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The Kansas Response to the Crisis in Workers Compensation: An Overview of the 1993 Amendments to the Kansas Workers Compensation Act

By DAVID J. REBEIN

About the Author
DAVID J. REBEIN graduated from Washburn University and received his law degree from Kansas University. He is a member of the Mangan, Dalton, Trenkle, Rebein & Doll Chartered law firm of Dodge City.
For nine years, Rebein was a member of the adjunct facility at St. Mary of the Plains College, Dodge City, where be lectured in Business and Constitutional Law.
He has authored many employment law articles and manuals and offers seminars and supervisory training sessions on employment law issues.
Rebein is a co—author of the Kansas Bar Association Handbook on Workers Compensation and is a frequent speaker on employment law topics.
In 1992, Rebein was elected president of the Kansas Bar Association Litigation Section and is a member of the Board of Directors of the Kansas Association of Defense Council.

Nationwide, workers compensation costs are skyrocketing. Costs associated with workers compensation are up 150 percent since 1980. The average worker compensation claim now costs over $19,000. In 1987, the Kansas Legislature addressed these runaway costs with major amendments to the Kansas Workers Compensation Act. The definition of work disability was changed and vocational rehabilitation was implemented. Costs continued to rise.

All are well aware of the rapid rise in medical care costs. Perhaps less known is the fact that workers compensation medical costs have risen 50 percent faster than ordinary health care cases. It is not surprising, therefore, that medical costs now account for 40 percent of all workers compensation outlays, up from 33 percent just 10 years ago.

In February of 1993, the Legislative Post-Audit Committee presented to the Legislature its performance audit report entitled "Reviewing Selected Issues Related to Workers Compensation."

In that legislative audit report, several findings were summarized, many of which were disturbing:

1. Medical costs now amount to 47.4  percent of all dollars spent in Kansas workers compensation. In 1985, those costs amounted to 38.8 percent.
2. Although Kansas workers compensation premiums have curved sharply upward, those premiums are still less in Kansas than in most other states. Likewise, the benefits paid to workers are middle of the road.
3. Kansas pays $3.21 per $100 in payroll for workers compensation premiums. The national median is $3.68.
4. From January 1986 to January 1992, Kansas workers compensation premiums increased 65.2 percent. The national average was 65.3 percent. There was, however, wild variation. Hawaii, for instance, had a 35.2 percent decrease in that same period of time while Louisiana experienced a 290.1 percent increase.

The Legislative Post—Audit Committee recommended: reform of the litigation and multi—level appeal process, implementation of a medical fee schedule, reform of vocational rehabilitation, enactment of legislation to address fraud and abuse in the system, and safety programs be mandated and aggressively pursued by companies.

As the 1993 Kansas Legislature gathered to begin its session in January, Kansas businesses had undergone increases of over 40 percent in workers compensation premiums in just two years. Further, the National Council on Compensation Insurance (NCCI) had requested a 21.3 percent workers compensation premium increase. Forces converged upon Topeka crying out for reform. Workers compensation became the issue of the 1993 legislative session.

The Legislature succeeded in passing a bill which Governor Finney vetoed. During the veto session, the deadlock was broken. On April 30, 1993, at 4:30 ant, a compromise was reached. The next day, Saturday afternoon, May 1, 1993, Senate Bill 307 was passed unanimously by both the House and Senate. On the 4th day of May, 1993, Governor Finney signed this bill into law.

I have prepared the following summary of some of the 1993 changes to the Workers Compensation Act. Please bear in mind several things: the new law is 138 pages long, its provisions are difficult and complicated, massive regulations will be implemented by the director’s office that will impact the statutes, courts undoubtedly will construe its provisions in ways that would surprise us, and no doubt I have missed some intricacies of the changes. For whatever it's worth, however, here goes.

Effective Date. The 1993 amendments will take effect July 1, 1993. There will be argument as to how much of the Act is procedural in nature and applies to accidents which occurred prior to July 1, 1993, and how much is substantive in nature and applies only to accidents occurring after July 1, 1993.

Coverage. The wage threshold for application of the Act is increased from the current $10,000 to $20,000. K.S.A. 44-505(a)(3).

Accidental injury. In order to be compensable under the Workers Compensation Act, an accident must arise out of and in the course of employment. The new Act tightens the concept of accident and injury in several respects:

1. The Act disallows compensation for disability as a result of the natural aging process or by the normal activities of day-to-day living. K.S.A. 44—508(e).
2. Injuries to employees while engaged in recreational or social activities where the employee was under no duty to attend and where the injury did not result from the performance of job tasks are not allowed. K.S.A. 44-508(f).
3. Preexisting conditions are not compensable except to the extent that they are aggravated due to work. "Any award of compensation shall be reduced by the amount of functional impairment determined to be preexisting.” K.S.A. 44-501(c).

Defenses. Several defenses were either created or strengthened.

1. Drugs and alcohol. Under the old law, in order to deny a claim, one had to show that the injury, disability or death was substantially caused by the employee's use or consumption of drugs, chemicals or other compounds. Under the amendment, the standard has been changed to whether or not the drugs or alcohol contributed to the injury. K.S.A. 44—501(d)(2).
There is a conclusive presumption of impairment if alcohol concentration is .04 or more. This defense can apply to prescription drugs which are abused.
2. Fraud. Both criminal and civil penalties are imposed for fraudulent acts. Nearly everyone involved in the workers compensation system from claimants to employers to attorneys to health care providers and insurance companies are covered by the fraud and abusive practices enumerated in the Act. Included are such things as lending a claimant money, misrepresentation, intentional misclassification of employees, and misrepresentation as to employee rights under the Act. An assistant attorney general's position is created whose primary function will be to investigate and prosecute acts which constitute a crime. Under the bill, fraud amounting to less than $500 is a Class C misdemeanor and fraud amounting to more than $500 is a Level 9 nonperson felony.
The director of workers compensation is given the responsibility for monitoring and investigating complaints of fraud concerning players in the workers compensation system who are not regulated by the commissioner of insurance. The commissioner of insurance shall monitor and investigate complaints of fraud pertaining to individuals or entities regulated by the office of the commissioner of insurance.
3. Notice. The notice defense has been stiffened. The rule has always been that notice of an accident must he given to the employer within 10 clays. However failure to give notice did not bar a claim unless an employer could show prejudice. Under K.S .A. 44-520 as amended, the claimant must give notice of the accident, stating the time and place with particulars thereof, to the employer within 10 days after the date of the accident except that actual knowledge of the accident by the employer or employer’s duly-authorized agent renders the giving of notice unnecessary. The failure to give a 10—day notice is not a bar from compensation if the claimant shows that a late notice was clue to just cause. A proceeding for compensation cant be maintained unless the notice was given to the employer within 75 days after the accident except where the employer had actual notice of the accident, the employer was unavailable to receive the notice, or the employee was physically unable to give the notice.

Medical compensation. The employer still has the right to direct medical.

1. Medical fee schedule. The amendment to K.S.A. 44-5 10 implements some measures that are designed to control medical costs. First, the director shall appoint a medical administrator. The medical administrator, with the assistance of an advisory panel, will develop a medical fee schedule, develop procedures for appeals and reviews of disputed charges and monitor the medical costs of workers compensation.
The medical fee schedule is to be in place by July 1, 1993. This fee schedule is to be reviewed annually by the director to assure that the schedule is current, reasonable, and fair.
2. Utilization review. No later than December 31, 1993, the director shall develop and implement or contract with a qualified entity to implement utilization review and peer review procedures to review services rendered by providers and facilities under the Act.
3. Unauthorized medical. If the services of a physician or other health care provider are unsatisfactory to the employee, then the employee may seek a second opinion, without the permission of the employer, and the second opinion will be paid for by the employer up to $500. However. unauthorized medical is not to be used to obtain a functional impairment rating and, in fact any functional impairment rating obtained with unauthorized medical proceeds is inadmissible in any proceeding under the Workers Compensation Act. K.S.A. 44-510(c)(2).
4. Change of physician. If the employee desires to change physicians, the administrative law judge may authorize the appointment of another health care provider and, in this case, the employer shall submit the names of three health care providers and the employee will select one from that list as the authorized treating health care provider. If the employee is still dissatisfied, then a benefit review conference can be held. If that is not satisfactory, then the administrative law judge may select a treating health care provider. K.S.A. 44-510(c)( 1).

Vocational rehabilitation. In the past, an employee could apply for vocational rehabilitation if not returned to work at a substantially comparable wage. K.S.A. 44-510g(b) now provides:

“If the employer or employers insurance carrier does not agree to provide vocational rehabilitation services, the employee may request the vocational rehabilitation administrator to refer the employee to an appropriate provider for vocational rehabilitation services to be provided at the employee’s expense.”

In other words, if the employer doesn’t agree to vocational rehabilitation, then the employee may still obtain vocational rehabilitation but at the employees own expense.

Compensation. Monetary compensation is divided into temporary total disability, temporary partial disability and permanent partial disability.

1. Average weekly wage. The starting point in figuring any disability is to determine the average weekly wage. Under the old law, a full-time employee was presumed to have worked a 40-hour week. K.S.A. 44-511(b)(4) has been amended to provide: "40 hours shall constitute the minimum hours for computing the wage as a full-time hourly employee, unless the employers regular and customary work week is less than 40 hours, in which case, the number of hours in such employer’s regular and customary work week shall govern.
2. $50,000 cap for functional impairment. The maximum benefits payable pursuant to K.S.A. 44-510(f) are now: $125,000 for permanent total disability; $100.000 for temporary total disability, permanent partial disability or temporary partial disability; and a new $50,000 cap on permanent partial disability where functional impairment only is awarded. This cap is designed to limit white collar "Fletcher Bell type” awards that were publicized during the legislative session.
3. Shoulder as a scheduled member. Permanent partial disability is still divided mainly between two types: scheduled injuries and general body disabilities. Injuries to the shoulder, shoulder joint, shoulder girdle, shoulder musculature, and any other shoulder structure are now scheduled injuries. K.S.A. 44-510d(21). Any ratings to a scheduled member shall be based upon the American Medical Association Guidelines for the Evaluation of Permanent Impairment, 3rd Edition Revised. K.S.A. 44-510d(23).
4. Healing period allowed for amputations only. The amendments to K.S.A. 44-510d(b) clarify that the healing period is only allowed in amputation cases and shall not exceed more than 10 percent of the total period allowed for the scheduled injury and in any event, no longer than 15 weeks.
5. General body disability. Under the new law, as with the old general body disability is an injury resulting in disability that is not scheduled. Shoulder injuries are now scheduled, but bilateral shoulder, arm or hand injuries will still be a general body disability. K.S.A. 44-510e. General body disability was changed in other ways as well.

a. Functional impairment:
“Means, that extent, expressed as a percentage, of the loss of a portion of the total physiological capabilities of the human body as established by competent medical evidence and based on the Third Edition Revised of the American Medical Association Guidelines for the Evaluation of Permanent Impairment, if the impairment is contained therein.” K.S.A. 44-510e.

The employee is always entitled to the functional impairment caused by an accident. If there is disagreement as to the employees functional impairment, the administrative law judge will refer the claimant to an approved list of doctors for a rating upon which to base the employees functional impairment.

b. Work disability. The employee may be entitled to work disability if the injury exceeds functional impairment and if the employee is not engaging in any work for wages equal to 90 percent or more of the average gross weekly wage earned by the employee at the time of the injury.

Work disability. If a worker returns to work for wages equal to 90 percent or more of the average gross weekly wage that the employee was earning prior to the injury, then no work disability is available. If, however, 90 percent of comparable wage cannot be attained, then the employee is entitled to work disability figured as follows:

"Partial general disability shall be the extent, expressed as a percentage, to which the employee, in the opinion of the physician, has lost the ability to perform the work tasks that the employee performed in any substantial gainful employment during the 15-year period preceding the accident, averaged together with the difference between the average weekly wage the worker was earning at the time of the injury and the average weekly wage the worker is earning after the injury." K.S.A. 44-510e.

Employers who are able to accommodate an employee at comparable wane wont pay work disability. However, if the employer refuses or is unable to return the employee to work following an injury, the employer could be liable for more than before the amendments.
6. New computation for general body disability. The amendments to K.S.A. 44-510e(a) changed the way that general body disability is computed. The new formula is:

Step 1. Find the gross average weekly wage.

Step 2. Multiply the average weekly wage by two-thirds to find the weekly payment rate except that the weekly payment rate cannot exceed the maximum for temporary total disability.

Step 3. Subtract the number of temporary total disability weeks (except the first 15 weeks cannot be subtracted) from 415 weeks and multiply that by the percentage of impairment. For instance, if an employee earned $600 a week and had a five percent permanent partial impairment to the body as a whole as a result of a back injury and missed 20 weeks from work, the following compensation would be paid.

a) AWW $600.
b) $600 x .6667 = $400. However, this is above the maximum for temporary total disability which is $299. Weekly payment rate: $299.
c) 415 weeks — 20 weeks of temporary total (except the first 15 weeks cannot be deducted) leaves - 410 weeks available for impairment.
d) 410 weeks x 5 percent = 20.5 weeks x $299 weekly payment rate = $6,129.50.

Although the employee receives less money under the new computation than under the old, the employee’s impairment is paid off much faster since the employee will receive permanent partial disability payments at the temporary total rate.

Many cases will involve simply deciding upon a functional impairment rating since scheduled injuries are all determined by functional impairment ratings. General body disability cases where the employee has returned to 90 percent of comparable wage will also be determined by functional impairment ratings. In the past, this has been the classic battle of the doctors. The new amendments provide:

"If the employer and the employee are unable to agree upon the employees functional impairment, such matter shall be referred by the administrative law judge to an independent health care provider who shall be selected by the administrative law judge from the list of health care providers maintained by the director. The health care provider selected by the director pursuant to this section shall issue an opinion regarding the employee’s functional impairment which shall be considered by the administrative law judge in making a final determination." K.S.A. 44—510e(a).

The bill also prohibits a claimant from accumulating over 100 percent permanent partial disability in a lifetime. Once the limit is reached, however, a claimant may continue receiving necessary medical expenses.

7. Offset for retirement benefits. If the employer against whom the employee has made a workers compensation claim is paying retirement benefits to the employee, then post-retirement benefits are offset against the workers compensation benefits. The same offset would apply to Social Security retirement benefits. As to other retirement benefits from other employers or benefits for which the employee paid or contributed, the offset would not apply. The offset cannot reduce the employee’s workers compensation benefits below the functional impairment level. K.S.A. 44-501(h).

Death benefits. The amendments to K.S.A. 44-510b raised funeral expenses recoverable under the Act from $3,200 to $3,300. Under the old Act, in death cases where the employee did not leave dependents who were citizens of or residing at the time of the accident in the United States, the amount of compensation paid was $750. This noncitizen distinction has been removed. All dependents are treated the same whether or not they are citizens of or reside in the United Stjtes

Workers Compensation Fund. The Kansas Workers Compensation Fund serves several purposes. First, it provides payments where employers are insolvent or haven’t otherwise provided for insurance to cover the claims. The most expensive part of the Fund, however, has been its payments to reimburse employers who hired handicapped workers who were then injured as a result of or partially because of their handicap. In the past, the state general fund contributed to the Fund. In recent years, however, the Fund assessments were paid by employers and then funneled back to employers in the form of reimbursement payments.

Given the broad scope of the Americans With Disabilities Act, many felt that the Workers Compensation Fund was no longer necessary. Further, the Fund has become a major expense. As stated above, the employer is no longer liable for preexisting conditions except to the extent they are aggravated. For these reasons and others, the Workers Compensation Fund will no longer contribute money for disabilities as a result of preexisting conditions after July 1, 1994. K.S.A. 44-567(a)(1).

A workers compensation fund oversight committee, composed of all members, was created to study the termination of the Workers Compensation Fund. This group could make recommendations for legislation to modify the Fund’s termination.

Procedural changes. The Legislature focused on ways to discourage litigation. As a result, many procedural changes were implemented.

1. Pleadings, motions, etc. Every pleading, motion or other document filed in the workers compensation case by a party who is represented by an attorney must be signed in the attorneys individual name. Sanctions may be imposed if the pleading is without basis or is filed to harass or delay.
2. Employer’s duty to explain employee rights. Immediately upon receiving notice of an injury, the employer must mail to the employee an explanation of the benefits available under the Workers Compensation Act, must summarize the process to be followed in making a claim, and must identify the person responsible for processing workers compensation claims. This material will be prepared by the director of workers compensation and disseminated to employers.
3. Benefit review conferences. When an application for a preliminary hearing is filed, the director may require parties to meet in a benefit review conference to reach agreement on disputed issues. These are designed to be informal dispute resolution conferences where testimony is not taken. Benefit review officers will be appointed by the director as employees within the division of workers compensation to conduct the benefit review conferences. The parties may be represented by an attorney or the employee may request the services of an ombudsman. 
Following the benefit review conference, any settled issues are reduced to writing. If a complete settlement of the claim is reached at the benefit review conference, any party to a settlement may withdraw from the settlement within 14 days after the benefit review conference. If all the disputes are not resolved in the benefit review conference, then the review officer will prepare a written report detailing disputes still at issue. If necessary, a preliminary hearing will be held within 60 clays after the benefit review conference.
4. Ombudsman program. Workers compensation claimants may be represented at the benefit review conference by an ombudsman from the director’s office. The job of the ombudsman is to assist the claimant at benefit review conferences and otherwise assist unrepresented claimants, employers and other parties to protect the rights of such parties under the Workers Compensation Act.
5. Preliminary hearings. K.S.A. 44-534a sets forth the new rules for preliminary hearings:
Each person desiring a preliminary hearing will give written notice to the adverse party of intent to file a preliminary hearing application. This notice shall contain a specific statement of the benefit change being sought. If the parties don’t agree to the change of benefits within the seven-day period, then the application for preliminary hearing is filed together with the certification that the request for benefit change was either denied or ignored. Copies of medical reports and other evidence which the party intends to produce as exhibits will be included with the application. A benefit review conference will be held within 15 days after receipt of the application for preliminary hearing to attempt to resolve the issues raised. If the issues cannot be resolved by benefit review conference, then the director shall assign the application to an administrative law judge for a hearing. All parties shall he given at least seven days notice of the date set for the hearing.
Preliminary hearings will continue to be summary in nature, however, a finding with regard to a disputed issue as to whether the employee suffered an accidental injury, whether the injury arose out of and in the course of employment, whether notice was made in timely fashion, or whether certain other defenses apply will be subject to review by the workers compensation board. Such an appeal, however, shall not stay the payment of medical compensation or temporary total disability benefits.
At the preliminary hearing, if temporary total disability benefits are to be ordered, an opinion must be presented by the authorized treating health care provider shown to be based upon an assessment of the employee’s actual job duties with the employer, with or without accommodation. K.S.A. 44-510c(b)(2).
6. Regular hearings. If a regular hearing is requested, then not less than 10 clays prior to the first full hearing, a prehearing settlement conference shall be conducted by the administrative law judge. K.S.A. 44-523(d).
7. Attorney’s fees. To discourage litigation, attorney's fees were further limited. Under the old law, an attorney was entitled to a reasonable fee up to a maximum of 25 percent of all amounts recovered. Under the amendments to K.S.A. 44—536(a), the attorney may not claim more than 25 percent of compensation obtained from zero to $10,001, 20 percent of compensation recovered greater than $10,000 and less than $20,001, and 15 percent of all compensation recovered and paid which is in excess of $20,000.
Further, no attorney's fees may he charged with respect to vocational rehabilitation benefits.
If a written offer was made by the employer prior to representation, then:

"Fees for services rendered by an attorney shall not exceed the lesser of (1) a reasonable amount for such services; or (2) the amount equal to 25 percent of that portion of compensation recovered and paid which is in excess of the amount of compensation offered to the employee by the employer prior to the attorney’s entry of appearance in the claim which is less than $10,001, 20 percent of that portion of the amount of compensation recovered and paid which is in excess of the amount of compensation offered to the employee prior to the attorney’s entry of appearance in the claim which is more than $10,000 and less than $20,001, and 15 percent of that portion of the amount of compensation recovered and paid which is in excess of the amount of compensation offered to the employee prior to the attorney’s entry of appearance in the claim which is in excess of $20,000 as specified in subsection (a)." K.S.A. 44-536(A).

8. Appeals. The Legislative Post-Audit Committee, which reviewed workers compensation costs and cost drivers at the request of the Legislature, was critical of the multiple levels of appeal in workers compensation cases. In an effort to streamline the appeal process, directors reviews and district court appeals were replaced by reviews by the workers compensation board. It will be the job of the board to review all decisions of administrative law judges. Each board member shall be an attorney and shall apply full—time professional efforts to the job and shall receive a salary equal to the amount paid to a district judge. Applicants for these positions are reviewed by the workers compensation board nominating committee which is composed of two members, one appointed by the Kansas AFL—CIO and the other appointed by the Kansas Chamber of Commerce and Industry. The nominating committee must reach unanimous agreement on any nomination to the board. Nomination to the board is for a four—year term. The board consists of five members appointed by the secretary of human resources after approval by the workers compensation board nominating Committee.
Appeals from the workers cornpe nsation board shall he to the court of appeals. The board may divide itself into hearing panels which shall consist of at least two members but only one member of the board is necessary to hear appeals in preliminary hearing decisions.

Insurance amendments.

1. Assigned risk. The Legislature was concerned that the assigned risk plan and the assessment required to underwrite the plan is growing. K.S.A. 40-2109 was amended to mandate a reduction in the amount of the assessments to fund the assigned risk plan to less than 10 percent by January 1, 1997. Further, companies within the assigned risk plan with less than $2,250 in annual premiums shall not be assessed higher than companies in the voluntary market except on the basis of individual risk and claims experience. 
2. Group funded self-insured pools. The Legislature loosened the restrictions on group funded self-insured pools. Under the old law, only same or similar type businesses could pool for workers compensation purposes.
Under K.S.A. 44-581 as amended, the definition of same, similar or closely related type of businesses was clarified to mean "a business in which the principal payroll is in a manual classification or combination of classifications representing occupations which contribute to an essential part of the end product or service which is the primary business interest of the membership of a bona fide trade, merchant or professional association."
Further, dissimilar types of businesses who nonetheless are members of the same bona fide trade, merchant or professional association may pool their resources, but the requirements for pooling are somewhat higher. As to dissimilar businesses, the combined net worth of all members must be $1,250,000 (as compared to $1 million net worth as to members of similar businesses). Further, the Kansas gross premium of a dissimilar type pool must be $500,000 (as compared to $250,000 for Kansas pools with similar businesses). Finally, 55 percent of the estimated annual premium must be paid into a designated depository by a dissimilar pool (as compared to only 25
percent of the estimated annual premium paid by similar business pools). K.S.A. 44-582.
3. Filing Rates. By July 1,1993, the Commissioner of Insurance must require rating organizations to file rates which are reflective of prospective loss costs only and which do not take into account the insurers expenses or profits other than losses in connection with claims.

Workers Compensation Advisory Council. The 1993 workers compensation amendments created an entity known as the Workers Compensation Advisory Council. The Workers Compensation Advisory Council consists of the director of workers compensation and 10 other members: five of whom shall be broadly representative of employers throughout Kansas, and five of whom shall be broadly representative of employees throughout Kansas. There is a complicated method for appointment to the advisory council. Each member of the Advisory Council serves at the pleasure of the secretary of human resources. The purpose of the Advisory Council is to study the Workers Compensation Act and any proposed amendments to the Act as well as to track costs.
The Advisory Council will be available to the Legislature to advise on necessary amendments to the Workers Compensation Act and specifically to advise on whether the state should embark upon a competitive state workers compensation insurance plan. This report must be presented to the Legislature not later than December 15, 1993.
If the Advisory Council makes a recommendation to the Legislature for an amendment to the Workers Compensation Act, this recommendation must carry a vote of four of the five employer members and four of the five employee members.
The intent of the Advisory Council is to remove partisan politics from workers compensation and require employers and employees to sit down and, in good faith, negotiate problems.

Miscellaneous amendments.

1. Workplace safety. Each insurance company or group funded self-insurance plan must maintain accident prevention programs. These accident prevention programs shall be staffed with field-safety representatives. Each policyholder must be notified that accident prevention services are available. On an annual basis, the insurance company or group funded self-insurance plan shall submit to the director of workers compensation detailed information on the type of accident prevention programs offered and the amount of money spent on these programs together with information concerning the number of site inspections, the number and qualifications of field-safety representatives actually employed, and evidence of the effectiveness of and accomplishments in accident prevention.
2. Child support and spousal maintenance assignments. Under the old law, workers compensation payments were not reachable by garnishment or other execution. Under the 1993 amendments, both child support assignment orders and spousal maintenance assignment orders can reach compensation to a maximum of 25 percent of weekly compensation or up to 40 percent of lump sum settlements. K.S.A. 44-514.
3. Seeking indemnity. If a subcontractor fails to provide insurance and a principal contractor is held responsible, the principal contractor may implead the subcontractor into the workers compensation case to seek indemnity.
4. Subrogation. In a third-party action brought by an employee, the employer is given the right to intervene for recovery purposes. Employers have the right of subrogation up to the amount of workers compensation benefits paid but this subrogation right does not extend to loss of consortium.
5. Director of Workers Compensation. K.S.A. 75-5708 was amended to provide that the director of workers compensation shall serve a term of four years at the pleasure of the secretary of human resources.

Conclusion. The 1993 amendments are not completely acceptable to anyone. On the one hand, workers’ weekly benefits and medical were not diminished. On the other hand, the method of figuring general body disability was changed and a cap was placed on functional impairment awards, both of which will result in less money to injured workers. Shoulder injuries were made part of the schedule as well.

Employers successfully pushed through major amendments to the Act on issues such as preexisting conditions, limitation of attorney’s fees, and others. However, employers have created several levels of bureaucracy in the benefit review and ombudsman programs. In addition, employers were unable to prevent representation of claimants by attorneys at the benefit review conference.

Only time will tell whether the 1993 amendments will have the intended effect of holding down costs, discouraging litigation, and yet providing fair medical and monetary compensation to injured workers.

The 1993 amendments to the Workers Compensation Act are the most sweeping changes in 26 years and will hold off large rate increases for the immediate future. How well the new Act will work will depend to a large extent of how well it is administered by the director’s office.

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