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Legislative Updates

• Q4 2022 Legislative Updates

  Q4 2022 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the fourth quarter of 2022 and their practical implications:

  Major State Privacy Legislation: On January 2, 2023, the Wall Street Journal reported that many new state laws in the coming year would focus on consumer data privacy. Nearly two years ago we noted that California and Virginia had enacted new and comprehensive privacy statutes, both becoming effective on January 1, 2023. The California Privacy Rights and Enforcement Act (CPRA) expands upon the current California privacy statute, the California Consumer Privacy Act (CCPA), by regulating not only the buying and selling of consumer information, but also its “sharing.” This term, while appearing to be broad, actually is narrowly defined as targeted advertising based on the consumer’s personal information.  The focus of California’s privacy protection measures was and continues to be on commercial use of consumers’ personal information for sales and marketing purposes. The Virginia Consumer Data Protection Act (CDPA) takes a different approach to consumer privacy, following many of the concepts found in the European Union’s General Data Protection Regulation (GDPR). A business that determines the purpose and means of processing personal data (a “controller”) may collect and use this information for only specific purposes, must allow a consumer to access and in many cases to delete the data, and is responsible for compliance of third party “processors” acting on its behalf. There are a number of thresholds and exemptions that will relieve most workers’ compensation payers and their service providers from CDPA compliance obligations.  Of more relevance to the workers’ compensation industry is the NAIC Insurance Data Security Model Law, which has now been enacted, in whole or part, in 21 jurisdictions. Similar in many ways to the New York’s Cybersecurity Requirements for Financial Services Companies (NYCCR §500), the Model Law establishes a comprehensive regulatory framework applying to claim payers and protecting the non-public data of insurance “consumers,” including claimants.  Key features of the Model Law include the following:

  • Defines “consumers” to include claimants as well as applicants, policyholders and insureds.
  • Defines a “cybersecurity event” to include both data loss or misuse and access to, disruption or misuse of, an information system.
  • Defines “licensees” subject to the law to include all entities licensed or registered under the state’s insurance laws.
  • Defines protected “nonpublic information” to include both personally identifiable information and licensees’ sensitive business information.
  • Requires licensees to develop and implement a comprehensive information security program, including a written incident response plan, which identifies and mitigates against reasonably foreseeable internal or external threats.
  • Requires licensees to annually certify their compliance to their domiciliary insurance regulator.
  • Requires licensees to promptly investigate and, if confirmed, remediate any suspected cybersecurity event, notifying regulatory authorities within 72 hours of discovery.
  • Requires licensees to follow applicable state data breach laws notifying consumers of an incident.
  • Requires licensees to oversee their third party service providers’ compliance with information security laws and to take responsibility for managing their third party service providers’ cybersecurity events.

  Implications: All business entities participating in adopting states’ workers’ compensation systems are either directly or indirectly subject to the Model Law, so it is important that payers and their trading partners establish a comprehensive information security program complying with the Model Law. Further, because the Model Law has not been enacted in every jurisdiction and has been enacted with important revisions in others, it is important to review the relevant statute for key variances. For example, the Maryland statute, effective October 1, 2022, applies specifically to third party administrators as well as insurers, but this clarifying provision does not appear in the NAIC Model Law.

• Q3 2022 Legislative Updates

  Q3 2022 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the third quarter of 2022 and their practical implications:

  Revisions to Texas HCN Regulations: The Texas Department of Insurance has adopted many revisions to the regulations governing WC Health Care Networks (HCNs). Many of these changes are more administrative than substantive, as TDI noted in July 29, 2022, issue of the Texas Register, but there are a number of amendments that will require compliance efforts by Texas WC stakeholders. Among the material revisions are those that:

  • require HCNs to provide detailed information about telehealth providers in their provider rosters
  • require HCNs seeking certification to provide provider location maps for 21 specialties
  • require TDI prior approval before HCNs change their service areas or merge with other networks
  • add newly mandated language to HCN provider contracts
  • tighten requirements for notifying employees they are subject to HCN rules
  • require HCNs to show evidence of their provider recruitment efforts in non-qualifying geographic areas
  • increase HCN recordkeeping requirements relating to provider complaints and appeals

  Implications: The new HCN regulations recognize the growing prominence of telehealth services and represent an increased commitment by TDI to the proper functioning of HCNs.  Nevertheless, Texas WC stakeholders will need to work diligently to ensure their compliance by the January 1, 2023 deadline, at which point HCNs are required to attest to their compliance. Ohio Statute Defining Compensability of Work-From-Home Injuries: Ohio has enacted HB 447, which sets standards for WC compensability for injuries incurred by work-from-home employees. Three criteria must be met:

  1. The employee's injury or disability arises out of the employee's employment.
  2. The employee's employment necessarily exposes the employee to conditions that substantially contribute to the risk of injury.
  3. The injury or disability is sustained in the course of activity that is taken on by the employee for the exclusive benefit of the employer.

  Implications: With a substantial proportion of the workforce working remotely and likely not returning to the office fulltime, legislatures are grappling with work-relatedness issues that at one time were self-evident, or at least settled law. WC stakeholders can expect lawmakers, regulators and jurists to continue to address these questions for the foreseeable future. The Ohio statute became effective on September 23, 2022. California Study Law on Prompt Medical Treatment:  California Governor Gavin Newsom has signed into law AB 2848, which requires the Division of Workers’ Compensation to contract with an outside independent research organization to evaluate and report on the impact of the delivery of medical treatment within the first 30 days after a claim is filed. The measure requires the report to be provided to the DWC Administrative Director, the Senate Committee on Labor and Industrial Relations and the Assembly Committee on Insurance before July 1, 2023. Implications: This legislation can be seen as part of a continuing discussion in California regarding the function and value of registered Medical Provider Networks (MPNs) in delivering timely and accessible health care to injured workers. It is generally recognized in the workers’ compensation community that prompt delivery of health care services improves work-related injury outcomes and independent research has shown this to be the case.

• Q2 2022 Legislative Updates

  Q2 2022 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the second quarter of 2022 and their practical implications:

  Maryland Cybersecurity Law: In June, Maryland enacted legislation that sets cybersecurity standards for insurers, TPAs and their third-party service providers. According to the National Association of Insurance Commissioners, Maryland becomes the 18^th state to adopt a version of the NAIC Insurance Data Security Model Law (#668). Along with the New York regulation “Cybersecurity Requirements for Financial Services Companies” (addressing the same issues but following a different model), the legislation establishes generally accepted data security standards for workers’ compensation payers and their trading partners.   Implications:  The provisions of the model act offer a guidepost for payers’ internally developed cybersecurity standards, since they are now broadly required by state law. Fortunately, they are reasonable, requiring payers to develop and implement a data security program to identify and protect against risks, respond to data incidents and investigate and disclose cybersecurity events to regulatory authorities and affected consumers and trading partners. Payers are also required to oversee compliance of their third-party service providers using or accessing the payer’s confidential information.   New York WCB Clarification regarding Payer Objection Notices: The Workers’ Compensation Board has clarified its earlier guidance, stating that Form C-8.4 notices to providers and the Board need not be sent if the reasons for lower payment are standard bill review adjustments, including PPO network reductions. Specifically, the bulletin states:   Payments may be appropriately reduced, but objections should not be submitted by the insurer to the Board in the following scenarios:

  • The amount billed for the particular CPT code is in excess of the amount designated by the applicable medical fee schedule and the insurer pays the bill at the appropriate medical fee schedule amount.
  • The insurer reduces the amount of the bill to 12, 15 or 18 relative value units for evaluation services and modalities, as set forth in the applicable medical fee schedule.
  • The insurer reduces the amount of the bill pursuant to a contractual agreement with the provider (e.g., network or PPO discount).
  • There is a duplicate bill.

    Implications: This revision should greatly reduce the voluminous paperwork burdening claim organizations doing business in New York. On a related topic, the WCB is in the midst of a multiple-year move to electronic submission of filings, a key feature of which is the OnBoard application.  For more information go to the Payers section of the Medical Portal here:  http://www.wcb.ny.gov/medicalportal/.   Telehealth Compliance with HIPAA: The Office of Civil Rights (OCR) within the US Department of Health and Human Services has recently issued guidance broadly endorsing the use of audio-only telehealth services to increase access to health services by patients who have limited financial resources or who live in rural areas with limited broadband availability. The guidance can be found here: https://www.hhs.gov/hipaa/for-professionals/privacy/guidance/hipaa-audio-telehealth/index.html.   Implications: OCR enforces federal privacy regulations (e.g., HIPAA) that generally don’t apply to WC payers, but health care providers and payers’ third-party service providers don’t enjoy those same exemptions, so this clarification comes as a welcome relaxation of regulatory constraints. On a related telehealth topic, a new study from physical therapy quality analytics firm Focus on Therapeutic Outcomes (FOTO) found that, for telerehabilitation for low back pain, telerehab (a) was equally effective in improving functional status outcomes for patients with low back pain compared to traditional in-person office visits, (b) usually involved significantly fewer visits, and (c) had roughly equal patient satisfaction ratings (82% for telerehab versus 86% for in-person office visits.

• Q1 2022 Legislative Updates

  Q1 2022 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the first quarter of 2022 and their practical implications:

  Texas WC Network Regulation:  In January, the Texas Division of Workers’ Compensation proposed revisions to existing WCN regulations, explaining that changes were needed to clarify the provisions and to implement legislative amendments to the Insurance Code. These proposed changes are extensive and bear attention of WC system participants. Among the prominent proposed provisions are the following:

  • Location and service type identification requirements for WCN participating providers have been made much more specific.
  • Networks must give prior notice to TDI of any proposed change of ownership.
  • Networks must give prior notice to TDI regarding modifications to network configurations involving telehealth services.
  • Network contracts and subcontracts with providers must include a statement that a carrier contesting compensability may not deny payment prior to the issuance of a notice that the injury was not compensable.
  • Carriers and employers must have a documented procedure for determining which is responsible for obtaining signed employee acknowledgements of the employer’s network participation as well as signed copies of the employee acknowledgements.
  • By September 23, 2022, networks must have a documented credentialing process that meets NCQA or URAC standards.
  • Networks may only use Texas-licensed doctors to perform in-network utilization reviews.

  Implications: Payers, certified WCNs and specialty networks should review their policies and procedures in preparation for TDI’s enforcement efforts based on these proposed regulations. California MPN Legislation:  A once-onerous bill has been brought back to life, but in a much-diminished form. As originally proposed Assembly Bill 399 would have mandated that MPNs pay participating providers at California’s Official Medical Fee Schedule and would have prohibited negotiated rates below the regulatory fee. The measure would also would have restricted MPNs’ ability to review provider bills for mistakes, fraud and abuse. Through intense opposition by WC payers and employers, the bill was held in the Assembly Insurance Committee without being voted on and, as a consequence, is ineligible for further consideration until the next legislative session. In January, a revised AB 399 was unanimously passed by the Assembly and sent to the Senate.  In its current state, the measure merely requires payers to provide employees, within five business days of their request, with the MPN’s name and identification number. The payer may satisfy this requirement by providing the information in writing or an explanation of benefits or by posting the information on a website. Implications: Through a concerted lobbying effort, the earlier version of AB 399 was converted into a reasonable provision giving employees timely and useful information. Without any discernable opposition, the measure is very likely to be enacted and signed into law.

• Q4 2021 Legislative Updates

  Q4 2021 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges in the fourth quarter of 2021 and their practical implications:

  New York: Amendments to the Workers’ Compensation Board Medical Billing Disputes regulation became effective on November 1. These amendments require all objections to medical bills be filed with the Board simultaneously rather than sequentially. As amended, 12 NYCRR 325-1.25 now provides that the Board will deny any objections to payment of a health care provider’s bills that are not raised simultaneously in Form C-8.1, including objections based on legal, valuation or Medical Treatment Guideline grounds. The regulation is further amended to require payers, if the objection relates to the provider’s failure to obtain prior authorization, to provide with the filing evidence that the prior authorization request was actually denied. Implications: The New York State WCB, in adopting these revisions, cited the need to expedite the resolution of medical payment disputes in the interest of administrative efficiency. The new requirements, however, appear to place the burden of improved timeliness primarily on insurers, employers and TPAs. The revisions may present challenges for payers’ claim staff in compiling and presenting all potential objections to medical bill payment within New York’s 45-day prompt payment timeline.

• Q3 2021 Legislative Updates

  Q3 2021 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the third quarter of 2021 and their practical implications:

  Legislative Action & Trends: As reported in the recently published NCCI 2021 Regulatory and Legislative Trends Report, recent state legislative activity has focused heavily on the COVID-19 pandemic. These legislative measures have adopted and expanded presumptions that workers’ exposure to COVID-19 arises out of and in the course of and scope of employment and therefore, is a compensable injury or disease under workers’ compensation. Five states that recently expanded presumptions are Alaska, Illinois, Minnesota, Vermont and Wyoming. Further, legislative measures establishing a presumption of work-relatedness are broadening employers’ WC exposure in three additional ways. First, the original list of workers subject to the presumption (e.g., health care workers and first responders), has been considerably broadened to include many less dangerous employee classes as seen in statutes in Texas and Virginia. Second, many bills do not have sunset dates tied to a time-limited COVID-19 emergency declaration (typical of a gubernatorial executive order), so they will not expire when the pandemic subsides. Rather, they will become a permanent part of the WC benefits landscape. Third, some bills are not limited specifically to COVID-19, but instead have terms that apply broadly to future unspecified infectious diseases or pandemics, e.g., statutes in Tennessee and Washington. Another societal trend finding its way into legislation affecting WC compensability arises from public awareness of the serious and lingering health effects of post-traumatic stress syndrome (PTSD) suffered by public safety personnel and armed service members. States enacting legislation in 2021 expanding WC coverage for mental injuries include Connecticut, Idaho, Maine, Maryland, Nebraska, New Hampshire, Utah, West Virginia and Wisconsin. Implications: The third quarter of 2021 was relatively quiet from a legislative perspective, with many legislatures adjourned or in special session focused on issues not specifically directed at WC. With the arrival of autumn, however, most state assemblies will reconvene to continue their consideration of pending bills that, while not narrowly targeting WC, may have a large impact on WC claims in the longer term. North Dakota:  On August 1, North Dakota became the first US jurisdiction to permit physical therapists to act as primary treating providers for workers’ compensation claimants. The state’s exclusive state fund, Workforce Safety & Insurance agency (WSI), issued guidelines permitting PTs to perform stay/return to work planning, correspond with WSI regarding the injured worker’s injury, provide capability assessments every two weeks, determine maximum medical improvement to guide claim management and refer the patient to most other health care providers without WSI prior authorization. Implications: Allowing patients to have direct access to PTs without requiring a referral from a physician is common within group health plans, but the North Dakota statute and guidelines break new ground for workers’ compensation claimants. North Dakota employers currently have the option of requiring injured workers to treat with the employer’s choice of Designated Medical Provider, however, so the immediate impact on employers may be limited. Nevertheless, this innovation bears watching as a means of delivering prompt and cost-effective health care and medical management to claimants who have experienced musculoskeletal injuries.

• Q2 2021 Legislative Updates

  Q2 2021 Legislative Updates

  Here is a summary of legislative and regulatory developments and challenges for the second quarter of 2021 and their practical implications:

  California MPN Legislation: Two bills that posed significant challenges to California’s Medical Provider Network (MPN) system have been defeated, at least for now. Assembly Bill 399 would have mandated that MPNs pay participating providers at California’s Official Medical Fee Schedule and would have prohibited negotiated rates below the regulatory fee. The measure would also have restricted MPNs’ ability to review provider bills for mistakes, fraud and abuse. Through intense opposition by employers and WC payers, the bill was held in the Assembly Insurance Committee without being voted on and, as a consequence, is ineligible for further consideration until the next legislative session. Assembly Bill 1465 would have required the Division of Workers’ Compensation to establish a state-run MPN (CAMPN) and would have permitted injured workers to select providers from this network in lieu of their employers’ MPNs. This measure is now a “study bill,” meaning that the California Commission on Health and Safety and Workers' Compensation (CHSWC) will compare treatment delays and provider access issues between MPN and non-MPN claims and issue a report of its findings by January 1, 2023. Implications: It is unlikely that either of these bills will be resurrected in the foreseeable future. Unlike SB 537, a similar measure that was enacted in a weakened form in 2019, AB 399 failed to gain any traction during the current legislative session, due in large part to the immediate increase in WC medical costs forced by the measure’s prohibition of network discounts. AB 1465 also met strong opposition from the business community, and the CHSWC study likely will counter the arguments of AB 1465 proponents that California injured workers lack access to high quality medical care via MPNs. Arizona Telehealth Legislation: On May 5, Governor Doug Ducey signed into law HB 2454, which provides broad support for telehealth services in group health coverage. The measure clarifies existing law that Arizona endorsement of telehealth encounters applies to ancillary services and requires a carrier to reimburse health providers at the same level of payment for equivalent services, regardless of whether the services are provided in-person or via audio-visual telehealth. Specifically in relation to workers’ compensation, the law allows medical examinations for workers' compensation claims to be conducted via telehealth with the consent of both the employee and the requesting party. Implications: HB 2454, which was effective on its enactment, continues the broad trend toward state endorsement of telehealth when those services are medically appropriate. WC payers should incorporate telehealth into their injured worker treatment options if they haven’t done so already.