Arizona SB 1551 Signed into Law: Key Updates to Workers' Compensation ​

Arizona Governor Hobbs has officially signed SB 1551 into law, marking a significant milestone in the state's workers' compensation system. This legislation introduces critical updates to enhance benefits for injured employees, streamline administrative processes, and address longstanding procedural issues. Below is an overview of the key provisions and the significance of these changes.

Key Provisions

1. Expanded Fee Schedule Requirements ​The Industrial Commission of Arizona (ICA) is now required to fix a schedule of fees for workers' compensation services provided by health care, dental care, and supply providers, in addition to physicians, physical therapists, and occupational therapists. ​

2. Increased Dependent Allowance ​The monthly dependent allowance for employees receiving temporary total disability compensation has been increased from $25 to $100. ​ ​

3. Electronic Service of Notices ​The definition of "serve" or "service" has been updated to include electronic transmission methods reasonably calculated to achieve effective notice. ​ Parties may opt out of electronic service by providing written notice, modernizing communication processes. ​

4. Updated Definition of Interested Party ​The definition of "interested party" now includes third-party administrators (TPAs) and authorized representatives if the employee is deceased. ​ This change corrects the ICA's previous practice of serving notices on the insurance carrier rather than the TPA handling the claim. By formally recognizing TPAs as interested parties, the legislation ensures that notices are sent to the appropriate entity managing the claim, improving efficiency and accuracy in the claims process.

5. Transparency in Fee Schedules The ICA must publish the schedule of fees on its publicly available website, enhancing transparency. ​ However, the ICA is no longer required to publish these schedules in the Arizona Administrative Register. ​

6. Exemption from State Procurement Code ​Contracts necessary to develop and publish dental care fee schedules are exempt from the State Procurement Code, allowing for more efficient implementation. ​

   
   

Significance of Adding TPAs as Interested Parties ​

The inclusion of TPAs as interested parties is a critical correction to the ICA's previous practice of serving notices on insurance carriers rather than the TPAs managing the claims. TPAs often handle the day-to-day administration of workers' compensation claims, and this change ensures that notices and communications are directed to the correct entity. This adjustment reduces delays, minimizes errors, and improves the overall efficiency of the claims process, benefiting both employees and employers.

Effective Date

The provisions of SB 1551 will take effect on the general effective date, ensuring timely implementation of these updates. ​

With Governor Hobb's signature, SB 1551 represents a significant step forward in Arizona's workers' compensation system. By addressing procedural inefficiencies and enhancing benefits, this legislation ensures better support and streamlined processes for injured employees and their families.