STAND. COM. REP. NO. 151

Honolulu, Hawaii

RE:    S.B. No. 857

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 857 entitled:

"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to limit employers' denial of workers' compensation claims pending investigation.  Specifically, this measure:

     (1)  Requires employers to pay for all medical services required by an employee with a compensable injury;

     (2)  Prohibits employers from denying a claim without reasonable cause or during a pending investigation;

     (3)  Establishes notification procedures regarding billing disagreements;

     (4)  Imposes penalties for employers who fail to adhere to notification requirements; and

     (5)  Establishes resolution procedures for employers and providers who have reasonable disagreements over liability for services provided to an injured worker.

     Your Committee received testimony in support of this measure from the Hawaii Chapter-American Physical Therapy Association; Kauai Community Health Alliance, Hale Lea Medicine; Work Injury Medical Association of Hawaii; ILWU Local 142; and three individuals.  Your Committee received testimony in opposition to this measure from the City and County of Honolulu Department of Human Resources, Hawaii Insurers Council, National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America, Chamber of Commerce Hawaii, Society for Human Resource Management–Hawaii, and Solera Integrated Medical Solutions.  Your Committee received comments on this measure from the Department of Human Resources Development and Department of Labor and Industrial Relations.

     Your Committee finds that Hawaii's workers' compensation system is plagued by employers' delays and denials of claims, which exacerbate the recovery of injured workers.  Your Committee finds that employers must be held accountable for processing claims for medical services in a timely manner to assure that injured workers may recover and return to work within a reasonable time.

     Your Committee has amended this measure by:

     (1)  Creating a presumption of compensability for a claim submitted by an employee who is excluded from coverage under the Hawaii Prepaid Health Care Act;

     (2)  Clarifying that a provider of services may issue a notification of services rendered or bill to an employer;

     (3)  Requiring the employee to reimburse the source from which compensation was received for services rendered whenever a claim is found to be non-compensable;

     (4)  Inserting an effective date of January 7, 2059, to encourage further discussion; and

     (5)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 857, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 857, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

________________________________

GILBERT S.C. KEITH-AGARAN, Chair