MINUTES OF THE ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT Sixty-eighth Session June 20, 1995 The Committee on Labor and Management was called to order at 5:01 p.m., on Tuesday, June 20, 1995, Chairman Saundra Krenzer presiding in Room 119 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 STAFF MEMBERS PRESENT: Mr. Vance A. Hughey, Senior Research Analyst Mr. Fred W. Welden, Chief Deputy Research Director OTHERS PRESENT: Mr. Dan Williams, Dare to Dream Network Mr. Charles Harrall, Nations Personnel of Nevada, Inc. Mr. Paul Aakervik, W.R. Gibbens Inc. Ms. Barbara Costello, Dare to Dream Network Mr. Doug Dirks, General Manager of State Industrial Insurance System (SIIS) Mr. Bob Ostrovsky, Nevada Resort Association Mr. Leonard Ormsby, General Counsel for SIIS Ms. Nancyann Leeder, Nevada Attorney for Injured Workers Ms. Barbara Gruenewald, Nevada Trial Lawyers Chairman Krenzer apologized for the delay in the start of the meeting. She explained because the Assembly floor session ran late, all other afternoon committee meetings had been impacted. Therefore, she called the meeting to order in the form of a subcommittee. The first order of business would be to take public testimony on Senate Bill (S.B.) 458. SENATE BILL 458 - Makes various changes to provisions relating to industrial insurance. Dan Williams, Dare to Dream Network, testified from Las Vegas. He recalled a motion to delete section 105 of the bill having been made at a previous meeting. He inquired whether this was still the intention of the committee. Chairman Krenzer stated she does not recall this motion and if he would like to testify on this section to please continue. Mr. Williams explained section 105, proposed subsection 3, changes his benefits, his rights and compensation from the date of injury to the date of determination. NRS 616.625 is very clear in regards to one's rights, governed by the Nevada Revised Statutes (NRS), and Nevada Administrative Code (NAC), being fixed as of one's date of injury. He drew attention to a packet of letters he submitted for the committee's review, pointing out they reinforce the determining factor used in designating which statutes will apply, is the date of injury. See (Exhibit C). Mr. Williams declared the language in section 105 would effectively override established law in this state and change the rights of employees who have been injured on the same dates. He requested the committee delete section 105. Chairman Krenzer thanked Mr. Williams for his testimony and asked if there was anyone else wishing to testify on S.B. 458. Charles Harrall, Nations Personnel of Nevada, Inc., testified. He spoke in support of the bill, pertaining to the sections on employee leasing companies, as it is written. He does not wish to see it changed. Ms. Krenzer clarified as it stands now, this is the position the committee will recommend. Mr. Williams returned to the witness table. He requested section 5 be deleted. He explained if an insurer is acting in good faith and delivering timely benefits as required the section is not needed. This section would only be used by those insurers or third-party administrators who willfully violate the State Industrial Insurance Act. The section would not prohibit abuse but sanction it, by the leaders the people have elected to office. Chairman Krenzer referred to the amendments for A.B. 61, explaining they provide for fines against employers who violate chapters 616 or 617 of NRS. Mr. Williams reiterated his concern with section 5 of S.B. 458 and also with the possibility of it being adopted into A.B. 61. Paul Aakervik, W.R. Gibbens, Inc., wished to testify on item III, page one, of the work session document. See (Exhibit D). The proposal is to amend chapter 616 by adding a new section. He expressed his concern with the word, "coverage" believing a better word to use would be "liability". Barbara Costello, Dare to Dream Network, came forward. She asked what the legislative body considers "a program" to be, in regard to the sections about vocational rehabilitation. Doug Dirks, general manager of SIIS, replied he is uncertain of the legal definition of "program". He would like to research chapter 616 to see if a definition is given. Chairman Krenzer stated it is language in existing law. Ms. Costello expounded on her concern with the definition of the word "program", emphasizing misinterpretation of the word can result in benefits being denied. Mr. Williams reiterated Ms. Costello's concerns and suggested a "program" be replaced by "rehabilitation services". Being no one else wished to testify on S.B. 458, Chairman Krenzer closed the hearing. The committee then reviewed the amendments, just returned from bill draft, for A.B. 587 and A.B. 552. See (Exhibit E and Exhibit F). Being the committee agreed with them, Ms. Krenzer stated the bills would go to the floor. Being a quorum was now present, Chairman Krenzer attempted to open the hearing on S.B. 128 but was informed the witness who wished to testify was involved in another committee meeting. She explained the next order of business before the committee was to review the work session document, (Exhibit D). Leonard Ormsby, general counsel for SIIS, explained, in regards to item I, the latest recommendation was to retain the original language of S.B. 458, sections 15, 17, 52, and 53, but to delete section 16. Assemblyman Ernaut suggested another subcommittee be formed and a meeting be posted for Thursday in order for all parties interested to be able to review this recommendation. The committee proceeded with item II. Chairman Krenzer pointed out the subcommittee report on confidentiality could be found at the end of the work session document. She explained the subcommittee's recommendations meet the concerns she had as well as those of the other interested parties. ASSEMBLYMAN ERNAUT MOVED TO ADOPT THE AMENDMENTS. ASSEMBLYMAN NOLAN SECONDED THE MOTION. THE MOTION PASSED. The committee then addressed item III of (Exhibit D). Doug Dirks explained there are two provisions of chapter 616 which are effected by his proposed amendment. One is section NRS 616.517 which specifies the composition of a claims management team. He proposed that provision be completely eliminated from the statute which exists in S.B. 458. The second provision is section NRS 616.2225, the last sentence of subsection 4, which reads, "in no event, during any year may the system develop a majority of the plans for programs of vocational rehabilitation for injured employees insured by the system." This provision requires the system send out to private rehabilitation counselors, a majority of its rehabilitation programs. Mr. Dirks explained he would like to see that sentence removed so it will be at the system's discretion as to whether or not a program stays within the system or is referred to an outside vendor. He elucidated this would have no impact on the provision which has a cap of 35 cases per rehabilitation counselor. If the system chose to do vocational rehabilitation, in no event could a counselor handle more than 35 cases. He pointed out there is no requirement the system handle up to 35 cases before it refers to outside vendors. It could refer 100 percent of cases to outside vendors if it chose. Mr. Nolan expressed concurrence with Mr. Dirks' first proposal but has some concern with the second provision. He questioned the probability of the patients being equally distributed amongst private and state vocational rehabilitation counselors, being someone could form a monopoly. Mr. Dirks' replied as the insurer, it should be their discretion as to which cases are referred to outside vendors and which are handled internally. It is a policy issue as to how many cases an individual counselor can handle. He pointed out this body has made a determination of 35 as the cap. He stressed the issue of referring cases is a management decision. At that point, Chairman Krenzer had to step out of the room and so the gavel was passed to Co-Chairman Nolan and the meeting continued in the form of a subcommittee. ASSEMBLYMAN ERNAUT MOVED TO RECOMMEND THE ADOPTION OF THE PROPOSED AMENDMENT TO THE FULL COMMITTEE. Ms. Krenzer having returned to the room, resumed the chair. The motion was reiterated. ASSEMBLYMAN KRENZER SECONDED THE MOTION. Assemblyman Bache expressed his preference of the original language which required 50 percent of the cases be referred to the private sector. THE MOTION TO RECOMMEND CARRIED. ASSEMBLYMAN BACHE VOTED NO. After a brief recess, Chairman Krenzer recognized Nancyann Leeder to present an amendment concerning vocational rehabilitation, item III of (Exhibit D). Nancyann Leeder, Nevada Attorney for Injured Workers, explained this amendment is a result of public testimony before this committee. She stated all interested parties concur with the proposal. Chairman Krenzer asked if Ms. Leeder had any problems to Mr. Aakervik's proposal of changing, "coverage" to "liability". Ms. Leeder suggested stating, "the issue of who the responsible party is." Mr. Aakervik stated this would be acceptable to him. ASSEMBLYMAN ERNAUT MOVED TO ADOPT THE AMENDMENT. ASSEMBLYMAN NOLAN SECONDED THE MOTION. THE MOTION CARRIED. Chairman Krenzer recalled number 1 of item IV, was proposed by the committee. It would delete references to the SIIS board of directors and leave the Governor and the manager of SIIS in charge. ASSEMBLYMAN ERNAUT MOVED TO ADOPT #1 OF ITEM IV. ASSEMBLYMAN KRENZER SECONDED THE MOTION. THE MOTION CARRIED. Chairman Krenzer stated number 2 of item IV, clarifies the Department of Industrial Relations' general counsel will serve as legal counsel for the individual and group self-insurance subsequent injury fund boards. ASSEMBLYMAN ERNAUT MOVED TO ADOPT #2 OF ITEM IV. ASSEMBLYMAN SANDOVAL SECONDED THE MOTION. THE MOTION CARRIED. Chairman Krenzer explained number 3 of item IV, exempts SIIS from state purchasing. Mr. Anderson inquired if this exemption prohibits the system from using the services entirely. Mr. Dirks replied it is his understanding SIIS could use the services of the state purchasing division but it would not be mandatory. ASSEMBLYMAN ERNAUT MOVED TO ADOPT #3 OF ITEM IV. ASSEMBLYMAN SANDOVAL SECONDED THE MOTION. THE MOTION CARRIED. Mr. Ernaut stated numbers 4 and 5 of item IV, are simply deletions because they already exist in A.B. 552. ASSEMBLYMAN ERNAUT MOVED TO ADOPT #4 AND #5 OF ITEM IV. Mr. Anderson inquired if A.B. 552 includes the identical language, including the same effective dates. Mr. Ernaut replied, "absolutely." Mr. Ernaut further explained S.B. 458 will be silent in regards to three-way insurance and the legislative committee. This will prevent any conflicts. Chairman Krenzer reminded the committee there was a motion made by Mr. Ernaut. ASSEMBLYMAN SANDOVAL SECONDED THE MOTION. THE MOTION CARRIED. Mr. Ernaut stated number 6 of item IV is a technical amendment. ASSEMBLYMAN ERNAUT MOVED TO ADOPT #6 OF ITEM IV. ASSEMBLYMAN NOLAN SECONDED THE MOTION. THE MOTION CARRIED. Chairman Krenzer explained with regards to fraud, the committee recommends deleting all provisions in order to eliminate conflicts between A.B. 587 and S.B. 458. ASSEMBLYMAN ERNAUT MOVED TO ADOPT #7 OF ITEM IV. ASSEMBLYMAN NOLAN SECONDED THE MOTION. THE MOTION CARRIED. Moving on to number 8 of item IV, Ms. Krenzer summarized this amendment addresses the AMA Guide. ASSEMBLYMAN ERNAUT MOVED TO ADOPT #8 OF ITEM IV. ASSEMBLYMAN MANENDO SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN ANDERSON AND ASSEMBLYMAN BACHE VOTED NO. For clarification purposes, Chairman Krenzer explained to move on an amendment it takes a simple majority with a quorum present. The committee proceeded to work through the work session document. Mr. Ernaut explained the proposed amendment to A.B. 552 is a provision he recommends the committee not adopt. It was an afterthought being the bill has already had action on it. Chairman Krenzer stated Doug Dirks is requesting this be a floor amendment. Mr. Dirks requested the amendment be withdrawn. He explained it was advanced in error. ASSEMBLYMAN ERNAUT MOVED TO NOT ADOPT THE AMENDMENT TO SECTION 197 OF A.B. 552. ASSEMBLYMAN SANDOVAL SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN KRENZER ABSTAINED. The next item of business before the committee was to address the Senate's amendment #767 to A.B. 61 as well as an additional amendment from Ms. Gruenewald. ASSEMBLY BILL 61 - Revises administrative penalties for violations of provisions governing industrial injuries, occupational diseases and control of asbestos. Barbara Gruenewald, Nevada Trial Lawyers, brought forward her proposed amendment. See (Exhibit G). This amendment to A.B. 61, would clarify that nothing in this amendment would change, modify, or delete any determination of an appeals officer, hearings officer, written settlement agreement or written stipulation. Bob Ostrovsky, Nevada Resort Association, stated he has no problem with the concept of her amendment. He clarified there is a section in this bill which talks about how an overpayment is corrected on behalf of the DIR, if they find such an overpayment has been made. The Nevada Trial Lawyers are concerned this may be misinterpreted to allow the DIR to overturn a decision of an appeals officer or a court of competent jurisdiction. Mr. Ostrovsky claimed this was clearly not the intent of the language and this amendment would correct it. He reiterated it was not the intent to give the DIR any oversight authority over those decisions, but to see the insurer properly paid when such a decision was reached or whether the insurer made a determination on their own. Ms. Gruenewald stressed they are proposing this amendment because they feel there was an unintended ambiguity and it can be easily clarified by adding this amendment. This would be added to section 2 of A.B. 61. Chairman Krenzer asked if there were any questions. There were none. Mr. Ernaut stated he does support the amendment. He suggested the committee not concur on A.B. 61 so the amendment can be adopted in a conference committee. ASSEMBLYMAN ERNAUT MOVED TO NOT CONCUR ON A.B. 61. ASSEMBLYMAN BACHE SECONDED THE MOTION. Mr. Ostrovsky agreed with Mr. Ernaut's recommendation. THE MOTION CARRIED. Being there was no further business before the committee, Chairman Krenzer adjourned the meeting at 6:00 p.m. RESPECTFULLY SUBMITTED: Jennifer Carnahan, Committee Secretary Assembly Committee on Labor and Management June 20, 1995 Page