MINUTES OF THE
SENATE COMMITTEE ON COMMERCE AND LABOR
Sixty-seventh Session
June 19, 1993
The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 1:00 p.m., on Saturday, June 19, 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:
Dr. Frank Krajewski, Senior Research Analyst
Brian Davie, Senior Research Analyst
Sheri Asay, Committee Secretary
Beverly Willis, Committee Secretary
OTHERS PRESENT:
Scott Craigie, Chief of Staff, Governor's Office
Harvey Whittemore, Lobbyist,
Terry Rankin, Commissioner of Insurance, Department of Insurance,
State of Nevada
Jim Jeppson, Acting Administrator, Division of Industrial Regulation, Department of Industrial Relations, State of Nevada
Pam Miller, Lobbyist, Associated General Contractors
Ray Bacon, Lobbyist, Nevada Manufacturers Association
Senator Townsend opened the meeting and announced that he had met with the chairman of the Assembly Committee on Labor and Management, and with the assembly administration. He stated, " As a result, we think that in the best interest of the public, two things occur. Number one is the cut-off date for recommendations for technical changes to Senate Bill (S.B.) 316 be noon on Wednesday...Number two, how do you define technical versus substantive...." Senator Townsend suggested that if there is an obvious difference in substantive matters, both committees be brought together to rectify the conflict.
SENATE BILL 316: Makes various changes to provisions governing industrial insurance.
Senator Townsend stressed that the time is past for bringing up policy issues. He said the goal now is to make sure that S.B. 316, which is now law, be technically correct. Senator Townsend referred to an outline of the amendments and explained from whom they originated (Exhibit C).
Senator Townsend referred to number 1 of Exhibit C, regarding the stress provision.
Scott Craigie, Chief of Staff, Governor's Office, said the purpose of this language is to determine that, in order to be compensable, the events must occur "in and out of the workplace" and not at home.
There was general discussion on what constitutes "at place of employment" and what events would be compensable, in item number 1.
Senator Nevin suggested replacing "the conditions" with "at the place of employment."
Referring to number 4, Senator Brown stated, "I don't think this is substantive, because the people I spoke to about what they intended...didn't intend for it to have a limit then, if the insurer really felt there was a reason to go beyond any limits. But by saying 'including any extension,' I don't think that's the effect of the plain language."
There was general discussion on the time limit.
Senator Townsend referred to number 5 of Exhibit C, regarding "excessive" losses. He expressed concern about unfairness to the construction industry, which may have a high rate of losses. Senator Townsend pointed out, "...if they're paying for them, then I think you put a class at a substantial disadvantage."
Terry Rankin, Commissioner of Insurance, Department of Insurance,
State of Nevada, said that number 5 refers to Nevada Revised Statutes (NRS) 616.380, "...which says the manager shall adopt a plan for those with excessive losses, as defined by the plan...on page 64, lines 4 and 5" (Exhibit D).
Jim Jeppson, Acting Administrator, Division of Industrial Regulation, Department of Industrial Relations, State of Nevada, said "...if I recall correctly, SIIS [State Industrial Insurance System] identified those 500 plus employers who had losses at 90 percent or more of their premium...I agree with Terry [Rankin], that subsection 6 on page 64 allows the manager to...establish the definition of what is excessive."
Senator Townsend stated, "We just have to make sure that there is a standard and not just an arbitrary decision by the manager to handpick companies that he or she doesn't like...."
Senator Nevin asked if a modification factor would affect the decision. Mr. Craigie said that it probably would not, "...it's probably the comparison of losses to premiums."
Pam Miller, Lobbyist, Associated General Contractors, said the constractors are concerned about the definition of "excessive." She said they would like assurances that the system used by SIIS, which is 90 percent of premium versus losses for 2 consecutive years, remain in place.
Mr. Craigie, responding to a concern by Senator Townsend, said, "...given the fact that we've added to section 146, the additional hit of the $1000 deductible...we're going to have to review that reg [regulation] and see whether or not the combination of the two now aren't so punitive that they're too tough."
There was discussion of the fiscal analysis, whether or not a change would affect the total amount of dollars saved.
Referring to number 6 of Exhibit C, Mr. Craigie explained that he had made a mistake, and that the language should be changed to require Managed Care Organizations (MCOs) to be certified by the manager. He said there would be many providers wanting to bid, now that the caps and minimum numbers in the two large market areas are in place. Mr. Craigie stressed, "We want to encourage as many to come in as possible. We thought this language was doing it, and it has just the opposite effect."
There was general discussion on section 75.
Mr. Craigie said the Request for Proposal (RFP) would define two bidding processes, and spell out the standards. The first would be all groups who wanted to be considered, and the second would be the bidding for the business in the terms of the prices, etc. He
described the certification process.
Mr. Craigie pointed out that the bill drafters had made a change from "utilization review" to "evaluations." He said no one noticed the error until after it was printed.
Ray Bacon, Lobbyist, Nevada Manufacturers Association, agreed with Mr. Craigie. He noted, "That [utilization review] is defined in section 10 of this bill."
Senator Townsend referred to the meeting of June 16, 1993 (Exhibit C), and discussed number 1, which deals with section 21.3.
Mr. Craigie commented, "The way the drafting came out on this issue, it would require the system, or the insurer, to basically sit on their hands, until they've finished paying 3 months of TTD [Total Temporary Disability] to a person, even if they are, in fact, otherwise ready to go into rehab [rehabilitation]." He said this amendment would free the system to get the person started on rehabilitation at an earlier date.
Responding to a question by Senator Brown, Mr. Craigie said it was intended that the person doing the written assessment could not take more than 30 days from the time the vocational rehabilitation counselor is given the assignment.
In number 2, section 21.3, subsection 2, Mr. Craigie said the language should specify that the employer be contacted, in addition to contacting the worker and the treating physician.
Mr. Craigie explained, regarding number 3 of Exhibit C, that the MCOs need to be able to deliver the medical services required. He said the RFP would define the standard, and addded that the statutory language, without the word "all," "still gives the authority to do that." Senator Townsend said he thinks the word "all" is redundant.
In number 4, Mr. Craigie said there is already a requirement that the manager shall cause an independent utilization review (UR) to be done within a certain period of time when the contract is signed, and every 3 years thereafter. He pointed out that this language seems to release the manager from that minimum responsibility. Mr. Craigie explained that replacing the word "such" with "additional" allows the manager to do more URs than are required, rather than giving the manager the ability to decide whether or not to do the URs at all.
Senator Townsend said that number 5, section 79, subsection 1, line 33, deals with the issue of the MCO's administrative appeals.
In response to a concern of Senator Brown, Mr. Craigie explained that the purpose of the language was to allow the aggrieved person to go outside the MCO, if the MCO did not give an answer through its own mechanization, within 14 days.
There was further discussion on the meaning of the language in number 5.
Senator Townsend referred to amendments submitted by Scott Young, General Counsel, State Industrial Insurance System (Exhibit E).
Mr. Bacon said he did not see any conflict in item number 1.
Mr. Craigie said that this section provided enabling legislation to adopt the regulations.
Referring to number 3, Brian Davie, Senior Research Analyst, explained that this recommendation was supposed to be aimed directly at child care, "so this language [children] may be okay."
Referring to number 4, Mr. Craigie said that the reimbursement should apply to whomever incurs the expense of fraud investigation.
There was discussion on whether the fraud included employer fraud, not just claimant fraud. Senator Townsend stated that he thought line 37, section 63, should read "any person," not "claimant."
Mr. Craigie stated that the intent of the language was "any person."
Senator Townsend asked if anyone has more technical amendments for the committee to review. He outlined what will occur next, in regard to discussion and resolution of the amendments to S.B. 316.
Mr. Craigie suggested it would be helpful if everyone would type up and provide copies of their amendments, such as were presented at this meeting.
Senator Brown asked if the persons presenting lists would provide them to the committee members in the morning preceding the meeting.
There being no further business, Senator Townsend adjourned the meeting at 1:45 p.m.
RESPECTFULLY SUBMITTED:
Sheri Asay,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE:
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Senate Committee on Commerce and Labor
June 21, 1993
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