The Texas Workers' Compensation Commission (the Commission) proposes new rules §124.1 and §124.2, concerning carriers required notices and mode of payment and the simultaneous repeal of §§124.1 - 124.4, concerning the same subject. These rules define what constitutes written notice of injury, the insurance carriers responsibility once written notice of injury is received from the employer, the Commission's responsibility when notified of an injury by a source other than the insurance carrier, the insurance carrier's responsibility when notified of an injury by a party other than the employer and the reporting of claim administration information to the employee and/or Commission. The new rules are proposed to provide more direct guidance regarding an insurance carrier's responsibility to maintain claim administration information, and the requirements for reporting that information to the employee and the Commission. The two new rules incorporate the provisions in the four rules proposed for repeal. The Texas Register published text shows new text and should be read to determine all proposed new language. Nothing is these rules should be seen to limit the Commission's authority to take enforcement actions regarding noncompliance with these rules, any other Commission rule or the Texas Workers' Compensation Act as provided in the statute including the issuance of administrative penalties or other sanctions.

§124.1.

Proposed §124.1 focuses on written notice of injury and incorporates provisions contained in existing §124.1. Written notice of injury is an important concept in the workers' compensation system because receipt of this notice triggers nearly all carrier duties regarding administration of the claim.

Proposed subsection (a) defines written notice of injury. The definition in the proposed new rule is slightly different than under current §124.1. In the situation where a source other than the Commission or the Employer's First Report of Injury supplies the information, the new rule requires only the assertion that the injury was work related.

Proposed subsection (b) requires an insurance carrier to create a written record of the earliest report of injury if the injury is received via tele-claims or other electronic means. It also establishes the date of receipt of the notice as the date the insurance carrier obtained the information.

Proposed subsection (c) requires the Commission to notify the carrier of qualified injuries, deaths and occupational diseases reported to the Commission by a source other than the insurance carrier.

Proposed subsection (d) requires an insurance carrier to report to the employer all injuries, deaths and occupational diseases reported to the insurance carrier by a source other than the employer. The Commission has discovered that in many cases, the employer is unaware of the injury before the carrier initiates benefits despite the fact that the carrier is expected to review a claim to determine whether to accept the compensability of the injury within seven days of written notice of the injury. The requirement to contact the employer is to ensure that the carrier has more complete information to make its decision regarding compensability. In addition, the contact will ensure that the employer is aware that there may be reporting requirements concerning the injury.

§124.2.

Proposed new §124.2 focuses on carrier reporting to the employee, the Commission actions taken on claims, and key events occurring in claims. The proposed rule includes requirements contained in current §§124.1 through 124.4 which are proposed for repeal. Proposed subsection (a) requires an insurance carrier to notify the claimant and the Commission of actions taken on or events occurring in a claim

Proposed subsection (b) requires the Commission to establish the form, format and manner of electronic submission of claim benefit information. It also requires insurance carriers to obtain a copy of the International Association of Industrial Accident Boards and Commissions Electronic Data Interchange (EDI) Implementation Guide.

Proposed subsection (c) identifies the events which require a carrier to report only to the Commission.

Proposed subsection (d) requires insurance carriers to electronically submit the information from the first report of injury to the Commission not later than the seventh day after the receipt of the report.

Proposed subsection (e) requires the information described in subsection (c)(2) (correction of Commission-identified errors) to be filed with the Commission electronically.

Proposed subsection (f) requires the information described in subsection (c)(3) (change in an electronic record) to be filed electronically not later than the tenth day after identifying the change.

Proposed subsection (g) requires the information described in subsection (c)(4) (compensable death with no beneficiaries) to be filed electronically not later than the tenth day after a determination is made that there are no beneficiaries in a death.

Proposed subsection (h) identifies the events that require the insurance carrier to notify the Commission and the claimant.

Proposed subsection (i) requires insurance carriers to electronically report to the Commission the carrier's denial of a claim, described in subsection (h)(1), not later than the seventh day after the date the claim is denied.

Proposed subsection (j) requires insurance carriers to electronically report to the Commission the events described in (h)(2) - (8) not later than the tenth day after the event occurs or the action is taken.

Proposed subsection (k) requires insurance carriers to notify claimants of the actions described in subsection (h)(1) using plain language notices with language prescribed by the Commission not later than the seventh day after taking the action. This notice must also provide a full and complete statement of the carrier's reason(s) for the action.

Proposed subsection (l) requires insurance carriers to notify claimants of the actions described in (h)(2) - (8) using plain language notices with language prescribed by the Commission not later than the tenth day after taking the action. This notice must also provide a full and complete statement of the carrier's reason(s) for the action.

Proposed subsection (m) establishes the criteria and time frames for notification to certain employees of the termination of income benefits pending expiration of 401 weeks from the date of injury.

Proposed subsection (n) requires the Commission to send acknowledgments to trading partners identifying which records were accepted, accepted with errors, or rejected. It also requires records accepted with errors to be corrected in accordance with Commission rule §102.5.

Proposed subsection (o) identifies information which is not required to be submitted to the Commission. This type of unnecessary, unsolicited information serves no purpose and is costly to the system in terms of staff time to process, storage, etc.

Proposed subsection (p) provides that a written request for waiver from the requirement that the first report of injury be filed electronically are to be submitted to the Executive Director or his/her designee. Requests must be filed annually and must include a justification for the waiver, the carrier's volume of claims and total premium amounts, current automation capabilities and a timeframe for implementation of electronic data interchange.

Proposed subsection (q) allows the hardcopy/paper submission of information which would ordinarily be required to be submitted electronically if such submission is directed by the Commission. Such direction could come through Commission advisory, the Texas Electronic Data Interchange Guide, or other Commission communication.

Ed Buchanan, Finance Manager, has determined that for the first five year period, the proposed sections are in effect, the sections will have no fiscal implications for state or local governments as a result of administering the sections. The proposed sections will provide general guidance regarding what constitutes a written notice of injury and the carrier's responsibility after receipt of the notice of an injury, and the submission of claim administration data to the Commission and employee/legal beneficiary. Over time, the proposals are expected to result in cost savings to the Commission as Electronic Data Interchange transmissions replace hardcopy (paper) filings. Local government and state government as covered entities will be impacted in the same manner as described later in this preamble for persons required to comply with the sections as proposed.

Mr. Buchanan also has determined that for each of the first five years the sections are in effect, the public benefit anticipated will include an increased ability of the parties to clearly understand the requirements regarding submission of claim administration data to the Commission; and will provide plain language written communications between injured employees/legal beneficiaries and insurance carriers which will be easier to understand for all participants in the system.

Insurance carriers should benefit from the sections by being able to reduce the number of hardcopy (paper) forms that must be created and handled, and by reducing the amount of time for submission of information to the Commission. Additionally, the edits required for EDI will require a higher level of data quality than that previously submitted. Carriers should benefit from the use of plain language notices rather than Commission form TWCC-21. The notices will enable the injured employee to better understand the actions taken and the reason(s) the insurance carrier took the action. This better understanding by the injured employee may reduce verbal contacts to the insurance carrier requesting clarification and may also reduce the number of disputes raised due to misunderstanding. Initially, insurance carriers will incur the expenses associated with the development and programming for the electronic reporting standards. However, these standards will also be available for use in other jurisdictions that are moving toward electronic data interchange. There will also be costs associated with the development and implementation of the plain language notifications. However, these initial costs will be offset by subsequent savings realized from the reduction of paper and mail handling processes, postage, and added consistency of data reporting requirements between jurisdictions.

Injured employees/legal beneficiaries should benefit from the rules due to the implementation of the plain language notices and replacement for the TWCC-21 form. The notices will provide information in a format that should be easier to understand and will provide more specific information regarding the actions taken on a claim by an insurance carrier and the reason for the action. The information will include benefit payment information, disputed claim information and general information regarding the claim. There are no anticipated costs to the employee/legal beneficiaries.

Covered employers should benefit from increased communication with their insurance carrier regarding workers' compensation claims reported by the employer and by parties other than the employer.

To the extent that there is any impact to small businesses it will not differ from the impact on large businesses.

Comments on the proposal must be submitted to Donna Davila by 5:00 p.m., April 19, 1999 at the Office of the General Counsel, Mailstop #4-D, Texas Workers' Compensation Commission, Southfield Building, 4000 South IH-35, Austin, Texas 78704-7491. A public hearing on these proposed sections is tentatively scheduled for April 1, 1999 at the Austin office of the Commission. Those persons interested in attending the public hearing should contact the Commission's Office of Executive Communication at (512) 440-5690 to confirm the date, time, and location of the public hearing. Based upon various considerations, including comments received and the staff's or Commissioners' review of those comments, or based upon action by the Commissioners at the public meeting, the rule as adopted may differ from the rule as proposed. Persons in support of the rules as proposed, in whole or part, may wish to comment to that effect.