Spring is in the air – it must be time for Colorado legislative and Division of Workers’ Compensation updates. As always, we are here to ensure you are aware of and understand them all. Below is our review of the April 30th changes, the upcoming changes effective July 1st, as well as proposed legislation.
Round 1. Rules first:
Rule 2: Workers’ Compensation Insurance Premium and Payroll Surcharge (EFFECTIVE 7/1/21)
Last year, Of Counsel Frank Cavanaugh pointed this rule out, as an approved rate reduction in “loss costs” had occurred. This year it again went down. Loss costs are the average cost of lost wages and medical payments paid to or on behalf of the injured worker. This is a component of an employer’s premium calculation. Rule 2 changes do not have anything to do with claim handling and, therefore, do not require coverage.
Rule 4: Carrier Compliance (EFFECTIVE 4/30/21)
4-1(A): The changes in this section are primarily removing language and have little practical effect; however, it is important to understand the content. Believe it or not, some of the terminology throughout the rules did not match. So efforts were made to apply clarity.
4-1(C): In this section again, language was removed, and it was clarified that fines can be imposed if the carrier does not meet 90% or higher compliance in each of the 10 categories audited.
4-1(D): The change under this section requires that after the carrier receives the preliminary audit they may request an extension of time beyond the 30-day time frame to disagree with the findings. The request, however, must be submitted in writing within the 30 calendar days from receipt of the report to respond. If the response is not submitted in writing, it will be considered a “waiver of the right” to file a disagreement with the audit.
There were some additional changes under this section; however, these changes were not substantive.
4-2: Fines for Claims Audits
4-2(E): The change to this section removed the fines per audit deficiency per compliance category. The rule provides for a fine for deficiencies in each category; however, they removed the increased fine for “subsequent finable occurrences”.
Rule 5: Claims Adjusting Requirements (EFFECTIVE 7/1/2021)
5-1: Completion of Division Forms
5-1(D): This was an added section requiring electronic filing. It specifies that there can only be one file per electronic submission and all attachments must be included. You must include the claimant’s first and last name and the type of document being filed with a certificate of the date it was submitted. It is specific that admissions, petitions to modify, terminate, suspend, request for lump sum payments, and motions to close for lack of prosecution must be sent to CDLE_DOWC_FILINGS@STATE.CO.US. It also formalized a requirement recently added that all motions to close must have email addresses for all parties or they are to be submitted via regular mail.
All motions, other than those to close a file, and submissions for prehearings and settlements must be submitted to CDLE_DOWC_PREHEARINGS@STATE.CO.US. All other communications are to be submitted to CDLE_WORKERS_COMPENSATION@STATE.CO.US.
5-2: Filing of Employers First Report of Injury
5-2(B)(1): This change requires the filing of a First Report of Injury within 3 days of notice to the insurance carrier or the self-insured when a fatality occurs, or when 3 or more employees are injured in the same accident.
5-2(B)(2): Language was added to emphasize that a First Report of Injury must be filed no more than 10 days after notice to an employer or self-insured of an occupational disease resulting in lost time from work in excess of 3 shifts or calendar days, occurrence of permanent physical impairment, or contraction of a specified occupational disease.
5-5(A): Admissions of Liability
The language changed to specifically require that the narrative report and the worksheets should include a statement from the authorized treating physician regarding the date of maximum medical improvement, permanent impairment, and the need for maintenance medical benefits. Under paragraph (1), if maintenance medical benefits are being denied, a reference must be made to the date of the medical report which supports your denial, along with the physician’s name. The DOWC has already changed the FAL forms. Under paragraph (3) (dealing with medical-only claims that have been reported to the Division), if no impairment, either a narrative report or the physicians report of workers’ compensation injury form can be used as long as they are attached.
5-8: Admission for Permanent Total Disability Benefits
In this section (B)(2) was removed, which required receipt or proof of payment of compensation to the claimant through the date of death.
5-9: Revising Final Admissions
The change to this rule removed paragraph (C), which dealt with admissions of liability on or after July 1, 1991- and before August 5, 1998. This change appears to be more housekeeping in nature.
Rule 6: Modification, Termination or Suspension of Temporary Disability Benefits (EFFECTIVE 7/1/2021)
The changes in this rule are to clarify terminology. Under paragraph 6-1(A)(2), there was a change from the term “regular employment” to “full or regular duty.” Paragraph 6-1 (A)(3) changed “report” to “Statement” and added language regarding claimant returning to work “at full wages and hours.” The other changes clarified language but did not substantively change the rule.
6-4: Suspension, Modification or Termination of Temporary Disability Benefits by Petition
The significant change in this rule is under paragraph (B). When retroactively decreasing temporary benefits but with a previously filed admission of liability, the petition must be filed within 30 days of the original admission and this process cannot be used for a safety rule violation. The right to set a hearing remains and is usually needed for the denial of the petition.
7-1: Closure of Claims and Petitions to Reopen (EFFECTIVE 7/1/2021)
7-1(C)(1): This was added confirming the Division’s position that they will not allow case closure for failure to prosecute if a claimant is receiving temporary disability benefits. Under paragraph (2), they have also emphasized the motions or petitions to close can be submitted via email if there are email addresses for all parties. If not, they are to be filed by mail.
7-2: Petitions to Reopen
The change in this rule outlines that the process to reopen a claim is by filing an application for hearing endorsing the issue of reopening. It effectively took away the process of a petition to reopen on a standard Division form.
Round 2. Legislation:
Legislation is a yearly struggle, given the makeup of the legislature in Colorado. We see a continual battle to shift the control of claims to the claimants which, of course means, to their attorneys. Each year there are behind-the-scenes negotiations to try to compromise what could be drastic changes, and this year is no exception.
SB21-096: Sunset Workers’ Compensation Classification Appeals Board
Most of you would not be involved with this process. This board was set up to hear grievances brought by employers against insurers concerning the calculation of experience modification factors and classification assignment decisions. This board was due to expire and it has now been continued with clarification. This was signed by the Governor on April 15, 2021 and is the law.
HB21-1213: Conversion of Pinnacol Assurance
This bill was introduced to change Pinnacol from a political subdivision of the state to a stock insurance company. It is now postponed indefinitely.
HB21-1207: Overpayment of Workers’ Compensation Benefits
There has been a push through legislative actions and through the case law to dramatically alter the ability of respondents to collect overpayment of benefits. This bill defines overpayment in a very restrictive manner, to include only benefits paid as a result of fraud, or duplicate benefits that are resultant of offsets regarding disability or death benefits. It does still allow for offsetting and taking credit for any indemnity benefits paid beyond the date of MMI. If the error was a miscalculation issue, it can be remedied within the 30 days allowed for an objection to the admission. This bill is still under consideration.
HB21-1050 Workers’ Compensation
This bill has been referred to as the compromise bill. There are some major inclusions, which in the past have given flexibility, but now the outcome is defined.
- In the present form, if passed, the bill will require appointment of Guardian ad litem and conservators to the list of medical aid that an employer must furnish.
- This bill also limits credit for Social Security benefits to those benefits which the claimant was not receiving at the time of injury. In the past, we have been able to take credit for SSDI benefits even though they were being received at the time of injury.
- The ability to take apportionment against TTD, TPD and medical benefits is gone. The ability to reduce PPD and PTD is still at issue.
- There are also specific limitations when selecting IME physicians.
- One of the more drastic changes that will affect benefits is changing the percent of impairment needed to exceed the first PPD cap from 25% to 19%.
- Respondents will now be unable to withdraw an Admission of Liability when two years have passed from the admission, with the exception of fraud.
- For the purpose of appeals, this bill would require the Director or the ALJ to award benefits when compensability or liability are at issue. This does help respondents, as claimants can’t get an order that a case is compensable and prevent an appeal of that decision as the ALJ didn’t order benefits paid. There are also discussions regarding appeals, orders, and the review process.
- The amount that a claimant must earn for respondents to reopen a prior determination of PTD is increased from $4,000 to $7,500.
- The claimant will now have to submit mileage reimbursement within 120 days and the carrier has 30 days to pay or dispute.
This bill is currently still being considered so the final version is unknown.
SB21-197: Workers’ Compensation Physician
This bill is probably the most dangerous of them all. Over the past several years, claimants’ bar has pushed to reduce and change respondents’ ability to control medical care. This bill, if enacted, will give all control of choice of physician to the claimant.
The current designation of physician process would be gone. The employer would have 7 business days after notice of the injury to give the employee or claimant an authorized physician designation form developed by the Director. At that point, the claimant would be able to designate any level I or level II accredited physician as the authorized treating physician. They are able to make this designation up until the time they reach MMI. The claimant can also make a request to have his/her personal physician or chiropractor be the treating physician. If the treating physician will no longer treat the claimant, the insurer or self-insured must advise the claimant that they need to choose a new physician.
This bill is currently in the Senate Business, Labor, and Technology Committee so the final version is unknown.
If you have any questions about the updated Rules, or any employment or workers’ compensation related question, please contact us.