MINUTES OF THE SENATE COMMITTEE ON COMMERCE AND LABOR Sixty-eighth Session April 12, 1995 The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:30 a.m., on Wednesday, April 12, 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 Vance Hughey, Senior Research Analyst OTHERS PRESENT: Ron Swirczek, Administrator, Division of Industrial Relations Douglas Dirks, General Manager, State Industrial Insurance System (SIIS) Cecilia Colling, Assistant General Manager, State Industrial Insurance System (SIIS) Donna Sweger, Supervising Attorney, Nevada Attorney For Injured Workers Danny Thompson, Political Director, American Federation of Labor/Congress of Industrial Organizations (AFL/CIO) Lenard Ormsby, General Counsel, State Industrial Insurance System (SIIS) Senator Townsend opened the meeting with the introduction of an amendment by Senator Neal to Senate Bill (S.B.) 128. SENATE BILL 128: Authorizes agreement that prohibits former employee from pursuing certain competitive activities. Senator Neal announced S.B. 128 will be amended to delete wording on line 22. Senator Neal went on to state the new language will now read, "If the agreement is supported by valuable consideration and is otherwise reasonable in its scope and duration." SENATOR NEAL MOVED TO AMEND AND DO PASS S.B. 128. SENATOR O'CONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * First to testify Ron Swirczek, Administrator, Division of Industrial Relations, noted language for proposed legislation is almost complete. Next to testify, Douglas Dirks, General Manager, State Industrial Insurance System (SIIS), stated there is information still needed for proposed legislation. At this time, Senator Townsend, addressing Mr. Dirks, referred to Exhibit C and Exhibit D, giving an explanation, noting in Exhibit D, an affidavit from John W. Taylor, which addresses "reciprocity." According to Senator Townsend: (Mr. Taylor feels) he addresses, in what he thought would be the appropriate way to deal with it, that being a potential retroactivity. .............he is making a recommendation that 14a (referring to Exhibit C) be dealt with, which is that nothing shall be retroactive. Senator Townsend continued to Mr. Dirks: In your discussion with us, you speak specifically to your ability to apply retroactivity to certain areas of the law, specifically if someone reopens a claim, medically, can they be placed in an Managed Care Organization (MCO) type of care. Is that a fair characterization? Mr. Dirks replied in the affirmative. Senator Townsend then addressed the generic problem of retroactivity. He continued to Mr. Dirks: The trial bar has asked for 14a (referring to Exhibit C) which would prohibit applicability retroactively of any portion of any of our statutes. You have asked specifically in several cases; (especially) the MCO issue. Do you have a list of things you would like to see applied retroactively? Senator Townsend inquired if Mr. Dirks thought the committee needs to make that determination statutorily, or is Mr. Dirks looking for a more general application. Mr. Dirks replied to the best of his recollection the main circumstance will be the ability to reopen into managed care. Mr. Dirks continued, stating it might go to the method of treatment as opposed to the amount of benefit conferred on an injured worker. Senator Townsend went on noting to Mr. Dirks, The prospective nature to present SIIS legislation and managed care would say that anyone injured prior to the date would have the right to continue under present legislation statutes. It is your contention since a claim closes medically then that would trigger a new opportunity or a new claim medically in order to get around the retrospective problem. Mr. Dirks noted there is a different set of circumstances than the original date of the injury. He went on to note the benefit is not being altered, the method of treatment accessed through the system is being altered. Mr. Dirks stated it is preferable to have specific authority to handle this. Senator Townsend, Mr. Dirks and Cecilia Colling, Assistant General Manager, State Industrial Insurance System (SIIS), went on with a discussion regarding problems associated with reopening a claim. Next to testify, Donna Sweger, Supervising Attorney, Nevada Attorney For Injured Workers, noted her associate feels Proposal 14a of Exhibit C, is unnecessary. Ms. Sweger went on to state she believes, perhaps with the exception of MCOs, the law should not be applied retroactively for reopening (claims). Ms. Sweger noted she feels laws applying at the time of a claim's first initiation should apply. When claimants reopen a claim they should not be under a new law that was not in effect when the claim was originally filed. Senator Townsend stated the committee is trying to be sure what a claimants' rights are. This is difficult since there are multiple issues arising. Senator Townsend, Ms. Sweger, Ms. Colling and Mr. Dirks discussed further problems connected with reopening a claim. Answering an inquiry posed by Senator Townsend regarding the number of new claims during a year, Mr. Dirks answered "accepted new claims, about 49,000," noting most were probably active. Senator Neal and Ms. Sweger discussed possible problems connected with reopening claims and what rules may apply. Senator Neal noted he has concerns with the fact that claimants may not retain their benefits when a claim is reopened. Mr. Dirks noted SIIS is applying the same standard to all reopened claims, regardless of the date of injury. Senator Neal and Ms. Colling held an in-depth discussion on policy as it pertains to claims that might occur when a claimant has a low (below $500) claim, then after an expiration period may need to reopen. Ms. Colling stated she thinks this is an acceptable policy and gave her reasons. Ms. Sweger entered the discussion noting exposure to a disease that may not manifest itself till a long period of time has passed, poses a real problem. Ms. Sweger noted since symptoms may not be evident till many months or years after an expiration date, these claimants will not be able to reopen their claim. Ms. Colling noted with a work related exposure case, if there are symptoms of certain diseases, i.e., acquired immunodeficiency syndrome (AIDS) or Tuberculoses (T.B.), the claim will not be closed. Senator Townsend expressed the thought that a representative from Ms. Sweger's organization/office may want to communicate with representatives from SIIS to make sure people who demonstrate their disease/exposure is job related have a means of recourse. Danny Thompson, Political Director, American Federation of Labor/Congress of Industrial Organizations (AFL/CIO), came forward to give his views on retroactivity. Lenard Ormsby, General Counsel, State Industrial Insurance System (SIIS), noted: The Nevada Supreme Court has ruled the right to compensation, the right to benefits under SIIS, is not by contract, but evolves by statute. It is also ruled at the time of injury the right to compensation vests. The issue, and we are litigating this in federal district court and state courts right now is,................if you reopen a claim and you are in an MCO network you go to the MCO. Mr. Ormsby continued his comments. Senator Townsend referring to Exhibit D, made comments about retroactive changes in the law regarding compensation. Senator Neal and Mr. Ormsby proceeded with a discussion on the rights of a claimant regarding the reopening of claims. Mr. Ormsby went on to note "you have the right to compensation and our position is, the choice of treating physician is not part of the compensation that vests at the time of the injury." After a discussion between Ms. Sweger and Senator Neal on problems connected with reopening of claims and retroactivity, Senator Townsend summarized. He stated, ".......... The system is arguing the law is very clear on benefits [that then] cannot be tampered with retroactively if it is compensation, but it is unclear if it is for other things." Ms. Sweger, Senator Neal and Mr. Dirks continued with their discussion. Voicing concerns, Senator Shaffer noted: It's obvious there is a lot of debate over policy we feel has been established. We are trying to get to the bottom of this whole thing ...... it seems we are walking away from something leaving the opportunity for extended litigation that should not even be existing. We should be addressing it right here before it goes to the courts to be decided. Senator Townsend concurred, noting there needs to be a definitive answer. Ms. Sweger noted there may be issues where her organization will feel the need for litigation, since many claims will preclude any new legislation. Senator Townsend remarked he feels those in the SIIS organization and others involved should bring language they feel is appropriate before the committee so hopefully some agreement will be forthcoming. He then observed: Every issue that is argued on behalf of a claimant or every issue that ultimately gets back to you (SIIS) that is argued on behalf of a claimant, we can't deal with every case. We have to figure what a policy is that can be applied to those cases. Mr. Ormsby stated he will contact representatives of Ms. Sweger's organization to draft appropriate language for presentation to the committee. There being no further business, the meeting was adjourned at 10:25 a.m. RESPECTFULLY SUBMITTED: Beverly Willis, Committee Secretary APPROVED BY: Senator Randolph J. Townsend, Chairman DATE: Senate Committee on Commerce and Labor April 12, 1995 Page