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Advisory 97-03

FIRST REPORT OF INJURY FILING REQUIREMENTS - ELECTRONIC FILING COMPLIANCE

Advisories 95-05 and 95-06 addressed the injury reporting and electronic filing requirements established under Texas Labor Code section 409.005, as amended, and Commission Rules 120.2 and 124.1. The Commission is advising system participants that compliance with these statutory and administrative requirements is now being enforced, particularly the requirements regarding the proper filing of the Employer's First Report of Injury. Although the Commission is not expected to adopt a revised TWCC-1 until the middle of 1998, system participants are also advised of certain modifications to the form.

Proper Filing of TWCC-1

The Commission has identified the following TWCC-1 Employer's First Report of Injury reporting issues that are increasing the cost of processing claims:

  1. Carriers currently in production with Electronic Data Interchange ("EDI") are transmitting only a portion of their reportable claims using the electronic method. The balance of reportable claims are filed via paper injury reports. The carrier is in noncompliance if an EDI waiver has not been granted by the Commission;
  2. Employers continue to file a repetitive paper copy of the TWCC-1 form with the Commission after the carrier has reported the same data electronically. Carriers have not effectively communicated the change in the reporting requirement to their policyholders. An employer should file a paper TWCC-1 form with the Commission only in response to a specific request from the Commission;
  3. Employers continue to file numerous paper TWCC-1 forms directly with the Commission although the employer is required, by statute and rule, to file the report with the insurance carrier. The carrier is required to file the TWCC-1 electronically with the Commission, unless the carrier is granted an EDI reporting waiver by the Commission. If a waiver has been granted, the carrier is required to file the paper TWCC-1 with the Commission until EDI reporting is implemented; and
  4. Carriers who are unable to report electronically but fail to obtain an EDI reporting waiver from the Commission will be in violation of the statute.

Revision Plans for TWCC-1 Forms

The Commission anticipates the development and issuance of a revised TWCC-1 form after completion of the following national actions which are expected to be completed in early 1998:

  1. The International Association of Industrial Accident Boards and Commissions (:IAIABC") completes Release 2 of the electronic claims reporting standards and adopts a revised First Report of Injury form (the revised TWCC-1 will correspond to the IAIABC form); and
  2. Occupational Safety and Health Administration ("OSHA") employer injury reporting regulatory changes are completed.

Following completion of these national actions, the Commission will promptly act to issue a revised TWCC-1 form. Until the Commission adopts a revised TWCC-1 form, employers are instructed to disregard the language in the upper left hand corner of the current form which states that the employer must file the original report with the Commission. Individuals and entitles which have been approved to publish copies of the Commission's forms may change the language to read:

"Send the specified copies to you Workers' Compensation Insurance Carrier and the injured worker. EMPLOYERS - Do not send this form to the Texas Workers' Compensation Commission, unless the Commission specifically requests a direct filing."

Compliance Enforcement

The reporting issues described above require the Commission to process more paper First Report of Injury forms than necessary and jeopardize the potential savings achievable from electronic reporting. The Commission believes carriers have been accorded sufficient time to implement the EDI reporting standards using in-house resources or servicing vendor. To assist attaining compliance with the statute and rules, the Commission:

  1. Requests carriers, servicing companies, and employer groups to distribute this Advisory to policyholders, members and other system participants by August 15, 1997.
  2. Will notify, by separate letter, individual insurance carriers and/or certified self-insurers of EDI reporting compliance and will include scheduled dates for the carrier to enter EDI testing and to be in full EDI reporting. A carrier that achieves EDI reporting status by the scheduled date may avoid administrative penalty exposure for noncompliance with EDI reporting requirements;
  3. Will limit future approvals of EDI reporting waivers to those carriers that lack sufficient reporting numbers to make EDI testing and connectivity cost effective for the Commission; and
  4. Will conduct a benchmark audit of EDI reporting compliance by carrier by October 1, 1997. Future audits will measure EDI reporting improvements subsequent to the benchmark audit and violations will be subject to administrative penalties of up to $500 per occurrence as provided by section 409.005 of the Texas Labor Code. In addition, pursuant to section 415.021 of the Texas Labor Code, the Commission may assess administrative penalties up to $10,000 for business practices that allow repeated violations.

The attention of all system participants to correct these problems and bring TWCC-1 reporting into compliance is imperative. If you need additional information concerning the requirements for reporting via EDI, please contact Program Administrator for EDI Development and Information at (512) 440-3885. For general information concerning reporting responsibilities, contact the Commission's Workers' Compensation Information Services Section at (512) 440-3789.

Signed July 18, 1997

Todd K. Brown, Executive Director



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