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MONTANA SELF INSURERS' ASSOCIATION

MSIA Legislative Update 3/17/23 - Week 10

  • Legislative Action – Not Much on Comp Bills
  • New Bill HB 836 – Regulatory Sandbox
  • MSF Annual Medical Conference Whitefish 4/26 - 28
  • WCRI Study on ‘Impact of Medical Provider Consolidation on WC Payments’
  • Legislative Action 
  • Late Bill Introduction

LC 3945             Nicol    R-Billings           This is a 147-page bill that just popped on the legislative web site. The State Fund refers to this as the annual ‘kill bill.’ It may have an impact on the market, and to the extent it impacts self-insurers ability to get things done in the system, MSIA will respond based on the potential impact. 

  • I have not read the bill yet – but this is always an important legislative proposal and draws a lot of attention and interest. LAWS Detailed Bill Information Page LC 3945


While the legislature is back, they’ve been spending more time this week with budget and social issues which do not affect our business as much. This week, the action was mostly scheduling hearings on bills we are concerned with for next week. 


Never consider a bill dead – really dead - until the day after the legislature goes home. As a result, we will continue to monitor all the legislation previously reported. When there is action, or a change, we will update the report. Otherwise, if the bill is not reported on, nothing has happened since the last report. 


SB 22                  Morigeau          D-Missoula                    This bill is the clean-up of the attempt last session to require the Department of Labor to do more investigation regarding an independent contractor or employee designation in addition to relying on the presence, or absence, of an ICEC. The bill has been amended so that someone who presents an Independent Contractor Exemption Certificate (ICEC) is presumed to be an independent contractor, unless the ICEC is forged or otherwise fraudulent, or the ICEC expired within 120 days while working with that contractor. The amended bill passed final reading in the Senate 48 – 0 on 2/16. The bill has been set for a hearing in the House Business & Labor Committee on 3/23. MSIA supports the amended version of the bill.


SB 165                Usher                 R-Billings                         This bill requires first and third party claimants against insurers to provide information and cooperate with an insurers’ claims adjudication process in a timely manner and provides insurers an affirmative defense if they do not. In addition, it amends the Unfair Trade Practices Act (UTPA) so that third party claimants would no longer have a common law bad faith action opportunity against insurers, as created in the BREWINGTON v EMPLOYERS FIRE INS C :: 1999 :: Montana Supreme Court Decision. Under the current law, first party claimants (your insured) have a private right of action against their insurer, should the company not deal in good faith in adjudicating the claim. Third party claimants, under this proposal, would specifically have the same rights, and be limited to those rights. The bill passed final reading in the Senate 34-14 along party lines on 2/16. The bill has been set for a hearing in the House Business & Labor Committee on 3/23. MSIA supports this bill.


SB 260               D Salomon        R-Ronan                          This bill would change the Unfair Trade Practices Act (UTPA) in the insurance law so that the independent cause of action section of the UTPA claims practices clause does not apply to a captive insurance company (but does apply to captive risk retention groups). Currently the language of 33-18-242 (8) specifically includes self-insurance as being covered under the law. However, self-insurance is not defined in the insurance code. A Supreme Court decision, Dannels v BNSF (Dannels v. BNSF :: 2021 :: Montana Supreme Court Decision) specifically addressed the application of the unfair claims practices application and the private right of action to both captives and self-insurers (see Justice Sandifurs’ consent). Together with SB 165, above, the UTPA will be strengthened to limit actions against self-insurers that are permitted under current law. The bill passed final reading in the Senate 46 – 4 on 2/14. The bill has been set for hearing on 3/21 in front of the House Business & Labor Committee. MSIA supports this bill. 


HB 178               K. Walsh           R-Twin Bridges              This bill clarifies that injuries which occur off the clock and as the result of social or recreational activity on the employer’s premises are not compensable. The bill defines that a social or recreational activity is one that includes exercise, pleasure, relaxation, or voluntary optional preparation related to the employment. For example, should a ski area or golf course employee injure themselves while skiing or golfing off the clock during a work day, they would not be covered by WC in that specific instance. MSIA supported this bill. The bill was sent to the Governor on 3/14; he is expected to sign it. 


HB 702             Harvey               D – Butte                         This bill repeals the sunset provision of the 2019 law that has the state reimburse employers for increased workers’ compensation cost for being involved in certain work-based learning programs. The bill is set for hearing in front of the Senate Business, Labor & Economic Affairs Committee on 3/14. The bill passed the House on 3/2 by a vote of 96 - 3. MSIA is monitoring this bill.  


HB 636               J. Kassmier        R-Bozeman                     This bill would reduce the corporate officer/owner threshold for WC coverage exemption from 20% ownership of the business to 10%. The bill passed the House on 3/2 by a vote of 96 - 3. The bill is set for hearing in front of the Senate Business, Labor & Economic Affairs Committee on 3/24. MSIA is monitoring this bill. 


HB 313               Etchart             R-Billings                          This bill, as amended, would permit Physician Assistants (PA’s) with a minimum of 6000 hours (3 years) of experience to have an independent practice. Under current law, PA’s must work under a supervising physician. The bill passed the House on 2/28 by a vote of 92 – 6. This bill is set for hearing in front of the Senate Business, Labor & Economic Affairs Committee on 3/22. MSIA can support the amended version of the bill. 


HB 836               K. Zolnikov        R-Billings                        This bill is an MSF idea to create a ‘regulatory sandbox’ to allow for additional, limited experimentation within the marketplace. The idea is to permit new ideas that do not fit within the regulatory scheme to have some freedom to betested out, within a somewhat controlled environment. The bill permits these experiments as long as there is a written business plan, no negative impacts to consumers and no negative impacts to the financial solvency of the insurance carrier and it would be limited to 10,000 policyholders. An ‘innovation waiver’ from regulation for a period of up to three years would be provided and reporting would be required, and it only applies to property and casualty insurance. MSF reports they would like to see how it might be applied to return to work and safety programs in workers’ compensation. Despite the insurance code not applying to self-insurers, within the context of return to work an safety programs, MSIA can support the proposal. 


  • MSF Annual Medical Conference – Whitefish 4/26 - 28

Managing Recovery & Return to Work is the theme of Montana State Fund’s 21st annual medical conference. This year the event will be held at the Lodge at Whitefish Lake, April 26-28, 2023, in Whitefish, MT. 

The MSF Annual Medical Conference has been one of the more in depth medical conferences for Montana WC professionals. It was designed to help us understand and connect with the Montana medical community and provide an opportunity for them to connect with us. 

With the expansion from one day to two, MSF has taken advantage of bringing in more prominent speakers. This year I am familiar with some and know they will provide insight and interesting presentations. Bill Zachry, formerly with Safeway and Board Chair for the CA State Insurance Fund, Dr. Marcos Iglesias, VP and Chief Medical Director for Travelers and Tyrone Spears, City of Los Angeles Division Director, heading up their self insured workers’ compensation program are all excellent speakers and bring approaches to our work that sets them apart. 

Conference Topics

  • Claims: A Medical Perspective – R. David Bauer, MD, Orthopedic Independent Medical Examinations
  • Medical Technology in Workers’ Compensation – Bill Zachry
  • Preventing Delayed Recovery by Addressing Psychosocial Barriers – Dr. Marcos Iglesias
  • A Comprehensive Approach to Pain Medicine – Aaron Cross, DO Helena Orthopedic Clinic
  • Successes and Challenges with Return to Work – Tyrone Spears
  • Medical Expert Testimony – Imperatives, Principles and Methodologies – Donald Sinclair, Attorney, Steptoe & Johnson, PLLC 
  • A Perspective from the Workers’ Compensation Court – MT WC Court Judge David Sandler
  • Tears and Lies My Radiologist Told Me – R. David Bauer
  • The Story You Don’t Hear About: How Caregivers Changed My Life for the Better – Cody Byrns, Founder Cody Byrns Foundation for Burn Survivors


Register for Conference and Book Hotel Accommodations.


  • WCRI Study on ‘Impact of Medical Provider Consolidation on WC Payments’


WCRI is hosting their Annual Conference next week in Phoenix. MSIA is a member of WCRI and will be at the Annual Conference. Typically, WCRI also releases some reports just prior to the Conference, and provides more detailed presentations on their findings at the meeting. As a member, MSIA makes WCRI studies available to our members. 


The ‘Impact of Medical Provider Consolidation on Workers’ Compensation Payments’ was released this week. 


We know that the business of medicine has changed significantly within the last decade or so with Health Systems purchasing independent practices and more mergers within the business. According to WCRI, many group health studies have found the growing concentration of providers may lead to higher payments without corresponding improvements in patient outcome. What has been the impact on WC costs, if anything?


  • Between 2012 and 2018, the study range, the percentage of physicians practicing at sites owned by hospitals or health systems (defined as more than one hospital in the same ownership group) increased from 32 to 49% for primary care physicians and from 18 to 35% for orthopedic surgeons. 


  • On average, vertical integration (of physicians becoming part of a hospital or health system) increased payments per procedure, service type and per day by 8, 10 and 10%. However, holding the mix of procedures constant over time, WCRI found the vertical integration led to increases of around 2 percent. This suggests, according to WCRI, that most of the changes in WC payment resulting from vertical integration are likely attributable to changes in the utilization, rather than changes in price per procedure. There may be changes in billing or increases in the volume or complexity of services as well. 


  • Again, on average, vertical integration lead to primary care physician payment increases of 14 – 22% and 4 – 6% for orthopedic surgeons. Note that the dollar amounts could be very different based on the fact that orthopedic surgeon costs are likely to be significantly higher than primary care physicians. 


WCRI found that states with medical fee schedules (as in the case of Montana) had lower price increases due to vertical integration. Even so, changes in price were also impacted by the changes in the nature of care provided – utilization and complexity of services - as well as billing practices. 


Data for the WCRI study comes from the WCRI Detailed Benchmark/Evaluation database from 34 states - Montana is not included. 


See you next week!