GSIA Digest 2010

February 18, 2010

The Georgia General Assembly yesterday completed its 20^th legislative day, the halfway point of the 2010 legislative session. The legislature will be in recess until March 8 as lawmakers struggle to balance the state budget before using any of the remaining 20 legislative days.

House panel approves State Board bill.
The House Industrial Relations Committee yesterday approved HB 1101, the legislation developed by the Advisory Council of the State Board of Workers’ Compensation. The bill now awaits action in the House Rules Committee before going before the full House of Representatives.

HB 1101 provides that “Nothing in this subsection shall prohibit the board or its designees from publishing decisions of the board, provided adequate security measures have been taken to protect the identity and privacy of the parties.”  The permissive nature of the language was necessary to ensure that confidentiality of records and data is maintained.  The State Board is committed to publishing decisions in workers’ compensation cases, which should help ensure transparency and uniform application of the law.

Introduced by Industrial Relations Chairman Mike Coan, HB 1101 also changes provisions related to the Guaranty Trust Fund.  The changes were recommended by trustees of the Fund to protect the Fund and self insured employers from the consequences of defaults and insolvencies. Changes include:

• 30 day notice instead of 60 day notice of a hearing to revoke a self insurance certificate.
• Adding to the definition of “insolvent self-insurer” a self insured employer in default of its workers’ compensation obligations.
• An increase in the surety bond or letter of credit requirement from $100,000 to $250,000.
• A reduction in the threshold at which a special assessment may be levied from $7 million to $5 million.

The proposed changes in the Guaranty Trust Fund law are in direct response to recent issues arising from defaults and insolvencies.

Senate amends and passes medical network bill.
The Senate yesterday passed SB 50, the bill to restrict application of provider network discounts in health plans. Moreover, Senator Seth Harp added two damaging amendments to increase penalties and encourage lawsuits.  The good news is that the bill now goes to the House of Representatives where it is expected to face strong opposition.

At GSIA’s request, an attempt was made to exempt workers’ compensation. However, the exempting language is in the wrong section and does not include self insurance. GSIA has already begun working on the House side for an amendment that would exempt all workers compensation coverage under Title 34. Prospects for exempting workers’ compensation are good, and numerous other provisions of the bill are likely to draw  substantial opposition.

As passed by the Senate, SB 50 would restrict the ability of “contracting entities” to “grant access to a provider’s health care services and contractual discounts.”  Contracting entities, which would apparently include self-insured employers and TPAs, would be required to register with the Commissioner of Insurance and maintain a website where providers can obtain a listing of parties granted access to the network and contractual discounts.

SB 50 will almost certainly be referred to the House Insurance Committee, where this intrusion into private contracts will likely face great scrutiny.

Bill would exempt “single loss event” from SITF assessment.
A bill is currently in the hopper to provide that “total workers’ compensation claims shall not include claims arising from a single loss event and attributable to a single employer” for the purpose of calculating assessments to the Subsequent Injury Trust Fund.  Sponsored by Senate Rules Chairman Don Balfour, SB 446 will apparently be introduced on the next legislative day.

The bill stipulates that a single event cannot be used to calculate assessments to the SITF under the following conditions.

• When the single event is assigned a Catastrophic Code by the National Council on Compensation Insurance.
• When losses exceed the total losses attributable to the employer and reported by the insurer or self-insurer for the preceding year.
• When the losses cannot give rise to any liability of the SITF.

As the bill is written, all three of the conditions listed above must be met for the single event exception to apply.

GSIA Digest 2009

December 15
Claimant lawyers still want to cut off employer dialog with doctors.
An article in the summer/fall edition of the Workers’ Compensation Section Newsletter contends that a recent Supreme Court decision prohibits all ex parte communications between treating physicians and employers’ attorneys in workers’ compensation cases.  Macon attorney Jarome Gautreaux wrote that, in Moreland v. Austin, 284 Ga. 730 (2008) the Court held that ex parte communications to discuss medical information are permissible only with the patient’s consent or a court order.

Atlanta attorney and GSIA member Andrew J. Hamilton has written a strong rebuttal to the Gautreaux article, contending that it demonstrates a “misunderstanding of the law with respect to such communications in Georgia” and also “places undue reliance upon case law from neighboring states, each of which have differing statutory schemes than that employed in Georgia.”  The bulk of Mr. Hamilton’s rebuttal is reproduced below.

            First, Mr. Gautreaux’s reliance upon  Moreland v. Austin is misplaced. Moreland arose in the context of a medical malpractice claim, not a workers’ compensation claim. Indeed, in medical malpractice claims, the Health Insurance Portability and Accountability Act (“HIPAA”) governs the disclosure of protected health information and expressly preempts state law. Therefore, any inconsistency in state law is expressly preempted in favor of HIPAA’s Privacy Rule. In workers’ compensation claims, however, as correctly stated by Mr. Gautreaux in his article, HIPAA does not expressly preempt state law and instead defers to workers’ compensation laws in each respective state in determining whether HIPAA’s Privacy Rule governs. Therefore, in order to determine whether opposing attorneys may conduct ex parte communications with medical providers in workers’ compensation claims in Georgia, one must look not to HIPAA but instead to the Georgia Workers’ Compensation Act.

            First, a careful analysis of statute governing the release of medical information in workers’ compensation claims in Georgia, O.C.G.A. § 34-9-207, must be undertaken. Subsection (a) provides in pertinent part:

When an employee has submitted a claim for workers’ compensation benefits or is receiving payment of weekly income benefits or the employer has paid any medical expenses, that employee shall be deemed to have waived any privilege or confidentiality concerning any communications related to the claim or treatment of injury arising from the incident that that the employee has had with any physician…This waiver shall apply to the employee’s medical history with respect to any condition or complaint reasonably related to the condition for which such employee claims compensation. (emphasis added).

            It is clear that Section 34-9-207 covers not only the release of medical records related to an employee’s work-related injury, but also any communication related thereto. Further, there is no indication from the statutory text that the legislature intended to restrict the waiver of confidentiality to solely communications from the doctor to patient and vice versa.

Further, Subsection (b) of Section 34-9-207 provides that:

When an employee has submitted a claim for workers’ compensation benefits or is receiving payment of weekly income benefits or the employer has paid any medical expenses, the employee, upon request, shall provide the employer with a signed release for medical records and information related to the claim or history or treatment of injury arising from the inciden. (emphasis added).

            The General Assembly’s use of the word “information” in Subsection (b) of Section 34-9-207 is broad enough to cover not only information obtained from written medical records, but also to information obtained through communications (whether oral or written) by opposing attorneys to an employee’s medical providers.

            Once we conclude that HIPAA, by its own terms, is rendered inapplicable in workers’ compensation claims and that the statute governing the release of medical information in such claims in Georgia, O.C.G.A. § 34-9-207, is the appropriate vehicle through which one may determine whether ex parte communications between opposing attorneys and medical providers are permitted thereunder, the remainder of Mr. Gautreaux’s arguments are not persuasive.

            The citation to case law from other jurisdictions is inapplicable. Such decisions have no effect, persuasive or otherwise, on Georgia courts considering the issue, unless such states have similar statutes to O.C.G.A. § 34-9-207.

            First, in Sorenson v. Barbuto, 207 U.T. 8, 177 P.3d 177 (2008), the plaintiff brought suit for personal injuries in tort, and the case had nothing to do with workers’ compensation.

            Next, although the Tennessee Supreme Court indeed held in Overstreet v. TRW Commercial Steering Division, 2008 Tenn. LEXIS 413, 256 S.W.3d 626 (2008), that ex parte communications between opposing attorneys and medical providers were not permitted under the Tennessee Workers’ Compensation Act, Tennessee’s disclosure statute for workers’ compensation claims is far more restrictive than that employed in Georgia.

            In Salaam v. N.C. Dep’t of Trans.,122 N.C. App. 83, 468 S.E.2d 536 (1996), the Court of Appeals of North Carolina indeed prohibited ex parte communications between opposing attorneys and medical providers. However, the Court noted that it considered itself bound by a previous decision prohibiting such ex parte communications in medical malpractice actions. Notably, this prior decision was rendered before the implementation of HIPAA.  Accordingly, it is not known whether a North Carolina court would again consider itself bound by a decision that has subsequently been preempted by federal law.

            While Mr. Gautreaux’s article suggests that South Carolina employs a statute similar to that employed in Georgia governing the disclosure of medical information in workers’ compensation claims, the case cited by Mr. Gautreaux as standing for the proposition that South Carolina prohibits ex parte communication between opposing attorneys and medical providers, Brown v. Bi-Lo., Inc. 354 S.C. 436, 581 S.E.2d 836 (2002), actually places a great deal of weight upon the portions of the South Carolina statute which are not present in Georgia’s statute. A close reading of Brown reveals that the Court interpreted the statute at issue as only applying to the disclosure of “written records and documentary materials.”  Indeed the Court noted that “the statute refers to the exchange of ‘existing information,’ ‘medical records,’ and ‘X-rays’ after a receipt of a written request.”  Additionally, the Court noted that the statute “provides a penalty if the facility or physician fails to ‘send’ information as requested” and subsequently held that the statutory text indicated “the General Assembly’s clear intent to require health care providers and facilities to forward existing written records and documents.” Accordingly, the state did not “authorize other ‘ex parte’ methods of communication between an insurance carrier, employer, or their representatives and the employee’s health care provider.”

            Additionally, the case of Hydraulics, Inc. v The Industrial Commission, 329 Ill. App. 3d 166, 768 N.E.2d 760 (2002), indeed prohibited ex parte communications between opposing attorneys and medical providers in the workers’ compensation context. However, the decision was based upon public policy considerations of physician-patient fiduciary duties and not upon a literal interpretation of a relevant medical disclosure law. Accordingly, the Appellate Court of Illinois’ approach in Hydraulics would not apply in Georgia given Georgia’s broad medical disclosure law for workers’ compensation claims.

            Finally, the public policy considerations raised by Mr. Gautreaux in the latter part of his article are both inapplicable to workers’ compensation claims and also insufficient to outweigh a clear interpretation of the medical disclosure statute in workers’ compensation claims in Georgia, O.C.G.A. § 34-9-207, which clearly permits such communications. This conclusion is unaffected by either HIPAA or the Georgia Supreme Court’s recent decision in Moreland v. Austin.

Mr. Hamilton’s entire rebuttal to the Gautreaux article, including footnotes, has been submitted to the Workers’ Compensation Section Newsletter.

State Board’s bill being drafted.
The 2010 Georgia General Assembly will open on January 11 with budget and transportation issues at the top of the agenda.  The State Board of Workers’ Compensation will also have legislation, now being developed by the Legislative Committee of the State Board’s Advisory Council.  While work is still underway on the bill, it will likely include the following.

• a provision for publishing decisions by the Appellate Division of the State Board. GSIA has long advocated publication of decisions in workers’ compensation cases as a means of achieving consistency, predictability, and fairness in the system. GSIA is also urging that decisions of administrative law judges in workers’ compensation cases be published.
• an increase from 2000 to 3000 cycles per second in the maximum frequency at which a hearing loss can constitute a compensable hearing disability.  The national medical standard is 3000 cycles per second.  Hearing losses greater than 3000 cycles per second are generally thought to be age related.

Of equal interest to provisions in the bill, are those items proposed but likely to be left out of the State Board’s bill.  For instance, the bill is not expected to include an increase in the maximum weekly benefit due to current economic conditions. This would mark the third straight year with no increase in the income benefit, which was raised to $500 per week in 2007.

Claimant lawyers and organized labor representatives proposed indexing the benefit to the State Average Weekly Wage, suggesting that such a move would automatically account for economic conditions.  GSIA opposed the indexing proposal, noting that individuals who have lost their jobs and have no income are not included in the SAWW data from the Department of Labor.

GSIA proposals for a “predominant cause” provision related to aggravation and for amending the definition of “catastrophic injury” are also unlikely to be in the 2010 legislation.

Bill would end discounts from fee schedule.
SB 50, a carryover bill from the 2009 legislative session, would require insurers and self insured employers to pay medical providers at the fee schedule, even when the provider is part of a network that offers discounts below the fee schedule.  The bill regulates the application of medical fee discounts both in group health and workers’ compensation cases.

GSIA spoke against inclusion of workers’ compensation in the bill at an informal meeting with the bill’s sponsor last month.  Senator Ralph Hudgens indicated that he will give serious consideration to amending his bill so that it applies only to group health insurance.

Model bill addresses misclassification of construction workers.

The National Conference of Insurance Legislators is promoting state legislation to increase oversight and  penalties for misclassification of construction workers for  worker’s compensation purposes.  Taken largely from laws in Tennessee and West Virginia, the model bill would make general contractors liable for the uninsured employees of any subcontractor they hire. 

The model bill was originally more broad-based, dealing with all types of employers. However, an NCOIL subcommittee narrowed the measure to apply only to the construction industry, where misclassification is thought to be most common.  Senate Insurance Chairman Ralph Hudgens is expected to introduce the bill in Georgia’s 2010 legislative session.

Other news related to workers’ comp ….
Colorado, North Carolina, and Maine have announced plans to reduce employer rates for workers’ compensation in 2010.  Colorado’s Department of Regulatory Agencies said workers’ compensation rates for employers will be cut by 9.7%, while North Carolina’s Insurance Department will cut employer rates 9.6% in April.  In Maine, an average decrease of 7% in employer workers’ compensation rates has been announced by the Maine Bureau of Insurance.

The U.S. House Financial Services Committee has approved a bill to create a Federal Department of Insurance.  The potential effects on state workers’ compensation programs are unclear, but the bill is intended to “monitor all aspects of the insurance industry.”

The Atlanta Business Chronicle reports that the Occupational Safety and Health Administration is “using an influx of new inspectors to crack down on businesses with workplace safety violations.”  OSHA’s southeast region has reportedly added 31 new inspectors this year. The Obama administration is asking Congress for a $50 million increase in the OSHA budget.

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February 25, 2009
Panel approves bill to ensure employer access to medical records.
Late yesterday the House Industrial Relations Committee passed legislation to reverse a recent State Board decision limiting employer access to medical records of workers’ compensation claimants.  HB 330 provides that the waiver of confidentiality required of claimants “shall apply to the employee’s medical history with respect to any condition or complaint reasonably related to the condition for which such employee claims compensation.” 

Introduced by House Industrial Relations Chairman Mike Coan, HB 330 will allow employers to review medical records for pre-existing conditions and thus ensure that injuries are truly work-related.

Chairman Coan added language to HB 330 to provide for reciprocity with the workers’ compensation laws of other states as they relate to construction. The new language provides that employers from another state engaged in construction work in Georgia are covered by their home state workers’ compensation if Georgia Workers’ Compensation law is recognized by their home state.

HB 330 must now clear the Rules Committee before it can be considered by the full House of Representatives.

No further action expected on network “rental” bill.
Senate Insurance and Labor Chairman Ralph Hudgens has told GSIA that he does not expect his committee to consider SB 50, the bill to regulate the application of medical fee discounts both in group health and workers’ compensation cases.  Backed by physician groups, SB 50 would require insurers and self-insured employers to pay medical providers at the fee schedule, even when the provider is part of a network that offers discounts below the fee schedule. 

Medical providers are now circulating draft language that would require disclosure of network affiliations and fees in workers’ compensation. GSIA continues to suggest that any legislation on this complicated subject should be vetted through the Advisory Council to the State Board of Workers’ Compensation.

Seat belt bill clears committee.
The Senate Judiciary Committee has approved legislation to provide that failure to use automobile safety belts may be evidence of causation, negligence, and contributory negligence.  Introduced by Senator Lee Hawkins of Gainesville, SB 23 would end the current bar on evidence related to safety belt use.

A similar House bill, HB 200, was introduced by Rep. Harry Geisinger of Roswell.  HB 200 remains in the House Judiciary Committee, while SB 23 must now clear the Senate Rules Committee before going to the floor of the Senate.

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February 10, 2009
Bill would ensure employer access to medical records.House Industrial Relations Chairman Mike Coan has introduced legislation to reverse a recent State Board decision limiting access to medical records of Workers’ Compensation claimants. HB 330 provides that the waiver of confidentiality required of claimants “shall apply to the employee’s medical history with respect to any condition or complaint reasonably related to the condition for which such employee claims compensation.”

HB 330 was developed by the Advisory Council to the State Board of Workers’ Compensation, and therefore should encounter little opposition in the General Assembly.  Joining Chairman Coan as co-sponsors are several members of the Industrial Relations Committee, including Vice-Chairman Bobby Reese of Sugar Hill, Mark Hamilton of Cumming, and Tom Knox of Cumming.

Last year the State Board of Workers’ Compensation held that the language in the current law applies only to records for the treatment of the work injury, and does not give the employer/insurer access to any other medical records.  In denying a motion for reconsideration, the State Board wrote “We agree that past medical reports are often very relevant in determining whether a condition is related to an on the job injury and consequently they are subject to production under O.C.G.A 9-11-34. However, we find that the scope of the sanctions provided in O.C.G.A. 34-9-207(b) of removing a claim from the hearing calendar or the suspension of benefits for failure to execute a release is limited to the release of communications and records for any provider or facility treating the employee for the injuries on which the claim is based.”

If not reversed, this bar on review of pre-existing conditions will lead to more litigation, exactly opposite the original intent of 34-9-207.

Docs seek end to discounts from fee schedule.
Legislation now in the Senate Insurance and Labor Committee would require insurers and self-insured employers to pay medical providers at the fee schedule, even when the provider is part of a network that offers discounts below the fee schedule.  SB 50 regulates the application of medical fee discounts both in group health and Workers’ Compensation cases.

Backed by physician groups, the bill would have the state intrude in areas now governed by private contracts.  Those contracts typically offer medical providers increased volume in return for discounted fees.

Seat belt bill could affect tort awards.
Companion bills have been introduced in the House and Senate to provide that the failure to use automobile safety belts may be evidence of causation, negligence, and contributory negligence.  Current Georgia law bars evidence related to safety belt use.

SB 23 was introduced by Senator Lee Hawkins of Gainesville, and HB 200 was introduced by Rep. Harry Geisinger of Roswell.  Now in their respective Judiciary Committees, these bills would change the odd nature of Georgia law which requires use of seat belts in automobiles, but bars introduction of evidence in civil cases that the claimant was not in compliance with the law.

Plaintiff lawyer organizations are opposing the two bills.

Court upholds two-year statute of limitations.
The Georgia Court of Appeals has held that catastrophic injury claims are indeed subject to the two-year statute of limitations, affirming the decision of the Superior Court of Clarke County.  The Atlanta law firm of Drew, Eckl & Farnham, LLP, drafted an amicus brief on behalf of GSIA in this case, urging the Court to uphold the lower court decision.

In this case, Williams v. Conagra Poultry, the claimant sustained a compensable injury in 1992 and received income benefits for 400 weeks, the limit for non-catastrophic injury stipulated in 1992 legislation backed by GSIA.  A year later the claimant filed for a catastrophic designation. That request and a subsequent request were denied, but in 2003 the Rehabilitation Division of the State Board granted the catastrophic designation.

More than two years after the catastrophic designation was awarded, the claimant filed for recommencement of TTD benefits.  The State Board denied the claim because it was filed after the statute of limitations had expired.

The amicus brief points out that the statute of limitations in 34-9-104(b) is automatically triggered when income benefits have been suspended, and it does not exempt catastrophic claims. 

Reciprocity bill drafted.
Rep. Mike Coan plans to introduce legislation aimed at encouraging other states to recognize compliance with Georgia Workers’ Compensation laws by Georgia construction companies.  The draft legislation provides that “any employer from another state engaged in the construction industry with workers’ compensation coverage issued under the laws of a state other than Georgia so as to cover that employer’s employees while in this state” is in compliance with Georgia law if:

• The extraterritorial provisions of Georgia law are recognized in that other state; and
• If the employers and employees who are covered in this state are likewise exempted from the application of the workers’ compensation insurance or similar laws of the other state.

This proposed legislation is apparently a reaction to harsh administration of Florida’s workers’ compensation laws against Georgia companies doing business in Florida.

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GSIA Digest 2008
February 25, 2008

SITF bill would end assessments decades earlier.
The House Industrial Relations Committee will take up legislation this week that would hasten close-out of the Subsequent Injury Trust Fund and still keep assessments below current levels.  The General Assembly passed legislation in 2004 to phase-out the SITF, and subsequently set June 30, 2006 as the last date of injury eligibility for reimbursements from the Fund.

Current law provides that the proportion of each insurer and self-insurer’s assessment must be based on the total payout of claims from the previous year. An actuarial study shows that this assessment formula will not be adequate to pay down the $900,000,000 obligation until some time after 2070. Current law mandates that the SITF be terminated by December 31, 2020.

Introduced by Industrial Relations Chairman Mike Coan, HB 1186 would allow the Trustees of the SITF to set the assessment at a level sufficient to close out the Fund by the end of 2020. According to Trustees, the annual assessment for any insurer or self insurer would still be less than they currently pay.

Subcommittee to hear “data mining” bill.
A House Insurance subcommittee will take up HB 661 tomorrow.  This bill would require the State Board of Workers’ Compensation to set up a data base which a New York Company could then “mine” and sell the information to health insurers.  Self insured employers would then be required to “make direct reimbursements to health insurers when the health insurer can reasonably demonstrate that it has paid medical claims for a work-related injury.”

GSIA plans to testify against HB 661 at the hearing.  Georgia law already provides for third party reimbursements.  Moreover, the overwhelming majority of misfiled claims are almost certainly non-work-related injuries inappropriately filed in the Workers’ Compensation system – not the other way around.  There is considerable incentive for a claimant to file a Workers’ Compensation claim instead of a group health claim for a non-work-related injury.  There are no deductibles and no co-pays in the Workers’ Compensation system, and there is an income benefit for lost time cases.

Perhaps the most negative aspect of HB 661 for employers is that the involvement of the third party would make settlements much more difficult to achieve.  For employees, the bill raises serious concerns about privacy as the “mining company” would have access to their records at the State Board.

GSIA members should consider contacting their State Representatives to express their views on this legislation.

April 23, 2007

The 2007 Georgia General Assembly adjourned sine die at midnight Friday, ending one of the longest and most contentious legislative sessions in state history.  Not since the major reforms of 1992 has workers’ compensation been such a hotly contested issue.  In the end, no legislation harmful to employers was approved, and several beneficial provisions will become law with the Governor’s signature.

Comp bill amended and passed.
Late on the last day of the legislative session, the Senate agreed to House amendments that removed from HB 424 two troublesome provisions previously added in the Senate Insurance and Labor Committee.  The bill now awaits the Governor’s signature.

Three new provisions were added to HB 424 in the Senate.  One of those includes alligator farms under the agriculture definition and thus exempts them from the mandate to provide workers’ compensation coverage.  That provision remained in the final bill. The other two provisions would have:

• Required the State Board to provide an elaborate database that health insurers could use to compare claims and shift health care claims to the workers’ compensation system.
• Required the State Board to hold “stakeholder” meetings and extensive public hearings before adding any providers to a medical fee schedule.

Both of these provisions were deleted in the House and are not in the bill as passed.  Both would have added costs to the system and led to higher assessments on self-insured employers.

Also excluded from the bill was any provision to exempt burn centers from the fee schedule. GSIA vigorously opposed creation of such exemptions, which would inevitably lead to an unraveling of the fee schedule and markedly higher costs for employers.  Attempts to add such an exemption ended when the State Board of Workers’ Compensation negotiated new levels for certain DRG codes under the fee schedule.

The centerpiece of HB 424 is a clarification that the State Board of Workers’ Compensation may include prescription drugs under a fee schedule.  Prescription drugs account for 15 to 18% of the $550 million in medical costs under workers’ compensation.  Currently, drugs in workers’ compensation cases are priced at 120% of the average wholesale price – far higher than in any other health care setting. Combined with an anticipated requirement for the use of generic drugs, this measure promises to bring substantial savings to the workers’ compensation system.

Other provisions in the final version of HB 424 include:

• An increase in the maximum weekly income benefit from $450 to $500.  This puts the maximum at about two-thirds of the state average weekly wage. Still, Georgia’s maximum benefit is at or near the bottom for all states.
• A corresponding increase in the temporary partial disability benefit from $330 to $334 per week.
• Clarification that independent medical exams may include psychological examinations. Since psychologists cannot use expensive pharmaceuticals, some employers may prefer to use them rather than psychiatrists.
• A five year limit on the duration of any claim for which no medical or income benefits have been paid or hearings held.  Currently there is no limit.
• A change from 15 to 20 days from the date of notification for an employer to select a rehabilitation provider.

HB 424 was introduced by House Industrial Relations Chairman Mike Coan of Lawrenceville, who also moved to eliminate the troublesome Senate amendments from the bill.  Rep. Coan also opposed any exemptions from the fee schedule.

Lawmakers clarify SITF assessments.
The General Assembly on April 17 gave final approval to legislation that clarifies how self-insured employers will be assessed for their participation in the Subsequent Injury Trust Fund.  SB 131 provides that employers who cease to be self-insured must continue to pay assessments to the SITF for any remaining claims made while they were still self-insured.

Past practice by the SITF has been to end assessments when an employer switched from self-insured status to commercial insurance coverage. This created an inequity for remaining self-insured employers, and that inequity was exacerbated by the phase-out of the SITF.

As SB 131 was moving through the House Industrial Relations Committee, Rep. Tom Knox of Cumming attempted to add an amendment that would have exempted from assessments those self-insured employers who made no claims against the fund in that year.  This amendment would have ignored remaining claims for such employers and shifted their liabilities to other employers.  GSIA testified against this amendment, which was defeated in the committee.

Bill Status Report.
SB 43: Rogers of Woodstock – would prohibit employers from banning firearms in employee parking lots. Held in Senate and recommitted. Will carryover to 2008 legislative session.

SB 96: Golden of Valdosta – amended on the Senate floor to delete references to post accident drug testing and passed without dissent.  As passed by the Senate and House, provides only for the use of saliva samples in employee drug testing programs.

SB 109:  Hudgens of Comer – would include administrators for self-insured health plans in the prompt pay requirements of Code Section 33-23-100. Continues to exempt workers’ compensation plans.  Passed Senate and House.

SB 161: Heath of Bremen – provides that disability retirement benefits of state employees shall be reduced by the amount of workers’ compensation benefits received.  Passed Senate and House.

SB 239: Goggans of Douglas – clarifies the exemption from workers’ compensation for agricultural workers.  Amended on the Senate floor so that it only adds to the exemption those involved in the care, feeding, and training of alligators.  Amended bill passed Senate. Provisions of  this bill were added to HB 424 in the Senate.

HB 408: Knox of Cumming – to provide that captive insurance companies issuing workers’ compensation insurance and associated with an industry or association may participate in the Georgia Insurers Insolvency Pool.  Passed House and Senate.

HB 597: Harbin of Augusta – would exempt from the hospital fee schedule under workers’ compensation certain treatments provided by the burn center in Augusta and at the burn unit of Grady Memorial Hospital.  Remained in House Industrial Relations Committee.

HB 661: Burkhalter of Alpharetta – would create a “workers’ compensation records inquiry service” within the State Board of Workers’ Compensation.  Would allow health insurers to challenge claims they feel should be paid under workers’ compensation. Remains in House Insurance Committee.  Will carry over to 2008 session.

HB 719: Forster of Ringgold – would create a state Occupational Safety and Health Administration.  Remains in House Industrial Relations Committee. Will carry over to the 2008 session.

March 21, 2007

The General Assembly will reconvene on Tuesday, March 27 for its 30^th legislative day. Bills that fail to clear their House of origin by the 30^th day are ineligible for further consideration this year, and will carry over to the 2008 legislative session.

State Board’s bill clears House.
The House of Representatives this week passed HB 424 without a dissenting vote and without amendment. The bill had previously been recommitted to the Rules Committee as an Augusta burn center pushed for an amendment that would exempt them from the fee schedule set by the State Board of Workers’ Compensation.

HB 424 is now in the Senate where it must first clear the Insurance and Labor Committee.  GSIA and other business groups will continue to oppose any amendments that would exempt any medical providers from the fee schedule.  Any such exemption would almost certainly lead to the eventual unraveling of the fee schedule as various provider groups seek exemptions through legislation.

For employers, the centerpiece of HB 424 is a provision to clarify that the State Board can include pharmaceuticals under the fee schedule. Pharmaceuticals used in workers’ compensation cases are priced at about 120% of average wholesale, well above prices for drugs in group health plans.  Prescription drugs make up 15 to 18% of the $550 million of medical costs in Georgia’s workers’ compensation system.  Currently, prescription drugs are the only major component of the medical costs in workers’ compensation that are not governed by a fee schedule.   

Introduced by Rep. Mike Coan, HB 424 will also increase in the maximum weekly income benefit from $450 to $500.  This puts the benefit at about two-thirds of Georgia’s average weekly wage, and more importantly for employers, it keeps the benefit statutory in nature rather than indexed to the average weekly wage.  The insurance industry has estimated the impact of this benefit increase at about 2%, far below the cost savings anticipated from any fee schedule on pharmaceuticals. 

“Bring your guns to work” bill headed to Senate floor?
The Senate Rules Committee is expected to approve legislation Monday that would  prohibit employers from banning guns in employee parking lots. The National Rifle Association has made an all out push for SB 43, which has been languishing in the Rules Committee since mid February.  If approved by the Rules Committee on Monday, the bill will be considered by the full Senate on Tuesday, the crossover deadline for all bills.

Introduced by Senator Chip Rogers of Woodstock, SB 43 was amended in the Judiciary Committee to include a troublesome employer liability provision. As passed by the committee, the bill would make employers liable for actions arising from guns in the parking lot if they “knew or should have known” that such actions might arise.  This creates a “catch 22” for employers, who can be held liable if they act or if they do not act to prevent a potential violent act arising from the presence of a gun in the parking lot.

Under SB 43, employers could still ban guns in employee parking lots if they provide “a secure parking area which restricts general public access through the use of a gate, security station, or other similar means of limiting public access.”  Company vehicles are also exempt from the provisions of the bill.

Employer groups are opposing SB 43 because it diminishes employer property rights as well as their right to set policies for their own operations.  The bill also has implications for Georgia’s status as an “employment-at-will” state, as there would doubtless be litigation over employment termination that could be linked to firearms in vehicles.

Other bills of interest.
SB 96: Golden of Valdosta – would provide for post accident, on-site drug testing and the use of saliva samples by employers with certified drug-free workplaces.  Still in Senate Insurance and Labor Committee.

SB 109:  Hudgens of Comer – would include administrators for self-insured health plans in the prompt pay requirements of Code Section 33-23-100.  Maintains current exemption for administrators of workers’ compensation group funds. Favorably reported by Senate Insurance and Labor Committee.  Recommitted and favorably reported a second time.

SB 131: Hudgens of Comer – to provide that employers who cease to self insure their workers’ compensation coverage must continue to pay assessments to the Subsequent Injury Trust Fund for claims they referred to the SITF while they were self insured.  Passed Senate and now in House Industrial Relations Committee.

SB 161: Heath of Bremen – provides that disability retirement benefits of state employees shall be reduced by the amount of workers’ compensation benefits received.  Passed Senate and first read in House.

SB 239: Goggans of Douglas – clarifies the exemption from workers’ compensation for agricultural workers by further defining “farm laborers” to include those involved in “cultivating the soil or in connection with raising or harvesting any agricultural or horticultural commodity, other than timber, including but not limited to the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, fur-bearing animals, and wildlife. Favorably reported by Senate Insurance and Labor Committee.

HB 597: Harbin of Augusta – would exempt from the hospital fee schedule under Workers’ Compensation certain treatments provided at the burn center in Augusta and at the Grady Memorial Hospital burn unit.  Still in House Industrial Relations Committee

February 26, 2007

The Georgia General Assembly recessed Thursday and will reconvene Tuesday for three legislative days. While no schedule has been finalized beyond Thursday, it appears the lawmakers will then take a long recess – perhaps two weeks – while Congress decides whether to provide further support to the Peach Care insurance program for children without health insurance. The legislature has completed 24 of its 40 legislative days.

Drug fee schedule measure awaits floor action.
The House Industrial Relations Committee this week approved HB 424, the bill to clarify that the State Board of Workers’ Compensation can set a fee schedule for prescription drugs. The measure is now in the House Rules Committee, and could be cleared for consideration by the full Senate this week.  The bill must pass the House by the 30^th legislative day to remain eligible for further consideration.

While there was only one dissenting vote in the committee, HB 424 could face vocal opposition on the House floor.  Rep. Buddy Carter of Pooler, a pharmacist, strongly opposed the bill during the committee debate, and pharmacy interests are likely to work in opposition to the bill when it comes up on the House floor. GSIA members are urged to contact their state representatives regarding HB 424. Key points regarding the bill are:

• Prescription drugs are the only component of medical costs under workers’ compensation that are not under a fee schedule.
• Prices for prescription drugs under workers’ compensation are now at 120% of the “average wholesale” price, while the same products are at 86% of average wholesale for the State’s group health plan, and are even lower for many private group health plans.
• Failure to place pharmaceuticals under a fee schedule would drive more self-insured employers to use pharmaceutical benefit management programs.
• Georgia employers and insurers now pay $550 million a year in medical costs under workers’ compensation, and prescription drugs account for 15 to 18% of that cost.
• Savings from the fee schedule are needed to balance the $50 increase in the maximum weekly income benefit provided in the bill.

The actual level of the fee schedule would be set by the State Board.  Employer savings from a fee schedule on pharmaceuticals would be substantial, even if the schedule was no lower than 100% of wholesale. In addition to the fee schedule, the State Board would mandate the use of generic drugs where available.

Cost pressure from the $50 benefit would be minor – about 2% according to insurance industry estimates.

Floor vote set on SITF bill.
On Tuesday the full Senate will consider legislation to require that employers who cease to be self-insured must continue to pay assessments to the Subsequent Injury Trust Fund for claims they referred to the SITF while they were still self insured.  The sponsor of the bill, Insurance and Labor Chairman Ralph Hudgens of Comer, will oppose any amendments to SB 131.

An insurance company had reportedly proposed an amendment to the bill that would have ended the SITF immediately and returned all claims to the employers. Senator Hudgens contends that Georgia employers are not prepared to reserve for the $1 billion in liabilities currently in the SITF.  It now appears unlikely that there will be an attempt to amend the bill on the Senate floor, but stranger things have happened.

Other bills of interest.
SB 43: Rogers of Woodstock – would prohibit employers from banning firearms from cars in employee parking lots unless the parking lot is secured by guards or gates.  Favorably reported by Senate Judiciary Committee and still in Senate Rules Committee.

SB 96: Golden of Valdosta – would provide for post accident, on-site drug testing and the use of saliva samples by employers with certified drug-free workplaces. Still in Senate Insurance and Labor Committee.

SB 109:  Hudgens of Comer – would include administrators of self-insured health plans in the prompt pay requirements of Code Section 33-23-100.  Maintains current exemption for administrators of workers’ compensation group funds. Favorably reported by Senate Insurance and Labor Committee.

SB 161: Heath of Bremen – provides that disability retirement benefits of state employees shall be reduced by the amount of workers’ compensation benefits received.  Still in Senate Retirement Committee.

HB 45: Stephens of Savannah – provides that no “health benefit plan or policy shall require prior approval for a prescription drug if a drug manufacturer utilizing a pricing structure for sales to various classes of trade provides that a community pharmacy is charged the lowest price in the pricing structure for such prescription drug.”  Definition of “health plan or policy” includes workers’ compensation insurance carriers.  Still in House Insurance Committee.

February 15, 2007

The Georgia General Assembly reached the halfway mark of the 2007 legislative session yesterday, completing the 20^th legislative day. 

Bill targets prescription drug costs.
Rep. Mike Coan this week introduced legislation to clarify that the State Board of Workers’ Compensation can set a fee schedule for prescription drugs.  With passage of HB 424, the State Board would not only set fees, but would by rule require use of generic drugs where available.  The bill is now in the House Industrial Relations Committee chaired by Rep. Coan.

HB 424 was developed by the Advisory Council to the State Board of Workers’ Compensation. In addition to the provision for a fee schedule on prescription drugs, the bill calls for an increase in the maximum weekly benefit from $450 to $500.  Employer representatives on the Advisory Council supported this increase, as it keeps the maximum benefit at about two-thirds of the State average weekly wage.  The insurance industry has estimated the impact of this benefit increase at about 2%, far below the cost savings anticipated from any fee schedule on pharmaceuticals.  The benefit increase would take effect on July 1, two years after the last increase in the maximum benefit. Other provisions in HB 424 include:

• An increase in temporary partial disability benefit from $330 to $334 per week.
• Clarification that an employer-requested independent medical examination may include psychiatric and psychological examinations.
• Provision that, after July 1, 2007, any claim for which no medical or income benefits have been paid or hearings held for five years “shall stand dismissed with prejudice.”
• Changes from 15 to 20 days from the date of notification for an employer to select a rehabilitation supplier. 

With pharmaceuticals prescribed in workers’ compensation cases typically going for 120% of the average wholesale price, the proposed fee schedule should mean substantial savings for Georgia employers.  Drugs now account for 15 to 18% of the $550 million in medical costs in Georgia’s workers’ compensation system.

SITF measure approved by committee.
The Senate Insurance and Labor Committee this week passed SB 131, a bill providing that employers who cease to be self-insured must continue to pay assessments to the Subsequent Injury Trust Fund for claims they referred to the SITF while they were still self insured.  Insurance and Labor Chairman Ralph Hudgens, who sponsored the bill, said that it was needed to ensure equity for all self insured employers and provide an orderly phase-out of the SITF.

Chairman Hudgens also noted that one insurance company had proposed an amendment to the bill that would have simply brought an abrupt end to the SITF, returning all claims to the employers.  He added that he would oppose any such amendment, as Georgia employers are not prepared to reserve for the $1 billion in liabilities currently in the SITF. An abrupt closure of the SITF would also have serious implications for the Guaranty Trust Fund.

“Bring your guns to work” bill awaits floor action.
Legislation to prohibit employers from banning guns in employee parking lots has cleared the Senate Judiciary Committee and is now in the Senate Rules Committee.  SB 43 could be scheduled for a vote in the full Senate at any time.

 Introduced by Senator Chip Rogers of Woodstock, SB 43 was amended in the Judiciary Committee to include a troublesome employer liability provision. As passed by the committee, the bill would make employers liable for actions arising from guns in the parking lot if they “knew or should have known” that such actions might arise.  This creates a “catch 22” for employers, who can be held liable if they act or if they do not act to prevent a potential violent act arising from the presence of a gun in the parking lot.

Under SB 43, employers could still ban guns in employee parking lots if they provide “a secure parking area which restricts general public access through the use of a gate, security station, or other similar means of limiting public access.”  Company vehicles are also exempt from the provisions of the bill.

Employer groups are opposing SB 43 because it diminishes employer property rights as well as their right to set policies for their own operations.  The bill also has implications for Georgia’s status as an “employment-at-will” state, as there would doubtless be litigation over employment termination that could be linked to firearms in vehicles.

On-site drug testing proposed.
Current Georgia law limits work site drug testing to immediate post-employment situations. A bill introduced by Senator Tim Golden of Valdosta would allow employers with certified drug free workplaces to perform on-site testing where there is reasonable suspicion of drug use or immediately after a work related accident.

SB 96 would also provide for the use of saliva samples in addition to the current provision for urine samples.  Use of saliva samples would make on-site testing far more practical and less controversial.

Now in the Senate Insurance and Labor Committee, SB 96 should help diminish the time required for return-to-work after a workplace injury.  GSIA members interested in this legislation should contact their state senators.

Other bills of interest.
SB 109:  Hudgens of Comer – would include administrators for self-insured health and workers’ compensation plans in the prompt pay requirements of Code Section 33-23-100.  Referred to Senate Insurance and Labor Committee.

SB 161: Heath of Bremen – provides that disability retirement benefits of state employees shall be reduced by the amount of workers’ compensation benefits received.  Referred to Senate Retirement Committee.

HB 45: Stephens of Savannah – provides that no “health benefit plan or policy shall require prior approval for a prescription drug if a drug manufacturer utilizing a pricing structure for sales to various classes of trade provides that a community pharmacy is charged the lowest price in the pricing structure for such prescription drug.”  Definition of “health plan or policy” includes workers’ compensation insurance carriers.  Referred to House Insurance Committee.

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January 16, 2007