Legislature(2005 - 2006)BUTROVICH 205

04/05/2005 08:30 AM JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 130 WORKERS' COMPENSATION TELECONFERENCED
Heard & Held
+ SB 137 EVICTING INSTITUTIONAL PROPERTY USERS TELECONFERENCED
Moved SB 137 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         April 5, 2005                                                                                          
                           8:40 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Ralph Seekins, Chair                                                                                                    
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Gene Therriault                                                                                                         
Senator Hollis French                                                                                                           
Senator Gretchen Guess                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 130                                                                                                             
"An Act relating  to a special deposit  for workers' compensation                                                               
and  employers' liability  insurers;  relating  to assigned  risk                                                               
pools; relating  to workers'  compensation insurers;  stating the                                                               
intent  of   the  legislature,   and  setting   out  limitations,                                                               
concerning the  interpretation, construction,  and implementation                                                               
of workers'  compensation laws; relating  to the  Alaska Workers'                                                               
Compensation   Board;    assigning   certain    Alaska   Workers'                                                               
Compensation  Board   functions  to  the  division   of  workers'                                                               
compensation   in  the   Department   of   Labor  and   Workforce                                                               
Development and to that department,  and authorizing the board to                                                               
delegate administrative  and enforcement duties to  the division;                                                               
establishing   a   Workers'  Compensation   Appeals   Commission;                                                               
providing for workers' compensation  hearing officers in workers'                                                               
compensation  proceedings;  relating   to  workers'  compensation                                                               
medical benefits and  to charges for and payment of  fees for the                                                               
medical benefits; relating to  agreements that discharge workers'                                                               
compensation   liability;  relating   to  workers'   compensation                                                               
awards;  relating to  reemployment benefits  and job  dislocation                                                               
benefits; relating  to coordination of workers'  compensation and                                                               
certain  disability benefits;  relating to  division of  workers'                                                               
compensation records;  relating to release of  treatment records;                                                               
relating to an  employer's failure to insure and  keep insured or                                                               
provide  security;   providing  for  appeals   from  compensation                                                               
orders; relating to  workers' compensation proceedings; providing                                                               
for  supreme  court jurisdiction  of  appeals  from the  Workers'                                                               
Compensation Appeals  Commission; providing for a  maximum amount                                                               
for  the  cost-of-living  adjustment  for  workers'  compensation                                                               
benefits;   relating  to   attorney  fees;   providing  for   the                                                               
department to  enter into contracts with  nonprofit organizations                                                               
to  provide  information  services and  legal  representation  to                                                               
injured  employees; providing  for  administrative penalties  for                                                               
employers  uninsured or  without adequate  security for  workers'                                                               
compensation; relating to fraudulent  acts or false or misleading                                                               
statements in  workers' compensation  and penalties for  the acts                                                               
or  statements;  providing for  members  of  a limited  liability                                                               
company to  be included as  an employee for purposes  of workers'                                                               
compensation;  establishing  a   workers'  compensation  benefits                                                               
guaranty  fund;  relating  to  the  second  injury  fund;  making                                                               
conforming amendments;  providing for a  study and report  by the                                                               
medical  services   review  committee;   and  providing   for  an                                                               
effective date."                                                                                                                
                                                                                                                                
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 137                                                                                                             
"An Act  providing that  an institution  providing accommodations                                                               
exempt from  the provisions of  the Uniform  Residential Landlord                                                               
and  Tenant Act  may  evict tenants  without  resorting to  court                                                               
proceedings under AS 09.45.060 - 09.45.160."                                                                                    
                                                                                                                                
     MOVED SB 137 OUT OF COMMITTEE                                                                                              
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 130                                                                                                                  
SHORT TITLE: WORKERS' COMPENSATION                                                                                              
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/03/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/03/05       (S)       L&C, FIN                                                                                               
03/08/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/08/05       (S)       Heard & Held                                                                                           
03/08/05       (S)       MINUTE (L&C)                                                                                           
03/10/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/10/05       (S)       Heard & Held                                                                                           
03/10/05       (S)       MINUTE (L&C)                                                                                           
03/15/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/15/05       (S)       Heard & Held                                                                                           
03/15/05       (S)       MINUTE (L&C)                                                                                           
03/17/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/17/05       (S)       Heard & Held                                                                                           
03/17/05       (S)       MINUTE (L&C)                                                                                           
03/22/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/22/05       (S)       Heard & Held                                                                                           
03/22/05       (S)       MINUTE (L&C)                                                                                           
03/24/05       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
03/24/05       (S)       Heard & Held                                                                                           
03/24/05       (S)       MINUTE (L&C)                                                                                           
03/29/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/29/05       (S)       -- Meeting Canceled --                                                                                 
03/31/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/31/05       (S)       Moved CSSB 130(L&C) Out of Committee                                                                   
03/31/05       (S)       MINUTE (L&C)                                                                                           
04/01/05       (S)       L&C RPT CS 2DP 1NR 2AM NEW TITLE                                                                       
04/01/05       (S)       DP: BUNDE, STEVENS B                                                                                   
04/01/05       (S)       NR: SEEKINS                                                                                            
04/01/05       (S)       AM: DAVIS, ELLIS                                                                                       
04/01/05       (S)       JUD REFERRAL ADDED AFTER L&C                                                                           
04/05/05       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 137                                                                                                                  
SHORT TITLE: EVICTING INSTITUTIONAL PROPERTY USERS                                                                              
SPONSOR(s): SENATOR(s) SEEKINS                                                                                                  
                                                                                                                                
03/08/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/08/05       (S)       L&C, JUD                                                                                               
03/22/05       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/22/05       (S)       Heard & Held                                                                                           
03/22/05       (S)       MINUTE (L&C)                                                                                           
03/24/05       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
03/24/05       (S)       Moved SB 137 Out of Committee                                                                          
03/24/05       (S)       MINUTE (L&C)                                                                                           
03/29/05       (S)       L&C RPT 3DP                                                                                            
03/29/05       (S)       DP: BUNDE, DAVIS, STEVENS B                                                                            
04/05/05       (S)       JUD AT 8:30 AM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Joseph Michele                                                                                                              
Staff to Senator Seekins                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced SB 137                                                                                        
                                                                                                                                
Mr. Paul Lisanki, Director                                                                                                      
Division of Worker's Compensation                                                                                               
Department of Labor & Workforce Development                                                                                     
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT:  Commented on SB 130                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  RALPH   SEEKINS  called  the  Senate   Judiciary  Standing                                                             
Committee meeting to  order at 8:40:22 AM.  Present were Senators                                                             
Charlie  Huggins,  Gene  Therriault, Gretchen  Guess,  and  Chair                                                               
Ralph Seekins.                                                                                                                  
                                                                                                                                
          SB 137-EVICTING INSTITUTIONAL PROPERTY USERS                                                                      
                                                                                                                                
8:40:53 AM                                                                                                                    
MR. JOSEPH MICHELE, staff to  Senator Seekins, introduced SB 137.                                                               
The University of  Alaska asked the Legislature to  carry SB 137.                                                               
A few  disruptive students  have used the  court system  to stall                                                               
impending  evictions. The  bill  is meant  to  fix a  discrepancy                                                               
between  legislative intent  of the  Uniform Landlord  Tenant Act                                                               
and  the recent  lower court  decision regarding  the removal  of                                                               
individuals  residing  in  a  residence   that  is  owned  by  an                                                               
institution described under AS 34.03.330.                                                                                       
                                                                                                                                
8:43:17 AM                                                                                                                    
The  University  of Alaska  has  put  into place  a  three-strike                                                               
policy with a review process and a peer process.                                                                                
                                                                                                                                
CHAIR RALPH SEEKINS closed public testimony.                                                                                    
                                                                                                                                
SENATOR GENE THERRIAULT asked whether  the action was just adding                                                               
educational institutions to the list contained in AS 34.03.330.                                                                 
                                                                                                                                
8:45:08 AM                                                                                                                    
MR.  MICHELE  answered   higher  educational  establishments  are                                                               
included  in  AS  34.03.330.  SB   137  stems  from  lower  court                                                               
hearings.                                                                                                                       
                                                                                                                                
CHAIR SEEKINS commented exempt institutions  would not have to go                                                               
to court to evict a person.                                                                                                     
                                                                                                                                
8:45:58 AM                                                                                                                    
MR. MICHAEL  HOSTINA, associate general counselor,  University of                                                               
Alaska,  commented SB  137 is  clarifying the  eviction statutes,                                                               
which have been interpreted by  the courts to require an eviction                                                               
action even  for the exempt  institutions. SB 137  doesn't modify                                                               
the  landlord/tenant law;  it modifies  the procedures  governing                                                               
evictions.                                                                                                                      
                                                                                                                                
SENATOR THERRIAULT  moved SB 137  from committee  with individual                                                               
recommendations  and  attached  fiscal note(s).  There  being  no                                                               
objection, the motion carried.                                                                                                  
                                                                                                                                
CHAIR SEEKINS announced a brief recess at 8:47:00 AM.                                                                         
CHAIR SEEKINS reconvened the meeting at 8:48:42 AM.                                                                           
                                                                                                                                
                  SB 130-WORKERS' COMPENSATION                                                                              
                                                                                                                                
8:49:15 AM                                                                                                                    
MR. PAUL  LISANKI, director,  Division of  Worker's Compensation,                                                               
Department of Labor and  Workforce Development (DOLWD), presented                                                               
a  summary   of  the  committee  substitute   (CS).  The  reforms                                                               
contained in  SB 130 are  aimed at  lessening the threat  to jobs                                                               
and workers benefits that are  being caused by insurance premiums                                                               
increasing at  intolerable rates. The reforms  address five major                                                               
areas.                                                                                                                          
                                                                                                                                
8:50:51 AM                                                                                                                    
Protecting Workers' Benefits and Jobs:                                                                                      
Section 21  would empower the  division director to shut  down an                                                               
employer upon  completion of an  investigation that  confirms the                                                               
employer  does  not  have   the  required  worker's  compensation                                                               
liability insurance. Section  21 would also empower  the Board to                                                               
fine employers up  to $1,000 per employee per day.  The intent is                                                               
to take  away the  opportunity for  employers to  operate without                                                               
the required insurance.                                                                                                         
                                                                                                                                
8:52:44 AM                                                                                                                    
A  brief  inadvertent  problem  would   be  viewed  as  a  lesser                                                               
infraction than an employer with repeated infractions.                                                                          
                                                                                                                                
CHAIR SEEKINS  queried whether cancellation  without notification                                                               
from an insurer would be vigorously pursued.                                                                                    
                                                                                                                                
MR.  LISANKI confirmed.  Section  22 would  establish a  benefits                                                               
guarantee  fund to  receive the  fines.  The fund  would use  the                                                               
fines  to pay  benefits to  the injured  workers whose  employers                                                               
were uninsured at the time of injury.                                                                                           
                                                                                                                                
8:54:48 AM                                                                                                                    
Section  2  and  Section  3  address  the  insurance  provisions.                                                               
Section 2 would  protect the benefits payments  from an insurer's                                                               
insolvency by  requiring in-state deposits to  back the insurer's                                                               
loss  reserves.  Section 3  would  release  the deposits  to  the                                                               
Alaska Insurance Guaranty Association.                                                                                          
                                                                                                                                
CHAIR SEEKINS  asked Mr.  Lisanki whether  this would  reduce the                                                               
number of insurers offering worker's compensation coverage.                                                                     
                                                                                                                                
MR.  LISANKI  answered  he  did  not know.  He  would  defer  the                                                               
question to the Division of Insurance.                                                                                          
                                                                                                                                
8:56:51 AM                                                                                                                    
Quicker  and  More  Efficient  Resolution  of  Disputed  Benefits                                                           
Claims:                                                                                                                     
 Section  41 would  legalize a  private attorneys'  receipt of  a                                                               
one-time consultation  fee up to  $300 to advise  injured workers                                                               
on benefits  matters. The  Worker's Compensation  Act makes  it a                                                               
crime to  receive an attorney's  fee without a Board  approval in                                                               
advance.                                                                                                                        
                                                                                                                                
SENATOR GENE  THERRIAULT asked whether  this was for  the payment                                                               
out of pocket.                                                                                                                  
                                                                                                                                
MR. LISANKI  said yes. If the  attorney takes the case  s/he will                                                               
attempt to  seek reimbursement  from the  insurance company  as a                                                               
litigation cost.                                                                                                                
                                                                                                                                
9:01:15 AM                                                                                                                    
Section  9 would  allow  the DOLWD  to  contract with  non-profit                                                               
organizations  to provide  information  and  legal assistance  to                                                               
inured  workers  unable to  obtain  private  council. This  would                                                               
permit the  Workers' Compensation Board to  delegate authority to                                                               
the division  director. It  allows the DOLWD  to contract  with a                                                               
non-profit organization  to represent those who  cannot obtain an                                                               
attorney.                                                                                                                       
                                                                                                                                
CHAIR  SEEKINS asked  whether Alaska  Legal Services  Corporation                                                               
would be an example.                                                                                                            
                                                                                                                                
MR. LISANKI  said he was not  sure it would be  asset based. This                                                               
would be to address the issue  that there are a limited number of                                                               
private attorneys who are willing to provide the service.                                                                       
                                                                                                                                
9:05:15 AM                                                                                                                    
Section  10 would  allow injured  workers  represented by  Alaska                                                               
licensed attorneys to  settle their claims without  review by the                                                               
Worker's Compensation Board.  It would allow the  Board more time                                                               
to  focus  on   people  who  are  minors,   incompetent,  or  not                                                               
represented by counsel and would speed the system up.                                                                           
                                                                                                                                
Section 7  requires the use  of hearing officers and  adoption of                                                               
conflict of interest regulations. A  panel hears the dispute. For                                                               
over  20   years,  the  DOLWD   and  the  Division   of  Worker's                                                               
Compensation have used hearing officers  on the panel. This would                                                               
propose to legalize what is already happening.                                                                                  
                                                                                                                                
9:07:54 AM                                                                                                                    
Fair Benefits at Reasonable Employer Cost:                                                                                  
Section 30  would cap non-resident compensation  rates. Currently                                                               
non-resident injured workers who live  in a higher cost of living                                                               
climate  receive  the  higher   compensation.  Section  34  would                                                               
coordinate payments  of the  workers' compensation  benefits, and                                                               
disability  benefits  under a  plan  to  which an  employer  also                                                               
contributed.  This  would ensure  the  combined  payments do  not                                                               
exceed the injured worker's take home pay.                                                                                      
                                                                                                                                
9:10:47 AM                                                                                                                    
SENATOR GRETCHEN GUESS asked how Section 34 is done currently.                                                                  
                                                                                                                                
MR. LISANKI  answered it currently  isn't done. The DOLWD  has to                                                               
figure out the proper worker's  compensation benefits. Section 34                                                               
would give the employer the  opportunity to reveal other payments                                                               
that are paid to the worker.                                                                                                    
                                                                                                                                
CHAIR SEEKINS asked for an example.                                                                                             
                                                                                                                                
MR. LISANKI  preferred not to  give an example. Section  34 would                                                               
not  be aimed  at  a policy  bought by  an  individual worker.  A                                                               
private policy establishes  what a person would get  in the event                                                               
they  receive worker's  compensation benefits.  Also they  do not                                                               
pay more than 70 percent of  the take home pay. Certain employers                                                               
are paying  into other  funds; PERS for  example, and  the worker                                                               
can get  an occupational disability  benefit. There is  no offset                                                               
at this time.                                                                                                                   
                                                                                                                                
9:13:29 AM                                                                                                                    
SENATOR  THERRIAULT  said under  the  PERS  system a  person  can                                                               
select disability coverage, but the employee covers the cost.                                                                   
                                                                                                                                
MR.   LISANKI   said    this   addresses   the   employer-defined                                                               
occupational disability policy.                                                                                                 
                                                                                                                                
SENATOR GUESS asked the definition of "spendable weekly wage."                                                                  
                                                                                                                                
MR. LISANKI answered it was  the net after withholding taxes. The                                                               
intent is to pay a fair  and reasonable amount but less than what                                                               
they would receive if they were working.                                                                                        
                                                                                                                                
9:16:00 AM                                                                                                                    
Section 38 and  Section 39 are both designed  to strengthen anti-                                                               
fraud provisions. There have been  complaints that people are not                                                               
being  prosecuted effectively.  Section  40 also  follows in  the                                                               
anti-fraud  provisions.  It  would  adopt the  Ad  Hoc  Committee                                                               
recommendations  authorizing courts  to  award punitive  damages,                                                               
compensatory  damages,  and  attorney's fees  for  violations  of                                                               
fraud provisions.                                                                                                               
                                                                                                                                
9:18:21 AM                                                                                                                    
SENATOR GUESS  asked Mr.  Lisanki to speak  about the  problem of                                                               
fraud.                                                                                                                          
                                                                                                                                
MR. LISANKI responded the Workers  Compensation Division does not                                                               
have  the  authority  to  investigate   fraud.  The  Division  of                                                               
Insurance performs fraud investigation.                                                                                         
                                                                                                                                
9:20:07 AM                                                                                                                    
SENATOR GUESS referred to Page 24,  line 8, and asked Mr. Lisanki                                                               
to  comment  on how  the  DOLWD  decides whether  to  investigate                                                               
fraud.                                                                                                                          
                                                                                                                                
MR.  LISANKI  said they  would  have  to install  regulations.  A                                                               
discretionary call  would have to  be made regarding  which cases                                                               
they would pursue depending on resources.                                                                                       
                                                                                                                                
CHAIR  SEEKINS commented  among the  business community  worker's                                                               
compensation  fraud   is  common.  It  is   a  two-fold  problem.                                                               
Insurance companies  do not aggressively  pursue claims  of fraud                                                               
they  just  increase rates.  There  aren't  enough teeth  in  the                                                               
statutes to effectively prosecute people.                                                                                       
                                                                                                                                
9:22:54 AM                                                                                                                    
MR. LISANKI  said there should  not be anybody getting  away with                                                               
fraud.                                                                                                                          
                                                                                                                                
9:24:39 AM                                                                                                                    
SENATOR  GUESS  commented  fraud   investigation  should  not  be                                                               
limited to one type of business.                                                                                                
                                                                                                                                
MR. LISANKI continued  Section 36 clears up a  gray area. Limited                                                               
Liability  Company members  need not  have workers'  compensation                                                               
coverage  but  would  allow  the  Company  to  add  them  to  its                                                               
insurance policy if desired.                                                                                                    
                                                                                                                                
9:26:25 AM                                                                                                                    
Section 26 would  speed processing of medical  bills by requiring                                                               
the  injury report  to  include release  of  medical records  for                                                               
treatment of  injury. It  would require  the division  to re-work                                                               
medical  reports.  Attorneys  who  represent both  sides  of  the                                                               
dispute recommended this.                                                                                                       
                                                                                                                                
Section  27 would  maintain confidentiality  of worker's  medical                                                               
and rehabilitation records held by the Board.                                                                                   
                                                                                                                                
Section 28  is a new provision,  which would ban the  Division of                                                               
Worker's  Compensation from  assembling  or providing  individual                                                               
records  for  commercial  purposes.   The  Division  of  Worker's                                                               
Compensation is  asking people to file  online so as to  speed up                                                               
the  process.  However,  they are  getting  requests  from  other                                                               
people  to  provide  information  that  may  be  used  for  other                                                               
purposes. People have legitimate privacy concerns.                                                                              
                                                                                                                                
9:30:37 AM                                                                                                                    
Improving Return-to-Work Benefits While Reducing Costs:                                                                     
Section 33 would provide for  a phase-out of the limited, archaic                                                               
Second Injury Fund.                                                                                                             
                                                                                                                                
CHAIR SEEKINS asked  Mr. Lisanki to describe the  function of the                                                               
Second Injury Fund.                                                                                                             
                                                                                                                                
MR. LISANKI explained  the Second Injury Fund  was developed when                                                               
it was common and legal  to discriminate against people. They are                                                               
mostly claims  with people  who are  permanently disabled.  If an                                                               
employer hires a  person under one of the  listed limitations and                                                               
the person receives  another injury, after paying  two years, the                                                               
Second  Injury  Fund kicks  in.  Currently  there are  about  130                                                               
claims.                                                                                                                         
                                                                                                                                
9:34:11 AM                                                                                                                    
MR.  LISANKI continued  it is  based on  six percent  of all  the                                                               
dollars paid  for time lost benefits.  It ends up being  about $4                                                               
million a year  to keep the system going. The  hope is by phasing                                                               
it out,  they would continue paying  the claims off but  not have                                                               
any new ones. Gradually the balance  of the fund will grow so the                                                               
savings will be passed to employers.                                                                                            
                                                                                                                                
9:35:55 AM                                                                                                                    
SENATOR  GUESS inquired  the  result for  the  employer when  the                                                               
Second Injury Fund gets phased out.                                                                                             
                                                                                                                                
MR.  LISANKI answered  the insurance  company  would continue  to                                                               
have full liability.                                                                                                            
                                                                                                                                
9:37:17 AM                                                                                                                    
Section 13  is an improvement that  came from the Senate  Labor &                                                               
Commerce  Standing Committee  (L&C).  It  would require  improved                                                               
reporting  of reemployment  benefits, including  plan status  and                                                               
tracking  of  injured  workers' employment  status  at  intervals                                                               
following retraining  plan completion,  in order to  provide more                                                               
accurate  and  detailed  information about  the  functioning  and                                                               
effectiveness  of  the  reemployment benefits  system.  The  data                                                               
would  be   better  and  it   would  be  easier  to   assess  the                                                               
effectiveness of the system.                                                                                                    
                                                                                                                                
SENATOR GUESS  referred to Page 8,  line 22 and wondered  why the                                                               
L&C  committee singled  out "successfully  completed reemployment                                                               
plan." She commented it is  sometimes just as interesting to look                                                               
at the unsuccessful plans.                                                                                                      
                                                                                                                                
MR.  LISANKI  said  he  felt  there was  enough  breadth  in  the                                                               
previous  sections  and  the Division  of  Worker's  Compensation                                                               
would look at the entire picture.                                                                                               
                                                                                                                                
9:39:47 AM                                                                                                                    
Section  14  would  attempt  to   reduce  delays  in  determining                                                               
reemployment  benefits  eligibility,   and  resulting  costs,  by                                                               
allowing workers and employers to  stipulate to eligibility. This                                                               
would allow workers  and employers to agree to  disagree and move                                                               
forward.                                                                                                                        
                                                                                                                                
9:41:29 AM                                                                                                                    
CHAIR  SEEKINS  commented  he  is not  familiar  with  any  other                                                               
dispute that says you can't stipulate.                                                                                          
                                                                                                                                
MR. LISANKI  agreed. He said  there is certain  stipulations that                                                               
the Board requires that it see and accept.                                                                                      
                                                                                                                                
CHAIR SEEKINS  expressed concern  that employees would  be forced                                                               
into stipulation.                                                                                                               
                                                                                                                                
MR.  LISANKI responded  he  does  not see  that  as a  legitimate                                                               
concern.                                                                                                                        
                                                                                                                                
9:43:59 AM                                                                                                                    
MR. LISANKI  pointed out the  reemployment benefits  are entirely                                                               
voluntary at the option of the injured worker.                                                                                  
                                                                                                                                
Senator French joined the committee at 9:44:43 AM.                                                                            
                                                                                                                                
CHAIR  SEEKINS  recalled  there were  rehabilitation  specialists                                                               
that opposed the stipulation.                                                                                                   
                                                                                                                                
9:46:02 AM                                                                                                                    
Section   16   is   designated  to   encourage   utilization   of                                                               
reemployment benefits, and reduce  costs, by requiring the worker                                                               
to either choose  to begin the current  retraining process within                                                               
15 day of eligibility determination  or choose to accept cash job                                                               
dislocation benefits.                                                                                                           
                                                                                                                                
9:47:46 AM                                                                                                                    
MR. LISANKI mentioned  a possible amendment to  Section 17, which                                                               
would keep the  sequence of SB 130 the same.  The amendment would                                                               
change the word "plan" in several  places and replace it with the                                                               
words "reemployment process." This is  designed to ratify what is                                                               
already being done.                                                                                                             
                                                                                                                                
9:52:58 AM                                                                                                                    
Since  1988  the  worker's  compensation  system  in  Alaska  has                                                               
switched  from   one  that  paid  permanent   partial  disability                                                               
benefits to one that pays permanent partial impairment benefits.                                                                
                                                                                                                                
CHAIR SEEKINS  advised Mr. Lisanki  the proposed  amendment would                                                               
be considered later on in the bill hearing.                                                                                     
                                                                                                                                
CHAIR SEEKINS announced a brief recess at 9:58:21 AM.                                                                         
CHAIR SEEKINS reconvened the meeting at 10:07:39 AM.                                                                          
                                                                                                                                
Maintaining Medical Benefits While Reducing Costs:                                                                          
Section  25  would  reduce health  care  costs  incrementally  by                                                               
resetting  the current  maximum  reimbursement  rates for  health                                                               
care services at the maximum  level applied to bills for services                                                               
rendered in 2004.                                                                                                               
                                                                                                                                
10:09:43 AM                                                                                                                   
Section  23  would  maintain maximum  reimbursement  rates  until                                                               
completion   of   an   appointed   medical   review   committee's                                                               
comprehensive  examination of  the  workers' compensation  health                                                               
care delivery system.                                                                                                           
                                                                                                                                
10:10:29 AM                                                                                                                   
SENATOR GUESS  clarified Section  23 in combination  with Section                                                               
51 gives the comprehensive package.                                                                                             
                                                                                                                                
CHAIR SEEKINS referred to line 6  and asked the reason for out of                                                               
state assistance.                                                                                                               
                                                                                                                                
MR.  LISANKI answered  that language  has been  in statute  since                                                               
1988. Often consultants do not have an office in Alaska.                                                                        
                                                                                                                                
CHAIR  SEEKINS expressed  a preference  to spend  state money  in                                                               
state.                                                                                                                          
                                                                                                                                
                                                                                                                                
10:13:01 AM                                                                                                                   
SENATOR  GUESS suggested  since  the  intent is  to  look at  the                                                               
entire  delivery system,  the  DOLWF  may want  to  add the  word                                                               
"delivery" to Section 51, line 12.                                                                                              
                                                                                                                                
MR. LISANKI agreed that was a reasonable consideration.                                                                         
                                                                                                                                
SENATOR THERRIAULT  referred to  Section 25 and  wondered whether                                                               
an  employee has  any  sense  of the  cost  of  the medical  care                                                               
received, and  whether other states  impose limits on  the amount                                                               
of medical care offered to the employee.                                                                                        
                                                                                                                                
MR. LISANKI said a variety of  states have tried to put treatment                                                               
guidelines into  place. Implementation varies.  It is a  topic of                                                               
worker's compensation reform.                                                                                                   
                                                                                                                                
10:16:19 AM                                                                                                                   
SENATOR  GUESS  asked the  consequences  if  an employee  doesn't                                                               
choose a physician on the preferred physician list.                                                                             
                                                                                                                                
MR. LISANKI responded there were no consequences.                                                                               
                                                                                                                                
10:17:17 AM                                                                                                                   
Section 24 seeks  to promote injured workers'  safe and efficient                                                               
return to health and function.                                                                                                  
                                                                                                                                
10:19:15 AM                                                                                                                   
SENATOR HOLLIS  FRENCH asked whether  a rebutted  presumption was                                                               
challengeable.                                                                                                                  
                                                                                                                                
MR. LISANKI responded  there was no specific  language to address                                                               
that. He would expect everything is challengeable.                                                                              
                                                                                                                                
10:20:30 AM                                                                                                                   
Section 24 would require the Board to adopt similar guidelines                                                                  
for injuries not covered by ACOEM guidelines.                                                                                   
                                                                                                                                
10:22:49 AM                                                                                                                   
MR. LISANKI continued some guidelines would be continually                                                                      
updated. Section 24 would also take advantage of generic drug                                                                   
cost savings and adopt a preferred drug list.                                                                                   
                                                                                                                                
10:24:20 AM                                                                                                                   
Section 25 would allow employers to develop a preferred                                                                         
providers list and negotiate fee rates.                                                                                         
                                                                                                                                
CHAIR SEEKINS advised committee members of his intent to take                                                                   
testimony from people who are working to improve SB 130.                                                                        
                                                                                                                                
There being no further business to come before the committee,                                                                   
Chair Seekins adjourned the meeting at 10:31:05 AM.                                                                           
                                                                                                                                

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