Legislature(2011 - 2012)BELTZ 105 (TSBldg)

04/05/2011 02:00 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 103 WORKERS' COMPENSATION FOR FIREFIGHTERS TELECONFERENCED
Heard & Held
*+ SB 116 WORKERS' COMP.: COLL BARGAINING/MEDIATION TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 100 PERS TERMINATION COSTS TELECONFERENCED
Moved SB 100 Out of Committee
+= HB 119 AIDEA: PROCUREMENT; PROJECTS TELECONFERENCED
Moved SCS CSHB 119(L&C) Out of Committee
        SB 116-WORKERS' COMP.: COLL BARGAINING/MEDIATION                                                                    
                                                                                                                              
2:39:34 PM                                                                                                                    
CHAIR EGAN announced SB 116 to be up for consideration.                                                                         
                                                                                                                                
SENATOR  PASKVAN  moved to  bring  SB  116, labeled  27-LS0549\I,                                                               
before the committee.                                                                                                           
                                                                                                                                
CHAIR EGAN objected for discussion purposes.                                                                                    
                                                                                                                                
2:40:21 PM                                                                                                                    
DANA  OWEN, staff  to the  Senate Labor  and Commerce  Committee,                                                               
presented SB  116 [labeled 27-LS0549\I]  on behalf of  the Senate                                                               
Labor and  Commerce Committee,  sponsor. He  said the  concept of                                                               
this bill  was brought to  them by  a number of  different people                                                               
who  recognize that  there have  been problems  with the  current                                                               
Workers' Compensation  system. Originally,  workers' compensation                                                               
was established  to bring speedy,  timely conclusion  to workers'                                                               
compensation  claims for  injuries that  workers received  on the                                                               
job. For  workers it  provided a  means to  be treated  for their                                                               
injuries  with dispatch  and for  the employers  it brought  some                                                               
sense of stability and finality.  They knew they couldn't be sued                                                               
and they  were also  promised they would  have a  reasonably cost                                                               
effective workers' compensation premium.                                                                                        
                                                                                                                                
He said  they had heard  anecdotally for many years  that workers                                                               
have had  great difficulty concluding their  claims. Some workers                                                               
have had  their cases  drag on  for several  years and  they know                                                               
from repeated  contacts by  employers that  workers' compensation                                                               
costs  are viewed  as being  excessive. California  and Minnesota                                                               
are two  states who have  had many  years of experience  with the                                                               
kind of workers'  compensation system that this  bill would allow                                                               
and this  idea makes  the time to  conclude those  claims shorter                                                               
and reduces costs.                                                                                                              
                                                                                                                                
MR. OWEN said  this bill would allow within  the current workers'                                                               
compensation system for an employer  and a group of employees who                                                               
are  represented by  a collective  bargaining  unit to  establish                                                               
beforehand  the terms  under  which  their workers'  compensation                                                               
claims will  be resolved. One  of the key  parts of this  is that                                                               
the   injured   worker   will  be   directed   toward   mediation                                                               
immediately.  Currently  that  mediation  happens  only  after  a                                                               
series  of conflicts.  So, the  two  parties could  agree in  the                                                               
beginning to the  doctor who would initially see  the patient and                                                               
also  to  the   doctor  who  would  provide   a  second  opinion.                                                               
Currently,  the system  generally  takes  three physicians;  this                                                               
would eliminate  one of them. The  net effect would be  to reduce                                                               
costs and to shorten the time for getting people back to work.                                                                  
                                                                                                                                
SENATOR  GIESSEL said  their packets  have a  colored chart  that                                                               
appears   different  than   what  he   described.  She   saw  two                                                               
independent medical  evaluations in the present  system, but none                                                               
in the bill.                                                                                                                    
                                                                                                                                
MR. OWEN explained that the  confusion may be in his description.                                                               
Under  current   workers'  compensation   you  could   get  three                                                               
different  medical  examinations. As  proposed  in  the bill  (by                                                               
agreement between  the two parties),  an injured worker  can have                                                               
as few as two.                                                                                                                  
                                                                                                                                
SENATOR GIESSEL said  that is not what she sees  in the chart and                                                               
or the bill.                                                                                                                    
                                                                                                                                
MR. OWEN  replied that he  is describing the approach  some other                                                               
states are using. This is an example  of one of the ways that two                                                               
parties,  under collective  bargaining, could  agree on  how they                                                               
would handle the claims.                                                                                                        
                                                                                                                                
SENATOR GIESSEL said  language in (1)(B) on page  1, lines 13-14,                                                               
says mediation shall  be conducted by a hearing  officer or other                                                               
classified  employee of  the Division  of Workers'  Compensation.                                                               
She assumed that the employee  would be a classified employee and                                                               
asked  if that  meant the  injured  worker would  be mediated  by                                                               
another classified employee.                                                                                                    
                                                                                                                                
MR. OWEN replied  yes; the bill envisions  using hearing officers                                                               
currently in the division to do the mediation.                                                                                  
                                                                                                                                
SENATOR PASKVAN asked  if this applies to all  workers around the                                                               
state.                                                                                                                          
                                                                                                                                
MR.  OWEN  answered  yes;  all  workers  who  are  covered  under                                                               
collective bargaining agreements.                                                                                               
                                                                                                                                
2:46:38 PM                                                                                                                    
STEVE  RANK,  Iron  Workers International  and  Impact,  a  labor                                                               
management  cooperative  trust fund,  said  he  is based  out  of                                                               
California.  He  explained  that California  experienced  extreme                                                               
medical  costs and  litigation; both  employers and  workers were                                                               
frustrated with  the system.  In 2003,  labor and  management got                                                               
together   and  developed   a  collectively   bargained  workers'                                                               
compensation that  allows employers and labor  representatives to                                                               
sit  down  and  pre-designate  medical providers  so  that  their                                                               
injured workers are provided "the  best medical attention not the                                                               
worst."                                                                                                                         
                                                                                                                                
He  said  these programs  are  voluntary  and don't  require  any                                                               
insurance carrier  or employer to participate.  "They're designed                                                               
to improve  the delivery of  medical benefits to  injured workers                                                               
period." Nothing  in this bill  takes benefits away  from injured                                                               
workers.                                                                                                                        
                                                                                                                                
MR. RANK  said that now  workers don't have  to wait six  or nine                                                               
months to hear about their  claim. Through cooperative efforts of                                                               
the   insurance   carriers,   the   employers   and   the   labor                                                               
representatives  these claims  are  expedited to  make sure  that                                                               
workers are attended to and  that their questions are answered by                                                               
an  ombudsman who  is available  24/7. Published  statistics from                                                               
the states of  California and Minnesota show that  these types of                                                               
programs reduce  medical costs, lost work  days and, importantly,                                                               
litigation.  This  program attempts  to  give  injured workers  a                                                               
method  of  dealing  with  their   issues  without  resorting  to                                                               
unnecessary litigation  in a  system that,  in many  cases, can't                                                               
answer their questions.                                                                                                         
                                                                                                                                
2:50:11 PM                                                                                                                    
KEVIN  GREGERSON,   Program  Administrator,   Union  Construction                                                               
Workers' Compensation Program, Minnesota,  said he developed this                                                               
program back  in 1997  on behalf of  a labor/management  board of                                                               
trustees  and has  been running  it  ever since.  The program  he                                                               
administers  came  out  of 1995  statute  that  Minnesota  passed                                                               
allowing  for these  alternative collectively  bargained workers'                                                               
compensation programs.                                                                                                          
                                                                                                                                
MR. GREGERSON  said he was  asked to compare his  experience with                                                               
the  State of  Minnesota's workers'  compensation system  for the                                                               
last  13  years.  He  said  recent data  showed  that  having  an                                                               
ombudsman  to  answer  question   for  all  parties  resulted  in                                                               
significant  improvement in  terms of  injured workers  receiving                                                               
benefits on  a timely  basis. They  have seen  a reduction  of 40                                                               
percent in the  average cost of a workers'  compensation claim as                                                               
compared to claims  for a similar injury in  a similar occupation                                                               
going  through the  State  of  Minnesota's workers'  compensation                                                               
system. The biggest reason for  that is that they had preselected                                                               
the physicians, the vocational  rehabilitation counselors and the                                                               
attorneys  who serve  as mediators  and arbitrators  who interact                                                               
with their injured participants and contractors.                                                                                
                                                                                                                                
2:53:18 PM                                                                                                                    
He also said that language in  Alaska statute gives the Labor and                                                               
Management Committee the authority to  determine how they want to                                                               
perform  independent medical  examinations.  This  is really  the                                                               
legislature  empowering  labor and  management  to  figure out  a                                                               
better  way  to  deliver  the  same  set  of  statutory  benefits                                                               
utilizing people  that they have  mutual trust with and  have the                                                               
ability  to work  with who  understand the  construction industry                                                               
and the unique aspects that that industry faces.                                                                                
                                                                                                                                
2:54:41 PM                                                                                                                    
FRED  BROWN,  Executive  Director, Health  Care  Cost  Management                                                               
Corporation of  Alaska, Fairbanks, said  they support SB  116. He                                                               
said his letter  is with the committee, but he  wanted to mention                                                               
that  his  corporation  is focused  on  controlling  health  care                                                               
costs. Associated  charts show Alaska  is among the  highest cost                                                               
states  in  the  union  for  delivery  of  workers'  compensation                                                               
benefits generally and specifically that  75 percent of the total                                                               
costs of workers' compensation are medical.                                                                                     
                                                                                                                                
MR.  BROWN said  the  2009 report  of  the Workers'  Compensation                                                               
Medical Services Review  Committee observed on page  10 that even                                                               
though  there is  the opportunity  to  create preferred  provider                                                               
networks,  there  is  no  incentive to  do  so,  because  statute                                                               
doesn't  require providers  to  participate. So,  they view  this                                                               
langauge as an opportunity for  labor and management to negotiate                                                               
together  with  providers  to   institute  a  preferred  provider                                                               
network if they choose to do so.                                                                                                
                                                                                                                                
SENATOR  PASKVAN asked  if he  knows what  the potential  savings                                                               
might be if this system is followed.                                                                                            
                                                                                                                                
MR. BROWN  replied that his organization  can sometimes negotiate                                                               
significant discounts in the neighborhood of 50-60 percent.                                                                     
                                                                                                                                
2:57:17 PM                                                                                                                    
LAIRD  GRANTHAM,  Carpenters  Local   1243,  Fairbanks,  said  he                                                               
supported SB 116. He said that  from 2005 to 2009, Alaska has had                                                               
the highest workers' compensation rates  in the nation. They make                                                               
Alaska  the  very  least  competitive  state  in  the  union  for                                                               
conducting business according to a  CNBC report. Because of this,                                                               
they  see  more  "shady  employers"  who  have  no  insurance  or                                                               
misclassify  their   employees  to  cut  costs   and  "cheat  the                                                               
industry." He said  this bill will allow for  quick resolution of                                                               
a claim and at a much lower cost to all parties.                                                                                
                                                                                                                                
Just yesterday, Mr. Grantham said,  his office received a request                                                               
for information  about a workers'  compensation claim  dated back                                                               
to  1988  and  remarked,  "Why   should  any  one  individual  or                                                               
companies have  to wait that  long for  any type of  closure?" He                                                               
said it's time to allow this voluntary program in Alaska.                                                                       
                                                                                                                                
2:58:47 PM                                                                                                                    
PAUL GROSSI,  lobbyist for the  Alaska State Pipe Trades  and the                                                               
Iron  Workers, said  he supported  SB 116  and that  most of  his                                                               
points  were already  covered. But,  he  said, all  of them  have                                                               
probably  had some  experience with  constituent complaints  from                                                               
either employers about  the cost of the system  or from employees                                                               
about how cumbersome  the system is.  He used  to be the director                                                               
of  Workers'  Compensation  in  Alaska  and  used  to  get  these                                                               
complaints; he knows what they are about.                                                                                       
                                                                                                                                
MR. GROSSI  stated that this  bill is just enabling  language. It                                                               
will  allow  groups  under  a  collective  bargaining  system  to                                                               
improve the ways  to deal with some of  the costs, inefficiencies                                                               
and  difficulties in  getting treatment.  When  he first  started                                                               
working at  the Division of Workers'  Compensation, medical costs                                                               
were 30 percent  of the entire cost and now  they are 75 percent.                                                               
"So, there  is a drastic need  to address some of  these issues."                                                               
This bill allows pilot projects on improvements to the system.                                                                  
                                                                                                                                
3:02:07 PM                                                                                                                    
LAW HENDERSON,  Workers' Compensation Coordinator,  Department of                                                               
Risk Management,  Municipality of  Anchorage, said he  opposed SB                                                               
116. He  said the  Municipality of  anchorage has  eight separate                                                               
bargaining units and one exempt unit.  With SB 116, it could very                                                               
likely   end  up   being  governed   by  two   separate  workers'                                                               
compensation  systems, one  with  a due  process protection  (the                                                               
current one) and one without.                                                                                                   
                                                                                                                                
He noted  that Section  1 of  the bill  simply codifies  what the                                                               
Division  of Workers'  Compensation has  been doing  for about  a                                                               
decade already - which is fine.  The problem is in Section 2 that                                                               
creates   a  new   workers'  compensation   system  through   the                                                               
collective  bargaining  process.   AS  23.30.285(a)(1)  says  the                                                               
division would  have to hire  more employees devoted to  this new                                                               
alternative  or  parallel system.  Beyond  that,  the statute  is                                                               
vague. It his  understanding that the system  envisioned under SB                                                               
116 is what Minnesota does,  but that system stripped the parties                                                               
of  discovery and  selection rights  afforded  under the  current                                                               
system. For  example, under  the current  system an  employer may                                                               
obtain an independent medical evaluation  to determine whether an                                                               
injury is  work-related or not  and if not  work-related, whether                                                               
disability,  permanent impairment,  medical  vocational or  other                                                               
benefits  are warranted  under the  Alaska Workers'  Compensation                                                               
Act. Under the  system envisioned in SB 116, the  employer has no                                                               
right  to an  independent  medical  examination. Without  medical                                                               
evidence  to  support  a  denial  of  benefits,  an  employer  is                                                               
prevented by  law from denying  benefits. If denied  without such                                                               
evidence,  an  employer  faces  a  25  percent  penalty  and  the                                                               
adjuster faces possible loss of his license.                                                                                    
                                                                                                                                
3:04:39 PM                                                                                                                    
Thus, he  said, under SB  116, an  employer is unable  to develop                                                               
contrary  medical  evidence  and  is compelled  to  simply  write                                                               
checks for  benefits having  lost any  mechanism for  testing the                                                               
validity of the  employee's claim. Under the  current system, the                                                               
Alaska  workers'   compensation  Board  itself  may   request  an                                                               
independent medical  evaluation by  a physician of  its choosing.                                                               
Under SB 116, no such  evaluation is permitted. Under the current                                                               
system, the  employee is free  to treat with whoever  he chooses;                                                               
under SB  116 they  can only  select from  the list  developed by                                                               
their  trust.   The  current   system  has   numerous  vocational                                                               
counselors available  to the employee;  under SB 116  an employee                                                               
is limited to  those developed by the trust.  The only similarity                                                               
between the two systems is who  pays for them - insurers and self                                                               
insureds -  thereby increasing the  cost of the  overall workers'                                                               
compensation system.  In short, SB  116 would develop  a parallel                                                               
system devoid  of the constitutional due  process protections and                                                               
choices available under the current system.                                                                                     
                                                                                                                                
CHAIR EGAN said he assumed he opposed SB 116.                                                                                   
                                                                                                                                
MR. HENDERSON responded yes.                                                                                                    
                                                                                                                                
3:06:31 PM                                                                                                                    
DAVID  MECUEN, President,  California Erectors,  California, said                                                               
he  is  also  co-chair  of  the  California  Field  Iron  Workers                                                               
Negotiated Workers' Compensation Program.  He explained that they                                                               
developed   this  program   in   2003   because  their   workers'                                                               
compensation program  was "out  of control."  Forty-three percent                                                               
of  their base  wage  was being  paid  for workers'  compensation                                                               
premium, but  after legislative changes, California  is paying 14                                                               
percent  of  base wage  for  workers'  compensation premium  -  a                                                               
substantial savings.                                                                                                            
                                                                                                                                
MR. MCCUEN  said California has  a parallel program; it  has both                                                               
signatory  and  non-signatory   employees  covered  through  this                                                               
program. It  is not a  burden whatsoever  and it has  worked well                                                               
for  them.  He has  not  heard  one  complaint from  the  workers                                                               
covered  under the  negotiated program  and  delivery of  medical                                                               
care is "a lot better than it  used to be." Someone had a rotator                                                               
cuff injury; in  the old days it would have  taken him six months                                                               
before  he would  actually get  authorization for  surgery. Under                                                               
their new program, the person  got authorization within two weeks                                                               
and  returned   to  work  within   six  months.  The   costs  are                                                               
considerably  less;  so much  so  that  they  have been  able  to                                                               
actually pay their guys more for temporary disability.                                                                          
                                                                                                                                
He said nothing  in their process prohibits  attorneys from being                                                               
involved, so  if an  injured worker  wants representation  he can                                                               
have it. He said it's a much  better way of doing business and it                                                               
saves money for everybody.                                                                                                      
                                                                                                                                
3:09:55 PM                                                                                                                    
MR. MCCUEN  said it also saves  money for the state  by lessening                                                               
the  burden on  their workers'  compensation appeals  process. In                                                               
California,  an  appeal  takes 1-4  years;  under  their  current                                                               
dispute resolution  program they get  mediation in 2-6  weeks and                                                               
if  it does  go  to arbitration,  which is  very  rare, it  takes                                                               
another 2-4  weeks. It's  a much  faster process  with phenomenal                                                               
savings. "Everybody wins under this."                                                                                           
                                                                                                                                
SENATOR PASKVAN asked how long their program has been operating.                                                                
                                                                                                                                
MR. MCCUEN answered eight years.                                                                                                
                                                                                                                                
SENATOR  PASKVAN  asked  in  what   categories  the  savings  are                                                               
located.                                                                                                                        
                                                                                                                                
MR.  MCCUEN  replied  much  of the  savings  comes  from  quicker                                                               
resolution  of  the  problems  and  reduction  in  medical  rates                                                               
through   a  preferred   provider  program   (PPO).  Using   PPOs                                                               
eliminates  doctors who  don't  work  with workers'  compensation                                                               
patients and  in most cases the  doctors they use are  the ones a                                                               
worker  would  choose  to  see   on  his  own.  Their  costs  are                                                               
discounted  by  20-30 percent  and  if  someone  wants to  see  a                                                               
specialist it  takes about  one-third the time  it used  to take.                                                               
They  also  see savings  through  reduced  MOD rates  (Experience                                                               
Modification  Rate) by  several percentage  points which  reduces                                                               
claim costs.  Issues are  resolved much  faster which  saves even                                                               
more money.  In the old system  an injury took six  months to get                                                               
back to work system and now it takes generally takes six weeks.                                                                 
                                                                                                                                
3:13:01 PM                                                                                                                    
SENATOR PASKVAN verified that the  base rate was 43 percent eight                                                               
years ago and now it's 14 percent.                                                                                              
                                                                                                                                
MR. MCCUEN  replied that was correct,  but that was for  his firm                                                               
only.                                                                                                                           
                                                                                                                                
SENATOR  PASKVAN  asked  if  that   reduction  in  base  rate  is                                                               
monitored by private insurers.                                                                                                  
                                                                                                                                
MR. MCCUEN  answered that  California has  a state  rating bureau                                                               
and  the state  rates  his  firm based  on  costs  and number  of                                                               
claims;  that  has  also  gone down.  Their  category,  which  is                                                               
construction over two  stories, has seen a  dramatic reduction as                                                               
a result of alternative dispute  resolution (ADR), for which they                                                               
also set the rate.                                                                                                              
                                                                                                                                
3:14:33 PM                                                                                                                    
MIKE  MONAGLE,  Director,   Division  of  Workers'  Compensation,                                                               
Department of  Labor and Workforce  Development (DOLWD),  said he                                                               
was available to answer questions,  but the administration had no                                                               
position on SB 116.                                                                                                             
                                                                                                                                
SENATOR PASKVAN  said he saw  the two  components of the  bill as                                                               
different  types of  alternative  dispute  resolution models.  He                                                               
asked Mr. Monagle if he saw a benefit with both models.                                                                         
                                                                                                                                
MR.  MONAGLE  replied he  wasn't  sure  what  he meant  by  "both                                                               
models."  There is  an  alternative  dispute resolution  process,                                                               
which includes mediation and if  that is not successful, they can                                                               
go to arbitration.                                                                                                              
                                                                                                                                
SENATOR  PASKVAN said  in other  words  in Section  1 any  worker                                                               
injured under  any circumstance can attend  mediation; that's one                                                               
method.  The second  section  talks  about collective  bargaining                                                               
agreements  where   any  employer   dealing  with   a  collective                                                               
bargaining agent, if  they want to, can reach an  agreement as to                                                               
an alternative dispute resolution  mechanism. His question to Mr.                                                               
Monagle  is if  he sees  the benefit  of the  alternative dispute                                                               
resolution process an improvement in  both methods whether it's a                                                               
represented worker or a non-represented worker.                                                                                 
                                                                                                                                
3:16:39 PM                                                                                                                    
MR. MONAGLE replied  first about Section 1  saying that mediation                                                               
has been taking  place in the workers' compensation  system for a                                                               
number of years;  last year they mediated about  40 complex cases                                                               
with about  90 percent satisfactory settlement  that was approved                                                               
by the  board. He thinks that  mediation is a valuable  tool that                                                               
can often lead to reduced disputes and quicker resolution.                                                                      
                                                                                                                                
The second section also has  a mediation and arbitration process.                                                               
It's is difficult  for him to answer, because it  talks about the                                                               
ultimate  dispute   resolution  process   being  set  out   in  a                                                               
collective  bargaining   agreement.  His   workers'  compensation                                                               
officers mediate  terms under the  Workers' Compensation  Act and                                                               
don't mediate terms under a collective bargaining agreement.                                                                    
                                                                                                                                
3:18:08 PM                                                                                                                    
SENATOR  PASKVAN asked  if all  workers in  Alaska are  currently                                                               
covered by workers' compensation statutes.                                                                                      
                                                                                                                                
MR. MONAGLE replied yes - with a few statutory exceptions.                                                                      
                                                                                                                                
SENATOR PASKVAN asked  if he viewed Section 2 as  an exception to                                                               
the workers'  compensation coverage.  Is the  alternative dispute                                                               
resolution  a viable  cost savings  method  and what  would be  a                                                               
better method if there is one?                                                                                                  
                                                                                                                                
MR.  MONAGLE   replied  that  he   didn't  know   of  alternative                                                               
possibilities   for   resolving    disputes   in   the   workers'                                                               
compensation  system,   but  Section   2  allows   employers  and                                                               
employees  to come  up  with  a solution  to  disputes through  a                                                               
collective  bargaining  process  that  may  mirror  the  Workers'                                                               
Compensation Act. Current experience  is that a mediation process                                                               
can bring quicker resolution, but  he couldn't speak specifically                                                               
to the terms of what a collective bargaining agreement might be.                                                                
                                                                                                                                
3:21:10 PM                                                                                                                    
SENATOR GIESSEL  asked what  he would describe  as broken  in the                                                               
Workers' Compensation Act now.                                                                                                  
                                                                                                                                
MR. MONAGLE replied that the bill  does a good job of identifying                                                               
some  areas   in  the  workers'  compensation   system  that  are                                                               
"broken."  He explained  that the  department  receives 20,000  -                                                               
25,000 reports of  injury every year and in the  vast majority of                                                               
these cases the injured worker  receives speedy medical treatment                                                               
and timely  disability benefits, but a  small percentage actually                                                               
end up in complex disputes. These get a lot of attention.                                                                       
                                                                                                                                
Medical costs  in the system are  high and last year  he found it                                                               
took about  two years from  the time a  dispute is begun  until a                                                               
final decision  was made. One  of the  areas the bill  touches on                                                               
that the  current workers' compensation  system does  not address                                                               
is a return to work program.                                                                                                    
                                                                                                                                
SENATOR GIESSEL said she is  by profession a health care provider                                                               
who  has  provided  workers'  compensation  services  to  injured                                                               
workers and  asked him to  describe what kind of  case management                                                               
an employee gets to help him negotiate the system.                                                                              
                                                                                                                                
MR.  MONAGLE  answered  that   they  have  workers'  compensation                                                               
officers as part of their staff  and they are available to assist                                                               
injured workers  in knowing what  their rights are. For  the most                                                               
part,  an injured  worker under  the  current system  is free  to                                                               
receive  the medical  treatment  of their  choice.  There are  no                                                               
restrictions on  whom they can treated  by or from or  the nature                                                               
or scope of  their treatment. The employer reserves  the right to                                                               
send the  injured worker to  a doctor of their  choice. Sometimes                                                               
there  are  medical  disputes  over whether  a  certain  mode  of                                                               
treatment is  necessary or  not. Often  when those  disputes come                                                               
before the  board, they have a  panel of medical experts  that it                                                               
can assign.  If the  parties are still  in dispute,  the workers'                                                               
compensation board  is free  to weigh  all that  medical evidence                                                               
and  find what  portion -  all,  some or  none -  is credible  in                                                               
awarding benefits  to the injured worker  or withholding benefits                                                               
from him.                                                                                                                       
                                                                                                                                
3:25:21 PM                                                                                                                    
SENATOR MENARD  asked how  often the  medical board  meets saying                                                               
she was trying to figure out how  big the holdup is. How bad is a                                                               
medical dispute for the business  climate overall? PPOs are never                                                               
popular.                                                                                                                        
                                                                                                                                
MR. MONAGLE  replied that  there is  no person  or board  that an                                                               
injured person  has to await  to approve their  treatment. Delays                                                               
typically  have to  do with  hearing  back from  the employer  or                                                               
their  insurance company  on whether  they  believe something  is                                                               
compensable or not.                                                                                                             
                                                                                                                                
SENATOR  GIESSEL said  the  process  now has  the  option for  an                                                               
independent  evaluation. How  often is  that used  and what  does                                                               
that entail?                                                                                                                    
                                                                                                                                
MR. MONAGLE replied typically it's  the employer who asks for the                                                               
independent  medical   evaluation  and  that  is   based  on  the                                                               
experience of  a particular case  manager or  claim administrator                                                               
and if  he believes  there is sufficient  evidence to  warrant an                                                               
independent  review.  Normally,  the   process  begins  when  the                                                               
insurance  company asks  the  injured worker  to  sign a  medical                                                               
release. Then  they will  look at copies  of his  medical records                                                               
for any  red flags;  for instance  if he  previously had  a motor                                                               
vehicle accident and they think  maybe his current complaints are                                                               
more related to that accident  than his occupational injury, then                                                               
they might ask for an  independent medical examiner and ask those                                                               
types of questions to determine  whether or not there is contrary                                                               
medical evidence  to warrant the  payment of  a claim or  not. He                                                               
said the vast majority of these cases are paid with no dispute.                                                                 
                                                                                                                                
3:29:29 PM                                                                                                                    
SENATOR GIESSEL  asked if he  saw the  removal of that  option to                                                               
ask for an independent medical  evaluation from an employer or an                                                               
employee in SB 116.                                                                                                             
                                                                                                                                
MR. MONAGLE replied  that Section 2 provides  that the collective                                                               
bargaining  agreement   can  establish   an  exclusive   list  of                                                               
providers   and  an   exclusive  list   of  independent   medical                                                               
evaluators.  Now,  the  assumption  he  is  making  is  that  the                                                               
employer  and  the employee  have  agreed  to  the terms  of  the                                                               
collective  bargaining agreement  and therefore,  have agreed  to                                                               
establish  that exclusive  list and  abide  by the  terms of  the                                                               
agreement. In  that regard some  rights are preserved  by parties                                                               
because they aren't forced into these agreements.                                                                               
                                                                                                                                
SENATOR GIESSEL thanked him and said since they had heard from                                                                  
lots of employee groups that she wanted also to hear from some                                                                  
employers.                                                                                                                      
                                                                                                                                
3:31:31 PM                                                                                                                    
CHAIR EGAN said they would invite employers. Finding no further                                                                 
business to come before the committee, he adjourned the meeting                                                                 
at 3:31 p.m.                                                                                                                    

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