Amendment No. 1104

Senate Amendment to Assembly Bill No. 470 First Reprint (BDR 53-1298)

Proposed by: Committee on Commerce and Labor

Amendment Box: Replaces Amendment No. 1005. Resolves conflict with sections 31 and 37 of S.B. No. 92. Makes substantive changes.

Resolves Conflicts with: SB92

Amends: Summary: Title: Preamble: Joint Sponsorship:

ASSEMBLY ACTION Initial and Date | SENATE ACTION Initial and Date

Adopted Lost | Adopted Lost

Concurred In Not | Concurred In Not

Receded Not | Receded Not

Amend sec. 8, page 4, line 5, after "inclusive," by inserting:

"or chapter 617".

Amend the bill as a whole by adding a new section designated sec. 8.5, following sec. 8, to read as follows:

"Sec. 8.5. NRS 616C.230 is hereby amended to read as follows:

616C.230 1. Compensation is not payable pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS for an injury:

(a) Caused by the employee’s willful intention to injure himself.

(b) Caused by the employee’s willful intention to injure another.

(c) Proximately caused by the employee’s intoxication. If the employee was intoxicated at the time of his injury, intoxication must be presumed to be a proximate cause unless rebutted by evidence to the contrary.

(d) Proximately caused by the employee’s use of a controlled substance. If the employee had any amount of a controlled substance in his system at the time of his injury for which the employee did not have a current and lawful prescription issued in his name, the controlled substance must be presumed to be a proximate cause unless rebutted by evidence to the contrary.

2. For the purposes of paragraphs (c) and (d) of subsection 1:

(a) The affidavit or declaration of an expert or other person described in NRS 50.315 is admissible to prove the existence of any alcohol or the existence, quantity or identity of a controlled substance in an employee’s system. If the affidavit or declaration is to be so used, it must be submitted in the manner prescribed in NRS 616C.355.

(b) When an examination requested or ordered includes testing for the use of alcohol or a controlled substance , [:

(1) If] the laboratory that conducts the testing [is located in a county whose population is 100,000 or more and the testing is of urine, the laboratory] must be [certified for forensic testing of urine for drugs by the College of American Pathologists or a successor organization or by the federal Department of Health and Human Services; and

(2) Any such testing of breath for alcohol must be performed pursuant to the regulations of the federal Department of Transportation.] licensed pursuant to the provisions of chapter 652 of NRS.

3. No compensation is payable for the death, disability or treatment of an employee if his death is caused by, or insofar as his disability is aggravated, caused or continued by, an unreasonable refusal or neglect to submit to or to follow any competent and reasonable surgical treatment or medical aid.

4. If any employee persists in an unsanitary or injurious practice that imperils or retards his recovery, or refuses to submit to such medical or surgical treatment as is necessary to promote his recovery, his compensation may be reduced or suspended.

5. An injured employee’s compensation, other than accident benefits, must be suspended if:

(a) A physician or chiropractor determines that the employee is unable to undergo treatment, testing or examination for the industrial injury solely because of a condition or injury that did not arise out of and in the course of his employment; and

(b) It is within the ability of the employee to correct the nonindustrial condition or injury.

The compensation must be suspended until the injured employee is able to resume treatment, testing or examination for the industrial injury. The insurer may elect to pay for the treatment of the nonindustrial condition or injury.".

Amend sec. 10, page 6, by deleting lines 4 and 5 and inserting:

"refer the employee to a physician or chiropractor [chosen by the hearing officer.] of his choice who has demonstrated special competence to treat the particular medical condition of the employee. If the medical question concerns the rating of a permanent".

Amend sec. 12, page 8, by deleting lines 6 and 7 and inserting:

"refer the employee to a physician or chiropractor [chosen by the appeals officer.] of his choice who has demonstrated special competence to treat the particular medical condition of the employee. If the medical question concerns the rating of a permanent".

Amend the bill as a whole by adding new sections designated sections 13 through 26, following sec. 12, to read as follows:

"Sec. 13. Chapter 686B of NRS is hereby amended by adding thereto a new section to read as follows:

"Prospective loss cost" means the portion of a rate that is based on historical aggregate losses and loss adjustment expenses which are adjusted to their ultimate value and projected to a future point in time. Except as otherwise provided in this section, the term does not include provisions for expenses or profit.

Sec. 14. NRS 686B.1751 is hereby amended to read as follows:

686B.1751 As used in NRS 686B.1751 to 686B.1799, inclusive, and section 13 of this act, unless the context otherwise requires, the words and terms defined in NRS 686B.1752 to 686B.1762, inclusive, and section 13 of this act, have the meanings ascribed to them in those sections.

Sec. 15. NRS 686B.1765 is hereby amended to read as follows:

686B.1765 The advisory organization may:

1. Develop statistical plans including definitions for the classification of risks.

2. Collect statistical data from its members and subscribers or any other reliable source.

3. Prepare and distribute data on [the basic premium rate or rates, adjusted for expected changes in reported losses and for trends in losses, according to its statistical plan.] prospective loss costs.

4. Prepare and distribute manuals of rules and schedules for rating which do not permit calculating the final rates without using information other than the information in the manual.

5. Distribute any information filed with the commissioner which is open to public inspection.

6. Conduct research and collect statistics to discover, identify and classify information on the causes and prevention of losses.

7. Prepare and file forms and endorsements for policies and consult with its members, subscribers and any other knowledgeable persons on their use.

8. Collect, compile and distribute information on the past and current premiums charged by individual insurers if the information is available for public inspection.

9. Conduct research and collect information to determine what effect changes in benefits to injured employees pursuant to chapters 616A to 617, inclusive, of NRS will have on [the basic premium rate or rates.] prospective loss costs.

10. Prepare and distribute rules and rating values for the uniform plan for rating experience.

11. Calculate and provide to the insurer the modification of premiums based on the individual employer’s losses.

12. Assist an individual insurer to develop rates, supplementary rate information or other supporting information if authorized to do so by the insurer.

Sec. 16. NRS 686B.177 is hereby amended to read as follows:

686B.177 1. The advisory organization shall file with the commissioner a copy of every basic premium rate, the portion of the rate that is allowable for expenses as determined by the advisory organization, every manual of rating rules, every rating schedule and every change, amendment or modification to them which is proposed for use in this state at least 60 days before they are distributed to the organization’s members, subscribers or other persons. The rates shall be deemed to be approved unless they are disapproved by the commissioner within 60 days after they are filed.

2. The commissioner shall report any changes in rates or in the uniform plan for rating experience, the uniform statistical plan or the uniform system of classification, when approved, to the director of the legislative counsel bureau.

3. The rates filed by the advisory organization and approved by the commissioner apply to every insurer. In no case may an insurer’s rate be less than the approved rate by more than the following percentages:

(a) For the period beginning on July 1, 1999, and ending on June 30, 2000, no variance.

(b) For the period beginning on July 1, 2000, and ending on June 30, 2001, no more than a [5] 15 percent variance.

[(c) For the period beginning on July 1, 2001, and ending on June 30, 2002, no more than a 10 percent variance.

(d) For the period beginning on July 1, 2002, and ending on June 30, 2003, no more than a 15 percent variance.]

Sec. 17. NRS 686B.177 is hereby amended to read as follows:

686B.177 1. The advisory organization shall file with the commissioner a copy of every [basic premium rate,] prospective loss cost, every manual of rating rules, every rating schedule and every change, amendment or modification to them which is proposed for use in this state at least 60 days before they are distributed to the organization’s members, subscribers or other persons. The rates shall be deemed to be approved unless they are disapproved by the commissioner within 60 days after they are filed.

2. The commissioner shall report any changes in rates or in the uniform plan for rating experience, the uniform statistical plan or the uniform system of classification, when approved, to the director of the legislative counsel bureau.

Sec. 18. NRS 686B.1775 is hereby amended to read as follows:

686B.1775 1. [If the interaction among insurers and employers is presumed or found to be competitive, each] Each insurer shall file with the commissioner all the rates , [and] supplementary rate information, supporting data, and changes and amendments thereof, except any information filed by the advisory organization, which the insurer intends to use in this state. [The insurer shall file the rates and supplementary rate information] An insurer may adopt by reference any supplementary rate information or supporting data that has been previously filed by that insurer and approved by the commissioner. The filing must indicate the date the rates will become effective. An insurer may file its rates pursuant to this subsection by filing:

(a) Final rates; or

(b) A multiplier and, if used by an insurer, a premium charged to each policy of industrial insurance regardless of the size of the policy which, when applied to the prospective loss costs filed by the advisory organization pursuant to NRS 686B.177, will result in final rates.

2. Each insurer shall file the rates, supplementary rate information and supporting data pursuant to subsection 1:

(a) Except as otherwise provided in subsection 4, if the interaction among insurers and employers is presumed or found to be competitive, not later than 15 days [after] before the date the rates become effective. [An insurer may adopt by reference, with or without a deviation, the rates or supplementary rate information filed by any other insurer.

2.] (b) If the commissioner has issued a finding that the interaction is not competitive, [each insurer shall file with the commissioner all the rates and supplementary rate information, except for the information filed by the advisory organization, at least] not later than 60 days before the rates become effective.

3. If the information supplied by an insurer pursuant to [this] subsection 1 is insufficient, the commissioner shall notify the insurer and [the information shall be deemed to be filed when] require the insurer to provide additional information. The filing must not be deemed complete or available for use by the insurer and review by the commissioner must not commence until all the information requested by the commissioner is received by him.

[3.] If the requested information is not received by the commissioner within 60 days after its request, the filing may be disapproved without further review.

4. If, after notice to the insurer and a hearing, the commissioner finds that an insurer’s rates require supervision because of the insurer’s financial condition or because of rating practices which are unfairly discriminatory, the commissioner shall order the insurer to file its rates, supplementary rate information , supporting data and any other information required by the commissioner, at least 60 days before they become effective.

[4.] 5. For any filing made by an insurer pursuant to this section, the commissioner may authorize an earlier effective date for the rates upon a written request from the insurer.

[5. Every]

6. Except as otherwise provided in subsection 1, every rate filed by an insurer must be filed in the form and manner prescribed by the commissioner.

7. As used in this section, "supporting data" means:

(a) The experience and judgment of the insurer and of other insurers or of the advisory organization, if relied upon by the insurer;

(b) The interpretation of any statistical data relied upon by the insurer;

(c) A description of the actuarial and statistical methods employed in setting the rates; and

(d) Any other relevant matters required by the commissioner.

Sec. 19. NRS 686B.1777 is hereby amended to read as follows:

686B.1777 1. If the commissioner finds that:

(a) The interaction among insurers is not competitive;

(b) The rates filed by insurers whose interaction is competitive are inadequate or unfairly discriminatory; or

(c) The rates violate the provisions of this chapter,

the commissioner may require the insurers to file information supporting their existing rates. Before the commissioner may disapprove those rates, he shall notify the insurers and hold a hearing on the rates and the supplementary rate information.

2. The commissioner may disapprove any rate [which must be filed before it becomes effective] without a hearing. Any insurer whose rates are disapproved in this manner may request in writing and within 30 days after the disapproval that the commissioner conduct a hearing on the matter.

Sec. 20. NRS 686B.1779 is hereby amended to read as follows:

686B.1779 1. The commissioner may disapprove a rate filed by an insurer [:

(a) At any time after the rate becomes effective; or

(b) At] at any time . [before the rate becomes effective.]

2. The commissioner shall disapprove a rate if:

(a) An insurer has failed to meet the requirements for filing a rate pursuant to this chapter or the regulations of the commissioner; or

(b) The rate is inadequate, excessive or unfairly discriminatory.

Sec. 21. NRS 686B.1779 is hereby amended to read as follows:

686B.1779 1. The commissioner may disapprove a rate filed by an insurer [:

(a) At any time after the rate becomes effective; or

(b) At] at any time . [before the rate becomes effective if the insurer is required to file its rates before they become effective.]

2. The commissioner shall disapprove a rate if:

(a) An insurer has failed to meet the requirements for filing a rate pursuant to this chapter or the regulations of the commissioner;

(b) The rate is inadequate or unfairly discriminatory and the interaction among insurers and employers is competitive; or

(c) A rate is inadequate, excessive or unfairly discriminatory and the commissioner has found and issued an order that the interaction among the insurers and employers is not competitive.

Sec. 22. NRS 686B.1784 is hereby amended to read as follows:

686B.1784 1. The commissioner may examine any insurer, advisory organization or plan for apportioned risks whenever he determines that such an examination is necessary.

2. The reasonable cost of an examination must be paid by the insurer or other person examined upon presentation by the commissioner of an accounting of those costs pursuant to NRS 679B.290.

3. In lieu of an examination, the commissioner may accept the report of an examination made by the agency of another state that regulates insurance.

Sec. 23. NRS 686B.1793 is hereby amended to read as follows:

686B.1793 1. [A] An insurer or other person who violates any provision of NRS 686B.1751 to 686B.1799, inclusive, and section 13 of this act shall, upon the order of the commissioner, pay an administrative fine not to exceed $1,000 for each violation and not to exceed $10,000 for each willful violation. These administrative fines are in addition to any other penalty provided by law. Any insurer using a rate before it has been filed with the commissioner as required by NRS 686B.1775, shall be deemed to have committed a separate violation for each day the insurer failed to file the rate.

2. The commissioner may suspend or revoke the license of any advisory organization or insurer who fails to comply with an order within the time specified by the commissioner or any extension of that time made by the commissioner. Any suspension of a license is effective for the time stated by the commissioner in his order or until the order is modified, rescinded or reversed.

3. The commissioner, by written order, may impose a penalty or suspend a license pursuant to this section only after written notice to the insurer, organization or plan for apportioned risks and a hearing.

Sec. 24. Section 197 of chapter 580, Statutes of Nevada 1995, as amended by chapter 410, Statutes of Nevada 1997, at page 1456, is hereby amended to read as follows:

Sec. 197. 1. This section and sections 25 to 36, inclusive, 44, 86, 119, 127, 128, 186.5, 188, 194, 195 and 196 of this act become effective upon passage and approval.

2. Section 68 of this act becomes effective at 12:01 a.m. on July 1, 1995.

3. Section 161 of this act becomes effective on July 1, [2003.] 2001.

4. The remaining sections of this act become effective:

(a) Upon passage and approval for the purposes of:

(1) The adoption of regulations by the commissioner of insurance and the administrator of the division of industrial relations of the department of business and industry.

(2) The qualification of private carriers to sell industrial insurance.

(3) The designation of a licensed advisory organization by the commissioner and the initial filing of classifications of risk, the uniform plan for rating experience and the uniform statistical plan, by that organization.

(4) The inspection of the records of the system, the Nevada industrial commission and the administrator with respect to the self-insured employers, by the commissioner and the advisory organization.

(5) The filing, by private carriers and the system, of rates to be used by them.

(b) For all other purposes on July 1, 1999.

5. Section 145 of this act expires by limitation on July 1, 2001.

Sec. 25. Section 81 of chapter 410, Statutes of Nevada 1997, as amended by section 36 of Senate Bill No. 453 of this session, is hereby amended to read as follows:

Sec. 81. 1. This section and sections 3 to 10, inclusive, 12, 13, 15, 15.5, 16, 17, 20, 21, 22, 27, 28, 35, 40.5, 41, 42, 61, 62, 62.5, 63, 65, 67, 70, 72, 74, 76, 78, 79 and 80 of this act become effective on July 1, 1997.

2. Section 14 of this act becomes effective at 12:01 a.m. on July 1, 1997.

3. Sections 1, 11, 26, 36, 37, 38, 39, 43, 45, 46, 49, 51, 52, 53, 54, 58 and 59 of this act become effective on January 1, 1998.

4. Section 50 of this act becomes effective at 12:01 a.m. on January 1, 1998.

5. Sections 18, 23, 40, 48, 57, 60, 77 and 77.5 of this act become effective on July 1, 1999.

6. Sections 64, 66, 68, 71, 73 and 75 of this act become effective on July 1, [2003.] 2001.

Sec. 26. 1. This section and sections 14, 16, 20, 22, 23, 24 and 25 of this act become effective at 12:01 a.m. on July 1, 1999.

2. Sections 1 to 7, inclusive, and 9 to 12, inclusive, of this act become effective on October 1, 1999.

3. Sections 8 and 8.5 of this act become effective at 12:01 a.m. on October 1, 1999.

4. Section 13, 15, 17, 18, 19 and 21 of this act become effective at 12:01 a.m. on July 1, 2001.".

Amend the title of the bill to read as follows:

"AN ACT relating to industrial insurance; prohibiting organizations for managed care that provide medical and health care services to injured employees from engaging in certain practices that restrict the actions of a provider of health care; requiring a response to a request for prior authorization for medical treatment to be issued within a certain number of days; allowing an injured employee whose employer’s insurer has entered into a contract with an organization for managed care or providers of health care to change treating physicians or chiropractors under certain circumstances; requiring that a test of an injured employee for the presence of alcohol or a controlled substance be performed by a laboratory that is licensed by the health division of the department of human resources; allowing hearing officers and appeals officers to refer an injured employee to a physician or chiropractor competent to determine the necessity of certain medical treatment; revising the provisions governing the filing of rates for industrial insurance with the commissioner of insurance; and providing other matters properly relating thereto.".

Amend the summary of the bill, second line, by deleting the period and inserting:

"and filing of rates for industrial insurance.".