MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-First Session
March 28, 2001
The Committee on Commerce and Labor was called to order at 3:49 p.m., on Wednesday, March 28, 2001. Vice Chairwoman Barbara Buckley presided in Room 4100 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Joseph Dini, Jr., Chairman
Ms. Barbara Buckley, Vice Chairman
Mr. Bob Beers
Ms. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. David Goldwater
Mr. Lynn Hettrick
Mr. David Humke
Ms. Sheila Leslie
Mr. Dennis Nolan
Mr. John Oceguera
Mr. David Parks
COMMITTEE MEMBERS EXCUSED:
Mr. Morse Arberry, Jr.
Mr. Richard D. Perkins
GUEST LEGISLATORS PRESENT:
Senator Mark Amodei, Capitol Senatorial District
Assemblyman Doug Bache, Assembly District 11
STAFF MEMBERS PRESENT:
Crystal McGee, Committee Policy Analyst
Vance Hughey, Committee Policy Analyst
Ann M. VanNostrand, Committee Secretary
OTHERS PRESENT
Wayne Carlson, Executive Director, Public Agencies Compensation Trust
Bob Balkenbush, General Council, Public Agencies Compensation Trust
Bob Ostrovsky, Nevada Resort Association, and Employers Insurance Company of Nevada
Michael Lynch, Builders Association of Nevada
Mark A. Marsh, Reiser and Associates, and Bison Group
Andrew List, Nevada Association of Counties
Daryl Capurro, Nevada Motor Transport Association
Jim Fry, private citizen, Douglas County
Ray Badger, Attorney, Nevada Trial Lawyers Association
Jim Perkins, Professional Fire Fighters of Nevada
Danny Thompson, Nevada AFL-CIO
Cheryl Blomstrom, Nevada Chapter, Associated General Contractors
Vicki Robinson, City of Las Vegas
Mat Durangriutia, Diversified Management Group
Richard Staub, Attorney
Rose McKinney-James, Clark County School District
Joanne Rennie, City of Henderson
John Reiser, Reiser and Associates, and Builders Association
Daniel Hansen, Independent American Party
Gene Munnings, Odyssey Business Services
John O’Connor, Local IEU Union 1177
Jim Wadhams, American Insurance Association
Leslie Bell, President, Nevada Self-Insured Association
Rusty McAllister, Professional Fire Fighters of Nevada
Craig Kadlub, Clark County School District
Susan Dunt, Risk Manager, State of Nevada
Don Jayne, Nevada Self-Insured Association
Mark Tilton, Safety Director
Jack Jeffrey, Southern Nevada Building and Construction Trades Council and the Southern Nevada Central Labor Council
Nancyann Leeder, Nevada Attorney for Injured Workers
Vice Chairwoman Buckley opened the hearings as a subcommittee until arrival of remainder of the full committee, and began the hearings with A.B. 313.
Assembly Bill 313: Creates conclusive presumption that hepatitis is occupational disease for certain employees. (BDR 53-843)
Assemblyman Oceguera, primary sponsor of A.B. 313, disclosed he was a paid professional fire fighter, and as such, would be affected by the provisions of the bill. However, because he was affected no differently than any other paid professional fire fighter in the state, he was advised he could legally advocate for the bill and vote on it. His verbatim testimony was attached as Exhibit C. Assemblyman Oceguera shared with the committee a memo (Exhibit D) from Robert U. Barone of the Community Counseling Center in Las Vegas.
Rusty McAllister, Representative for the Professional Fire fighters of Nevada, offered their full support of A.B. 313 presented by Assemblyman Oceguera and Senator Amodei. A copy of Mr. McAllister’s verbatim testimony was attached as Exhibit E.
Assemblyman Goldwater interjected he appreciated the bill and all fire fighters and citizen legislators, the spirit of Nevada’s Legislature, who brought their expertise in the form of a bill. Even with the stated conclusive presumption the case could be denied.
Mr. McAllister answered he was not sure if workers’ compensation had the right to deny it, but at that point in time, they did. Anything that was presumed could be denied.
Assemblyman Goldwater referenced heart and lung disease. Though there was a statutory presumption on heart and lung claims when following all of the rules, workers’ compensation was able to deny a claim. What he saw with A.B. 313 was a shift of the burden of proof. He felt it very fair to fire fighters who took such risks to at least say, “Just prove I didn’t get it on the job,” rather than having to prove they did. Under workers’ compensation and “no fault insurance,” he stated, it was ridiculous the Legislature had to pass such a bill.
Vice Chairwoman Buckley called on Crystal McGee, committee policy analyst, to offer any comments regarding the phrase “conclusive presumption.”
Crystal McGee, Committee Policy Analyst, Legislative Counsel Bureau, Research Division, stated the phrase in question meant it was conclusively presumed that the disease occurred in the course and scope of employment. Under A.B. 313, if the disease was contracted, it would be covered under the Occupational Diseases Act.
Assemblywoman Giunchigliani remarked the bill stated “salaried” firemen, and requested clarification if volunteer fire fighters had been overlooked.
Mr. McAllister stated legal counsel drafted the bill in those terms, but volunteer fire fighters were not intentionally excluded. In trying to keep the fiscal note to a minimum, the word “voluntary” was excluded, though they would certainly be covered.
Assemblywoman Giunchigliani noted the bill called for new employees to be tested to set a benchmark date. She asked what would be used for present employees’ benchmark dates.
Mr. McAllister answered the bill stated that if passed, there was a 30-day window in which present staff were tested. If they tested positive for Hepatitis C, they would be considered to have met all requirements for blood tests and be covered under this bill.
Assemblywoman Giunchigliani asked if Hepatitis A, B, and C would be covered. Mr. McAllister stated Hepatitis A and B were curable, thus most of the testimony focused on Hepatitis C, for which there was no cure. There were also available vaccinations for Hepatitis A and B and, for the most part, most fire departments and emergency care/ambulance companies provided vaccinations to provide employees protection from contracting Hepatitis A and B. He stated, though, there were a few who failed to provide those needed vaccinations. For example, Mr. McAllister had inquired about the cost for Hepatitis A and B vaccines. Hepatitis A cost $60 and Hepatitis B cost $105, both a series of three shots. There was no reason for employers to avoid providing the vaccinations. It was less costly to provide the vaccinations than to pay for medical claims on an employee diagnosed with Hepatitis A or B.
Speaker Emeritus Dini asked the cost of testing for Hepatitis A, B, and C, thinking it was approximately $390. Mr. McAllister stated the cost of a complete Hepatitis A, B, and C panel was $55.
Vice Chairwoman Buckley asked if it could be estimated how many times a person could be exposed to one of the three above-mentioned diseases; was there any yearly average estimate on record. Mr. McAllister estimated eight million people in the United States were diagnosed with Hepatitis C. The fire fighters would come in contact with some of those but he had no estimated figures on the number of contacts.
Vice Chairwoman Buckley referenced Assemblywoman Sheila Leslie’s bill, A.B. 279, which created a prevention program to help employees of health care facilities reduce the risk of certain job-related injuries due to needle stick incidents. An employee was tested at the time of the incident, keeping employees from having to be tested annually if there were no exposures. She asked if the same approach was considered, or if the duties were so varied they chose A.B. 313 instead.
Mr. McAllister stated they looked at both scenarios and found it necessary to choose to pursue a bill of their own. He stated nurses worked in more sterile environments and the testing of the injured worker was immediately available. Hospital staffs worked in a lighted environment, and in the case of surgical procedures, were aware of patient blood types as well as disease history. Fire fighters were blind to that information upfront, oftentimes being unknowingly exposed. He stated victims they assisted did not come to the fire fighters offering the information of blood-borne pathogen diseases they may have. Statistics showed that by having the yearly testing, early detection and treatment, the costs of workers’ compensation was cut drastically. He stated Hepatitis C could lay dormant for 30 years and not present symptoms, thus yearly testing provided early treatment.
Assemblyman Oceguera introduced Jim Perkins, a public citizen and fellow fire fighter. Mr. Perkins stated he began an Emergency Medical Technician (EMT) career in the state of Nevada during 1970, working with a volunteer fire department. In 1973, he joined the Clark County Fire Department, and during 1974 he was assigned to The State of Nevada Governor’s Pilot Program for Paramedics. It was safe to say that no one in the state of Nevada had been a paramedic longer than he, though one other individual shared the same tenure. That individual had been diagnosed with Hepatitis B and was exposed to Tuberculosis. Mr. Perkins stated he was diagnosed with Hepatitis C and tested positive for exposure to Tuberculosis. The Hepatitis C malady was discovered during a routine blood donation workup at the Clark County Health Department. He filed a workers’ compensation claim for Hepatitis C, researched his job-related exposure documents and found seven different exposures to Hepatitis and six exposures for HIV during his career. When the first workers’ compensation claim was filed, it was denied, the reason being the proper paperwork had not been completed at the time of the first exposure during 1982, when a screening had not been done for Hepatitis C, but chronic Hepatitis only. He noted 1982 was prior to the Hepatitis C being identified, which was during 1992. The second appeal was denied and a third appeal was to be heard in the not too distant future.
Mr. Perkins focused on portions of Mr. McAllister’s testimony, explaining that his present position as Captain in a technical rescue unit encompassed such tasks as confined space rescue, transfer rescue, vehicle extrication, and all other technical calls of such nature. He shared a story about being called to Henderson, Nevada, to help with extrication of a person in a trench collapse accident. In that accident, the worker had been buried under approximately three tons of concrete, water, and other debris. It took approximately 8.5 hours to extricate the victim. During that time, the team worked knee-deep in water, in the bottom of a pit. Later that day, the team was called to a multiple vehicle accident with fatalities; one eviscerated and one decapitated. All parts of the victims were removed from the vehicles by bending and cutting metal and putting body parts into body bags. Later, during that same shift, there was another fatal accident where two teenagers had wrapped their vehicle around a tree. In one 24-hour shift Mr. Perkins received three calls with five fatalities, all involved working in and around exposure problems such as broken glass, jagged metal, and chunks of concrete. With all the exposure, and all five victims being deceased, there was no blood-borne pathogen disease screening done on the deceased.
There was no way for the rescue team to document or anticipate to what exposures they would be subjected. Fire fighters and EMTs did not do their jobs for the money, but for the days when they arrived home and knew a person was alive because of something they had done. He stated he spoke for every fire fighter and EMT in the state of Nevada when saying he never hesitated to go into a situation to provide service for the citizens for whom they worked. He urged the committee to return that consideration of loyalty.
Assemblyman Nolan stated his exposure was to Hepatitis B, but it could have as easily been Hepatitis C. He stated his liver panels remained abnormal, which he related to the healthcare field. He stated he received his EMT training from Mr. Perkins, as well as having worked with him on a number of rescues. He did not find his testimony to be embellished or magnified regarding exposure possibilities. Mr. Nolan had done some calculations that pertained to an urban setting. At ten call-outs per day, if 20 percent of the calls received by fire fighters and EMT staff were considered to be life threatening, 20 of those calls per month afforded exposure possibilities when figured on a base of 240 calls per month minimum. The calculations reflected per individual, not team.
Speaker Dini asked Assemblyman Oceguera if he would object to amending the bill to include the statement “salaried and volunteer.” Assemblyman Oceguera had no objection and continued, explaining the fiscal note was projected from an earlier bill. Susan Dunt, Nevada Risk Management, provided backup that indicated errors on the fiscal note, which would be reevaluated on a significantly reduced exposure base of less than 100 employees. Vice Chairwoman Buckley stated the committee would await a revised fiscal note to reference.
Senator Mark Amodei, Capitol Senate District, appreciated the opportunity to work with Assemblyman Oceguera and the Commerce and Labor Committee on the legislation. It was not a feel-good type of legislation, but a strong factual basis to believe there was a substantial increased occupational risk to on-scene medical emergency personnel. Having been a veteran of the Heart/Lung wars of the 1999 legislative session, and knowing the Assembly was subjected to the same, he urged taking a strong look at the actual cost of prevention to exposure and care. The costs for such were ripe for people to overstate and speculate about, and the information gathered with questioning would set the actual costs. It was well worth the costs to provide such safety to our on-scene emergency medical caregivers. A.B. 313 represented a responsible and proactive approach to an objectively quantifiable circumstance, which should be dealt with. He urged strong support of the bill.
Assemblywoman Buckley asked those in the gallery wishing to speak in support for A.B. 313 if they had anything to offer that had not already been shared. She then asked the secretary to enter the names into the record of those supporting A.B. 313:
Barbara Gruenewald, Nevada Trial Lawyers Association
Jim Caumiant, Operating Engineers, Local 13
Chuck Laking, President, Professional Fire Fighters of Nevada
Tim Vett, Vice President, Professional Fire Fighters of Nevada
Gene Munnings, Odyssey Business Services
Wayne Carlson, Executive Director, Public Agencies Compensation Trust (PACT), a self-insured association of public employers authorized by the Legislature April 1, 1996, said the membership included rural Nevada counties, cities, hospitals, school districts and special districts with approximately 2,200 members. He stated there were several bills on tap that addressed the various exposures, with other bills expanding the lists to auxiliary police officers, schoolteachers, principals, boards of trustees and custodians. PACT’s concern was the fiscal impact would not be minimal with financial conditions as they related to rural Nevada. He referenced Speaker Emeritus Dini’s request to add “volunteer firepersons,” and stated that on their records they had 832 volunteer firemen. With an incident rate of 1.8 percent, and a total of 16 cases at one half million dollars each, the numbers heard consistently for the medical and disability expense combined, the fiscal impact was $9 million when including volunteers. Rural areas had 66 paid firemen and emergency medical staff, providing one case for medical and disability expenses at a rate of one half million dollars. PACT operated on a workers’ compensation system, not a universal health system. The health insurances covered the non-work health side of Hepatitis, and remained covered. The workers’ compensation side also covered Hepatitis with documented work compensation exposure. It appeared there were problems in the administration of the cases on the occupational side. The PACT amendments (Exhibit F) were to further the public policy objectives to cover workers’ compensation cases under the workers’ compensation statutes.
Bob Balkenbush, General Council to the Public Agency Compensation Trust, drafted and presented to the committee the PACT amendments (Exhibit F). He stated it was clear the sponsors of the bill wanted to provide industrial insurance coverage for contagious diseases and preventative treatment for those exposed on the job. The amendments, they felt, satisfied the aim of the legislation through an objective mechanism to facilitate the public policy to be accomplished through the bill. A verbatim reading began on Exhibit F.
Upon Vice Chairwoman Buckley’s request, Mr. Balkenbush highlighted the verbiage the committee had in front of them. He stated they wanted to eliminate “conclusive presumption” and facilitate prompt and immediate care. Not in the bill, but what they felt was needed was a definition of exposure to a contagious disease, as well as what diseases were considered contagious. He felt the definitions would eliminate much of the other language already in place in the bill. The purpose in elimination of “conclusive presumption” was to cover contagious diseases incurred during the scope of employment. As written, the bill allowed coverage of contagious disease contracted but not incurred during the course and scope of the employment. As an example, he told of litigation on a hospital case where a liver biopsy test concluded the level of liver fibrosis fixed the infection 10 to 15 years prior. The claim had been filed after the individual had worked at the rural hospital for only one and one half years. Thus, the employee had the Hepatitis C infection 10 to 15 years prior to employment by the hospital. He stated “conclusive presumption” would have provided coverage for the employee who would become a liver transplant patient with an estimated claim cost of approximately $1 million. PACT felt “conclusive presumption” did not facilitate the public policy already established in NRS 6168.010. They felt the provisions they put into the bill via the amendments facilitated the same goal, giving quick and preventative treatment, but also permitted the question of the disease being contracted during the course and scope of employment, making it subject to good, objective proof.
Assemblyman Goldwater first referenced a legal point, which was the opposite of what he understood “conclusive presumption” to mean. If able to prove the disease was not contracted during the course and scope of the employment, the claim could still be denied. Mr. Balkenbush answered anything could be denied, but the under the law, “conclusive presumption” meant it was not rebuttable. The insurer could deny a claim even with “conclusive presumption,” but on appeal the constitutional question would be raised of whether or not a “conclusive presumption” was constitutional if it was discovered the disease was not contracted during the course and scope of the employment.
Assemblyman Goldwater stated every heart and lung claim was not accepted though there was a “conclusive presumption.” He felt, per Mr. Balkenbush’s testimony, if a position with the fire department was obtained all hepatitis claims would be accepted, which probably would not be true, as it probably was not for heart and lung. He then asked Mr. Carlson his position with PACT. Mr. Carlson answered he was simply the Executive Director. Assemblyman Goldwater stated he found it amazing Mr. Carlson, as Executive Director of PACT, had signed in against the bill, but his testimony to Assemblyman Goldwater was the most compelling reason to pass the bill. As Mr. Carlson had stated, anyone under PACT association, or where there was any pecuniary interest in any part of the association, a hepatitis claim was too costly, and the committee should not pass the bill because it would put PACT at financial risk. Not including the legitimate on-the-job claims because there was a financial cost and denying such was unbelievable. Assemblyman Goldwater understood an elected local official had told the committee the premiums would go up if the bill was passed, or employees’ contributions may rise, which were tax dollars and the committee needed to be mindful of tax dollars. But the executive director of the trust that was administering an insurance program saying A.B. 313 was not the right thing to do because it would cost too much was the evidence needed to become more in favor of the bill.
Wayne Carlson stated there was a mischaracterization of his testimony. He represented the local government officials; his office was a public entity through the Local Cooperation Act, and he spoke on behalf of those whose costs would increase and bear the burden. They owned the policy and were jointly bound to pay the obligations of the association, though he himself administered the program.
Assemblyman Goldwater understood Mr. Carlson represented the local government officials, and they universally opposed the bill. Mr. Carlson answered they opposed the bill as written. Assemblyman Goldwater asked again if every local government official opposed the bill. Mr. Carlson stated he had not contacted each one, but he had informed them of his testimony and had not received response that they disagreed. Mr. Goldwater stated he felt the fire fighters of the districts represented would be very interested in knowing their local government officials opposed this legislation when there was universal coverage available and that somehow because it was not covered by workers’ compensation, it was covered on the health side. That was an argument heard quite often. Assemblyman Goldwater likened that to nothing short of simple union busting, because workers’ compensation did not want to pay. In talking about fire fighters, they were organized through a union, and he wanted to be careful the Legislature did not get into discussions or debates, which he took very seriously.
Bob Balkenbush interjected the bill was being opposed as presented, not the concept that there be coverage for preventive treatment for contagious diseases to which an employee, during the course and scope of employment, was exposed. But the present state of the bill read any contagious disease contracted by any employee was conclusively presumed contracted at the present workplace. There was no debate and the only out was if “conclusively presumed” was deemed unconstitutional. He and Mr. Carlson were trying to assist the committee in facilitating the objective of coverage for employees on the job that were exposed to and contracted contagious diseases. Assemblyman Goldwater summarized his position simply by saying the financial bearing or impact on any members of your association had absolutely no bearing to the testimony, yet Mr. Carlson’s testimony was that it did.
Vice Chairwoman Buckley’s concern was that many of the fire fighters did not know from where they contracted the disease. Mr. Perkins’ testimony showed it could have been through any number of exposures throughout their careers. Mr. Carlson stated he did not want this to be a health insurance program, and she assured him the committee clearly understood the difference between programs. But with the types of diseases being discussed, blood-borne pathogens, and fire fighter and EMT exposure on the job, a quandary remained that a company could deny a claim and put the burden of proof on the claimant, thus the reason for seeking a presumption.
Bob Balkenbush referenced the incidences described by Mr. Perkins, where records from the accidents, personal injury claims, and law enforcement reports identifying the accident victims would identify the individuals for testing after the fact. Vice Chairwoman Buckley asked whose burden that would be. In the meantime the fire fighters and EMTs did not receive the benefits needed. Mr. Balkenbush stated in their version of the amended bill if a fire fighter was exposed to blood or body fluids, including human excrement, during the course of performing their duties, they would then be entitled to preventative treatment. Vice Chairwoman Buckley asked about their wages and workers’ compensation benefits during the time away from the job. Mr. Balkenbush stated they would be entitled to preventative treatment, which included testing the injured worker and the victims they came in contact with. At that point, the results would show which victim had the contagious disease.
Vice Chairwoman Buckley again asked what the fire fighter did while tracking down the tourist from Iowa to see if they would agree to testing five years later. Mr. Balkenbush stated the fire fighter only had to submit the claim, and under the definition of contagious disease and exposure to contagious disease, in the version of the bill presented, they would be entitled to preventive treatment. Vice Chairwoman Buckley responded that answer had been twice repeated. Her question referenced the other benefits needed from the workers’ compensation system. Mr. Balkenbush responded and asked what benefits would be needed if they had not contracted a contagious disease. Vice Chairwoman Buckley impressed upon the witness she was speaking about someone who had contracted the disease. Mr. Balkenbush stated if it was traceable, they would get full coverage. Vice Chairwoman Buckley called on Assemblyman Nolan.
Assemblyman Nolan stated there was not always a complete record on every incident. There were many occasions where the people were transported by ambulance service to a facility where they were treated and left no information. Many times accident victims gave misleading information, false identification and address, leaving no trail for tracking if needed in the future. Another point was within the preventative care area; did the company include the new HIV preventative medication cocktails? Mr. Balkenbush stated the amended version of the bill, as they presented, provided for appropriate blood tests and current medical technology. Assemblyman Nolan stated a long-standing issue with testing and preventative measure follow-up included Hepatitis vaccinations, plus, in the case of HIV, a host of preventative medications, which were not included unless the person actually demonstrated development of the HIV virus.
Mr. Balkenbush stated that in hospitals the employees could opt not to have such treatment, but with exposure they were provided that opportunity as a form of preventive treatment through workers’ compensation insurance programs. He went on to say every exposure to blood or body fluids did not lead to a contagious disease. They wanted to further the goal to provide preventative care to policemen, firemen, and EMT staff, and then if they ultimately contracted a contagious disease from the exposure, to provide the coverage. He felt “conclusive presumption” went beyond the policy the Legislature was trying to facilitate. Assemblyman Nolan stated it went beyond the policy Mr. Carlson and Mr. Balkenbush represented, but the Legislature had a different agenda at times for establishing a policy.
Mr. Balkenbush stated that by policy he meant the state had an established Workers’ Compensation Act, which was to provide for contagious diseases contracted during the course and scope of employment, by which “conclusive presumption,” by definition, would cover some contagious diseases not contracted through employment. Assemblyman Beers asked Mr. Balkenbush if their company exhumed bodies to test for communicable diseases since he had stated there was an ability to test all potential exposures. Mr. Balkenbush stated that was a good point as to what would be done in the case of a fatality. He admitted to not thinking through that scenario, but did not feel it necessary to exhume the body. The point he was trying to make was their amended version of the legislation was designed to try and pick up a test of the blood and body fluids of the individual the emergency staff was treating to determine actual exposure. In healthcare settings, those exposed had the opportunity to have the patient immediately tested, and if the patient was disease free that provided much psychological relief to the healthcare provider. In terms of fatalities, he felt the company could provide some mechanism in addition to those provided already rather than just jumping to a conclusive presumption.
Don Jayne, representative for the Nevada Self-Insured Association (NSIA), voiced no opposition to the bill. He introduced Leslie Bell, President of the Nevada Self-Insured Association and Director CDS Workers’ Compensation, who clarified points in the bill important to the committee. Ms. Bell commented their concern was the “conclusive presumption” wording. Currently, with the heart and lung bill, it did not matter whether the heart or lung problem preexisted the employment, it was covered after meeting a five-year criteria. Under A.B. 313, and current cases where the term “presumptive” appeared, even if known on a pre-employment physical an employee was positive for one of the diseases, it would become presumptively work-related after the five-year criteria, a fact upheld by the courts. The term “presumptive” made the legislation pre- and post-employment. Through research and discussion with her medical directors, it was believed fire fighters, police officers, and medical care workers were at increased risk for the diseases because of their vocations. There was a theory within workers’ compensation that if you were at increased risk, deference had to be given to work-related events. She believed that was effectively accomplished without saying that someone afflicted prior to employment would have coverage because they were covered. Under the Gallagher Decision, the Supreme Court said retirees had the benefits as well. She cautioned the committee regarding the presumptive term analogy.
Ms. Bell pointed out that federal OSHA standards required employers pay for prophylactic care after an exposure, that was not limited to a specific type of employment status but required by OSHA. She stated also that if the CDC [Center for Disease Control] recommended the HIV cocktail, the employer had to foot the expense, though at times it was done by workers’ compensation and at other times by the employer. If no injury was incurred, yet there was an exposure, it was not covered under workers’ compensation, but the employer was clearly told they were obligated under federal standards to incur the cost. They also encouraged the provider to bill the employer. Under current law the fire fighters, policemen, and medical care staff were covered under workers’ compensation because of special legislation that required such. In general industry the coverage was required across the board.
As the Director of CDS, Ms. Bell represented nine municipal entities that covered fire fighters and/or police officers. She believed it needed to be “pinned down” to protect those individuals in the emergency care field, but again was concerned about the “presumption.”
Assemblyman Nolan asked the legal counsel to provide clarification on Ms. Bell’s last statement. His understanding of the federal blood-borne pathogen law was that employers were required to pay for follow-up testing on any exposure, which included monitoring and blood draws. The fact of when the care began was when the disease was actually contracted and diagnosed. Because of preventative measures which could be taken prophylactically, it was not necessarily care of a disease but an attempt to prevent a disease from occurring which was not clearly defined in state statutes and was a gray area within the blood-borne pathogen standards as defined by OSHA. Ms. Bell said they would support anything based on research and medical evidence that existed. They knew it would turn into a real crisis since it was presumed to affect 8 percent of the general population by the year 2004. Again, she stated, a baseline was needed. She referenced a bill that required testing one-year post-employment. Her research showed the antibodies could be detected 30 days post exposure. Waiting a full year allowed a “window” where the disease could have been contracted anywhere.
Vice Chairwoman Buckley struggled with the fact that in the case of fire fighters they were unable to pinpoint when the exposure occurred. Once the claim was denied because of the expense, it became a quagmire for them because of the denial and no further help was being obtained. Therefore, there needed to be a presumption that meant the individual could begin receiving benefits. Ms. Bell stated the claims were very difficult to process, especially for individuals between 50 and 60 years of age, especially considering the lifestyles of the 1960s. She understood the disease had exacerbated from the lifestyles of the 1960s. She agreed that if the employee was tested upon hiring, 30 days post exposure, and during annual exams, the window of exposure would be narrowed considerably. Detection and early treatment was the key with incredible advances in the medical field. Assemblywoman Buckley said it was sad when a fishing expedition through one’s past held the key for acceptance or denial of a claim. As heard from a nurse, it was hard enough she put her life on the line and then was victimized once again.
Assemblyman Oceguera felt the bill provided for testing upon employment and annually thereafter. With an exposure they would administer a post 30-day test. The problems rested with the unknowns.
Vice Chairwoman Buckley closed the hearing on A.B. 313 and opened the hearing on A.B. 322.
Assembly Bill 322: Limits payment of compensation for subsequent injuries from subsequent injury fund for private carriers to injuries that occur before certain date and eliminates fund upon occurrence of certain conditions. (BDR 53-787)
Assemblyman Lynn Hettrick, Assembly District 39, shared the intent of the bill was to eliminate subsequent injury funds in the private sector for workers’ compensation. The funds were created years prior to facilitate the hiring of injured workers. Employers were cautious about hiring a previously injured worker because if there was a claim, it was possible the claim would be exacerbated by the previous injury or they might be more prone to further injury. Therefore, a fund was established called a subsequent injury fund, which said if an employer hired a previously injured worker and they had a claim, the claim could be filed against the subsequent injury fund. It had a great intent and probably worked quite well. With the advent of the Americans with Disabilities Act (ADA), it became inappropriate and against the law for an employer to ask an employee, prior to hiring them, if they had had an on-the-job injury. The fund no longer facilitated rehiring because the question could not be asked. What began happening was the sophisticated companies performed a post-hire interview and if they learned the new hire had a previous injury, it was noted. At the first incidence of an injury by that employee, the sophisticated companies filed a subsequent injury claim and, therefore, had that billing relieved from their workers’ compensation costs, premiums, and cost factors. There was much discussion with eliminating these within the existing workers’ compensation system, which had been difficult at best and not recommended by the interim committee studies. However, in the private sector the plans had not been started though the plan was in the law. The bill had a “wind down” procedure that allowed the claims to be filed within a certain timeframe, assessments be made, as they would have been anyway to fund the claims, and then phase out subsequent injury for private carriers only. It did not affect the self-insured or group insurances. When there was a subsequent injury assessment pool, the companies were all a part of the pool. After a claim was submitted and paid by a subsequent injury policy, all companies received assessments and were assessed to pay the claims. The assessments changed annually, moving up or down, based on the number of claims. In the end, it came out the same. If there was an assessment, it was ultimately passed back to the insured, therefore it averaged out. In the end, the results were spread in the name of what was a good policy years prior, which may have helped hire injured workers, but presently the cost of claims was artificially spread through the subsequent injury fund, not doing what was intended when it was first put in place. Virtually all states had eliminated the process. Companies that had poor claims experience should have to pay their own claims and not spread the responsibility to another entity. It also encouraged better safety training and procedures in the workplace if the process of subsequent injury claims was deleted. With that process eliminated, the employer could not dump its losses onto someone else. The downside was that many small businesses were simply not sophisticated enough to access, through their private carrier, a subsequent injury account due to lack of knowledge on how to research such claims, what questions to ask employees, etc. The intent of the bill was to do away with the process before it became a larger problem.
Jim Wadhams, representative of the American Insurance Association (AIA), the large casualty companies numbering about 380 within the association, that wrote workers’ compensation coverages supported the bill because:
As Mr. Hettrick explained, the Americans with Disabilities Act (ADA) had supplanted the original purpose of hiring those who had been injured much more readily. Under the current statute there were three discrete funds:
1. For the self-insured, large employers inclusive of utility companies, casinos, and manufacturing. That fund was available for self-insured employers;
2. There was a separate fund for groups of self-insured employers; and
3. A third fund for the commercial insurance companies.
That meant the fund constituted a bank for the commercial insurance companies to swap dollars.
Assemblyman Hettrick thought it important, as did the insurance companies, to point out that of the 380 insurance companies Mr. Wadhams represented, most all of them provided workers’ compensation insurance for the state, and opposed maintenance of the program because the dollar swapping between insurance companies was offset by the cost of the administration and additional assessments. The notion of only bearing the cost of claims because they had charged a premium for that risk to begin with was appropriate.
Another problem, yet to come to light, as explained by Assemblyman Hettrick, was the fund had not been accessed or activated during the past 18 months when there were only commercial insurance companies within the marketplace. What happened, after perusing the fiscal note, was certain employers experienced rated that might, through future premiums, have some benefit from their insurance companies swapping dollars out of the fund. What that meant was the small employers who were not experienced rated would never have any benefit from a dollar swap. Therefore, costs were being shifted in a discriminatory fashion between the larger of the small employers against the smaller of the small employers. The funds were being phased out across the United States because the original purpose was supplanted and the cost of administration was not generally considered to be worthwhile. Also, discrimination occurred between the nonexperienced rated employers and those that were.
Mr. Wadhams stated those he represented encouraged consideration and wanted it known the repeal of the fund did not affect that which was accessed by self-insured employers or the group self-insured employers.
Daryl Capurro, Nevada Motor Transport Association and Nevada Transportation Self-Insured Group, found himself in a dilemma because of agreeing with the previous two speakers, though the bill only eliminated the fund for one of the “three legs” that existed in Nevada. For the purpose of fairness, if the bill was processed, he asked the subsequent injury fund be eliminated as regards to group and individual self-funded insurance coverage.
Cheryl Blomstrom, representative for the Nevada Association of General Contractors, spoke in opposition of eliminating subsequent injury funds for the private insurers. They operated a program with a series of experience rated employers who benefited from accessing the subsequent injury fund. She introduced Mark Tilton, an employee who had benefited from the fund.
Mark Tilton, a Safety Director and Risk Manager, was positive he would not have been hired for his position without subsequent injury coverage. He was rated at a 20 percent disability because of his back, on which had been performed six surgeries. As far as the ADA, employment was not a problem for him because he approached the company, telling them up-front of the subsequent injury fund protecting him. While working for three companies over the past ten years, the fund protected him. Because he was a safety director and risk manager for the companies, especially in the drywall business, there were many employees that worked for companies they competed with. Many of the jobs were obtained through the unions, and when laid off, they searched for other jobs through the union. Many times the employees presented history of their former injury at the onset, assuring the employer of a no-risk situation because of their subsequent injury coverage.
Danny Thompson, Nevada State AFL-CIO, stated opposition to the bill. ADA did not provide a financial incentive for an employer to keep an employee with a subsequent injury. Often the employee was let go, and they were very concerned about the cost to the state of Nevada should the fund be outlawed, and where and what would have to be done in order to recoup the losses.
Mat Durangriutia, representing Diversified Management Group (DMG), a small firm that represented employers in workers’ compensation, voiced opposition to the bill, his agency opted to keep subsequent injury as a program within Nevada. It provided a valuable service in the way of relief to employers who hired injured workers with disabilities. The ADA provided an incentive to employers to hire the disabled by prohibiting discrimination and requiring reasonable accommodation. Subsequent injury provided financial relief for the employer if an employee was reinjured. ADA provided no financial relief. The disabled did get injured and when that happened, many times their previous disability increased the cost of workers’ compensation coverage. It was also more difficult to close those claims, which established a very heavy impact on the employer. Also, there was a Last Injuries Exposure Rule, which was called by the Nevada Supreme Court as rather harsh. What it said was a person could have a series of exposures with a long-standing problem, change employers and filed a claim while working for the new employer. According to the rule in question, the present employer would be responsible for the cost of the entire claim. The rule was universally applied in Nevada and the only form of relief from the extensive cost imposed by the Last Injuries Exposure Rule was through subsequent injury. There was no penalty assessed to the employee as benefits continued, the claim settled quickly and responsibly.
When addressing the insurance companies, Mr. Durangriutia felt they should simply accommodate the pitfalls, trials, and tribulations on the subject of subsequent injury. The end result was subsequent injury benefited employers who hired the disabled. He referenced a comment that the program was not for small employers, which was generally true. There was a provision in the statute where insurance companies could provide an experience rating system to small employers, and also there was the reality that if a small employer with a large claim there was no relief through subsequent injury, it would be difficult to obtain an insurance policy with the case assigned to a high risk pool because of losses. He closed by saying subsequent injury was believed valuable because it protected employers many times from unfair costs, it did not hurt the injured worker whatsoever, and provided an incentive to hire the disabled.
Assemblyman Hettrick stated Mr. Durangriutia and he had conferred on the bill, to which they agreed to disagree. Assemblyman Hettrick referenced Exhibit G, entitled “Subsequent Injury Analysis FY 1996-2000.” The exhibit listed the companies contributing and those collecting, which clearly showed a small group of sophisticated employers was benefiting at the others’ expense and, as testimony indicated, there was no impact on the injured workers. He felt as it stood now subsequent injury artificially created premiums within the insurance market and he felt it incomprehensible.
Susan Dunt, Risk Manager for the State of Nevada, understood all of the issues regarding the subsequent injury fund but wanted to make clear that the elimination of the fund would have a fiscal impact on the State of Nevada (Exhibit H), and it would be a cost passed on to all state agencies. In the past, through the insurance program with Employers Insurance Company of Nevada (EICON), $1.4 million dollars in refunds was received from premium costs based on successful subsequent injury relief fund requests. Presently, under the new private insurance plan, there were $1.3 million in costs pending between EICON and DIR. Also, the state was currently insured through a private insurer. It was understood there were assessment and fairness issues, but it was felt it needed to be made clear there was a fiscal impact on the state.
John Reiser, representing Reiser and Associates and Builders Association, stated he had discussed the issue in question with Governor O’Callaghan, for 28 years a leading proponent for subsequent injury protection, which had benefited thousands of employees and employers over the past 28 years. The one thing not mentioned was the workers’ compensation legislative committee did a wonderful job studying all of the issues, as had Ms. Dunt and many others who had testified. Their conclusion was Nevada should retain the subsequent injury fund and work with DIR to make sure all employers were aware of the program to take advantage of the protection it provided. This was the one issue over the past 28 years that labor and management, in a previous as well as a new generation, had supported and benefited by responsibly keeping disabled employees working in their professions.
Mr. Reiser had a number of individuals who were hiring the disabled and modifying the work to make safe work environments. One example was the position of a crane operator with a 75-pound lift limit who could not set up the 105-pound crane operation by himself. The contractors thus sent a helper to assure safe continuance of the job. It was felt to be a fair benefit to both employers and employees and he urged the committee to continue subsequent injury funds with nonpassage of A.B. 322.
Vice Chairwoman Buckley shared that in addition to having the same discussions in the interim, the same discussion was held during the 1999 legislative session, for which the entire committee was present. The committee also recalled Governor O’Callaghan’s editorial after the 1999 legislative session.
Mark Marsh, Reiser and Associates and Bison Group, brought to light a couple of issues about the subsequent injury fund that were daily issues facing employers and employees alike. Mr. Marsh stated that as an attorney he had worked within the workers’ compensation world for nine years, trying many such cases. Mr. Marsh commented the insurance industry testified that the fund was not currently being accessed. He was able to show, via a district court petition, how the Doug Manicouchi case was holding up 22 other appeals within his office concerning the Last Injury Exposure Rule as one issue, and the subsequent injury fund another. This was because the insurance industry would not pay while they searched for a loophole in the way the fund was moved from EICON to DIR, i.e., who was responsible to pay and who was in control of the fund. Thus, to say the fund had not been accessed; there was a small caveat there because of the litigation.
Comments were made also that the fund did not benefit the employer. Mr. Marsh found that extremely difficult to believe because he solely represented employers and saw how it affected their accounts. Referencing experienced, modified employers, their tool of measurement was E-Mod, which assessed the costs. For the nonrated small employer, their loss ratio was lowered by subsequent injury coverage. It is difficult for a small employer with a high loss ratio to get insurance in the Nevada three-way market when he is placed in the high-risk pool with a 24 percent surcharge.
Mr. Marsh emphasized no previously injured employee began the day with the intent to be injured; it just occurred and were accidents by their very nature. He stated also, as was stated before, the ADA was not applicable when it came to financial aid. He did state there was discrimination within the bill as currently written as it singled out self-insured employers as people who would continue to receive the benefit of the subsequent injury fund should the bill pass. His company represented nearly 300 employers who were not self-insured funded themselves wondering why they were singled out for such exclusive treatment.
Mr. Marsh had a case where an individual had worked 13 years as a welder at a mine in eastern Nevada. He worked his entire career for one employer and the job ran out on a Friday. He had applied and obtained a position with the new company and began the following Monday at the same job site. That Monday and halfway through the shift he reported that his back hurt. A hearing was held for a person who had worked half of a shift and his entire claim for the degeneration of the spine from years of welding occurred with the previous employer. But, because he had started with a new employer and worked half a shift, the new employer received the entire bill. Nevada was not only one of the last states with a subsequent injury fund, but the last state with many things, some of which were good. This was one of the things that was good. Other states had allowed apportionment of disabilities. In Nevada, because of the Last Injurious Exposure Rule, that was not done.
Vice Chairwoman Buckley closed the hearing on A.B. 322 and opened the hearing on A.B. 332.
Assembly Bill 332: Provides for establishment of voluntary protection program for occupational safety and health. (BDR 53-238)
Assemblyman Nolan stated the bill required the administration of DIR and the state OSHA office to implement a Voluntary Protection Program (VPP) as modeled by the federal OSHA Act. He referenced Exhibits I & J, sharing OSHA had established a VPP and disseminated it both to federal and state OSHA offices. The program was designed to encourage labor and management to establish a safer work environment through a voluntary effort, and development of an elite and prestigious safety program within individual work places. The VPP was comprised of safety and health program elements demonstrated to reduce incidence and severity of workplace illnesses and injuries where the programs were an integral part of daily operations. The program was completely voluntary and embraced by 42 states, Nevada not being one of those states. Labor, management, and OSHA established a cooperative relationship in the workplace, implementing strong health and safety programs.
Included in the VPP were three levels of lead status for employers who wished to voluntarily participate. To meet the levels, as described on page two of Exhibit I, businesses had to commit to a higher standard of employee safety and prevention. The question arose why a business would voluntarily go under that type of scrutiny with the other 42 states implementing such programs, and the answers were:
The handout drafted by Crystal McGee, Senior Research Analyst with the Legislative Counsel Bureau (Exhibit I), was dated January 2000, when the program was initially developed through discussion with OSHA administrators. On page 2, under “Nevada’s Participation in the VPP,” the former administration had indicated reasons why Nevada should not join the other 42 states in putting a program in place. The reason cited as providing more of an impetus for the state to become involved was, “to participate in a VPP, a company must exhibit a sincere commitment to safety. Many VPP participants in other states had a very sophisticated safety and health program, which most businesses in Nevada do not have.” This was drafted about one year ago, but Assemblyman Nolan disagreed with it. There were many businesses with a very strong commitment with safety programs in place. Ms McGee continued, “companies in Nevada, like Kerr-McGee, that have VPP sites in other states may have the superior safety and health program necessary to quality for a VPP in Nevada.” The way Assemblyman Nolan interpreted that statement was that Kerr-McGee had a great program somewhere else but the program might not fit what they were going to do in Nevada.
In essence, Assemblyman Nolan stated, he would be very willing to withdraw the bill if he knew that the DIR and labor could come together on such a program voluntarily and discuss the tenets of implementing the programs. In a phone call to OSHA, where he spoke with Tom Jahowski, the new director of the division, he stated it was his intention to work toward a program if labor would work with him to establish safety guidelines in the program in various work places.
Danny Thompson, Nevada AFL-CIO, was uncertain about his feelings about the bill. He and Assemblyman Nolan had discussed the issue briefly. The state of Nevada currently had a program in place called SCATS, which provided safety consultation and training. They were not an enforcement organization and would help businesses with training programs, or through identifying job hazards in the workplace. Labor would be more than willing to sit with DIR and Assemblyman Nolan to look at ways to implement the plan as described. Mr. Thompson knew that SCATS offered free educational assistance and if he had his own business, he would certainly use SCATS over one that required a monetary investment.
Mark Tilton, Safety Director, stated VPP as explained was a general industry program, which did not include the construction industry. He spoke with David Going, representative of VPP programs, who explained VPP was only a 1910 General Industry Program, only beneficial to manufacturing companies, especially countrywide companies.
Assemblyman Nolan stated the program would apply to the construction industry and the way the VPP was set, there were construction standards, general duty standards, and mining standards. The VPP would include construction sites, and in the handout provided under the listed rates, there was inclusion of construction sites for general industry, leaving the rest of the provisions the same. He went on to address the concern raised by Mr. Thompson, whereby SCATS covered education and consultation and OSHA handled the complaints. It was mandated that all states have those two components. The VPP would work in unison with SCATS as an enhancement for employers and employees.
Vice Chairwoman Buckley asked why a company would become involved with OSHA if it was not mandatory, stating further that Assemblyman Nolan was interested in getting the discussion going regarding the lack of having voluntary involvement with safety programs. Since beginning that dialogue and planning to explore it further with Mr. Thompson, he would be willing to withdraw the bill. Rather than have more testimony, considering his intent had been met, perhaps the bill should be withdrawn and testimony stopped. She asked Assemblyman Nolan if he had any comments or objections.
Assemblyman Nolan stated his initial intention was to move forward with the bill; however, Mr. Thompson’s demonstrated willingness to begin negotiations on the bill prompted him to withdraw the bill.
Cheryl Blomstrom, Representative, Nevada Chapter of the Associated General Contractors of America, Inc. (AGCA), offered the services of the very active safety committee at the AGCA for participation in the dialogue as well.
Vice Chairwoman Buckley asked if it was permissible to indefinitely postpone the bill.
ASSEMBLYMAN NOLAN MOVED TO INDEFINITELY POSTPONE A.B. 332.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
MOTION CARRIED. Speaker Emeritus Dini, Assemblyman Arberry and Speaker Perkins were not present for the vote.
Daniel Hansen, representative for the Independent American Party of Nevada, stated though a minority party they felt they had rights also. Their concern was not to argue over safety and health, but about the proper role of government, separation of powers, and constitutional government. He felt Nevadans should be self-governed and able to make their own decisions. A.B. 322 transferred much of that power to OSHA. He asked what a federal voluntary protection program represented. Exhibit K further explained the party’s stand on this bill.
Assembly Bill 338: Makes various changes concerning workers’ compensation. (BDR 53-711)
Jack Jeffrey, representative of the Southern Nevada Building and Construction Trades Council and the Southern Nevada Central Labor Council, stated A.B. 338 primarily addressed benefits lost in 1993 and reestablished those benefits to help a claimant through the workers’ compensation process. In 1993, the system was in a great deal of financial difficulty and lost about 27 percent of the benefits laborers enjoyed. The bill was meant to return those losses.
Vice Chairwoman Buckley called on Assemblyman Doug Bache, Assembly District 11. Assemblyman Bache stated he had drafted the bill on behalf of the Southern Nevada Building and Construction Trades Council and the Southern Nevada Central Labor Council and was more than willing to let their representatives voice the need for the bill.
Ray Badger, Attorney, Nevada Trial Lawyers Association (NTLA), shared a two-page outline of the bill with the committee (Exhibit L). He stated the bill denied or delayed payment with no justifiable cause and an onerous time limit. The remainder of his testimony was verbatim from Exhibit L. Mr. Badger also provided Exhibit M, Maxwell v. State Industrial Insurance System [109 Nev. 1407 (1993)], which related to disability benefits being received for “psychological impairment,” and the relevant ruling by the Supreme Court.
Danny Thompson, Nevada AFL-CIO representative, stated that in 1993, when workers’ compensation was in crisis and the state was in trouble because the workers’ compensation system was a constitutional trust fund, radical changes were made and difficult decisions arrived at by both Assembly and Senate Commerce and Labor Committees. He felt no one involved in the process took pride in doing what he or she had to do to remedy the situation. Some benefits were restored over the past several sessions, and A.B. 338 would return benefits to the 1991 level. EICON was privatized and was no longer an obligation of the state as far as counting against the bond rating. They urged passage of the bill and submitted Exhibit N, which outlined proposed changes.
Nancyann Leeder, Nevada Attorney for Injured Workers, stated their agency and Mr. Ray Badger represented the same type of clients with the same problems. She felt the bill would resolve those problems.
Gene Munnings, Odyssey Business Services, reported for the company risk manager, who, he stated, was adamant about having an injured worker’s prescription filled without having to provide a claim number, a process now that Nevada supported three-way workers’ compensation coverage. It sometimes took days, even weeks, depending on the carrier, to receive the information from the carrier. There were arrangements with a few pharmacies to provide the medication without out-of-pocket payment by the claimant, but an identification card was still needed that designated temporary filling of prescriptions until a claim number was received. Otherwise, his company was a proponent of the bill with the addition of immediate prescription access without out-of-pocket expense.
Bob Ostrovsky, representative for the Nevada Resorts Association (NRA), commented on certain sections of the bill, beginning with Section 3, which referenced slow processing of files, with the new proposal of providing information within 21 days. He stated they would like the wording changed to 21 days for open claims. Closed claims were often stored in off site locations and would probably take longer to process, requesting the 21 days adhere to open claims only.
Section 5 mentioned an injured worker paying his physician or medical care provider and then asking for reimbursement. They believed that NRS 616C.135 prohibited a medical provider from collecting fees at any time from an injured worker. The statute stated that if the medical care provider accepted a workers’ compensation claimant for services, the claimant would not be balance billed, accepting for payment in full the money received from the insurance carrier. They felt it went backward, a provision in the section of the law that allowed the DIR to fine a medical care provider $250 if that clause was violated. A disputed statement went through the appeals process. Unfortunately, the doctor had to wait to be paid, one of the downsides for the medical community in servicing injured workers. He felt it was a trade-off, as they knew exactly what they would be paid according to the fee schedule or a previously scheduled amount.
Mr. Ostrovsky stated there was a long-standing principle in this state that the injured worker could choose his treating physician, yet referrals made to specialists were not the employee’s choice. Section 7 opened the process of selecting doctors from a list. He was not totally opposed, but when the medical provider referred the client to more specialized service, the bill left it open for the client to choose someone other than the recommended service provider. Section 8 referenced the PPD award, and a long-standing debate about doctor shopping. Before language was developed to create a rotating list, there was doctor shopping both by injured workers, employers, insurers, and their representatives, looking for the doctor who would provide the lowest (employer/insurer) or highest (injured worker) PPD value, depending on which side of the scale they were on. Therefore, the rotating system was created and had worked well. Section 8 provided that if the client did not like the doctors on the rotating list provide by the DIR, the client could “shop around” for another doctor instead of requesting an appointment with the next doctor in line. The rotation list was controlled completely by the DIR, not insurers or their representatives. He voiced opposition to that section of the bill.
Sections 10, 11, and 12 of A.B. 338 related to the situation of doctors balance billing patients until final determination was made on a claim, even if it meant a long appeal process. Section 13 changed from primary to substantial contributing, and Mr. Ostrovsky recalled hearing that had been a mistake missed. Primary meant a higher standard, which people were asked to meet on the reopening of a claim. If substantial contributing was chosen, he wanted it understood the standard was lowered and the claim became more easily reopened.
Section 14 of A.B. 338 had some language regarding temporary light duty and informing employees for which reasons they could be terminated. He felt that was a reasonable request. Section 15 referenced the selection of a physician to do the PPD rating with pertinent sections of the American Medical Association (AMA) Guide was followed as well. All rotating physicians were certified by and had finished the DIR training program, thus they had AMA Guide copies available. If there was something wrong with the physicians and chiropractors doing ratings, that was the area to focus upon. He was not sure what the “currently employed” language meant. Did it mean they were on the list of the managed-care company, or did it mean directly employed by the insurance company? If the insurance company employed the physicians, he had no question that those people should be limited, yet some of the managed-care lists held 600 to 700 names. Anything that looked as though the employee had not received proper representation should be addressed.
Subsection 5 of Section 15 of A.B. 338 opened awards to other factors. For review, words stricken were “no other factors other than the degree of physical impairment of the whole man may be considered in calculating the entitlement for compensation for a permanent partial disability.” By striking that language, he believed that the Legislature would be opening up all claims to other factors. It was decided long ago to use the guide of physical impairment. If a person was a carpenter and lost three fingers on one of his/her hands, he/she could not be a carpenter anymore. The person was compensated because he/she could no longer function as a carpenter, and with the recommended changes, the person was compensated because they lost three fingers regardless if a carpenter, concert pianist, or secretary.
Other factors were significant substantial policy decisions the bill would ask to be followed, as was the psychological issue, but with a psychological ruling the individual did receive PPD.
Section 17 of the bill provided for no rehabilitation without a PPD award. He questioned having a zero disability, yet the employee was not allowed to return to the job. He questioned the rating and felt there were cases that could be reopened to show a zero-rating though the employee could not return to the job. If a person was unable to return to their job, there should have been a way to provide a disability award. He questioned why rehabilitation was being opened to people awarded a zero disability, which meant opening rehabilitation to an entirely new group of employees larger than those currently receiving vocational rehabilitation benefits. He stated there were more injuries not resulting in a PPD award than those that did.
In subsection 5 of Section 17 of A.B. 388, he was not sure why the existing skills language provided a controversy; changes were recommended for existing skills language though buy-outs far surpassed requests for rehabilitation. He supported the increase in the buy-out language, a buy-out being voluntary.
A substantial policy issue was the right to sue and whether or not the benefit penalties established in NRS 616D.120 were adequate to balance the rights of the injured worker against the rights of the employer and the insurer. There was a delicate balance if the insurer, medical care provider, or employer did something inappropriate. Was there a penalty and was it significant enough to stop and defray the same behavior again, or from doing it willfully and purposely? Mistakes were one thing; willful acts were another. It was decided a benefit penalty could be imposed by the DIR and beyond that, the ability to withdraw a certificate of self-insurance or an insurer’s right to sell compensation in Nevada if they continued to willfully obstruct the act. Mr. Ostrovsky did not know of any inadequate evidence shown. To take a stand on the right to sue, there needed to be a closer look at what had happened to benefit penalties, the cases, problems, and all situations arising there from. It would become a very expensive and litigious matter for claimants and insurance companies while slowing down the process altogether. He stated the other matters were mostly technical to which he was not opposed.
Bob Balkenbush, representative, Public Agency Compensation Trust, concurred with Mr. Ostrovsky’s comments.
Craig Kadlub, representative for the Clark County School District, stated Rose McKinney-James had signed in to speak but was testifying in another committee hearing at the present time. Therefore, she had asked Mr. Kadlub to request permission to present her testimony in writing at another time (Exhibit O). Vice Chairwoman Buckley assured Mr. Kadlub Ms McKinney-James’ narrative would be included in the record.
Daryl Capurro, representative for Nevada Motor Transport Association, concurred with the comments of Mr. Ostrovsky. He then pointed out three areas of support:
Don Jayne, representative, Nevada Self-Insured Association (NSIA), provided a bit of history, returning to the 1993 era when problems were first addressed with workers’ compensation in Nevada. At that time he was general manager of SIIS, having been hired from out-of-state and handed the task of informing Governor Miller the state had a bankrupt insurance company. It was difficult and challenging to correct.
Mr. Jayne addressed the issue of hiring an actuary. The job of the actuary was to predict the future based on the trends of the past. Today, while looking at the trends of the past, they were looking into a time that was changed during 1993, 1997, and virtually every legislative session since while addressing and making adjustments to workers’ compensation. He felt the adjustments would continue because workers’ compensation was mandated legislation. Many aspects of A.B. 338 were described as returning to the benefit levels in place in 1993, and he felt that in many ways was true. He voiced caution in making the policy decisions, as they would impact the very same trends of 1993. Many elements they supported were areas that needed correction, particularly the way claims were administered. Other elements needed to be evaluated and measured as to the impact into those moves, and recognizing what would happen in the industry as the changes were made.
Mr. Jayne stated that in many ways those he represented agreed with prior witnesses Mr. Ostrovsky and Mr. Capurro, and then introduced Ms. Leslie Bell, who addressed technical issues surrounding the bill.
Leslie Bell, President of the Nevada Self Insurance Association (NSIA) and Director, CDS Comp First, shared NSIA was opposed to Sections 13 and 15 of the bill. They believed there was some good language that would correct some problems within the industry. However, Section 15, subsection 6, stated a person was rated based not on their permanent impairment after treatment, but before treatment of the anomaly. She had no problem with Section 7, though felt that an insurer, self-insured employer, or an employer had the right to have an injured worker seen in consultation by a specialist of their choice.
Ms. Bell stated as the Director of CDS she had penned two letters, her resignation and a notice to the clients that the administrative fees would triple if A.B. 338 passed as written. She did not object to a bad faith clause being reintroduced as she strongly opposed anyone that conducted themselves in bad faith. She did not have clients that operated under bad faith and would remove them from that status. She terminated employees for bad faith behavior.
Vicki Robinson, Manager of Insurance Services, City of Las Vegas, strongly agreed with Mr. Ostrovsky and Ms. Bell. She added Section 7 put the onus on the employee to find a specialist. A problem learned from employees was that physicians were often very reluctant to treat a workers’ compensation cases because of the rates. If an employee was referred to a specialist not on the list, her office interceded and began tracking to find a specialized physician to accept the patient. If the physician did not accept the workers’ compensation rate, the insurer paid what the physician billed because the patient needed the treatment. She did not feel it right to ask the patient to find their own doctor. She stated PPD, as Mr. Ostrovsky had stated, needed to be addressed, but most possibly outside of the legislative session.
Joanne Rennie, Risk Manager for the City of Henderson, voiced agreement with concerns expressed by the previous speakers.
Vice Chairwoman Buckley stated she would ask the sponsors of the bill to consider all testimony given and submit to Chairman Dini and Ms. McGee a list of areas of agreement to be considered during a work session.
Vice Chairwoman Buckley opened hearing on A.B. 423.
Assembly Bill 423: Revises provisions governing benefits for industrial insurance for exposure to contagious diseases. (BDR 53-1187)
Assemblyman Hettrick, Assembly District 39, stated A.B. 423 was a bill by request that revised provisions governing the benefits for industrial insurance due to exposure to contagious disease. Several bills of that nature had been heard and comments regarding A.B. 423 from constituents indicated the language more thoroughly covered some of the issues heard over the past few weeks. Mr. Jim Fry was introduced to continue the bill introduction to the committee.
Jim Fry, resident, Douglas County, Nevada, appeared before the committee as a private citizen. His verbatim testimony is identified as Exhibit P.
Assemblywoman Giunchigliani stated the bill addressed issues not heard in other bills of a similar nature, specifically teachers who dealt with blood-borne pathogens. Discussion was needed on safety training other than a pair of plastic gloves and a baggie of five band-aids handed out at the beginning of the school year. She hoped there was consideration to make sure there was no debate on whether or not teachers had the right to go in and argue for coverage on Hepatitis C.
Danny Thompson, Nevada State AFL-CIO, dealt with the 120 different local unions statewide, inclusive of fire fighters, police officers, culinary workers, nurses, and garbage truck operators. From those interactions, he had learned Hepatitis C was becoming a very prevalent topic of discussion because of the numbers of people exposed to and contracting the disease. The week prior, a legislative conference was held where the teamsters representing the garbage workers in Las Vegas reported six workers diagnosed with Hepatitis C. The plumbers and pipe fitters testified that they increasingly found their members diagnosed with Hepatitis C. The disease, he believed, was at almost epidemic proportions and he felt protection should be provided for the workers who came in contact with that virus on the job. He voiced support for the bill.
Gene Munnings, Odyssey Business Services, shared support for the bill from small businesses. An employee in janitorial services was injured while emptying a trashcan at Carson/Tahoe Hospital where staff had discarded hazardous waste. The workers’ compensation program would not cover the needle stick injury. The janitor did not become infected, but had he, this bill would cover that type of injury.
On a personal note, Mr. Munnings stated he worked in a nursery in his state of residence prior to his move to Nevada. Drug users would drop their needles in the evergreens and when the plants were moved, the worker received a needle stick. That happened to him several times, from which he caught a terminal illness. At that point, he was not covered because the law read it had to be an occupational illness and, for a nursery worker, the disease contracted was not an occupational illness. He was thankful he had received enough treatment to still be alive today, the incident having occurred ten years prior. The bill would cover those working in positions who might never consider being exposed to such diseases, but could contract by accident.
Bob Balkenbush, Public Agency Compensation Trust, voiced support of the bill, yet requested it be considered in conjunction with the previously proposed amendments to A.B. 313.
Nancyann Leeder, Nevada Attorney for Injured Workers, indicated the bill would decrease some of the litigation received after denials to claims. Exposure was a medical issue and therefore did not need further definition. She stated the bill was good as written.
Bob Ostrovsky, Nevada Resort Association, voiced some concerns regarding the deemed language. They were not opposed to covering people exposed, and providing them the appropriate preventative treatment, and if they were infected, paying for medical care, which he felt was the obligation of the employer. What the bill asked was to “deem,” and that was to say if the employee had any of the named infectious diseases, there was no ability to question whether the exposure was received at work or elsewhere. It should be covered in NRS 616A.2651, which talked about injury and personal injury, and if the language needed to be changed to include better definitions for injury, that was fine. There needed to be an opening for rebuttal allowed. The “deemed” language in the bill told the workers’ compensation companies there was no ability to rebut for any reason, at any time, if the employee had one of the named diseases.
Vice Chairwoman Buckley noted the wording was vague: “in the course and scope of his employment shall be deemed to be an injury within the course and scope of his employment . . .” She did not feel it was trying to create that same presumption as in the other bill, though a bit circular.
Rose McKinney-James, Clark County School District (CCSD) representative, stated the district had testimony prepared by CCSD’s assistant general counsel, which she left for committee review. The current form of the bill required CCSD to speak in opposition of the bill, with regard to the following:
Those were the major points outlined in the testimony, which was submitted by Mr. Stephen Demaree of the CCSD (Exhibit Q).
Bob Balkenbush, PACT, stated the language appeared in A.B. 313, which they suggested be changed to “shall be entitled to preventative treatment” as opposed to “shall be deemed to be an injury by accident,” to permit employees immediate access to treatment, but to limit the scope and coverage to preventative treatment in the event an exposure to a contagious disease did not lead to contraction. In the event the exposure did lead to a contagious disease, there would be no dispute about full insurance coverage.
Vice Chairwoman Buckley closed the hearing on A.B. 423 and opened the hearing on A.B. 393
Assembly Bill 393: Provides for prospective increase in certain compensation for industrial insurance. (BDR 53-1288)
Assemblywoman Chris Giunchigliani, Assembly District 9, spoke for the bill’s sponsor Assemblyman Bob Price. The object of the bill was to rectify an issue that had repeatedly appeared over the past session; building some kind of an increase for individuals of partial permanent disability (PPD). A modifier was suggested in the way of a CPI index. Assemblywoman Giunchigliani was not aware of what the fiscal impact would encompass but there were those who had been on PPD for years with no increase to cover the increased cost of living they also were subjected to.
Rusty McAllister, Professional Fire Fighters of Nevada, went on record in support of the bill, stated it provided for many disabled fire fighters who had been off the job for quite some time and had not seen any increase in their disability benefit.
John O’Connor, Local IEU Union 1177, employee of Lockheed Martin, stated the problem the employees faced was prioritized insurance. He pointed to Exhibit R where he had highlighted, “Benefits vary based on your state.” A scenario provided was of an injury resulting in a cut hand that required sutures. Two weeks later sutures were removed. During the interim, the individual was off work and the company was not picking up the lost time and the employee was using sick or annual leave on a workers’ compensation injury. Most were off with no pay, and during negotiations the employees asked the company to voluntarily pick up the lost wages. They refused because they were not compelled to do so according to state law. He closed by stating he was not sure if A.B. 393 was the bill to amend, but it was the closest he could find.
Vice Chairwoman Buckley stated the amendment presented would fit more under A.B. 338 and she would ask Assemblyman Bache and Danny Thompson, Nevada State AFL-CIO, to factor this in to see if there was something the Legislature could do to help. Danny Thompson, Nevada State AFL-CIO, offered support of the bill as written.
Leslie Bell, President, Nevada Self-Insured Association, stated she believed the last time permanent total disability (PTD) employees received an increase was in 1981, and posed questions regarding cost of living increases. However, in a permanent partial disability (PPD), compensation was factored into the settlement that provided an increase based on age. Through a chart produced by DIR, the percentage of increase was factored in for PPD and taken into consideration.
Bob Ostrovsky, Employers Insurance Company of Nevada (EICON), stated they were the company under the most impact by the legislation in question. A letter from the chief financial officer of EICON, Ms. Eileen J. Boosales (Exhibit S), outlined the costs imposed by A.B. 393. Using a 20-year average of the company’s installment payment, with a projected cost of living at an average of 3.7 percent, the amount of reserve required under the bill would be approximately $200 million. Mr. Ostrovsky’s interpretation was $300,000. She had calculated the amount based on current payments to individuals receiving monthly installments. He did not believe the bill was limited to monthly installments, but required the company to go back and make the payments to those who accepted a lump-sum buy out as well. The estimate for such a refund was additionally an approximate $100 million. Under either interpretation, EICON would be declared insolvent as a result of the passage of this legislation and unable to sell insurance in this state.
Mr. Ostrovsky went on to say the last time such a change was made, the 1981 legislative session, there was a one-time increase to all insurers. At that time, everyone purchased from the State Industrial Insurance System (SIIS) or was self-insured. There was a one-time rate increase of 7.7 percent for one year and then the rate increase was removed. The 7.7 percent increase in rates for the one year was to fund the one-time cost of living change made for certain older claims. He stated the oldest installment claim on EICON’s books was 61 years old. With the 61-year history of people being affected by the bill and going forward, the issue was calculated into the rate by the NCCI to determine the value forward, but as indicated by the self-insured policy, there was some calculation for age and time currently permitted under the statute the way the PPD award was calculated. On EICON’s behalf, he asked the bill not be processed in its current form due to the expense, as well as not being written in the reinsurance agreement. The old claims were sold and new benefits created would fall on the shoulders of the current policyholders at EICON, who would not remain in the state to pay the $200 million and would have to be picked up by another insurer.
Assemblyman Nolan stated Mr. Ostrovsky was one of the most knowledgeable people he knew on issues related to workers’ compensation. The particular issue of PPD and PTD affecting people with real life problems and expenses had been documented to the committee members, both present and past. He understood to make a change as suggested with the bill would be a monstrous cost that would devastate many insurers, but at some point in time the right thing had to be done to make a positive adjustment for those individuals and their present living conditions. Between energy and fuel cost increases recently and over the past 20 years, he asked what Mr. Ostrovsky proposed to help those individuals.
Mr. Ostrovsky stated the numbers in question were so huge he asked his client to put it in writing to give to the committee, thus the letter from Ms. Boosales. Secondly, if funding was provided for old claimants prior to today, the money to make up the difference would have to be collected from all employers in the state. The only place that type of funding existed was in the DIR assessment fund. There would be an argument about wanting to do that, but there was an assessment fund and it was decided to assess every employer in the state to pay for prior injuries once a formula was developed. It was the only place he knew of where everyone providing workers’ compensation insurance could be contacted.
Rose McKinney-James disclosed that as of March 21, 2001, she became a member of the Board of Directors of EICON. She was present to represent CCSD and offered testimony consistent with that heard throughout the session whenever she appeared as a witness. She had to identify any instance where an unfounded mandate was seen, this bill being one for the CCSD.
Vice Chairwoman Buckley closed the public hearing on A.B. 393. Regarding A.B. 345, Vice Chairwoman Buckley asked how many in the gallery had traveled a great distance to testify. Since Assemblyman Goldwater had been called away and was not present to present the bill, she would accept testimony from those who did not want to have to travel again at a later date.
Assembly Bill 345: Revises provisions governing claims for compensation under industrial insurance for certain occupational diseases. (BDR 53-1267)
The bill was not heard at this time.
With no other business to come before the committee, the meeting was adjourned at 7:00 p.m.
Ann M. VanNostrand
Committee Secretary
APPROVED BY:
Assemblywoman Barbara Buckley, Vice Chairwoman
DATE: