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Industry Insights

Major Legislative Change Coming in 2015?

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Will the Florida Chamber of Commerce be successful in "Bending the Cost Curve for Florida's Families?" The Florida Legislature is in session through early May. These 60 days each year are challenging. There are many topics to follow, and various bills will be debated, amended and followed through in efforts to change a variety of Florida statutes.

At first glance, it looks like a quiet session for Florida workers' compensation. There are some legislative efforts to exempt fee schedule rulemaking from legislative oversight. This effort is in SB 1060 and HB 1013. That effort seems to have a fair amount of support.

Then there is a proposal by the Chamber of Commerce referenced above. It is not a workers' compensation bill, but it may still have an impact on that market directly and indirectly. It is also still a proposal. Time will tell if it becomes formalized and begins to move through the legislative process.

The Chamber is recommending a "seven point comprehensive plan" to change Florida health care. The implications for workers' compensation should be fairly obvious. Workers' compensation revolves around health care. Medical costs for workers' compensation claims have been rising over recent years. Medical care is integral to returning injured workers to employment. Any change to medical practice and regulation may indirectly impact workers' compensation.

There are details to the plan here. It states a recognition that Florida has many uninsured families. This leads to "the expensive cost shift on Florida's families." The Chamber says that "insured Floridians pay about $2,000 for every hospital stay to cover the cost of the uninsured." That is a rudimentary concept, hospitals charge people who can pay more so that they can remain solvent as they provide care to people who will not pay.

I have been curious about how much medical care really costs. There are allegations that workers' compensation subsidizes other medical care. There are those who question why certain procedures are reimbursed at higher rates in workers' compensation than in the group health or the Medicare systems. Is there a systemic shifting of costs similar to the one described in the Chamber plan, or are those examples anomalies?

The Chamber plan creates Section 456.4501 to authorize the use of "Telehealth." This will apparently leverage technology to bring efficient interaction with health care providers. Practitioners using these communication methods to provide care and diagnosis will not be "practicing medicine without a license."

The Chamber plan would amend Section 110.12315 regarding the state's prescription drug program. Currently, a physician can override the default in favor of generic medication. The physician needs to state on the script that the name-brand is medically necessary. The plan would allow nurse practitioners or physician assistants to provide that explanation. The involvement of nurse practitioners and physician assistants is expanded in other statutory amendments in this plan. The general theme is a greater involvement of these professions.

The plan also includes general revenue (that is, generally speaking, "tax revenue") for the Agency for Healthcare Administration to create methods for incentivizing hospitals. The goal is increasing medical residency opportunities in Florida. These would not be broadly defined, but only in "medical specialty currently underserved in the state." Using $20 million each year, the Agency would allocate $100,000 bonuses. This would apparently increase the population of certain physician specialties, increasing access to care.

The plan's law would require the Agency for Healthcare Administration to negotiate a waiver with federal authorities to "extend the option for health care coverage to low-income residents of Florida and to provide health insurance cost relief to individuals and the business community by reducing the cost shift currently related to uncompensated care."

Upon passage, the plan would require the Office of Insurance Regulation to hire a consultant to "calculate the health care savings expected for individuals and business as a result of the law." A report would be submitted to the leaders of both chambers of the Legislature and the Governor. There is a goal to reduce health insurance rates by 8%. Insurance companies who do not reduce rates by that amount will be required to explain why.

There is a tort-reform section. Through this plan, Section 768.755 is created and deals with "damages recoverable for cost of medical care services." There are provisions also dealing with "noneconomic damages."

And finally, towards the end of the proposal, there is the section amending the workers' compensation act, Section 440.15. This provides that "If an employee reaches the maximum number of weeks allowed for temporary disability benefits, but has not reached maximum medical improvement, then the temporary disability benefits shall continue until the employee reaches maximum medical improvement, whereupon a permanent impairment rating shall be assigned immediately." This could be interpreted as eliminating any limitation on the period of entitlement to temporary indemnity benefits.

Some might refer to this as the "Westphal fix." Westphal v. City of St. Petersburg is working its way through the Florida Supreme Court right now. They will perhaps decide if Section 440.15 is constitutional. Or, the court may just decide which of the First District Court of Appeal's en banc decisions on Section 440.15 is a proper interpretation of the law.

There is a section addressing Florida workers' compensation attorney fees. Currently, the statutory percentage fee is what must be awarded, that is, the fee "must be equal to" the percentages. This section would make that percentage the most that can be awarded, and "shall be limited to" the statutory percentage. There is also a provision that would allow judges more discretion on fees regarding benefits valued less than $10,000. In those instances, a fee not to exceed $2,500 could be awarded.

This might be referred to by some as the "Castellanos fix." Followers of this blog will already know that Castellanos and its "companion cases" are working their way through the Florida Supreme Court. The Court has already interpreted Section 440.34 and avoided the constitutional question in Murray v. Mariner Health in 2008. The current challenge is focused on a constitutionality determination, and some feel that the statute cannot be remedied with statutory interpretation this time.

Whenever a bill starts to circulate, the question is always, "Will it pass?" The right answer is usually, "Time will tell." There will be much time for discussion, debate, critique and amendment. Many bills that do pass are not identical in their final form to their initial form. So it is very early in the session for prognostication. However, this is certain, the proposed bill is an interesting read.

David Langham is deputy chief judge of the Florida Office of Judges of Workers' Compensation Claims. This column was reprinted with his permission from his Florida Workers' Comp Adjudication blog.

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