MINUTES OF THE ASSEMBLY SUBCOMMITTEE ON LABOR AND MANAGEMENT Sixty-eighth Session June 7, 1995 The Subcommittee on Labor and Management was called to order at 7:55 a.m., on Wednesday, June 7, 1995, Chairman Brian Sandoval presiding in Room 331 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. COMMITTEE MEMBERS PRESENT: Mr. Brian Sandoval STAFF MEMBERS PRESENT: Mr. Vance A. Hughey, Senior Research Analyst OTHERS PRESENT: Ms. Jan Myers, Division of Industrial Relations Mr. Ron Swirczek, Administrator of Division of Industrial Relations Mr. Danny Thompson, Nevada State AFL-CIO Mr. Jack Jeffrey, Southern Nevada Building Trade Council Ms. Barbara Gruenewald, Nevada Trial Lawyers Association Ms. Nancyann Leeder, Nevada Attorney for Injured Workers Ms. Cecilia Colling, Assistant General Manager of SIIS Ms. Amy Halley, Nevada Self-Insurers Association Chairman Sandoval explained to those present, the subcommittee was formed to study sections 32, 101 and 153 of Senate Bill (S.B.) 458, specifically the AMA guides. He would hear testimony from the Department of Industrial Relations (DIR) first. SENATE BILL NO. 458 - Makes various changes to provisions relating to industrial insurance. Ms. Jan Myers, DIR, stated section 32 is a technical amendment. The language is currently in the law contained in NRS 616.427, dealing with subsequent injury. DIR requested the language be removed from this statute and placed in NRS 616.605, the main permanent partial disability (PPD) statute. The bill drafters suggested it be brought into an entirely new section to address the guide for ratings. Mr. Ron Swirczek, Administrator of DIR, testified. He referred to the last sentence in section 32 which states, "In adopting the Guides to the evaluation of Permanent Impairment, the division shall consider the edition most recently published by the American Medical Association", and stated the key words are "shall consider". Mr. Swirczek explained this does not mean DIR will adopt it but shall consider it. If the fourth edition or any edition proves to be beneficial to both employees and employers and makes sense for the conditions presiding in Nevada then DIR will move ahead with the adoption. Chairman Sandoval referring to the first sentence of section 32, inquired in what circumstance would DIR make use of that clause. Mr. Swirczek responded when they go to public hearing and there are fatal flaws or portions of the AMA guide that would be detrimental to the conditions existing in Nevada, then DIR may choose to incorporate all or portions of the AMA guides. This would allow them flexibility in order to fit Nevada's needs. Mr. Sandoval asked if the lack of certainty of which guide will be used is cause for a lot of confusion in the future. Mr. Swirczek stated there has been discussion in regards to creating their own guide to impairment if none of the existing guides fit the needs of Nevada. During their most recent exploration of this matter, they asked two questions. They asked is the body of knowledge and evidence medically and scientifically sound to the point that if a rating is done by two different physicians would they be the same? Secondly, being sensitive to the fragile financial condition of SIIS, if there is going to be a detrimental impact would they be able to bring it back to the legislature? The intent being everyone who has a vested interest would be informed to whatever consequences there would be. Chairman Sandoval referred to Mr. Swirczek's testimony from a previous meeting in regards to the second edition being hard to find, distribute and not workable. For a point of clarification, he asked why he would want to keep parts of it. Mr. Swirczek explained the second edition is out of print. It is not recognized by the AMA. To find any recognized organization that will provide training is nonexistent. He further explained it is his understanding that the Division had requested authorization to reprint the second edition. That request was denied. Mr. Swirczek expressed it is DIR's position to move ahead with the hearings in order to get everything out in the open and yet there seems to exist a great deal of fear. He does not understand this being they could lead to an informed decision on which edition would be best. Ms. Myers interjected the language in section 32 also allows them to adopt the guide by reference by regulation. If another guide was to come along at a later date this gives them the opportunity to hold public hearings for the adoption of any subsequent guides. Mr. Danny Thompson, representing Nevada State AFL-CIO and Vice-Chair of the DIR advisory board, testified. The DIR advisory board is privy to posed regulations and participates in the hearings. He explained a meeting was held concerning the adoption of the AMA fourth edition because currently the law is written around the second edition. After comparing the two editions the results were mixed but the three or four different doctors who were in attendance testified in favor of the fourth edition. Their reason was the fourth edition is more stable in that the ratings are more consistent. One of the problems expressed was in order for the doctors to use the fourth edition training was necessary. On the Senate side, concerns were raised about higher ratings for different injuries. He stated he recognizes the concern of adopting one or the other but he does not know which one he prefers. Mr. Thompson expressed his support for giving the division the authority to have public hearings and investigate it fully, but due to the complexity does not know which one he prefers. He pointed out the second edition is out of print but is currently being used so people must have copies around somewhere. He concluded his remarks by stating he does not know the answer but they must proceed with caution. Chairman Sandoval questioned if Mr. Thompson supported the language of the bill as it is written. He replied he does not have a problem with section 32. Mr. Sandoval further questioned being this issue has been investigated in the past what more do they expect to learn. Mr. Thompson clarified they have only had one meeting and it only lasted a couple of hours. It truly has not been investigated yet. Mr. Sandoval asked of Mr. Thompson, as part of the advisory committee what he thinks needs to be done in order to establish the better edition. Mr. Thompson replied he would like to see an in-depth study of the issue. He stated he does have concerns with taking bits and pieces of each guide and therefore would prefer one of the guides be adopted in full. Mr. Sandoval agreed with Mr. Thompson and stated the words "may amend" could potentially lead to exactly that situation. Mr. Thompson stated when they speak of "amend" he believed the intent to be taking another whole section that is recommended by the medical professionals. He does not want to see it be opened to a political process whereby bits and pieces will be combined because not all the pieces fit together. Mr. Jack Jeffrey, representing Southern Nevada Building and Construction Trades Council, testified. His concern also lies with section 101 precisely because of the language allowing for amendments. The language, "a rating evaluation must include an evaluation of the loss of motion, sensation and strength", should be left in there. He feels it is a very important component of evaluating an injury. He would not want this left to the political process if the guides were going to be amended. If guides are adopted in total then these things would be covered. "If not, it is going to be a crapshoot, I'm afraid." Chairman Sandoval asked if Mr. Jeffrey had any specific recommendations. Mr. Jeffrey replied in his opinion, the brackets should be removed in section 101, subsection 4. Mr. Thompson stated he would concur with Mr. Jeffrey's recommendation. Mr. Paul Aakervik, W.R. Gibbens, Inc., told the subcommittee about a workshop done with DIR. Ms. Myers had a study done by the Disability Evaluation Services (DES). It looked at 334 permanent partial disability(PPD) evaluations done by the Disability Evaluation Services Company. While he is aware of their experience with PPD evaluations and the second edition of the AMA guide, he is unaware of their experience with the fourth edition AMA guide. Mr. Aakervik explained they took their own studies, their own PPD evaluations and all the records and they attempted to estimate what the AMA fourth edition would do. It has two different ways of doing the ratings. One is the range of motion model also known as the ROM. The other is the DRE which is the diagnostically related estimates. He stated both this study and the study done by Dr. Bingham, which he faxed up to Ms. Krenzer earlier but does not know if the subcommittee has had a chance to see it yet, are flawed. Each of the studies took a piece of paper to rating and not a physical body. From the rating they attempted to estimate what the ROM and the DRE model estimates would be. He stressed there are problems in doing this. First, the second edition of the AMA guide, uses a goniometer. The fourth edition, in order to use the range of motion study, they have a person bend over and they put an inclinometer on them, not a goniometer. The inclinometer comes up with some different figures than the goniometer. Mr. Aakervik pointed out he did his own study focusing on the spinal injuries using the percentages of the DES study and Dr. Bingham's study. He admitted if these two studies are flawed his is most probably also flawed. In order to have an intelligent discussion and make an intelligent decision, the IIRS needs to be given some time. He would recommend being real specific, especially in regards to spinal injuries being this is the area in which the AMA guides, fourth and second edition, differ the most. Mr. Aakervik suggested taking a two month period of time of all the ratings and compare the second and fourth edition with a live body in front of you. This would allow for the decision to be based on fact. No one wants to make the decision to use one edition rather than the other knowing it could result in SIIS going under. Mr. Aakervik pointed out Mr. Swirczek would probably feel a lot more comfortable if someone from the Assembly and another from the Senate sit down with him and give him some support. He reiterated his recommendation to do an in-depth study of both the AMA guides, particularly on the spinal injuries. Chairman Sandoval questioned if Mr. Aakervik believes the language of the bill allows for this to occur. Mr. Aakervik responded yes, he does. The language should stay. He added he disagrees with Mr. Jeffrey's testimony concerning the brackets in section 101. The deletion of the range of motion comment needs to remain. In order to use the AMA guide, fourth edition, if that is the final decision, the ROM model should be replaced with the DRE model, being it is the recommended method of doing this. Referring again to his own study on the basis of the DES study, he finds only a one percent differential in the increases on the spinal injuries going to the DRE model. For clarification purposes, he offered a summary of what the doctors do in the DRE model versus ROM. He agrees with Mr. Thompson that the fourth edition allows for a better, more consistent rating. "On the ROM model they would require the physician to make the measurement with an inclinometer six times for each measurement. In other words, if he is going to do a spinal injury measurement, he is going to put the inclinometer on the person, ask them to bend forward and touch their toes six times. Hopefully he will come up with something based on an average. With the DRE, the doctor does not use an inclinometer. He does not ask the person to bend, twist and so forth. What he does is go through the medical record with the person there and he finds that the person has a pain, an ache and so forth that has lasted for, let's say, six months. He estimates it will probably last for another year. That then becomes a permanent impairment. From that review of the medical record, like the physical therapy records over a six month period of time of treatment, they will show what the person has been able to do. The doctors can establish what, from the records, the improvement is the person has had and where he has stabilized in his medical condition. If he finds that there is a consistent and constant problem then he can say there is a lumbar problem so we will give him a flat five percent. They will eliminate all the one, two, three and four percent back injury range of motions that we are doing under the AMA guide, second edition. This is one of the reasons it will become more expensive for spinal injuries. From that medical record, he is going to say there is a lumbar problem, a thoracic problem that is expected to be a permanent type situation under these guidelines and a cervical problem. For each of those he can provide a five percent. He can provide even more but five percent would be a minimum. It is going to be more cut and dry." Mr. Aakervik recommended using the fourth edition. It is much clearer and it uses more modern medicine, taking into consideration a lot of the new medical practices including laser and orthoscopic surgeries. There are graphs and pictures in the book that would eliminate a lot of the errors which physicians are currently making. The fourth edition also takes into consideration aging. The second edition does not. Mr. Aakervik declared the fourth edition is a much better rating tool but because of the major changes in the spinal injury section a study is necessary to make an informed determination. Modification may be deemed necessary. Ms. Barbara Gruenewald, Nevada Trial Lawyers Association, proposed two amendments. She objects to DIIR being able to make the decision and therefore would ask that DIIR hold the hearings, take testimony but then make recommendations only to the Legislature of which to adopt. Her second concern is in making this recommendation, DIIR either recommend to adopt the second or adopt the fourth. She reiterated previous testimony agreeing with the fact that if a hybrid is adopted, it is left open to the political process when it is a medical determination. She fears good sections will be deleted, "leaving the injured worker out in the cold." She stated everyone knows about and is comfortable with the second edition. People have accepted it and there is a whole body of case law defining it. The other option is the fourth edition. She pointed out previous testimony suggests the AMA is not going to send people out to do training for the fourth edition if a hybrid is adopted. Ms. Gruenewald concurs with Mr. Jeffrey in regards to deleting the brackets, leaving in the law the present language of section 101. She explained the reason it is in there is because the PPD physicians who rated did not do it. In 1993 it was put into the law to force them to follow the AMA guides. Ms. Nancyann Leeder, Nevada Attorney for Injured Workers, testified. She explained most of what she intended to say has been said but for the record she is also in favor of deleting the proposed brackets in section 101. She reiterated it was put in as a corrective measure. If claimants appeal their improper ratings because they were not rated for loss of sensation or a loss of strength, then they of course would win but many claimants do not. Physicians had not been properly rating. They were mandated to rate as the guides told them to through legislation. She believes it would be improper for a medical, coherent whole devised by many doctors working many long hours to apprise a value for impairment. This is what we rate on in Nevada, not disability. It would be wrong for that to be changed because it should remain a coherent whole whether the fourth or second edition is chosen. Mr. Sandoval asked for Ms. Leeder's specific comments on the second edition versus the fourth edition. Ms. Leeder expressed the fourth edition is more up-to- date. It takes account of modern medical practice and is probably a better system to use but there is more familiarity with the second edition. She agrees with Ms. Gruenewald in regards to a hybrid being adopted. Mr. Sandoval further asked other than section 101, does she have any specific recommendations or does she support the language in sections 32 and 153. Ms. Leeder stated she has not devised any particular language but feels section 32 should be amended to state even though there may be additional regulations, they would not abridge the addition that is adopted. Mr. Sandoval inquired if she thinks it would be better if it was tested, investigated and then a recommendation be made to the 1997 Legislature or should this decision be made now. Ms. Leeder remarked over many years the DIIR has been charged with promulgating regulations. It is equipped to promulgate those regulations perhaps more so than the Legislature is because this is a medical issue. Ms. Leeder stated on the other hand, if proper investigation has not been done then we are going into the situation blindly. She believes it is an issue of modern medical practice versus cost. That itself is a policy issue. Chairman Sandoval asked if there was anyone else wishing to testify. Ms. Myers came forward in hopes of dispelling some of the fear she was hearing. She explained it has never been the intention of the division to pick and choose, basically invalidate the credibility of the fourth edition if it was to be adopted. There are certain things that may need to be adopted by regulation. One of them is in the chapter on psychological testing. Currently, psychological testing is not done as a regular course of events in a PPD evaluation. However, there are certain cases which do warrant psych testing. The fourth edition of the guide does not assign a body basis to the psychological section. The second edition does assign disability ratings for body basis. They may have to go back and assign to the different categories. Most of this information would be made available to anyone through the hearings process for the adoption of the regulations. In section 101, if they do not leave the brackets in and take out the language concerning the loss of range of motion, technically the Legislature would invalidate the adoption of the fourth edition of the guides because the range of motion would have to be used for any ratings on the back. Range of motion is used for all ratings with the exception of the back. In the back section, the recommended method of rating is the DRE. Ms. Myers explained she would like to have an opportunity to meet with those who are concerned and for them to attend some of the agency's public meetings and hearings. This might dispel some of their fears about the fourth edition. Ms. Cecilia Colling, Assistant General Manager of SIIS, testified. She stated because of difficulties in training and inability to re-train rating physicians it is SIIS's position to move off of the second edition of the guides. However, she also has some concerns with the spinal areas. They have had discussions with DIIR and what they see potentially happening is as the rating physicians are learning how to apply the guides there would be room for a lot of discrepancy between their interpretations of SIIS's diagnosis. She believes things need to be done to define what the state of Nevada thinks is appropriate for the spine. Range of motion is not always the best way to go. Ms. Colling noted SIIS has been reviewing the guides used in other states, Texas is one and they are working on a schedule that works hand in hand with the fourth edition. She summarized practically speaking, we need to move off the second edition. In response to Mr. Sandoval's request for more specifics, Ms. Colling responded there are ways of defining how to interpret the diagnosis that SIIS could put into a schedule or through the regulatory process with the DIR. There is also discussion about legislative committees working on it. She stated she does not care what vehicle is used but SIIS would like to have some input on how the diagnosis on the spine works. Chairman Sandoval asked if Ms. Colling supports all the language as it is presented in sections 32, 101 and 153. Ms. Colling answered yes, she does. Ms. Amy Halley, representing the Nevada Self-Insurers Association, stated they would like to go on record as supporting the language in the sections as they stand in S.B. 458. She expressed their goal is to see the oversight committee study both editions of the guide. She concurs with Ms. Colling in regards to the possibility of a schedule for some of the spinal injuries being necessary. Chairman Sandoval asked if there were any others wishing to testify. Being there were none, he explained he would take all of these ideas back to the full committee for a decision. He adjourned the meeting at 8:35 a.m. RESPECTFULLY SUBMITTED: Jennifer Carnahan, Committee Secretary APPROVED BY: Assemblyman Saundra Krenzer, Chairman Assemblyman Dennis Nolan, Chairman Assembly Committee on Labor and Management June 7, 1995 Page