MINUTES OF THE ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT Sixty-eighth Session January 26, 1995 The Committee on Labor and Management was called to order at 3:30 p.m., on Thursday, January 26, 1995, Chairman Dennis Nolan presiding in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Ms. Saundra (Sandi) Krenzer, Chairman Mr. Dennis Nolan, Chairman Mr. David Goldwater, Vice Chairman Mr. Lynn Hettrick, Vice Chairman Mr. Bernie Anderson Mr. Douglas A. Bache Mr. John C. Carpenter Mr. Pete Ernaut Mr. Mark Manendo Mr. Brian Sandoval COMMITTEE MEMBERS ABSENT: None GUEST LEGISLATORS PRESENT: None STAFF MEMBERS PRESENT: Mr. Vance A Hughey, Senior Research Analyst Mr. Fred W. Welden, Chief Deputy Research Director OTHERS PRESENT: Bryan A. Nix, Senior Appeals Officer Nancyann Leeder, Nevada Attorney for Injured Workers After the roll call, Mr. Bryan Nix began his presentation with a brief overview of the Hearings Division. The division hears appeals of SIIS claimants, self-insured employer claims, Victims of Crime program and other state agencies and their administrative law matters. In the Workers' Compensation arena, there are two levels of appeals: first, when a worker does not agree with the decision of the insurer or the employer does not agree with the SIIS determination; and second, when the claimant, the employer, or the insurer does not agree with the determination of the Hearing Officer. The first level of appeal is held informally before a Hearing Officer, who is a lay person not an attorney. If the dispute cannot be resolved through discussion or mediation, the Hearing Officer can make his determination. If any party does not agree with the decision of the Hearing Officer, they can proceed to the second level of appeal. The second level of appeal is held before an Appeal Officer in a more formal setting. The Appeal Officer is an attorney, the proceedings are recorded with transcripts available, and the rules of evidence are more closely followed with most parties represented by attorneys. If this decision is disputed, the next step would be into the court system. Mr. Nix proceeded to review the 1994 Annual Statistical Report (Exhibit C). A discussion developed between Assemblyman Anderson and Mr. Nix regarding the policy of reopening claims. Mr. Nix pointed out that S.B. 316 altered the opening rights of claimants. Prior to the bill, a client could reopen his claim during his lifetime. After the bill was passed, reopening was limited in the following cases: if medical expenses were less than $500 or medical care was less than six months, the claim could be closed automatically without any appeal rights; or, if the claimant had previously requested reopening and the request was denied and upheld by the appeal process or the courts, that claimant could not reopen the claim again for one year unless they could show that a change of circumstances required a reopening. Mr. Anderson asked Mr. Nix if a claim was not eligible for reopening, would the claimant be notified immediately or have to wait until the date of the hearing. Mr. Nix responded that a hearing is scheduled three to four weeks after a request is received. Hearing Officers may not have the information to make that decision until the day of the hearing. Discussion continued on the Statistical Report with Mr. Nix stating that he would provide the committee with a breakdown of percentages of self-insured and SIIS claims that went before the Hearings Office from 1991 to present. Mr. Anderson questioned the large difference between the percentage of remanded cases in Las Vegas and Carson City. Mr. Nix stated the advocates for SIIS in Carson City would rather have a mutually agreed dismissal than a remand. Las Vegas prefers remands. Assemblyman Sandoval asked why an injured worker would rather pay for a private attorney when he could use the state attorney free. Mr. Nix replied that the Nevada Attorney for Injured Workers (NAIW) is restricted to representing claimants in appeals before his agency while private attorneys can represent their clients in all aspects of their cases and NAIW cannot appear before the hearing officer. Mr. Nix and Assemblyman Krenzer engaged in a discussion regarding continuances. Mr. Nix explained there are six appeals officers with a caseload of approximately 100 per month each. An appeal must be scheduled within 90 days. Continuances are a major problem in the system and could be alleviated by allowing the appeal officer to schedule his own hearing dates based on the parties abilities to litigate on behalf of their client. Eliminating the 90 day window would also eliminate a certain percentage of the continuances. Assemblyman Bache inquired what areas of the law have generated the most complaints to Hearings and Appeals since the passing of S.B. 316. Mr. Nix stated that the Managed Care Organization (MCO) appeals process has caused quite a bit of confusion. He is preparing a memorandum to present to the committee outlining some of the difficulties that he sees with the statute because it has no time frames, it is unclear when issues can be appealed, and when they are appealed what happens next. Mr. Bache then asked if pre-existing conditions were one of the major factors in denials and noted that the reversal rate of decisions appeared to be much higher in Carson City than Las Vegas and questioned why. Mr. Nix responded that as a result of S.B. 316, pre-existing conditions now were a major factor in denials and felt the reversal rate may be higher because of the differences in litigation in the two cities. Mr. Anderson pointed out legislation had been passed to narrow the scope of people that could appear before the Appeals Officers to represent clients, namely attorneys and people who were well prepared. He wondered what constituted the category "agent other" on the chart on page 14. Mr. Nix suggested that it was primarily interpreters and other family members who were coming to assist the claimant. Mr. Nix stated that the remaining charts were repeats of the charts just reviewed and unless there were further questions his presentation was complete. Ms. Nancyann Leeder, NAIW, began her presentation by stating their mission was to assist injured workers to obtain justified workers' compensation benefits. She proceeded with her review of (Exhibit D) Expanded Program Narrative. Mr. Anderson asked if NAIW screened the applicants to decide if their case was strong enough to proceed to the second level (appeal level.) Ms. Leeder replied yes and no. Once NAIW is appointed, they are supposed to receive discovery materials from the insurer within two weeks. This does not always happen. When they do receive the discovery materials and talk to the claimant, they can assess the case, form an opinion and either proceed, dismiss or withdraw from the case. Mr. Anderson then queried what were the alternatives if the case was withdrawn. Ms. Leeder responded that the case usually ended there unless there were mental or interpreter problems and it would allow the court to have a fair hearing. NAIW tries not to withdraw unless there is difficulty in contacting the persons necessary to put together the case or some kind of a conflict. They try to convince the client that the case should be dismissed. This could be a factor in the continuance problem. Ms. Leeder concurred with Mr. Nix that continuances are a tremendous time consuming problem in her office also. Mr. Bache inquired what areas of the law since passage of S.B. 316 have generated most of NAIW's business for the appeals level and have most of the appeals been because of pre-existing conditions. Ms. Leeder agreed that there is a lot of pre-existing litigation, and litigation regarding when does each facet of the law become applicable, pre or post 1993, and what type of evidence is available, whether the doctor has supported his opinion properly. Ms. Krenzer asked for suggestions from Ms. Leeder that might facilitate the process for both injured workers and insurers. Ms. Leeder restated Mr. Nix's feelings of allowing the attorneys to set their cases with the approval of the appeals office to reduce the number of continuances. She has observed a mushrooming of formal discovery. Because this absorbs a lot of time, perhaps there should be a limiting of discovery. The MCO procedure must be tightened up substantially. Mr. Anderson observed that it might be appropriate in the future to arrange for an examination of the process being utilized by the MCO's so the committee could see how they interact in the process. Chairman Nolan responded that the MCO's would be giving a presentation next week that would address that issue. He thanked both Mr. Nix and Ms. Leeder for their presentations. As there was no further business to be brought before the committee, Chairman Nolan adjourned the meeting at 5:00 p.m. RESPECTFULLY SUBMITTED: Susanne Mund, Committee Secretary APPROVED BY: Assemblyman Saundra Krenzer, Chairman Assemblyman Dennis Nolan, Chairman Assembly Committee on Labor and Management January 26, 1995 Page