HB0359

HOUSE BILL 359

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Daymon Ely

AN ACT

RELATING TO WORKERS' COMPENSATION; AMENDING PROVISIONS OF THE

WORKERS' COMPENSATION ACT RELATING TO THE AWARD OF POINTS FOR PARTIAL DISABILITY EDUCATION AND PHYSICAL CAPACITY MODIFICATIONS, INDEPENDENT MEDICAL EXAMINATIONS, UNSANITARY OR INJURIOUS PRACTICES AND ATTORNEY FEES AND COSTS ASSOCIATED WITH CLAIMS; ALLOWING PRIVATE RIGHTS OF ACTION FOR BAD FAITH AND UNFAIR CLAIMS PROCESSING; INCREASING PENALTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 52-1-6 NMSA 1978 (being Laws 1990 (2nd S.S.), Chapter 2, Section 4) is amended to read:

"52-1-6. APPLICATION OF PROVISIONS OF ACT.--

A. The provisions of the Workers' Compensation Act shall apply to employers of three or more workers; provided that act shall apply to all employers engaged in activities required to be licensed under the provisions of the Construction Industries Licensing Act regardless of the number of employees. The provisions of the Workers' Compensation Act shall not apply to employers of private domestic servants and farm and ranch laborers.

B. An election to be subject to the Workers' Compensation Act by employers of private domestic servants or farm and ranch laborers, by persons for whom the services of qualified real estate salespersons are performed or by a partner or self-employed person may be made by filing, in the office of the director, either a sworn statement to the effect that the employer accepts the provisions of the Workers' Compensation Act or an insurance or security undertaking as required by Section 52-1-4 NMSA 1978.

C. Every worker shall be conclusively presumed to have accepted the provisions of the Workers' Compensation Act if [his] the worker's employer is subject to the provisions of that act and has complied with its requirements, including insurance.

D. [Such] Compliance with the provisions of the Workers' Compensation Act, including the provisions for insurance, shall be [and construed to be] a surrender by the employer and the worker of their rights to any other method, form or amount of compensation or determination thereof or to any cause of action at law, suit in equity or statutory or common-law right to remedy or proceeding whatever for or on account of personal injuries or death of the worker than as provided in the Workers' Compensation Act and shall be an acceptance of all of the provisions of the Workers' Compensation Act and shall bind the worker [himself] and, for compensation for [his] the worker's death, shall bind [his] the worker's personal representative, [his] surviving spouse and next of kin, as well as the employer and those conducting [his] the employer's business during bankruptcy or insolvency.

E. The Workers' Compensation Act provides exclusive remedies. No cause of action outside the Workers' Compensation Act shall be brought by an employee or dependent against the employer or [his] the employer's representative, including the insurer, guarantor or surety of any employer, for any matter relating to the occurrence of or payment for any injury or death covered by the Workers' Compensation Act; except that the Workers' Compensation Act shall not provide the exclusive remedy for claims of bad faith, unfair claims-processing practices or other similar common law or statutory claims against an employer, insurer or other party. Nothing in the Workers' Compensation Act [however] shall affect [or be construed to affect], in any way, the existence of or the mode of trial of any claim or cause of action that the worker has against any person other than [his] the worker's employer or another employee of [his] the worker's employer, including a management or supervisory employee, or the insurer, guarantor or surety of [his] the worker's employer."

SECTION 2. Section 52-1-26.3 NMSA 1978 (being Laws 1990 (2nd S.S.), Chapter 2, Section 14, as amended) is amended to read:

"52-1-26.3. PARTIAL DISABILITY DETERMINATION--EDUCATION MODIFICATION.--

A. The range of the education modification is one to eight. The modification shall be based upon the worker's formal education, skills and training at the time of the disability rating.

B. A worker shall be awarded points based on the formal education that the worker has received. A worker who:

(1) has completed no higher than the fifth grade shall be awarded [three] four points;

(2) has completed the sixth grade but has [completed no higher than the eleventh grade] not graduated from the twelfth grade or has not obtained a high school equivalency credential shall be awarded [two] three points;

(3) has [completed] graduated from the twelfth grade or has obtained a high school equivalency credential but has not completed a four-year college degree shall be awarded [one point; and] two points;

(4) has completed a four-year college degree [or more] shall receive [zero points] one point; and

(5) has completed a two-year or more graduate degree shall receive zero points.

C. A worker shall be awarded points based upon the worker's skills. Skills shall be measured by reviewing the jobs that the worker has successfully performed during the ten years preceding the date of disability determination. For the purposes of this section, "successfully performed" means having remained on the job the length of time necessary to meet the specific vocational preparation (SVP) time requirement for that job as established in the dictionary of occupational titles published by the United States department of labor. The appropriate award of points shall be based upon the highest SVP level demonstrated by the worker in the performance of the jobs that the worker has successfully performed in the ten-year period preceding the date of disability determination, as follows:

(1) a worker with an SVP of one to two shall be awarded [four] six points;

(2) a worker with an SVP of three to four shall be awarded [three] five points;

(3) a worker with an SVP of five to six shall be awarded [two] four points; and

(4) a worker with an SVP of seven to nine shall be awarded [one point] two points.

D. A worker shall be awarded points based upon the training that the worker has received. A worker who cannot competently perform a specific vocational pursuit shall be awarded one [point] to five points pursuant to an agreement of the parties or a determination of the workers' compensation judge based on the reasonable likelihood that the worker will be able to return to a job for which the worker is trained and otherwise able to do. A worker who can perform a specific vocational pursuit shall not receive [any] less than two points or more than four points.

E. The sum of the points awarded the worker in Subsections B, C and D of this section shall constitute the education modification."

SECTION 3. Section 52-1-26.4 NMSA 1978 (being Laws 1990 (2nd S.S.), Chapter 2, Section 15, as amended) is amended to read:

"52-1-26.4. PARTIAL DISABILITY DETERMINATION--PHYSICAL CAPACITY MODIFICATION.--

A. The range of the physical capacity modification is one to eight.

B. The award of points to a worker shall be based upon the difference between the physical capacity necessary to perform the worker's usual and customary work and the worker's residual physical capacity. The award of points shall be based upon the following table:

RESIDUAL PHYSICAL CAPACITY

S L M H

PRE-INJURY S 1 1 1 1

PHYSICAL CAPACITY L 3 1 1 1

(USUAL AND M 5 3 1 1

CUSTOMARY WORK) H 8 5 3 1.

C. For the purposes of this section:

(1) "H" or "heavy" means the ability to lift over fifty pounds occasionally or up to fifty pounds frequently;

(2) "M" or "medium" means the ability to lift up to fifty pounds occasionally or up to twenty-five pounds frequently;

(3) "L" or "light" means the ability to lift up to twenty pounds occasionally or up to ten pounds frequently. Even though the weight lifted may be only a negligible amount, a job is in this category when it requires walking or standing to a significant degree or when it involves sitting most of the time with a degree of pushing and pulling of arm or leg controls or both; and

(4) "S" or "sedentary" means the ability to lift up to ten pounds occasionally or up to five pounds frequently. Although a sedentary job is defined as one that involves sitting, a certain amount of walking and standing is often necessary in carrying out job duties. Jobs are sedentary if walking and standing are required only occasionally and other sedentary criteria are met.

D. If a worker suffers a primary mental impairment, the workers' compensation judge shall award points to a worker based upon the difference between the physical capacity necessary to perform the worker's usual and customary work and the worker's residual physical capacity as affected by the primary mental impairment.

[D.] E. The determination of a worker's residual physical capacity shall be made by a health care provider defined in Subsection C, E or G of Section 52-4-1 NMSA 1978. If the worker or employer disagrees on who shall make this determination, the dispute shall be resolved in accordance with the provisions set forth in Section 52-1-51 NMSA 1978."

SECTION 4. Section 52-1-28.1 NMSA 1978 (being Laws 1990 (2nd S.S.), Chapter 2, Section 29) is amended to read:

"52-1-28.1. UNFAIR CLAIM-PROCESSING PRACTICES--BAD FAITH.--

A. Claims may be filed under the Workers' Compensation Act alleging unfair claim-processing practices or bad faith by an employer, insurer or claim-processing representative relating to any aspect of the Workers' Compensation Act. The director may also investigate allegations of unfair claim processing or bad faith on [his] the director's own initiative.

B. If unfair claim processing or bad faith has occurred in the handling of a particular claim, the claimant shall be awarded, in addition to any benefits due and owing, a benefit penalty not to exceed twenty-five percent of the benefit amount ordered to be paid.

C. If an employer, insurer or claim-processing representative has a history or pattern of repeated unfair claim-processing practices or bad faith, the director or a workers' compensation judge may impose a civil penalty of up to [one thousand dollars ($1,000)] five thousand dollars ($5,000) for each violation. The civil penalty shall be deposited in the workers' compensation administration fund.

D. Any person aggrieved by an order under this section may request a hearing pursuant to the Workers' Compensation Act.

E. The director shall adopt by regulation definitions of unfair claim-processing practices and bad faith.

F. This section shall not be construed as limiting or interfering with the authority of the superintendent of insurance as provided by law to regulate any insurer, including [his] the superintendent's jurisdiction over unfair claim-settlement practices.

G. This section shall not limit or interfere with a person's ability to pursue other remedies in the common law or statute for recovery of bad faith or unfair claims-processing practices against an employer, insurer or other party."

SECTION 5. Section 52-1-51 NMSA 1978 (being Laws 1929, Chapter 113, Section 19, as amended) is amended to read:

"52-1-51. PHYSICAL EXAMINATIONS OF WORKER--INDEPENDENT MEDICAL EXAMINATION--UNSANITARY OR INJURIOUS PRACTICES BY WORKER--TESTIMONY OF HEALTH CARE PROVIDERS.--

A. In the event of a dispute between the parties concerning [the reasonableness or necessity of medical or surgical treatment, the date upon which maximum medical improvement was reached, the correct impairment rating for the worker, the cause of an injury or any other medical issue, if the parties cannot agree upon the use of a specific independent medical examiner, either party may petition a workers' compensation judge for permission to have the worker undergo an independent medical examination] any medical issue, the parties may agree to have the worker undergo an independent medical examination to try to resolve the dispute. If the parties cannot agree on the doctor or doctors to perform the independent medical examination, they shall petition the administration to decide which doctor shall perform the independent medical examination. A workers' compensation judge may order an independent medical examination on a party's motion only if admissible medical evidence tends to prove that there is a bona fide medical dispute between the worker's authorized health care providers. If a workers' compensation judge believes that an independent medical examination will assist the judge with the proper determination of [any] a medical issue in the case, [including the cause of the injury] the workers' compensation judge may order an independent medical examination upon the judge's own motion. The workers' compensation judge shall describe in the order authorizing the independent medical examination, citing specific medical evidence from the case, how an independent medical examination will assist the judge with the proper determination of any medical issue. An independent medical examination shall be performed [immediately] as soon as possible, pursuant to procedures adopted by the director [by a health care provider other than the designated health care provider, unless the employer and the worker otherwise agree].

B. [In deciding who may conduct] If the workers' compensation judge is required to decide who shall perform the independent medical examination, the workers' compensation judge [shall not] may designate the health care provider initially chosen by the petitioner. The workers' compensation judge [shall] may also designate a health care provider [on] from the approved list of [persons] health care providers authorized by the committee appointed by the advisory council on workers' compensation to create that list. The decision of the workers' compensation judge shall be final. The employer shall pay for [any] all independent medical [examination] examinations.

C. Only a health care provider who has treated the worker pursuant to Section 52-1-49 NMSA 1978 or the health care provider providing the independent medical examination pursuant to this section may offer testimony at any workers' compensation hearing concerning the particular injury in question. An independent medical examination report shall be admissible evidence at any hearings pursuant to the Workers' Compensation Act, including formal hearings.

D. If, pursuant to Subsection C of Section 52-1-49 NMSA 1978, either party selects a new health care provider, the other party shall be entitled to periodic examinations of the worker by the health care provider the other party previously selected. Examinations may not be required more frequently than at six-month intervals; except that upon application to the workers' compensation judge having jurisdiction of the claim and after reasonable cause therefor, examinations within six-month intervals may be ordered. In considering such applications, the workers' compensation judge shall exercise care to prevent harassment of the claimant.

E. If an independent medical examination or an examination pursuant to Subsection D of this section is requested, the worker shall travel to the place at which the examination shall be conducted, which shall be set by the workers' compensation judge, unless the parties agree on the place at which the examination will be conducted. Within thirty days after the examination, the worker shall be compensated by the employer for all necessary and reasonable expenses incidental to submitting to the examination, including the cost of travel, meals, lodging, loss of pay or other like direct expense, but the amount to be compensated for meals and lodging shall not exceed that allowed for nonsalaried public officers under the Per Diem and Mileage Act.

F. No attorney shall be present at any examination authorized under this section.

G. Both the employer and the worker shall be given a copy of the report of the examination of the worker made by the independent health care provider pursuant to this section.

H. If a worker fails or refuses to submit to examination in accordance with this section, the worker shall forfeit all workers' compensation benefits that would accrue or become due to the worker except for that failure or refusal to submit to examination during the period that the worker persists in such failure and refusal unless the worker is by reason of disability unable to appear for examination.

I. If any worker persists in any unsanitary or injurious practice that [tends to imperil, retard or impair] imperils, retards or impairs the worker's recovery or [increase] increases the worker's disability or if the worker refuses to submit to [such] medical [or surgical] treatment [as] that is reasonably essential to promote the worker's recovery, the workers' compensation judge may in the judge's discretion reduce or suspend the workers' compensation benefits. Once the worker ceases the unsanitary or injurious practice or submits to the medical treatment, the employer and insurer shall reinstate the workers' compensation benefits and shall pay the worker any benefits that were not paid due to a reduction or suspension of benefits by the judge."

SECTION 6. Section 52-1-54 NMSA 1978 (being Laws 1987, Chapter 235, Section 24, as amended) is amended to read:

"52-1-54. FEE RESTRICTIONS--APPOINTMENT OF ATTORNEYS BY THE DIRECTOR OR WORKERS' COMPENSATION JUDGE--DISCOVERY

COSTS--OFFER OF JUDGMENT--PENALTY FOR VIOLATIONS.--

A. It is unlawful for any person to receive or agree to receive any fees or payment directly or indirectly in connection with any claim for compensation under the Workers' Compensation Act except as provided in this section.

B. No party shall pay an attorney a fee unless a workers' compensation judge has approved the fee.

[B.] C. In all cases where the jurisdiction of the workers' compensation administration is invoked to approve a settlement of a compensation claim under the Workers' Compensation Act, the director or workers' compensation judge, unless the claimant is represented by an attorney, may in the director's or judge's discretion appoint an attorney to aid the workers' compensation judge in determining whether the settlement should be approved and, in the event of an appointment, a reasonable fee for the services of the attorney shall be fixed by the workers' compensation judge, subject to the limitation of Subsection [I] K of this section.

[C.] D. In all cases where the jurisdiction of the workers' compensation administration is invoked to approve a settlement of a compensation claim under the Workers' Compensation Act and the claimant is represented by an attorney, the total amount paid or to be paid by the employer in settlement of the claim shall be stated in the settlement papers. The workers' compensation judge shall determine and fix a reasonable fee for the [claimant's attorney] parties' attorneys, taking into account any sum previously paid, and the fee fixed by the workers' compensation judge shall be the limit of the fee received or to be received by [the] any attorney in connection with the claim, subject to the limitation of Subsection [I] K of this section.

[D.] E. The cost of discovery shall be borne by the party who requests it. If, however, the claimant requests any discovery, the employer shall advance the cost of paying for discovery up to a limit of [three thousand dollars ($3,000)] six thousand dollars ($6,000). If the claimant [substantially] prevails on the claim, as determined by a workers' compensation judge, any discovery cost advanced by the employer shall be paid by that employer. If the claimant does not [substantially] prevail on the claim, as determined by a workers' compensation judge, the claimant shall reimburse the employer [shall be reimbursed] for discovery costs advanced according to a schedule for reimbursement approved by a workers' compensation judge.

[E.] F. In all cases where compensation to which any person is entitled under the provisions of the Workers' Compensation Act is refused and the claimant thereafter collects compensation through proceedings before the workers' compensation administration or courts in an amount in excess of the amount offered in writing by an employer five business days or more prior to the informal hearing before the administration, the compensation to be paid the attorney for the claimant shall be fixed by the workers' compensation judge hearing the claim or the courts upon appeal in the amount the workers' compensation judge or courts deem reasonable and proper, subject to the limitation of Subsection [I] M of this section.

G. In determining and fixing a reasonable fee for the parties' attorneys, the workers' compensation judge or courts shall take into consideration:

(1) the sum, if any, offered by the employer:

(a) before the worker's attorney was employed;

(b) after the attorney's employment but before proceedings were commenced; and

(2) the present value of the award made in the worker's favor; and

(3) any failure of a party to participate in a good-faith manner in informal claim resolution methods adopted by the director.

[F.] H. After a recommended resolution has been issued and rejected, but more than ten days before a trial begins, the employer or claimant may serve upon the opposing party an offer to allow a compensation order to be taken against the employer or claimant for the money or property or to the effect specified in the offer, with costs then accrued, subject to the following:

(1) if, within ten days after the service of the offer, the opposing party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof, and thereupon that compensation order may be entered as the workers' compensation judge may direct. An offer not accepted shall be deemed withdrawn, and evidence thereof is not admissible except in a proceeding to determine costs. If the compensation order finally obtained by the party is not more favorable than the offer, that party shall pay the costs incurred by the opposing party after the making of the offer. The fact that an offer has been made but not accepted does not preclude a subsequent offer;

(2) when the liability of one party to another has been determined by a compensation order, but the amount or extent of the liability remains to be determined by further proceedings, the party adjudged liable may make an offer, which shall have the same effect as an offer made before trial if it is served within a reasonable time not less than ten days prior to the commencement of hearings to determine the amount or extent of liability;

(3) if the employer's offer was greater than the amount awarded by the compensation order, the employer shall not be liable for the employer's fifty percent share of the attorney fees to be paid the worker's attorney and the worker shall pay one hundred percent of the attorney fees due to the worker's attorney; and

(4) if the worker's offer was less than the amount awarded by the compensation order, the employer shall pay one hundred percent of the attorney fees to be paid the worker's attorney, and the worker shall be relieved from any responsibility for paying any portion of the worker's attorney fees.

[G.] I. In all actions arising under the provisions of Section 52-1-56 NMSA 1978 where the jurisdiction of the workers' compensation administration is invoked to determine the question whether the claimant's disability has increased or diminished and the claimant is represented by an attorney, the workers' compensation judge or courts upon appeal shall determine and fix a reasonable fee for the services of the claimant's attorney only if the claimant is successful in establishing that the claimant's disability has increased or if the employer is unsuccessful in establishing that the claimant's disability has diminished. The fee when fixed by the workers' compensation judge or courts upon appeal shall be the limit of the fee received or to be received by the attorney for services in the action, subject to the limitation of Subsection [I] K of this section.

[H.] J. In determining reasonable attorney fees for a claimant, the workers' compensation judge shall consider only those benefits to the worker that the attorney is responsible for securing. At the judge's discretion, the value of future medical benefits [shall not] may be considered in determining attorney fees.

[I.] K. Attorney fees, including [but not limited to] the costs of paralegal services, legal clerk services and any other related legal services costs on behalf of a claimant or an employer for a single accidental injury claim, including representation before the workers' compensation administration and the courts on appeal, shall not exceed twenty-two thousand five hundred dollars ($22,500). This limitation applies whether the claimant or employer has one or more attorneys representing the claimant or employer and applies as a cumulative limitation on compensation for all legal services rendered in all proceedings and other matters directly related to a single accidental injury to a claimant. The workers' compensation judge may exceed the maximum amount stated in this subsection in awarding [a] reasonable attorney [fee] fees if the judge finds that a claimant, an insurer or an employer acted in bad faith with regard to handling the injured worker's claim and the injured worker or employer has suffered economic loss as a result. However, in no case shall this additional amount exceed [five thousand dollars ($5,000)] fifteen thousand dollars ($15,000). As used in this subsection, "bad faith" means conduct by the claimant, insurer or employer in the handling of a claim that amounts to fraud, malice, oppression or willful, wanton or reckless disregard of the rights of the worker or employer. Any determination of bad faith shall be made by the workers' compensation judge through a separate fact-finding proceeding. Notwithstanding the provisions of Subsection [J] M of this section, the party found to have acted in bad faith shall pay one hundred percent of the additional fees awarded for representation of the prevailing party in a bad faith action.

L. The limitation on the parties' attorney fees in Subsection K of this section shall not apply to permanent total disability claims. In a permanent total disability claim, either party's attorney may petition the administration for an order authorizing fees to be paid above the fee limit. If the fees requested satisfy the requirements for awarding fees, a judge shall order them paid.

[J.] M. Except as provided in Paragraphs (3) and (4) of Subsection [F] H of this section, the payment of a claimant's attorney fees determined under this section shall be shared equally by the worker and the employer.

[K.] N. It is unlawful for any person except a licensed attorney to receive or agree to receive any fee or payment for legal services in connection with any claim for compensation under the Workers' Compensation Act.

[L.] O. Nothing in this section applies to agents, excluding attorneys, representing employers, insurance carriers or the subsequent injury fund in any matter arising from a claim under the Workers' Compensation Act.

[M.] P. No attorney fees shall be paid to any party until the claim has been settled or adjudged.

[N.] Q. Every person violating the provisions of this section is guilty of a misdemeanor and upon conviction shall be fined not less than [fifty dollars ($50.00)] five hundred dollars ($500) or more than [five hundred dollars ($500)] five thousand dollars ($5,000), to which may be added imprisonment in the county jail for a term not exceeding ninety days.

[O.] R. Nothing in this section shall restrict a claimant from being represented before the workers' compensation administration by a nonattorney as long as that nonattorney receives no compensation for that representation from the claimant."

SECTION 7. Section 59A-16-30 NMSA 1978 (being Laws 1984, Chapter 127, Section 296.1, as amended) is amended to read:

"59A-16-30. PRIVATE RIGHT OF ACTION.--[Any] A person covered by Chapter 59A, Article 16 NMSA 1978 who has suffered damages as a result of a violation of that article by an insurer or agent is granted a right to bring an action in district court to recover actual damages. Costs shall be allowed to the prevailing party unless the court otherwise directs. The court may award [attorneys'] attorney fees to the prevailing party if:

A. the party complaining of the violation of that article has brought an action that [he] the party knew to be groundless; or

B. the party charged with the violation of that article has willfully engaged in the violation. The relief provided in this section is in addition to remedies otherwise available against the same conduct under the common law or other statutes of this state [provided, however, that the Workers' Compensation Act and the New Mexico Occupational Disease Disablement Law provide exclusive remedies]."

SECTION 8. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2017.

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