Committee hears push to make medical case management an entitlement and raise late‑payment penalties in workers' comp bill

The Vermont House Committee on Commerce and Economic Development on April 4 heard testimony on S.125 that would add medical case management and translation access to the state workers' compensation statute and change the penalty structure for untimely indemnity payments.

Kelly Massacott, a practicing attorney in Montpelier with the law firm Bigham Fox Skinner representing the Vermont Association of Justice, told the committee the bill would make existing medical case management services an entitlement for injured workers under Title 21 and outlined four principal changes: a statutory definition of medical case management, entitlement when reasonably supported, access to translation services, and a revised penalty schedule for late wage‑replacement payments. "The proposed addition to the definitions under 21 V.S.A. §601 would grant claimants, injured workers, entitlement to these services if the evidence supports it," Massacott said.

Massacott urged the panel to keep the bill's current language defining "reasonable support" to include either a treating health care provider's recommendation or other evidence showing the injured worker would benefit from case management. "A health care provider recommending it is important, but it's also important that there might be other evidence," she said, adding that some injured people lack an ongoing treating provider or have cognitive or social limitations that make outside evidence necessary.

The bill would use the same preauthorization process that already applies to medical treatment: an initial 14‑day insurer response window with an additional 30 days allowed for expert review. Massacott said the Department of Labor (DOL) case specialists typically act promptly when disputes reach the department, though she and committee members expressed a desire for faster on‑the‑ground turnaround in urgent situations.

Massacott also described proposed changes to the penalty structure for untimely indemnity (wage‑replacement) payments. Under current statute, a late payment that is up to 20 days late carries a 5% penalty; more than 21 days late carries a 10% penalty. S.125 would move to a graduated scheme based on the number of late payments in a claim — 5% for the first late payment, 10% for the second, and 15% for the third and subsequent late payments. Massacott said the Senate had at one point considered a 25% cap but the version she discussed capped penalties at 15%.

Massacott provided case‑level figures to illustrate the problem: since January 2024 she reviewed 64 cases in which indemnity payments were due; 47% of those claims had at least one late payment, 32% had at least two late payments, and 26% had at least three late payments. "This is not okay," she said, describing the financial stress late payments cause for claimants who rely on those benefits as a paycheck.

Representatives of the insurance industry told the committee they view the case management and translation provisions as largely codifying current practice but urged clearer statutory language on what constitutes "reasonable support." Jamie Feeney of PREMIER, speaking on behalf of the American Property Casualty Insurance Association (APCIA), said insurers prefer an initial determination to be based on a health care provider's recommendation. "Our preference would be to have that initial determination be determined by the medical provider solely," Feeney said, while acknowledging the department retains authority to review and order services if insurers do not act.

APCIA witnesses and committee members also debated how widespread late payments are and whether penalty increases should be adopted without better data. Feeney said late payments are "rare" in carriers' experience and that some late payments arise from logistical errors or circumstances outside insurer control, such as account problems or missing information from claimants. APCIA offered to work with the committee and DOL to identify reporting options and root causes before increasing penalties.

Committee members asked DOL questions about the department's ability to track late payments and whether administrative penalties already available to the commissioner are sufficient. Witnesses noted that administrative penalties, when imposed, go to the department rather than to injured workers; committee members and Massacott discussed whether part of any penalty should be directed to workers to make them whole for bank fees or other harms caused by late payments.

Massacott also raised a separate concern about unemployment calculations for workers who earn limited part‑time wages while on temporary partial disability, suggesting those reduced wages should not depress later unemployment benefits. Committee members said they would consult with the department about possible federal constraints and legal interactions before pursuing that fix.

The committee did not take formal action and indicated it will continue discussion in future sessions and pursue additional data from carriers and the department.

The discussion took place during the House Committee on Commerce and Economic Development's April 4, 2025, hearing on S.125 (as well as closely related language in S.117).