Establishes loss of workers' compensation benefits for noncompliance with a treatment plan. Limits chiropractor or massage therapy visits to 24 per year for a work-related injury. Provides process to streamline medical information release for work-related injuries. Requires that a mutually selected physician do employer-requested medical exams for workers' compensation permanent impairment determination cases. Authorizes the department of labor and industrial relations to use funds from the special compensation fund to hire personnel to monitor vocational rehabilitation recipients. Requires an injured employee's employer to approve the employee's choice of vocational rehabilitation program prior to enrollment.

A BILL FOR AN ACT

PART I

SECTION 1. The legislature finds that in 2001, 2002, and 2003, Hawaii's workers' compensation rates -- driven by rising medical costs -- have gone up an average of 3.5 per cent in 2001, 4.6 per cent in 2002, and eight per cent last year. In August 2004, a study by the private Work Loss Data Institute gave Hawaii a failing grade for its workers' compensation system in 2002, primarily because injured workers stayed out much longer than in other states. The legislature also finds that in Hawaii, 22.6 per cent of injured workers stayed off the job for more than thirty days.

The legislature further finds that, during the 1995 and 1996 regular legislative sessions, the legislature enacted major sweeping workers' compensation reforms that resulted in workers' compensation insurance rates being lowered over the ensuing five years by approximately forty-seven per cent. However, due to the rise in workers' compensation insurance rates over the past four years, the legislature believes that it is time to revisit the workers' compensation law and enact new reforms to curb rising insurance costs to employers.

The purpose of this part is to:

SECTION 2. Section 386-21, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) If it appears to the director that the injured employee has wilfully refused to accept the services of a competent physician or surgeon selected as provided in this section, or has wilfully obstructed the physician or surgeon, or medical, surgical, or hospital services or supplies, or failed to substantially comply with a treatment plan recommended by the injured employee's health care provider, the director may consider such refusal or obstruction on the part of the injured employee to be a waiver in whole or in part of the right to medical care, services, and supplies, and may suspend the weekly benefit payments, if any, to which the employee is entitled so long as such refusal or obstruction continues. For the purposes of this subsection, "failure to substantially comply with a treatment plan recommended by the injured employee's health care provider" means an injured employee's failure to attend at least one-third of the medical or rehabilitative treatments included in a treatment plan established by the injured employee's health care provider to restore the injured employee to either fully functioning working status in the employee's former employment capacity, or in another employment capacity if the injury results in a permanent disability that prevents the injured employee from returning to the employee's former position; provided that if the injured employee can show good cause for noncompliance with a treatment plan, then the injured employee's benefits shall not be suspended pursuant to this subsection."

SECTION 3. Section 386-26, Hawaii Revised Statutes, is amended to read as follows:

"§386-26 Guidelines on frequency of treatment and reasonable utilization of health care and services. The director shall issue guidelines for the frequency of treatment and for reasonable utilization of medical care and services by health care providers that are considered necessary and appropriate under this chapter[.]; provided that with regard to chiropractic services, an employer shall only be liable for up to twenty-four visits per calendar year for each injury compensable under this chapter.

The guidelines shall be adopted pursuant to chapter 91 and shall not interfere with the injured employee's rights to exercise free choice of physicians under section 386-21.

In addition, the director shall adopt updated medical fee schedules referred to in section 386-21 and where deemed appropriate shall establish separate fee schedules for services of health care providers as defined in section 386-1 to become effective no later than June 30, 1986, in accordance with chapter 91."

SECTION 4. The director of labor and industrial relations, in collaboration with the insurance commissioner and the office of information practices, shall develop recommendations and if practicable, establish procedures to streamline the medical information release process as it relates to injuries compensable under the workers' compensation law. The recommendations and procedures shall promote the effective and efficient administration of workers' compensation claims and shall not contravene any federal law enacted to otherwise protect the personal and medical information of a patient.

The director of labor and industrial relations shall submit a report and any necessary proposed legislation to the legislature not later than twenty days prior to the convening of the 2006 regular session on the actions taken pursuant to this section.

PART II

SECTION 5. The legislature finds that, in some cases, determining whether an injured employee has suffered a permanent disability that is compensable under the State's workers' compensation law has become a contentious matter. Furthermore, medical service providers are sometimes reluctant to participate in such an examination due to the contentious nature of the potential ensuing legal proceedings. The legislature believes that providing a process by which a qualified examiner is selected upon the mutual agreement of the employer and the injured employee would serve to alleviate the adversarial nature of the existing selection process and result in a more efficient and expedient resolution to determining an injured employee's health status.

The purpose of this part is to require that when an examination is performed solely to determine permanent impairment pursuant to approved guidelines under the State's workers' compensation law, the determination shall be conducted by an impairment examiner who has been mutually agreed upon by the employer and employee.

SECTION 6. Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§386- Examination for determination of permanent impairment. (a) Any examination performed solely to determine permanent impairment pursuant to approved guidelines shall be conducted by an impairment examiner who has been mutually agreed upon by the employer and employee. In the event the parties are not able to mutually agree upon an examiner, the director shall appoint an impairment examiner from a list of qualified examiners categorized, and to the extent necessary, selected by specialty of practice. The director shall compile and maintain a list of impairment examiners and shall appoint examiners to conduct examinations in the order that they appear on the list.

(b) The cost of examinations shall be borne by the employer.

(c) The decision of an examiner under this section shall be final.

(d) The director shall adopt rules under chapter 91 to effectuate the purposes of this section."

SECTION 7. The department of labor and industrial relations shall submit a report to the legislature not later than twenty days prior to the convening of the 2006 regular session on its efforts to effectuate the purposes of this part.

PART III

SECTION 8. The legislature finds that the department of labor and industrial relations disability compensation division administers compliance with the State's workers' compensation law codified as chapter 386, Hawaii Revised Statutes. As part of its duties, the disability compensation division utilizes the special compensation fund to pay for, among other things, disability benefits to injured workers. In some cases, part of an injured worker's recuperation from a work-related injury includes the use of vocational rehabilitation services. Although vocational rehabilitation may be necessary in certain instances, the legislature believes that the provision of these services need to be more closely monitored to ensure the service's efficacy and that the services provided reasonably match the injured employee's post-injury abilities.

The purpose of this part is to authorize the director of labor and industrial relations to expend a portion of special compensation fund moneys to contract the services of persons qualified to monitor vocational rehabilitation services provided to injured workers and to require that an injured employee's employer approve any vocational rehabilitation program prior to the employee's enrollment.

SECTION 9. Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to part IV, subpart C, to be appropriately designated and to read as follows:

"§386- Special compensation fund; authorized use of funds. (a) In addition to any other uses of moneys contained in the special compensation fund authorized by law, the director may expend a portion of special compensation fund moneys to contract the services of persons qualified to monitor vocational rehabilitation services provided to injured workers to ensure that the injured worker is receiving appropriate education and training.

(b) The director shall adopt rules in accordance with chapter 91 to effectuate the purposes of this section."

SECTION 10. Section 386-25, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) Enrollment in a rehabilitation plan or program shall not be mandatory and the approval of a proposed rehabilitation plan or program by the injured employee and the injured employee's employer shall be required. The injured employee may select a certified provider of rehabilitation services. [Both the certified provider and the injured employee, within a reasonable time after initiating rehabilitation services, shall give proper notice of selection to the employer.]"

PART IV

SECTION 11. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 13. This Act shall take effect upon its approval.