MINUTES OF THE

      SENATE COMMITTEE ON COMMERCE AND LABOR

 

      Sixty-seventh Session

      February 24, 1993

 

 

The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 5:00 p.m., on Wednesday, February 24, 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:

 

Linda Krajewski, Primary Secretary

Brian Davie, Senior Research Analyst

Frank Krajewski, Senior Research Analyst

 

OTHERS PRESENT:

 

Scott Craigie, Chief of Staff, Governor's Office, State of Nevada

Frankie Sue Del Papa, Attorney General, Central Office, State of       Nevada

Robert Pike, Chief Investigator, Attorney General's Office, State      of Nevada

Bob Ostrovsky, Lobbyist, Nevada Resort Association

Sam McMullen, Lobbyist, Nevada Self-Insurers Association

Arthur Busby, Benefits Specialist, Horseshoe Hotel and Casino, Las      Vegas

Danny Thompson, Lobbyist, Nevada American Federation of                Labor/Congress of Industrial Organizations

Marsha Berkbigler, Lobbyist, Nevada State Medical Association

Stephanie Tyler, Lobbyist, Nevada State Chiropractic Association

George McNally, Lobbyist, Nevada Trial Lawyers Association

Michael Fischer, M.D., Nevada State Medical Association

John Vergiels, ex-Senator, Lobbyist, Nevada Association of Physical      Therapists

 

 

 

 

 

Senator O'Connell opened the meeting, explaining that Senator Townsend had lost his voice.  She opened the hearing on Bill Draft Request (BDR) 53-1764.

 

BDR 53-1764:      Makes various changes to provisions relating to workers' compensation.

 

Scott Craigie, Chief of Staff, Governor's Office, State of Nevada, submitted Exhibit C, Revised Appeals Process, and Exhibit D, Stress As A Compensable Injury.  He explained both documents to the committee. 

 

Senator Shaffer asked if an attorney would accompany claimants to the mediation.  Mr. Craigie said there were no provisions for the injured worker's attorney to accompany him.  He said there would be records kept in the threshold issues cases only, not in mediation sessions. 

 

Senator Brown asked if there were any records kept before the district court level.  Mr. Craigie said there were not. 

 

Regarding stress as a compensable injury, Mr. Craigie said:

 

      We believe that stress itself should not become a major new area for benefits.  We are very concerned about the cost to the [State Industrial Insurance] system.  For example, the two medical journals, the [American Medical Association] AMA Guides that are being considered ... if one of those two guides were to be adopted by [Department of Industrial Relations] DIR right now, stress would become a compensable injury across-the-board, and we would significantly increase the cost of the system.  As much as we would all like, and you will probably hear arguments about why we need to have stress be a compensable injury, the fact is we cannot afford it.  At this stage, even if we didn't have the unfunded liability that we have, we would be facing severe problems, financially, if we adopted that standard.  Whatever we do, whether it's this language or some other language, we cannot afford to leave the issue of stress unaddressed in the statutes.  If it's not in the statutes, eventually it's going to happen, and we cannot afford it.

 

Mr. Craigie spoke of the problems, and solutions, regarding industrial insurance in the state of Oregon.  He stated those problems and Nevada's problems were not comparable.

 

Mr Craigie said, "The Governor believes, and asked me to tell you, that he knows that nobody has worked harder, on this process than this committee, and more sincerely to find a solution.  We do recognize that you folks have really struggled hard.  Many of you have worked on it for 2 years over this process, and I'm sure have got the scars to show for it."

 

Mr. Craigie then spoke of the areas of the proposed legislation which still, in his opinion, needed work.

 

Senator O'Connell questioned whether it would be acceptable to the Governor if the committee found a different way to make up the $59 million, as opposed to using the gross-to-net option.  Mr. Craigie said there were other options to explore, but felt the answer was in cutting the benefits package, one way or another.  He stated he hoped the committee would seriously consider the Governor's suggestions. 

 

Frankie Sue Del Papa, Attorney General, Central Office, State of   Nevada, submitted written testimony (Exhibit E), and a fiscal note (Exhibit F).

 

Senator O'Connell commended the attorney general on her excellent staff, and thanked her for all the work they had done. 

 

Senator O'Connell said that, ideally, if the system that was put in place was doing what it should do with managed care, the provider would only be paid the agreed upon price, so there would not be any bundling.  She asked how much fraud would be cut out immediately.

 

Robert Pike, Chief Investigator, Attorney General's Office, State  of Nevada, stated his office had some figures on that.  He said they felt the amount of fraud would go down, but would still occur. 

Senator Brown said she had heard mention of the idea of having some of the fines the Attorney General's Office collected being used, in part, to help support the function.  Ms. Del Papa stated that in the case of the Medicaid Fraud Unit, federal statutes dictated that money went back into the unit.

 

Senator O'Connell asked how the Attorney General's Office envisioned the State Industrial Insurance System (SIIS) Fraud Unit fine money would be handled.  Mr. Pike said the regulator would assess for their unit.  If a fine was received it would be given back to the regulator.

 

Bob Ostrovsky, Lobbyist, Nevada Resort Association, said his organization was not opposed to reducing levels of compensation, but felt there were easier ways to achieve the needed cuts.  Mr. Ostrovsky stated he had large concerns about whether an employer paying an initial medical bill constituted acceptance of that claim. 

 

Sam McMullen, Lobbyist, Nevada Self-Insurers Association, submitted a proposed amendment (Exhibit G), which would maintain flexibility for self-insured employers.

 

Arthur Busby, Benefits Specialist, Horseshoe Hotel and Casino, Las Vegas, said he wanted to make sure an employee who experienced stress due to a violent crime on the job would be able to receive treatment.

 

Senator O'Connell thanked him for expressing his concerns, and said the committee shared those concerns.

 

Mr. McMullen said:

 

      I forgot to add one point of clarification.  I don't mean to suggest by this language, and I don't want to take away from this testimony, that there is no opportunity for self-insurers to contract with a [paid provider organization] PPO, an [health maintenance organization] HMO, [managed care organization] MCO, or anything else of the alphabet soup that's been created in this area.  I want to make sure that is clear for the record. 

 

Mr. Craigie said the chairman had asked him to re-emphasize a point.  He stated the number of weeks an injured employee spent in the system, receiving compensation, had increased from 9 weeks, 10 years ago, to 22 weeks currently.  The proposals the Governor's Office discussed were specifically designed to reduce that time.    

Danny Thompson, Lobbyist, Nevada American Federation of Labor/Congress of Industrial Organizations, Marsh Berkbigler, Lobbyist, Nevada State Medical Association, Stephanie Tyler, Lobbyist, Nevada State Chiropractic Association, and George McNally, Lobbyist, Nevada Trial Lawyers Association, submitted a proposed amendment on managed care (Exhibit H).  Ms. Berkbigler explained the amendment. 

 

Senator Shaffer asked if the amendment would deal with the concerns of the people who wanted a guarantee they would be able to join a panel of providers, if they so chose.  Ms. Berkbigler said it would answer most of the people who were concerned about not being able to participate in the system. 

 

Mr. Thompson stated the language was crafted to provide for managed care, open panels, and willing providers, but would not exclude HMOs. 

 

Michael Fischer, M.D., Nevada State Medical Association, pointed out that when an MCO moved into a community it invited physicians who wanted to participate under the contract the MCO offered. 

 

Senator Lowden said the witnesses were trying to get closed panel companies to change their policy.  Ms. Berkbigler stated that was not the case, because when an MCO entered a community they invited everyone to join.  She said her concern was that the proposed legislation did not make that clear. 

 

 

John Vergiels, ex-Senator, Lobbyist, Nevada Association of Physical  Therapists, said that the proposed amendment could be interpreted as saying no one could be excluded from participating, as long as they met the criteria set by whomever let the contract.

 

As there was no further business, the meeting was adjourned at 6:50 p.m.

 

     

 

 

 

            RESPECTFULLY SUBMITTED:

 

 

 

                                    

            Denise Pinnock,

            Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                     

Senator Randolph J. Townsend, Chairman

 

 

DATE:                                

??

 

 

 

 

 

 

 

Senate Committee on Commerce and Labor

February 24, 1993

Page 1