Legislature(2001 - 2002)
03/14/2002 01:35 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 274- WORKERS' COMP: HEARING/MEDICAL EXAM
CHAIRMAN STEVENS announced HB 274 to be up for consideration.
MS. RENIEVA MOSS, Staff to Representative Coghill, said that HB
274 does two basic things.
It changes a statute that currently requires a
physician who performs an IME to reside in the state
that he is licensed in. HB 274 changes it so that he
would be required to be licensed in the state that he
performs the examination in. The second thing it does
is provides that if an injured worker has a medical
condition that is not receiving medical treatment, that
injured worker can request an expedited hearing from
the Workers Comp Board. At the point of that request,
it would be up to the staff of Workers' Compensation to
determine if there is a need for medical attention and
if they make that determination, they may schedule an
expedited hearing. Under the existing system, an
average hearing takes about 138 days to be heard. If
there is a medical condition that needs medical
attention, 138 days can make a lot of difference in
whether or not that injured worker will recover. It
just gives the Workers' Comp. Board a mechanism to
prioritize Workers' Comp. cases and to expedite
hearings if medical attention is not being received.
MS. BARBARA WILLIAMS, Alaska Injured Workers Association, urged
them to reconsider the amendments they have requested.
The offerings that you have made to workers are very
inadequate. I would like offer you some information so
that you can make some informed changes that will
benefit workers and not insurers. Workers understand
the need the insured employers have to have the right
to examine workers by their own doctors. We understand
insurers and employers want and need a second opinion.
This would be an excellent check and balance if the
language were adjusted to indicate more protection for
workers. What that would look like is a licensed
physician licensed in the state of Alaska. Licensing
held in Alaska [indisc] for Workers' Compensation. When
we leave the state and we use physicians outside the
state, they do not know the requirements for Workers'
Compensation under the state. This would mean that
physicians flying to Alaska must be licensed to
practice in this state. Additionally, physicians not
licensed outside the state would provide [indisc] proof
of license and bond in the state in which the
examination occurs. Any sanctions must be noted and the
workers informed before the examination commences. A
panel of physicians must be approved by the Alaska
Workers' Compensation Board before an employee would
have to submit to this examination. Right now in their
second independent medical process they have over 40
doctors. That's the most doctors they have ever had in
a panel since I've been working with workers informally
for four years and over the fifteen years I have
actively been doing this.
Most workers are subject to panels of physicians with
many different specialties. Currently, workers do not
have the ability to appoint panels of doctors. In the
mean time, the workers are subject to [indisc] mental
psychiatric examinations and have no idea that they're
being seen for these types of mental diagnosis. There's
also no legal requirement for anybody to produce or
read our medical records for injured workers. Often
insurers hire nurse case managers to summarize the
medical records or pass the information along to the
independent medical examiner. We have found through
independent research that workers have questioned these
doctors and discovered the independent medical
evaluators had never looked at their records in some
cases. The legal requirement is only attached for the
Board to have to arrange for the second opinion that
the employer pays for.
A little known fact about this is that the fees and
services are under the reasonable and customary fees
schedule and an opinion only has a billable rate of
$350. Any other fee must be approved by the Board. If,
in fact, the insurers [indisc] fees that begin at
$1,200 and are moving up into the tens of thousands of
dollars.
Ensurers are able to manipulate the medical care the
injured workers receive. There is currently no
protection for workers in this area.
There needs to also be a legal requirement that all the
records that will be relative the client be reviewed by
the independent medical evaluator. There is currently
no such regulation for independent medical evaluators.
If an employee refuses an examination, a hearing should
be held to conclude if the employee had a good reason
for not submitting to the examination. In some cases
that I'm very familiar with, employees have to struggle
to fight to get childcare if they don't have someone to
take care of their children while they must leave the
state for these independent medical evaluations.
MS. WILLIAMS also explained that people with little
cognitive brain injuries could experience barriers such as
reading, language and cultural barriers absolutely have no
protection and they have found that Alaska has the lowest
paid attorneys representing employees.
CHAIRMAN STEVENS informed her that she was addressing issues
outside of the bill that was before the committee.
MS. WILLIAMS concluded that she didn't support the legislation
because it doesn't offer adequate protection for workers.
2:50 p.m.
MS. LAURA JACKSON, Claims Manager, University of Alaska,
said that HB 274 proposed two changes to the Workers
Compensation Act.
The first is that all physicians performing an
examination requested by the employer or the board be
licensed to practice medicine in the jurisdiction in
which the examination occurs. Although this requirement
does not impose that same requirement on the employee,
I could think of no adjuster or board member who would
object to this requirement. On the contrary, it is in
the best interests of all [indisc]…
The problematic area of the proposed amendment is
section 2 regarding the expedited hearings. It has been
noted that the Board does not have a member with
medical expertise. I believe it would be extremely
difficult to find a competent medical expert willing to
volunteer this significant amount of time for the work
this amendment would generate.
During public testimony, Paul Grossi, the Director of
the Alaska Workers Compensation Board, advised the
Board it relies on a lot of medical expertise involved
[indisc]. "Doctors' testimony and doctors' reports and
doctors' depositions." I would like to point out the
expedient time frame would preclude the development and
provision of such information for the board's use and
consideration. In other words, they would only have the
information from the employee's doctor with no
independent inputs - not even from the boards own
independent examination.
According to statistics generated by the Alaska Workers
Compensation Board, the vast majority of work comp
claims are handled quickly by adjusters. There is only
a very small percent, possibly about 1%, where a
concern arises regarding coverage. I might note in the
Act it requires clear evidence in the possession of the
adjuster in order to controvert a claim. If the
coverage is clearly questionable, how can the employer
now be denied their due process? For that is exactly
what is being proposed in this amendment. This will
increase litigation by denying the adjuster the
opportunity to have an independent medical evaluation
that can clear up the issue and allow continued
coverage without litigation and by encouraging
countless more cases to have expedited hearings
followed by inevitable appeals. The cost of this
amendment is incalculable.
First, the Board will have a greatly increased workload
to handle these hearings and the litigation, which will
follow. Second, the employer will be forced into what
may have been the unnecessary litigation of a hearing
and possible appeal. This would have a devastating
impact on the cost and availability of Workers'
Compensation Insurance in the state of Alaska.
I have been here during a number of ups and downs in
the insurance market. Post [indisc] Workers'
Compensation Insurance has become so expensive that
it's nearly unavailable already, especially to small
employers. I am convinced the increased cost of claims
caused by the amendment will have a devastating affect
on the availability of insurance and the ability to do
business and employ workers in the state of Alaska.
Finally, may I ask you to imagine for a moment that you
go home tonight and hear a knock on your door. You open
the door to find a person there wearing a neck brace
and with their arm in a sling. They hand you some
papers and tell you, 'I fell in your driveway on
Tuesday. No one was home at the time. I wanted to let
you know that I'm injured and by the way there will be
a trial regarding it in two weeks.' Do you think you
would be ready? Do you think you would have due
process? Thank you.
MS. JACKSON concluded that she was speaking against the expedited
hearings in section 2.
MR. DAVID TWEDEN said he is an injured worker and wanted to
comment on the independent medical evaluations. In his case there
was a big difference in opinions on his percentage of impairment
and he thought there should be some sort of checks and balance to
see if the injured worker was favored or the insurance adjuster.
"The fees should be customary and usual, not the insurance
adjuster paying these independent doctors a huge amount of
money."
CHAIRMAN STEVENS said he appreciated his comments about the
independent evaluators.
MR. TWEDEN added that he knows from his first independent medical
evaluation that the doctor was from Oregon and flies to Alaska
all the time to do the independent medical evaluations. He didn't
know if he was licensed to practice in the state and that should
concern everybody.
MS. MURLENE WILKES said she has been a licensed Alaska adjuster
since 1965 and has grave concerns over section 2. She said that
Mr. Grossi has assured everyone that this section would be
applied in a very limited fashion and carefully. She didn't see
any reason to add that section and objected to the broad based
language, which appears to circumvent the intent of AAC 45.070.
She understands it was recommended because in some cases failure
to authorize medical treatment has caused physical harm to an
employee. She reminded them:
The ability to deny a controversial work place incident
injury has become just next to impossible and to
controvert a claim requires "substantial evidence
supporting the position of the controversion.
MS. WILKES said that even though the definition of injury under
AS 23.30.395 does not include mental injury or mental stress, now
because of the Harris Eastlake versus State of Alaska case, they
just simply cannot deny mental claims without going through
extremely costly investigation and medical testing. While that is
going on, they have to pay.
She said that most employees have decent health coverage, but
those who don't often have VA benefits or qualify for Medicaid.
If the claim is controverted, these other systems will kick in
once they receive a copy of the controversion notice. If the
controversion is overturned, those payments are reimbursed.
I feel the amendments along with recently passed
regulations on hearings is simply a matter to create
work for a second and new panel of board positions in
Southcentral.
She noted that a number of big decisions came down from the board
in 2000 and 2001 - Gary Richardson v. University of Alaska
Fairbanks, Devita Gray v. State of Alaska, Laurie Walters v.
State, to name a few.
MS. WILKES said that the board members are not medical
professionals and, "To assume that they could make a
determination of physical harm seems in credulous to me."
She urged them to not pass the bill, but if they did, to make it
absolutely clear.
MS. SUSAN DANIELS, Northern Adjusters, said that they are
concerned on behalf of their insurers with the conflicts that
exist with section 2 and the existing provisions of Workers Comp.
Act and regulations in terms of the discovery. They are concerned
about the cost to employers and the board to add staff and to be
such a broad presentation. She urged that the legislature oppose
this section and at least reconsider specifying a much narrower
focus. Once a claim is disputed, there needs to be enough
testimony and research for the board members to make an educated
decision of what's at stake.
MR. TIM MCKEEVER said he is an attorney who works with a law firm
who works with a lot of employers and Workers' Compensation
cases. He was concerned about section 1 because it is superfluous
and opposed section 2.
The Medical Board in this state already believes that
an IME doctor who does an independent medical
examination in the state has to be licensed in this
state and I believe they have communicated that fact to
the Workers' Compensation Board. I would encourage the
committee to enquire of the State Medical Board if they
believe the doctors who do I.V.s for the state have to
be licensed. I think you find that they do and the
first section is therefore unnecessary.
MR. MCKEEVER thought:
The second section denies due process to employers
because an expedited hearing would be held in a fashion
that does not permit employers to have or take
advantage of procedures that the legislature has
previously enacted which would allow for example the
employer to get medical records, to obtain a release
from the employee, to obtain an independent medical
evaluation or if there's a dispute between the
employee's doctor and the employer's doctor, to obtain
a second independent medical examination. It is
virtually impossible for an employer to defend a claim
on very short notice without having due process to be
able to conduct appropriate investigation. The
standards in the act are also very low. It would simply
require a statement from a physician that a person
needs medical treatment or they will suffer physical
harm and that is all it would take under this bill for
them to have an expedited hearing.
MR. MCKEEVER said that if an expedited hearing results in a
payment of medical treatment, under the current version of the
Act, the only remedy an employer has to recover overpayment of
improperly paid Workers' Compensation benefits is to recover them
from future payments that are paid to the same claimant. If that
claimant is not entitled to those future benefits, there's no way
to get back the cost of the care that's been provided. "The
employer could be paying $50 or $60,000 for a surgical procedure
and never be able to get that money back. I think that's a
concern."
MR. MCKEEVER continued:
HB 274 upsets the balance that the legislature has
reached over years of tweaking the Workers'
Compensation Act. It tilts that balance unfairly in
favor of the injured worker and deprives employers of
the right of due process and the right to effectively
defend themselves. Let me conclude by saying I think
there may be cases, and I'm not familiar with any even
though I've been doing this for 20 years, where an
injured worker has been denied medical care that has
resulted in permanent physical harm to that injured
worker. But if the legislature, after deliberate
consideration, determines that is a problem, that there
are people who have been deprived of medical care that
they really need to have, then I think there are
alternatives to this legislation that would protect the
rights of employers and protect the rights of
employees. Those alternatives include, as has been
mentioned, to explore other options for payment, such
as private health insurance, V.A., I.H.S. benefits -
all of which have the right to get repaid if the Comp
carriers are determined to be responsible. So
alternative forms of payment should be explored.
Another alternate may be the Second Injury Fund, which
is a fund that exists under the jurisdiction of the
Department of Labor, which is paid for by
contributions, donations, taxes perhaps on benefits
that are being paid. It is very possible to set up a
system by which the Second Injury Fund would be
required to advance the cost of emergency and urgently
needed medical care and then to have the insurance
carriers pay the Second Injury Fund back if it's
determined that the claim is compensible.
Fundamentally, the standard needs to be higher. It
shouldn't just require an injured worker to come in and
say or have a doctor say that there's a risk of
physical harm. It should be a risk of significant
permanent physical harm rather than relatively miner
risk, given the lack of due process that an employer
would have under this section if it's enacted. I think
the standard for getting emergency hearings needs to be
substantial. This bill would change the economics of
Workers' Compensation….
TAPE 02-12, SIDE A
3:12 p.m.
MR. MCKEEVER concluded by urging them not to enact section 2 of
HB 274, but encouraged them to explore options.
MS. KATHY COLLINS, Claims Administrator, ARECA Insurance
Exchange, said they are an insurance company for electrical and
telephone utilities through the state of Alaska and has 22
members. She said the ARECA is also concerned with section 2 for
all the previously stated reasons. Based on her 18 years of
experience as a claims adjuster, she could not think of any cases
where physical harm resulted to an injured worker because she had
denied medical treatment.
My experience is that in cases where there's serious
physical harm that's imminent, those cases are clear-
cut because they are usually tied to traumatic injury
and it's obvious the injury is work related.
The issue of authorization for medical care often times
arises in cases where the relationship to the condition
or injury is not clear and by their very nature, these
cases require expert medical review often by the
injured worker's physician, the independent medical
evaluators who have to buy the insurance carrying the
employee and often by the [indisc] process.
Calling the Board to schedule an expedited hearing when
the injured worker is requesting medical care doesn't
allow the employer due process…
She summarized:
It's my experience that the situation for which this
amendment was formulated happens very rarely and in
complicated cases, which need time for preparation.
Furthermore, the amendment is ambiguous and wordy as to
what constitutes physical harm to the injured worker.
MS. CLAIRE HIRATSUKA, Claim Manager, Umialik Insurance Co., a
small company owned by the North Slope Native Corporation, said
she couldn't think of a case where an employee suffered because
they were denied medical treatment, but several times she has
scheduled a second opinion. She has been thanked by employee who
has had another treatment suggested during an IME and has
benefited from it. She didn't know how a board of non-medical
people would have the competence to decide on medical treatment.
MR. MIKE KLAWITTER, Director, Risk Management, Anchorage School
District, said they have about 5800 employees which they self-
insure Workers' Comp for. "I believe HB 274 substantially impacts
the Anchorage School District in a negative way."
He echoed previous comments regarding the section 2 expedited
hearings. It negatively impacts the school district and gains
very little for an employee. The physician licensing is also
redundant and unnecessary.
MR. PAUL GROSSI, Director, Division of Workers' Compensation,
said they support this bill, which is just minor changes.
SENATOR TORGERSON asked him to comment on section 2 not providing
a fair opportunity for one of the other parties have their own
doctors look at them or prepare themselves for a hearing.
MR. GROSSI replied that occasionally a claim is filed for an
injury that occurred a while back and there is need for
discovery, but in the vast majority of cases, the employer files
a controversion on a claim denying a particular treatment.
For a controversion to be valid, they have to have
medical evidence or some legal basis for that. I don't
understand completely the denial of due process since
the employer wouldn't have denied the benefits in the
first place, unless they had done some basic discovery
on medical treatment in order to deny the treatment in
the first place. There may be some instances, but a
relatively small number of those cases.
MR. GROSSI explained:
Basically, the employee gets injured, they file an
injury report, they go to a doctor and gets treated,
the employer can pay or not pay it and if they are
questioning the claim, they'll have the person examined
by a doctor of their choice. Choice is what we've heard
some testimony on and then they can either pay or deny
the claim or the treatment or the various benefits that
would surround that. That is they way the vast majority
of the cases are dealt with.
He pointed out that the law doesn't say that you have to have an
examination.
SENATOR TORGERSON asked if this only applied to disputed claims.
MR. GROSSI replied yes and that in the vast majority of cases
controversions are not filed. A small portion of claims are
denied and those denials have to be based on evidence or a legal
basis.
SENATOR TORGERSON asked if they have expedited hearings now and
if they do, what criteria would it fall under as far as
notification. "What does expedited hearing actually mean?"
MR. GROSSI replied that he didn't think the board would rely on
its own prognosis or diagnosis, but would rely on medical
evidence and reports before they set a hearing. The hearing would
have some preferential treatment over other standard types of
cases.
SENATOR TORGERSON asked if that should be explained in the bill.
"Should we put a timeline in here to make sure that all that's
covered?"
MR. GROSSI replied that the designee would only be determining
whether the expedited hearing should be scheduled, not
determining the underlying decision as to whether these medical
benefits should be allowed or not.
SENATOR TORGERSON asked what would happen if they deleted "upon
request by a party" and inserted "on request by both parties".
MR. GROSSI replied, "If both parties are requesting it, then the
payment could be made."
SENATOR TORGERSON asked if this was a disputed claim and the
Board is helping to negotiate liability.
MR. GROSSI replied that mostly there would be a dispute or
denial, so one side would want a hearing.
SENATOR TORGERSON asked what putting "serious physical harm"
would do instead of just "physical harm".
CHAIRMAN STEVENS pointed out that someone mentioned "permanent
harm".
MR. GROSSI said that would indicate what level of harm they
should be looking for. He said that all cases are important to
the individuals, but sometimes some cases need to be heard sooner
than others for many different reasons. This gives the Board a
tool of being able to make those kinds of distinctions between
cases.
MS. MOSS commented that this bill was heard in the House Labor
and Commerce Committee where approximately 15 people testified in
favor of the bill. It passed the House unanimously.
When an employer files a controversion, they do have
the medical information to base that controversion on.
So, the medical information is available for an
expedited hearing. All this intended for is to give
Workers' Comp a vehicle to address, and I don't think
Representative Coghill would have a problem with adding
the word "serious" to address injuries that are not
getting medical attention.
As far as the Medical Board is concerned, they may
think this is redundant, but the fact of the matter is
that the law does state that the physician only has to
be licensed in the state in which he resides.
CHAIRMAN STEVENS said that the bill needed more work before it
could pass for committee. He thought both parties agreeing to an
expedited hearing had merit.
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