Titles of Regulations: 16VAC30-60. Procedural Regulations Governing the Administration of Medical Costs Peer Review by the Regional Peer Review Committees under the Virginia Workers' Compensation Act (repealing 16VAC30-60-10 through 16VAC30-60-100).

16VAC30-70. Plan of Operation for the Medical Costs Peer Review Statewide Coordinating Committee under the Virginia Workers' Compensation Act (repealing 16VAC30-70-10 through 16VAC30-70-120).

Statutory Authority: § 60.2-111 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: December 8, 2022.

Effective Date: December 23, 2022.

Agency Contact: Evelyn V. McGill, Executive Director, Virginia Workers' Compensation Commission, 333 East Franklin Street, Richmond, VA 23219, telephone (804) 205-3603, or email evelyn.mcgill@workcomp.virginia.gov.

Basis: The Virginia Workers' Compensation Commission administers the Virginia Workers' Compensation Act (§ 65.2-100 et seq. of the Code of Virginia). Sections 65.2-1300 through 65.2-1310 of the Code of Virginia, repealed by Chapters 279 and 290 of the 2016 Acts of Assembly, established the basic parameters for peer review regulations and gave the commission the authority to enact peer review regulations. The repeal removed the commission's authority to continue the peer review program.

Purpose: The rationale for the repeal of these regulations is that there is no longer statutory authority for the regulations. In addition, a repeal of these regulations would benefit the welfare of the citizens of Virginia because these regulations no longer have statutory authority. The repeal would solve the problem of existing regulations that are no longer authorized by statute.

Rationale: In 2016, the General Assembly removed the peer review program from the Virginia Workers' Compensation Act. Because of the repeal of the statutory provisions that authorized these regulations, this rulemaking is expected to be noncontroversial and appropriate for the fast-track rulemaking process.

Substance: The regulations will be completely repealed.

Issues: The primary advantage to the public of implementing this regulatory action is that the end result will be to bring the Virginia Administrative Code into agreement with the Code of Virginia. There are no disadvantages to the public in implementing this regulatory action.

The primary advantages to the Virginia Workers' Compensation Commission and the Commonwealth of implementing this regulatory action is that the end result will be to bring the Virginia Administrative Code into agreement with the Code of Virginia. There are no disadvantages to the commission or to the Commonwealth in implementing this regulatory action.

Department of Planning and Budget's Economic Impact Analysis: The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia (Code) and Executive Order 19. The analysis presented represents DPB's best estimate of these economic impacts.¹

Summary of the Proposed Amendments to Regulation. The Virginia Workers' Compensation Commission (Commission) proposes to repeal 16VAC30-60 Procedural Regulations Governing the Administration of Medical Costs Peer Review by the Regional Peer Review Committees under the Virginia Workers' Compensation Act and 16 VAC 30-70 Plan of Operation for the Medical Costs Peer Review Statewide Coordinating Committee under the Virginia Workers' Compensation Act.

Background. The two regulations proposed for repeal were authorized by §§ 65.2-1300 through 65.2-1310 of the Code of Virginia. These Code sections were repealed by Chapters 279 and 290 of the 2016 Acts of Assembly.² With the repeal, the Commission no longer had jurisdiction to continue the medical costs peer review program. Hence, the peer review program was disbanded in 2016.

In place of the medical costs peer review program, the legislation mandated that the Commission adopt regulations establishing fee schedules setting the maximum pecuniary liability of the employer for medical services provided to an injured person pursuant to the Virginia Workers' Compensation Act, in the absence of a contract under which the provider has agreed to accept a specified amount for the medical service. Such regulation was adopted via an exempt action in 2018.³

Estimated Benefits and Costs. The two regulations are obsolete in that they pertain to a program that no longer has statutory authority and no longer exists. Repealing the regulations would be beneficial in that people who read regulations would not be misled into believing the program still exists.

Businesses and Other Entities Affected. The proposal affects readers of Virginia Workers' Compensation Commission regulations.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁴ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. Since the repeal of the regulations would not increase net costs or affect revenues, no adverse impact is indicated.

Small Businesses⁵ Affected:⁶ The proposed repeal of the regulations would not adversely affect small businesses.

Localities⁷ Affected⁸ The proposed repeal of the regulations would not disproportionally affect any particular localities and would not introduce costs for local governments.

Projected Impact on Employment. The proposed repeal of the regulations would not affect employment.

Effects on the Use and Value of Private Property. The proposed repeal of the regulations would not affect the use and value of private property or real estate development costs.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

²See third enactment clause of https://lis.virginia.gov/cgi-bin/legp604.exe?161+ful+CHAP0279 and https://lis.virginia.gov/cgi-bin/legp604.exe?161+ful+CHAP0290.

³See https://townhall.virginia.gov/L/ViewAction.cfm?actionid=4963.

⁴Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁵Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁶If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to Code § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁷"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁸Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency Response to the Department of Planning and Budget's Economic Impact Analysis: The Virginia Workers' Compensation Commission is in agreement with the economic impact analysis completed by the Virginia Department of Planning and Budget.

Summary:

The action repeals Procedural Regulations Governing the Administration of Medical Costs Peer Review by the Regional Peer Review Committees under the Virginia Workers' Compensation Act (16VAC30-60) and Plan of Operation for the Medical Costs Peer Review Statewide Coordinating Committee under the Virginia Workers' Compensation Act (16VAC30-70).