Legislature(2005 - 2006)BELTZ 211

03/22/2005 01:30 PM Senate LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 137 EVICTING INSTITUTIONAL PROPERTY USERS TELECONFERENCED
Heard & Held
*+ SB 140 BAN INTERNET SPYWARE TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
+= SB 130 WORKERS' COMPENSATION TELECONFERENCED
Heard & Held
                  SB 130-WORKERS' COMPENSATION                                                                              
                                                                                                                                
CHAIR CON BUNDE announced SB 130 to be up for consideration.                                                                    
                                                                                                                                
BARBARA  WILLIAMS,  Alaska  Injured  Workers  Alliance,  did  not                                                               
support SB  130, because rolling back  the rates would lead  to a                                                               
bigger shortage of physicians to  treat injured workers. Further,                                                               
she said  it didn't address  the problems with the  fee schedule.                                                               
Some  health care  providers  the Alliance  surveyed  hold a  fee                                                               
schedule and  regularly have their  bills reduced below  the rate                                                               
set out in it. She stated:                                                                                                      
                                                                                                                                
     This  would mean  that  globally,  if insurance  review                                                                    
     companies  are reducing  payments,  there  is no  clear                                                                    
     idea of how much a  company is saving on medical costs.                                                                    
     What it  does reveal  to us is  that the  medical costs                                                                    
     are already being  cut. It also tells us  that not only                                                                    
     are  insurance companies  saving  money,  but they  are                                                                    
     providing  little  information  on what  those  savings                                                                    
     might be.                                                                                                                  
                                                                                                                                
     We  also  have  no   enforcement  of  the  current  fee                                                                    
     schedule.  It  would appear  that  there  is more  cost                                                                    
     shifting  here than  enforcement  of  this current  fee                                                                    
     schedule.  We need  reliable  data  and information  to                                                                    
     address these costs.                                                                                                       
                                                                                                                                
Her survey has information from an audit review indicating that                                                                 
the bills are being reduced at Providence Hospital. Regarding                                                                   
medical benefits, she said:                                                                                                     
                                                                                                                                
     We do not  believe that a preferred provider  list or a                                                                    
     drug   list   would   be   appropriate   for   Workers'                                                                    
     Compensation. This  further limits  the care  and drugs                                                                    
     workers   could  potentially   receive  and   insurance                                                                    
     companies now  have control over what  they are willing                                                                    
     to  pay  for. The  current  law  does not  provide  for                                                                    
     preauthorization  of  service  and pushing  a  list  of                                                                    
     providers  and   drugs  would  further   complicate  an                                                                    
     already complex process.                                                                                                   
                                                                                                                                
     Equally, the  injured employees  would like  to suggest                                                                    
     the employer  is to be  held to an  independent medical                                                                    
     evaluator provider list. Injured  workers would like to                                                                    
     see  only one  doctor at  a time  unless a  referral is                                                                    
     provided.  Right now,  currently,  injured workers  are                                                                    
     subject to panels of doctors paid for by employers.                                                                        
                                                                                                                                
     Adjudication of  claims - We  do not feel  the proposed                                                                    
     education  would   better  serve  injured   workers  or                                                                    
     employers. There  is currently no education  process to                                                                    
     explain  to them  how they  should  participate in  the                                                                    
     adjudication process.  Complex changes in  the proposed                                                                    
     bill will, in our view,  increase time delay appeals to                                                                    
     about the  same time  that we're currently  looking at.                                                                    
     Additionally, we do not feel  that an over panel should                                                                    
     have the authority to set  precedence over Superior and                                                                    
     Supreme  Court. The  balance must  be  restored to  the                                                                    
     impartial  process  to create  a  fair  chance for  all                                                                    
     parties. We're giving  a lot of power  to an unbalanced                                                                    
     board or division and we feel this is wrong.                                                                               
                                                                                                                                
     Retraining benefits  - We feel that  a clear retraining                                                                    
     process  that  provides  results  for  injured  workers                                                                    
     would  be of  greater benefit  than the  proposed bill.                                                                    
     Injured  workers  know  little  or  nothing  about  the                                                                    
     retraining process and this will  add more red tape and                                                                    
     confusion to  an already complex  part of  the benefits                                                                    
     available   to  injured   workers.   Workers  need   to                                                                    
     understand  and  not  guess about  what  benefits  they                                                                    
     need.                                                                                                                      
                                                                                                                                
     Overall,  we know  that the  personnel in  the division                                                                    
     have  little  or no  training  on  the complex  hearing                                                                    
     process, the  Workers' Compensation  Act and  little or                                                                    
     no  medical  training.  Yet,  they  must  make  complex                                                                    
     decisions based  on the  information that  is available                                                                    
     to them. We  need to encourage training  for all staff,                                                                    
     make  benefits more  clear and  base rate  increases on                                                                    
     tangible,  factual  data.  We   do  not  need  to  make                                                                    
     sacrifices for the  sake of expediency, but  we do need                                                                    
     to  make  informed  changes based  on  facts.  We  have                                                                    
     little  or  no  information on  the  complex  [indisc.]                                                                    
     medical costs, rehabilitation,  retraining benefits and                                                                    
     know the hearing process is far from impartial....                                                                         
                                                                                                                                
     Legal counsel  would not  become more  available unless                                                                    
     defense costs  are fully reported.  Plaintiff attorneys                                                                    
     are making  approximately 50 cents on  the dollar while                                                                    
     defense attorneys get dollar  for dollar what they bill                                                                    
     for. Why  not drop the  defense costs to match  that of                                                                    
     injured workers to contain costs?                                                                                          
                                                                                                                                
     Insurance  premiums  should  be  frozen  until  we  can                                                                    
     figure  out  this  mess  so   that  employers  are  not                                                                    
     overcharged   for  their   insurance  product.   Hiring                                                                    
     advocates in  theory is  good, but  who wants  the job?                                                                    
     Legal  services is  a non-profit  and  Alaska pro  bono                                                                    
     programs are  not geared for Workers'  Compensation. At                                                                    
     minimum, it could potentially take  up to two years for                                                                    
     them to get  the nuances of the program as  well as the                                                                    
     practices and procedures. We urge you not to pass this                                                                     
     bill....                                                                                                                   
                                                                                                                                
MS.  WILLIAMS  said that  a  bill  from Providence  Hospital  was                                                               
$14,000  and  by  not  utilizing  the  proper  fee  schedule,  it                                                               
collected only $11,000. She said  there is no mechanism to report                                                               
accurate figures to the Division of Workers' Compensation.                                                                      
                                                                                                                                
2:37:57 PM                                                                                                                    
CHAIR BUNDE asked who belongs to her organization.                                                                              
                                                                                                                                
MS. WILLIAMS replied that the  Alaska Injured Workers Alliance is                                                               
a  non-profit  organization  educating  injured  workers.  It  is                                                               
partnering  with Alaska  Public  Interest  Research Group  Alaska                                                               
Public Interest  Research Group (AKPIRG)  on this  issue, because                                                               
she feels there are consumer issues involved.                                                                                   
                                                                                                                                
2:38:56 PM                                                                                                                    
JERRY FLOCK,  injured worker,  said he  has fallen  through every                                                               
possible crack  in the current  system. "Because my  employer was                                                               
uninsured,  my employer  got to  pick what  medical it  would and                                                               
would not pay for."                                                                                                             
                                                                                                                                
He said there  have been problems with  workers' compensation for                                                               
a  while. An  audit report  dated October  31, 1999,  was written                                                               
about  the insufficiencies  of workers'  compensation. SB  130 is                                                               
just  a bandaid.  The Division  of Workers'  Compensation already                                                               
has police powers. In his case,  the state had to pay $10,000 for                                                               
an operation,  because his employer wasn't  insured. His employer                                                               
had an  annual edit error  and there is  a $10,000 fine  for that                                                               
and $100 per day fine for 10 days afterwards.                                                                                   
                                                                                                                                
     That  means this  employer owes  the state  a total  of                                                                    
     $77,000. Will  the state go  for it? No, they  don't go                                                                    
     for it. They  don't even ask for it, but  yet the state                                                                    
     will  come after  me for  a $10,000  surgery that  they                                                                    
     paid for.                                                                                                                  
                                                                                                                                
2:44:58 PM                                                                                                                    
MR.  FLOCK discussed  the penalty  section and  how his  employer                                                               
allowed his  insurance to lapse 18  times, but was still  able to                                                               
get a business license.                                                                                                         
                                                                                                                                
2:46:03 PM                                                                                                                    
CHAIR BUNDE  said his  point is well-taken.  He said  even though                                                               
Mr. Lisankie couldn't  comment on Mr. Flock's case,  he wanted to                                                               
know what  enforcement tools the  division has and how  well they                                                               
are being used on people who drop their insurance.                                                                              
                                                                                                                                
2:46:28 PM                                                                                                                    
PAUL  LISANKIE,  Director,   Division  of  Workers  Compensation,                                                               
replied that  he didn't have  the specifics of Mr.  Flock's case,                                                               
but  it  is well-known  in  the  division.  This  is why  he  has                                                               
mentioned to the  committee that the division needs  some kind of                                                               
a hammer  to get on top  of an uninsured employer  quickly rather                                                               
than to try to come in after the  fact and clean up the mess. Mr.                                                               
Flock's testimony indicated  how difficult it is  to get anything                                                               
once a problem has transpired.                                                                                                  
                                                                                                                                
He  disagreed that  this bill  doesn't change  anything, however.                                                               
Under this bill, the director of  the division could order a stop                                                               
work order immediately,  as opposed to what happens  now where an                                                               
investigator  comes back,  gets  a hearing  scheduled before  the                                                               
Workers'  Compensation  Board and  then  there  is a  hearing  to                                                               
decide if the employer is still uninsured at that moment.                                                                       
                                                                                                                                
     I have  no doubt that  there are employers that  do run                                                                    
     without insurance  for a  period of  time. If  they get                                                                    
     detected, their normal response  oftentimes is to bring                                                                    
     their insurance current  and go forward. That  can be a                                                                    
     recurrent  problem  and  that  would  be  some  of  the                                                                    
     factors   that   would   be   considered   under   this                                                                    
     bill...that the  board could consider how  much to fine                                                                    
     that employer.                                                                                                             
                                                                                                                                
     I think also  based on Mr. Flock's  testimony, which is                                                                    
     eloquent  as far  as what  happens when  you get  court                                                                    
     orders and  then you try  to enforce them in  the court                                                                    
     system  against  somebody  who  may  or  may  not  have                                                                    
     money....                                                                                                                  
                                                                                                                                
2:49:23 PM                                                                                                                    
CHAIR  BUNDE remarked  that  it  is hard  to  collect money  from                                                               
someone who  doesn't have  it. He said  he would  continue taking                                                               
public  testimony on  Thursday and  would address  a CS  one week                                                               
from today.  There being no  further business to come  before the                                                               
committee, he adjourned the meeting at 2:51:19 PM.                                                                            

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