MINUTES OF THE

      SENATE COMMITTEE ON COMMERCE AND LABOR

 

      Sixty-seventh Session

      January 25, 1993

 

 

 

The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:00 a.m., on January 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:

 

Brian Davie, Senior Research Analyst

Linda Krajewski, Primary Secretary

Paul K. Fredericks, Primary Secretary

 

OTHERS PRESENT:

 

Joe Lawrence, President, Managed Care Consultants

Don Jayne, General Manager, Nevada State Industrial Insurance          System (SIIS)

 

 

 

 

Senator Townsend opened the meeting by stating the focus of the day's meeting was continuation of managed care.  He invited Joe Lawrence, President, Managed Care Consultants, an independent managed care company located in Las Vegas and Reno, to speak to the committee.  Mr. Lawrence explained his background to the committee.  Senator Townsend introduced Mr. Lawrence's handout (Exhibit C) and invited the press to take a copy.  Senator Townsend asked Mr. Lawrence for a brief list of his clients.  Mr. Lawrence stated that at that time his clients for managed care relating to workers' compensation were Harrah's, Las Vegas, Westward Ho, and Barbara Scarborough on the Nugget enterprise.  They had done utilization management for about 40,000 other members in Las Vegas.

 

Mr. Lawrence presented a brief historical explanation of how they had become involved in managed care on workers' compensation.  They had been working with some of their present clients since l990, doing the utilization management and they were very pleased with the results.  They were not owned by providers.  His clients had been pleased with the results and kept comparing the costs of a broken arm or an injury in the non-workers' compensation site and asked if they would address it.  His company spent about 6 months searching the law to make sure they would protect the employers' rights.  They met with the Department of Industrial Relations (DIR) and several different people and found that there were laws in the existing statutes that permitted them to do utilization management.  As a result, starting in April of l992, they started doing very active hands-on utilization management. 

 

Mr. Lawrence outlined the course of action taken when a worker was injured.  He described in detail the time frame for reporting injuries and submission of treatment plans.  Mr. Lawrence stated they did not determine which injuries were compensable, as they were medical management, not claims administrators.

 

Mr. Lawrence reported that since his company had been working with Harrah's the average time off work had been decreased by more than 50 percent.  They were given about 39 claims which had been open for l8 months, and were able to close 36 of them to everyone's satisfaction.

 

Mr. Lawrence then reaffirmed, if the medical management team got involved from the very beginning, and made sure the patient had appropriate care, the overall cost would be markedly decreased.  

 

Senator Nevin asked how many people Mr. Lawrence had working in managed care.  Mr. Lawrence stated there were five people, including three nurses. 

 

Mr. Lawrence said managed care is labor intensive, but is also cost effective.  He added that Barbara Scarborough had asked him to say the following for the record:

 

      Whatever comes out of this legislation, please make sure that (there are) some teeth in it, so that it doesn't just add more bureaucracy and legal issues.  Managed care has to have some teeth so that if the appropriate peers say that it's no longer needed, then we support it.

 

Senator Nevin agreed and assured Mr. Lawrence that whatever they did would "have teeth" in it.  Senator Nevin added that the problem they had was that they were looking at setting up a totally new concept under Nevada State Industrial Insurance System (SIIS).  He said that for years they had been told, "We can do it.  Just give us more bodies.  More people."  Senator Nevin explained that having more people could cause more internal problems, which they wanted to avoid.

 

Mr. Lawrence pointed out that early involvement would lead to fewer cases.  Also, the cases would be of shorter duration, so it would not take the same amount of staff as anticipated.

 

Senator Lowden wanted to know if they had something like a paid provider organization (PPO) list for their group.

 

Mr. Lawrence explained that they did not have a formal PPO since the law did not permit that, but the law did permit them to have contracts with groups that would accept lower than the improved rate and they had several different industrial providers to whom they referred.

 

Senator Lowden brought up that the previous week they had talked about "willing providers."

 

Mr. Lawrence responded that he had no problem with willing providers as long as appropriate criteria were set down; the criteria would be they be credentialed appropriately in the area they were claiming to be proficient in, and they be contractually required to comply with utilization and quality assurance guidelines.

 

Senator Townsend stated that Senator Nevin had touched on an excellent question earlier and asked Mr. Lawrence to address the issue, "too many claims per team." 

 

Mr. Lawrence thought his organization could still increase their volume per existing staff.  They usually did not have more than 20 or 30 open claims per individual.

 

Senator Townsend stated the SIIS was at 2,000 per team.

 

Senator Townsend then stated private or self-funded plans who use either third party administrators (TPAs) or private managed care organizations (MCOs) manage their claims better, including better overall care for the injured worker.  Senator Townsend asked what the key components were to self-funded plans' better ability to manage claims, outside of the fact that there was lower volume.

 

Mr. Lawrence said having medical staff involved in the management and approval of the care made the biggest difference. 

 

Senator O'Connell asked Mr. Lawrence what the average length of time off work was for a lower back injury.  He said for a muscle strain the average was between 2 and 3 weeks. 

 

Senator Townsend asked what kind of savings could be realized by helping the system manage their claims better.  Mr. Lawrence estimated they would see about a 30 percent savings.

 

Senator Nevin asked how long it would take to implement the reorganization plans recommended by the Coopers & Lybrand study.  Don Jayne, General Manager, Nevada State Industrial Insurance System, stated they were already actively reorganizing internally, and were essentially ready to move forward when it became clear what would be the law. 

 

Senator Townsend asked Brian Davie, Senior Research Analyst, to compile figures on the ratio between hearings and appeals, and total claims. 

 

Senator O'Connell questioned whether Mr. Lawrence felt the size of the SIIS would preclude efficient claims management.  He said with a good foundation of management criteria it would still be possible to maintain efficiency on a large scale.

 

Senator Brown asked if Mr. Lawrence had any ideas on how to deal with getting injured workers back to light duty in small companies where it might be more difficult to find light duty.  Mr. Lawrence said working with physicians to develop light duty job descriptions was of prime importance.

 

Senator McGinness pointed out there might be increased time off work if Mr. Lawrence's company had high risk clients.  Mr. Lawrence agreed, but stated active management would still reduce the overall time.  Senator McGinness asked if Managed Care Consultants did deal with "the easier" companies.  Mr. Lawrence said the frequency of injury to various body parts might vary by industry, but the difficulty of managing the actual injury would be the same, no matter what.

 

As there was no further business the meeting was adjourned at 10:39 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

January 25, 1993

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