MINUTES OF THE ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT Sixty-eighth Session February 2, 1995 The Committee on Labor and Management was called to order at 3:30 p.m., on Thursday, February 2, 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. Pete Ernaut Mr. Mark Manendo Mr. Brian Sandoval COMMITTEE MEMBERS ABSENT: Mr. John C. Carpenter - Excused GUEST LEGISLATORS PRESENT: None STAFF MEMBERS PRESENT: Mr. Vance A Hughey, Senior Research Analyst Mr. Fred W. Welden, Chief Deputy Research Director OTHERS PRESENT: Patricia Allen, Senior Vice President, Prime Health Dr. Malcolm Weiss, President, Medical Benefit Consultants Cecilia Colling, SIIS Chairman Nolan called for a motion to introduce Bill Draft Requests 22-382 and 53-392. ASSEMBLYMAN ANDERSON MOVED FOR COMMITTEE INTRODUCTION OF THE ABOVE BILL DRAFT REQUESTS. ASSEMBLYMAN ERNAUT AND ASSEMBLYMAN BACHE SECONDED MOTIONS, RESPECTIVELY. THE MOTIONS CARRIED UNANIMOUSLY BY THOSE PRESENT. Assemblyman Krenzer declared a conflict as she works for a Managed Care Organization (MCO), but as there will be no consideration of a motion today, she will participate in the discussion. Assemblyman Goldwater disclosed that he works for a health care provider that deals with MCOs, but feels he can participate in both discussion and motion to vote as he has no pecuniary interest in the organization. There being no further disclosures, Chairman Nolan asked for the representatives of the MCOs to step forward and introduce themselves. Patricia Allen of Prime Health began her presentation by thanking the committee, SIIS and the MCOs for their cooperation and response to the issues. She stated that the purpose of her testimony was to give insight on the trends and operational issues that occurred with the integration of MCOs and State Industrial Insurance System (SIIS). Special emphasis will be made on the dispute resolution process and the benefits of utilization review based on the committee's request (Exhibit C). The first year all the MCOs and providers incorporated nationally recognized concepts and the philosophy of managed care to help the injured worker. This step enabled them to achieve their goals which were to reduce claim expenses and stabilize the premiums while providing the highest quality of health care. This process, in partnership with SIIS, is continually being fine tuned and improved. Providers, employers and employees are receiving continued education on the best utilization of this system. Ms. Allen stated she and Dr. Weiss will give a three part overview consisting of: first, trends of managed care; second, the strength and weaknesses of the present system; and third, areas of improvement. Ms. Allen explained MCOs have contracted with medical providers and specialists in the area of workers' compensation medical care. With the approval of SIIS and the Insurance Division, they have established panels which contain all the specialty areas necessary to provide care. These providers agree to assist the MCOs to ensure that referrals, diagnostic testing and treatment plans are all developed to care for the injured worker and to cooperate in the administrative work flow needed to make the system efficient. The MCOs propose to work with the providers to increase and improve the quality and efficiency of the care for injured workers. MCOs are responsible for the enrollment process. They give packets to the employers which contain enrollment information, the provider network listing, and the dispute resolution process. After enrollment, there is continued help and consultation for employers as needed. Mr. Anderson inquired if there are any restrictions placed on the provider list. Ms. Allen responded that providers must, first, meet standard professional credential requirements and, second, they must provide services in workers' compensation areas. Most doctors are selected on a geo-access analysis, those who can service the areas in which the employers and employees live and work. Mr. Anderson asked if an injured worker does not have a provider in his area, can he go out of his geographical area to be treated. Ms. Allen assured provisions are made for such cases. Ms. Krenzer pointed out if the case is outside the twenty mile radius of Washoe or Clark County, this would not apply. Chairman Nolan queried if the MCOs have sole discretion over which provider will be maintained. Ms. Allen responded that was correct. Cecilia Colling from SIIS interjected they do monitor for the specialties, which is a contract requirement. If they are under covered, SIIS will require the MCOs to add people to their panels. Ms. Krenzer questioned if some MCOs charged physicians to be on their panel. Ms. Allen stated it was not uncommon to charge because of the paperwork and the credentialing process which is involved. Dr. Weiss stated he would present the responsibilities of medical directors and registered nurse case managers in managing the care of injured workers. Their role is to ensure all patients have access to quality health care and to review all the services provided. Their responsibility to the employer is to oversee cost effectiveness. MCOs have introduced a uniform system for evaluating and managing the care of injured workers. They use nationally recognized published criteria manuals for making their decisions about treatment. Mr. Anderson asked if the AMA medical guide is used to determine degree of disability. Dr. Weiss responded yes, they were now using the fourth edition. Mr. Anderson requested a copy of that edition for reference. Ms. Krenzer asked how the standards are developed that are used for disability determinations. Dr. Weiss pointed out diagnostic and treatment codes development has taken place over a long period of time from data gathered from medical schools, universities, clinics, hospitals and physician's offices. Currently, they use the international diagnostic codes for diagnosis and CPT codes for treatment. Dr. Weiss utilizes specialty review committees that meet to review the latest medical changes to determine if they need to make alterations in their criteria. This illustrates why utilization review is needed and has to be done by professionals trained in managed health care. Another important reason for utilization review has to do with co-existing medical conditions as all people cannot be treated in the same way for the same injury. Dr. Weiss further stated all health procedures provided to patients are reviewed for safety and all hospitalizations are reviewed for medical necessity and length of stay. Discharge planning is begun at the time of admission as there are alternative delivery sites outside the hospital that provide excellent care but are less expensive. Physicians understand that all cases are reviewed by their peers prior to a SIIS billing for services. Case Managers interact with providers in regard to information pertinent to a patient's treatment plan. Ms. Allen continued the presentation with the standard dispute resolution process. (Exhibit D,E and F.) All MCOs are contracted to provide a dispute resolution process. They are required to notify SIIS on a quarterly basis of all dispute resolutions they have had. Many problems have been resolved before they reach the dispute resolution process by case managers. If the dispute proceeds, peers of the same specialty area review medical appropriateness of the treatment. Assemblyman Goldwater stated it is common to hear of inconsistencies in administrative policy concerning both treatment policy and dispute resolutions. He asked for comments from Ms. Allen on this issue. Ms. Allen responded the MCO process is new to the employers and physicians. The administrative guidelines they need to follow and the amount of information they had to absorb in such a short period of time may have caused lapse in knowing of a dispute or accessing an appeal correctly. That is the reason for continuing education through in-services and newsletters. Mr. Goldwater then asked if Ms. Allen thought the committee should help MCOs standardize those administrative duties, making them consistent in statute or if MCOs will become cohesive through familiarity. Ms. Allen felt after audits and reviews are completed with determinations made of who is having problems, legislation may help. If MCO's policies are so far apart that providers are getting confused, SIIS with their knowledge of all systems could help the MCOs create efficiencies. Chairman Nolan questioned if under S.B. 316 the MCOs are able to provide the highest quality care that they can. Dr. Weiss felt this was so as every MCO has the same contract with SIIS and everyone does their best to abide by every word in that contract. SIIS oversees how they fulfill their contractual obligations. The problems they have now can be worked out one to one with SIIS. Chairman Nolan called attention to the proposal brought to the committee by SIIS to remove the cap on the number of MCOs in the north, south areas. What would an increase or decrease in numbers of MCOs do to the quality of care being provided. Dr. Weiss personally felt that competition is beneficial. The more people looking at and trying to solve problems and to do things better is, in general, good for the state. Ms. Allen continued by saying the rest of the presentation dealt with administrative procedures that MCOs follow in doing bill review, bill repricing and monitoring of both. She felt that there were problems with the enrollment process as it was rather cumbersome and hoped that could be streamlined. Manually having to go out and enroll every employee was hard on the employer and the MCOs. They have some proposed MCO solutions on administrative policies and procedures such as better access to SIIS claims information; continued improvement in communication between MCO case managers and disability prevention teams; and exploration of electronic data interchanges. Cecilia Colling wanted to clarify the fact that SIIS does not contract with MCOs to do physician's ratings of disabilities or impairments. They use nationally recognized protocols for utilization. Some of them may use the AMA guides to rate for other insurance purposes or for other disabilities, but that is not what the contract is for. As there was no further business, Chairman Nolan adjourned the meeting at 4:30 p.m. RESPECTFULLY SUBMITTED: Susanne Mund, Committee Secretary APPROVED BY: Assemblyman Saundra Krenzer, Chairman Assemblyman Dennis Nolan, Chairman Assembly Committee on Labor and Management February 2, 1995 Page