P&C Update: Auto Liability and Workers’ Comp Could See a Tidal Wave of Change in 2023
August 2022 was a busy month across the U.S. in the area of workers’ compensation and auto casualty compliance. A monthly update report from Enlyte looks at the recent happenings in both spaces and how these legislative decisions will impact coverage capabilities and policy triggers for the future.
In particular, the workers’ comp determinations span across not just state lines but also in their scope. From COVID-19 provisions to objections of medical bill payment, the industry is expected to be experiencing a tidal wave of updates.
Automotive Casualty Updates
In Michigan, reversing an earlier decision in Andary vs. USAA, the state’s Court of Appeals found that the new Michigan fee schedule does not apply retroactively to legacy claims. Rather, it may only be applied to “claims with dates of injury after the effective fee schedule.”
In the new decision, the Michigan Court of Appeals further decided that “even if retroactive intent had been demonstrated, imposing the new limits would substantially impair no-fault insurance contracts entered into before the amendments’ effective date, and therefore would violate the Contracts Clause of the Michigan Constitution.”
USAA, the defendant in the original case, intends to appeal the decision.
The Michigan House of Representatives introduced the bill HB 6335, which states that an automobile policy will not cover damages that are the result of a sexually transmitted infection or pregnancy that occurs as a result of sexual relations in a motor vehicle.
The New Jersey Legislature introduced Bill S481,which requires automobile insurance policies to provide certain minimum amounts of liability, uninsured motorist and under-insured motorist coverage.
The bill specifies that except for a basic automobile insurance policy, no motor vehicle liability policy or renewal of such policy of insurance can be issued in New Jersey unless it includes coverage in limits for bodily injury or death as follows: an amount or limit of $15,000 for plans issued or renewed prior to January 1, 2023; $25,000 for plans issued or renewed on or after January 1, 2023 but prior to January 1, 2026; and $35,000 for plans issued or renewed on or after January 1, 2026; and an amount or limit, subject to such limit for any one person injured or killed, of $30,000 for plans issued or renewed prior to January 1, 2023; $50,000 for plans issued or renewed on or after January 1, 2023 but prior to January 1, 2026; and $70,000 for plans issued or renewed on or after January 1, 2026.
Workers’ Compensation Decisions
From California to Florida to Ohio, the array of workers’ compensation compliance issues from August covers everything — spinal cord stimulator reimbursements to changes to certified Health Care Networks (HCN) to physician-dispensed medications.
The State of Michigan Department of Insurance and Financial Services released its annual adjustment of the maximum work loss benefit and survivors’ loss benefit, both of which will reflect changes in the cost of living. Effective October 1 of each year, these adjustments apply only to benefits that arise from accidents that occur after the date of the change in the maximum.
As of October 1, 2022 (through September 30, 2023), Michigan’s new work loss and survivors’ loss benefit payable shall not exceed $6,615 per single 30-day period. This is an increase from the previous year’s maximum work loss and survivor’s loss benefits for the previous year, which was $6,065 per single 30-day period.
COVID played a big role in alternations to workers’ compensation in various states. Recently, California extended some COVID claim presumptions to January 1, 2024 for first responders.
Specifically, the bill expanded COVID claim provisions currently applicable to firefighters and police officers to include active firefighting members of a fire department at the State Department of State Hospitals, the State Department of Developmental Services, the Military Department, and the Department of Veterans Affairs and to officers of a state hospital under the jurisdiction of the State Department of State Hospitals and the State Department of Developmental Services.
In August, California also saw a proposed measure to reduce the investigation period for selected claims from 90 days to 75 days. In addition, workers’ compensation payments that are considered “unreasonably” delayed will result in penalties of up to $50,000 for specified first responder claims.
The New York State Workers’ Compensation Board also posted a reminder that denials of prior authorization requests (PAR) that have advanced to Level 2 review, without an insurance carrier’s physician review and signature, are invalid and subject to penalty.
The Workers’ Compensation Board in New York stated, “When a payer denies or partially approves a PAR (MTG Variance, MTG Special Services, MTG Confirmation, Medication, Durable Medical Equipment), the payer must also declare any other basis for denial or such basis for denial will be deemed waived.”
When objecting to payment of medical bills, the New York State Workers’ Compensation Board stated payers will be required to use the appropriate Claim Adjustment Reason Codes and Remittance Advice Remark Codes on explanation of benefits/explanation of review EOB/EORs when objecting to paying a medial bill.
Additionally, the payer must also file one of two forms with the New York State Workers’ Compensation Board: A Notice of Objection to a Payment of a Bill for Treatment Provided or Notice to Health Care Provider and Claimant of an Insurer’s Refusal to Pay All (or a portion) of a Medical Bill Due to Valuation Objection(s).
Effective August 2, the state of Texas introduced new rules governing Texas-certified Health Care Networks (HCN). Some of the new changes to HCNs include elimination of the physical onsite visit for provider credentialing, clarifications regarding coverage maps, adding telemedicine as a reportable “practice focus,” as well as clarifications regarding coverage maps and clarifications to the HCN complaint process.
HCNs have until January 1, 2023 to comply to these new rules.
The Minnesota Department of Labor and Industry also recently released the state’s workers’ compensation medical fee schedules. The new resourced-based relative value schedule (RBRVS) is effective October 1, 2022 to September 30, 2023.
While the RBRVS conversion factors rose slightly for physical medicine/rehabilitation services in part and for chiropractic services as compared to the fee schedules for October 1, 2021 to September 30, 2022, the conversion factors for or medical/surgical services, as well as pathology and laboratory services were slightly reduced as compared to the same time period. &