Fla. Takes Aim at Late Reporting by Employers and Carriers

Work Comp Central.com--December 5, 2008

As reprinted in the FASI News and Events Update–December 8, 2008

The Florida Division of Workers’ Compensation released a set of sweeping changes to its Standards and Practices Rules Thursday aimed at curbing late payments and tardy data reporting by employers and carriers and levying “pattern-and-practice” fines of $20,000 if it finds routine violations.

The DWC released its proposed rule 69L-24 and scheduled a workshop for Jan. 6, with the caveat that none of the new fines being proposed exceed the enforcement powers the agency was given by the 2003 workers’ compensation reforms passed as SB 50A.

The rule sets out specific fines for the late filing of forms employers and insurers use to report provider bills and to detail developments in injured workers’ claims. The rule also boosts the minimum standard for timely filings from 90% to 95% in some cases.

And it establishes clear rules for employers and carriers who commit “willful” violations, as opposed to filing problems considered “non-willful.”

Sabolic said the overhaul was triggered in part by the DWC’s advances in its Electronic Data Interchange (EDI) program. Florida is considered a leader in the conversion to EDI filings and in its use of the electronic system to track carrier payment and filing practices.

“The payment of benefits to injured workers and also the timely payment to health care providers have been very positive. The carriers are doing an extremely good job,” he said. “Where there is some evidence of a problem, is in reporting that data to the division. On a case-by-case basis, the non-reporting issues could be very detrimental.

“What we’ve done with this rule is that we have attempted to clarify the violations that would be associated with willful and non-willful late reporting and set out the penalties that are associated with them.”

Florida Statute 440.525, added as part of the 2003 reforms, gives the agency the right to examine the operations of carriers, third-party administrators, servicing agencies and other claims handling-entities every five years.

It also allows for on-site inspections and gives the agency subpoena power.

The statute allows for fines of up to $2,500 for patterns of non-willful violations capped at a total of $10,000 for incidents arising out of the same administrative action. It allows fines not to exceed $20,000 for willful patterns of violations – capped at $100,000 for violations arising out of the same action.

But the law gives the agency leeway in how it fines carriers and similar parties for individual violations.

The proposed rule covers a series of wage, claims and coverage filings and spells out DWC’s power to investigate carriers for late payments to injured workers.

It sets out a 95% performance standard for timely payments to workers. It establishes fines of $50 each for late payments if the employer or carrier falls between the 90% and 95% performance standard, and fines of $100 for each late payment if the employer or carrier falls below the 90% measure.

Employers who make late filings of DFS-F2-DWC-1, the first report of injury, with carriers and carriers who make late filings of the report to the state face a range of penalties based on the delinquency of the filings.

The agency will fine employers or carriers $100 for every first report of injury filed between 1 and 7 days late. The fines increase by week and reach $500 per form for those more than 28 days late.

If a carrier accrues fines of more than $10,000 in a single month and does not contest them, the carrier can be fined another $25 for every late form. If the carrier logs fines of more than $10,000 in three months in a calendar year, DWC can impose an additional $20,000 fine for a willful pattern or practice violation.

The proposed rule also spells out the fines carriers face for late payments. For medical services provided after Jan. 1, 2004, carriers must pay or disallow medical, dental, pharmacy and hospital bills within 45 days of receipt. If the carrier falls below the 95% standard for timeliness, it can be fined $25 for each bill that falls between the 90% and 95% standard and $50 for every late payment that falls below the 90% standards.

“We’re really trying to be transparent,” Sabolic said. “In the electronic environment, we’ve uncovered some situations where we certainly believe that a new penalty structure is more representative of the violations that occur.”

Gary Landry, vice president of the Florida Insurance Council, said the council was reviewing the new filing on Thursday.

The workshop is scheduled for 10 a.m. (EST) Jan. 6 in Room 104J of the Hartman Building at 2012 Capital Circle S.E. in Tallahassee.

The proposed rule is at http://www.myfloridacfo.com/wc/pdf/notice69L-24.pdf.

By Michael Whiteley, Eastern Bureau Chief
mike@workcompcentral.com