MINUTES OF THE SENATE COMMITTEE ON COMMERCE AND LABOR Sixty-eighth Session May 5, 1995 The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:00 a.m., on Friday, May 5, 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: Sharon Shaffer, Chairman, State Board of Funeral Directors, Embalmers, Operators of Cemeteries and Crematories. Robert Auer, Senior Deputy Attorney General, Boards & Commission Sections, Office of the Attorney General Robert Crowell, Lobbyist, Farmers Insurance Jim Werbeckes, Legislative Representative, Farmers Insurance George Schindler, Branch Claims Manager, Farmers Insurance Pat Cashill, Lobbyist, Lawyer, Nevada Trial Lawyers Association (NTLA) Mike Hillerby, Lobbyist, Nevada State Board of Pharmacy Diana Bond, Board Member, Nevada State Board of Pharmacy Louis Ling, Deputy Attorney General, Boards & Commissions Sections, Office of the Attorney General Marsha Berkbigler, Lobbyist, Nevada State Medical Association Cecilia Colling, Assistant General Manager, State Industrial Insurance System (SIIS) Douglas Dirks, General Manager, State Industrial Insurance System (SIIS) Harvey Whittemore, Lobbyist, Nevada Resort Association Senator Townsend opened the meeting with a hearing on Senate Bill (S.B.) 355. SENATE BILL 355: Makes various changes to provisions relating to disposition of dead human bodies. Sharon Shaffer, Chairman, State Board of Funeral Directors, Embalmers, Operators of Cemeteries and Crematories, opened with her testimony (Exhibit C) and introduced Exhibit D. Ms. Shaffer went on to interpret her testimony. Discussion continued between Senator Shaffer and Ms. Shaffer with an explanation of various problems the board must contend with. One difficulty stems from the fact that board members travel without compensation, to every funeral home in the state of Nevada, for inspection purposes. Two members of the board are from the private sector and one of these must accompany a member of the funeral industry on these inspection trips with no per diem or any other form of compensation. Ms. Shaffer noted it is possible to contract these inspection trips, however, rates are prohibitive. In answer to questions posed by Senator O'Connell, Ms. Shaffer clarified the purpose of these inspection trips. Further discussion ensued between Senator Regan and Ms. Shaffer concerning the proper storage of dead bodies. Robert Auer, Senior Deputy Attorney General, Boards & Commissions Sections, Office of the Attorney General, then addressed questions posed by Senator Neal concerning separate licenses for separate locations. Senator Augustine, Senator Townsend, Senator Shaffer, Senator Lowden, Mr. Auer and Ms. Shaffer held further deliberation dealing with a fine that might be placed for an infraction of any rule. SENATOR O'CONNELL MOVED TO AMEND AND DO PASS SENATE BILL 355 WITH AMENDMENT NO. 326. SENATOR REGAN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR SHAFFER ABSTAINED FROM THE VOTE.) * * * * * Senator Townsend closed the hearing on S.B. 355 and opened the hearing on S.B. 300. SENATE BILL 300: Allows limitation or denial of insurance claim for medical condition if certain notice or information is not provided to insurer. Robert Crowell, Lobbyist, Farmers Insurance, and Jim Werbeckes, Legislative Representative, Farmers Insurance, came forward to testify on S.B. 300. Mr. Crowell reviewed a proposed amendment (Exhibit E) and gave an explanation. Mr. Crowell went on to note he received a copy of a letter from the Nevada Trial Lawyers Association (NTLA), indicating the NTLA disagrees with language in Exhibit E and will require additional language, obliging the insurance company to divulge the policy limits for an insured prior to any litigation. Mr. Crowell stated, "I'm here to tell the committee that we categorically and emphatically do not accept that amendment." At this time, Mr. Werbeckes entered the discussion, presenting the committee with the purposes of S.B. 300, noting of prime importance, this legislation will allow evaluation of reserves of amounts needed for claims. Mr. Werbeckes continued stating another important purpose is to allow the ability to keep abreast of a claimant's condition. He went on to state, "What we are attempting to accomplish is to obtain the medical records in a timely manner. We believe every 90 days is reasonable. If they (claimants/lawyers) don't want to provide them every 90 days, if they will just give us a medical release, we will be happy to contact doctors/hospitals to obtain those records." Mr. Werbeckes went on to note that basically opening up communications between an attorney representing an individual and the insurance company who is eventually going to end up paying the claim is very important. Senator Lowden asked Mr. Crowell and Mr. Werbeckes if they feel the claims are managed more efficiently, will the price of insurance be lowered. Responding to Senator Lowden, George Schindler, Branch Claims Manager, Farmers Insurance, answered noting, "The price of claims determines the price of insurance." Mr. Schindler continued with his reasons. Senator Neal, Mr. Schindler, and Mr. Werbeckes continued with discussion and clarification pertaining to the basis for this legislation. Next to testify, Pat Cashill, Lobbyist, Lawyer, Nevada Trial Lawyers Association (NTLA), asserted his association favors the proposed amendment, as far as it goes. However, the position of the NTLA is that the proposed language, as written, does not go quite far enough. He went on to express language he feels needs to be included, "A provision requiring the insurer, when it receives a claim, to provide to the claimant the limits of insurance available." Mr. Cashill proceeded with his explanation and requested an addition to Exhibit E, stating, "Upon submission of a claim the claimant is entitled to be advised by the insurance carrier the limits of the coverage." Senator Lowden, Senator Augustine and Mr. Cashill discussed the pros and cons pertaining to knowledge of the amount of insurance coverage available. Answering questions posed by Senator Augustine, Mr. Cashill stated, "The injury to the person is what determines the value of the claim, not the level of insurance." Senator Townsend then closed the hearing on S.B. 300 and opened the hearing on S.B. 385. SENATE BILL 385: Makes various changes relating to practice of pharmacy. Next to testify, Mike Hillerby, Lobbyist, Nevada State Board of Pharmacy, introduced Diana Bond, Board Member, Nevada State Board of Pharmacy and Louis Ling, Deputy Attorney General, Boards & Commissions Sections, Office of the Attorney General. Mr. Hillerby proceeded to review and define S.B. 385. Mr. Hillerby made special mention of portions referring to generic substitution. Ms. Bond addressed this subject, stating she feels the patient needs to be informed if they (the patient) are receiving a generic drug. However, Ms. Bond feels the legislation should not dictate the time when the patient is informed. Ms. Bond asserted she feels it needs to flow with the process of the prescription and to work with the patient. Senator Townsend expressed serious concerns regarding this portion of S.B. 385, noting he feels he cannot support S.B. 385 with this section as it is. Senator Augustine and Ms. Bond continued discussing this section, with Ms. Bond stating perhaps the language needs to be modified. Mr. Hillerby continued with his summary. Senator Augustine voiced concerns over section 6, stating,"I want to make absolutely sure, and I want it on the record, this is not in opposition to the bill we passed on intractable pain prescription, S.B. 298." SENATE BILL 298; Prohibits disciplinary action against physician or osteopathic physician for prescribing or administering certain controlled substances for treatment of intractable pain. Senator Augustine specifically mentioned section 6, item number 2 of S.B. 385. Any prescription for a dangerous drug, regardless of the authorization to refill given by the prescribing practitioner, must not be refilled after 1 year has elapsed from the date it was originally issued and may be refilled only in keeping with the number of doses ordered and directions for use. Mr. Hillerby noted section 6 will not affect that ability. He went on to note for controlled substances, after 6 months that prescription expires and a new prescription will need to be issued. For dangerous drugs, a prescription must be renewed every year. Ms. Bond noted this is federal law. Mr. Ling noted S.B. 385 is legislation affecting the dispensing of drugs and is not found in the pharmacy statute. Marsha Berkbigler, Lobbyist, Nevada State Medical Association, was next to testify, presenting Exhibit F. Ms. Berkbigler voiced concerns over the word "dispense" in S.B. 385. Ms. Berkbigler went on to explain her concerns. SENATOR REGAN MOVED TO AMEND AND DO PASS SENATE BILL 385. SENATOR O'CONNELL SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Townsend noted wording for the amendment is still needed. At this time, Senator Townsend closed the hearing S.B. 385. The next item of business was the hearing on workers' compensation reform proposals. Senator Townsend presented Exhibit G and Exhibit H and proceeded with an explanation. AT this time Cecilia Colling, Assistant General Manager, State Industrial Insurance System (SIIS), came forward with a more thorough explanation of Exhibit H. Further detailed discussion between Senator Townsend, Ms. Colling, and Douglas Dirks, General Manager, State Industrial Insurance System (SIIS) ensued. As there was some confusion regarding Exhibit H, Senator Townsend requested further detailed explanation from Ms. Colling and Mr. Dirks. Senator Regan, Senator Lowden, Senator Neal and Senator O'Connell joined the discussion. Senator Neal requested further explanation of Exhibit H from Ms. Colling. Harvey Whittemore, Lobbyist, Nevada Resort Association, came forward to testify, stating: Senator Neal has accurately depicted a fix, which would be to go back and identify the claims for those claims that were frozen. In 1993 there were 24,042 claims. In 1994 there were 18,888 claims. That would be the group of individuals you would have to give a retroactive payment back, if you were to go back and undo the freeze which was imposed in 1993. ............It is clearly a policy decision as to whether you, by virtue of simply removing the freeze, you want to create a notch baby problem, or whether you solve it by retroactive, or whether you go forward. Senator Townsend then referred to Exhibit I. Mr. Whittemore noted this language is not in the proposed legislation. SENATOR NEAL MOVED TO MAKE THE FREEZE RETROACTIVE AND PICK UP THE GROUP. SENATOR LOWDEN SECONDED THE MOTION. Once again, Mr. Whittemore spoke for the record: The proposal to retroactively reverse the freeze would be something we would adamantly oppose. In order to obtain further information, Senator Neal withdrew his motion. 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 May 5, 1995 Page