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House Bill 7
The Employer Perspective
General information
The Texas Legislature designed House Bill 7 to improve return-to-work (RTW) outcomes, enhance the access to and quality of health care for injured employees, help control costs for employers, and create a more efficient workers’ compensation system for all stakeholders.
Effective September 1, 2005, House Bill 7:
- Abolished the Texas Workers’ Compensation Commission (TWCC)
- Transferred most of TWCC’s authority to the Texas Department of Insurance (TDI)
- Established the Texas Department of Insurance, Division of Workers' Compensation (the Division) with a separate, governor-appointed commissioner
- Created the Office of Injured Employee Counsel (OIEC), which will house the ombudsman program formerly handled by TWCC
Implementing the system changes created by House Bill 7 will take several months. If you would like to receive email updates regarding implementation of House Bill 7, click here. Be sure to include all of the information requested in the body of the email. We also maintain a House Bill 7 resource page in the News section of our website.
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Health care networks
The new law focuses on return-to-work (RTW) outcomes because studies have shown that injured employees in Texas stay off work longer than those with similar injuries in other states. By incorporating workers' comp health care networks, the system will move away from the “any willing provider” model. Network doctors and other health care providers (HCPs) should follow the philosophy of occupational medicine, which in turn should produce better RTW results.
Employers may elect to participate in a workers' comp health care network or not, and some insurance carriers may not offer both options. Division rules will regulate non-network coverage. (Current rules and forms will remain in effect until new rules and forms supersede them.)
Workers' comp health care network coverage offers many advantages for employers, and they require employers to be responsible for some actions.
- When you (the employer) participate in a network, your employees must receive care from within the network, if they live within the network service area.
- You must give all employees a written notice of the network program. Each employee must receive and acknowledge the notice before you may require them to use a network HCP.
- Employees must select a network provider as their treating doctor, unless they already have an HMO doctor who agrees to abide by the network treatment and RTW guidelines.
- Each network may designate which specialties it allows as treating doctors. This provision should limit some HCPs from treating injuries outside their area of specialty.
- Each network may negotiate fees. This should encourage more HCP participation in the workers’ comp system.
- Networks will adopt evidence-based treatment guidelines, RTW guidelines, and individual treatment protocols. The use of evidence-based medicine should increase objectivity in the system.
- The law mandates that each network makes returning injured employees to work a top priority.
- Networks may apply for TDI-certification on or after January 1, 2006. TDI may take up to 60 days to review a network's application, so we may not see the first TDI-certified workers' compensation health care network until March 1, 2006.
- TDI will issue consumer report cards on networks 18 months after it certifies the first network. For example, if the first network receives its certification on March 1, 2006, then TDI will issue a consumer report on its performance on September 1, 2007.
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Nonsubscribers
If you are a nonsubscriber (an employer without workers' compensation insurance), you may wish to reconsider your options. Workers' compensation is the only type of insurance that provides full medical and disability coverage for your employees and legal protection for you as their employer.
By law, nonsubscribers are not protected from employee lawsuits over on-the-job injuries. Only workers' compensation coverage provides an "exclusive remedy" for such claims. In the past, some nonsubscribers tried using pre-employment waivers to limit the employee's right to sue. After the 78th Legislature made that practice illegal, some nonsubscribers adopted the use of post-injury waivers instead.
Although House Bill 7 did not prohibit the use of post-injury waivers, it added new administrative requirements on the practice, which may make workers' compensation coverage more appealing to nonsubscribers that currently use waivers.
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Return-to-work outcomes
The new law includes several positive steps to help improve outcomes and control system costs, including the evidence-based treatment guidelines, network quality improvement programs for case management, and greater attention to return-to-work (RTW) outcomes.
- The percentage of injured employees returning to work should improve with the new law’s focus on RTW issues.
- Designated doctors will now address RTW issues.
- The Division may adopt disability management rules for out-of-network claims in order to get employees back to work.
- The Division will provide RTW information to employers and employees.
- Returning injured employees to productive employment is now a legislative mandate, not just a by-product of the system.
- Law requires carriers to evaluate the need for skilled case management as early as possible in the claim to help improve RTW outcomes.
- New cooperation between the Division and the Department of Assistive and Rehabilitative Services should facilitate the return-to-work process.
- Supplemental Income Benefit recipients will have new work search compliance standards in order to continue receiving benefits. The current standards will remain in place until DWC adopts new rules.
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Consumer report cards
Consumer “report cards” will allow employers to objectively evaluate workers' comp health care network performance. TDI will begin issuing their findings on networks 18 months after the first network is certified. Additionally, new compliance programs will identify insurance carrier performance in the revised workers' comp system. Carriers that earn a “consistently high” rating will be able to use the TDI rating in their promotional materials.
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Clarifying the law
House Bill 7 expanded the legal definition of “exclusive remedy” to also apply to non-compensable workplace injuries. This should help protect employers against employee lawsuits for non-compensable on-the-job injuries, such as a workplace accident that was the result of horseplay or intoxication.
Intoxication at the time of the accident was another potentially gray area in the law. In the past, some employees had successfully claimed that a positive test for an intoxicating substance (e.g., alcohol or marijuana) did not prove that they were impaired at the time of the on-the-job injury. House Bill 7 adds a “rebuttable presumption of intoxication” to the law, so that, effective September 1, the burden of proof is on the employee if he or she tests positive for an intoxicating substance immediately following a workplace accident.
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Dispute resolution
Carriers may use medical examinations to determine compensability. This change should help ensure that all parties understand the relatedness of treatment up front, which should reduce the number of medical necessity and compensability disputes. Additional changes to the indemnity dispute resolution process should streamline that process, too.
- Benefit review officers will receive additional training.
- The law limits the number of benefit review conferences to two per issue.
- With the injured worker's approval, benefit review conferences may be conducted by telephone.
- The division of workers' compensation will stop the practice of automatically scheduling a contested case hearing whenever it schedules a benefit review conference. This logistical change should help contested case hearing officers better handle the workload.
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Additional resources
For more information about House Bill 7, click here or attend a Texas Mutual® policyholder workshop near you.
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