MINUTES OF THE

      SENATE COMMITTEE ON COMMERCE AND LABOR

 

      Sixty-seventh Session

      March 1, 1993

 

 

 

The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:00 a.m., on Monday, March 1, 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:

 

Beverly Willis, Committee Secretary

Denise Pinnock, Committee Secretary

Brian Davie, Senior Research Analyst

Frank Krajewski, Senior Research Analyst

 

OTHERS PRESENT:

 

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

George McNalley, Nevada Trial Lawyers Association

Bryan Nix, Senior Appeals Officer, Department of Administration,       State of Nevada

Scott Young, General Counsel, State Industrial Insurance System

Larry Zimmerman, Consensus Group

 

 

Chairman Townsend opened the meeting with the announcement of Brian Davie's analysis on his memo for February 28, 1993 for The Cash Flow Statistics, Exhibit C, projecting that expenses this year will be $455 million in claims expenses, while salaries and benefits are $33 million, operating expenses $34 million, property payments of $1.3 million, for a total expense of $524 million.  Premium income is $360 million, investment income $39 million, total income of $399 million with a cash flow shortage of $125 million.  After reading the portion Differences in Deficit  Figures, Senator Townsend stated that copies would be made of this document in order for it to be available to the public.  He wanted Mr. Harris and Mr. Jayne to have a copy of the entire report in order to be informed before a vote is taken  on Friday.  According to the information in Mr. Davie's report, the system was $125 million short this year.  If agreement was reached on the $125 million, that is the figure that would be used.  If not, agreement would be reached by Friday.

 

Senator Nevin asked if a pie chart based on the dollar could be broken out as to wages, injured workers, and how the dollar was broken down to see where everything was.  Senator Townsend said there was a chart in the packet to that effect, but Senator Nevin said he would prefer a pie-shaped chart.  Brian Davie was asked to make a chart of that nature.

 

Senator O'Connell asked what period of time these figures encompassed.  Brian Davie answered that they were provided by SIIS through December 31, 1992 and were projected through the end of the fiscal year.  Senator O'Connell asked if those figures reflected the latest information on those entities that might be self-insured and was told probably not, by Scott Young, General Counsel for State Industrial Insurance System (SIIS). 

 

Senator Townsend said everyone would get a copy of the report and to let the committee know if it could be used as a fair analysis.

 

Senator Townsend accepted a report, Revised Appeals Process, (Exhibit D), from Scott Craigie, Chief of Staff, Governor's Office, State of Nevada.  A copy of this report was sent to those in Las Vegas, by facsimile, for their information.

 

Mr. Craigie expanded on the Revised Appeals Process.  He referred to the fact that a mediator was put in to help with cases in transition, then the case would go on to an attorney and the court. 

Senator Lowden inquired if non-binding mediation would be through the Division of Industrial Insurance Regulation (DIIR).

 

Mr. Craigie, said mediation would not be handled through DIIR.  He stated mediation was a process where two parties had to agree before there was a resolution.  No formal decision would be issued by the mediator; they would only try to have two parties come to an agreement.  It would be separate from SIIS.

 

Senator O'Connell asked if this was reflected in the budget that had been submitted.  Mr. Craigie indicated that there would be a reduction in the budget, not an expansion, because the number of hearings and appeals officers would be reduced.  These positions would be referred to as Fact Finders and the position would be somewhat less prestigious, as well as, a less formal position and probably not a term appointee.

 

Senator Townsend asked to have clarification on the fact that there would no longer be a Hearing Officer or Appeals Officer level, but a Fact Finder Level, to which Mr. Craigie responded in the affirmative.  Senator Townsend went on to ask if the hearings would be administrative levels of record, so there would not be a trial de novo, or would all issues go to court as a trial de novo.  Mr. Craigie indicated there would be some of each.  Mr. Craigie said that issues involving drug, alcohol, or wage issues, would be hearings of record and a formal decision would be issued by the Fact Finder.  In the case of issues heard in the rural areas, there would be a record.  In the mediation process, there would not be a record.

 

Senator Nevin inquired whether the issue of record meant a court reporter or a recording.  Mr. Craigie said he preferred a court reporter, but felt that a recording would be an option.

 

George McNalley of the Nevada Trial Lawyers Association inquired of Mr. Craigie, whether rural areas referred to working there or living there.  Mr. Craigie responded that was simply an example because it was an area where there was no managed care organization. 

 

Mr. Young offered a pie chart, entitled State of Nevada Workers' Compensation Program Hearings and Appeals Process Performance Audit, presented as Exhibit E, in answer to Senator Townsend's inquiry regarding the outcome of hearings.  This was duly discussed by Bryan Nix, Senior Appeals Officer, Department of Administration, State of Nevada, Senator Nevin and Scott Craigie.  It was stated that many people did not understand the process of a claim.  It was also noted that people are anxious and need to have a final determination and the process, at present, precludes a quick determination. 

 

Senator Townesend asked George McNalley to respond on the effect that eliminating various levels of hearings would have on the courts, whether the courts would be flooded with cases.  Mr. McNalley felt the new system would be a step in the right direction.  There was a discussion between Senator Townsend, Mr. Nix and Mr. McNalley regarding time frames for persons appealing decisions.

 

Senator Brown raised the question of the possibility of binding arbitration or court, as an option.  After discussion between Mr. McNalley, Mr. Craigie, Mr. Zimmerman, Senator Brown and Senator Lowden, the general opinion was that, barring unexpected objections, having a choice would be the best way to go.

 

Mr. Nix, presented two handouts, Hearings Process - Options (Exhibit F), and  Notes On Converting Hearing Division To Mediation (Exhibit G), with suggestions on how to streamline the appeals process.  He then proceeded with an explanation of these exhibits.  There was a general discussion on the pros and cons of the information in those exhibits.  One of the largest points of discussion, was the various levels of processing; i.e. hearing officer, appeals officer, mediator, etc.  It was generally agreed that no determination should be made, at this time.  Mr. Craigie stated that a very important point was trying to reduce litigation. 

Senator Townsend stated that there was a scheduling conflict so that day's meeting would have to be concluded shortly, but that more thought was needed on those issues.  He asked that Senator Brown meet with Jan Needham, Senate Bill Drafting Adviser, to walk her through parts of that mechanism.  That way, it would be possible to get a start on drafting the language, especially on the more complicated issues.

 

George McNalley suggested that language be included in cases where there was binding arbitration or a de novo district court trial with a medical issue involved, that the case be allowed some sort of preferential treatment over other civil cases.

 

Senator Townsend asked Bryan Nix what sort of reduction might be expected, with a program based on binding arbitration, trial, or appeals officer only; noting that the present budget was about $1.95 million, and assuming the program would be a concept the Governor might accept.  Senator Townsend requested that Mr. Nix have that information on Friday, if it was not available at that moment.

 

Mr. Nix stated he could not answer at that time, since it would depend on how the process was structured, based on the various options.  It would also depend on how much was handled internally and how much went to the district court.  There were several suggestions as to whether arbitration should be handled internally, or an outside party should be called in.  It was generally agreed, though, that an arbitrator should be mutually agreed on.  Senator Brown felt that an outside arbitrator would be best.  Mr. McNalley commented that there were a vast number of sources to choose from.  Mr. Craigie stated one of his main concerns was that it be a mutually agreed on decision, and there needed to be the option of going to someone other than the Department of Administration.

Senator Brown obtained clarification on the fact that special issues should be listed in the verbiage of the bill, but that the subject of fraud should be left out.

 

There being no further business, the meeting was adjourned, at 10:00 a.m.

 

 

            RESPECTFULLY SUBMITTED:

 

 

 

                                    

            Beverly Willis,

                                        Committee Secretary

 

 

 

APPROVED BY:

 

 

 

 

                                      

Senator Randolph J. Townsend, Chairman

 

 

DATE:                                

 

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Senate Committee on Commerce and Labor

March 1, 1993

Page 1