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 9  AN ACT concerning the workers compensation act; relating to defining
10    disability and establishing certain other procedures thereunder;
11    amending K.S.A. 44-511, 44-528 and 44-536 and K.S.A. 1996 Supp.
12    44-510, 44-510e and 75-5708 and repealing the existing sections.
13
14  Be it enacted by the Legislature of the State of Kansas:
15    Section 1.  K.S.A. 1996 Supp. 44-510 is hereby amended to read as
16  follows: 44-510. Except as otherwise provided therein, medical compen-
17  sation under the workers compensation act shall be as follows:
18    (a)  It shall be the duty of the employer to provide the services of a
19  health care provider, and such medical, surgical and hospital treatment,
20  including nursing, medicines, medical and surgical supplies, ambulance,
21  crutches, and apparatus, and transportation to and from the home of the
22  injured employee to a place outside the community in which such em-
23  ployee resides, and within such community if the director in the director's
24  discretion so orders, including transportation expenses computed in ac-
25  cordance with subsection (a) of K.S.A. 44-515 and amendments thereto,
26  as may be reasonably necessary to cure and relieve the employee from
27  the effects of the injury.
28    (1)  The director shall appoint, subject to the approval of the secretary,
29  a specialist in health services delivery, who shall be referred to as the
30  medical administrator. The medical administrator shall be a person li-
31  censed to practice medicine and surgery in this state and shall be in the
32  unclassified service under the Kansas civil service act. The medical ad-
33  ministrator, subject to the direction of the director, shall have the duty
34  of overseeing the providing of health care services to employees in ac-
35  cordance with the provisions of the workers compensation act, including
36  but not limited to:
37    (A)  Preparing, with the assistance of the advisory panel, the fee
38  schedule for health care services as set forth in this section;
39    (B)  developing, with the assistance of the advisory panel, the utili-
40  zation review program for health care services as set forth in this section;
41    (C)  developing procedures for appeals and review of disputed
42  charges or services rendered by health care providers under this section;
43    (D)  developing a system for collecting and analyzing data on expend-
SB 289
                                     

 1  itures for health care services by each type of provider under the workers
 2  compensation act; and
 3    (E)  carrying out such other duties as may be delegated or directed
 4  by the director or secretary.
 5    (2)  The director shall prepare and adopt rules and regulations, which
 6  shall be in effect on or before July 1, 1993, and which establish a schedule
 7  of maximum fees for medical, surgical, hospital, dental, nursing, voca-
 8  tional rehabilitation or any other treatment or services provided or or-
 9  dered by health care providers and rendered to employees under the
10  workers compensation act. The schedule shall include provisions and re-
11  view procedures for exceptional cases involving extraordinary medical
12  procedures or circumstances and shall include costs and charges for med-
13  ical records and testimony.
14    (3)  The schedule of maximum fees shall be reasonable, shall promote
15  health care cost containment and efficiency with respect to the workers
16  compensation health care delivery system, and shall be sufficient to en-
17  sure availability of such reasonably necessary treatment, care and atten-
18  dance to each injured employee to cure and relieve the employee from
19  the effects of the injury.
20    (4) (A)  In every case, all fees, transportation costs, charges under this
21  section and all costs and charges for medical records and testimony shall
22  be subject to approval by the director and shall be limited to such as are
23  fair, reasonable and necessary. The schedule of maximum fees shall be
24  reviewed annually by the director to assure that the schedule is current,
25  reasonable and fair.
26    (B)  There is hereby created an advisory panel to assist the director
27  in establishing a schedule of maximum fees as required by this section.
28  The panel shall consist of the commissioner of insurance and seven mem-
29  bers appointed as follows:  (i) One person shall be appointed by the Kansas
30  medical society, (ii) one member shall be appointed by the Kansas asso-
31  ciation of osteopathic medicine, (iii) one member shall be appointed by
32  the Kansas hospital association, (iv) one member shall be appointed by
33  the Kansas chiropractic association, and (v) three members appointed by
34  the secretary. One member appointed by the secretary shall be a repre-
35  sentative of employers recommended to the secretary by the Kansas
36  chamber of commerce and industry. One member appointed by the sec-
37  retary shall be a representative of employees recommended to the sec-
38  retary by the Kansas AFL-CIO. One member appointed by the secretary
39  shall be a representative of entities providing vocational rehabilitation
40  services pursuant to K.S.A. 44-510g and amendments thereto. Each ap-
41  pointed member shall be appointed for a term of office of two years which
42  shall commence on July 1 of the year of appointment.
43    (C)  All fees and other charges paid for such treatment, care and at-
SB 289
                                     

 1  tendance, including treatment, care and attendance provided by any
 2  health care provider, hospital or other entity providing health care serv-
 3  ices, shall not exceed the amounts prescribed by the schedule of maxi-
 4  mum fees established under this section or the amounts authorized pur-
 5  suant to the provisions and review procedures prescribed by the schedule
 6  for exceptional cases. A health care provider, hospital or other entity pro-
 7  viding health care services shall be paid either such health care provider,
 8  hospital or other entity's usual charge for the treatment, care and atten-
 9  dance or the maximum fees as set forth in the schedule, whichever is less.
10  In reviewing and approving the schedule of maximum fees, the director
11  shall consider the following:
12    (i)  The levels of fees for similar treatment, care and attendance im-
13  posed by other health care programs or third-party payors in the locality
14  in which such treatment or services are rendered;
15    (ii)  the impact upon cost to employers for providing a level of fees
16  for treatment, care and attendance which will ensure the availability of
17  treatment, care and attendance required for injured employees;
18    (iii)  the potential change in workers compensation insurance premi-
19  ums or costs attributable to the level of treatment, care and attendance
20  provided; and
21    (iv)  the financial impact of the schedule of maximum fees upon health
22  care providers and health care facilities and its effect upon their ability
23  to make available to employees such reasonably necessary treatment, care
24  and attendance to each injured employee to cure and relieve the em-
25  ployee from the effects of the injury.
26    (D)  Members of the advisory panel attending meetings of the advi-
27  sory panel, or attending a subcommittee of the advisory panel authorized
28  by the advisory panel, shall be paid subsistence allowances, mileage and
29  other expenses as provided in K.S.A. 75-3223 and amendments thereto.
30    (5)  Any contract or any billing or charge which any health care pro-
31  vider, vocational rehabilitation service provider, hospital, person, or in-
32  stitution enters into with or makes to any patient for services rendered in
33  connection with injuries covered by the workers compensation act or the
34  fee schedule adopted under this section, which is or may be in excess of
35  or not in accordance with such act or fee schedule, is unlawful, void and
36  unenforceable as a debt.
37    (6)  The director shall have jurisdiction to hear and determine all dis-
38  putes as to such charges and interest due thereon and shall prescribe
39  procedural rules to be followed by the parties to such disputes. In the
40  event of any controversy arising under this section, payments shall not be
41  delayed for any amounts not in dispute or controversy. Acceptance by
42  any provider of services of a payment amount under this section which is
43  less than the full amount charged for the services, shall not affect the
SB 289
                                     

 1  right to have a review of the claim for the outstanding or remaining
 2  amounts. In the event of a dispute as to such charges, the health care
 3  provider, hospital, institution, person or other provider under this section
 4  may appear and be represented in the action under the workers com-
 5  pensation act.
 6    (7)  If the director finds, after utilization review and peer review, that
 7  a provider or facility has made excessive charges or provided or ordered
 8  unjustified treatment, services, hospitalization or visits, the provider or
 9  facility shall not receive payment pursuant to this section from an insur-
10  ance carrier, employer or employee for the excessive fees or unjustified
11  treatment, services, hospitalization or visits and such provider or facility
12  shall repay any fees or charges collected therefor.
13    (8)  Not later than December 31, 1993, the director shall develop and
14  implement, or contract with a qualified entity to develop and implement,
15  utilization review and peer review procedures relating to the services
16  rendered by providers and facilities, which services are paid for in whole
17  or in part pursuant to the workers compensation act. The director may
18  contract with one or more private foundations or organizations to provide
19  utilization review, as appropriate, of entities providing health care services
20  or vocational rehabilitation services, or both, pursuant to the workers
21  compensation act.
22    (9)  By accepting payment pursuant to this section for treatment or
23  services rendered to an injured employee, a health care provider or health
24  care facility shall be deemed to consent to submitting all necessary records
25  to substantiate the nature and necessity of the service or charge and other
26  information concerning such treatment to utilization review and peer re-
27  view under this section. Such health care provider shall comply with any
28  decision of the director pursuant to subsection (a)(10).
29    (10)  If it is determined by a peer review committee that a provider
30  improperly overutilized or otherwise rendered or ordered unjustified
31  treatment or services or that the fees for such treatment or services were
32  excessive, the director may order the provider to show cause why the
33  provider should not be required to repay the amount which was paid for
34  rendering or ordering such treatment or services and shall provide the
35  provider a hearing thereon if requested. If a hearing is not requested
36  within 30 days of receipt of the order and the director decides to proceed
37  with the matter, a hearing shall be conducted and if a prima facie case is
38  established a final order shall be issued by the director. If the final order
39  is adverse to a health care provider, the director shall provide a report to
40  the licensing board of the health care provider with full documentation
41  of any such determination, except that no such report shall be provided
42  until after judicial review if the order is appealed. Any order of the di-
43  rector under this section shall be subject to review by the board.
SB 289
                                     

 1    (11)  Except as provided by K.S.A. 60-437 and amendments thereto
 2  or this section, all reports, information, statements, memoranda, pro-
 3  ceedings, findings and records which relate to utilization review or peer
 4  review conducted pursuant to this section, including any records of peer
 5  review committees, shall be privileged and shall not be subject to discov-
 6  ery, subpoena, or other means of legal compulsion for release to any
 7  person or entity and shall not be admissible in evidence in any judicial or
 8  administrative proceeding, except those proceedings authorized pursuant
 9  to this section.
10    (12)  A provider or facility may not improperly charge or overcharge
11  a workers compensation insurer or charge for services which were not
12  provided, for the purpose of obtaining additional payment.
13    (13)  Any violation of the provisions of this section which is willful or
14  which demonstrates a pattern of improperly charging or overcharging
15  workers compensation insurers constitutes grounds for the director to
16  impose a civil fine not to exceed $5,000. Any civil fine imposed under
17  this section shall be subject to review in accordance with the act for
18  judicial review and civil enforcement of agency actions in the district court
19  for Shawnee county. All moneys received for civil fines imposed under
20  this section shall be deposited in the state treasury to the credit of the
21  workers compensation fund.
22    (14)  As used in this subsection (a), unless the context or the specific
23  provisions require otherwise, ``provider'' means any health care provider
24  or vocational rehabilitation service provider, and ``facility'' means any fa-
25  cility providing health care services or vocational rehabilitation services,
26  or both, including any hospital.
27    (b)  Any health care provider, nurse, physical therapist, any entity pro-
28  viding medical, physical or vocational rehabilitation services or providing
29  reeducation or training pursuant to K.S.A. 44-510g and amendments
30  thereto, medical supply establishment, surgical supply establishment, am-
31  bulance service or hospital who accept the terms of the workers compen-
32  sation act by providing services or material thereunder shall be bound by
33  the fees approved by the director and no injured employee or dependent
34  of a deceased employee shall be liable for any charges above the amounts
35  approved by the director. If the employer has knowledge of the injury
36  and refuses or neglects to reasonably provide the services of a health care
37  provider required by this section, the employee may provide the same
38  for such employee, and the employer shall be liable for such expenses
39  subject to the regulations adopted by the director. In any case where the
40  employer neglects or refuses to provide medical treatment under a good
41  faith belief that an employee's claim is non-compensable, and the director
42  subsequently finds in a preliminary hearing that the employee's claim is
43  compensable, the employer shall have the right thereafter to furnish the
SB 289
                                     

 1  services of a health care provider of the employer's choosing who shall be
 2  the authorized treating physician. No action shall be filed in any court by
 3  a health care provider or other provider of services under this section for
 4  the payment of an amount for medical services or materials provided
 5  under the workers compensation act and no other action to obtain or
 6  attempt to obtain or collect such payment shall be taken by a health care
 7  provider or other provider of services under this section, including em-
 8  ploying any collection service, until after final adjudication of any claim
 9  for compensation for which an application for hearing is filed with the
10  director under K.S.A. 44-534 and amendments thereto. In the case of
11  any such action filed in a court prior to the date an application is filed
12  under K.S.A. 44-534 and amendments thereto, no judgment may be en-
13  tered in any such cause and the action shall be stayed until after the final
14  adjudication of the claim. In the case of an action stayed hereunder, any
15  award of compensation shall require any amounts payable for medical
16  services or materials to be paid directly to the provider thereof plus an
17  amount of interest at the rate provided by statute for judgments. No
18  period of time under any statute of limitation, which applies to a cause
19  of action barred under this subsection, shall commence or continue to
20  run until final adjudication of the claim under the workers compensation
21  act.
22    (c) (1)  If the director finds, upon application of an injured employee,
23  that the services of the health care provider furnished as provided in
24  subsection (a) and rendered on behalf of the injured employee are not
25  satisfactory, the director may authorize the appointment of some other
26  health care provider. In any such case, the employer shall submit the
27  names of three health care providers that are not associated in practice
28  together. The injured employee may select one from the list who shall
29  be the authorized treating health care provider. If the injured employee
30  is unable to obtain satisfactory services from any of the health care pro-
31  viders submitted by the employer under this subsection (c)(1), either
32  party or both parties may request the director to select a treating health
33  care provider.
34    (2)  Without application or approval, an employee may consult a
35  health care provider of the employee's choice for the purpose of exami-
36  nation, diagnosis or treatment, but the employer shall only be liable for
37  the fees and charges of such health care provider up to a total amount of
38  $500. The amount allowed for such examination, diagnosis or treatment
39  shall not be used to obtain a functional impairment rating. Any medical
40  opinion obtained in violation of this prohibition shall not be admissible
41  in any claim proceedings under the workers compensation act.
42    (d)  An injured employee whose injury or disability has been estab-
43  lished under the workers compensation act may rely, if done in good faith,
SB 289
                                     

 1  solely or partially on treatment by prayer or spiritual means in accordance
 2  with the tenets of practice of a church or religious denomination without
 3  suffering a loss of benefits subject to the following conditions:
 4    (1)  The employer or the employer's insurance carrier agrees thereto
 5  in writing either before or after the injury;
 6    (2)  the employee submits to all physical examinations required by the
 7  workers compensation act;
 8    (3)  the cost of such treatment shall be paid by the employee unless
 9  the employer or insurance carrier agrees to make such payment;
10    (4)  the injured employee shall be entitled only to benefits that would
11  reasonably have been expected had such employee undergone medical
12  or surgical treatment; and
13    (5)  the employer or insurance carrier that made an agreement under
14  paragraph (1) or (3) of this subsection may withdraw from the agreement
15  on 10 days' written notice.
16    (e)  In any employment to which the workers compensation act ap-
17  plies, the employer shall be liable to each employee who is employed as
18  a duly authorized law enforcement officer, ambulance attendant, mobile
19  intensive care technician or firefighter, including any person who is serv-
20  ing on a volunteer basis in such capacity, for all reasonable and necessary
21  preventive medical care and treatment for hepatitis to which such em-
22  ployee is exposed under circumstances arising out of and in the course
23  of employment.
24    (f)  No person shall be subject to civil liability for libel, slander or any
25  other relevant tort cause of action by virtue of performing utilization
26  review or peer review under contract with the director pursuant to sub-
27  section (a)(7).
28    Sec. 2.  K.S.A. 1996 Supp. 44-510e is hereby amended to read as
29  follows: 44-510e. (a) If the employer and the employee are unable to
30  agree upon the amount of compensation to be paid in the case of injury
31  not covered by the schedule in K.S.A. 44-510d and amendments thereto,
32  the amount of compensation shall be settled according to the provisions
33  of the workers compensation act as in other cases of disagreement, except
34  that in case of temporary or permanent partial general disability not cov-
35  ered by such schedule, the employee shall receive weekly compensation
36  as determined in this subsection during such period of temporary or per-
37  manent partial general disability not exceeding a maximum of 415 weeks.
38  Weekly compensation for temporary partial general disability shall be
39   662/3% of the difference between the average gross weekly wage that the
40  employee was earning prior to such injury as provided in the workers
41  compensation act and the amount the employee is actually earning after
42  such injury in any type of employment, except that in no case shall such
43  weekly compensation exceed the maximum as provided for in K.S.A. 44-
SB 289
                                     

 1  510c and amendments thereto. Permanent partial general disability exists
 2  when the employee is disabled in a manner which is partial in character
 3  and permanent in quality and which is not covered by the schedule in
 4  K.S.A. 44-510d and amendments thereto. The extent of permanent partial
 5  general disability shall be the extent, expressed as a percentage, to which
 6  the employee, in the opinion of the physician, has lost the ability to per-
 7  form the work tasks that the employee performed in any substantial gain-
 8  ful employment during the fifteen-year period preceding the accident,
 9  averaged together with the difference between the average weekly wage
10  the worker was earning at the time of the injury and the average weekly
11  wage the worker is earning after the injury. In any event, The extent of
12  permanent partial general disability shall not be less than the percentage
13  of functional impairment. Functional impairment means the extent, ex-
14  pressed as a percentage, of the loss of a portion of the total physiological
15  capabilities of the human body as established by competent medical ev-
16  idence and based on the fourth edition of the American Medical Asso-
17  ciation Guides to the Evaluation of Permanent Impairment, if the im-
18  pairment is contained therein. An employee shall not be entitled to
19  receive permanent partial general disability compensation in excess of the
20  percentage of functional impairment as long as the employee is engaging
21  in any work for wages equal to 90% or more of the average gross weekly
22  wage that the employee was earning at the time of the injury. If the
23  employee is not engaging in any work for wages equal to 90% or more of
24  the average gross weekly wage that the employee was earning at the time
25  of the injury, the employee shall be entitled to supplemental functional
26  disability compensation. If the employer and the employee are unable to
27  agree upon the employee's functional impairment and if at least two med-
28  ical opinions based on competent medical evidence disagree as to the
29  percentage of functional impairment, such matter may be referred by the
30  administrative law judge to an independent health care provider who shall
31  be selected by the administrative law judge from a list of health care
32  providers maintained by the director. The health care provider selected
33  by the director pursuant to this section shall issue an opinion regarding
34  the employee's functional impairment which shall be considered by the
35  administrative law judge in making the final determination. The amount
36  of weekly compensation for permanent partial general disability shall be
37  determined as follows:
38    (1)  Find the payment rate which shall be the lesser of (A) the amount
39  determined by multiplying the average gross weekly wage of the worker
40   prior to such injury by 662/3% or (B) the maximum provided in K.S.A. 44-
41  510c and amendments thereto;
42    (2)  find the number of disability weeks payable by subtracting from
43  415 weeks the total number of weeks of temporary total disability com-
SB 289
                                     

 1  pensation was paid, excluding the first 15 weeks of temporary total disa-
 2  bility compensation that was paid, and multiplying the remainder by the
 3  percentage of permanent partial general disability functional impairment
 4  as determined under this subsection (a); and
 5    (3)  multiply the number of disability weeks determined in paragraph
 6    (2) of this subsection (a) by the payment rate determined in paragraph
 7    (1) of this subsection (a).
 8    (4)  If the employee is entitled to supplemental functional disability
 9  compensation, the amount of such compensation shall be calculated by
10  determining the percentage difference between the average weekly wage
11  the worker was earning at the time of the injury and the average weekly
12  wage the employee is earning after the injury. The percentage difference
13  will represent the number of weeks of supplemental compensation for
14  functional impairment to be paid in addition to the disability weeks de-
15  termined in paragraph (3) of this subsection. If the worker is unemployed
16  or is not earning a wage at the time of the decision, the trier of fact shall
17  impute a postinjury average weekly wage based upon evidence in the
18  record.
19    The resulting award shall be paid for the number of disability weeks at
20  the full payment rate until fully paid or modified. If there is an award of
21  permanent disability as a result of the compensable injury, there shall be
22  a presumption that disability existed immediately after such injury. In any
23  case of permanent partial disability under this section, the employee shall
24  be paid compensation for not to exceed 415 weeks following the date of
25  such injury, subject to review and modification as provided in K.S.A. 44-
26  528 and amendments thereto.
27    (b)  If an employee has received an injury for which compensation is
28  being paid, and the employee's death is caused by other and independent
29  causes, any payment of compensation already due the employee at the
30  time of death and then unpaid shall be paid to the employee's dependents
31  directly or to the employee's legal representatives if the employee left no
32  dependent, but the liability of the employer for the payments of com-
33  pensation not yet due at the time of the death of such employee shall
34  cease and be abrogated by the employee's death.
35    (c)  The total amount of compensation that may be allowed or
36  awarded an injured employee for all injuries received in any one accident
37  shall in no event exceed the compensation which would be payable under
38  the workers compensation act for 100% permanent total disability re-
39  sulting from such accident.
40    (d)  Where a minor employee or a minor employee's dependents are
41  entitled to compensation under the workers compensation act, such com-
42  pensation shall be exclusive of all other remedies or causes of action for
43  such injury or death, and no claim or cause of action against the employer
SB 289
                                     

 1  shall inure or accrue to or exist in favor of the parent or parents of such
 2  minor employee on account of any damage resulting to such parent or
 3  parents on account of the loss of earnings or loss of service of such minor
 4  employee.
 5    (e)  In any case of injury to or death of an employee, where the em-
 6  ployee or the employee's dependents are entitled to compensation under
 7  the workers compensation act, such compensation shall be exclusive of
 8  all other remedies or causes of action for such injury or death, and no
 9  claim or action shall inure, accrue to or exist in favor of the surviving
10  spouse or any relative or next of kin of such employee against such em-
11  ployer on account of any damage resulting to such surviving spouse or
12  any relative or next of kin on account of the loss of earnings, services, or
13  society of such employee or on any other account resulting from or grow-
14  ing out of the injury or death of such employee.
15    Sec. 3.  K.S.A. 44-511 is hereby amended to read as follows: 44-511.
16    (a) As used in this section:
17    (1)  The term ``money'' shall be construed to mean the gross remu-
18  neration, on an hourly, output, salary, commission or other basis, at which
19  the service rendered is recompensed in money by the employer, but it
20  shall not include any additional compensation, as defined in this section,
21  any remuneration in any medium other than cash, or any other compen-
22  sation or benefits received by the employee from the employer or any
23  other source.
24    (2)  The term ``additional compensation'' shall include and mean only
25  the following: (A) Gratuities in cash received by the employee from per-
26  sons other than the employer for services rendered in the course of the
27  employee's employment; (B) any cash bonuses paid by the employer
28  within one year prior to the date of the accident, for which the average
29  weekly value shall be determined by averaging all such bonuses over the
30  period of time employed prior to the date of the accident, not to exceed
31  52 weeks; (C) board and lodging when furnished by the employer as part
32  of the wages, which shall be valued at a maximum of $25 per week for
33  board and lodging combined, unless the value has been fixed otherwise
34  by the employer and employee prior to the date of the accident, or unless
35  a higher weekly value is proved; (D) the average weekly cash value of
36  remuneration for services in any medium other than cash where such
37  remuneration is in lieu of money, which shall be valued in terms of the
38  average weekly cost to the employer of such remuneration for the em-
39  ployee; and (E) employer-paid life insurance, health and accident insur-
40  ance and employer contributions to pension and profit sharing plans. In
41  no case shall additional compensation include any amounts of employer
42  taxes paid by the employer under the old-age and survivors insurance
43  system embodied in the federal social security system. Additional com-
SB 289
                                     

 1  pensation shall not include the value of such remuneration until and un-
 2  less such remuneration is discontinued. If such remuneration is discon-
 3  tinued subsequent to a computation of average gross weekly wages under
 4  this section, there shall be a recomputation to include such discontinued
 5  remuneration. However, such remuneration shall not be deemed discon-
 6  tinued if the employee voluntarily separates from employment for reasons
 7  unrelated to the work-related injury or if the employee is terminated from
 8  employment for reasons unrelated to the work-related injury.
 9    (3)  The term ``wage'' shall be construed to mean the total of the
10  money and any additional compensation which the employee receives for
11  services rendered for the employer in whose employment the employee
12  sustains an injury by accident arising out of and in the course of such
13  employment.
14    (4)  The term ``part-time hourly employee'' shall mean and include
15  any employee paid on an hourly basis: (A) Who by custom and practice
16  or under the verbal or written employment contract in force at the time
17  of the accident is employed to work, agrees to work, or is expected to
18  work on a regular basis less than 40 hours per week; and (B) who at the
19  time of the accident is working in any type of trade or employment where
20  there is no customary number of hours constituting an ordinary day in
21  the character of the work involved or performed by the employee.
22    (5)  The term ``full-time hourly employee'' shall mean and include
23  only those employees paid on an hourly basis who are not part-time hourly
24  employees, as defined in this section, and who are employed in any trade
25  or employment where the customary number of hours constituting an
26  ordinary working week is 40 or more hours per week, or those employees
27  who are employed in any trade or employment where such employees
28  are considered to be full-time employees by the industrial customs of
29  such trade or employment, regardless of the number of hours worked
30  per day or per week.
31    (b)  The employee's average gross weekly wage for the purpose of
32  computing any compensation benefits provided by the workers compen-
33  sation act shall be determined as follows:
34    (1)  If at the time of the accident the money rate is fixed by the year,
35  the average gross weekly wage shall be the yearly rate so fixed divided by
36  52, plus the average weekly value of any additional compensation and the
37  value of the employee's average weekly overtime as computed in para-
38  graph (4) of this subsection.
39    (2)  If at the time of the accident the money rate is fixed by the month,
40  the average gross weekly wage shall be the monthly rate so fixed multi-
41  plied by 12 and divided by 52, plus the average weekly value of any
42  additional compensation and the value of the employee's average weekly
43  overtime computed as provided in paragraph (4) of this subsection.
SB 289
                                     

 1    (3)  If at the time of the accident, the money rate is fixed by the week,
 2  the amount so fixed, plus the average weekly value of any additional com-
 3  pensation and the value of the employee's average weekly overtime as
 4  computed in paragraph (4) of this subsection, shall be the average gross
 5  weekly wage.
 6    (4)  If at the time of the accident the employee's money rate was fixed
 7  by the hour, the employee's average gross weekly wage shall be deter-
 8  mined as follows:  (A) If the employee was a part-time hourly employee,
 9  as defined in this section, the average gross weekly wage shall be deter-
10  mined in the same manner as provided in paragraph (5) of this subsection;
11  (B) if the employee is a full-time hourly employee, as defined in this
12  section, the average gross weekly wage shall be determined as follows:  (i)
13  A daily money rate shall first be found by multiplying the straight-time
14  hourly rate applicable at the time of the accident, by the customary num-
15  ber of working hours constituting an ordinary day in the character of work
16  involved; (ii) the straight-time weekly rate shall be found by multiplying
17  the daily money rate by the number of days and half days that the em-
18  ployee usually and regularly worked, or was expected to work, but 40
19  hours shall constitute the minimum hours for computing the wage of a
20  full-time hourly employee, unless the employer's regular and customary
21  workweek is less than 40 hours, in which case, the number of hours in
22  such employer's regular and customary workweek shall govern; (iii) the
23  average weekly overtime of the employee shall be the total amount earned
24  by the employee in excess of the amount of straight-time money earned
25  by the employee during the 26 calendar weeks immediately preceding
26  the date of the accident, or during the actual number of such weeks the
27  employee was employed if less than 26 weeks, divided by the number of
28  such weeks; and (iv) the average gross weekly wage of a full-time hourly
29  employee shall be the total of the straight-time weekly rate, the average
30  weekly overtime and the weekly average of any additional compensation.
31    (5)  If at the time of the accident the money rate is fixed by the output
32  of the employee, on a commission or percentage basis, on a flat-rate basis
33  for performance of a specified job, or on any other basis where the money
34  rate is not fixed by the week, month, year or hour, and if the employee
35  has been employed by the employer at least one calendar week imme-
36  diately preceding the date of the accident, the average gross weekly wage
37  shall be the gross amount of money earned during the number of calendar
38  weeks so employed, up to a maximum of 26 calendar weeks immediately
39  preceding the date of the accident, divided by the number of weeks em-
40  ployed, or by 26 as the case may be, plus the average weekly value of any
41  additional compensation and the value of the employee's average weekly
42  overtime computed as provided in paragraph (4) of this subsection. If the
43  employee had been in the employment of the employer less than one
SB 289
                                     

 1  calendar week immediately preceding the accident, the average gross
 2  weekly wage shall be determined by the administrative law judge based
 3  upon all of the evidence and circumstances, including the usual wage for
 4  similar services paid by the same employer, or if the employer has no
 5  employees performing similar services, the usual wage paid for similar
 6  services by other employers. The average gross weekly wage so deter-
 7  mined shall not exceed the actual average gross weekly wage the em-
 8  ployee was reasonably expected to earn in the employee's specific em-
 9  ployment, including the average weekly value of any additional
10  compensation and the value of the employee's average weekly overtime
11  computed as provided in paragraph (4) of this subsection. In making any
12  computations under this paragraph (5), workweeks during which the em-
13  ployee was on vacation, leave of absence, sick leave or was absent the
14  entire workweek because of illness or injury shall not be considered.
15    (6) (A)  The average gross weekly wage of a person serving on a vol-
16  unteer basis as a duly authorized law enforcement officer, an ambulance
17  attendant, mobile intensive care technician, firefighter, or any other vol-
18  unteer under the workers compensation act, who receives no wages for
19  such services, or who receives wages which are substantially less than the
20  usual wages paid for such services by comparable employers to employees
21  who are not volunteers, shall be computed on the basis of the usual wages
22  paid by the employer for such services to employees who are not volun-
23  teers, or, if the employer has no employees performing such services for
24  wages who are not volunteers, the average gross weekly wage shall be
25  computed on the basis of the usual wages paid for such services by com-
26  parable employers to employees who are not volunteers. Volunteer em-
27  ployment shall not be presumed to be full-time employment.
28    (B)  The average gross weekly wage of any person performing com-
29  munity service work shall be deemed to be $37.50.
30    (C)  The average gross weekly wage of a volunteer member of the
31  Kansas department of civil air patrol officially engaged in the performance
32  of functions specified in K.S.A. 1993 Supp. 48-3302 and amendments
33  thereto shall be deemed to be $476.38. Whenever the rates of compen-
34  sation of the pay plan for persons in the classified service under the Kansas
35  civil service act are increased for payroll periods chargeable to fiscal years
36  commencing after June 30, 1988, the average gross weekly wage which
37  is deemed to be the average gross weekly wage under the provisions of
38  this subsection for a volunteer member of the Kansas department of civil
39  air patrol shall be increased by an amount, adjusted to the nearest dollar,
40  computed by multiplying the average of the percentage increases in all
41  monthly steps of such pay plan by the average gross weekly wage deemed
42  to be the average gross weekly wage of such volunteer member under
43  the provisions of this subsection prior to the effective date of such in-
SB 289
                                     

 1  crease in the rates of compensation of the pay plan for persons in the
 2  classified service under the Kansas civil service act.
 3    (7)  The average gross weekly wage of an employee who sustains an
 4  injury by accident arising out of and in the course of multiple employ-
 5  ment, in which such employee performs the same or a very similar type
 6  of work on a part-time basis for each of two or more employers, shall be
 7  the total average gross weekly wage of such employee paid by all the
 8  employers in such multiple employment. The total average gross weekly
 9  wage of such employee shall be the total amount of the individual average
10  gross weekly wage determinations under this section for each individual
11  employment of such multiple employment.
12    (8)  In determining an employee's average gross weekly wage with
13  respect to the employer against whom claim for compensation is made,
14  no money or additional compensation paid to or received by the employee
15  from such employer, or from any source other than from such employer,
16  shall be included as wages, except as provided in this section. No wages,
17  other compensation or benefits of any type, except as provided in this
18  section, shall be considered or included in determining the employee's
19  average gross weekly wage.
20    (c)  In any case, the average yearly wage shall be found by multiplying
21  the average gross weekly wage, as determined in subsection (b), by 52.
22    (d)  The state's average weekly wage for any year shall be the average
23  weekly wage paid to employees in insured work subject to Kansas em-
24  ployment security law as determined annually by the secretary of human
25  resources as provided in K.S.A. 44-704 and amendments thereto.
26    (e)  Members of a labor union or other association who perform serv-
27  ices in behalf of the labor union or other association and who are not paid
28  as full-time employees of the labor union or other association and who
29  are injured or suffer occupational disease in the course of the perform-
30  ance of duties in behalf of the labor union or other association shall re-
31  cover compensation benefits under the workers compensation act from
32  the labor union or other association if the labor union or other association
33  files an election with the director to bring its members who perform such
34  services under the coverage of the workers compensation act.
35    The average weekly wage for the purpose of this subsection shall be
36  based on what the employee would earn in the employee's general oc-
37  cupation if at the time of the injury the employee had been performing
38  work in the employee's general occupation. The insurance coverage shall
39  be furnished by the labor union or other association.
40    Sec. 4.  K.S.A. 44-528 is hereby amended to read as follows: 44-528.
41    (a) Any award or modification thereof agreed upon by the parties, except
42  lump-sum settlements approved by the director or administrative law
43  judge, whether the award provides for compensation into the future or
SB 289
                                     

 1  whether it does not, may be reviewed by the administrative law judge for
 2  good cause shown upon the application of the employee, employer, de-
 3  pendent, insurance carrier or any other interested party. In connection
 4  with such review, the administrative law judge may appoint one or two
 5  health care providers to examine the employee and report to the admin-
 6  istrative law judge. The administrative law judge shall hear all competent
 7  evidence offered and if the administrative law judge finds that the award
 8  has been obtained by fraud or undue influence, that the award was made
 9  without authority or as a result of serious misconduct, that the award is
10  excessive or inadequate or that the functional impairment or work disa-
11  bility of the employee has increased or diminished, the administrative law
12  judge may modify such award, or reinstate a prior award, upon such terms
13  as may be just, by increasing or diminishing the compensation subject to
14  the limitations provided in the workers compensation act.
15    (b)  If the administrative law judge finds that the employee has re-
16  turned to work for the same employer in whose employ the employee
17  was injured or for another employer and is earning or is capable of earning
18  the same or higher wages than the employee did at the time of the ac-
19  cident, or is capable of gaining an income from any trade or employment
20  which is equal to or greater than the wages the employee was earning at
21  the time of the accident, or finds that the employee has absented and
22  continues to be absent so that a reasonable examination cannot be made
23  of the employee by a health care provider selected by the employer, or
24  has departed beyond the boundaries of the United States, the adminis-
25  trative law judge may modify the award and reduce compensation or may
26  cancel the award and end the compensation.
27    (c)  The number of reviews under this section shall be limited pur-
28  suant to rules and regulations adopted by the director to avoid abuse. No
29  application for review and modification pursuant to this section shall be
30  considered if such application is filed after all compensation which was
31  originally awarded has been paid.
32    (d)  Any modification of an award under this section on the basis that
33  the functional impairment or work disability of the employee has in-
34  creased or diminished shall be effective as of the date that the increase
35  or diminishment actually occurred, except that in no event shall the ef-
36  fective date of any such modification be more than six months prior to
37  the date the application was made for review and modification under this
38  section.
39    Sec. 5.  K.S.A. 44-536 is hereby amended to read as follows: 44-536.
40    (a) With respect to any and all proceedings in connection with any initial
41  or original claim for compensation, no claim of any attorney for services
42  rendered in connection with the securing of compensation for an em-
43  ployee or the employee's dependents, whether secured by agreement,
SB 289
                                     

 1  order, award or a judgment in any court shall exceed (1) a reasonable
 2  amount for such services or (2) the amount equal to the total of 25% of
 3  that portion of total compensation recovered and paid which is less than
 4  $10,001, 20% of that portion of total compensation recovered and paid
 5  which is greater than $10,000 and less than $20,001, and 15% of that
 6  portion of the total amount of the compensation recovered and paid
 7  which is in excess of $20,000, whichever is less, in addition to actual
 8  expenses incurred, and subject to the other provisions of this section.
 9  Except as hereinafter provided in this section, in death cases, total disa-
10  bility and partial disability cases, the amount of attorney fees shall not be
11  based upon compensation which would be due under the workers com-
12  pensation act beyond 415 weeks of permanent total disability based upon
13  the employee's average gross weekly wage prior to the date of the accident
14  and subject to the maximum weekly benefits provided in K.S.A. 44-510c
15  and amendments thereto.
16    (b)  All attorney fees in connection with the initial or original claim
17  for compensation shall be fixed pursuant to a written contract between
18  the attorney and the employee or the employee's dependents, which shall
19  be subject to approval by the director in accordance with this section.
20  Every attorney, whether the disposition of the original claim is by agree-
21  ment, settlement, award, judgment or otherwise, shall file the attorney
22  contract with the director for review in accordance with this section. The
23  director shall review each such contract and the fees claimed thereunder
24  as provided in this section and shall approve such contract and fees only
25  if both are in accordance with all provisions of this section. Any claims
26  for attorney fees not in excess of the limits provided in this section and
27  approved by the director shall be enforceable as a lien on the compen-
28  sation due or to become due. The director shall specifically and individ-
29  ually review each claim of an attorney for services rendered under the
30  workers compensation act in each case of a settlement agreement under
31  K.S.A. 44-521 and amendments thereto or a lump-sum payment under
32  K.S.A. 44-531 and amendments thereto as to the reasonableness thereof.
33  In reviewing the reasonableness of such claims for attorney fees, the di-
34  rector shall consider the other provisions of this section and the following:
35    (1)  The written offers of settlement made prior to representation;
36    (2)  the time and labor required, the novelty and difficulty of the ques-
37  tions involved and the skill requisite to perform the legal services prop-
38  erly;
39    (3)  the likelihood, if apparent to the employee or the employee's de-
40  pendents, that the acceptance of the particular case will preclude other
41  employment by the attorney;
42    (4)  the fee customarily charged in the locality for similar legal serv-
43  ices;
SB 289
                                     

 1    (5)  the amount of compensation involved and the results obtained;
 2    (6)  the time limitations imposed by the employee, by the employee's
 3  dependents or by the circumstances;
 4    (7)  the nature and length of the professional relationship with the
 5  employee or the employee's dependents; and
 6    (8)  the experience, reputation and ability of the attorney or attorneys
 7  performing the services.
 8    (c)  No attorney fees shall be charged with respect to compensation
 9  for medical expenses, except where an allowance is made for proposed
10  or future treatment as a part of a compromise settlement. No attorney
11  fees shall be charged with respect to vocational rehabilitation benefits.
12    (d)  No attorney fees shall be charged in connection with any tem-
13  porary total disability compensation unless the payment of such compen-
14  sation in the proper amount is refused, or unless such compensation is
15  terminated by the employer and the payment of such compensation is
16  obtained or reinstated by the efforts of the attorney, whether by agree-
17  ment, settlement, award or judgment.
18    (e)  With regard to any claim where there is no dispute as to any of
19  the material issues prior to representation of the claimant or claimants
20  by an attorney, or where the amount to be paid for compensation does
21  not exceed the offer made to the claimant or claimants by the employer
22  prior to representation by an attorney, the fees to any such attorney shall
23  not exceed either the sum of $250 or a reasonable fee for the time actually
24  spent by the attorney, as determined by the director, whichever is greater,
25  exclusive of reasonable attorney fees for any representation by such at-
26  torney in reference to any necessary probate proceedings. With regard to
27  any claim where the amount to be paid for compensation does exceed
28  the written offer made prior to representation, fees for services rendered
29  by an attorney shall not exceed the lesser of (1) a reasonable amount for
30  such services or (2) the amount equal to the total of 25% of that portion
31  of the amount of compensation recovered and paid, which is in excess of
32  the amount of compensation offered to the employee by the employer
33  prior to the attorney's entry of appearance in the claim and which is less
34  than $10,001, 20% of that portion of the amount of compensation recov-
35  ered and paid, which is in excess of the amount of compensation offered
36  to the employee prior to the attorney's entry of appearance in the claim
37  and which is more than $10,000 and less than $20,001 and 15% of that
38  portion of the amount of compensation recovered and paid, which is in
39  excess of the amount of compensation offered to the employee prior to
40  the attorney's entry of appearance in the claim and which is in excess of
41  $20,000, as specified in subsection (a).
42    (f)  All attorney fees for representation of an employee or the em-
43  ployee's dependents shall be only recoverable from compensation actually
SB 289
                                     

 1  paid to such employee or dependents, except as specifically provided
 2  otherwise in subsection (g) and (h).
 3    (g)  In the event any attorney renders services to an employee or the
 4  employee's dependents, subsequent to the ultimate disposition of the
 5  initial and original claim, and in connection with an application for review
 6  and modification, a hearing for additional medical benefits, or otherwise,
 7  such attorney shall be entitled to reasonable attorney fees for such serv-
 8  ices, in addition to attorney fees received or which the attorney is entitled
 9  to receive by contract in connection with the original claim, and such
10  attorney fees shall be awarded by the director on the basis of the reason-
11  able and customary charges in the locality for such services and not on a
12  contingent fee basis. If the services rendered under this subsection by an
13  attorney result in an additional award of compensation, the attorney fees
14  shall be paid from such amounts of compensation. If such services involve
15  no additional award of compensation, the director shall fix the proper
16  amount of such attorney's fees in accordance with this subsection and
17  such fees shall be paid by the employer or the workers compensation
18  fund, if the fund is liable for compensation pursuant to K.S.A. 44-567 and
19  amendments thereto, to the extent of the liability of the fund no attorney
20  fees shall be awarded.
21    (h)  Any and all disputes regarding attorney fees, whether such dis-
22  putes relate to which of one or more attorneys represents the claimant
23  or claimants or is entitled to the attorney fees, or a division of attorney
24  fees where the claimant or claimants are or have been represented by
25  more than one attorney, or any other disputes concerning attorney fees
26  or contracts for attorney fees, shall be heard and determined by the ad-
27  ministrative law judge, after reasonable notice to all interested parties and
28  attorneys.
29    (i)  After reasonable notice and hearing before the administrative law
30  judge, any attorney found to be in violation of any provision of this section
31  shall be required to make restitution of any excess fees charged.
32    Sec. 6.  K.S.A. 1996 Supp. 75-5708 is hereby amended to read as
33  follows: 75-5708. (a) There is hereby established within and as a part of
34  the department of human resources a division of workers compensation.
35  The division shall be administered, under the supervision of the secretary
36  of human resources, by the director of workers compensation, who shall
37  be the chief administrative officer of the division. The director of workers
38  compensation shall be appointed by the secretary of human resources
39  and shall serve at the pleasure of the secretary. The director shall be in
40  the unclassified service under the Kansas civil service act and shall receive
41  an annual salary fixed by the secretary of human resources, with the ap-
42  proval of the governor. The director of workers compensation shall be an
43  attorney admitted to practice law in the state of Kansas. The director shall
SB 289
                                     

 1  devote full time to the duties of such office and shall not engage in the
 2  private practice of law during the director's term of office.
 3    (b)  The director of workers compensation may appoint two assistant
 4  directors of workers compensation and also may appoint not to exceed
 5  10 administrative law judges. Such assistant directors and administrative
 6  law judges shall be in the classified service. The assistant directors shall
 7  act for and exercise the powers of the director of workers compensation
 8  to the extent authority to do so is delegated by the director. The assistant
 9  directors and administrative law judges shall be attorneys admitted to
10  practice law in the state of Kansas, and shall have such powers, duties
11  and functions as are assigned to them by the director or are prescribed
12  by law. The assistant directors and administrative law judges shall devote
13  full time to the duties of their offices and shall not engage in the private
14  practice of law during their terms of office.
15    (c)  Assistant directors and administrative law judges shall be selected
16  by the director of workers compensation, with the approval of the sec-
17  retary of human resources. Each appointee shall be subject to either dis-
18  missal or suspension of up to 30 days for any of the following:
19    (1)  Failure to conduct oneself in a manner appropriate to the ap-
20  pointee's professional capacity;
21    (2)  failure to perform duties as required by the workers compensation
22  act; or
23    (3)  any reason set out for dismissal or suspension in the Kansas civil
24  service act or rules and regulations adopted pursuant thereto.
25    No appointee shall be appointed, dismissed or suspended for political,
26  religious or racial reasons or by reason of the appointee's sex. Any ad-
27  ministrative law judge appointed after July 1, 1997, shall be appointed in
28  accordance with the procedures prescribed for the selection of the workers
29  compensation board, pursuant to K.S.A. 1996 Supp. 44-555c, and amend-
30  ments thereto, and shall be appointed for a four-year term. Any admin-
31  istrative law judge so appointed shall agree, prior to appointment, to ad-
32  here to the specifications for the position designated by the director.
33  Failure to adhere to such specifications may serve as grounds for suspen-
34  sion without pay or termination pursuant to K.S.A. 75-2949, and amend-
35  ments thereto. All administrative law judges appointed prior to July 1,
36  1997, shall continue to be members of the classified service. When a seated
37  administrative law judge vacates the administrative law judge's position,
38  such position shall be filled in accordance with this section.
39    Sec. 7.  K.S.A. 44-511, 44-528 and 44-536 and K.S.A. 1996 Supp. 44-
40  510, 44-510e and 75-5708 are hereby repealed.
41    Sec. 8.  This act shall take effect and be in force from and after its
42  publication in the statute book.