STAND. COM. REP. NO. 3800

Honolulu, Hawaii

RE: H.B. No. 1509

H.D. 2

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committees on Judiciary and Ways and Means, to which was referred H.B. No. 1509, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Repeal the authorization of a physician to transmit a treatment plan by mail or facsimile to an address or facsimile number provided by the employer;

(2) Require employers denying a treatment plan to file a written denial with the Director of Labor and Industrial Relations within seven days of receipt;

(3) Place the burden of proof on the employer to establish by a preponderance of medical evidence that the denial of the treatment plan is justified;

(4) Establish a presumption that a denial of a treatment plan not supported by a medical opinion or relevant medical records existing at the time of denial shall be presumed to be without reasonable grounds;

(5) Clarify that a treatment plan is deemed accepted if an employer fails to file a written denial within the seven-day period;

(6) Require employers to pay the appropriate health care provider for any medical care set forth in a treatment plan that is accepted or deemed accepted; and

(7) Establish penalties for employers whom the Director found to have denied a treatment plan without reasonable grounds, frivolously, or primarily for purposes of delay, or to have failed to pay for an injured employee's medical care under an accepted treatment plan.

Your Committees received testimony in support of this measure from the Department of Labor and Industrial Relations; United Public Workers, AFSCME Local 646, AFL-CIO; University of Hawaii Professional Assembly; Work Injury Medical Association of Hawaii; and twenty-five individuals.

Your Committees received testimony in opposition to this measure from two individuals.

Your Committees received comments on this measure from the Department of Human Resources Development, Hawaii Insurers Council, and Kohala Coast Resort Association.

Your Committees find that the workers' compensation system is rife with issues, including rising health care costs, inconsistent treatment guidelines, inefficient claims processing, prolonged litigation, and significant delays in medical care. Furthermore, many health care providers experience long reimbursement timelines, discouraging participation in the system. Streamlining administrative bottlenecks and imposing a seven-day timeline for employers to file a written denial to a treatment plan will ensure that workers receive treatment in a timely fashion, allowing them to swiftly return to work. This measure will strengthen the accountability of the workers' compensation system to protect injured workers from avoidable and harmful delays in their recovery.

As affirmed by the records of votes of the members of your Committees on Judiciary and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1509, H.D. 2, S.D. 1, and recommend that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committees on Judiciary and Ways and Means,

________________________________ DONOVAN M. DELA CRUZ, Chair

________________________________ KARL RHOADS, Chair