By Sacha L. Armstrong
There are several changes to the Indiana Worker’s Compensation Act that will go into effect on July 1, 2018.
Chapter 1, I.C. § 22-3-2-15, Agreements of settlement or compromise, was amended to add a new subsection (d) that requires payments of compensation under an authorized agreement to be made not later than 30 days after the date the Worker’s Compensation Board approves the agreement. This means that payment of permanent partial impairment (PPI) benefits by State Form 1043 agreements to compensation and section 15 stipulations to settlement must be paid to the claimant within 30 days from the date that they are approved by the board. An employer that fails to comply with this subsection is subject to a civil penalty under I.C. § 22-3-4-15. It is unclear how delays in receiving orders and file-marked approvals will affect potential compliance issues. It is not uncommon to receive an order several weeks after it has been approved. Attorneys who frequently practice before the board may want to make arrangements to check frequently for the status of board approvals.
A new section to the act was added. I.C. § 22-3-3-10.5, Items that must be tendered to employee — Permanent partial impairment agreement, reads:
“(a) The following must be tendered to an employee not later than fifteen (15) days after the date of the physician’s statement described in subdivision (2): (1) A proposed permanent partial impairment agreement. (2) The associated physician’s statement required by I.C. § 22-3-3-6(e). (3) The employee waiver of examination. (4) A hand/foot chart, if necessary. (b) A permanent partial impairment agreement signed by the employee, along with the supporting documentation listed in subsection (a), must be submitted to the worker’s compensation board for approval not later than fifteen (15) days after the date of receipt from the employee. (c) Not later than thirty (30) days after the date the worker’s compensation board approves the permanent partial impairment agreement, one (1) of the following amounts must be paid: (1) The first weekly installment of compensation for permanent partial impairment. (2) The lump sum, if the compensation is to be paid in a lump sum amount. (d) An employer that fails to comply with subsection (c) is subject to a civil penalty under I.C. § 22-3-4-15.
Section 10.5 requires employers and worker’s compensation administrators to send the proposed PPI agreement and other required forms within 15 days after the date of the physician’s statement, i.e., the date of the appointment or evaluation. This requirement has already raised some compliance concerns with employers and administrators because physicians’ reports and statements are often not transcribed for weeks after the appointment date and not actually received by the employer or administrator for weeks after that. It is not uncommon to have a 15- to 30-day lag between the PPI evaluation and receipt of the PPI report. Section 10.5 does not seem to take into account this reality.
Issues may also arise where employees and employers are negotiating compromised stipulations to settlement that resolve all claims under the act, such as back wages and additional medical treatment. This new section obligates the employer to send an agreement to pay the PPI alone even though these other issues may exist. Employers may need to notify injured claimants that they are required to send this form per the new changes to the act but settlement negotiations and discussions can continue. There is also nothing that prevents a separate payment of additional compensation after a PPI rating is paid out to resolve any remaining issues via section 15 stipulation of settlement.
Subsection (b) again requires the permanent partial impairment agreement to be submitted to the Worker’s Compensation Board for approval not later than 15 days after the date of receipt from the employee. There is nothing in this section that stipulates any time period in which the injured employee is required to return the signed PPI agreement to the employer. However, you may want to advise your clients that if they do not receive a return signature for the PPI agreement to send a copy of the unsigned agreement to the board with a letter stating that the agreement was never signed by the employee.
Chapter 3, I.C. § 22-3-3-24, Times of payment by agreement or in award, was amended to require an award of compensation ordered by a single hearing member of the Worker’s Compensation Board to be paid not later than 30 days after the date of the award, or as the award provides, if the award is not appealed to the full board. An employer that fails to comply with this subsection is subject to civil penalty under I.C. § 22-3-4-15. Again, potential issues in practice may arise where employers and their representatives are unable to obtain payment information from claimants and their attorneys after a determination or award. For those of us who routinely represent employers, we know that the issuance of checks often requires updated tax identification and other payment detail information. It is unclear how the board will handle compliance issues where there are significant delays by the claimant or claimant’s attorney in providing payment information.
Another change to the act amends I.C. § 22-3-4-13, Employers and carriers —Records and reports of injuries — Penalty for violation of article to require a first report of injury to be filed with the board for any actual, alleged or reported injury that requires medical treatment beyond first aid. This changes the previous language that required the first report to be issued within seven days after the first day of a disability that arises from a workplace injury and the employer’s knowledge of the disability that causes an employee’s death or absence from work for more than one day. The change does away with the one-day requirement and requires the filing of a first report for injuries that may have previously been handled as medical only claims. Subsection (c) states that the reporting requirement under this subsection is intended to be consistent with the recording requirements set out in the United States Occupational Safety and Health Administration (OSHA) regulations found at 29 C.F.R. 04.7.
I.C. § 22-3-4-15, Additional violations and civil penalties, was amended to assess civil penalties under this section for:
(1) Failure to timely pay compensation under an approved settlement agreement as required by I.C. 22-3-2-15(d);
(4) Failure to timely pay compensation for permanent partial impairment as required by I.C. 22-3-3-10.5(c); and
(5) Failure to timely pay a compensation award as required by I.C. 22-3-3-24(a).
The first violation of an offense listed in subsection (a) allows the board to apply civil penalties of $50 for the first offense, $150 for the second unrelated violation of the same offense, and $300 for the third unrelated violation of the same offense. These penalties would seem to apply to the employer as the named party on a claim as opposed to the carrier or worker’s compensation administrator. In the past, the board has declined to get in the middle of the employer and the worker’s compensation carrier or administrator when issuing fines.
I.C. § 22-3-5-2.5, Proof of compliance — Noncompliance — Penalties, was amended to allow civil penalties against the employer of $100 per day beginning on the date of the request to an employer to provide the board with current proof of compliance with insurance in accordance with I.C. § 22-3-5-2 and ending on the date that compliance occurs.
Other changes include an expanded definition of employer to include limited liability partnerships and a corporation, LLC, or LLP that controls the activities of another corporation or commonly owned entities or where the controlling corporation is otherwise considered a joint employer for purposes of the act.
Posting of notice of worker’s compensation coverage, I.C. § 22-3-2-22, was amended to add a new subsection (c) that requires an employer that has mobile or remote employees to convey the information required under subsection (a), Notice of Worker’s Compensation coverage, to the employer’s employees in an electronic format or in the same manner as the employer conveys other employment-related information. Changes to the information must be conveyed promptly to the employer’s employees in the same manner.
I.C. § 22-3-3-7, subsection (b), Temporary disability — Payment of benefits, was amended to require form 1043 agreements to compensation to be filed with the Worker’s Compensation Board electronically and tendered to the employee or to the employees’ dependents by hard copy.
I.C. § 27-7-2-28.1, Assigned risk plan, was amended to establish the Assigned Risk Plan and allow the worker’s compensation board to administer the assigned risk plan with the commissioner’s approval.
I.C. § 22-3-3-13, Second Injury Fund, was also amended to change the maximum benefit time period amount from 150 weeks to 3 years under subsections (i) and (j).
The Legislative Council was also urged to assign an appropriate interim study committee with the task of studying increases to the benefit schedules.
Drug Formulary Act
Presumably in response to the national opioid crisis that is affecting Indiana as well as the rest of the nation, the General Assembly added I.C. § 22-3-3-4.7 to the act, which will enable an employer to deny prescription medications where the medication is flagged as improperly prescribed (“N”) in the ODG database. As used in this section, “formulary” refers to the Official Disability Guidelines (ODG) Workers’ Compensation Drug Formulary Appendix A published by MCG Health. I.C. § 22-3-3-4.7 (a).
Beginning January 1, 2019, reimbursement is not permitted for a claim for payment for a drug that:
(1) is prescribed for use by an employee who files a notice of injury under this chapter; and
(2) according to the formulary, is an “N” drug.
However, if the employee begins use of the “N” drug before July 1, 2018, and the use continues after January 1, 2019, reimbursement is permitted for the “N” drug until January 1, 2020. Id. at (c).
The prescribing physician may still be able to prescribe the “N” drug for use by the injured employee if the physician submits a request to the employer that includes the prescribing physician’s reason for requesting use of the “N” drug, and the employer approves the request. Id. at (d). If the employer does not approve the prescribing physician’s request under subsection (d) to permit use of an “N” drug, the employer must:
(1) send the request to a third party that is certified by the Utilization Review Accreditation Commission to make a determination concerning the request; and
(2) notify the prescribing physician and the injured employee of the third party’s determination not more than five (5) business days after receiving the request. Id. at (e).
If an employer fails to provide the notice required by subsection (e)(2), the prescribing physician’s request under subsection (d) is considered approved, and reimbursement of the “N” drug prescribed for use by the injured employee is authorized. Id. at (f).
In instances where a UR determination is to deny the prescribing physician’s request to permit the use of an “N” drug:
(1) the employer shall notify the prescribing physician and the injured employee; and
(2) the injured employee may apply to the worker’s compensation board for a final determination concerning the third party’s determination under subsection (e). Id. at (g).
None of these changes apply to situations where “N” drugs are prescribed during a medical emergency. The formulary database applies to prescriptions only. It does not apply to treatment protocols. Based on discussions with Chairwoman Linda Hamilton and Director of Compliance Katia Brodskaya at a meeting with members of the DTCI worker’s compensation section in June 2018, prescribing physicians and insurance carriers are already considered to be familiar and used to dealing with formulary databases. It is anticipated that physicians will simply choose from the approved list. It should be noted that there is a six-month grace period before this new section goes into effect on January 1, 2019.
It will be interesting to see how the single hearing members and the board treat disputes brought before them under the new I.C. § 22-3-3-4.7. Historically, the use of utilization review by the employer to determine whether treatment and prescriptions should be authorized has not been favored by the board. In the past, there have also been directives from the board as to appropriate communications between field nurses assigned to claims and treating physicians in response to concerns from the plaintiffs’ bar that employers and worker’s compensation administrators were attempting to improperly influence treatment providers and/or direct the injured employee’s care. The new I.C. § 22-3-3-4.7 would seem to open the door to these same arguments and issues.•
Ms. Armstrong is a partner in the Evansville office of Kightlinger & Gray and chairs the DTCI Worker’s Compensation Section. The opinions expressed in this article are those of the author.