Workers’ Comp Bills Sent to Texas Governor

June 2, 2003

The Alliance of American Insurers praised the passage of two bills in both houses the Texas Legislature that it believes will achieve meaningful reform of the troubled Texas workers’ compensation system. The bills were sent to the governor.

“These bills (HB 2198/SB 820 and HB 2199) make important changes to existing law that will help fight insurance fraud,” said David Anderson, vice president and assistant director of workers compensation and health for the Alliance. “These bills address adverse court decisions in Continental Casualty Co. v. Downs and Fulton v. Associated Indemnity Corp.”

HB 2199 gives a workers compensation carrier 15, rather than seven, days to determine the legitimacy of a claim. It also makes an insurer violating this time period subject only to administrative penalties. Previously, failure of an insurer to contest compensability of a claim within the seven-day period automatically waived the insurer’s right to deny the claim.

“The seven-day period was too short a time for an insurer to adequately look into a claim and determine whether a workers compensation death benefit claim should be denied or not,” Anderson said. “It would have led to more fraudulent claims being paid or bad-faith claims being brought. The 15-day period would better allow insurers sufficient time to do their investigations properly.”

Meanwhile, HB 2198/SB 820 makes, with several exceptions, the first valid certification of maximum medical improvement (MMI) and assignment of an impairment rating final if they are not disputed within 90 days. “Currently, no time limit is placed on the finalization of MMI certification, resulting in numerous requests for ‘designated doctors’ and having a negative effect on insurers’ attempts to contain claim adjustment expenses,” Anderson said. “Enactment of this new law should help rein in these runaway costs.”

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