The Committee on Labor and Management was called to order at 3:50 p.m., on Thursday, March 6, 1997. Chairwoman Saundra (Sandi) Krenzer presided in Room 1214 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List.

COMMITTEE MEMBERS PRESENT:

COMMITTEE MEMBERS NOT PRESENT:

Mr. Peter Ernaut (Excused)

GUEST LEGISLATORS PRESENT:

Senator Randolph J. Townsend, Senatorial District No. 4

STAFF MEMBERS PRESENT:

Erin DeLong, Committee Secretary

OTHERS PRESENT:

Jack Jeffrey, Representing the Southern Nevada Building & Construction

Geraldine T. DuMars, Representing Herself

Barbara Gruenewald, Representing the Nevada Trial Lawyers Association

Bob Ostrovsky, Representing the Nevada Resort Association

Sandra Simon, President, the Nevada Self-Insured Employers’ Association

Cecilia Meyer, President/Administrator, Silver State Administrative

Services, Inc. (SSASI)

Linda M. Collins, Representing Mirage Resorts, Inc., and Member of the

Board of Directors for the Self-Insured Association

Sam Basile, Litigation Attorney, Representing Mirage Resorts, Inc.

Wayne Carlson, Executive Director, Public Agency Compensation Trust

Patricia Bullentini, Safety/SIIS Manager, Martin Iron Works

Mat Dorangricchia, President, Diversified Management Group,

Representing the Associated General Contractors

Mary Jane Wirges, R.N., M.S., Executive Vice President,

Horizon CompCare

Barbara Merritt, R.N., C.R.C., Director of Workers’ Compensation,

Sierra Healthcare Options, Inc. and MedOne Works Managed Care

Program, and Representing Horizon CompCare

Larry Zimmerman, President, CDS of Nevada

Christi Mosher, R.N., Workers’ Compensation Case Manager,

Saint Mary’s CompFirst

Chairwoman Krenzer called the meeting to order and asked the committee secretary to read the roll. Assemblymen Anderson and Ernaut were excused. The Chair opened the hearing on the following:

Assemblyman Goldwater, representing Assembly District 10 from Clark County, gave an introduction of Assembly Bill 147 (A.B. 147). A constituent contacted him concerning a communication problem regarding workers’ compensation. He contacted a friend of his in the legal community who confirmed the problem occurred frequently. It was determined that legislation was needed to correct it. He stated that A.B. 147 would prohibit ex parte communication between a physician and a claims administrator or insurer. If there was communication conducted with a doctor concerning an injured workers’ case, the patient needed to be informed and an attempt should be made to include the employee.

Assemblyman Goldwater said currently under tort law, if there was ex parte communication between an insurance company and a doctor regarding a defendant, it would be improper and subject to sanction. However, a doctor could talk freely with a claims administrator or insurer and exclude the patient if that injury was covered under workers’ compensation. He said the concept of protecting and including a patient in all communication needed to be transferred to workers’ compensation as a matter of fairness. If an administrator or insurer needed to relay information to a doctor, a copy should be provided to the patient.

He said opponents of A.B. 147 suggested this communication requirement might elongate the claims process, but he believed it would expedite it. If any decisions were challenged in the examination or hearings processes, the patient would be informed and provided copies. Therefore, he said it would make presented case evidence more sound.

Assemblyman Goldwater commented that doctors should not be intimidated by claims administrators or insurers in making decisions. He said policies should be in place to protect physicians from potential intimidation, and A.B. 147 would put that protection into place.

He said the question that should be asked regarding this bill was what communication between a doctor and an insurer or claims administrator needed to be kept secret. If there was none, then it should be shared with the patient. He remarked this legislation would ensure that all communication was shared with injured workers, and he would be happy to answer questions.

Before taking questions, Chairwoman Krenzer wanted to disclose that she worked in managed care regarding workers’ compensation for Sierra Healthcare Options, a wholly-owned subsidiary of Sierra Health and Life Insurance Company, Inc. She stated that, pursuant to the Nevada Revised Statutes (NRS) 281.501, she was allowed to participate in the meeting but would not be voting or advocating for or against A.B. 147.

Assemblyman Nolan said there was a contractual arrangement in workers’ compensation involving the employer and physician, as well as a managed care organization. He remarked there was an inequity in Assemblyman Goldwater’s comments, because an employer did not have the right to communicate with a physician concerning a particular case without communicating first with the employee or representing attorney.

Assemblyman Goldwater stated he was trying to illustrate there were concepts in tort law protecting against improper communication which were not present in workers’ compensation law. He said A.B. 147 was attempting to protect the injured worker and prohibit improper communication just as in tort law.

Assemblyman Nolan said everyone’s definition of "improper" would be somewhat different. However, he admitted that intimidation of physicians making decisions regarding injured employees should not be allowed, and agreed with Assemblyman Goldwater’s attempt to alleviate that problem.

Assemblyman Hettrick asked if Mr. Goldwater considered all communication to be improper. He responded no.

Assemblyman Hettrick then asked if the bill was an attempt to resolve a few situations where there might be improper communication, but would include other situations that might be appropriate in order to accelerate care for an injured worker.

Assemblyman Goldwater responded that most communication was proper. The intent was to share with a patient what communication was taking place concerning his case.

Assemblyman Hettrick said he did not interpret A.B. 147 as saying merely to "copy" a patient regarding communication. He said the bill stated that before any oral or written communication was initiated, ". . . a copy of the communication is submitted to the injured employee or his representative in the same manner and on the same day . . ." He acknowledged that he was having trouble with the technicalities of how communication would be delivered. He asked whether that meant a copy could be mailed, or had to be physically delivered; and what would happen if the claimant was not home, for example.

Assemblyman Hettrick commented that it appeared there was a very small percentage of communication taking place that was questionable in some way. He said the bill would ". . . punish 100 percent of communications by increasing cost to . . . attempt to reach, and we are going to slow down if you cannot reach . . ." a claimant. He had concerns regarding the bill, but agreed there might be a problem that needed to be resolved. However, a solution should not "punish everyone . . . or everything else that goes along with it."

Assemblyman Goldwater agreed there might be some technicalities in A.B. 147 that needed to be worked out, and he would be more than happy to assist in resolving any problems. However, he stated the principle of the matter was fairly clear, and he did not think anyone was being "punished" by requesting that the patient be included in the process. He commented that it was a courtesy, and in the long run it served all parties involved as well as the patient.

Chairwoman Krenzer recognized Senator Randolph J. Townsend, Chairman of the Senate Committee on Commerce and Labor, in the audience. She then called Dean Hardy, Danny Thompson, and Jack Jeffrey forward to testify.

Dean Hardy, an attorney representing the Nevada Trial Lawyers Association, provided three handouts to the committee (Exhibits C, D, E). Mr. Hardy said he had experience working with industrial injuries, and was therefore aware of this problem from the claimant’s perspective.

Mr. Hardy said A.B. 147 was not trying to hinder the processing of claims. He agreed with Assemblyman Hettrick that the claimants, employers, or managed care coordinators would not benefit from delays. Nevada’s managed care system provided that employees injured on the job did not have an opportunity to choose a physician. Often they were placed with a physician by a claims administrator, managed care coordinator, or insurer. As a result, Mr. Hardy commented there existed some skepticism on the part of injured workers as to whether a physician was ". . .working for (the claimant), or is he working for the administrator that is paying their bills?"

Mr. Hardy agreed that claims administrators had an absolute necessity to talk to physicians regarding claimants’ cases. He said A.B. 147 was not attempting to prohibit that; its objective was to allow injured workers to participate. If an administrator called a physician to find out if a claimant was ready to go back to work, he stated that was a valid conversation. He asked why there was a problem with a claimant being involved in that conversation. There could be a "flip side" to that conversation where an administrator wanted to move the process along and get a person back to work by accommodating that individual with light duty, for example. He said if that claimant or his representative was involved, it would prevent the doctor from authorizing the injured employee back to work because the administrator was possibly making a determination that he was ready and able to work.

He referred to the first handout provided, which was a copy of a letter from a claims administrator to a doctor (Exhibit C). Mr. Hardy said it was not his intent to lambaste employers or insurers, and he was not trying to suggest that anyone was a bad employer or administrator. The example was from a case in which he was currently involved concerning a woman with an industrial injury. He stated claimants would be evaluated for residual disability at the conclusion of their claims. An evaluating physician would be chosen from a rotating list by the administrator when the claimant reached a point of stability, and he said that was done in this case.

Mr. Hardy remarked that the selected physician had a reputation of being notoriously conservative. He determined the injured woman was 54 percent disabled. A request for hearing was filed, because Mr. Hardy believed the physician accurately and adequately described the individual’s disability. However, the administrator of the claim did not want to authorize payment for a 54 percent disability, and wanted to get a second opinion from a different doctor. In the course of litigation, the opposing attorney called Mr. Hardy and asked if he would agree on a second physician. One was agreed upon, the patient was seen by the second doctor, whose report came back substantially similar to the initial physician’s evaluation. Mr. Hardy and his client were satisfied and wanted to continue litigation, since the two doctor evaluations provided positive pieces of evidence.

The employer sent out a letter (Exhibit C), without sending a copy to Mr. Hardy or the claimant. The letter to the doctor stated, "In reading your PPD (permanent partial disability) evaluation of 2/6/97 it is apparent that you were lacking the complete file . . .," which Mr. Hardy said was a blatant misrepresentation of fact; he represented that the doctor had the complete file.

He also read from the letter, "We would appreciate your providing an addendum to your 2/6/97 PPD evaluation following perusal of this supplemental information . . . ." Mr. Hardy remarked that was encouraging the doctor to change his opinion. He continued reading, "The following will explain each of the supplemental information sheets contained herein. A copy of the Nevada Revised Statutes 616C.090 . . . ." Mr. Hardy said he was concerned as to why the administrator was sending the doctor a copy of a statute.

The letter continued, "In section 4 of this statute it specifically states that the insurer is not responsible for any charges for medical treatment or for any compensation for any aggravation of the employee’s injury attributable to improper treatments." Mr. Hardy said the claims administrator concluded the claimant underwent improper treatments. The administrator outlined the improper treatment: ". . . For your edification, (the injured worker’s) claim was closed at the time she received the epidural injection. The insurer neither authorized nor paid for the injection. Based on this statute, the insurer is not responsible for the subsequent ailments following the injection." Mr. Hardy stated that if it was not authorized, that did not necessarily mean that it was improper; it meant the administrator was not responsible for payment. He said the administrator was also reaching a conclusion that what happened after the medical care was not their responsibility. Mr. Hardy elaborated that was for a court to decide; not for an administrator to tell a doctor, "Please amend your report based upon what I am telling you."

The second enclosure the claims administrator sent the doctor was "A copy of the police report indicating that (the claimant) was involved in a motor vehicle accident . . . This report shows that (the claimant’s) car sustained a moderate amount of damage . . . A copy of (the doctor’s) report . . . which indicates that (the claimant) became aware of pain in her right shoulder/arm and neck following the motor vehicle accident . . . ." Although it could be true, he said the administrator was reaching a conclusion from the intervening motor vehicle accident. Mr. Hardy stated he should have been sent a copy of the letter so that he would have the same opportunity to provide the opposing side drawn from the evidence.

Assemblyman Nolan said he understood Mr. Hardy’s intent in promoting open written and verbal communication between an employer and claimant or his attorney. He commented that the employer could be identified on the example being shown. He asked Mr. Hardy if that employer was informed that a case involving one of its employees was being brought before the legislature.

Mr. Hardy replied that he tried to "white out" all identifying information in the example.

Assemblyman Nolan continued that he did not think it was fair of Mr. Hardy to make representations or misrepresentations without that employer being present to provide a defense. He said it was inappropriate to be discussing this issue because it was almost as though the appropriateness of the claimant’s care and that particular administrator was being adjudicated.

Mr. Hardy responded that the purpose of his presentation and example was not to point out whether the content was accurate or inaccurate in terms of what conclusions were drawn. He was making his own editorial comments about the conclusions as an example of how a doctor’s opinion might be swayed. His point was that he did not mind whether a letter of this nature was written, but wanted to be informed if it was written. That type of letter would help him in court, because he could show that whatever response the doctor gave was tainted by its leading nature. He apologized that the employer was able to be identified, and he stated he was not trying to cast any aspersions. He was sorry if it was offensive to Assemblyman Nolan or inappropriate in terms of that employer not having the ability or opportunity to offer a defense. Mr. Hardy stated that the question and the issue being addressed in A.B. 147 was why he was not carbon copied on the letter. He pointed out that in this arena it was an inappropriate communication. If the letter writer thought it was acceptable to write that type of letter, Mr. Hardy questioned what other verbal and oral communications were being hidden.

Mr. Nolan said he understood Mr. Hardy’s point and why he brought the example. He was not disagreeing that type of communication should be shared with the claimant.

Chairwoman Krenzer stated she had requested earlier that Mr. Hardy not use proper names. Mr. Hardy had said he would make every effort to have the documents "whited out."

Assemblyman Goldwater asked Mr. Hardy what would happen if it was not concerning a workers’ compensation claim, and that kind of letter was sent to a physician. Mr. Hardy responded that he would file a motion for a contempt citation in district court, and also probably file a bad faith case. Assemblyman Goldwater pointed out that a bad faith claim could not be filed regarding workers’ compensation, so that remedy was not available.

Mr. Hardy continued with his testimony, referring to the second example he provided (Exhibit D). The first page was an administrative determination letter from a claims administrator to a claimant. He said the letter indicated that communication took place via telephone between the administrator and a surgeon regarding surgical intervention based upon an industrial injury. It was determined from that conversation that the claimant had a preexisting condition. He emphasized the importance of their communication, and said the claimant should have been included so he could relay his side of the story.

The doctor’s response (Exhibit D, page 2) indicated a complete difference of opinion. The physician stated the claimant’s need for surgery was related to his industrial accident. Mr. Hardy remarked if the claimant had been part of this communication, it would have lessened the adversarial nature of the situation and assisted in promoting reasonable opportunities to move the claim forward. He was not suggesting that a claims administrator should not have the opportunity to conduct that type of communication with a physician. It was necessary that there be open communication, and a copy of correspondence be provided to the claimant.

If a doctor called a claims administrator to get approval for a magnetic resonance imaging (MRI), Mr. Hardy commented that would be an innocuous conversation. It would not have any tremendous ramifications unless the conversation went further. He gave an example of a 50-year old claimant; according to the claims administrator, prior x-rays showed tremendous degenerative changes in his spinal column. The administrator denied the MRI because he believed the claimant was being treated for preexisting conditions, and also denied further medical care because of preexisting degenerative changes. The administrator then requested that the physician write up his report and refer the claimant to group healthcare coverage because it was no longer a workers’ compensation problem.

Mr. Hardy said that doctor’s report would become a significant piece of medical evidence and he would challenge the decision of the administrator to suggest the claimant’s condition was preexisting. He said the medical report stated it was preexisting, but it was not the doctor’s opinion. It was the administrator’s opinion who had informed the doctor that it was a preexisting situation.

He commented that no one in that scenario was attempting to do anything inappropriate. The administrator was providing his opinion that he might have advocated to the physician. He said instead of the word "intimidate," he would prefer "influence" because it was a more appropriate appraisal of what occurred in terms of communication between an administrator and a doctor. He stated if given the opportunity, administrators would try to influence doctors’ opinions. Mr. Hardy said he expected it from claims administrators because they were his adversaries. Administrators were aware that doctors’ reports were tremendous pieces of evidence, one way or the other, and in communications with doctors they have a perfect opportunity to influence them. He said a tainted piece of medical evidence did not accurately reflect a doctor’s medical opinion; it would not be an independent conclusion by a doctor making decisions.

Assemblyman Hettrick referred to the last example (see Exhibit D, page 2) which stated ". . . so ultimately an MRI was obtained which did show a very large spur pressing into his nerve . . . ." Assemblyman Hettrick said it appeared that prior to the MRI, he did not know there was a spur pressing into the nerve. He asked Mr. Hardy if he agreed with that determination. Mr. Hardy said yes.

Assemblyman Hettrick asked who requested the MRI in that case. Mr. Hardy responded that he did not know, but suspected it was the physician.

Assemblyman Hettrick inquired as to how Mr. Hardy knew to send a letter requesting a copy of the doctor’s letter of January 23, 1996. Mr. Hardy said it was in response to correspondence that he had previously sent to the doctor.

He asked how did Mr. Hardy know to send the doctor his initial correspondence regarding that particular situation, because the doctor was obviously responding to some questions Mr. Hardy had asked him. Mr. Hardy replied that was correct, and he was asking the doctor for his opinion. He knew that doctor was the claimant’s treating physician and could provide an answer.

Assemblyman Hettrick asked how did Mr. Hardy know to ask specifically regarding the spur and whether it was preexisting. Mr. Hardy said he would send a letter to a doctor and get his opinion if a case was going into litigation.

Assemblyman Hettrick asked if the committee could get a copy of Mr. Hardy’s letter to the doctor. Mr. Hardy said certainly, but he did not have it with him at the moment.

He asked if it appeared to Mr. Hardy that the doctor was requesting a surgery. Mr. Hardy said yes. Assemblyman Hettrick asked if he believed the surgery was intended to remove the spur or treat it. Mr. Hardy responded that he did not know. The surgery proposed was a "Facetetomy of the L5-S1."

Assemblyman Hettrick remarked that he did not want to get into the medical details of the case. A claims administrator might be looking at whether to pay for what a doctor agreed was preexisting. He said in this case, the question from the administrator’s standpoint might be whether the spur or back injury from the fall was being treated; in other words, who was paying for what and why. He was curious as to why the administrator believed the claimant’s injury was preexisting.

Mr. Hardy concurred that Assemblyman Hettrick’s conclusions might be accurate, and his questions were astute. However, he said the issue was whether the initial suggestion of a preexisting condition was actually the doctor’s medical opinion, or the claims administrator’s opinion imposed on the physician resulting in the conclusion reached.

Assemblyman Hettrick said he understood Mr. Hardy’s point, and did not disagree with it. He was having difficulty assuming the letter was based on the fact that the doctor was convinced of an opinion in the telephone conversation. He said the letter did not prove the doctor was influenced; only that the administrator had a telephone conversation with the doctor. Mr. Hardy agreed.

Assemblyman Hettrick said he therefore could not understand why the letter was an inappropriate communication. Mr. Hardy replied it was because he was not a participant and neither was the claimant. If he or the claimant was able to give the other side of the story, and the doctor still agreed with the administrator, then that would be the decision. He said he was not talking about the merits. Mr. Hettrick agreed and he was not talking about the merits, either. He said that Mr. Hardy was assuming the administrator made a suggestion to the doctor, but the letter did not indicate the doctor was influenced in any way during the telephone call. Mr. Hardy said the point was well taken, and he did not have a response. He agreed that there might not have been inappropriate communication.

Assemblyman Goldwater stated that Assemblyman Hettrick pointed out the reason why A.B. 147 was needed. In the example presented by Mr. Hardy, communication took place, but it could not be determined whether it was improper. If the patient or his legal representative was included, there would be no question whether it was proper. The patient would know whether communication was appropriate and would have the opportunity to hear what took place that might be in question.

Mr. Hardy said he had one more example regarding a 38-year old woman with a major knee injury (Exhibit E). An orthopedic surgeon suggested surgery and a procedure which was apparently deemed to be experimental by the managed care coordinator. As a result, the administrator denied authorization for the surgery. The surgeon also discontinued all physical therapy because he believed it would not help the claimant and might cause further damage to her knee.

Mr. Hardy said the claims administrator’s attorney called him and suggested they order an independent evaluation together and agree on a second doctor. If that doctor determined the nature of that surgery was not experimental or was appropriate under the circumstances, then the issue might be resolved. The attorneys selected another orthopedist, who agreed with the managed care coordinator that the surgery was experimental. However, the second doctor did recommend further physical therapy.

The case was in litigation for over 6 months at that point. Mr. Hardy said the claims administrator took the second physician’s report to the original surgeon and requested physical therapy be resumed for the claimant. The doctor agreed to implementing the physical therapy, even though it was against his original opinion. The managed care coordinator called the claimant and said her doctor prescribed physical therapy and she was to start the next day. Mr. Hardy’s client called him and was very concerned because the doctor had changed his opinion. He said she felt the doctor had "turned on her" because he had told her previously that physical therapy was not going to help and might even cause her further knee problems. Mr. Hardy stated all of the communication between the claims administrator and the two surgeons occurred without the knowledge of the claimant or himself. The decision was made and then imposed on the claimant, which he commented was inappropriate.

Mr. Hardy said it was essential that claims administrators inform claimants when reports concerning their cases were sent to other physicians. He did not think the managed care coordinator in this case was trying to do anything inappropriate. However, if there was a statutory obligation to inform the patient, there would be no surprises and the claimant would not have been upset.

The point of his examples was to show that outrageous problems were not causing the necessity for A.B. 147; there was a need to make sure that claims administrators practiced open communication. Mr. Hardy said administrators might suggest it would be difficult to contact attorneys. He noted that fundamental fairness and equanimity should be promoted throughout the processing of claims. Moving a case was extremely important, but it should "take a back seat" to fundamental fairness, in his opinion. The speed of moving a claim was not as important as moving a claim fairly, and that was the issue being presented and the intent of the proposed bill.

Assemblyman Goldwater referred to the issue concerning oral communication. He asked Mr. Hardy whether it would be acceptable if someone made a "good faith" attempt to include him, recorded or copied the patient in written form and mailed it if he could not be reached.

Mr. Hardy said that idea was something he would consider. He was not trying to "punish" claims administrators or ". . . tie their hands to something that will not allow them to do their job . . . ." He said he would be open to reviewing any compromise of language to the bill.

Assemblyman Carpenter said he might agree with Mr. Hardy regarding fundamental fairness, but he was concerned with the way A.B. 147 was written. It stated ". . . a copy of the communication is submitted to the injured employee or his representative in the same manner and on the same day that the communication is submitted to the physician. . ." and if that cannot be done, the person would be guilty of a misdemeanor. He said there ought to be a way to work out the fundamental fairness without "punishing" someone that maybe never had any intent for wrongdoing.

Mr. Hardy agreed that language ". . .may be a little strong . . . ." He said it was not meant to be bold or flippant, but to bring attention to a considerable problem. He commented there were certainly some things that could be done to satisfy all of the concerns the committee had brought forth.

Assemblyman Nolan asked if Mr. Hardy would also be agreeable to providing copies of any communications made on behalf of claimants with physicians, or any other medical providers, to the employers.

Mr. Hardy said yes. However, he did not want to see the patient/doctor relationship "swept aside" in the arena of workers’ compensation for the purpose of trying to administer a claim. The patient/doctor confidentiality ensured patients that communication was not going to be to their detriment when their physicians reported to the managed care coordinators. He said, "The problem, or the fine gray area in this instance is, a claimant has to have the opportunity to be open and free without feeling that that openness is going to work to their detriment."

Mr. Danny Thompson, representing the Nevada State AFL-CIO, stated they were in favor of the concept of A.B. 147. Managed care was implemented in 1993 to reduce costs. Prior to that time, claimants had the right to choose their doctor. The institution of managed care "opened the door" and created an unfair balance in the law concerning claimants, even though it might have been done with good intentions. In 1995, the legislature passed a bill that gave immunity for bad faith to employers, insurers, managed care organizations (MCOs), and third party administrators (TPAs). An administrative penalty up to $10,000 was imposed in its place, and if a company incurred two offenses it could not write insurance anymore.

Mr. Thompson commented that the communication problem was explained very well by Mr. Hardy and he provided proof in the examples. Doctors were no longer working for patients, but for an organization over which patients had no control. He said it was a monetary relationship that convoluted a patient’s privilege with a doctor, which put an injured worker at an extreme disadvantage. If a claimant did not have an attorney, he might not know to write a letter and request information. He said most constituents had little knowledge of the workers’ compensation system and would have difficulty dealing with it.

He suggested that some adjustment was needed in the current law to include the claimant and make it more fair. He said managed care organizations were very effective at controlling costs, but the doctor’s relationship with the patient ". . . has been skewed a little bit."

Mr. Thompson referred to the "Open Meeting Law" found in Nevada Revised Statutes (NRS) Chapter 241. It stated all meetings of public bodies be open and public, and all persons be permitted to attend those meetings. He said it provided fairness to everyone as a means of allowing protection, and that same type of protection should belong to injured workers as well.

Jack Jeffrey, representing the Southern Nevada Building and Construction Trades Council, and the Southern Nevada Central Labor Council, also testified in support of A.B. 147. He said the underlying cause of the problem being addressed in the bill was fact that, under managed care, an injured worker no longer had the right to choose his physician. Before managed care was introduced there was no question, in his opinion, that the physician’s loyalty was to the patient. He said with managed care, ". . . whether or not there has been open intimidation, there is an underlying fear on the part of some in the medical community that their livelihood now depends on getting along with the insurer, where in the past, it depended on doing a good job for the injured worker. There is a major change in mindset there."

Mr. Jeffrey gave an example involving a man he worked with, Frank Caine, who was the President of the Southern Nevada Building and Construction Trades Council. He handled problems concerning injured workers on a voluntary basis for 30 years as a business agent for iron workers, various crafts throughout the building trades, as well as other individuals not connected with the building trades. Mr. Jeffrey said Mr. Caine’s success record on the hearings level was very good, but he was not qualified to represent individuals at the appeals level.

A 60-year old laborer that Mr. Jeffrey knew and worked with 30 years ago, who had a good reputation as a worker, fell approximately 40 feet while on the job. During the course of treatment, the claimant had both hips replaced and two back surgeries. He came to see Mr. Caine because he had been given a full-duty release to return to work as a construction laborer, and his workers’ compen-sation benefits were discontinued.

Mr. Jeffrey explained that Mr. Caine discovered what actually happened to the injured employee through some of his sources. Someone on the claims team called the doctor and said they needed a full-duty work release for the claimant, retroactive to a certain date. He stated the point was that the injured worker had no idea why his benefits were cut off; there had been no communication with him.

A similar case occurred with a cement finisher who had a knee injury, according to Mr. Jeffrey. The claimant was in a soft cast from just below the hip to above his ankle. He was given a full-duty work release to go back to work as a cement finisher. Mr. Jeffrey questioned how the claimant would be able to finish cement with a brace on his leg. The injured worker was out of money and living with his daughter; he had lost his house and car, and had not worked in several months. Mr. Caine was able to help the worker regain his workers’ compensation benefits. Mr. Jeffrey said the representative he spoke with at the State Industrial Insurance System (SIIS) commented that he could not believe how that situation could have happened. The injured worker was later given a light duty work release, but there was no light duty available for him. The claimant ended up re-injuring the knee because he tried to do work that he should not have been doing, and had to have additional surgery.

Mr. Jeffrey stated that in both cases, the injured workers needed an attorney or someone to help them through the system. He commented that the system cannot operate in a vacuum. The doctors used to routinely discuss treatment with patients so they were aware of what was happening. He said that did not necessarily occur anymore, and A.B. 147 would be ". . . a good vehicle to open those lines of communications again and have the injured worker participate in his own treatment. It is his life and livelihood; he certainly ought to know what is going on in that case."

Geraldine DuMars addressed the committee as a constituent representing herself. She was employed as a psychiatric caseworker at the Nevada Mental Health Institute for nearly 16 years. She was also an active member of the State of Nevada Employees Association and the American Federation of State and County Municipal Employees (SNEA/AFSCME). She read her letter addressed to Chairwoman Krenzer dated March 6, 1997 (Exhibit F) and stated she was in support of A.B. 147.

Barbara Gruenewald, a Workers’ Compensation Attorney representing the Nevada Trial Lawyers Association, spoke in favor of A.B. 147. She provided an example regarding a client she represented from Elko, Nevada. The client had right knee, left ankle, and lower back injuries from an accident that occurred in 1992. He was treated conservatively in Elko and sent for an independent medical exam to an orthopedist in Reno, Nevada. The orthopedist said he possibly had an inflammatory disease and referred him to a rheumatologist.

The claimant saw his case worker from the insurance company talking to the rheumatologist prior to his appointment. The case worker left and the doctor went back in his office, and the claimant was called in for his examination. The doctor came in and told the claimant he had arthritis and then proceeded to evaluate him. The doctor’s report stated the patient had arthritis and, as a result, his workers’ compensation benefits were terminated in November 1992. The claimant spent the next 3 years going to specialist doctors whose reports were submitted to the insurance company. However, the insurance company continued to deny his claim because of the original report.

Ms. Gruenewald said in August of 1995, pursuant to an appeals officer decision, the patient’s claim was finally accepted. He received retroactive benefits and medical treatment. She pointed out that if there had been open communication and the claimant had been able to participate, perhaps 3 years of litigation with no treatment and benefits could have been prevented.

Assemblyman Hettrick commented that Ms. Gruenewald was assuming what happened in the meeting between the insurance company’s case worker and the claimant’s doctor. He said she had no proof whatsoever that the doctor even discussed that claimant’s case. He understood her point, but said she was asking the committee to believe that the case worker influenced and convinced the doctor that he should write a report stating the claimant had arthritis.

Ms. Gruenewald responded that she understood Assemblyman Hettrick’s point, and agreed that she had no proof. However, if the claimant had been included in that meeting, perhaps the next 3 years of the pain and agony he went through would not have occurred. The claimant should be allowed to participate in the decisions that were made about his treatment. The communication should be kept open, and no one should be allowed discuss a claimant’s case with the doctor in secret. If someone was going to talk to the doctor, the claimant and/or the claimant’s representative should be a part of that communication.

Mr. Hettrick said she was asking the committee to "make a leap of faith." For example, there was a possibility that more than one claimant was at that location being handled by that case worker, and they were discussing someone else. He was not arguing her point regarding open communication, but said there was no proof of any wrongdoing in the situation she presented that would be corrected by A.B. 147.

Chairwoman Krenzer asked for Ms. Gruenewald’s opinion that if the injured worker had been involved in the conversation with the doctor and the provider, 3 years would not have elapsed in the treatment or process of the case.

Ms. Gruenewald responded that probably would have been true, because there were other things that occurred with that particular case. She said assumptions were made by the doctor which were included with his medical opinion. She said those opinions and assumptions were all proven later to be incorrect. If the claimant would have been in the room at the time and communicated the correct facts, 3 years might not have passed.

Assemblyman Nolan referred to the previous discussion regarding a doctor/patient relationship. He said there was some implication that doctors owed some type of allegiance to managed care organizations because of their contractual arrangement. It was his opinion and experience that doctors were patient advocates. He asked whether Ms. Gruenewald believed the average physician truly felt a great allegiance to the MCO because of the capitated rates, oversights, approvals and fee schedules involved. He also asked if it was her experience that doctors maintained a good relationship with their patients and acted as advocates for them.

Ms. Gruenewald said she believed the doctors felt somewhat of an allegiance to the MCO’s because of their contract. She commented that doctors did not like to litigate or "fight" regarding cases. All they were concerned with was treating claimants and getting them better. She stated when doctors ". . . are pushed into a corner or the administrators attempt to influence them, the doctor really backs off." If a claimant retained an attorney and that representative stepped in to help the doctor, then sometimes the matter might be resolved.

Mr. Nolan described a scenario where communication influenced a physician and he wrote an opinion which would deny a patient benefits. He asked if that physician would be compensated for the care he provided throughout that case, or have the benefit of continuing treatment with that patient once benefits were denied.

Ms. Gruenewald said she could not answer the question as to how a doctor was compensated because she was not familiar with the contract between the doctor and the MCO. She remarked that if benefits were denied, sometimes the doctor would continue treatment because he cared about the patient and hoped the denial would be reversed. However, the doctor could say he was not authorized to treat the patient anymore because further benefits were denied.

Assemblyman Parks asked for Ms. Gruenewald’s impression as to whether the problems being discussed were isolated situations or frequent occurrences.

Ms. Gruenewald responded that was a good question. She believed the particular case regarding her client from Elko was more of an isolated incident. She was aware there were many communications between administrators and doctors because she reviewed files and saw memos of telephone conversations. As Mr. Hardy stated earlier in his testimony, she reiterated that not all communications were bad. Ms. Gruenewald said the point of A.B. 147 was there should be open communication including the claimant or the claimant’s representative. They should receive a copy of any letter sent by a claims administrator.

Chairwoman Krenzer asked if there was anyone else wishing to speak in favor of A.B. 147. There was no response, and she referred to the Guest List for those wishing to speak in opposition to A.B. 147.

Bob Ostrovsky stated for disclosure purposes that he represented Sierra Health Care, but was here before the committee representing the Nevada Resort Association. He said the Nevada Resort Association had an interest in workers’ compensation for two reasons. Most of the association’s members were self-insured employers, and they had taken an active role for many years in trying to balance the system against its financial needs and the needs of claimants for appropriate care.

He noted that workers’ compensation was a growing, evolving system. When he came to Nevada in the early 1980’s, the statutes were ". . . in a little red covered booklet that was no thicker than my little finger, and the administrative codes that went with it . . . ." The current workers’ compensation statutes included several sections providing all kinds of protections for employees, employers, and discussed the set up of self-funded programs.

Mr. Ostrovsky said it used to be that a patient with a permanent partial disability (PPD) award went to see a doctor who worked for the system. He stated an employee of the Nevada Industrial Commission (NIC), which was now SIIS, used to make that determination. The system now used a rotating list of physicians that would determine what PPD awards would be, or at least make an effort to do so. In many cases, there would be differences of opinion about what the rating should be, and sometimes second and third ratings would be ordered. Hearings and appeals processes would look at those cases. He commented that somehow trial lawyers were always able to obtain information. He agreed with Mr. Hardy that lawyers actually had an advantage when they found that kind of information in the files that lead them to question the doctors and their decisions.

Managed care was introduced in 1993, and he said the average time off work was 27 weeks. If a patient wanted to see a specialist, his physician would refer him. Some communication would be made to NIC and the patient would receive a response in about 5 or 6 weeks. The patient would receive temporary total disability (TTD) payments during that period until an appointment was made.

Mr. Ostrovsky said the system now was much different. There was a substantial decrease in time off work; the average now was less than 10 weeks. The same day a patient went to see his doctor, someone from the TPA or MCO would be calling the doctor’s office to ask whether the claimant needed to see a specialist. If the patient did need a referral, an appointment would be made in days, not weeks. His concern was if the loop of that communication was closed, it would make claims management more difficult and add tremendous cost to the system.

He said he believed that the system would be unworkable with the changes proposed in A.B. 147. The workers’ compensation system was an employer-paid, no-fault system, and if an employee had a preexisting condition it might be taken into consideration for an injury award. There might be some apportion-ment, which was another specific area in the law, but in a no-fault system the insurance company representing the employer would have to pay. Therefore, he stated that an insurance company was entitled to receive medical information.

If a person was ill and it was not work related, that person’s health insurance company would be requesting information from the doctor. The insurer would not pay a bill until it knew what the person was treated for and why, and whether that treatment was appropriate and covered under the insurance policy. Mr. Ostrovsky said the workers’ compensation insurance company likewise had every right to that medical information.

He commented there was some sort of "underlying current" that every time an administrator asked for medical information it was doing something "deceitful." He said that was not the case; they were trying to manage a claim, pay a bill, and get an employee back to work. Mr. Ostrovsky remarked that he took exception to those kinds of statements or accusations.

The question of oral communication in the first section of A.B. 147, and the fact that someone had to be present, was an issue already addressed by committee members. There might be difficulty locating a person and finding time when the doctor, claimant and insurance company were all available at the same time. That was one of the issues he believed would lead to slowing down the system and possibly a claimant’s medical care.

He questioned whether written communication meant that if a facsimile (fax) was sent to a doctor, would a fax likewise have to be sent to his patient. Additionally, if an electronic mail message (e-mail) by computer was sent to a doctor, would an e-mail also have to be sent to his patient. Mr. Ostrovsky commented, "We are in a different world than we were when this workers’ compensation system was set up 70 years ago, or when it was modified 20 years ago or 10 years ago, and we need to keep that into consideration."

Mr. Ostrovsky stated he was also opposed to criminal penalties. There were penalties that already existed in the law; he referenced NRS 616D.120 which allowed an insurer’s certification to be withdrawn. He said that chapter of the law made provisions regarding undue influence and duress on a claimant. He commented that no one testifying would support undue influence or duress on a doctor, and there ought to be an appropriate way to solve that problem.

He remarked the bill might be "killing a fly with a steamroller," which had happened before in workers’ compensation. The problem needed to be identified before a solution could be found, and A.B. 147 was not the appropriate solution to that problem. Mr. Ostrovsky said the Nevada Resort Association would offer to assist the committee in establishing a reasonable bill if one could be developed, in order to provide certain protection to employees without slowing down the system.

Sandra Simon, President of the Nevada Self-Insured Employers’ Association, stated the association was not in favor of A.B. 147. She said injured workers were viewed as employees and team members where she worked. They were people that knew and saw each other on a daily basis. There was much concern that injured workers receive timely and appropriate treatment. She said the bill would slow down treatment because case managers could not call and clarify reasons for treatments or testing, or find out whether a referral to a specialist was needed, for example. She commented that A.B. 147 was not going to accomplish what it set out to do for injured workers.

Cecilia Meyer, from Silver State Administrative Services, Inc. (SSASI), provided a letter addressed to Chairwoman Krenzer containing a brief summary of her testimony (Exhibit G). She was representing self-insured employers in opposition to the bill. Ms. Meyer noted that she concurred with Mr. Ostrovsky’s and Ms. Simon’s previous statements.

She said managed care was implemented not only for cost containment, but in response to injured workers. They came before the legislature many times to complain about the length of time they had to wait for testing and treatment. Administrators had to wait for reports to come out of transcription which caused delays if clarification was needed on a doctor’s findings or his reasoning for requesting certain tests.

She said a good rapport had been developed with many of the physicians who treat injured workers for SSASI’s employers. The doctors were encouraged to contact SSASI regarding findings and testing needed.

An attachment was provided by Ms. Meyer from E. James Greenwald, M.D. of Reno Orthopaedic Clinic (see Exhibit G, page 4). She said Dr. Greenwald indicated in his letter that he believed A.B. 147 was a "gag rule." He was one of the physicians that contacted SSASI regularly to discuss his findings and obtain approvals regarding testing or treatment for injured workers. She said often approvals were granted by telephone and an MRI, for example, could be completed before the end of the following day. She would receive the doctor’s report by fax, and further treatment would take place or determinations would be made, whatever the case might be.

Ms. Meyer said there was no problem with providing an injured worker or his representative with a carbon copy of all communication. Her concern was regarding oral communication. It was logistically impossible to bring injured workers from their home or job sites in order to call a doctor immediately, for example.

A.B. 147 required written communication also be handled in the same manner. She said fax machines and e-mail were available, but not as a common household appliance. If an injured worker did not have a fax machine, she therefore could not send a fax to the doctor. Ms. Meyer noted that was how most of her communication with doctors was handled, when clarification was needed or she was giving written approval. She recognized a claimant’s attorney present at the hearing to whom she would regularly send faxes and provide copies of information moments after it was sent to the treating physicians.

Ms. Meyer stated her position was to provide medical care to injured workers as quickly as possible on behalf of employers; obtain necessary tests and treatments, and get them back to work. She believed the language in A.B. 147 was going to hinder her job. Communications would revert to using the United States mail system, and injured workers would have to wait for lengthy periods of time waiting for tests and other medical care.

She noted that some of the testimony in favor of the bill indicated a claims administrator or employer must keep an injured worker and/or representative apprised at all times of oral and written communications. However, it was not indicated whether claimants’ attorneys were going to advise her, for instance, or employers when they intended to contact or provide written documentation to physicians. She believed in order to provide fairness, ". . . that if it is good for one, it is good for the other, and we should all communicate."

Ms. Meyer said her ultimate fear of the language of the bill was whether there were secret conversations. She commented that claimants’ attorneys might be having secret conversations as well, of which administrators were not aware. She remarked that she would not stop to ask that question of any of the claimant’s attorneys because she believed that they were ". . . all above board enough that that does not really go on . . . ." If the intent was to stop alleged "secretive actions" when a physician was seeing an injured worker, it would not be just the injured worker attending that appointment. Ms. Meyer noted that the third party administrator, the employer, the employer’s attorney if it had legal counsel, as well as the claimant and his lawyer would all feel a need to be present. As a result, she said physicians might want to discontinue handling workers’ compensation cases because it would add more difficulty to their jobs.

Assemblyman Nolan asked if lawyers were required to communicate with claims administrators and copy all of their communications to physicians regarding claims, would she object to providing copies of her written communications to attorneys. Ms. Meyer replied not at all, and she already did so on a regular basis.

Linda M. Collins, Workers’ Compensation Manager at Mirage Resorts, Inc., said she was also on the Board of Directors for the Self-Insured Association. She stated her greatest concern was her employees at Mirage Resorts. When employees were injured, they came to their employer for help. She remarked that the word "administer," in the license of self-administered workers’ compensation, meant that it was the administrator’s responsibility to make sure employees were given the best medical care as quickly as possible.

Ms. Collins believed there was not a great need for the bill, because there were protections built into current law to prevent this problem from happening. If an injured worker or his attorney had to be called every time authorization was needed for an MRI, testing, or to get a second opinion, she said the only person that would suffer was the injured worker. The claimant would have to put up with the pain for the extra amount of time to receive medical care.

She had absolutely no problem with the injured workers calling her for infor-mation; under current statute, they had that option. They could ask for a second opinion or anything else that a claims administrator could request. She firmly believed communication would be broken down if administrators had to go through three or four different people.

Ms. Collins commented that if she tried to coerce a doctor or change his mind, it would create an adversarial situation. The claimant would not be going back to work, the claim would be extended longer, attorneys would become involved, and the injured worker would have a bad feeling about his employer. She said Mirage Resorts did not want that to happen, and she did not believe self-insureds did, either. She wanted her employees to think they got help fast, someone cared about them, the employer wanted them returned to work, and they liked their employer and wanted to work there. She said A.B. 147 would stop that type of positive outlook and create a more frustrating situation.

She introduced Sam Basile as an attorney representing Mirage Resorts who was present to testify with her. Mr. Basile said his responsibilities on behalf of the corporation included supervision in all litigation affecting the appeals process for workers’ compensation, as well as litigation for tort law.

He wanted to inform the committee what was currently available for claimants and their attorneys. Every determination made by an insurer could be appealed. The appeals process allowed a claimant, either through the Nevada Attorney for Injured Workers or private counsel, to fully explore the insurer’s rationale. Claimants represented by the Nevada Attorney for Injured Workers could have access to file information and even obtain free copies.

Letters to physicians were disclosed to a claimant or his attorney. They could inquire through deposition, interrogatory, or the appeals process by calling a doctor as a witness and explain his rationale for releasing the claimant to return to work. He said those processes were already in place.

Mr. Basile explained that if an employer lost a case and a decision was reversed in favor of an employee, all fees including cost of copies, deposition and testifying fees would be born by the insurer as its penalty. An insurer would want to make sure rational determinations were being made because they would be challenged every step of the way.

If a doctor did not respond to a letter sent to him, that evidence would not be available in order to question the doctor. However, if a letter was in file from a doctor stating his opinion, an injured employee always had the opportunity to question his rationale. The claimant could find out if the physician communicated either orally or in writing with his employer. Credible and relevant testimony could be obtained regarding a doctor who made a decision and then changed it. The doctor could be questioned regarding the facts: what the medical objective standard was that changed his decision, or whether he was swayed by conversations with the self-insured employer. Mr. Basile said current law was fundamentally fair because of the adversarial process which existed on both sides, and the availability of discovery to obtain actual facts for an appeals or hearing officer to make a determination.

There was one other important factor Mr. Basile wanted to mention when it came time for an employer to prepare for a hearing. If he had to call a doctor to the stand as a witness, he would have to talk to that doctor and go over the testimony. According to A.B. 147, the claimant’s attorney could listen to that conversation with the doctor, which was protected by attorney/client privilege. Attorneys would be deprived of their own abilities to defend themselves in adversarial situations that might be brought forward by either side.

He said on the other hand, a claimant’s attorney that took part in the process of making decisions and provided input to a doctor regarding treatment might be disqualified as the claimant’s counsel because he would be made a witness. As a result, Ms. Basile stated there were some fundamental legal flaws to the bill. He would be more than happy to discuss further problems he found in A.B. 147 with the committee.

Assemblyman Hettrick asked Mr. Basile to clarify if it was his opinion as an attorney that a patient file at a doctor’s office was available to the patient at all times. Mr. Basile said yes, that was his opinion.

Assemblyman Hettrick asked if any letters in file, regardless of who wrote them, would be accessible to the patient or his attorney. Mr. Basile said the claimant would have access, and the attorney could obtain the information with the patient’s consent or by subpoena. Assemblyman Hettrick asked if files from a TPA, for example, would be available to a patient. Mr. Basile responded that files of TPAs, self-insured employers and SIIS were all open and available to patients. Assemblyman Hettrick asked if any letter sent to a doctor, or anyone else involved, would be open and accessible to a patient or his attorney at any time. Mr. Basile said absolutely.

Assemblyman Carpenter asked what percentage of claims was actually litigated. Ms. Collins asked him if he was referring to hearings or appeals litigation, because there was two different levels. Mr. Carpenter asked how many went to the appeals level, where an attorney and everyone involved would actually "go to the mat." She replied not more than 20 percent.

Chairwoman Krenzer announced the committee had lost its quorum because members had to leave, but those remaining would continue to hear testimony.

Wayne Carlson, Executive Director of the Public Agency Compensation Trust, was next to testify in opposition of A.B. 147. He said his organization’s claims were processed by a third-party administrator, and copies of a letter from the TPA were provided to the committee (Exhibit H). Mr. Carlson’s company was a self-insured association of governmental employers whose interest was returning injured employees to work as quickly as possible. He said no cases had gone to appeal in the 11 months his organization had been in operation. Only one case went to hearing out of approximately 4,000 employees in the group. Mr. Carlson said effective communication was critical in the process of getting injured employees back to work, and the bill would disrupt that process.

Patricia Bullentini, Safety/SIIS Manager at Martin Iron Works, stated she was very opposed to A.B. 147. She commented it was very difficult to contact construction and iron workers to include them in communication. Approxi-mately 30 percent of her company’s union employees were "fly-by-night" workers. Some might not show up for work the next day and could not be located.

She would fax a light-duty description to a doctor, for example, who was already aware of the employee’s injury and knew what would be acceptable for work duties. The doctor would then fax his response back as to whether her description was acceptable for that claimant. Ms. Bullentini said if she had to contact the employee first, sometimes they were very accessible because they had worked at the company for years. However, there were some employees that would never be seen again; they might have moved out-of-state, for example. She said the union hall would sometimes contact her trying to find an employee who was late paying his dues. There were some employees that stayed in hotels, which would make it difficult to contact them. She would have to mail documents certified; otherwise, she could not be sure they received them. In addition, not all injured workers would be represented by attorneys, which might make it easier because the attorney could be contacted instead of the claimant. She said it was also sometimes difficult to talk with doctors, because they did not like an employer calling to "drive them crazy."

Ms. Bullentini said she had to offer light duty to employees paying full wages with the union in order to stop TTD payments. She would fax a light duty description or call the doctor. She referred to Mr. Hardy’s comment regarding making a good faith attempt to contact an employee. She asked what would determine that a reasonable attempt was made. How many steps would she have to go through if she was required initially to make an attempt to find the employee before contacting the doctor.

Ms. Bullentini gave an example of an employee who had broken two teeth and she was trying to get him to a dentist. The workers would usually contact her to set up appointments because she had a list of doctors and dentists. She said the first two dentists she contacted from the list informed her they did not handle workers’ compensation cases anymore. Many physicians dropped from the industrial system because they believed there were already too many restrictions. She said A.B. 147 would impose another restriction not only for employers but also for physicians.

When she wanted information, she did not always get letters from attorneys or doctors; she came to Carson City and went through a worker’s file. The files included all of the information and were accessible to employers, attorneys, and patients. She said it was her responsibility as an employer to go through the files and get the information she needed, and that responsibility should also apply to other parties.

Mat Dorangricchia, President of Diversified Management Group, stated his company was an employer representative firm that managed a retrospective rating plan for a group of associated general contractors and consulted with other employers. He stated he was addressing the committee on behalf of his clients, Associate General Contractors, and wanted to go on record as opposed to A.B. 147. He commented that anything he would add to prior testimony might be redundant, but he would appreciate an opportunity to testify.

Mary Jane Wirges, R.N., M.S., Executive Vice President of Horizon CompCare, a managed care organization throughout the state of Nevada, wanted to give a "bird’s eye view" of the mail and faxes her company received. Their staff worked with about 60 percent of the state employers under SIIS. She received approximately 3,500 pieces of mail and 350 to 400 faxes per day regarding patients. Copies would be provided to SIIS and any attorneys involved with the cases. She said a requirement to call a claimant every time one of their staff communicated with a physician was impossible and almost untenable. It would change handling of cases from proactive to reactive case management.

Ms. Wirges said she received approximately 500 bills per day from providers that would have to be re-priced by her staff according to their contracts and then sent to SIIS. If a provider needed to be contacted regarding a bill and that particular patient was discussed, she would have to include the patient and his representative in that conversation. She commented a claimant would probably not even be interested because the state would be paying the bill.

Barbara Merritt, R.N., C.R.C., Director of Workers’ Compensation, Sierra Healthcare Options, Inc. addressed the committee. She said she was also the Director of the Sierra Healthcare Options and MedOne Works managed care programs. She also provided information on behalf of Horizon CompCare, but not from Saint Mary’s Preferred HealthCare Network. She stated that Sierra Healthcare Options managed care organization had difficulty agreeing with the broad nature of A.B. 147, particularly the section regarding oral communication.

She said two types of calls were placed to providers within a managed care organization. The first type was based on a prior authorization request received via fax or telephone by the managed care organization. A determination would be made, and the MCO would call the provider back to state whether the procedure was approved, additional information was needed, or it was denied. Ms. Merritt said among the three MCOs: Sierra HealthCare Options, MedOne Works, and Horizon CompCare, it was estimated that a total of 7,000 return calls were made to providers during a month. She said if a procedure was denied, the provider would be given an opportunity to speak with a medical director. If an issue could not be resolved, a peer review would also be a part of that process.

Ms. Merritt stated there were approximately 70 employees working in the combined departments of the three MCOs. The second type of calls handled by case management were contacts with doctors to clarify treatment. Some reports sent to the MCOs by doctors were not legible, for example. There was also a concern whether an employer could offer modified duty and the provider stated that a person was not able to work. The MCO wanted to know whether the employer offering return-to-work agreed with the limitations determined by the provider. She estimated that 17,000 to 18,000 of those types of calls were being made each month to providers by the 70 staff members.

Ms. Merritt commented that 90 percent of the claimants were working. They might have lost time from work at some point, but returned to their jobs. She concurred with prior testimony regarding the logistics problem of being able to contact claimants for telephone communication. She also noted that 80 percent of the injured workers they handled were not represented by attorneys.

Larry Zimmerman, President of CDS of Nevada, also agreed with prior testimony opposing A.B.147. He personally handled workers’ compensation claims in Nevada for 21 years. He was not aware that a communication problem existed until the presentation of the bill. He was unsure where the problem originated, because there was an opportunity to appeal decisions made by administrators.

He commented the problem might be a one-sided view of attorneys, not injured workers.

He said his company handled approximately 15,000 newly reported injuries each year. Thousands of telephone calls would be made that did not involve attorneys because they were not adversarial decisions concerning injured workers.

If the bill passed, Mr. Zimmerman stated it would hinder the process of sending injured employees back to work. He commented that it did not reflect the view of injured workers that wanted to return to their jobs. The present laws facilitated an early return to work, which he said had been a goal in Nevada for years. Current laws presently in place required insurers and rehabilitation counselors to make contact with physicians. Those laws were inspired over the years because of faulty claims administration and high claims costs. It had been an objective for years to lower excessive workers’ compensation costs in Nevada, and he said there had been some giant steps forward. A restrictive law like A.B. 147 would be a giant step backward, in his opinion.

The law would require that if a fax was sent to a doctor, one would have to be sent to the injured worker. Today’s business world was striving for electronic data interchange, sending information via faxes, computers and e-mail. If a claims administrator was required to have the presence of an attorney or injured worker for verbal communication or sending written information, it would be a major setback.

Christi Mosher, R.N., was the Workers’ Compensation Case Manager for Saint Mary’s CompFirst. She submitted her testimony in writing and provided copies for the committee (Exhibit I). She stated there was one other point that was missed in prior testimony.

She gave an example of a patient who was severely injured from a high fall. The case manager notified her of the claimant’s discharge from the hospital, and she had to immediately arrange for his home care. She called the patient’s physician and obtained a prescription via fax because prior authorizations in writing were required for everything costing over 200 dollars. His home care included a wheelchair, a health care worker to change his dressings, and continued physical therapy that had been started in the hospital. Ms. Mosher stated that situation defined managed care and case management from her point of view.

Ms. Mosher commented that a lack of communication with physicians should not allow sending a patient home without the proper care. The patient might not know what he needed, and a doctor might not remember certain details a patient would require. As a representative of St. Mary’s CompFirst, she stated their organization was very much opposed to the bill. If the system reverted to sending all communication in writing to physicians, it would stop needed medical care to patients which should be provided in a timely manner.

Chairwoman Krenzer asked if there was anyone else wishing to speak in opposition to A.B. 147, or if there was anyone that arrived late that wanted to speak in favor of the bill. Hearing no more comments, she adjourned the meeting at 6:40 p.m.

RESPECTFULLY SUBMITTED:

Erin DeLong,

Committee Secretary

APPROVED BY:

Assemblywoman Saundra (Sandi) Krenzer, Chairwoman

DATE: