HB 480: Workers' Compensation; Functional Capacity Examination; Occupational Therapy; Physical Therapy

A BILL FOR AN ACT

RELATING TO WORKERS' COMPENSATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that timely and accurate determination of an injured worker's physical abilities and functional restrictions is essential to ensure their fair treatment under the workers' compensation system.  Functional capacity examinations play a critical role in assessing whether an injured worker can return to work, with or without accommodations, or proceed with vocational rehabilitation when returning to full duty is not possible.  However, the current system often delays functional capacity examinations due to denials or pending approvals from insurers or adjusters, thereby prolonging the injured worker's path to recovery and return to work.  These delays exacerbate financial and emotional strain on workers, increase administrative inefficiencies, and impede the progress of vocational rehabilitation programs.

     The purpose of this Act is to streamline the approval process for functional capacity examinations, ensuring automatic approval of the examinations when requested by the attending physician under certain conditions, thereby reducing unnecessary delays and improving outcomes for injured workers.

     SECTION 2.  Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:

     "§386-    Functional capacity examination.  (a)  When an injured employee's attending physician has determined that the employee has reached medical stabilization and is permanently unable to return to the employee's usual and customary employment, the physician may request a functional capacity examination to be performed by a qualified health care provider whose opinion or advice is necessary in the evaluation and treatment of the injured employee's injury; provided that:

     (1)  The qualified health care provider shall be trained to perform a functional capacity examination; and

     (2)  The attending physician shall not be required to obtain permission from the employer before requesting a functional capacity examination or referring the employee for a functional capacity examination.

     (b)  The name, business address, discipline, and specialty of the qualified health care provider and reasons for the functional capacity examination shall be submitted in writing to the employer at least seven calendar days before the referral.

     (c)  The qualified health care provider performing the functional capacity examination shall provide a copy of the functional capacity examination report to the attending physician and employer no later than fourteen calendar days after the date of the examination.

     (d)  Fees for functional capacity examinations requested by the attending physician pursuant to this section shall be paid by the employer.

     (e)  For the purposes of this section:

     "Functional capacity examination" means a set of tests that are used to identify an injured employee's physical skills, functional capabilities, activity endurance, and work tolerances after reaching medical stabilization.

     "Functional capacity examination report" means a report issued by a qualified health care provider that provides recommendations regarding an injured employee's ability to return to work or return to work with restrictions or the need for accommodations to safely return to work based on a functional capacity examination performed on the employee.

     "Qualified health care provider" means a health care provider who meets the qualifications under section 386-27 to render health care and services under this chapter."

     SECTION 3.  Section 386-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  All health care providers rendering health care and services under this chapter shall be qualified by the director and shall remain qualified by satisfying the requirements established in this section.  The director shall qualify any person initially who has a license for the practice of:

     (1)  Medicine or osteopathy under chapter 453;

     (2)  Dentistry under chapter 448;

     (3)  Chiropractic under chapter 442;

     (4)  Naturopathic medicine under chapter 455;

     (5)  Optometry under chapter 459;

     (6)  Podiatry under chapter 463E;

     (7)  Psychology under chapter 465; [and]

     (8)  Advanced practice registered nurses under chapter 457[.]; and

     (9)  Occupational therapy under chapter 457G or physical therapy under chapter 461J; provided that occupational therapists and physical therapists qualified under this section shall be qualified for the limited purpose of performing functional capacity examinations pursuant to section 386‑  ."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2050.

Report Title:

Workers' Compensation; Functional Capacity Examination; Occupational Therapy; Physical Therapy

Description:

Authorizes an attending physician to request a functional capacity examination and refer an injured employee for the examination without first obtaining permission from the employee's employer.  Allows licensed occupational and physical therapists to be deemed qualified to perform functional capacity examinations.  Effective 7/1/2050.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO WORKERS' COMPENSATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that timely and accurate determination of an injured worker's physical abilities and functional restrictions is essential to ensure their fair treatment under the workers' compensation system.  Functional capacity exams play a critical role in assessing whether an injured worker can return to work, with or without accommodations, or proceed with vocational rehabilitation when returning to full duty is not possible.  However, the current system often delays functional capacity exams due to denials or pending approvals from insurers or adjusters, which prolongs the injured worker's path to recovery and return to work.  These delays can exacerbate financial and emotional strain on workers, increase administrative inefficiencies, and impede the progress of vocational rehabilitation programs.

     The purpose of this Act is to streamline the approval process for functional capacity exams, ensuring automatic approval of such exams when requested by the attending physician under certain conditions, thereby reducing unnecessary delays and improving outcomes for injured workers.

     SECTION 2.  Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:

     "§386-     Functional capacity exam.  (a)  When an injured employee's attending physician has determined that the employee has reached medical stabilization and is permanently unable to return to the employee's usual and customary employment, the physician may request a functional capacity exam to be performed by a qualified health care provider whose opinion or advice is necessary in the evaluation and treatment of the injured employee's injury; provided that:

     (1)  The qualified health care provider shall be trained to perform a functional capacity exam; and

     (2)  The attending physician shall not be required to obtain permission from the employer before requesting a functional capacity exam or referring the employee for a functional capacity exam.

     (b)  The name, business address, discipline, and specialty of the qualified health care provider and reasons for the functional capacity exam shall be submitted in writing to the employer at least seven calendar days prior to the referral.

     (c)  The qualified health care provider performing the functional capacity exam shall provide a copy of the exam report to the attending physician and employer within fourteen calendar days of the date of the exam.

     (d)  Fees for functional capacity exams requested by the attending physician pursuant to this section shall be paid by the employer.

     (e)  For the purposes of this section:

     "Functional capacity exam" means a set of tests that are used to identify an injured employee's physical skills, functional capabilities, activity endurance, and work tolerances after reaching medical stabilization and provide recommendations regarding the employee's ability to return to work or return to work with restrictions or the need for accommodations to safely return to work.

     "Qualified health care provider" means a health care provider who meets the qualifications under section 386-27 to render health care and services under this chapter."

     SECTION 3.  Section 386-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  All health care providers rendering health care and services under this chapter shall be qualified by the director and shall remain qualified by satisfying the requirements established in this section.  The director shall qualify any person initially who has a license for the practice of:

     (1)  Medicine or osteopathy under chapter 453;

     (2)  Dentistry under chapter 448;

     (3)  Chiropractic under chapter 442;

     (4)  Naturopathic medicine under chapter 455;

     (5)  Optometry under chapter 459;

     (6)  Podiatry under chapter 463E;

     (7)  Psychology under chapter 465; [and]

     (8)  Advanced practice registered nurses under chapter 457[.]; and

     (9)  Occupational therapy under chapter 457G or physical therapy under chapter 461J; provided that occupational therapists and physical therapists qualified under this section shall be qualified for the limited purpose of performing functional capacity exams pursuant to section 386‑   ."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

Workers' Compensation; Functional Capacity Exam; Occupational Therapy; Physical Therapy

Description:

Authorizes an attending physician to request a functional capacity exam and refer an injured employee for the exam without first obtaining permission from the employee's employer.  Allows licensed occupational and physical therapists to be deemed qualified to perform functional capacity exams.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to workers' compensation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that timely and accurate determination of an injured worker's physical abilities and functional restrictions is essential to ensure their fair treatment under the workers' compensation system.  Functional capacity exams play a critical role in assessing whether an injured worker can return to work, with or without accommodations, or proceed with vocational rehabilitation when returning to full duty is not possible.  However, the current system often delays functional capacity exams due to denials or pending approvals from insurers or adjusters, which prolongs the injured worker's path to recovery and return to work.  These delays can exacerbate financial and emotional strain on workers, increase administrative inefficiencies, and impede the progress of vocational rehabilitation programs.

     The purpose of this Act is to streamline the approval process for functional capacity exams, ensuring automatic approval of such exams when requested by the attending physician under certain conditions, thereby reducing unnecessary delays and improving outcomes for injured workers.

     SECTION 2.  Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:

     "§386-     Functional capacity exam.  (a)  When an injured employee's attending physician has determined that the employee has reached medical stabilization, the physician may request a functional capacity exam to be performed by a qualified health care provider whose opinion or advice is necessary in the evaluation and treatment of the injured employee's injury; provided that:

     (1)  The qualified health care provider shall be trained to perform a functional capacity exam; and

     (2)  The attending physician shall not be required to obtain permission from the employer before requesting a functional capacity exam or referring the employee for a functional capacity exam.

     (b)  The name, business address, discipline, and specialty of the qualified health care provider and reasons for the functional capacity exam shall be submitted in writing to the employer at least seven calendar days prior to the referral.

     (c)  The qualified health care provider performing the functional capacity exam shall provide a copy of the exam report to the attending physician and employer within fourteen calendar days of the date of the exam.

     (d)  Fees for functional capacity exams requested by the attending physician pursuant to this section shall be paid by the employer.

     (e)  For the purposes of this section:

     "Functional capacity exam" means a set of tests that are used to identify an injured employee's physical skills, functional capabilities, activity endurance, and work tolerances after reaching medical stabilization and provide recommendations regarding the employee's ability to return to work or return to work with restrictions or the need for accommodations to safely return to work.

     "Qualified health care provider" means a health care provider who meets the qualifications under section 386-27 to render health care and services under this chapter."

     SECTION 3.  Section 386-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  All health care providers rendering health care and services under this chapter shall be qualified by the director and shall remain qualified by satisfying the requirements established in this section.  The director shall qualify any person initially who has a license for the practice of:

     (1)  Medicine or osteopathy under chapter 453;

     (2)  Dentistry under chapter 448;

     (3)  Chiropractic under chapter 442;

     (4)  Naturopathic medicine under chapter 455;

     (5)  Optometry under chapter 459;

     (6)  Podiatry under chapter 463E;

     (7)  Psychology under chapter 465; [and]

     (8)  Advanced practice registered nurses under chapter 457[.]; and

     (9)  Occupational therapy under chapter 457G or physical therapy under chapter 461J; provided that occupational therapists and physical therapists qualified under this section shall be qualified for the limited purpose of performing functional capacity exams pursuant to section 386‑   ."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2025.

Report Title:

Workers' Compensation; Functional Capacity Exam; Occupational Therapy; Physical Therapy

Description:

Authorizes an attending physician to request a functional capacity exam and refer an injured employee for the exam without first obtaining permission from the employee's employer.  Allows licensed occupational and physical therapists to be deemed qualified to perform functional capacity exams.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 1798

Honolulu, Hawaii

RE:    H.B. No. 480

       H.D. 1

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committees on Commerce and Consumer Protection and Ways and Means, to which was referred H.B. No. 480, H.D. 1, 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)  Authorize an attending physician to request a functional capacity examination and refer an injured employee for the examination without first obtaining permission from the employee's employer; and

     (2)  Allow licensed occupational and physical therapists to be deemed qualified to perform functional capacity examinations.

     Your Committees received testimony in support of this measure from the Department of Human Resources Development, Hawaii Insurers Council, Hawaii Medical Association, and one individual.

     Your Committees find that an expedient workers' compensation process is critical to the integrity and health of the State's workforce.  However, delays in the performance of functional capacity examinations during the workers' compensation process, due to denials or pending approvals from insurers or adjusters, further prolong an employee's recovery and return to work.  Delays may also decrease the likelihood that an employee makes a full recovery and return to gainful employment.  Therefore, this measure streamlines the State's workers' compensation system by qualifying certain health care professionals to perform functional capacity examinations without first obtaining permission from the employee's employer.

     As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 480, H.D. 1, S.D. 1, and recommend that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Ways and Means,

STAND. COM. REP. NO. 1100

Honolulu, Hawaii

RE:    H.B. No. 480

       H.D. 1

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Labor and Technology, to which was referred H.B. No. 480, H.D. 1, entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Authorize an attending physician to request a functional capacity examination and refer an injured employee for the examination without first obtaining permission from the employee's employer; and

     (2)  Allow licensed occupational and physical therapists to be deemed qualified to perform functional capacity examinations.  

     Your Committee received testimony in support of this measure from the Department of Human Resources Development, Department of Labor and Industrial Relations, Hawaii Insurers Council, and Hawaii Medical Association.

     Your Committee finds that functional capacity examinations are a critical step in the State's workers' compensation program and return to work program, as they assess an injured worker's ability to return to work.  These examinations provide valuable medical information to objectively determine an employee's physical capabilities, thereby informing the optimal next steps in the employee's recovery and reemployment process.  Utilizing data from a functional capacity examination to modify jobs and gradually transition an employee back to work decreases the risk for reinjury or long-term disability.  Unreasonable delays in the approval and performance of these assessments may increase an injured employee's recovery timeline.  This measure amends the procedures for conducting functional capacity examinations to ensure the examinations are conducted in a timely manner and at the appropriate stage in the workers' compensation process, facilitating superior outcomes for employees and employers.

     Your Committee has amended this measure by:

     (1)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Labor and Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 480, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 480, H.D. 1, S.D. 1, and be referred to your Committees on Commerce and Consumer Protection and Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Labor and Technology,

STAND. COM. REP. NO.  911

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 480

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.B. No. 480, H.D. 1, entitled:

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

begs leave to report as follows:

     The purpose of this measure is to streamline the approval process for functional capacity exams to ensure automatic approval of such exams when requested by the attending physician for an injured employee under certain conditions.

     Your Committee received testimony in support of this measure from the Department of Labor and Industrial Relations; Department of Human Resources Development; and Hawaii Insurers Council.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 480, H.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

STAND. COM. REP. NO.  525

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 480

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 480, H.D. 1, entitled:

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

begs leave to report as follows:

     The purpose of this measure is to streamline the approval process for functional capacity exams to ensure automatic approval of such exams when requested by the attending physician for an injured employee under certain conditions.

     Your Committee received testimony in support of this measure from the Department of Labor and Industrial Relations; Department of Human Resources Development; Hawaii Insurers Council; and Hawaii Medical Association.  Your Committee received testimony in opposition to this measure from the Office of the Mayor of the County of Maui.  Your Committee received comments on this measure from one individual.

     Your Committee finds that a functional capacity exam is a set of tests that are used to identify the patient's physical skills, functional capabilities, activity endurance, and work tolerances, typically administered by a trained and licensed provider, such as an occupational therapist or physical therapist.  Employers understand well the importance of prompt evaluation as the functional capacity exam informs the clinical care team of possible diagnoses, treatments, and recovery.  Additionally, the functional capacity exam provides an objective assessment that assists with future job modifications and the safe gradual transition back to work, decreasing risks for reinjury or long-term disability.  This measure provides a reasonable step to decrease unnecessary and harmful delays for patients by eliminating employer permission for functional capacity exams in certain circumstances.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 480, H.D. 1, and recommends that it be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

STAND. COM. REP. NO.  11

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 480

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Labor, to which was referred H.B. No. 480 entitled:

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

begs leave to report as follows:

     The purpose of this measure is to streamline the approval process for functional capacity exams to ensure automatic approval of such exams when requested by the attending physician for an injured employee.

     Your Committee received testimony in support of this measure from the Department of Labor and Industrial Relations; Hawaiʻi Association of Professional Nurses; Hawaii Insurers Council; and one individual.  Your Committee received comments on this measure from the Department of Human Resources and Development.

     Your Committee finds that injured employees should receive medically necessary functional capacity exams upon a qualifying referral to improve the recovery of the injured employee.  Your Committee further finds that functional capacity exams are critical for assessing whether an injured employee can return to work with or without accommodations, or to proceed with vocational rehabilitation when return to work is not possible.  Currently, functional capacity exams are delayed because of pending approvals from insurers or adjustors.  This process is further delayed by limiting who is qualified to perform functional capacity exams.  Your Committee believes that this measure ensures the injured employee receives a functional capacity exam in a timely manner by authorizing attending physicians to request functional capacity exams without first obtaining the approval from an employer, and by allowing licensed occupational and physical therapists to perform these exams.

     Your Committee has amended this measure by:

     (1)  Specifying that a functional capacity exam can be requested when an injured employee has reached medical stabilization and is permanently unable to return to their usual and customary work; and

     (2)  Changing the effective date to July 1, 3000, to encourage further discussion.

     As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 480, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 480, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Labor,