MINUTES OF THE SENATE COMMITTEE ON COMMERCE AND LABOR Sixty-eighth Session March 28, 1995 The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:30 a.m., on Tuesday, March 28, 1995, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Randolph J. Townsend, Chairman Senator Ann O'Connell, Vice Chairman Senator Sue Lowden Senator Kathy M. Augustine Senator Raymond C. Shaffer Senator John B. (Jack) Regan Senator Joseph M. Neal, Jr. STAFF MEMBERS PRESENT: Beverly Willis, Committee Secretary Scott Young, Senior Research Analyst OTHERS PRESENT: Larry Zimmerman, President, CDS of Nevada Barbara Gruenwald, Attorney, Nevada Trial Lawyers Association Bryan Nix, Senior Appeals Officer, Department of Administration Doug Dirks, General Manager, State Industrial Insurance System (SIIS) Marsha Birkbigler, Lobbyist, Nevada State Medical Association Lenard Ormsby, General Counsel, State Industrial Insurance System (SIIS) Jerry Turman, Worker Kay Armstrong, Attorney, Nevada Trial Lawyers Association Senator Townsend opened the meeting by reminding the committee of a work document covering material to be covered at a future meeting. The next item of business was for a committee introduction providing for the repeal of certain sections of Senate Bill (S.B.) 434 of the Sixty-seventh Session. SENATE BILL 434 Provides for licensing of administrators of residential or OF THE SIXTY- facilities for groups. SEVENTH SESSION: SENATOR NEAL MOVED FOR THE COMMITTEE INTRODUCTION FOR THE REPEAL OF CERTAIN SECTIONS OF S.B. 434 OF THE SIXTY-SEVENTH SESSION. SENATOR REGAN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Referring to Proposal 20 of Exhibit C, Larry Zimmerman, President, CDS of Nevada, was first to testify. Mr. Zimmerman gave clarification, noting exclusive remedy provides a no-fault system for both employer and employee. He noted the trade off is the employer pays all benefits and the employee gives up his right to sue the employer. Mr. Zimmerman went on to state this system is designed to do away with costly litigation. Mr. Zimmerman continued, giving further views on exclusive remedy. He went on to note at present, workers' compensation, provides through statutes and regulations, the type and amount of benefit to which an injured worker is entitled. Mr. Zimmerman proceeded with an explanation of the appeals process. He went on to state he feels if the committee feels the injured worker has other benefits to which he/she is entitled, this should be outlined in a statute. After a discussion with Senator Neal, Mr. Zimmerman reiterated his belief this particular issue should be dealt with by statute. Barbara Gruenwald, Attorney, Nevada Trial Lawyers Association, was next to testify. Ms. Gruenwald, referring to Proposal 20 and the Falline case, stated the Falline case depicts, "Refusal, intentional refusal, or failure to pay benefits [and] is not covered by the exclusive remedy." Ms. Gruenwald went on to state, "This intentional refusal to pay benefits should not be allowed to be covered by the exclusive remedy." Senator Regan noted, "The committee is looking for an alternative solution to litigation for the appeal hearings offices situation, part of the exclusive remedy. What if we were to eliminate the hearing officers and go to mediation." Senator Townsend responded by reading from material provided by Scott Young, Senior Research Analyst, regarding mediation. Bryan Nix, Senior Appeals Officer, Department of Administration, noted he feels the present hearings system is as efficient as a mediation system, giving his reasons. Further discussion continued between Senator Regan and Mr. Nix. Mr. Nix noted his department hears cases from a variety of departments; however, a greater volume from workers' compensation. At this time, Senator Townsend, noted the Department of Administration is an independent agency that serves all the state. Marsha Birkbigler, Lobbyist, Nevada State Medical Association, addressed the next item, Proposal 67 of Exhibit C. Ms. Birkbigler stated it is her hope this proposal will be amended by regulatory procedure. Ms. Birkbigler presented Exhibit D, referring to Proposals 68, 69, 70 and 71. Senator Regan questioned the possibility of electronic transfer being used, stating he feels this might eliminate unnecessary paper work. Ms. Birkbigler and Senator Regan had further discussion regarding electronic transfer. Senator Townsend, Senator Regan and Ms. Birkbigler had further discussion on Proposals 68, 69, 70 and 71. Senator Neal and Ms. Birkbigler discussed the problems arising when Managed Care Organizations (MCOs) are removed from the provider list, but are not informed. Ms. Birkbigler expressed her concerns on this issue, as well. The next item to be addressed, Proposal 72, was dealt with by Douglas Dirks, General Manager, State Industrial Insurance System (SIIS) Mr. Dirks noted this subject will be taken up at a meeting with MCOs and hopefully, a standardized protocol governing physical therapy will be achieved. Senator Townsend then introduced discussion on Proposal 76, again questioning Mr. Dirks, who stated this item is also planned for review at the scheduled meeting with MCOs. Senator Townsend and Mr. Dirks had a detailed discussion regarding various problems and solutions that might appear as time progresses. Senator Neal queried Mr. Dirks whether SIIS has enough authority to deal with MCOs referencing the many items (Exhibit C) that are a concern to doctors, as well as others, or will a general provision in the law give SIIS enough authority to manage this in terms of contractual arrangements. Mr. Dirks replied he feels SIIS has the ability to handle these situations contractually. He noted he feels SIIS has the flexibility and negotiating clout to make arrangements with organizations. Senator Neal asked if Mr. Dirks feels he has the authority to take care of all problems addressed in Exhibit C, Proposals 1 through 77. Mr. Dirks replied he feels he has the contractual ability to accomplish this on most proposals. Proposal 77 of Exhibit C was the next item to be dealt with. Mr. Dirks noted he feels this proposal can be addressed contractually. Mr. Dirks and Senator Townsend reviewed Proposal 10. Mr. Dirks noted this proposal is not one SIIS had proposed. Senator Neal and Senator Neal explored various problems and advantages of this proposal. Senator Townsend then opened the hearing on Proposals 14a and 61, stating he wants to deal with these proposals together. Mr. Dirks, referring to Proposal 61, explained if a claim has closed then needs to be reopened, the claim reopens in a managed care environment. Mr. Dirks explained they (SIIS) believe managed care is a good program and should continue and is in the interest of all the parties. Senator Neal inquired if benefits would be reduced in any way, if an injured worker reopens a claim that initially was not under any type of managed care organization. Mr. Dirks stated it should not; Proposal 61 will simply change the manner in which the medical component of the claim is handled, but will not alter entitlement to a benefit. At Senator Townsend's request, Mr. Dirks stated he will provide figures on the number of people this might affect. Proposal 14a, which will according to Senator Townsend overlap Proposal 61, was discussed next. Senator Townsend and Senator Neal, expressed concerns on the meaning of Proposal 61. Next to testify was, Lenard Ormsby, General Counsel, State Industrial Insurance System (SIIS). Mr. Ormsby clarified and gave an opinion on Proposal 14a. Jerry Turman, Worker, representing himself, testified next giving an account of his problems. Mr. Turman was assisted by Kay Armstrong, Attorney, Nevada Trial Lawyers Association. There being no further business, the meeting was adjourned at 10:30 a.m. RESPECTFULLY SUBMITTED: Beverly Willis, Committee Secretary APPROVED BY: Senator Randolph J. Townsend, Chairman DATE: Senate Committee on Commerce and Labor March 28, 1995 Page