The DWC has posted a new report this month on progress implementing SB 863. “This report confirms that the reforms are on track. Employer costs are under control and injured worker benefits are increasing,” said Labor and Workforce Development Secretary David M. Lanier. “While there is ongoing work to reduce delays and improve the system – overall the progress is impressive.”
The report concludes that workers’ compensation costs for employers have dropped. In May 2015, the Department of Insurance adopted advisory pure premium rates for July 1, 2015, which on average are five percent less than the industry average for filed pure premium rates as of Jan. 1, 2015, and 10.2 percent less than the average of the approved Jan. 1, 2015 rates.
Benefits for injured workers have also increased. Prior to the reform legislation, the minimum weekly benefit payment for people with permanent disabilities was $130, and the maximum was $270. The new minimum weekly PD benefit is $160, and the maximum is $290. Also, the Return-to-Work-Supplement Program – which provides a one-time $5,000 supplement to eligible injured workers – became effective in April 2015. As of June 30th, DIR had issued 434 checks totaling over $2 million.
SB 863 also created an Independent Medical Review (IMR) program, in which physicians use evidence to determine the necessity of requested treatments. “The progress made since the passage of SB 863, which allows medical – rather than legal – experts to make medical decisions, is very encouraging,” said DIR Director Christine Baker. Additional key findings of the report include:
1) IMR decisions are being issued well within the 30-day statutory time frame from receipt of medical records.
2) Lien filings are a big factor in the reduction in overall costs. The report shows that lien filings have decreased by approximately 60 percent since the passage of SB 863. A retrospective evaluation report of SB 863 cost monitoring completed last November by the WCIRB estimated savings of $690 million due to the reduction in lien filings.
3) Commitment to evidence-based medicine is also demonstrated through recent adjustments to the Medical Treatment Utilization Schedule (MTUS). The MTUS is a set of guidelines for appropriate medical care based on high-quality, unbiased scientific studies. However, the system allows for exceptions when treatment can be based on guidance other than the MTUS.
SB 863’s revisions to the MPN program went into effect on August 27, 2014. More of these networks have been approved, and they are also now more accountable to DWC. Physician listings must be updated quarterly, and if a provider leaves the network, they are required to give 45 days’ notice. Furthermore, the revised access standards require an MPN to have at least three available physicians from which injured workers can choose.
On April 13, 2015, DIR launched the Return-to-Work Supplement Program (RTWSP) for injured workers. This $120 million per year fund, which provides an additional $5,000 to each eligible injured worker who has a disproportionate loss of earnings, is an important component of the workers’ compensation reforms in SB 863. As of June 30, 2015, DIR made supplemental payments totaling $2,170,000 to injured workers. DIR received 508 applications for the one-time payment of $5,000 by that date, with 454 application reviews completed, and the remaining 54 applications under review. Of the 454 applications reviewed, 388 applications were deemed eligible, and 66 were denied, either because the person was injured before Jan. 1, 2013, or the application filed was incomplete or a duplicate.