The State of the States

Regulatory Review

A round-up of nationwide regulatory changes affecting the workers' compensation industry.
By: | April 13, 2015


Interest Rates

The Division of Workers’ Compensation announced that any interest or discount provided for in the Texas Workers’ Compensation Act shall be at the rate of 3.77 percent. The rate is effective April 1 through June 30, 2015.


The rate in effect for the previous period of Jan. 1, 2015, through March 31, 2015 was 3.73 percent. For more information regarding calculation of the Discount Rate and Interest Rate, contact Dylan McCoy, Texas Department of Insurance, Financial Services at (512) 676-6195, or visit the website.

Lifetime Income Benefits

The Commissioner of Workers’ Compensation adopted new 28 Texas Administrative Code Section 131.1 regarding Initiation of Lifetime Income Benefits: Notice of Denial. The new rule was published in the Feb. 27 issue of the Texas Register and is available at The new rule requires that an insurance carrier review an injured employee’s eligibility for lifetime income benefits in a timely fashion, including when an injured employee requests LIBs, and requires that the carrier review all of the statutory criteria. The new rule also outlines the time frames for determining LIBs eligibility in situations where an injured employee requests LIBs in writing, as well as time frames for the payment of LIBs after the insurance carrier reasonably believes the injured employee is eligible. The new rule also helps ensure that if the insurance carrier denies LIBs eligibility, communication between the insurance carrier and the injured employee will be consistent, documented, and that all parties will be informed of their right to initiate dispute resolution. The new rule also retains the statutory eligibility requirements for LIBs. The new rule is effective June 1. The division has amended Form PLN-4, Notice Regarding Eligibility for Lifetime Income Benefits, for use with this rule. The finalized PLN-4 is available online and is also effective June 1.

Medical Audits

The Division of Workers’ Compensation’s Medical Advisor approved a Medical Quality Review Annual Audit Plan, which was adopted by the Commissioner of Workers’ Compensation. The purpose of the plan is to promote the delivery of quality health care in a cost-effective manner with emphasis on injured employee safety, ensure that health care providers adhere to medically accepted standards of care, and support return-to-work efforts and avoid unnecessary disability.


The medical quality review process is medical case review initiated from either a written complaint, which may include an internal referral, a plan-based audit, or monitoring resulting from a consent order in accordance with 28 Texas Administrative Code Section 180.68. The Medical Advisor oversees the medical quality review process conducted by the Medical Quality Review Panel.

Medical Billing

The Division of Workers’ Compensation announced that, beginning Oct. 1, the Texas workers’ compensation system will transition to the use of the International Classification of Diseases, 10th Edition, Clinical Modification and Procedure Coding System (ICD-10) from the 9th Edition (ICD-9) for medical billing, processing, and reporting in alignment with federal regulations. These federal regulations adopt standard medical data code sets that apply to the Medicare system, which is regulated by the Centers for Medicare and Medicaid Services. Although there have been delays in the implementation of the ICD-10 code sets, the DWC stated that it will follow the time frame set by CMS. The DWC stated that health care providers, insurance carriers, clearinghouses, and billing services that participate in the Texas workers’ compensation system must be prepared to comply with ICD-10. All health care services provided on or after Oct. 1 must be billed with ICD-10 diagnosis codes or ICD-10 procedure codes. This includes medical bills submitted electronically or paper forms. Health care services provided before Oct. 1 must continue to be billed with ICD-9 diagnosis and procedure codes. Practice management systems and bill review management must be able to accommodate both ICD-9 and ICD-10 codes until all medical bills for service dates before Oct. 1, 2015, have been processed.


Medical Billing Data Submissions

The Oregon Workers’ Compensation Division posted a list of insurers and self-insured employers that are required to electronically submit detailed workers’ compensation medical bill and payment data to the Oregon Department of Consumer and Business Services under OAR 436-160-0405. For more information, contact the EDI coordinator by telephone at (503) 947-7742, by email at [email protected], or visit online.



The Pennsylvania Department of Labor and Industries announced that workers’ compensation insurance rates dropped 5.99 percent, effective April 1.


The rate reduction follows the Insurance Department’s approval of the Pennsylvania Compensation Rating Bureau’s annual loss cost filing. The loss costs are used to determine the premiums businesses pay for workers’ compensation insurance. The department stated that premium savings for an individual employer will vary based on the employer’s risk classification, claims experience, and other factors. Not all employers will see a decrease. This is the fourth consecutive year that workers’ compensation insurance rates have been cut, the department stated.


Employer Classifications

The Department of Labor and Industries adopted rules that amend the following four specific areas: 1) rules applicable to the classification and reporting of professional sports teams (WAC 296-17-35203(1), 296-17A-6706, 296-17A-6707, 296-17A-6809, and 296-17A-7102); 2) rules applicable to the classification of employers operating spas (WAC 296-17A-6109, 296-17A-6204, and 296-17A-6501); 3) rules applicable to the classification of reforestation employment (WAC 296-17A-1007, 296-17A-5004, and 296-17A-5006); and 4) rules applicable to the classification of farming operations (WAC 296-17A-4802 through 296-17A-4813). The changes will be effective July 1.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]