Study Origin, Background and Objectives

In Virginia, workers' compensation furnishes the sole remedy for many of the Commonwealth's working men and women injured in the workplace. As such, assisting the well-being of injured workers and their families through expeditious claims processing is an essential component of the workers' compensation system. The Virginia Workers' Compensation Act, which sets out the basic provisions of the system, is administered by an independent agency of state government called the Virginia Workers' Compensation Commission ("the Commission"). Reflecting on a 1990 report of the Joint Legislative Audit and Review Commission (JLARC), which generally recommended that the Commission take affirmative steps to reduce claims processing times, the 1992 Session of the General Assembly established a joint subcommittee pursuant to Senate Joint Resolution No. 54 to determine "whether measurable progress has been achieved."

The joint subcommittee, which convened four meetings, was comprised of legislators, business and labor representatives, and a member of the Commission. The panel strived to confine its deliberations to aspects of the system relating to claims processing times, recognizing that a relatively narrow focus would facilitate a thorough and thoughtful consideration of the issues.

According to the Commission's records, between 180,000 and 200,000 claims have been established per year since 1989. While most reported injuries are relatively minor, approximately 60,000 injuries each year require that a detailed report be submitted to the Commission. Because hearings may be required over a number of years and claims remain active for the lifetime of the worker, the Commission's workload necessarily involves claims from prior years.

There are several factors that determine how quickly a claim is processed, including the overall volume of claims, the number of cases that require litigation, and the differing interests of the participants in the system. The amount of litigation in workers' compensation cases can largely be attributed to the system's complexity, where cases can involve issues for which an independent fact-finder is needed, including causation, diagnosis, extent of disability, and credibility of witnesses. The participation of employees, employers, insurers, physicians, attorneys, and the courts all contribute to delays in the process. Sharp Increases in medical costs have also served to intensify and increase disputes.

In conducting its study, the joint subcommittee examined the organization and management of the Commission with respect to its claims process, reviewed changes to certain administrative procedures of the Commission that were made in response to the JLARC report, and analyzed recent data on claims processing times. The panel also received input from parties affected by the claims process, including employers, insurers, injured workers and attorneys.

Recommendations of the Joint Subcommittee

The joint subcommittee made the following recommendations, all intended to improve the effectiveness and efficiency of the workers' compensation claims process:

• Request the General Assembly to enact legislation which increases financial penalties for employer noncompliance under the Workers' Compensation Act and stipulates that such moneys be paid into the Uninsured Employer's Fund;

• Request the General Assembly to enact legislation which requires the Workers' Compensation Commission to adopt rules of discovery and, as companion legislation, request the General Assembly to adopt a joint resolution which encourages the Workers' Compensation Commission to develop rules and other procedures that will serve to expedite the processing of workers' compensation claims;

• Request the General Assembly to enact legislation which permits hearings to be held in any city or county designated by the Workers' Compensation Commission;

• Request the General Assembly to enact legislation which places restrictions on the number of independent medical examinations an employer may obtain;

• Request the General Assembly to enact legislation which requires contractors and subcontractors to provide evidence of workers' compensation coverage to a governmental entity for which it performs work pursuant to the Public Procurement Act;

• Request the General Assembly to enact legislation which requires that a provisional workers' compensation award be paid from the Uninsured Employer's Fund when the Workers" Compensation Commission, after investigation, determines that (i) the employer of record has failed to satisfy insurance requirements pursuant to § 65.2-801 and (ii) the injury is compensable;

• Request the General Assembly to increase its appropriation to the Workers' Compensation Commission by $220,000 for the purpose of adding two deputy commissioners and support staff;

• Encourage the deputy commissioners of the Workers' Compensation Commission to issue their opinions within three weeks of the closing of the record;

• Encourage Commissioners of the Workers' Compensation Commission to issue their opinions with all due speed reasonable and practical under the circumstances;

• Request the Workers' Compensation Commission to take steps to ensure that an injured worker's average weekly wage be computed accurately and in a timely fashion; and

• Request the Governor's Advisory Commission on Workers' Compensation to (i) examine how to increase access to representation for parties before the Workers' Compensation Commission and (ii) consider the feasibility and desirability of requiring that suits against claimants by health care providers for payment of medical bills be deferred while a claim is pending.

Conclusion

Senate Joint Resolution No. 54 directed the joint subcommittee to study recent efforts made by the Commission to reduce judicial processing times and to examine how the system could be improved. The panel found that administrative actions taken by the Commission have improved the claims process and believes that its legislative package and other recommendations will further strengthen the system and expedite the claims process, to the benefit of all parties in the workers' compensation system.