Workers’ Compensation Reform achieved a huge victory earlier this summer with the signing into law of HB 1320, an act that the American Insurance Association feels ‘addresses problems which have been steadily mounting in Indiana for years.’
Indiana Governor Mike Pence penned the legislation which, effective of July 1, ensures a fee schedule with a maximum reimbursement rate of 200% of the Medicare rate for treatments and procedures to workers’ compensation claimants by medical service providers. While those are the provisions of the new legislation in a nutshell, there are plenty of other considerations Businesses need to be aware of, particularly considering the imminent arrival of Health Care Reform.
What Exactly Is Workers Compensation?
Workers’ compensation is defined by http://www.in.gov as ‘an accident insurance program paid for by the employer which may provide the injured with medical, rehabilitation and income benefits if they are injured on the job.’ While plans differ among jurisdictions, the common denominator across all states is that these benefits are aimed at helping an injured employee in their recovery and return to work.
Employees are covered by workers’ compensation from their first day of work. The benefits of workers’ compensation include payment of medical bills for the period during which the employee is injured and providing dependants with support in the event of a life-threatening injury. Prior to enacting the new law, Indiana was one of only a handful of states in the US that did not have a fee schedule for workers compensation medical bills.
What Does The Law Entail?
The bill specifies the pecuniary liability for workers’ compensation payments to a medical service facility, allowing a medical service provider to request an explanation from a billing review service, if the medical services provider's bill has been reduced as a result of the application of a Medicare coding change. As well as that, the bill ensures an increase in the average weekly wage used to determine workers’ compensation and occupational disease benefit amounts. HB 1320 also specifies clean claim payment requirements related to workers’ compensation claims and calls for employers to make an annual filing fee of $2 to the workers’ compensation supplemental administrative fund.
Essentially, this new standard will help to control the increasing costs of medical care provided to injured workers in the state of Indiana. The expected impact on workers’ compensation system costs is a reduction of between $5M and $16M.
What Should I Do Next?
Although HB 1320 does not directly affect the qualification requirements for Workers’ Compensation benefits, it is important that you talk to your employees so that they can understand how they are covered in the event of an accident. You can instruct them on provisions such as: who they will receive treatment from in the event of a workplace injury and whether or not they can go their own physician?
It is also crucial to consult your insurance provider and address your current Workers’ Compensation initiative and ensure it meets the requirements of HB 1320. It is also worth considering making amendments to your risk assessment policy so that you can further reduce the possibility of workplace accidents.
Understanding The Legislation
The signing into Indiana law of HB 1320 has already seen a shift in alignment for Indiana with other states, adopting similar fee schedules based on Medicare rates, however, with the Health Insurance exchanges due to open on October 1, further Health Insurance changes may be on the horizon, both in the State of Indiana and beyond. It is important for both employers and employees to prepare themselves by understanding new legislation and how it affects them.
