(1) The Legislature specifically rejected a broad exclusion of stress claims under workers’ compensation in 1998 when it limited the exclusion to mental stress claims arising solely from disciplinary action. (Section 386-3(c), HRS. See Act 224, SLH 1998). The legislative intent was recognized by the Intermediate Court of Appeals in Davenport v. City and County of Honolulu, 100 Haw. 297 (2002), and by the Hawaii Supreme Court in affirming the appellate court at 100 Haw. 481. The Administration now seeks to define "disciplinary action" to include what are essentially non-disciplinary, personnel matters. See proposed change to section 12-10-1, HAR (definition of "disciplinary action" includes action where "no sanction or punishment is ultimately imposed."). The proposed change would result in stress injury claims intended by the law to be compensable to be improperly excluded from workers’ compensation coverage;

(2) An injured worker is entitled to temporary disability benefits (TTD) so long as the worker is unable to resume work. (Section 386-31(b), HRS). The commercial guidelines on medical treatment adopted in the amended rules sent by the Director to the Governor establish "presumptive" effect under the amendments (see proposed change to sections 12-15-30(d) and 12-15-32, HAR) and those guidelines address not just medical care but the number of lost work days an injured worker would be limited to because of the injury. The current law provides no presumption for how long an employee can remain out on TTD before being "able to resume work" and properly leaves that determination to the attending physician, with the right of the Employer to object (See section 386-85, HRS);

(3) The Legislature provided authority to the Director to issue guidelines on health care and services. (Section 386-26, HRS). That authority was not without restrictions. The Director was limited to guidelines related to the frequency of treatment and for reasonable use of medical care and services that are considered necessary and appropriate under the statute. (Section 386-26, HRS). As defined by the Merriam-Webster dictionary, a guideline is an indication or outline of policy or conduct. It is something that serves as a guide or an example. (American Heritage Dictionary of the English Language). The amendments to the rules as submitted to the Governor propose to turn the guidelines from suggestive and informative to a "presumptive" guide in determining reasonableness of care. (See proposed change to section 12-15-32, HAR). The scope of treatment would be prescribed by an out-of-state, commercial organization’s publication and the medical provider would have to rebut the presumption by obtaining another national guidelines standard that supported his or her recommended regime of reasonable medical treatment. (See proposed changes to sections 12-15-30(d) and 12-15-32, HAR). The legislature has not allowed for such a presumption under section 386-85, HRS, and intended that medical treatment be assessed as whether it is reasonably related to the nature of the injury under section 386-21, HRS. Medical practitioners are already overworked and struggling to meet the paperwork requirements for handling workers’ compensation cases. The rules as submitted to the governor requiring additional justification of any treatment that deviates from a national standard will only reduce the pool of medical providers willing to accept workers’ compensation cases. In 1996, the Legislature deleted the requirement that the Director approve treatments (up to ten additional treatments) after the initial five treatments. (Act 260, section 3, Session Laws of Hawaii 1996). The effect of the 1996 legislative change was to provide more flexibility in treating the claimant. The Administration's proposal to impose mandatory, presumptively valid commercial guidelines is contrary to the legislative intent on medical treatment guidelines and the general intent to require the employer to provide all medical care, service, and supplies "as the nature of the injury requires." (Section 386-21, HRS);

(4) The Legislature intended that all processing of claims at the Disability Compensation Division (DCD) level and proceedings before the Director be informal, not contested case hearings under chapter 91, HRS. To the degree possible, this allows claimants and adjusters to represent themselves at the DCD level. For that reason, the Labor and Industrial Relations Appeals Board was given de novo review on any appeal. (Section 386-87, HRS). The administrative rules until now have been consistent with this intent by barring discovery procedures typically associated at the appeals board level and civil litigation and only allowing the discovery with approval by the Director upon showing of good cause. (Sections 12-10-65 to 12-10-67, HAR). The Administration seeks formal discovery and hearing procedures that impose waivers of statutory rights if the claimant fails to comply with the procedures. (See proposed changes to sections 12-10-65 and 12-10-72.1, HAR). Such procedural requirements necessitate that the claimant seek legal representation in any dispute with the employer that requires a hearing. These proposed changes which seek to establish contested hearing type cases at the DCD level are in conflict with the legislative intent of an informal process at the DCD level;

(5) The Legislature requires the Director to conduct a hearing on any dispute between the claimant and the employer. (Section 386-86, HRS, decisions to be rendered after a hearing). The Administration proposes the use of summary judgment which would deny the parties a right to a hearing. (See proposed changes to section 12-10-72.1, HAR). The proposed use of alternative dispute resolution (ADR) or mediation could also preclude a hearing, and would impose waivers of statutory rights if the claimant enters into some form of ADR or mediation. (See proposed changes to section 12-10-66, HAR). The proposed rule also increases the cost to the claimant and employer who must share the cost of the arbitrator or mediator in conflict with the intent of the statute;

(6) The Legislature provided presumptions in the law to minimize challenges to benefits while providing provisions elsewhere in the statute to minimize the employer’s exposure to liability. (Compare section 386-85 with sections 386-5 and 386-8, HRS). The Legislature did not intend to create any other presumptions through arbitrarily shifting the burden of proof to one party or the other. The party or parties who must bear the burden of proof are to be determined by law consistent with the purpose of the statute. The amendments to the administrative rules as sent to the Governor propose to arbitrarily assign the burden to the party requesting the hearing. (See proposed change to section 12-10-72.1, HAR). Because the employer can withhold or deny benefits, the claimant will always be the party requesting a hearing and, therefore, will always be required to carry the burden of proof at a hearing. This improperly shifts the balance created by the Legislature between the interests of the different parties to a workers’ compensation claim; and

(7) The Legislature provided for employers to become self-insured if they satisfied certain safeguards under the law. (See section 386-121, HRS). The Legislature finds the changes proposed by the Director (see proposed changes to section 12-10-94, HAR), are overly restrictive and will deter otherwise solvent, adequately financed employers from qualifying for self-insurance. It is the intent of the Legislature to give employers options in how they secure compensation to their employees for workers’ compensation injuries. The proposed changes restrictively limit those options.

(1) Codifying the existing administrative rules that reflect the purpose and intent of the Legislature in enacting chapter 386, HRS; and

(2) Assuring that the Administration does not usurp the authority of the Legislature to create laws, by limiting the Director's rulemaking authority.