurance Commissioner's designee, and two members to be appointed by the Governor, subject to confirmation by the Senate, one member who, on account of present or previous vocation, employment, or affiliation, shall be classified as a representative of employers, the other member who, on account of previous vocation, employment, or affiliation, shall be classified as a representative of employees. The panel shall determine statewide schedules of maximum reimbursement allowances for medically necessary treatment, care, and attendance provided by physicians, hospitals, ambulatory surgical centers, work-hardening programs, pain programs, and durable medical equipment. The maximum reimbursement allowances for inpatient hospital care shall be based on a schedule of per diem rates, to be approved by the three-member panel no later than March 1, 1994, to be used in conjunction with a precertification manual as determined by the agency. All compensable charges for hospital outpatient care shall be reimbursed at 75 percent of usual and customary charges. Until the three-member panel approves a schedule of per diem rates for inpatient hospital care and it becomes effective, all compensable charges for hospital inpatient care must be reimbursed at 75 percent of their usual and customary charges. Annually, the three-member panel shall adopt schedules of maximum reimbursement allowances for physicians, hospital inpatient care, hospital outpatient care, ambulatory surgical centers, work-hardening programs, and pain programs. However, the maximum percentage of increase in the individual reimbursement allowance may not exceed the percentage of increase in the Consumer Price Index for the previous year. An individual physician, hospital, ambulatory surgical center, pain program, or work-hardening program shall be reimbursed either the usual and customary charge for treatment, care, and attendance, the agreed-upon contract price, or the maximum reimbursement allowance in the appropriate schedule, whichever is less.

(b)  As to reimbursement for a prescription medication, the reimbursement amount for a prescription shall be the average wholesale price times 1.2 plus $4.18 for the dispensing fee, except where the carrier has contracted for a lower amount. Fees for pharmaceuticals and pharmaceutical services shall be reimbursable at the applicable fee schedule amount. Where the employer or carrier has contracted for such services and the employee elects to obtain them through a provider not a party to the contract, the carrier shall reimburse at the schedule, negotiated, or contract price, whichever is lower.

(c)  Reimburs