Purpose
The purpose of this bulletin is to inform hospitals about two important changes impacting workers’ compensation. The key changes are:
- Penalties for noncompliance with workers’ compensation rules will increase, effective September 1, 2020.
- Independent medical examinations must take place under specified circumstances within an injured workers’ community or via telemedicine, effective January 1, 2021.
Applicability/Scope
The new rules apply to all employers in Washington State, regardless of their workers’ compensation program. The increased penalties will only apply to employers that violate workers’ compensation laws.
Recommendations
- Understand the changes by reviewing this bulletin along with HB 2409 and SB 6440.
- Ensure compliance with existing L&I workers’ compensation laws to avoid the increased fees.
- Plan for the modifications to the independent medical examination process that take effect next year.
Overview
Washington State law requires all employers to provide workers’ compensation. Employers may do so either through the Department of Labor and Industries’ Industrial Insurance Program or through self-insurance. In 2020, the Washington State Legislature passed two pieces of legislation that change Washington State’s workers’ compensation laws.
- Workers’ Compensation Noncompliance Penalties
HB 2409 increases the penalties assessed to employers for noncompliance with workers’ compensation laws. The bill does not change the substance regarding offenses, only the penalty amounts. Beginning September 1, 2020, the new penalties will be:
| Violation | Current Penalty | Penalty Effective 9/1/2020 |
| Failure to pay a workers’ compensation claim | $500 max or double the amount of premiums occurred | $1000 max or double the amount of premiums incurred |
| Delay or refusal to pay a workers’ compensation claim | $500 or 25% of the amount due, whichever is greater | $1,000 or 25% of the amount due, whichever is greater |
| Noncompliance with Recordkeeping Requirements | $250 per violation | $500 per violation (L&I may waive penalties for first-time or de minimis violations) |
| Refusal to Submit Records to L&I for Inspection | $250 per violation | $500 per violation |
| Physician or Advanced Registered Nurse Practitioner (ARNP) Violates Requirements | $500 per violation assessed to the physician or ARNP | $500 per violation assessed to the physician or ARNP |
| Failure to Comply with a “Statutory Provision” | $500 | $1,000 |
The increased penalties will be adjusted for inflation every three years beginning July 1, 2023. This adjustment will reflect the Consumer Price Index change for the Seattle urban area, as published by the U.S. Bureau of Labor and Statistics.
- Independent Medical Exam Circumstances and Location
SB 6440 makes two changes to RCW 51.36.070 impacting the circumstances and location for an independent medical exam.
Currently, the law requires an independent medical exam when “necessary in order to resolve any medical issue.” SB 6440 clarifies this by listing specific circumstances that require injured workers to undergo an independent medical examination. Independent medical exams will be required to:
- Decide about a claim allowance or reopening;
- Resolve a new medical issue, appeal or case progress; or
- Evaluate a workers’ permanent disability or work restriction.
SB 6440 also requires independent medical examinations to take place within an injured workers’ community or via telemedicine. The new requirement states:
(b) The examination must be at a place reasonably convenient to the injured worker, or alternatively utilize telemedicine if the department determines telemedicine is appropriate for the examination. For purposes of this subsection, ‘reasonably convenient’ means at a place where residents in the injured worker’s community would normally travel to seek medical care for the same specialty as the examiner. The department must address in rule how to accommodate the injured worker if no approved medical examiner in the specialty needed is available in that community.
Rulemaking will occur to address these changes to the independent medical exam process.
Next Seps
Changes to the workers’ compensation noncompliance penalties (HB 2409) do not require any next steps relevant to hospitals.
New requirements relating to the location of independent medical exams (SB 6440) requires action by L&I.
First, L&I must write rules to implement the independent medical examination changes. These rules must specifically address the use of telemedicine and situations in which an approved medical examiner is unavailable. WSHA will provide updates on this rulemaking in its regulatory tracker.
Second, L&I is required to establish a workgroup to study issues related to independent medical examinations. The workgroup will consist of two State Representatives; two State Senators; one business representative on behalf of employers that participate in the state workers’ compensation program; one business representative on behalf of self-insured employers; two organized labor representatives; a representative on behalf of physicians who perform workers’ compensation medical exams; and one attorney who represents injured workers. The workgroup is currently in formation and will issue its report by December 11, 2020. WSHA will evaluate the report when it is released.
WSHA’s 2020 New Law Implementation Guide
Please visit WSHA’s 2020 implementation guide online, where you will find a list of the high priority laws that WSHA is preparing resources and information on to help members implement the new laws, as well as links to resources such as this bulletin. In addition, you will find the Government Affairs team’s schedule for release of upcoming resources on other laws and additional resources for implementation.
Background
HB 2409 and SB 6440 are intended to update portions of Washington States’ workers’ compensation laws that were outdated. SB 6440 is also part of a broader effort to improve the independent medical examination process for both workers and employers alike. This resulted in the workgroup’s creation, which is likely to lead to future independent medical examination process changes.
Resources
HB 2409– Industrial Insurance- Various Provisions
Chapter 51.48 RCW– Industrial Insurance- Penalties
SB 6440– Industrial Insurance Medical Examinations- Various Provisions
