Sunday, March 5, 2017

Florida's SB1582 - More Comp Discussion

On Friday, March 3, 2017, Florida Senator Bradley filed SB1582. It is a 28 page document that addresses workers’ compensation definitions, the pleading and adjudication of disputes, calculation of attorney fees, insurance rate-making, and the expenditures that carriers can make to defend cases, find work for injured workers, and more.

The bill defines "specificity," amending Section 440.02(40) significantly. Following the changes, underlined words added and strikethrough deleted, the definition would be:
(40) “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 for each requested benefit, the specific amount of each requested benefit, the calculation used for computing the requested benefit, of benefits being requested and includes a detailed explanation of any benefits received that should be increased.
Some will say that defining a "specific amount of each requested benefit" will be challenging in some cases. It is not uncommon that claims for indemnity benefits are made with a definite starting point, but no end. That is, they are from mm/dd/yy to the present (the day the petition is filed) and continuing. When benefits are continuing and ongoing, calculating a value of those benefits may be a challenge. 

The bill removes Section 440.105(3)(c) entirely. 
(c) It is unlawful for any attorney or other person, in his or her individual capacity or in his or her capacity as a public or private employee, or for any firm, corporation, partnership, or association to receive any fee or other consideration or any gratuity from a person on account of services rendered for a person in connection with any proceedings arising under this chapter, unless such fee, consideration, or gratuity is approved by a judge of compensation claims or by the Deputy Chief Judge of Compensation Claims.
This section has received significant discussion over recent decades. It is language that various people have various perspectives upon. The application of that section to attorneys who represent injured workers was a focus of the First District Court last year in Miles. As that decision precludes the application of this section to attorneys, the logic for striking it seems supported by Miles. Others may question whether the attorney prohibition of Miles, justifies striking the entire section, which some could argue has a broader prohibition than attorneys alone. See Some Interesting Questions on Miles

There has been much discussion of time limitations in Florida workers' compensation. See A Victory (Whose) on One-Time Change. The bill addresses "day" calculations with a new definition in Section 440.13(1)(c). Some will point out that this definition, in the medical portion of the Act, Section 440.13(1)(c), will apply as a modifier of "days" only in the medical contexts of the law. That is "business day" as defined in 440.13 will likely only apply in 440.13 and not in the rest of the Florida workers' compensation law. It provides:
(c) “Business day” means Monday through Friday, excluding the following holidays: New Year’s Day, Birthday of Dr. Martin Luther King, Jr., Memorial Day, Independence Day, Labor Day, Veterans’ Day, Thanksgiving Day and the Friday after Thanksgiving, and Christmas Day. If any of the holidays falls on Saturday or Sunday, the term does not include the day on Monday through Friday on which the holiday is observed.
Under this definition, only the actual holidays would be excluded from the calculation of days. When offices are closed on a weekday, in observation of a holiday that falls naturally on a weekend, the observation day would be included as a business day. This, despite the fact that state and federal offices might nonetheless be closed for that observation. And, more importantly, the very doctor whose office needs to be contacted, whose agreement to undertake care is needed, may likewise be closed in observation. 

One-time change would require written request, but the 5-day response period would now be “5 business days.” Section 440.13(2). The addition of “business” to modify “days” is proposed in various sections, including 440.13(4)”Notice of Treatment,” (5) “independent medical examinations,” and (9) “expert medical advisors.”

Requests from an “authorized health care provider,” under Section 440.13(3)(d) would no longer require a “response.” Instead, the “carrier” would be required to “authorize or decline a request for authorization” by the end of the “third business day after receipt of the request.” Failure to respond to a written request means the carrier “authorizes the request.” A similar time period of 10 days in Section 440.13(3)(i) would afford “10 business days” when the claim is for “specialist consultations, surgical operations, physiotherapeutic (sic) or occupational therapy procedures, X-ray examinations, or special diagnostic laboratory tests” of specified cost.

This holds the employer or carrier to a higher standard. The statute currently requires a response. Some would argue that "thank you," or any acknowledgement, is a response. The bill would seem to require a more substantive response that takes one of two forms, that is provided the treatment or deny that request. This language might be interpreted to provide litttle "middle ground."
  
Clarity perhaps comes to the subject of temporary benefits from this bill. Following the Supreme Court’s decision in Westphal, there has been discussion of the maximum period during which temporary benefits might be payable. This proposal clarifies that eligibility for temporary total would be 260 weeks, Section 440.15(2). The provision for temporary partial would also be 260 weeks. But this section says “as provided by this subsection and subsection (2).” Thus, arguably the total period of combined TTD and TPD would be 260 weeks. See Westphal is Over, Questions Remain

The bill amends Section 440.192 to remove the requirement of including a social security number when filing a petition for benefits. It also requires including the “Florida county or, if outside of Florida, the state of the occurrence of injury." It is possible that this location clarity would be of benefit to some process or procedure in the system. The bill includes further requirements for specificity in petitions for benefits in Section 440.192. These include a “specific date of maximum medical improvement” and “the specific date that such permanent benefits are claimed to begin” for any “claim for permanent benefits.” Section 440.192(2)(f).

Claims for change in the calculation of a worker’s average weekly wage (AWW) in Section 440.192(2)(j) would also require enhanced specificity. The petition would have to include “the specific amount of compensation claimed,” as well as “the methodology claimed to accurately calculate the average weekly wage.” And, if the petition does not include an AWW calculation claim, then the AWW calculated by the “employer or carrier are presumed to be accurate.” It is unclear if that presumption is for the claim or merely applies during the pendency of that particular petition.

Determination of motions for dismissal of petitions would be expedited. The bill mandates Judges of Compensation Claims “enter an order on the motion” in most instances “within 10 days after the motion is filed.” That is not the “10 business days” afforded regarding various provisions in Section 440.13 (above). That is 10 days. A motion filed on a Friday would have to be decided one week from the following Monday (S, S, M, T, W, Th, F, S, S, M). So, this 10 days is essentially 6 business days, unless there are holidays involved. So, in various weeks through the year, the requirement might require an order in 4-5 business days. When a hearing is required for such a motion, the judge would be afforded 20 days in which to enter an order.

The bill amends Section 440.34 regarding attorney fees. Essentially, the statutory "formula fee" would be retained. But, the Judge would be empowered to depart from that fee, to “increase or decrease” based upon findings regarding 6 factors. This, in large part, resurrects the provisions of Section 440.34 prior to the 2003 statutory amendments. The significant difference in this fee statute proposal, compared to the pre-2003 provisions of Section 440.34 is a cap on the hourly rate to “a maximum hourly rate of $250 per hour.” The bill would also delete Section 440.34(7), which provides an “alternative” fee in certain “medical only claims.” That fee was limited in both the number of hours that could be compensated and in the maximum hourly rate that could be paid ($150.00) per hour.

The bill would end Florida’s workers’ compensation rate-making process for workers’ compensation. Instead, Florida would adopt a “loss cost” rate-making. Significant portions of Section 627.072(5) would be deleted, and language would be added to Section 627.091. This would result in “each insurer” making an independent filing with the Office of Insurance Regulation. Currently, most carriers in Florida allow an aggregator (see Another 2017 Legislative Disccusion for a definition of "aggregator"), NCCI, to file for annual rates on their behalf. And significant portions of Section 627.211 would be deleted.

The bill creates a new Section 627.2151, titled “workers’ compensation excessive defense and cost containment expenses.” This would require accounting for a variety of carrier expenses including attorney fees, expert witness fees, bill auditing, utilization review, vocational rehabilitation, and medical examinations. These totaled expenses would be compared to overall “incurred losses” of the carrier. If those accounted expenses exceed 15% of the incurred losses, then those expenses are deemed “excessive.”

The bill requires that the excess “amount must be returned to policyholders in the form of a cash refund or credit toward the future purchase of insurance.” There are details for the process and timing of both excess refund processes.

The bill would be effective July 1, 2017. 

The Florida Legislative session starts Tuesday, March 7, 2017. It will conclude May 5, 2017, and it promises to provide much to talk about in the world of workers' compensation.

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