Kansas lawmakers challenge bureaucrats over rule-making for workers comp: 'You will pay for this'
As advocates praise workers compensation regulatory changes by the Democratic governor's administration that would benefit employees, Republican lawmakers and business representatives bristle at the rulemaking authority of unelected bureaucrats.
The political debate followed a slew of new, worker-friendly regulations from the Kansas Department of Labor for the workers compensation system.
Jeff King, director of the KDOL's workers compensation division, detailed the new regulations last week to the Legislature's Joint Committee on Administrative Rules and Regulations.
While attorneys who represent injured workers were supportive of the rules from Gov. Laura Kelly's administration, they faced criticism from the statewide chamber of commerce and an organization representing business interests in workers compensation law.
Republican lawmakers also opposed the rules and lamented their lack of power to block their implementation.
A public hearing on the six proposed regulations — five new ones and one amended one — is scheduled for Jan. 12 in Topeka.
The new regulations for Kansas' workers comp system
One regulation would require employers or their insurance carriers to notify an injured worker when they stop paying benefits and provide them with the reason.
"If they're receiving temporary total benefits or medical benefits in Kansas, those can just be stopped without any notice to the injured worker," King said.
"Injured workers need to make plans if their benefits are terminated," he said. "They need to maybe apply for work; apply for other benefits from other sources. This simply just requires the employer to notify them when and why the benefits were terminated."
One regulation would require employers to provide workers with copies of written communication with the medical provider.
King said it addressees a "transparency communication issue" and a "trust issue."
"One of the biggest problems, the reason for this, is the employer in Kansas gets to choose the treating physician for an injured worker," he said. "This just allows the injured worker to participate and be aware of any communications with his authorized physician and participate in his own medical treatment."
One regulation would require that, after a physician has already been chosen, an employer would have to get an injured worker's consent or judge's approval before changing the doctor.
Current state statute doesn't address what happens if the employer wants to change physicians, King said.
"There are circumstances in which a company is unsatisfied with the physician they chose, and so they just deauthorize them and authorize a new physician," he said. "We end up with big gaps in treatment."
One regulation would require administrative law judges to request that neutral evaluation physicians include more detailed information when determining the cause of an injury.
"A lot of these neutral exams, they come back with a conclusionary opinion ... without any explanation," King said. By getting more thorough responses from the doctor, "we can avoid then follow-up letters, which delay the proceedings further, or the deposition of the neutral physician, which sometimes those take months."
One regulation would change the way the average weekly wage is calculated. Generally, the number would be determined by averaging the actual earnings of a worker compared to the actual time worked over the prior 26 weeks.
King said the rule addresses issues where, prior to their injury, a worker missed time because of weather, sickness or other reasons. Those missed days of work will now be calculated in a way that does not as severely affect their average weekly pay.
"That's just to reflect a more accurate figure for the average weekly wage," he said.
One regulation would allow injured workers to seek reimbursement for costs of getting an expert opinion from a doctor. If a judge approves such awards during proceedings, the employer and their insurance carrier would have to pay.
Existing statute states that fees and costs can be awarded, but doesn't define those terms, King said.
"An exam with a physician ... should be included as costs," he said. "If they're not, it's almost prohibitive for an injured worker to seek further medical treatment."
Advocates support regulatory changes to workers compensation
Jonathan Voegeli, a workers compensation attorney in Wichita with Slape and Howard, was supportive of the regulatory changes.
"If you are hurt at work, you do not get to choose your doctor," Voegeli said. "... What I am saying is you are stuck. You don't get to go outside of work comp. ... If (your employer) dislike the treatment for whatever reason, they can change the physician."
Voegeli said the regulations would provide "a very common courtesy" with communication to workers. A denial letter helps workers by allowing them to start invoking health insurance and short-term disability benefits.
"(If) your insurance company directly communicated with your provider, and didn't share that information and you were denied treatment based upon that ... it would be absolutely horrifying to everyone in this room," Voegeli said. "But that can happen and often happens."
Getting more detailed information from doctors on neutral evaluations would make it easier to adjudicate the case, he said.
"What we're looking to do is standardize the questions and make the process more efficient," he said.
Working one day out of a week should not count as working a full week, he said. The average weekly wage calculation is important, Voegeli said, because it affects "every aspect of the compensation in your workers comp case."
Jan Fisher, a lobbyist for the AFL-CIO, said that 36 years of practice have taught her that "work comp is a very dehumanizing experience for the injured worker." Fisher is also a workers compensation professor at Washburn Law School in Topeka and attorney with McCullough, Wareheim and Labunker.
Fisher said delays in medical care can lead to worsening medical conditions, and getting more information on medical evaluations reduces litigation.
"These regulations make an effort to allow the person a little bit more dignity in the system, and it makes it a little bit more open," she said. "Don't treat them like they're claims. Treat them like they're human beings."
Opposition from business groups
"We oppose all of these," said Tony Andersen, representing the Kansas Self-Insurers Association.
Andersen said his organization believes the regulations don't "pass muster" both statutorily and "with regard to invading the province of the Legislature."
"Also, they're all designed to increase the cost and, if you don't mind the saying, throwing sand in the years of how worker's compensation works," he said.
Andresen said that state statute grants bureaucrats the power to promulgate rules to allow for administration of the Workers Compensation Act.
"If you look at each one of these, these are not designed to administer the act," he said. "They're not trying to make the act easier to administer. They're making it harder."
Andersen said the notification issue "is not a big problem" and the new rule would slow down the system. He said the regulations impose new duties on employers, which will incur a financial cost.
Andersen said the regulations would require written notifications letters on 45,000 cases a year, which Eric Stafford, a lobbyist for the Kansas Chamber, called an "additional burden" for employers that's not necessary. There would also be administrative costs associated with compliance.
Voegeli, the workers compensation attorney, said the additional notification protects employers from liability. He pointed to a case from his firm, Hull v. Spirit AeroSystems, where the company had to pay $250,000 in medical costs incurred by a claimant who was not notified when their benefits were cut off.
In written testimony, Natalie Bright of the state Society for Human Resource Management opposed the regulations.
"These rules and regulations will lead to increased administrative and litigation cost in the workers compensation system, thus making the system more expensive, less efficient and less equitable for all parties engaged," she said.
Stafford's testimony primarily targeted the rulemaking authority, not the merits of the proposals.
"We have very strong concern that these are establishing significant policies that are in conflict with Kansas statute and or previous court cases and opinions," Stafford said. "It stresses the importance of passing (the constitutional amendment)."
Republicans propose a constitutional amendment to create 'legislative veto'
Lawmakers have no authority to block regulations. The Kansas Supreme Court in 1984 held that a previous provision allowing the Legislature to suspend or revoke administrative rules was unconstitutional.
Currently, the Legislature only has the power to adopt a concurrent resolution expressing concern with and requesting the revocation of a regulation. The rules and regulations committee is required to issue reports with comments and recommendations on proposals.
Last session, Republicans proposed a constitutional amendment that would create a "legislative veto" of administrative branch orders. Party leaders brushed aside questions about why the issue didn't receive greater attention under previous Republican governors.
Republican attorney general and now gubernatorial candidate Derek Schmidt backed the proposal as a way to create more oversight of executive power, especially in light of Kelly's handling of the pandemic.
Schmidt's office signed off on the legality of the regulations in July, documents show, after the state's budget office and Department of Administration signed off in January. The secretary of state's office received the rules in October.
The attorney general's approval means the regulation "is within the authority conferred by law on the state agency."
A Revisor of Statutes memo noted that lawmakers granted KDOL the authority to adopt regulations to administer and enforce the Workers Compensation Act.
"This seems to be a problem throughout Rules and Regs," said committee chairperson Rep. Barbara Wasinger, R-Hays. "A lot of organizations and bureaus are trying to pass law without going through the Legislature. This is not new."
Sen. Caryn Tyson, R-Parker, said the KDOL regulations amount to government overreach.
"This is a prime example of why this committee needs some veto authority," she said.
"I'm also concerned that we as this committee don't have the authority to amend or otherwise change or revoke or strike these," said Sen. Kellie Warren, R-Leawood, noting the constitutional amendment proposal.
Under the proposed constitutional amendment, the rules and regulations committee still would not have the power its members seek. Instead, a simple majority of both the House and Senate would be needed to "veto" an administrative branch regulation.
'Legislation by bureaucrats'
Rep. Paul Waggoner, R-Hutchinson, who runs a manufacturing businesses, said the regulations are "an end run on some of what the Legislature has done" on workers compensation law. Warren called it "legislation by bureaucrats" and an attempt to "circumvent the legislative process."
"I'm very concerned about the breadth and depth of these proposed regulations on a very complex system," Warren said.
Wasinger targeted bureaucrats in a monologue to end the meeting.
"I continue to be horrified that staff who are unelected and unaccountable are making law," she said. "I'm not just going to pick on the Department of Labor, I'm talking about all of you. This cannot continue. We cannot create law by rules and regulation.
"You will pay for this. I'm telling you, you will find out I'm doing everything I can to let our constituents everywhere. This is a huge problem. We are held accountable for everything we do. ... When your departments create legislation without any responsibility, every Kansan loses."
Wasinger said she is begging KDOL not to go through with the regulations and promised to help the agency if they went through the Legislature.
"I would hope," she said, "that every legislator would tell their constituents, and everyone in Kansas, that bureaucrats are creating law every day through rules and regs, and you don't have a word to say about it."
Earlier, the Kansas Department of Health and Environment detailed amendments to existing regulations that put restrictions on COVID-19 contact tracing. The regulations were created at the direction of the Legislature, but that didn't stop lawmakers from questioning the reasoning behind the rules.
In the same meeting, the secretary of state's office explained several revoked regulations. Those administrative rules were cut because the statutory authority behind them was eliminated by the Legislature.
"We're revoking five regulations, and the common thread between all five is that the 2021 session, the Legislature eliminated the statutory authority for our office to regulate these areas," said Clay Barker, general counsel for Secretary of State Scott Scwab. "So with no authorization, we have to revoke these."
The regulations dealt with publication fees and census adjustments.
"I think it's a rare instance here where we actually are having less regulation rather than more," Warren said. "So it's kind of interesting and a little bit welcome."
Wasinger said it is "refreshing" to see rules and regulations eliminated.
"That doesn't happen very often," she said. "I'd like to see that more often."
But when the Kansas Board of Regents presented plans to revoke dozens of regulations connected to an ACT admissions requirement at the University of Kansas, Republicans were not supportive of cutting those regulations. They claimed the move lowered the university's academic standards in order to admit more students and pay administrators higher salaries.
Jason Tidd is a statehouse reporter for the Topeka Capital-Journal. He can be reached by email at email@example.com.