Highlights of Delaware’s workers’ comp changes

In some of its specific provisions Delaware’s workers’ compensation reform law (SB1):

• directs that a new workers’ compensation rating plan be filed with the Insurance Commissioner within 90 days of the effective date of a medical payment system and practice guidelines, and at least annually thereafter.

• clarifies the obligations of independent contractors and subcontractors with respect to maintaining workers’ compensation insurance.

• requires that petitions to the Industrial Accident Board for attorneys’ fees be accompanied by affidavit, and that fees awarded to an employee’s counsel offset any financial obligation the employee otherwise has to counsel.

• establishes new procedures for attorneys’ fees in workers’ compensation matters. Among other things, it requires that attorneys representing employees have written fee arrangements and limits an attorney’s ability to collect fees from an employee’s periodic benefit payments to special circumstances.

• authorizes employers or insurance carriers to make payments of indemnity benefits or health care benefits without prejudice to the right to later contest the employer’s obligation to pay the expense in question.

• establishes a Health Care Advisory Panel charged to develop various health care cost containment and efficiency measures.

• provides for a health care payment system intended to control health care costs in connection with workers’ compensation. The system will be developed by the Health Care Advisory Panel. The system is to provide clear schedules of maximum acceptable charges for professional services, hospital services, independent treatment centers, laboratory and pharmaceuticals. • provides for the development of health care practice guidelines that will implement best practice treatment standards in workers’ compensation. Such guidelines will be developed by the Health Care Advisory Panel within one year.

• provides for the development of certification standards for health care providers treating workers’ compensation patients.

• provides for the adoption of forms for a consistent and uniform reporting system among employees, employers, insurance carriers and health care providers.

• allows the Industrial Accident Board to offset payment otherwise due to an employee where the insurance commissioner has made a finding of insurance fraud and ordered restitution.

• provides for workers’ compensation matters before the Industrial Accident Board to be referred to mediation.

• provides a procedure to suspend workers’ compensation benefits to persons who are incarcerated due to a criminal conviction.

• directs that the Industrial Accident Board, when reviewing a proposal to commute benefits, consider attorneys’ fees and costs.

• requires that contractors and other parties doing substantial work within Delaware ensure that their employees are adequately insured for workers’ compensation.

• strengthens mandatory insurance provisions by requiring insurance carriers to notify the Department of Labor of cancellation of coverage and requiring employers to either establish that the employer has gone out of business, or is no longer required to maintain workers’ compensation insurance. It also enhances penalties for violating mandatory insurance coverage provisions.

• authorizes the Office of Workers’ Compensation to engage the firm of Ingenix, Inc. to provide services in connection with the development of health care cost containment measures adopted in the Act.