TITLE 16. LABOR AND EMPLOYMENT

VIRGINIA WORKERS' COMPENSATION COMMISSION

Fast-Track Regulation

Title of Regulation: 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 16VAC30-60-110 through 16VAC30-60-140).

Statutory Authority: § 65.2-1305 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: November 20, 2024.

Effective Date: December 5, 2024.

Agency Contact: Reba O'Connor, Information Security Compliance Policy Analyst, Virginia Workers' Compensation Commission, 333 East Franklin Street, Richmond, VA 23219, telephone (804) 774-4183, or email reba.oconnor@workcomp.virginia.gov.

Basis: Sections 65.2-1300 through 65.2-1310 of the Code of Virginia established basic parameters for peer review regulations and gave the Workers' Compensation Commission the authority to enact such regulations. Sections 65.2-1300 through 65.2-1310 were repealed by Chapter 279 of the 2016 Acts of Assembly. The commission has no jurisdiction to continue the peer review program.

Purpose: A repeal of these regulations would benefit the welfare of the citizens of Virginia because this regulation no longer has statutory authority.

Rationale for Using Fast-Track Rulemaking Process: The commission has no jurisdiction to continue the peer review program, so this repeal should be noncontroversial.

Substance: The amendments completely repeal the chapter.

Issues: The primary advantage of this regulatory action to the public, the commission, and the Commonwealth is that the end result will be to bring the Virginia Administrative Code into agreement with the Code of Virginia. There are no disadvantages of this action to the public, the commission, or 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 and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. The Virginia Workers' Compensation Commission (commission) seeks to repeal the remaining four sections of 16VAC30-60, Procedural Regulations Governing the Administration of Medical Costs Peer Review by the Regional Peer Review Committees under the Virginia Workers' Compensation Act (Chapter 60), since this chapter was made obsolete by Chapters 279 and 290 (identical) of the 2016 Acts of Assembly.

Background. Chapter 60 was originally authorized by §§ 65.2-1300 through 65.2-1310 of the Code of Virginia, which were repealed by Chapters 279 and 290 of the 2016 Acts of Assembly.² With the repeal, the commission no longer has jurisdiction to continue the medical costs peer review program. Hence, the peer review program was disbanded in 2016. Accordingly, the commission seeks to repeal sections 16VAC30-60-110, 16VAC30-60-120, 16VAC30-60-130, and 16VAC30-60-140; all other sections were repealed in 2022.³ 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 (16VAC30-110) was adopted via an exempt action in 2018.⁴

Estimated Benefits and Costs. This regulation is obsolete in that it pertains to a program that no longer has statutory authority and no longer exists. Repealing the regulation 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.⁵ An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.⁶ Since the repeal of the regulations would not increase net costs or affect revenues, no adverse impact is indicated.

Small Businesses⁷ Affected.⁸ The proposed repeal of the regulation would not adversely affect small businesses.

Localities⁹ Affected.¹⁰ The proposed repeal of the regulation would not disproportionally affect any particular localities and would not introduce costs for local governments.

Projected Impact on Employment. The proposed repeal of the regulation 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.

_____________________________

¹ Section 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.

² See 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.

³ Other sections of Chapter 60 were repealed in a previous action, effective December 29, 2022. See https://townhall.virginia.gov/L/ViewAction.cfm?actionid=6015.

⁴ See https://townhall.virginia.gov/L/ViewAction.cfm?actionid=4963.

⁵ Pursuant 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.

⁶ 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. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

⁷ Pursuant 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."

⁸ If 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 § 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.

⁹ "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.

¹⁰ Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

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

Summary:

The amendments repeal the remaining sections of Procedural Regulations Governing the Administration of Medical Costs Peer Review by the Regional Peer Review Committees under the Virginia Workers' Compensation Act (16VAC30-60), the statutory authority for which was repealed by Chapters 279 and 290 of the 2016 Acts of the Assembly.