CHAPTER 1

FORMERLY

SENATE BILL NO. 1

AN ACT TO AMEND TITLES 18 AND 19 OF THE DELAWARE CODE RELATING TO WORKERS' COMPENSATION.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

Section 1. AMEND §2411(e), title 18 of the Delaware Code, by inserting the following after the word “insurer” as it appears in said section: “, or self insured employer”.

Section 2. AMEND §2607, title 18 of the Delaware Code, by inserting the following at the conclusion of subsection ‘(c)’ of such section:

“The advisory organization shall file a rating plan with the Department of Insurance not later than ninety (90) days after the adoption of a health care payment system provided for by §2322B(n) of title 19 of the Delaware Code, and shall also file a rating plan not later than ninety (90) days after the adoption of health care practice guidelines provided for by §2322C(g) of title 19 of the Delaware Code. Thereafter, the advisory organization shall file a rating plan at least annually. Within sixty (60) days of each such rating plan becoming effective pursuant to this chapter, each authorized insurer shall make a rate filing pursuant to §2609 of this title.”

Section 3. AMEND §2609, title 18 of the Delaware Code, by adding a new subsection ‘(d)’ to such section to provide as follows:

“(d) A filing made pursuant to this section should provide for a reduction in premium based upon any savings realized by insurers as a result of workers’ compensation cost containment measures implemented pursuant to legislation adopted by the General Assembly.”

Section 4. AMEND chapter 23, title 19 of the Delaware Code by adding a new “§2301E”

to provide as follows:

Ҥ 2301E. Data collection and reporting

(a) It is the intent of the General Assembly that the Insurance Commissioner, and an advisory organization designated pursuant to chapter 26, title 18 of the Delaware Code, be provided with data enabling them to conduct studies to evaluate the workers’ compensation system in the State of Delaware, identify systemic cost drivers and provide objective information to guide policy formulation.

(b) The Insurance Commissioner shall appoint a committee of interested persons to advise the Commissioner concerning the adoption of a standardized data transmission protocol, developed and supported by a national workers’ compensation organization, to facilitate the collection of data concerning reports of industrial injuries and occupational disease, the cost of benefits associated with such injuries and diseases, and compliance with the mandatory workers’ compensation insurance requirement. The committee shall be chaired by the Insurance Commissioner or the Commissioner’s designee, and shall also include four (4) representatives of insurance carriers, including at least one (1) insurance carrier that writes at least ten percent (10%) of the total workers’ compensation premiums in the State, and one (1) insurance carrier that writes less than five percent (5%) of the total workers’ compensation premiums in the State, and all members of the workers’ compensation advisory group established by §2301D(c) of this title.

(c) The Insurance Commissioner, with the advice of the committee referenced above, shall adopt rules establishing a standardized data collection protocol, the data elements that will be mandated for collection, and a schedule for implementation of mandatory data submission and sanctions for non-compliance. The electronic collection of data concerning first reports of injuries or occupational disease and the electronic collection of information concerning compliance with the mandatory workers’ compensation insurance requirement shall receive the highest priority for implementation. The next highest priority shall be the reporting of health care data relating to procedures performed and cost of health care services.

(d) The Insurance Commissioner, with the advice of the committee referenced above, shall annually report to the Governor and the General Assembly the progress of data collection efforts and information obtained from the analysis of the data collected pursuant to this section.”

Section 5. AMEND chapter 23, title 19 of the Delaware Code, by striking §2302 of said chapter in its entirety and inserting in lieu thereof the following:

Ҥ 2302. Wages: definition and computation; valuation of board and lodging.

(a) ‘Average weekly wage’ means the weekly wage earned by the employee at the time of the employee’s injury at the job in which the employee was injured, including overtime pay, gratuities and regularly paid bonuses (other than an employer’s gratuity or holiday bonuses) but excluding all fringe or other in-kind employment benefits. The term ‘average weekly wage’ shall include the reasonable value of board, rent, housing or lodging received from the employer, which shall be fixed and determined from the facts in each particular case.

(b) The average weekly wage shall be determined by computing the total wages paid to the employee during the twenty-six (26) weeks immediately preceding the date of injury and dividing by twenty-six (26), provided that:

(1) if the employee worked less than twenty-six (26) weeks, but at least thirteen (13) weeks, in the employment in which the employee was injured, the average weekly wage shall be based upon the total wage earned by the employee in the employment in which the employee was injured, divided by the total number of weeks actually worked in that employment;

(2) if an employee sustains a compensable injury before completing his first thirteen (13) weeks, the average weekly wage shall be calculated as follows:

a. if the contract was based on hours worked, by determining the number of hours for each week contracted for by the employee multiplied by the employee’s hourly rate;

b. if the contract was based on a weekly wage, by determining the weekly salary contracted for by the employee; or

c. if the contract was based on a monthly salary, by multiplying the monthly salary by twelve (12) and dividing that figure by fifty-two (52); and

d. if the hourly rate of earnings of the employee cannot be ascertained, or if the pay has not been designated for the work required, the average weekly wage, for the purpose of calculating compensation, shall be taken to be the average weekly wage for similar services performed by other employees in like employment for the past twenty-six (26) weeks.

(3) In any event, the weekly compensation allowed shall not exceed the maximum or be less than the minimum provided by law.”

Section 6. AMEND chapter 23, title 19 of the Delaware Code, by striking §2311 in its entirety and inserting the following in lieu thereof:

Ҥ 2311. Contractors, subcontractors, independent contractors and lessees of motor vehicles transporting passengers for hire as employers.

(a) Notwithstanding any other provisions in this chapter, including but not limited to the definitions of employer and employee in §2301 of this title, the following provisions shall apply to persons who are licensed as contractors under title 30, chapter 25 of the Delaware Code, or persons shown to be conducting business in a manner in which they should be so licensed:

(1) Any contractor or subcontractor shall be deemed to be an employer. Any and all rights of compensation of employees of contractors or subcontractors shall be against the employer contractor or subcontractor and not against any other employer.

(2) For purposes of this section, “independent contractor” shall mean any person not excluded from mandatory coverage under provisions of this chapter, who performs work or provides services for a contractor, subcontractor or other “contracting entity” in return for remuneration and/or other valuable considerations but who is not an employee of the contractor subcontractor or other “contracting entity” or any other person or entity with respect to the work performed or the services provided.

(3) For purposes of the section, “contracting entity” shall mean any commercial entity that obtains work or services from a person not excluded from mandatory coverage under provisions of this chapter and who is not an employee of the “contracting entity” or any other commercial entity with respect to the work performed or services provided.

(4) All independent contractors governed by this subsection shall be covered under this chapter. Independent contractors shall have an option to purchase coverage to satisfy this requirement, or alternatively shall be insured by the general contractor, subcontractor or other contracting entity for which they perform work or provide services. Actual remuneration of the independent contractor will be used to determine premium subject to the executive officer minimum and maximum payrolls approved by the Department of Insurance. Executive officers, partners, sole proprietors and members of a limited liability company, when working in an independent contractor role, shall be subject to the same requirements as outlined above and may not rely upon §2308 of this title.

(5) any contracting entity shall obtain, and retain for three (3) years from the date of the contract, certification of insurance in force from any entity described in the preceding subsection. If the contracting entity should fail to do so, the contracting entity shall be deemed the employer for purposes of any workers’ compensation claim arising from the transaction.

(b) In all other types of commerce, the determination of employee or independent contractor status shall remain as before the adoption of subsection (a) above and §2308 and the other provisions defining employees and persons not covered by this chapter shall apply.

(1) No contractor or subcontractor shall receive compensation under this chapter, but shall be deemed to be an employer and all rights of compensation of the employees of any such contractor or subcontractor shall be against their employer and not against any other employer.

(2) Lessees transporting passengers for hire in motor vehicles leased pursuant to written leases shall not receive compensation under this chapter, but shall be deemed to be employers.”

Section 7. AMEND §2320(10), title 19 of the Delaware Code, by adding the following at the conclusion of subparagraph ‘a.’ of said subsection:

“In order for the Board to award a fee under this section, counsel for an employee shall submit to the Board an Attorneys’ Fee Affidavit in a form prescribed by or substantially in compliance with Board rules, along with a copy of the written fee agreement signed by the employee. Any fee awarded to an employee under this subsection shall be applied to offset the fees that would otherwise be charged to the employee by his attorney under the fee agreement.”

Section 8. AMEND §2320(10), title 19 of the Delaware Code, by adding subparagraphs ‘c.’ though ‘h.’ at the conclusion of said subsection, to provide as follows:

“c. Attorneys shall have written fee agreements to represent employees. Fee arrangements shall be governed by the rules of the Supreme Court concerning professional conduct.

d. If the fee agreement provides for a percentage of recovery, the attorney may collect the percentage at the time of payment of lump sums of accrued benefits. Any such fee shall be offset by fees paid by the employer or carrier as a result of agreement or Board order relating to that monetary amount.

e. An attorney shall not collect a fee from ongoing checks issued by the workers’ compensation fund while a petition for review is pending.

f. An attorney shall not collect the fee from ongoing weekly benefit checks except in the following circumstance and as approved by the Board in subparagraph g:

(1) Where the attorney certifies in an affidavit that the case is not economically viable for an attorney to agree to represent the employee without fees being deducted from ongoing weekly benefits and that the employee is likely to not be able to obtain the services of an attorney without paying a fee in such manner;

(2) With the application the attorney shall submit a proposed fee agreement that limits the overall fee in that case to an amount equal to or less than the fee authorized in §2320(10)a. of this title;

(3) The application shall also contain an affidavit of the employee that the employee understands the fee arrangement, wants to be represented, and requests the Board authorize the arrangement, and further states whether and when the employee has been declined representation by other attorneys without approval under this subsection.

g. When an attorney files an application to collect fees from the ongoing checks of an employee in accordance with the preceding subsection, the designated hearing officer shall, within ten (10) days of receipt of the written request, respond in writing with an approval or denial. The response of the hearing officer shall be sent to the attorney upon disposition of the request. Upon notice of approval or denial of the request, that decision is a final decision of the Board.

h. Attorneys for employees may take such action as is necessary to comply with domestic support garnishment orders, or any other valid court orders, requiring sums be deducted from-ongoing benefit checks.”

Section 9. AMEND §2322, title 19 of the Delaware Code, by adding new subsections ‘(h)’ and ‘(i)’ of such section to provide as follows:

“(h) An employer or insurance carrier may pay any health care invoice or indemnity benefit without prejudice to the employer’s or insurance carrier’s right to contest the compensability of the underlying claim or the appropriateness of future payments of health care or indemnity benefits. In order for any provision or payment of health care services to constitute a payment without prejudice, the employer or insurance carrier shall provide to the health care provider and the employee a clear and concise explanation of the payment, including the specific expenses that are being paid, the date on which such charges are paid, and the following statement, which shall be conspicuously displayed on the explanation in at least 14 point type: ‘This claim is IN DISPUTE and payment is being made without prejudice to the Employer's right to dispute the compensability of the workers’ compensation claim generally or the Employer's obligation to pay this bill in particular.’

(1) Partial payment of the uncontested portion of a partially contested health care invoice shall be considered a payment without prejudice to the right to contest the unpaid portion of a health care invoice, provided the above notice requirements are met.

(2) No payment without prejudice made under a reservation of rights pursuant to this subsection shall be subject to return, recapture or offset, absent a showing that the claim for payment was fraudulent.

(3) No payment without prejudice that complies with the above is admissible as evidence to establish that claim is compensable.

(4) No payment without prejudice that complies with the above shall extend the statute of limitations unless the claim is otherwise determined by agreement or the Board to be compensable.

(i) Availability of vocational rehabilitation services.

(1) Statement of Intent: The General Assembly realizes that despite the best efforts of all concerned, some injured workers may not be able to return to their pre-injury employment and may benefit from vocational rehabilitation.

(2) To the extent assistance may be required in this regard, resources are available to employees including, but not limited to, from the following organizations:

(a) Delaware Division of Vocational Rehabilitation;

(b) First State Project with Industry; and

(c) One Stop Centers.

(3) Nothing in this section is intended to change the existing rights and responsibilities of injured employees or employers regarding vocational rehabilitation services.”

Section 10. AMEND chapter 23, title 19 of the Delaware Code, by adding a new “§2322A” to provide as follows:

Ҥ 2322A. Health Care Advisory Panel.

(a) The General Assembly recognizes that issues related to health care in workers’ compensation require the expertise of the medical community and other health care professionals for resolution. A Health Care Advisory Panel is hereby established. The purpose of the Health Care Advisory Panel shall be to carry out the provisions of this chapter, with a diversity of perspectives, on matters relating to the provision of health care to employees pursuant to this chapter.

(b) Membership; terms. The Health Care Advisory Panel shall consist of seventeen (17) members. All members shall be appointed by the Governor by and with the consent of the Senate. As provided below, a majority of members shall be health care providers or representatives of providers. Members shall be appointed for a term of up to three (3) years and may be re-appointed. Terms of members shall be staggered so that less than half of the members’ terms expire in any one (1) year. Members shall receive no compensation.

(c) Representation. The Health Care Advisory Panel shall include one (1) representative of insurance carriers providing coverage pursuant to this chapter, one (1) representative of employers, one (1) representative of employees, two (2) attorneys licensed to practice law, one who regularly represents employees and one who regularly represents employers in matters arising under this chapter, three (3) public members, and nine (9) provider members. A public member may not be nor may ever have been certified, licensed, or registered in any health-related field; may not be the spouse of someone certified, licensed, or registered in any health-related field; at the time of appointment may not be a member of the immediate family of someone certified, licensed, or registered in any health-related field; may not be employed by a company engaged in a directly health-related business; and may not have a material financial interest in providing goods or services to persons engaged in the practice of medicine. The nine (9) provider members appointed to the Health Care Advisory Panel shall include a diverse group of health care providers (or provider representatives) who are most representative of those providing medical care to employees pursuant to this chapter. The provider members shall include representatives nominated by the following professional societies or associations:

1. Four (4) representatives of the Medical Society of Delaware (including one in the field of primary care, one in the field of neurosurgery, one in the field of occupational medicine and one at large representative);

2. One (1) representative of the Delaware Society of Orthopaedic Surgeons;

3. One (1) representative of the Delaware Academy of Physical Medicine and Rehabilitation;

4. One (1) representative of the Delaware Healthcare Association;

5. One (1) representative of the Delaware Chiropractic Association; and

6. One (1) representative of the Delaware Physical Therapy Association.

One member may represent more than one category. In addition to their ability to represent the perspective of their profession, provider members shall be selected for their ability to represent the interests of the community at large. The Department of Labor, Office of Workers’ Compensation shall provide at least one non-voting staff to assist the Panel in its work.

(d) Any person appointed to fill a vacancy on the Health Care Advisory Panel shall serve for the remainder of the unexpired term of the former member and shall be eligible for reappointment.

(e) Regular attendance is vital to the purposes of the Health Care Advisory Panel. Members shall accept the duty and obligation to attend meetings. Repeated absences shall be grounds for removal from the Panel at the discretion of the Governor.

(f) A Chair and Vice Chair shall be elected by a majority of members of the Health Care Advisory Panel for terms of one (1) year. The Chair and/or Vice Chair may be replaced at any time by a majority vote of members of the Health Care Advisory Panel. The Chair and Vice Chair of the Health Care Advisory Panel shall set an agenda for each meeting, shall preside at meetings, and shall forward recommendations, opinions and other communications of the Health Care Advisory Panel to the Governor and General Assembly.

(g) The Health Care Advisory Panel is authorized to appoint by majority vote such committees as it may deem appropriate and to define the powers duties and responsibilities of such committees. Such committees may include persons who are not regular members of the Health Care Advisory Panel.

(h) Order of business and schedule of meetings. Meetings of the Health Care Advisory Panel shall be held at least four (4) times annually and shall be scheduled by the Chair. Agendas for meetings shall be developed by the Chair and/or Vice-Chair of the Panel. Any member wishing to include an item on the agenda has the responsibility to draft and present the agenda item to the Chair for approval and inclusion. An agenda shall be distributed by the Office of Workers’ Compensation to members at least fourteen (14) days prior to the next meeting. Staff from Office of Workers’ Compensation shall record all meeting proceedings and prepare minutes for approval by the Health Care Advisory Panel prior to the next meeting. The Health Care Advisory Panel is authorized to adopt by majority vote bylaws and other procedures for meetings not inconsistent with this chapter. For any matter considered by the Health Care Advisory Panel that does not have unanimous approval, members shall be authorized to issue minority reports. Neither the Health Care Advisory Panel nor any committee thereof shall be subject to the provisions of chapter 100, title 29 of the Delaware Code.

(i) Quorum and voting. Administrative decisions, including the election of officers, recommendations to remove a member, or the adoption or amendment of bylaws, shall be effective upon approval by a majority of all members of the Health Care Advisory Panel. All other matters shall be subject to approval for by a majority of persons present at a duly constituted meeting consisting of at least a quorum of members. A quorum of at least nine (9) members, at least five (5) of whom shall be provider representatives referred to in subsection (c) above.”

Section 11. AMEND chapter 23, title 19 of the Delaware Code, by adding a new “§2322B” to provide as follows:

Ҥ2322B. Procedures and requirements for promulgation of health care

payment system

The health care payment system developed pursuant to this section shall be subject to the following procedures and requirements:

(a) The intent of the General Assembly in authorizing a health care payment system is not to establish a “push down” system, but is instead to establish a system that eliminates outlier charges and streamlines payments by creating a presumption of acceptability of charges implemented through a transparent process, involving relevant interested parties, that prospectively responds to the cost of maintaining a health care practice, eliminating cost shifting among health care service categories and avoiding institutionalization of upward rate creep.

(b) The health care payment system shall include payment rates, instructions, guidelines, and payment guides and policies regarding application of the payment system. When completed, the payment system shall be published on the Internet at no charge to the user via a link from the Office of Workers’ Compensation website at www. delawareworks.com/industrialaffairs/services/workerscomp. shtml, or a successor website. The payment system shall also be made available in written form at the Office of Workers’ Compensation during regular business hours.

(c) The maximum allowable payment for health care treatment and procedures covered under this chapter shall be the lesser of the health care provider’s actual charges or the fee set by the payment system. The payment system will set fees at ninety percent (90%) of the 75th percentile of actual charges within the geozip where the service or treatment is rendered, utilizing information contained in employers’ and insurer carriers’ national databases. For purposes of this section, “geozip” means an area defined by reference to United States ZIP Codes; Delaware shall consist of one “197 geozip” (comprised of all areas within the State where the address has a ZIP Code beginning with the three digits 197 or 198), and one “199 geozip” (comprised of all areas within the State where the address has a ZIP Code beginning with the three digits 199). If a geozip does not have the necessary number of charges and fees to calculate a valid percentile for a specific procedure, treatment, or service, the Health Care Advisory Panel in its discretion may combine data from Delaware’s two geozips for a specific procedure, treatment, or service. In the event that the Health Care Advisory Panel determines that there is insufficient data to calculate a valid percentile for a procedure, treatment or service, or that data from a commercial vendor is not sufficiently reliable to implement a payment system for professional services for a specific procedure, treatment or service, then the Health Care Advisory Panel may recommend an alternative method for a payment system for professional charges.  

The payment system will be adjusted yearly based on percentage changes to the Consumer Price Index-Urban, U.S. City Average, All Items, as published by the United States Bureau of Labor Statistics. Three (3) years after the effective date of this section, the Health Care Advisory Panel shall review the geozip reporting system and make a recommendation concerning whether the State should operate its workers’ compensation health care payment system on a geozip basis or on a single statewide basis.

(d) Upon adoption of the health care payment system, an employer and/or insurance carrier shall pay the lesser of the rate set forth by the payment system or the health care provider’s actual charge. If an employer or insurance carrier contracts with a provider for the purpose of providing services under this chapter, the rate negotiated in any such contract shall prevail.

(e) Whenever the health care payment system does not set a specific fee for a procedure, treatment or service in the schedule, the amount of reimbursement shall be at eighty-five (85%) of actual charge.

(f) The health care payment system shall include provisions for health care treatment and procedures performed outside of the State of Delaware. If any procedure, treatment or service is rendered outside the State of Delaware, the amount of reimbursement shall be the greater of (1) the amount set forth in a workers’ compensation health care payment system or fee schedule adopted by the state in which the procedure, treatment or service is rendered, if such a schedule has been adopted; or (2) the amount that would be authorized by the payment system adopted pursuant to this chapter if the service or treatment were performed in the geozip where the injury occurred or where the employee was principally assigned. Charges for a procedure, treatment or service outside the State of Delaware shall be subject to the instructions, guidelines, and payment guides and policies in the health care payment system.

(g) The health care payment system shall include separate service categories for the fields of: ambulatory surgical treatment centers, anesthesia and related services, dental and related services, hospital care, and professional services.

(h) Hospital fees developed in the health care payment system shall be determined in accordance with the following provisions:

(1) Hospital fees billed for services provided to employees pursuant to this chapter shall be equal to eighty-five percent (85%) of actual charges for such services as of October 31, 2006, subject to adjustment as provided in this subsection. Verification that such billing is performed in compliance with this subsection shall be provided by each hospital to the Office of Workers’ Compensation within sixty (60) days of the completion and issuance of audited financial statements to the hospital by its independent financial auditors. Such verification shall be subject to further review or audit by the Department of Insurance. Reasonable costs of such review or audit for purposes of this section shall be reimbursed to the Department of Insurance by the hospital whose billing is audited.

(2) One year after the effective date of the regulation provided for in subsection (n) of this section, and each year thereafter, the Department of Labor shall make an automatic adjustment to the maximum payment for a procedure, treatment or service in effect in January of that year. The amount payable pursuant to paragraph (1) of this subsection shall be adjusted annually by the Department of Labor in accordance with the Consumer Price Index-Urban, U.S. City Average for Medical Care, as published by the United States Bureau of Labor Statistics. The adjustment factor adopted by this paragraph shall be reviewed by the Health Care Advisory Panel three (3) years after the effective date of this section, and the Panel shall make a recommendation concerning the continued use the Consumer Price Index for medical care, or the adoption of a different index for cost adjustments in fees for hospital services.

(3) Services provided an emergency department of a hospital, or any other facility subject to the federal Emergency Medical Treatment and Active Labor Act, 42 United States Code §1395dd, et seq., and any emergency medical services provided in a pre-hospital setting by ambulance attendants and/or paramedics, shall be exempt from the health care payment system and shall not be subject to the requirement that a health care provider be certified pursuant to §2322D of this title, requirements for pre-authorization of services, or the health care practice guidelines adopted pursuant to §2322C of this title. Upon admission to a hospital and discharge from an emergency department, hospital charges shall be subject to paragraph (1) of this subsection.

(i) Fees billed for services provided to employees pursuant to this chapter by an Ambulatory Surgical Treatment Center (“ASCT”) shall be equal to eighty-five percent (85%) of actual charges for such services as of October 31, 2006, subject to annual adjustment as provided in subsection (n) of this section. Verification that such billing is performed in compliance with this subsection shall be provided by each hospital to the Office of Workers’ Compensation within sixty (60) days of the completion and issuance of audited financial statements to the hospital by its independent financial auditors. Such verification shall be subject to further review or audit by the Department of Insurance. Reasonable costs of such review or audit for purposes of this section shall be reimbursed to the Department of Insurance by the ASTC whose billing is audited. The ASTC fee determination mechanism adopted pursuant to this subsection shall apply to all services provided after the effective date of the regulation provided for in subsection (n) of this section, regardless of the date of injury.

(j) Professional service fees developed in the health care payment system shall be determined in accordance with the following provisions:

(1) The payment system for professional services shall conform to the Current Procedural Terminology (“CPT”), American Medical Association, 515 North State Street, Chicago, Illinois, 60610, 2006, no later dates or editions.

(2) Services covered by the payment system shall include evaluation and management, surgery, physician, medicine, radiology, pathology and laboratory, chiropractic, physical therapy, and other services covered under the CPT.

(3) The health care payment system shall require that services be reported with the Healthcare Common Procedural Coding System Level II (“HCPCS Level II”) or CPT codes that most comprehensively describe the services performed. Proprietary bundling edits more restrictive than the National Correct Coding Policy Manual in Comprehensive Code Sequence for Part B Medicare Carriers, Version 12.0, U.S. Department of Health and Human Services, Centers for Medicare and Medicare Services, 7500 Security Boulevard, Baltimore, Maryland, 21244, 2006, no later dates or editions, shall be prohibited. Bundling edits is the process of reporting codes so that they most comprehensively describe the services performed.

(4) An allied health care professional, such as a certified registered nurse anesthetist (“CRNA”), physician assistant (“PA”), or nurse practitioner (“NP”), shall be reimbursed at the same rate as other health care professionals when the allied health care professional is performing, coding and billing for the same services as other health care professionals if a physician health care provider is physically present when the service or treatment is rendered, and shall be reimbursed at eighty percent (80%) of the primary health care provider’s rate if a physician health care provider is not physically present when the service or treatment is rendered.

(5) Charges of an independently operated diagnostic testing facility shall be subject to the professional services and HCPCS Level II health care payment system where applicable. An independent diagnostic testing facility is an entity independent of a hospital or physician’s office, whether a fixed location, a mobile entity, or an individual non-physician practitioner, in which diagnostic tests are performed by licensed or certified non-physician personnel under appropriate physician supervision.

(k) As part of the health care payment system, the Health Care Advisory Panel shall adopt and recommend a reimbursement schedule for pathology, laboratory and radiological services. Such schedule shall be designed to result in savings of fifteen percent (15%) from charges prevailing in workers’ compensation matters as of October 31, 2006.

(l) As part of the health care payment system, the Health Care Advisory Panel shall adopt and recommend a formulary and fee methodology for pharmacy services, prescription drugs and other pharmaceuticals, and for durable medical equipment. Such formulary and fee methodology shall be designed to result in savings of fifteen percent (15%) from charges prevailing in workers’ compensation matters as of October 31, 2006.

(m) Fees for non-clinical services, such as retrieving, copying and transmitting medical reports and records, testimony by affidavit, deposition or live testimony at any hearing or proceeding, or completion and transmission of any required report, form or documentation, and associated regulations and procedures for the determination of and verification of containment of fees, shall be developed and proposed by the Health Care Advisory Panel, and adopted as part of the health care payment system. Such fees shall be revised periodically on the recommendation of the Health Care Advisory Panel to reflect changes in the cost of providing such services. Following the adoption of the initial health care payment system, adjustments to fees for non-clinical services shall be adopted by regulation of the Department of Labor pursuant to chapter 101, title 29 of the Delaware Code. The non-clinical service fees adopted pursuant to this subsection shall apply to all services provided after the effective date of the regulation, regardless of the date of injury.

(n) Subject to the foregoing provisions, the health care payment system authorized by this section shall be approved and proposed by the Health Care Advisory Panel. Thereafter, the health care payment system shall be adopted by regulation of the Department of Labor pursuant to chapter 101, title 29 of the Delaware Code. Such regulation shall be promulgated and adopted within 180 days of the first meeting of the Health Care Advisory Panel. One year after the effective date of the regulation and each year thereafter, the Department of Labor shall make an automatic adjustment to the maximum payment for a procedure, treatment or service in effect in January of that year. Except with respect to hospital charges that shall be adjusted in accordance with subsection (h) of this section, the Department of Labor shall increase or decrease the maximum payment by the percentage change of increase or decrease the maximum payment by the percentage change of increase or decrease in the Consumer Product Index – Urban, U.S. City Average, All Items, as published by the United States Bureau of Labor Statistics. The adjustment provided for in this section shall not be applied to fees for non-clinical services and supplies.”

Section 12. AMEND chapter 23, title 19 of the Delaware Code, by adding a new “§2322C” to provide as follows:

Ҥ2322C. Development of health care practice guidelines

Health care practice guidelines shall be developed in accordance with the following provisions:

(a) The Health Care Advisory Panel shall adopt and recommend a coordinated set of health care practice guidelines and associated procedures to guide utilization of health care treatments in workers’ compensation, including but not limited to care provided for the treatment of employees by or under the supervision of a licensed health care provider, prescription drug utilization, inpatient hospitalization and length of stay, diagnostic testing, physical therapy, chiropractic care and palliative care. The health care practice guidelines shall apply to all treatments provided after the effective date of the regulation referred to in subsection (g) of this section, regardless of the date of injury.

(b) The guidelines shall be, to the extent permitted by the most current medical science or other applicable science, based on well-documented scientific research concerning efficacious treatment for injuries and occupational disease. To the extent that well-documented scientific research concerning efficacious treatment is not available at the time of adoption or revision of the guidelines, the guidelines shall be based upon the best available information concerning national consensus regarding best health care practices in the relevant health care community.

(c) The guidelines shall, to the extent practical consistent with this section, address treatment of those physical conditions which occur with the greatest frequency (for services compensable under this chapter), or which require the most expensive treatments (for services compensable under this chapter), based upon currently available Delaware data.

(d) The guidelines shall contain a section guiding the utilization of prescription medications.

(e) The original health care practice guidelines may be based upon an existing model, already in use, to guide treatment of medical care for workers’ compensation. Additional guidelines may be initially adopted, pursuant to the same criteria, to obtain coverage of areas or issues of treatment not included in other adopted guidelines. In no event shall multiple guidelines covering the same aspects of the same medical condition be simultaneously in force.

(f) Services rendered by any health care provider certified to provide treatment services for employees shall be presumed, in the absence of contrary evidence, to be reasonable and necessary if such services conform to the most current version of the Delaware health care practice guidelines. Services provided by health care providers that are not certified shall not be presumed reasonable and necessary unless such services are pre-authorized by the employer or insurance carrier, subject to the exception set forth in §2322D(b) of this title. It is intended that these guidelines will be produced by Health Care Advisory Panel subcommittees in coordination with a qualified contractor with expertise in establishing treatment guidelines, developing the rules that define the use of such guidelines, and disseminating the guidelines in a manner that streamlines the delivery of health care.

(g) Subject to the foregoing provisions, after receiving the approval and recommendation of the Health Care Advisory Panel, the guidelines shall be adopted by regulation of the Department of Labor pursuant to chapter 101, title 29 of the Delaware Code. Such regulations shall be adopted and effective not later than one (1) year after the first meeting of the Health Care Advisory Panel. Health care practice guidelines shall be subject to review and revision by the Health Care Advisory Panel on at least an annual basis. It is the intent of the General Assembly that the development of health care guidelines will be directed by a predominantly medical or other health professional panel, recognizing that health care professionals are best equipped to determine appropriate treatment. It is further intended that subcommittees comprised of representatives from appropriate specialties will make comment and offer recommendations to the Health Care Advisory Panel.”

Section 13. AMEND chapter 23, title 19 of the Delaware Code, by inserting a new “§2322D” of said chapter, to provide as follows:

Ҥ2322D. Certification of health care providers

(a) Certification shall be required for a health care provider to provide treatment to an employee, pursuant to this chapter, without the requirement that the health care provider first pre-authorize each health care procedure, office visit or health care service to be provided to the employee with the employer or insurance carrier. The provisions of this subsection shall apply to all treatments to employees provided after the effective date of the rule provided by subsection (c) of this section, regardless of the date of injury. A health care provider shall be certified only upon meeting the following minimum certification requirements:

(1) Have a current license to practice, as applicable;

(2) Meet other general certification requirements for the specific provider type;

(3) Possess a current and valid Drug Enforcement Agency (“DEA”) registration, unless not required by the provider’s discipline and scope of practice;

(4) Have no previous involuntary termination from participation in Medicare, Medicaid or the Delaware workers’ compensation system, which shall be determined to be inconsistent with certification under regulations adopted pursuant to subsection (c) hereof;

(5) Have no felony convictions in any jurisdiction, under a federal-controlled substance act or for an act involving dishonesty, fraud or misrepresentation, which shall be determined to be inconsistent with certification under regulations adopted pursuant to subsection (c) hereof; and

(6) Provide proof of adequate, current professional malpractice and liability insurance.

The certification rules shall require that any health care provider to be certified agree to the following terms and conditions:

(1) Compliance with Delaware workers’ compensation laws and rules;

(2) Maintenance of acceptable malpractice coverage;

(3) Completion of state-approved continuing education courses in workers’ compensation care every two (2) years;

(4) Practice in a best-practices environment, complying with practice guidelines and Utilization Review Accreditation Council (“URAC”) utilization review determinations;

(5) Agreement to bill only for services and items performed or provided, and medically necessary, cost-effective and related to the claim or allowed condition;

(6) Agreement to inform an employee of his or her liability for payment of non-covered services prior to delivery;

(7) Acceptance of reimbursement and not unbundled charges into separate procedure codes when a single procedure code is more appropriate; and

(8) Agreement not to balance bill any employee or employer. Employees shall not be required to contribute a co-payment or meet any deductibles.

(b) Notwithstanding the provisions of this section, any health care provider may provide services during one office visit, or other single instance of treatment, without first having obtained prior authorization, and receive reimbursement for reasonable and necessary services directly related to the employee’s injury or condition at the health care provider’s usual and customary fee, or the maximum allowable fee pursuant to the workers’ compensation health care payment system adopted pursuant to §2322B of this title, whichever is less. The provisions of this subsection are limited to the occasion of the employee’s first contact with any health care provider for treatment of the injury, and further limited to instances when the health care provider believes in good faith, after inquiry, that the injury or occupational disease was suffered in the course of the employee’s employment. The provisions of this subsection shall apply to all treatments to injured employees provided after the effective date of the rule provided by subsection (c) of this section, regardless of the date of injury.

(c) Subject to the foregoing provisions, complete rules and regulations relating to provider certification shall be approved and proposed by the Health Care Advisory Panel. Thereafter, such regulations shall be adopted by regulation of the Department of Labor pursuant to chapter 101, title 29 of the Delaware Code. Such regulations shall be adopted and effective not later than one (1) year after the first meeting of the Health Care Advisory Panel.”

Section 14. AMEND chapter 23, title 19 of the Delaware Code, by adding a new “§2322E” to said chapter to provide as follows:

Ҥ2322E. Development of consistent forms for health care providers

(a) The Health Care Advisory Panel is authorized and directed to approve and propose standard forms for the provision of health care services pursuant to this chapter. Upon such recommendation, such forms and provisions governing their use shall be adopted by regulation of the Department of Labor, pursuant to chapter 101, title 29 of the Delaware Code. Such regulations shall be adopted and effective not later than 180 days after the first meeting of the Health Care Advisory Panel. Forms authorized by this section shall provide for prompt initial report of an employee’s condition upon the initial occurrence of injury treated pursuant to this chapter and upon reasonable intervals thereafter to report the conditions and limitations of an employee. At a minimum the initial reporting form shall provide for an outline of the physical capabilities of the employee in order to enable and encourage the injured employee to return to work at the highest level of capability.

(b) Every health care provider who evaluates or treats an employee shall complete and submit, as expeditiously as possible and not later than ten (10) days after the date of first evaluation or treatment, a report of employee condition and limitations, on a form adopted for that purpose pursuant to this section, and shall expeditiously provide copies of the report of employee condition and limitations to the employee, the employer and the employer’s insurance carrier, if applicable. In the event that an employee is treated and released from the emergency department of a hospital, the health care provider most responsible for follow up care, if applicable, or the emergency room attending physician, shall provide the report of employee condition and limitations to the employee upon release, and the employee shall be responsible for provision of the report to the employer and the employer’s insurance carrier, if applicable, within the time period provided by the rules adopted pursuant to this section.

(c) Every health care provider shall prepare supplemental reports of employee condition and limitations on forms prescribed pursuant to this section, and shall expeditiously provide copies of the report of employee condition and limitations to the employee, the employer and the employer’s insurance carrier, if applicable.

(d) Within fourteen (14) days of receiving a notice of injury, an employer shall provide to the health care provider and the employer’s insurance carrier, if applicable, an outline of modified-duty jobs which may be available to the employee.

(e) Fees for completion, copying and transmission of the forms shall be developed by the Health Care Advisory Panel. The employer or the employer’s insurance carrier shall be liable for payment of the fee for all such reports of employee condition and limitations, provided however, that the employer or insurance carrier shall not be liable for any such reports, requested by an employee more frequently than once during each three (3) month period.”

Section 15. AMEND chapter 23, title 19 of the Delaware Code, by adding a new “§2322F” to said chapter to provide as follows:

Ҥ 2322F. Billing and payment for health care services

(a) Charges for medical evaluation, treatment and therapy, including all drugs, supplies, tests and associated chargeable items and events, shall be submitted to the employer or insurance carrier along with a bill or invoice for such charges, accompanied by records or notes, concerning the treatment or services submitted for payment, documenting the employee’s condition and the appropriateness of the evaluation, treatment or therapy, with reference to the health care practice guidelines adopted pursuant to §2322C of this title, or documenting the pre-authorization of such evaluation, treatment or therapy. The initial copy of the supporting notes or records shall be produced without separate or additional charge to the employer, insurance carrier or employee.

(b) Charges for hospital services and items supplied by a hospital, including all drugs, supplies, tests and associated chargeable items and events, shall be submitted to the employer or insurance carrier along with a bill or invoice which shall be documented in a nationally recognized uniform billing code format, in sufficient detail to document the services or items provided, and any pre-authorization of the services and items shall also be documented. The initial copy of the supporting medical notes or records shall be produced without separate or additional charge to the employer, insurance carrier or employee. Payment for hospital services, including payment for invoices rendered for emergency department services, shall be made within thirty (30) days of the submission of a “clean claim” accompanied by notes documenting the employee’s condition and the appropriateness of the evaluation, treatment or therapy.

(c) Pre-authorized evaluations, treatments or therapy shall be paid at the agreed fee within thirty (30) days of the date of submission of the invoice, unless the compliance with the pre-authorization is contested, in good faith, pursuant to the utilization review system set forth in subsection (j) below.

(d) Treatments, evaluations and therapy provided by a certified health care provider shall be paid within thirty (30) days of receipt of the health care provider’s bill or invoice together with records or notes as provided in this section, unless compliance with the health care payment system or practice guidelines adopted pursuant to §2322B or §2322C is contested, in good faith, to the utilization review system set forth in subsection (j) below.

(e) Denial of payment for health care services provided pursuant to this chapter, whether in whole or in part, shall be accompanied with written explanation of reason for denial.

(f) In the event that a portion of a health care invoice is contested pursuant to this section, the uncontested portion shall be paid without prejudice to the right to contest the remainder. The time limits set forth in this section shall apply to payment of all uncontested portions of health care payments.

(g) If, following a hearing, the Industrial Accident Board determines that an employer, an insurance carrier or a health care provider failed in its responsibilities under §§ 2322B, 2322C, 2322D, 2322E or 2322F of this title, it shall assess a fine of not less than $1,000.00 nor more than $5,000.00 for violations of said sections. Such fines shall be payable to the Workers’ Compensation Fund.

(h) Prompt pay required for non-pre-authorized care. An employer or insurance carrier shall be required to pay a health care invoice within thirty (30) days of receipt of the invoice as long as the claim contains substantially all the required data elements necessary to adjudicate the invoice, unless the invoice is contested in good faith. If the contested invoice pertains to an acknowledged compensable claim and the denial is based upon compliance with the health care payment system and/or health care practice guidelines, it shall be referred to utilization review. Unpaid invoices shall incur interest at a rate of one percent (1%) per month payable to the provider. A provider shall not hold an employee liable for costs related to non-disputed services for a compensable injury and shall not bill or attempt to recover from the employee the difference between the provider’s charge and the amount paid by the employer or insurance carrier on a compensable injury.

(i) A health care provider referring an employee to, or encouraging an employee to utilize, any in-patient or out-patient facility or any medical or therapeutic practice, laboratory, diagnostic testing or radiological imaging machinery, equipment, practice or facility shall disclose to the employee any financial interest the health care provider has in such in-patient or out-patient facility, any medical or therapeutic practice, laboratory, diagnostic testing or radiological imaging machinery, equipment, practice or facility. The requirements of this subsection may be met by the prominent placement of a sign or signs in such health care provider’s office identifying such affiliated equipment, practices or facilities.

(j) Utilization review. The Health Care Advisory Panel shall develop a utilization review program. The intent is to provide reference for employers, insurance carriers, and health care providers for evaluation of health care and charges. The intended purpose of utilization review services shall be the prompt resolution of issues related to treatment and/or compliance with the health care payment system or practice guidelines for those claims which have been acknowledged to be compensable. An employer or insurance carrier may engage in utilization review to evaluate the quality, reasonableness and/or necessity of proposed or provided health care services for acknowledged compensable claims. Any person conducting a utilization review program for workers’ compensation shall be required to register with the Office of Workers’ Compensation once every two (2) years and certify compliance with Workers’ Compensation Utilization Management Standards or Health Utilization Management Standards of Utilization Review Accreditation Council (“URAC”) sufficient to achieve URAC accreditation or submit evidence of accreditation by URAC. If a party disagrees with the findings following utilization review, a petition may be filed with the Industrial Accident Board for de novo review. Complete rules and regulations relating to utilization review shall be approved and recommended by the Health Care Advisory Panel. Thereafter, such rules shall be adopted by regulation of the Department of Labor pursuant to chapter 101, title 29 of the Delaware Code. Such regulations shall be adopted and effective not later than one (1) year after the first meeting of the Health Care Advisory Panel.

(k) Coordination of health care payments

(1) Upon notification to an employer that an employee is exercising his or her rights under § 2304 of this title with respect to an injury or condition, the employer shall be exclusively responsible for treatment of that injury or condition to the extent that the employer is obliged to provide treatment under this chapter.

(2) An employee, as part of a notification that an employee will exercise rights under § 2304 of this title, shall notify the employer of all health insurance benefits that could compensate the employee for treatment of the injury or condition in question in the absence of coverage under this chapter. Such notification to the employer is intended to facilitate the notice provided for in paragraph (5) of this subsection; the failure of an employee to provide such notice shall not waive or defeat any rights the employee may have under this chapter.

(3) An employee whose health care treatment for an injury or condition is being paid for pursuant to this chapter shall not be entitled to seek compensation from any other health insurance carrier for the same treatment. A health care provider who is being paid for treating an injury or condition pursuant to this chapter shall not seek compensation from any other health insurance carrier for the same treatment.

(4) At any time that a final determination is made that an employee is not entitled to health care treatment pursuant to this chapter, the employer shall notify any health insurance carrier of which it is aware pursuant to paragraph (2) of this subsection of such a final determination.

(5) Notwithstanding any other provision of this chapter, if a final determination is made that an employee is not entitled to health care treatment pursuant to this chapter, the employee and/or the health care provider who provided said treatment may seek payment for such treatment from a health insurance carrier from which the employee had coverage applicable at the time of the injury or condition.

(6) Any time restrictions imposed upon an employee with respect to making claims against his health insurance coverage for an injury or condition for which he or she initially sought treatment under this chapter shall be tolled until notification of the health insurance carrier under paragraph (4) of this subsection.

(7) No requirements for preauthorization of treatment in any health insurance policy shall be the basis for denying payment of a claim submitted under paragraph (5) of this subsection.

(8) With respect to claims submitted by an employee pursuant to paragraph (5) of this subsection for treatment provided by a health care provider that had a contract with the health insurance carrier at the time of the treatment, reimbursement shall be at the contract rate.

(9) With respect to claims submitted by an employee pursuant to paragraph (5) of this subsection for treatment provided by a health care provider that did not have a contract with the health insurance carrier at the time of the treatment, reimbursement shall be at the health insurance carrier’s average contract rate for the same treatment with health care providers with whom it does have a contract.

(10) All claims submitted pursuant to paragraph (5) of this subsection shall be entitled to treatment under Insurance Department Regulation 1310 or any successor regulation relating to the prompt payment of health care claims by health insurance carriers.

(11) A health insurance carrier may deny payment of claims submitted under paragraph (5) of this subsection for health care that it determines was not reasonable or necessary. However, an employee shall have the right to immediate appeal to an Independent Utilization Review organization under §6416, title 18 of the Delaware Code for all such denials of treatment, with the cost of such appeal being borne by the health insurance carrier.

(12) A health care provider may not balance bill an employee for treatment for which the health care provider has been compensated under paragraphs (8) or (9) of this subsection.

(l) Balance billing prohibited

(1) Any health care provider rendering services under this chapter shall be prohibited from billing or invoicing an employee, employer or insurance carrier for charges or expenses other than those authorized by this chapter and the health care payment system provided for herein. No health care provider rendering treatment or services under this chapter shall seek payment for charges from an employee except as authorized by this section.

(2) Billing procedures where compensability under this chapter is contested.

(A) A provider may seek payment of the actual charges from the employee if the employer or insurance carrier notifies the provider that it does not consider the illness or injury to be compensable. If an employer notifies a provider that it will pay only a portion of a bill, the provider may seek payment of the unpaid portion from the employee up to the lesser of the actual charge, the negotiated rate, or the rate authorized by the payment system.

(B) If an employee informs the health care provider that a claim is on file at the Department, the provider shall cease all efforts to collect payment from the employee.

(C) While a claim concerning compensability is pending with the Department, a provider may notify an employee that the employee will be responsible for payment of unpaid invoices when the claim has been determined not to be compensable and the provider is able to resume collection efforts. Any such notice or reminder made under this subsection shall not be disclosed or otherwise provided to any credit agency. The provider may request information about the Department claim, and if the employee fails to respond or provide the information within ninety (90) days, the provider shall be entitled to resume collection efforts directly and the employee may be determined liable for invoices as otherwise provided by law.

(3) Upon final award or settlement, a provider may resume efforts to collect payment from the employee and the employee shall be responsible for payment of any outstanding bills without regard to this section and as otherwise provided or authorized by law. If the service is found compensable, the provider shall not require a payment rate, excluding interest, greater than the lesser of the actual charge or payment level set by the payment system. The employee shall be responsible for payment for services found not covered or compensable unless agreed otherwise by the provider and employee. Services not covered or not compensable shall not be subject to the payment system.”

Section 16. AMEND §2344, title 19 of the Delaware Code, by adding the following language to the end of subsection (b)(4), before the period:

“, which shall review the facts and circumstances of the alleged fraud in order to determine whether administrative, civil, or other proceedings are appropriate, in accordance with chapter 24, title 18 of the Delaware Code”

Section 17. AMEND §2347, title 19 of the Delaware Code, by adding the following as a new paragraph at the conclusion of said section:

“Upon any order imposed by the Insurance Commissioner under §2411(e) of title 18 of the Delaware Code requiring payment of restitution following a finding of insurance fraud, and after all rights of appeal from said order have been waived or exhausted, the Board shall, upon motion of the party to whom restitution was ordered and after hearing and opportunity to be heard, allow a credit against benefits payable under §§2324, 2325 and/or 2326 of this title, for any restitution ordered by the Insurance Commissioner remaining unpaid. The Board shall also review orders establishing such credits upon motion based upon any change in circumstances that may warrant modification or rescission of a prior order.”

Section 18. AMEND chapter 23, title 19 of the Delaware Code, by inserting a new “§2348A” of such chapter to provide as follows:

Ҥ 2348A. Mediation

(a) At any time prior to thirty (30) days after the pre-trial conference, either party may request mediation. The mediator shall be selected from a list of three (3) hearing officers provided by the Department of Labor, and each party may strike one hearing officer from the list of potential mediators. The hearing officer serving as the mediator for a claim shall not be the hearing officer assigned to a later hearing on the claim mediated. Mediation shall be conducted within thirty (30) days of the request.

(b) Any mediation under this section shall be non-binding. No transcription or other verbatim record of the proceedings shall be kept, and no testimonial evidence shall be given. Medical records or other documentary evidence may be considered, at the mediator’s discretion, if it will assist the mediation process.

(c) If the parties involved in the mediation conference reach a settlement as to all or any part of the then-pending issues, the agreement shall be reduced to writing and signed by the parties, the parties’ counsel, and the mediator. A signed mediation agreement shall be binding on the parties thereto as to those issues on which there is agreement, except that any such agreement shall be subject to review in accordance with §2347 of this title.

(d) In any hearing before the Board, no evidence shall be permitted regarding the mediation, including evidence regarding any statements or positions taken by any party in the context of the mediation. The Board may admit into evidence any signed mediation agreement, if relevant to any pending issue.”

Section 19. AMEND §2353, title 19 of the Delaware Code, by striking the title of said section and inserting in lieu thereof the words “§2353. Forfeiture or suspension of right to compensation” and adding subsections ‘(d)’ through ‘(g)’ of said section to provide as follows:

“(d) If an employee is receiving benefits, or claims to be eligible for benefits, for total or partial disability under §2324 or §2325 of this title, those benefits may be suspended by agreement or order of the Board under the following conditions and for only so long as those conditions apply:

(1) while an employee is incarcerated by the State of Delaware, after an adjudication of guilt;

(2) while an employee is incarcerated by another state or other government subdivision of another state authorized to operate a penal facility, after an adjudication of guilt; or

(3) while an employee is incarcerated by the federal government, after an adjudication of guilt.

(e) If the parties do not agree that a suspension condition applies, the party attempting to cease or begin benefits may file a petition for the matter to be adjudicated. Certified proof of conviction and incarceration as specified above from the responsible government entity, filed with the Board upon opposition to suspension of benefits, shall create a rebuttable presumption that benefits may be suspended unless countered by the filing with the Board of certified proof of release, parole, commutation of sentence or pardon. Work release or similar conditional release will not counter the presumption. The employer may suspend benefits until the hearing once the rebuttable presumption has been raised until countered or the Board adjudicates the matter.

(f) The employee shall give notice to the employer or insurance carrier when a period of suspension agreed to or ordered by the Board ends. At that time the employee shall provide medical certification that the disability continues. If the parties cannot agree to a specific date on which the suspension shall be lifted and benefits are to commence or recommence, either party may file a petition to have the Board adjudicate the issue.

(g) This section shall not prohibit an employee from collecting any other benefits due for other periods or types of benefits. An employee may collect from the Board Fund during a period for which a petition is pending under this section to stop paying benefits unless the above described rebuttable presumption is raised.”

Section 20. AMEND §2358, title 19 of the Delaware Code, by designating the existing text of such section as subsection ‘(a)’, and adding a new subsection ‘(b)’ to provide as follows:

“(b) The Board shall not approve a proposed commutation under this section without considering information regarding the amount of attorneys’ fees and costs, if any, employee will pay in connection with the proposed commutation. The Board shall not separately approve the attorneys’ fees to be paid by the employee, but shall approve or deny the proposed commutation based upon the best interests of the employee in light of the employee’s net recovery after fees and expenses are deducted.”

Section 21. AMEND §2371, title 19 of the Delaware Code, by striking said section in its entirety and inserting in lieu thereof the following:

“§ 2371. Insurance of employer’s compensation liability

(a) Every employer to whom this chapter applies shall insure the payment of compensation to the employees, or their dependents, in the manner provided in §2372 of this title. While such insurance remains in force, the employer shall be liable to any employee, or the employee’s dependents, for personal injury or death by accident only to the extent and in the manner specified in this chapter.

(b) Every employer having a primary place of business in another state shall carry Delaware workers’ compensation coverage in full for any employees doing substantial work in the State of Delaware as if they were an employer in Delaware. Every such employer whose employee is injured during the course of employment within the territory of the State of Delaware shall notify such employee of his or her rights under this chapter.

(c) Substantial work shall include, but not be limited to:

(1) a construction or contracting business for which a Delaware employer would be required to be licensed under Title 30, Chapter 25 of the Delaware Code;

(2) a business of any sort in which one or more employees is primarily engaged in the business of the employer in the territory of the State of Delaware for more than five (5) consecutive work days at a single time; or

(3) working for a business of any sort in which one or more employees is primarily engaged in the business of the employer for more than an aggregate of three (3) weeks in any six (6) month period. For purposes of this section a week shall consist of five consecutive work days.

(d) The insurance required of the above-described employers shall consist of:

(1) An actual Delaware workers’ compensation policy covering the activities of the employer for any employee engaged in the employer’s business in the territory of the State of Delaware; or

(2) A written rider on an out of state policy of insurance covering the work activities of the employees as fully and completely as an actual Delaware workers’ compensation policy would; or

(3) a declaration of self insurance that would be valid and acceptable if made by a Delaware employer in the territory of the State of Delaware providing such coverage, filings and surety as is required of Delaware employers to be self-insured for claims for Delaware workers’ compensation.

(e) All such employers described in this section shall comply with §§ 2372, 2373 and 2374 of this title.

(f) Every Delaware construction or contracting business employing an out of state business for which a Delaware employer would be required to be licensed under chapter 25, title 30 of the Delaware Code shall verify in any business transaction that the out of state construction or contracting business is in compliance with this requirement.”

Section 22. AMEND §2374, title 19 of the Delaware Code, by striking subsection ‘(b)’ of said section in its entirety, and inserting in lieu thereof the following as subsections ‘(b)’ through ‘(h)’:

“(b) Every insurance carrier shall notify the Department of Labor, on forms specified by the Department, within fourteen (l4) days that an employer’s policy for workers’ compensation coverage has been cancelled, lapsed, or is otherwise terminated, other than for replacement of coverage through a different insurance carrier, with a copy to the employer.

(c) Every employer, upon such notice, or, at the latest, when contacted by the Department of Labor concerning such notice, shall provide proof of insurance within fourteen (14) days or establish by proof satisfactory to the Secretary of the Department of Labor that the employer has:

(1) been granted self-insured status in accordance with all the laws of the State of Delaware;

(2) terminated operation;

(3) terminated or retired any employees and the operators of the business have elected to waive coverage under §2308 of this title;

(4) sold the business, been voluntarily or involuntarily been liquidated, and/or been enjoined by the courts from doing business; or

(5) otherwise ceased to exist as an entity that requires workers’ compensation coverage in Delaware.

(d) Whoever, being an employer, refuses or neglects to comply with the sections referred to in subsection (a) of this section shall be subject to a civil penalty:

(1) for employers previously insured until the default, an amount equal to the premium for the insurance not purchased times three (3), based on the last premium rate charged by the carrier providing the coverage before the default for a one year period; or

(2) for employers without previous history of coverage, an amount equal to the most expensive policy premium actually charged by any insurance carrier doing business in the State at the time of the assessment for appropriate coverage of the uninsured employer’s business times three (3) for a one (1) year period.

(e) Whoever, being an employer, refuses or neglects to comply with the sections referred to in subsection (a) of this section on a continuing basis after notice by the Department of Labor shall be subject to a civil penalty:

(1) as described in subsection (d) on the 15th day after notice to comply with subsection (c); and

(2) an assessment of $10 per day for each employee in the employer’s service at the time when the insurance became due, but not less than $250 for each day of such refusal or neglect and until the same ceases.

(3) The employer shall also be liable to the employer’s injured employees during continuance of such neglect or refusal, either for compensation under this chapter or in an action at law for damages. In such action, upon proof that the employer has not complied with this section, it shall not be a defense that the:

(a.) Employee was negligent; or

(b.) Employee had assumed the risk of the injury; or

(c.) Injury was caused by the negligence of a fellow employee.

(f) If any employer is in default under §§2372 and 2373 of this title for a period of thirty (30) days, in addition to the above, the employer may be enjoined by the Court of Chancery of this State from carrying on business while such default continues. The Department of Labor shall file such petitions in such cases seeking an order of the Court.

(g) When an employer is uninsured for any period and obtains insurance subsequently to comply with notice to provide proof of insurance, for each day that the employer is uninsured, regardless of whether or not a claim arises during that period, the employer shall be assessed the penalty in subsection (d) unless the employer can demonstrate to the satisfaction of the Secretary of Labor that the uninsured status was the fault of some other business entity, in which case the assessment shall be levied upon the business entity at fault for the uninsured status. Before an alternative business entity may be charged with the assessment, it shall be given notice and if the liability is contested, a hearing before the Secretary of Labor.

(h) Any assessment or fine collected under this section will be deposited in the Workers’ Compensation Fund and disbursed to pay the claims of any employee affected by the employer’s failure to comply with the requirements of insurance imposed by this chapter.”

Section 23. AMEND chapter 23, title 19 of the Delaware Code, by adding a new “§2379” to provide as follows:

Ҥ2379. Workplace safety program

(a) Purpose

(1) The safety of Delaware workers is of paramount importance to the General Assembly. This program has been developed by the Delaware Department of Insurance to ensure that safety is a priority for everyone in the workplace and to ensure that those who comply with this section are rewarded with a reduction in insurance premiums. To that end, the Industrial Accident Board will review this program annually to determine its effectiveness and to make recommendations which will improve safety in the workplace.

(2) The program is intended to enhance the health and safety of workers in the State of Delaware.

(3) The program is intended to provide lower insurance premiums for qualifying employers who currently pay $3,161 or more (or such other amount set by the Insurance Commissioner by regulation) of annual Delaware workers’ compensation premiums and other employers under subsection (i) of this section.

(4) The program establishes both testing and inspection procedures to determine an employer’s qualification for a premium credit.

(b) Administration and scope

(1) This section shall be administered by the Insurance Commissioner, who shall adopt such regulations, in accordance with existing law, to implement and administer this section.

(2) All employers who comply with the criteria set forth in this section shall be eligible for participation in the workplace safety program.

Only Delaware work sites will be eligible for this program and safety credit applies to only Delaware premiums in multi-state policies.

(c) Eligibility and premium credit

An employer is eligible for the safety program if its annual premium is $3,161 or more. This amount may be adjusted by the Insurance Commissioner by regulation. Workplace safety credit eligibility is based on the most current unit statistical card filing. The Delaware Compensation Rating Bureau, or another qualified entity designated by the Department of Insurance, shall test each employer by taking the most current unit statistical card payroll times current rates times current experience modification to determine the employer’s premium size.

(d) Notice of employer eligibility

Employers meeting the premium requirement will be notified by the Delaware Department of Insurance seven (7) months in advance of their policy renewal date. This notification shall include instructions for qualifying for a safe workplace credit.

(e) Eligibility period

The Department of Insurance shall notify the employer of eligibility, and inform the employer that the employer must elect at least five (5) months in advance of the date of policy renewal to participate in the safety program. Failure to notify the Department of Insurance within this time period of an intent to renew participation may preclude the employer’s participation in the program for the next year. Election to participate shall commence by contacting the Delaware Department of Insurance.

(f) Inspections and cost

(1) All inspections shall be made by a representative from an independent safety expert company under contract to the Department of Insurance. The Department of Insurance shall notify the inspector of the employer’s request. The inspector, in turn, will then contact the employer to set up the first of two inspections. A second unannounced inspection shall be made no later than the expiration date of the policy to which any workplace safety credit based on the inspection will apply to confirm the initial certifications of safety in the workplace. The Department of Insurance shall notify the Delaware Compensation Rating Bureau (or such other organization designated by the Insurance Commissioner) when an employer successfully completes each scheduled and/or nonscheduled inspection. Failure to pass a scheduled inspection shall result in a denial of an employer’s eligibility to participate in the workplace safety program. However, an employer, after failing an inspection can request another inspection, after successful completion of which will make the employer eligible for participation in the workplace safety program.

(2) The cost of each inspection will be borne by the employer. The minimum charge for safety inspection is $150 per location. This amount can be adjusted by the Insurance Commissioner by regulation. Each work location must successfully pass both inspections before an employer is entitled to a premium credit under the program. Inspection fees for large and/or complex employers may be established by the Department of Insurance.

(g) Renewals and eligibility

An employer must apply for the workplace safety program each year. For each year after the initial qualification, the inspection requirement shall consist of one unannounced inspection. The Department of Insurance shall maintain a list of inspection charges which shall be sent to interested parties upon request.

(h) Premium size ranges and corresponding credits

Safety credits will be granted according to the following formula:

20% x [ 1.0000 - C]

where “C” is the credibility of the qualified employer in the uniform Experience Rating Plan for the policy period expiring immediately prior to the application of the Safety credit. If the qualified employer was not experience-rated in the policy period expiring 'immediately prior to the application of the Safety credit, "C" will be set at 0.050 Safety credit packages will be rounded to the nearest whole percent.

(i) Effect upon mutual rates and schedule rating credits

(1) Workers’ compensation mutual rates shall be adjusted because of implementation of this program. A Delaware Workplace Safety Program Factor shall be included in loss costs and residual market rates. This factor may offset credits given to qualified employers, so that the workplace safety program will neither increase nor decrease premiums for eligible employers in the aggregate.

(2) Schedule rating plan credits given to policyholders for “competitive” reasons cannot be withdrawn. Schedule credits given for safety reasons may be reduced to offset the workplace safety program premium credit.

(3) A merit rating plan shall be implemented by the Department of Insurance which will provide incentives for employers paying less than $3,161 of annual Delaware workers’ compensation premiums to maintain safe workplaces.”

Section 24. The Department of Labor, Office of Workers’ Compensation, is authorized and directed to engage Ingenix, Inc., or an affiliate (“Ingenix”), to provide services with respect to the development of a comprehensive health care payment system and practice guidelines as provided herein. The Office of Workers’ Compensation shall retain Ingenix to provide the information and services necessary for the development and implementation of a health care payment system, a set of health care practice guidelines, including a utilization review procedure, suitable for use in the State of Delaware relating to the provision of services pursuant to this chapter. The development of payment systems, practice guidelines and utilization review procedures shall be the responsibility of the Health Care Advisory Panel. The provisions of chapter 69, title 29 of the Delaware Code are waived with respect to the engagement of Ingenix

Approved January 17, 2007