MINUTES OF THE
ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT
Sixty-seventh Session
May 17, 1993
The Assembly Committee on Labor and Management was called to order by Chairman Christina R. Giunchigliani, at 5:45 p.m., on May 17, 1993, in Room 119 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Ms. Christina R. Giunchigliani, Chairman
Mr. Douglas A. Bache
Mr. John C. Bonaventura
Mr. John C. Carpenter
Mr. Tom Collins, Jr.
Mr. Peter G. Ernaut
Ms. Lynn Hettrick
Ms. Erin Kenny
Mr. John B. Regan
Mr. Michael A. Schneider
COMMITTEE MEMBERS ABSENT:
Mr. Bernie Anderson, Vice Chairman, excused
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Ms. Kimberly Morgan, Bill Draft Advisor
Mr. Donald O. Williams, Principal Research Analyst
Mr. Frank Krajewski, Senior Research Analyst
Ms. Leigh C. O'Neill, Deputy Legislative Counsel
Ms. Vivian McClay, Senior Research Technician
OTHERS PRESENT:
Mr. Scott Young, General Counsel, the State Industrial
Insurance System (SIIS)
Ms. Carol Jackson, Director, Department of Industrial
Relations
Mr. Ray Bacon, Executive Director, Nevada Manufacturers
Association
Mr. John Wills
Mr. Bill Champion, Nevada Unified Coalition of Southern
Nevada
Mr. Jack Jeffrey, Southern Nevada Building & Construction
Trades Council
Mr. George McNally, Nevada Trial Lawyers Association (NTLA)
Mr. Jim Jeppson, Acting Administrator, Division of
Industrial Insurance Relations (DIIR)
Ms. Terri Potts, Executive Director, Nevada Physicians Caucus
Chairman Giunchigliani opened the hearing on SB-316, Sections 12-15, Notice of Injury. She explained these sections tied into the more simplified form the committee was trying to establish. The idea was to initiate a form where the injury was documented in case the injury got worse.
SENATE BILL 316 -Makes various changes to provisions governing industrial insurance. (BDR 53-1764)
Mr. Scott Young, General Counsel, the State Industrial Insurance System (SIIS), testified. He explained the Notice of Injury was a separate form distinct from the C-3 (employers first report of injury). The notice of injury would serve as an indication there had been an injury. A C-3 was needed if the injured worker had actually lost time or needed medical attention. Possibly the form could be designed to cover both, but there might be confusion about which part the employer was supposed to keep and not send to the insurer. Part of the reason for the notice of injury was to keep the minor injuries from been referred to the insurer.
Mr. Young explained the State Industrial Insurance System (SIIS) took the existing Sections 12-15, 73 and 166 of SB-316 and consolidated them into one section (Exhibit C). The amendments were set up in chronological order of how they would flow from the claimant, to the doctor, to the employer, to the insurer. He noted there was an error on page 8 of Exhibit C, Section 14, line 3-4 and explained "whichever occurs first," should be deleted.
Mr. Young called attention to page 10, Section 73 of Exhibit C, and explained this dealt with the reporting of the $200 deductible. Mr. Young noted it was preferable to have the employer send in the C-3 and have the claimant send SIIS the C-4 form (claim for compensation). This would enable the insurer to make the compensability determination. The billings would be made directly to the employer by the managed care organization.
Mr. Young further explained on page 11 of Exhibit C was an alternate version based on the assumption there would be no managed care organization or in the rural areas where no managed care existed. The system would then pay the deductible and bill the individual employers on a quarterly basis. In both versions under the managed care assumption and under the assumption the system would pay the bills first, there was a provision stating if the employer did not pay within a specified time period, then SIIS would commence action to terminate their insurance.
Chairman Giunchigliani reviewed all the amendments explained in Exhibit C. She questioned if a person had to file a claim for a minor injury of less than $200 listed on page 3, item 6, Exhibit C. Mr. Young explained someone had to pay the bill and it would still involve a compensability determination. He noted the threshold was if a person required medical care or had actually lost time from work, then the form had to be sent to the insurer.
The Chair stated currently an employer could go ahead and pay a claim under $200 and never have to file a claim. Mr. Young responded under the present law an injury had to be reported or the employer could be fined. He also explained any notice of injury had to be kept on file for three years.
Mr. Hettrick questioned if there was a problem between Section 1 which stated 30 days and Section 7, subsection 6 which stated 90 days (Exhibit C). Mr. Young explained the 30 day provision referred to the notice of injury. Mr. Young suggested deleting the wording "for which compensation is payable" in Section 1. Mr. Young explained sometimes a 90 day notification limit was necessary to give the injured party adequate time to turn in a claim. He further explained the notice of injury was one form and the claim for compensation was another.
Ms. Kimberly Morgan, Bill Draft Advisor, testified. She suggested adding language which stated, "Something that occurs out of the course and scope of the employment," and delete the compensation issue.
Mr. Bonaventura questioned if a C-4 had to be completed every time the injured worker visited his physician and if it had to be completed within three working days. Mr. Young responded the C-4 was only needed after the initial visit and subsequent visits only required an office note. Mr. Young suggested inserting the word "initial" in Section 7, subsection 9.
Mr. Bache called attention to Section 7, subsection 5. He described a scenario where a person had an accident, did not receive medical treatment, then had a subsequent injury more than three years later where the physician tracked it to the original injury. What would happen when the notice of injury had been disposed of after the three years, and how would this affect the self-insured since they were not mentioned on the notice of injury. Mr. Young responded the self-insureds were required to have the notice of injury. He further noted the notice of injury was connected to minor injuries and it would be very surprising if after three years a doctor would tie something back to an injury so minor there was not even a claim filed for it.
Mr. Bache suggested the notice of injury should go to Department of Industrial Relations (DIR) for the self-insureds. Mr. Young responded the injured worker should have a copy of the notice and the employer should keep it for three years. He also mentioned the notice of injury was established to cut down on the paperwork, and to also send it to DIR would defeat the purpose.
Ms. Carol Jackson, Director, Department of Industrial Relations, testified. Ms. Jackson concurred with Mr. Young regarding the notice of injury.
Mr. Carpenter asked if "Upon received" on page 7, Section 3 of Exhibit C was correct wording. Mr. Young responded it should state "Upon receipt."
Mr. Carpenter asked if the number of days the injured worker would be off work was noted on the certificate of disability. Mr. Young responded presently on the C-4 form there was a block where the physician would indicate whether the worker would be off for five days or more.
After discussion between Mr. Carpenter and Mr. Young it was decided to delete "whichever occurs first" from page 8, Section 14 of Exhibit C.
Mr. Carpenter asked Mr. Young to clarify Section 18, page 9 of Exhibit C. Mr. Young explained Section 18 referred to the acceptance or denial of a claim. Within 30 working days the insurer had to make the decision if a claim was valid or not. Mr. Young also noted SIIS tried to make these decisions as soon as possible, and if the injured worker was entitled to temporary total disability (TTD) he would get his first check immediately. SIIS did not automatically wait the 30 days to accept the claim or make payment. Once the claim was accepted the bills were processed immediately.
Chairman Giunchigliani asked if an employee was fined if he refused to complete the report. Ms. Jackson responded this was correct.
Mr. Ray Bacon, Executive Director, Nevada Manufacturers Association, testified. He explained claims under $200 which only involved medical would automatically be closed in one year. Mr. Bacon commented the notice of injury should not be kept more than one year unless the employee wanted to keep it. He suggested if a claim did not go beyond the $200 it should be automatically closed after one year to reduce paperwork.
Mr. Young noted in Section 191 of SB-316 if the claim was less than $200 the claim closed automatically if the employee was insured by the system and did not receive medical treatment for the injury for at least six months. He noted maybe Ms. Jackson could respond better as to what the Occupational Safety and Health Administration (OSHA) time requirements were. Ms. Jackson replied she would have to check into it and get back to the committee at a later date.
Chairman Giunchigliani questioned if an employee was penalized if he did not tell a new employer he had a previous injury, and was any paperwork required. Mr. Young responded in most instances an employee was only required to disclose the information and did not have to present documentation.
The Chair noted a five year record was required by OSHA. Mr. Bacon responded only if it was reportable under the OSHA 200 log. The vast majority of injuries were under $200.
The Chair suggested possibly this information could be kept on microfilm instead of keeping a hard copy. Mr. Young responded there was no requirement to keep a hard copy as long as there was a record, but also noted to keep a hard copy would not take up very much space, even with several hundred employees.
After some discussion the Chair acknowledged the committee's agreement to consolidate Sections 12-15, 73 and 166 of SB-316 (Exhibit C).
Chairman Giunchigliani opened testimony on Sections 194 and 292 of SB-316, Temporary Total Disability (TTD), (Exhibit D). She explained Section 194 eliminated the retroactive TTD payment for the first five days off work and clarified when eligibility benefits ceased for TTD's.
Ms. Kenny noted her objection to eliminating the TTD payment for the first five days off work, and expressed her desire to discuss this further. Mr. Bonaventura concurred.
Mr. Hettrick suggested amending the five days to two days, except when an injured worker went in the hospital, then the deduction would not apply to long term injuries. Mr. Hettrick also noted the system had to save money some way and employees would be less inclined to access the system knowing they would lose two days pay.
Mr. Bonaventura noted his disagreement with Mr. Hettrick and explained the injured worker would be penalized by taking away benefits.
Mr. Ernaut concurred with Mr. Hettrick and stated if the system was to function as other private insurance agencies did, then a deductible was very realistic. He noted almost all types of insurance policies had some type of deductible and this was to discourage indiscriminate access to the system.
Chairman Giunchigliani mentioned if there was a mandatory deductible the system would pay the deductible, and if it was a compensable claim the employer would reimburse the system. Mr. Hettrick said it was his understanding the deductible would be billed back to the employer, and his policy would be canceled if he did not pay. He further commented in the state of Nevada an employer would be under the fraud statute if he continued in business without insurance.
Chairman Giunchigliani pointed out when an injured worker was off work he received only 66 2/3 percent of his pay which would also be held up for an additional five days. Therefore, the injured worker was doubly losing. She further noted as far as the issue of fraud, the fraud unit was being created to deal with those issues.
After committee discussion regarding the first five days without pay and how it would affect the injured worker financially, Chairman Giunchigliani explained the committee was given a bill which someone else decided was the answer to fix the system and yet it did not. The system got broke by four years of no rate increases, dividends, and 10 years of claims mismanagement. All these things drove the costs to the now existing financial problems the system was facing.
Chairman Giunchigliani stated on Wednesday this would be discussed further.
Mr. John Wills, injured worker, testified via teleconference from Cashman Field. Mr. Wills stated it took him well in excess of 30 days to even get his claim opened and the amount he collects was 62 percent, not 66 2/3 percent. He noted if a person was in the system a long time there were no cost of living increases. He noted many of the figures passed around by the committee were in error. Mr. Wills asked the committee to explain the figures they previously spoke of.
The Chair responded the committee could probably respond to him on Wednesday night when these issues were dealt with.
Mr. Bill Champion, Nevada Unified Coalition of Southern Nevada, testified. Nobody wanted to punish the injured worker. He explained how employees took advantage of sick leave and used it as vacation time. Most accidents were contusions, abrasions, slips and falls. Mr. Champion agreed with Mr. Hettrick's suggestion of the first two days without pay for an injured employee. He noted this would not hurt the injured worker as much, would eliminate some accidents from happening, and would benefit the system.
Mr. Jack Jeffrey, Southern Nevada Building & Construction Trades Council, testified. He noted his disagreement with the first five days without pay and could not see the difference between someone in the hospital or someone who only required medical treatment. He noted most of the construction workers he knew had families to take care of and they would much rather be working than be in the hospital or injured. Mr. Jeffrey stated anything taken away from the injured worker was punishment and someone should not be punished for being injured. He noted the injury was punishment enough.
Chairman Giunchigliani opened testimony on Sections 195 and 196 of SB-316 (Exhibit D).
Mr. Carpenter declared he wanted the system to develop a schedule to provide the person with the greatest injury, the greatest percent of the average monthly wage.
Mr. Ernaut stressed he wanted the difference between impairment and disability distinguished in SB-316.
Mr. Regan concurred with Mr. Carpenter.
Chairman Giunchigliani requested Mr. Young and Mr. McNally to clarify the difference between permanent partial disability and permanent total disability, also to outline the difference between impairment and disability.
Mr. George McNally, Nevada Trial Lawyers Association (NTLA), testified. He explained permanent partial disability was a rating used when someone had reached medical stability. For instance when the physician stated, "You're as good as you're going to get; I can't do anymore for you." The injured worker was then scheduled for a permanent partial disability rating. If the injured worker had a percentage of impairment, then the impairment would be calculated according to his wage, age and percentage of impairment.
Mr. McNally outlined permanent total disability was also referred to as statutory total disability. For example if an employee lost both arms, at or above the elbow, he would be considered statutorily permanently disabled under the law in Nevada. He explained when a person was declared permanently totally disabled, he would receive benefits for life.
Mr. McNally explained when an employee went for an impairment rating, the doctor who did the rating must follow the AMA Guide for the evaluation of permanent impairment. Mr. Ernaut referenced the carpenter who lost the tip of his finger, never lost a day of work, but received a PPD award. He noted he was not disabled since he went back to work immediately. Mr. Ernaut interrogated why should someone automatically receive a PPD award for losing the tip of a finger, when he was not disabled for one day. Mr. McNally responded disability should be defined in SB-316 as a person who could not continue to be a productive employee.
Mr. Hettrick called attention to a handout from Mr. Young (Exhibit E), "Guides to the Evaluation of Permanent Impairment" which referenced the subject in question. Mr. Hettrick suggested establishing a low scale award schedule for minor impairments and another schedule for larger disabilities.
Ms. Kenny concurred with Mr. Ernaut and Mr. Hettrick.
Mr. Carpenter queried if an update on the dollar value SIIS needed to save would be presented to the committee or was the $300 million the correct figure. Chairman Giunchigliani responded on Wednesday SIIS would set up their computer and present to the committee a picture of what was going on in the system at present.
Mr. Carpenter mentioned if there was not enough time for SIIS to do their presentation, maybe the committee could work something simple with the percentages to achieve some of the equality to secure the cost savings necessary. He further noted if the system was going to be saved, some major dollar savings were needed. The Chair responded rate increases might also be included.
Mr. Ernaut questioned if Mr. Young's handout (Exhibit E) was part of the AMA Guide. Mr. Young responded it was the first page of the preface of the AMA Guide 2nd Edition, which was currently used by SIIS. He stated the guide referenced an accurate definition between a medical impairment and a disability. In Nevada the impairment was rated for a PPD, not the loss of earning capacity. The guide was used by SIIS to determine the extent of an impairment. Then under the statute SIIS used an impairment based formula to determine the PPD.
The Chair noted probably the correct title should be "Permanent Partial Impairment" (PPI). Permanent Partial Disability (PPD) should be brought in to cover the second factor of earning or wage losses.
After committee discussion comparing Nevada to other western states, the Chair asked Mr. Young to clarify.
Mr. Young explained when the Standing Committee met there were some figures presented from Southwest Gas where it was reported Nevada paid much higher than other states. Nevada's PPD ratings were higher than a number of states, but in comparing the Southwest Gas figures SIIS did not find the difference to be quite as large as Southwest Gas did.
Mr. Young mentioned although changing the percentage from a .6 to a .5 would save the system a large amount of money there were also many approaches which could be taken to make some adjustments to the present system. He suggested changing the way the rating physicians were selected by having both parties choose a physician jointly. Being bound by the rating unless there was a manifest error would decrease appeals.
Mr. Young noted these changes would not impact the financial burden facing the system as much as an across-the-board cut would, but it was an issue to be examined. When a decision was made whether an impairment base or lost earning base approach would be used, there was still some more technical issues to review. Maybe there were some improvements which could be made in terms of eliminating some of the subjectiveness and litigation.
Mr. McNally stated the PPD ratings and payments to injured workers in Nevada could not be compared with other states. He noted other states did not rate exactly as Nevada did. What had to be settled was whether or not Nevada paid injured workers more than was necessary.
Mr. Collins concurred with Mr. Young regarding the injured worker and the SIIS employee jointly choosing a physician. Mr. McNally also concurred. Mr. Collins questioned how often there were disagreements at present. Mr. McNally explained an injured worker got set up for a rating and the carrier notified DIR they had a rateable claimant. Then a doctor was assigned to rate the employee, and after the rating was complete it was reviewed by the system. Mr. McNally responded he did not know how often additional ratings were requested.
Discussion commenced regarding formulating a more realistic schedule for PPD awards, and more distinction should be made between small and large injuries.
Ms. Terri Potts, Executive Director, Nevada Physicians Caucus, testified. Ms. Potts addressed the position of the rating physician. She explained when the physicians caucus looked over Permanent Partial Disability (PPD) ratings and the possible cost savings which could be affected in the system with PPD's, one of the problems found consistently was the rating physicians who currently did PPD's were often not qualified. She noted at present a physician had to undergo an eight hour course through the Department of Industrial Relations (DIR). DIR had found this was not sufficient because there were physicians who had no training in muscular skeletal injuries who did PPD ratings. She noted recently an oral surgeon told her a SIIS patient was sent to him for a skin evaluation. He stated he was not qualified to do this evaluation, but did it because he was on the rating list. She recommended DIR develop a more intensive training schedule for rating physicians, and rating physicians should undergo a three month monitoring period under the supervision of an already qualified rating physician. Hopefully the new rating physicians work would be supervised by the previous rating physician, and this would help get a handle on leveling out the ratings. The physicians represented through Nevada Physicians Caucus felt the ratings needed to be more standardized. At present, examination, evaluation, and interpretation were not standardized. She also suggested establishing a binding physician arbitration panel. She mentioned a couple of training courses which had been developed.
Chairman Giunchigliani noted there were some training courses which were talked about last session. She also asked how the oral surgeon's name and specialty was listed.
Carol Jackson, Director, Department of Industrial Relations responded when there was a specialty needed such as cardiology, the insurer would note on the slip what specialty was needed. She noted the oral surgeon was in error to even try to do a rating for a skin evaluation.
Chairman Giunchigliani questioned if the treating physician was supposed to note what specialty was needed. Ms. Jackson replied the insurer would note what specialty was needed rather than just a standard rating physician.
Mr. Jim Jeppson, Acting Administrator, Division of Industrial Insurance Regulation, responded the rotating physician assigning program was fully automated at present and allowed for specialties to be designated. Presently there were no chiropractors on the list or training programs for any physicians.
Ms. Jackson stated until the third edition was adopted DIR could not add any physicians.
Chairman Giunchigliani asked when the fourth edition came out. Ms. Jackson stated it should be available for review some time this summer.
Mr. Collins questioned if chiropractors were ever listed. Mr. Jeppson noted DIR never had chiropractors listed as rating physicians.
Ms. Potts stated the physician who contacted her over the weekend asked if she could help him cut through the red tape so he could get out from the responsibility of having this patient. Ms. Potts noted it was taken care of.
There being no further business to come before committee, the meeting was adjourned at 8:00 p.m..
RESPECTFULLY SUBMITTED:
JEANNE PEYTON
Committee Secretary
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Assembly Committee on Labor and Management
May 17, 1993
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Assembly Committee on Labor and Management
May 17, 1993
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