MINUTES OF THE

      SENATE COMMITTEE ON COMMERCE AND LABOR

 

      Sixty-seventh Session

                February 9, 1993        

 

 

 

The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:00 p.m., on February 9, 1993, in Room 207/208 of the Cashman Field Center, Las Vegas, 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

Linda Krajewski, Primary Secretary

Brian Davie, Senior Research Analyst

Frank Krajewski, Senior Research Analyst

 

OTHERS PRESENT:

 

Courtney Alexander, Research Analyst, Culinary Workers Union

Gary Amick, Owner, Amick Physical Therapy and Associates, Inc.

Easton D. Blackburn, Safety Engineer, Frehner Construction Co.

Ina Bresee, President, D&N Delivery Corporation

Greg Brown, Private Citizen

Steve Casey, President, Walt Casey Water Conditioning, Inc.

Jerry Collier Lane, Lobbyist and Attorney, Edward M. Bernstein and       Associates

Lynn Grandlund, President, Grandlund, Watson, Clark and Associates

Mark Habersack, Compensation and Benefits Specialist, Harrahs Las       Vegas

George Jablon, President, Lin Construction, Inc.

George McNally, President, Nevada Trial Lawyers Association

Thomas F. Nelson, District Manager, W.R. Gibbons Inc.

Charles Nort, Nevada Administrators

William David Owen, Director of Risk Management, Clark County School       District

Mark Price, Former Owner, Creative Systems, Inc.

Kathy Thomas, Private Citizen

Danny Williams, Private Citizen

 

 

 

Chairman Townsend called the meeting to order by stating this meeting will address the provisions that were requested on Thursday.  He requested that employees and employers, who are dissatisfied with the provisions, suggest alternatives to the proposal. 

 

Mark Habersack, Compensation and Benefits Specialist, Harrahs Las Vegas, distributed copies of Harrah's benefits package.  (Exhibit C.  Original is on file in the Research Library.)  Mr. Habersack referred to the provisions that the committee has not yet voted on (Exhibit D).  He stated he disagreed with page 2 item 3 regarding rehabilitation and page 3 item 2 regarding occupation programs.  He referred to page 3 item 1, and stated one of Harrah's managers thought tort claims may be a problem.  He referred to page 4 item 3 which suggests amending the Nevada Revised Statutes (NRS) and dealing with subsequent injury.  He stated he needs more information on this.  He stated the rest of the document he agrees with.

 

Chairman Townsend thanked Mr. Habersack and his executive committee for their analysis.

 

Lynn Grandlund, President, Grandlund, Watson, Clark and Associates, testified she wants fraud investigations to fall under the Attorney General's Office.  She stated this would allow for access to files and the Attorney General's Office has knowledge of the State Industrial Insurance System (SIIS), but the investigations should stay within SIIS.

 

Chairman Townsend agreed that investigations should stay within SIIS.

 

Ina Bresee, President, D&N Delivery Corporation, testified the costs to small employers are constantly being raised.  She stated she employs between 27 and 35 employees.  She asked if small businesses could ban together to become self-insured.  Chairman Townsend stated this is in the current proposal by the Governor.

 

Senator Shaffer stated the Governors proposal would allow the grouping of small businesses to enter into private insurance after 5 years.  This would give SIIS 5 years to recover.

 

Thomas F. Nelson, Lobbyist, W.R. Gibbens Inc., stated his company represents about 500 employers who deal with SIIS.  He stated there are some good ideas in the proposed plans for SIIS.  He commented on some specific points of the plan such as self-insureds want to retain their rights to handle their own investigations.  He referred to page 8, section 3, of Exhibit E and stated he was concerned with the deductible and the premiums because of the past history.  

 

Chairman Townsend stated Mr. Nelson would want to monitor this because it will be a delicate balance.  He stated he does not want to promise premiums are going to plunge because of a $200 deductible when there is a $200 million cash flow shortfall and over a $2 billion in unfunded liability.  He stated it does mean that increases will accelerate at a less accentuated pace. 

 

Mr. Nelson stated the problem was employers do not want to pay a $200 deductible on every claim and still have the premiums at the same rate.

 

Easton D. Blackburn, Safety Engineer, Frehner Construction Co., testified on the need for a functioning committee that will continue to examine the workmans' compensation program in Nevada.  He commended the companies that have been willing to hire professional people to examine safety programs. 

 

Chairman Townsend asked Mr. Davie, Senior Research Analyst, to look into the classification column because of the categorizing and the "mod" factor which determines the penalty.  He stated he was concerned about the employer on the bottom who has had no claims and wondered if that employer could be placed in a higher category.

 

Senator Nevin stated an option would be to access the employer with the highest amount of claims more than an employer with no claims. 

 

Chairman Townsend suggested a premium rebate for the bottom 25 percent.

 

Senator Brown referred to Exhibit E which provided for a legislative oversight committee. 

 

Mr. Blackburn cautioned that fraud is sometimes committed by perspective employees that have had physical problems, because they may falsify documents so that they can be hired.  He complimented the committee for considering managed care and stated he was concerned with the litigation involved in SIIS. 

 

Jerry Collier Lane, Lobbyist and Attorney, Edward M. Bernstein and Associates, offered his services in drafting proposals or making suggestions to the committee.  He referred to page 4, item 1 of Exhibit D and stated this was a great concept.  He suggested the Nevada Occupational Diseases Act be added and incorporated into the bill that "the Nevada Supreme Court may in construing any statute in Chapter 616 or 617 of NRS, under the general principles of statutory construction, require them to first make an express finding that the statute is ambiguous."  He referred to item 3, and stated he would like to see the exact antithesis of this.  He suggested Judicial Review be utilized instead of constant appeals.  He asked who will have liability because page 1 states "Provide immunity from liability for insurers for the bad faith administration of claims."

 

Courtney Alexander, Research Analyst, Culinary Workers Union, read from Exhibit F. 

 

Chairman Townsend stated the seven members who have sat on the SIIS board in addition to the legislature are guilty of mismanagement.  He stated the Governor will be responsible for choosing the seven new members.  He said many of the bad managers are self-insured and should not be on the board.  He stated a new board will be necessary to insure that SIIS is managed properly so that injured workers will receive proper care.   He stated that he and Ms. Alexander disagree on the purpose of the SIIS board. 

 

Ms. Alexander stated the policy holders include employers and employees and that the labor representatives defend the employees rights and thus deserve a seat on the SIIS board. 

 

Kathy Thomas, private citizen, testified on the mandatory drug testing issue.  She stated after being injured at work she was required to take a drug test, which was supervised.  She felt this was humiliating and an invasion of privacy.  She stated this prevents people from reporting injuries.  She suggested the senators take a supervised drug test in case they are injured on the way out of the meeting.

 

Chairman Townsend stated the Governors proposal has been amended to require drug testing, after an accident, only if there is probable cause.

 

Senator Brown asked if the method was the problem.  Ms. Thomas stated she would not have a problem with the drug testing if she were allowed to go into the rest room by herself. 

 

Senator Nevin stated that procedure requires supervision because people have taken advantage of the "honor system."  

 

Steve Casey, President, Walt Casey Water Conditioning Inc., referred to Exhibit D, page 3, item 1.  He stated he liked the idea of employees sharing in the responsibility.  He stated he liked the idea of employer deductibles.  He suggested co-payments by the employee for doctors office visits.  He recommended the employee should have a time frame in which to report an accident.

 

Chairman Townsend stated a time frame will be addressed for employees to report accidents. 

 

Mr. Casey recommended the "three way" insurance framework be worked out now, rather than later. 

 

George Jablon, President, Lin Contruction Inc., suggested the committee do away with the "lump-sum payments" for the employees.  He suggested the payments from SIIS be dispensed over a period of time.  He also suggested a short-term "payroll deduction" for employees to help restore SIIS or as a deductible in case of an injury.  He also recommended mandatory training for employers to learn how the system works.  He referred to page 6, of Exhibit E, and stated there should not be a limit on the number of appeals.

 

Greg Brown, private citizen, stated he is an injured worker who was shot during a bank robbery.  He testified there should not be a limit on the time period of reopening of claims.  He stated the gun shot wound will require many future surgeries and should be covered by SIIS. 

 

George McNally, President, Nevada Trial Lawyers Association, stated the consensus group, that put together the plan (which would limit re-opening of claims), consisted of management, labor, SIIS, lawyers, etc...  He said the consensus group only suggested that without "clear and convincing medical evidence," the claim could not be reopened. 

 

Chairman Townsend questioned reopening Mr. Brown's case.  Mr. McNally stated Mr. Brown's case would be the type that could be reopened. 

 

Senator Shaffer asked who had the burdon of proof as to clear and convincing medical evidence.  Mr. McNally responded in total or permanent disability, SIIS has the burdon of proof.  

 

Mr. Brown stated the history of his surgeries and the extent of his injuries.  He said he was concerned with future problems stemming from his injuries. 

 

Chairman Townsend stated the law would reflect special circumstances like Mr. Browns.

 

William David Owen, Director of Risk Management, Clark County School District, testified on the managed care language.  He stated the lack of managed care creates problems such as pricing.  He said in the last fee schedule, chiropractic costs went up 45 percent.

 

Chairman Townsend asked what the fee now was.  Mr. Owen responded $71.

 

Chairman Townsend requested Mr. Davie acquire the testimony on the fee change, which was done in a hearing. 

 

Mr. Owen stated managed care will get the worker back to work sooner as well as expedite the compensation awards.

 

Mark Price, Former Owner, Creative Systems Inc., referred to Exhibit E, page 5, item 1.  He restated Mr. Brown's concerns.  He said he was concerned with page 6, limiting the hearings and appeals.  He stated "three way" insurance was a good idea.  He said he has had a very difficult time getting his claim with SIIS reopened.  He stated part of the problem is employers are hiring employees with known drug and alcohol problems. 

 

Danny Williams, private citizen, testified he is an injured worker and went through the "three way" system in California.  He stated that system was pretty bad but the Nevada system is worse.  He said SIIS does not comply with the NRS and Occupational Safety and Health Act (OSHA) does not do adequate enforcement.  He stated the people at SIIS should not have immunity, because they are the problem, not the employees.  He stated he presented a buyout program to SIIS 2 years ago and he was told it was a managable program, but no one will consider it because of the high cost. 

 

Senator Shaffer asked if Mr. Williams desired to be a underwater photographer.  Mr. Williams stated because of his injuries he cannot enter a new career, but he would like to be an environmental photographer.

 

Charles Nort, Nevada Administrators, encouraged Mr. Price to continue the unified effort with his proposal.  He referred to Exhibit E, page 9, item 3, and stated that composition of the board will work.  He stated the drug testing policy was not to embarass the workers but to make the workplace safe.  He agreed privacy should be observed.

 

Gary Amick, Physical Therapist, Amick Physical Therapy and Associates Inc., testified from Exhibit G.  He stated he was concerned with the lowering of fees.  He said he becomes annoyed when people accuse therapists of overutilization.

 

There being no further business, Chairman Townsend adjourned the meeting at 9:12 p.m.                                                

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                          

                                                                                                                 RESPECTFULLY SUBMITTED:

 

 

 

                                    

            Melanie Rosenberg,

            Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                      

Senator Randolph J. Townsend, Chairman

 

 

DATE:                                

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Senate Committee on Commerce and Labor

February 9, 1993

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