DTCI: Legislature updates Indiana Worker’s Compensation Act

During the last legislative session, the Indiana Worker’s Compensation Act received several updates, most of which have taken effect. This article highlights the changes made to the act and the date the amendments are effective.

First and foremost, Indiana Code § 22-3-3-3 was amended to read that if, after the occurrence of an accident, compensation is paid for temporary total disability or temporary partial disability, the two-year limitation period to file an application begins to run on the last date for which compensation was paid. The prior version of that section provided only that a claim for compensation is barred unless it was filed within two years after the occurrence of an accident or death of an employee. The new language codified the longstanding rule or practice established in caselaw that when indemnity benefits have been paid to an employee or to an employee’s dependents, the statute of limitations is extended to run two years from the last date for which that compensation was paid. It is notable that the payment for medical services does not extend the statute of limitations and — in cases where only medical services have been paid but no indemnity benefits — the statute will still run two years from the date of accident or death.

Another long-needed change was an increase to benefits paid for disability as well as compensation owed for permanent partial impairments. The current benefits had been in effect since 2016. However, the newly increased rates will take effect July 1, 2023, and will continue to increase on July 1 for each subsequent year through 2026. This includes the dollars per degree paid for a permanent partial impairment, the maximum amounts for an employee’s average weekly wage and temporary total disability rates, as well as the maximum amount of compensation.

Effective Jan. 1, “ambulatory outpatient surgical center” is added to the definition of “medical service facility” in I.C. 22-3-6-1(j). As a result, services rendered at an ambulatory outpatient surgical center will now be subject to reimbursement at the Medicare rate plus 200% for the same procedure provided in the same facility on the same day. While carriers/employers are still free to negotiate a different rate before the procedure, it is likely that carriers/employers would be unable to negotiate a better rate. By adding the ambulatory outpatient surgical centers to the definition, the medical care reimbursement rates are now uniform, thereby making the processing and payment of medical bills resulting from workplace injuries more efficient.

Finally, a new chapter added to the act addresses the payment of “clean claims.” I.C. 22-3-7.2 took effect Jan. 1. According to the definition of “medical service facility,” that chapter applies to any medical provider that provides a service or product and uses the CMS 1450 or CMS 1500 forms for Medicare reimbursement. “Clean claim” is defined as a claim with no defect, impropriety or particular circumstance requiring special treatment preventing payment. A “payor” — an employer or employer’s carrier that is liable for a claim for services under the act — shall pay or deny a claim within 30 days after receipt of claim if submitted electronically, and within 45 days if submitted on paper. The failure to give notice of a deficiency or denial of claim results in the automatic establishment of a clean claim.

Thereafter, when a clean claim is not paid or is denied timely, interest begins to accrue the day after the deadline to do so and will continue to accrue until the claim is paid. The interest rate is determined according to I.C. 12-15-21-3(7)(A), which states that the rate is the percentage rounded to the nearest whole number that equals the average investment yield on state general fund money for the state’s previous fiscal year, excluding pension fund investments, as published in the auditor of state’s comprehensive annual financial report. According to a notice published recently by the Indiana Worker’s Compensation Board, the rate for 2023 is 1.0% annually or .0027% daily.

While there appears to be no proposed legislation during this session that would bring changes to the Indiana Worker’s Compensation Act, changes could be on the horizon. However, it is anticipated that any future legislative changes will not be proposed until, at the very least, the 2024 session.•

__________

Libby Valos Moss is a partner in the Indianapolis office of Kightlinger & Gray LLP and serves on the DTCI Board of Directors. Opinions expressed are those of the author.