ARIZONA
HOUSE OF REPRESENTATIVES
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SB 1100: workers' compensation; claim settlement |
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PRIME SPONSOR: Senator Fann, LD 1 BILL STATUS: Caucus & COW
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Relating to settlement of workers'
compensation claims.
Provisions
Full and Final Settlements (Sec. 1)
1. Clarifies that an interested party to a claim can negotiate a settlement of an accepted claim if the period of temporary disability is terminated by a final notice of claim status, award of the ICA or stipulation of the interested parties.
2. Allows an authorized representative of a carrier, special fund or self-insured employer to sign a settlement.
3. Requires a settlement to have attached certain information provided by a carrier, special fund or self-insured employer.
4. Requires settlements to include specified signed attestations regardless if the employee is represented by counsel.
5. Adds the following attestations that must be included in a settlement:
a. The settlement amount representing future medical, surgical and hospital benefits;
b. The present value and total amount of future indemnity benefits;
c. The employee's life expectancy and rated age if applicable;
d. The source of the employee's life expectancy;
e. The discount rate used to calculate the present value and total amount of future indemnity benefits;
f. The parties have conducted a search for and taken responsible steps to satisfy any unpaid medical charges; and
g. The settlement was not achieved through coercion, duress, fraud, misrepresentation or undisclosed additional agreements.
6. Removes the authorization for an ALJ to approve the settlement.
7. ADDS THE REQUIREMENT FOR AN ALJ TO APPROVE THE SETTLEMENT IF THE EMPLOYEE IS REPRESENTED BY COUNSEL AND CERTAIN REQUIREMENTS ARE MET. (BI)
8. Directs an ALJ, if an employee is without counsel, to conduct a hearing and perform a detailed inquiry into the employee's attestations. The inquiry must include:
a. Whether the employee understands the specific right being settled and released;
b. The information, computation and methodology provided by the carrier, special fund or self-insured employer; and
c. The employee's responsibility to protect the interest of other payors and ensure the payment of future treatment costs.
9. Eliminates the requirement when approving a settlement that the ICA consider whether it is in the best interest of the employee based on specified criteria.
10. Permits the ICA to approve a settlement if certain requirements are met.
Supportive Medical Maintenance Benefits (Sec. 2)
11. States that any final settlement agreement involving undisputed entitlement to supportive medical maintenance benefits is not valid and enforceable until approved by the ICA.
12. Permits the ICA to approve a final settlement agreement involving undisputed entitlement to supportive medical maintenance benefits if certain requirements are satisfied.
13. Allows interested parties to a claim to enter into a final settlement and release of a claim for undisputed entitlement to supportive medical maintenance benefits after the period of temporary disability is terminated by a final notice of claim status or award of the ICA.
14. Directs a carrier, special fund or self-insured employer to submit a summary of all reasonably anticipated future supportive medical maintenance benefits and the projected cost of the benefits for review by the employee.
a. Requires the summary to be included with the final statement agreement filed with the ICA.
15. Requires all medical conditions subject to the final settlement agreement to be described in the agreement.
16. Requires the final settlement provisions only apply to future supportive medical maintenance benefits for the described condition.
17. Directs a carrier, special fund or self-insured employer to inform the attending physician of the approval of a final settlement agreement.
18. Directs a carrier, special fund or self-insured employer to remain responsible for payment for the treatment not covered by the final agreement unless supportive medical maintenance benefits rendered before the date of the final settlement are disputed or payment for treatment was included.
19. Asserts the requirements for a final settlement do not prohibit any other settlement.
20. Defines final settlement.
Miscellaneous (Sec. 1)
21. Makes technical and conforming changes.
Current Law
A.R.S. § 23-941.01 governs the approval of a full and final settlement of an employee's workers' compensation claim by the ICA. A full and final settlement is not considered valid and enforceable unless it is approved by the ICA. When determining if a settlement should be approved, the ICA must consider whether the settlement is in the best interests of the employee based on: 1) whether the employee's injuries are stabilized; and 2) the permanency of the employee's injuries.
Interested parties to a claim may: 1) settle and release an accepted claim for compensation, benefits, penalties or interest; and 2) negotiate a full and final settlement if the period of disability is terminated by the carrier, special fund or self-insured employer. A full and final settlement must: 1) be in writing; 2) be signed by the carrier, special fund or self-insured employer and the employee or the employee's authorized representative; 3) acknowledge that the employee had the opportunity to seek legal advice and be represented by counsel; and 4) include a description of the employee's medical conditions that have been identified and contemplated at the time of the settlement.
If an employee is represented by counsel, the full and final settlement must contain the following attestations: 1) the employee understands the rights settled and released; 2) the employee has been provided information from the carrier, special fund or self-insured employer that outlines any reasonable anticipated future benefits relating to the claim, the projected cost of those benefits and an explanation of how those projected costs were determined; 3) the employee understands that monies received for future medical treatment associated with the industrial injury should be set aside to ensure that the costs of treatment will be paid; 4) the parties have considered and taken reasonable steps to protect any interests of Medicare, Medicaid, the Indian Health Service and the US Department of Veterans Affairs; and 5) the parties have conducted a search for and taken reasonable steps to satisfy any identified medical liens.
If an employee is not represented by counsel, the employee must appear before an ALJ who is required to make specific factual findings regarding whether the statutory requirements are satisfied. The ALJ is prohibited from approving a settlement if it does not meet statutory requirements or is not deemed fair and reasonable to the employee.
Full and final settlement means a settlement in which the injured employee or, if the injured employee is deceased, the employee's estate, surviving spouse or dependent waives any future entitlement to benefits on the claim and any future right to change or reopen the claim.
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Fifty-third Legislature SB 1100
Second Regular Session Version 2: Caucus & COW
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