DWC Withdraws Proposed Enforcement Rules; Issues New Version

In perhaps their first decision together, the Division of Workers’ Compensation’s newly minted Commissioner Cassie Brown, and her more recently hired Deputy Commissioner of Compliance and Investigations, Debra Knight, the Division withdrew proposed enforcement rules after strong public comment criticized the agency’s rulemaking efforts. The proposed rules were drafted in an effort to comply with 2017 legislation that directed it, in effect, to direct its compliance efforts away from imposing penalties for minor violations of the Act or Rules.

The Division withdrew the proposed amendments to Chapter 28 of Texas Administrative Code Sections 180.26 and 180.8 that it had announced in May because of stakeholder comments it received.

A new version of the proposed rules has been scheduled for public hearing at 10:00AM on November 15, 2018 at the DWC Central Office, 7551 Metro Center Drive, Suite 100, Austin. The Division will accept public comments on the proposed rules through December 3, 2018.

Members of the carrier community and health care provider community each had complained during a public hearing in August that the previous proposal missed the point of the legislation. Senate Bill 1895 had directed the Division to adopt rules that require the commissioner to consider, when determining the amount of an administrative penalty, whether a violation had a negative impact on the delivery of benefits and whether the violator had a history of not complying with electronic data interchange requirements.

Stakeholders complained that the proposed rules merely reiterated the statutory language. Carriers argued that the purpose of the rules should be to require the Division to explain how it arrived at the amount of the penalties it imposes. They pointed out that prior to the legislation carriers had repeatedly been the subject of administrative penalties for EDI reporting violations that caused no harm to injured workers whatsoever. Similarly, health care providers argued that doctors were being fined far more than they earn for late reports following a designated doctor’s examination.

The Division has proposed new rule language that will require the agency to include on the notice of violation a statement of aggravating or mitigating factors that it considered when determining the sanction. Also, consent orders will be required to contain a statement acknowledging that the DWC and the entity being fined communicated about how the Division determined the amount of the penalty.

In the newly proposed rule, Associate Commissioner of Enforcement Marisa Lopez Wagley was quoted as saying that the proposed regulation does not change the circumstances under which an administrative penalty is assessed and enforced, but is “just a memorialization of current practices of providing additional information to persons subject to administrative penalties.”