MINUTES OF THE

      SENATE COMMITTEE ON COMMERCE AND LABOR

 

      Sixty-seventh Session

      February 25, 1993

 

 

The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:00 a.m., on Thursday, February 25, 1993, in Room 227 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

Senator Randolph J. Townsend, Chairman

Senator Sue Lowden, Vice Chairman

Senator Ann O'Connell

Senator Mike McGinness

Senator Raymond C. Shaffer

Senator Leonard V. Nevin

Senator Lori L. Brown

 

STAFF MEMBERS PRESENT:

 

Denise Pinnock, Committee Secretary

Brian Davie, Senior Research Analyst

Jan Needham, Senate Bill Drafting Advisor

Frank Krajewski, Senior Research Analyst

 

OTHERS PRESENT:

 

Mark Ellis, M.D., Medical Advisor, Nevada State Industrial             Insurance System (SIIS)

Jim Jeppson, Administrator, Division of Industrial Insurance           Regulation (DIIR), Department of Industrial Relations (DIR)

Terry Rankin, Director, Nevada Department of Insurance

Scott Young, Consensus Group

George McNally, Consensus Group

Jack Jeffrey, Consensus Group

Don Jayne, General Manager, Nevada State Industrial Insurance          System

Sam McMullen, Lobbyist, Nevada Self-Insurers Association

Tom Nelson, Lobbyist, W.R. Gibbons, Inc.

Carol Jackson, Director, Nevada Department of Industrial Relations

Terri Potts, Lobbyist, Nevada Physicians Caucus

 

 

Chairman Townsend called the meeting to order and noted Dr. Mark Ellis, Medical Advisor, Nevada State Industrial Insurance System (SIIS) had requested to speak first.  Dr. Ellis testified from Cashman Field, Las Vegas via teleconference.  He submitted Exhibit C to illustrate his opinion the committee should not implement the third revised edition of the American Medical Association's (AMA) Guides to the Evaluation of Permanent Impairment.

 

Jim Jeppson, Administrator, Division of Industrial Insurance Regulation (DIIR), Department of Industrial Relations (DIR), explained the DIR had not adopted the third revision of the AMA Guides.  They had planned on doing so, but had changed their minds due to prior testimony from Dr. Ellis and other physicians.  Senator Lowden asked whether Mr. Jeppson had looked at the fourth edition.  He said he had been unable to obtain a copy.   

 

Senator Townsend asked Dr. Ellis to review the fourth edition and return to testify before the interim committee.  Dr. Ellis agreed to do so.

 

Terry Rankin, Commissioner, Nevada Department of Insurance, stated:

 

      It seemed that last night there was a tremendous amount of confusion on nailing down language on closed and open panels.  I wanted to make a philosophical comment.  You're writing an insurance policy.  That's what workers' compensation is, a statutory insurance policy.  You are governing the relationship between the employer and the employee.  You really don't need to spend a lot of time worrying about the players outside that loop.  You're writing that relationship ... If you can maximize the flexibility that you're writing into the statute ... and hopefully through the regulatory and the insurance process we get the system itself turned around to be an insurance company making insurance decisions.  You should be able to be a lot more broad in your language and let the regulatory protections, solvency and consumer protection, take the place of you not having to worry about every Y in the road and every nuance of what could happen.  There was a lot of talk about willing provider, but you never got to willing contractor.  What you're talking about is the system being able to choose who it deals with.

 

Senator Townsend suggested she return the following day to testify regarding managed care.  He requested Jan Needham, Senate Bill Drafting Advisor, come forward to take direction from the committee.  Senator Townsend explained the committee would be clearing up miscommunications, and making amendments as suggested by consensus group members, to Exhibit D, Working Draft of BDR 53-1764 (see original in Research Library).

 

Senator Townsend explained sections 47 through 62, and section 94 were to be removed.  He said section 134 needed language to cover deductibles.  He stated:

 

      One of things we're trying to do is help with the paperwork.  It was suggested last night that the system could pay for it [medical care] and then bill the employer.  Well, what happens is we don't save the paperwork then.  So, whatever deductible we end up, we need language that says how an employer can keep a log or that they must keep a log, and make that as simple as possible.  I think we all agree that we're trying to stop the paperwork, but I think they need that in case there is a subsequent injury or one that goes above the deductible. 

 

Senator Townsend asked Ms. Needham to include a reference to Nevada Revised Statutes (NRS) 616.060, to help clarify what a private employer was.  Scott Young, General Counsel, Nevada State Industrial Insurance System (SIIS), stated there were some exclusions in that statute which needed to be stated in the section.

 

Mr. Young stated there had been a provision in the consensus language which made it clear that in section 18, appeal to a hearing or appeals officer was not an option.    

 

George McNally, Consensus Group, agreed to work with Mike Livermore, Lobbyist, W.R. Gibbons, Inc., and Ms. Needham to develop language for section 14.

 

Senator Townsend noted section 21 should be clarified to allow five or more employers to form an association.  Ms. Rankin explained to do so would make the section consistent with other sections. 

 

Mr. Young suggested section 74, paragraph 5, be deleted.  He said the proposed language could necessitate the committee holding hearings on individual claims.

 

Mr. Young stated the consensus group was concerned about section 77.  They questioned whether the section should stand.  Mr. Young said they felt the section should apply to all insurers or none of them.  He stated it would allow the commissioner of insurance to declare the system insolvent.  Senator Townsend said the commissioner would actually be forced to take over.  He asked Ms. Rankin how to get around that statutory requirement.  Ms. Rankin explained her department wanted to achieve reporting mechanisms, financial and other information they needed in order to be able to do proper rate reviews.  Senator Townsend instructed Ms. Needham to wait on that section and asked Ms. Rankin, a representative of the Governor's Office, and Mr. Young to meet and try to resolve the problems. 

 

After lengthy discussion the committee decided section 78 would require a mandatory $250 deductible.  Additional deductibles would be offered with enabling legislation, along with criteria for qualification.  Mr. McNally pointed out reference should be made to NRS 616.640 which says it is unlawful for any employer to deduct any cost from an employee's wages attributable to a workers' compensation claim.  Mr. Jayne asked to be able to meet with representatives of the administration to work out the details of section 78.  He asked for clarification of the committee's intent regarding deductibles for small businesses.  Senator Townsend asked that Senator O'Connell work with Mr. Jayne and the Governor's Office.  She agreed to do so.

 

Jack Jeffrey, Consensus Group, expressed concern over removing subsection 2(b) from section 78.  He said by not guaranteeing payment an injured worker would have trouble finding a doctor to treat him.  Senator Brown suggested language stating if the employer did not pay within a certain time frame the system would pay, then seek reimbursement.  Don Jayne, General Manager, SIIS, volunteered to try to come up with alternatives.  Senator Townsend agreed.

 

Sam McMullen, Lobbyist, Nevada Self-Insurers Association, stated section 83 allowed self-insured employers the option of contracting with a managed care organization or a certain set of providers.  Ms. Needham questioned whether the language was necessary as self-insured employers were not prohibited from entering into contracts with managed care organizations.  Mr. McMullen said the section would just clear up the fact they have no restrictions and maximize their flexibility. 

 

Ms. Rankin explained there are no longer any grandfathered employers covered under section 90, subsection 5.  She suggested repealing NRS 616.255 and 616.256. 

 

      SENATOR NEVIN MOVED TO REPEAL NRS 616.255 AND 616.256.

 

      SENATOR O'CONNELL SECONDED THE MOTION.

 

      THE MOTION CARRIED UNANIMOUSLY.

 

      * * * * *

 

Mr. Young testified he thought the training and education requirements put forth in section 93, subsection 4, should apply to all claims examiners, whether they worked for the SIIS or a third party administrator.  Tom Nelson, Lobbyist, W.R.Gibbons Inc., stated most of the people who work for his organization have been in the industry for a long time.  When a new person started working for them they would work with an experienced person.  He stated the commissioner of insurance licenses their claims examiners.  Mr. Jeffrey clarified the issue by stating there is no requirement for claims examiners to be licensed; persons who represent employers or employer groups at hearings must be licensed.  The committee decided to remove the section, but continue working on the concept. 

Carol Jackson, Director, Department of Industrial Relations (DIR), said section 135, subsections 5(c) and (d), needed to be changed, because her department had entered into a contract with an attorney to collect from uninsured employers.  Mr. Young said the Consensus Group had been trying to lighten the load of the DIR staff.  Mr. Jeppson stated something could be worked out as long as there was protection for all parties involved, including the self-insured employers.  The committee decided to remove the brackets in subsection 5.

 

The committee opted to remove the proposed changes from section 156, subsection 2.

 

Terri Potts, Lobbyist, Nevada Physicians Caucus, stated her organization agreed to the proposals in section 168, but felt there should be language ensuring lifetime reopening rights for cases medically designated as appropriate that would include, "complete and incomplete paraplegia and quadriplegia, major extremity amputation, prosthetic implants, prosthetic joints, severe neurologic damage, and HIV [human immunodeficiency virus] and hepatitis work-related exposure."  Mr. Jeffrey said those conditions would all be covered under "clear and convincing evidence."  Senator Townsend explained they had used the "clear and convincing evidence" language instead of specific conditions to ensure the inclusion of every case which did have clear and convincing evidence. 

 

Senator O'Connell asked about section 171.  She said language had been suggested which would include the use of Nevada Department of Transportation (NDOT) standards for intoxication.  Senator Townsend stated any amount of alcohol was too much in the workplace.  Mr. McMullen said:

 

      I just think this is excellent language.  The [N]DOT standards get into issues of impairment, involvement, and intoxication.  Those are relative standards.  This at least has an objective standard that can trigger a debate, and then you can decide whether the presumption is rebutted or not.

 

As there was no further business the meeting was adjourned at 10:50 a.m.

 

 

            RESPECTFULLY SUBMITTED:

 

 

 

                                    

            Denise Pinnock,

            Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                     

Senator Randolph J. Townsend, Chairman

 

 

DATE:                                

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Senate Committee on Commerce and Labor

February 25, 1993

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