02/19/2004 01:35 PM Senate L&C
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ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 19, 2004
1:35 p.m.
TAPE(S) 04-12, 13
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Ralph Seekins, Vice Chair
Senator Gary Stevens
Senator Hollis French
MEMBERS ABSENT
Senator Bettye Davis
COMMITTEE CALENDAR
SENATE BILL NO. 311
"An Act providing for a special deposit for workers'
compensation insurers; relating to the board of governors of the
Alaska Insurance Guaranty Association relating to covered
workers' compensation claims paid by the Alaska Insurance
Guaranty Association; stating the intent of the legislature, and
setting out limitations, concerning the interpretation,
construction, and implementation of workers' compensation laws;
relating to restructuring the Alaska workers' compensation
system; eliminating the Alaska Workers' Compensation Board;
establishing a division of workers' compensation within the
Department of Labor and Workforce Development and assigning
certain Alaska Workers' Compensation Board functions to the
division and the Department of Labor and Workforce Development;
establishing a Workers' Compensation Appeals Commission;
assigning certain functions of the Alaska Workers' Compensation
Board to the Workers' Compensation Appeals Commission; relating
to agreements that discharge workers' compensation liability;
providing for hearing officers in workers' compensation
proceedings; relating to workers' compensation awards; 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; providing for administrative penalties for employers
uninsured or without adequate security for workers'
compensation; relating to assigned risk pools and insurers; and
providing for an effective date."
HEARD AND HELD
SENATE BILL NO. 278
"An Act relating to fees for the inspection of recreational
devices, for certificates of fitness for electrical wiring and
plumbing, for filing voluntary flexible work hour plans, and for
licenses for boiler operators; and providing for an effective
date."
MOVED CSSB 278(L&C) OUT OF COMMITTEE
SENATE BILL NO. 263
"An Act extending the termination date of the Alaska Commission
on Aging and making technical revisions to citations related to
the commission."
MOVED SB 263 OUT OF COMMITTEE
SENATE BILL NO. 306
"An Act relating to the practice of naturopathic medicine; and
providing for an effective date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 311
SHORT TITLE: INSURANCE & WORKERS' COMPENSATION SYSTEM
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/09/04 (S) READ THE FIRST TIME - REFERRALS
02/09/04 (S) L&C, FIN
02/10/04 (S) L&C AT 1:30 PM BELTZ 211
02/10/04 (S) Heard & Held
02/10/04 (S) MINUTE(L&C)
02/19/04 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 278
SHORT TITLE: LABOR & WORKFORCE DEVELOPMENT FEES
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/23/04 (S) READ THE FIRST TIME - REFERRALS
01/23/04 (S) L&C, FIN
02/12/04 (S) L&C AT 1:30 PM BELTZ 211
02/12/04 (S) Heard & Held
02/12/04 (S) MINUTE(L&C)
02/19/04 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 263
SHORT TITLE: EXTEND ALASKA COMMISSION ON AGING
SPONSOR(s): SENATOR(s) DAVIS
01/14/04 (S) READ THE FIRST TIME - REFERRALS
01/14/04 (S) L&C, FIN
02/19/04 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 306
SHORT TITLE: NATUROPATHIC MEDICINE
SPONSOR(s): SENATOR(s) SEEKINS
02/06/04 (S) READ THE FIRST TIME - REFERRALS
02/06/04 (S) L&C, FIN
02/19/04 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
Ms. Linda Hall, Director
Division of Insurance
Department of Community and Economic Development (DCED)
PO Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Supports SB 311.
Mr. Chuck Lundeen, Chief Counsel
Liberty Northwest Insurance Corp.
Portland, Oregon
POSITION STATEMENT: Supports SB 311.
Ms. Kristin Knudsen, Assistant Attorney General
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Commented on SB 311.
Mr. John Giuchici
IBEW Local 1547
Fairbanks AK
POSITION STATEMENT: Opposes SB 311.
Ms. Sylvia Carlson
Anchorage AK
POSITION STATEMENT: Commented on SB 311.
Ms. Trena Heikes
Anchorage AK
POSITION STATEMENT: Supports SB 311.
Mr. Doug Wooliver
Administrative Attorney
Alaska Court System
Juneau AK
POSITION STATEMENT: Commented on SB 311.
Mr. Don Etheridge
American Federation of Labor - Congress of Industrial
Organizations
710 West 9th Street
Juneau, Alaska 99801
POSITION STATEMENT: Commented on SB 311.
Mr. Grey Mitchell, Director
Division of Labor Standards and Safety
Department of Labor & Workforce
Development
PO Box 21149
Juneau, AK 99802-1149
POSITION STATEMENT: Commented on SB 278.
Mr. Richard Benavides
Staff to Senator Bettye Davis
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on SB 263 for the sponsor.
Mr. Steven Ashland, Director
Division of Senior and Disability Services
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Supports SB 263.
Ms. Marie Darlin
AARP
Juneau AK
POSITION STATEMENT: Supports SB 263.
Ms. Pat Davidson, Auditor
Division of Legislative Audit
Legislative Affairs Agency
PO Box 113300
Juneau AK 99811-3300
POSITION STATEMENT: Commented on SB 263.
Ms. Nancy Burke, Program Officer
Alaska Mental Health Trust Authority
Department of Revenue
PO Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Supports SB 263.
Mr. Brian Hove
Staff to Senator Seekins
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on SB 306 for the sponsor.
Dr. Scott Luper
Fairbanks AK
POSITION STATEMENT: Supports SB 306.
Dr. Clyde Jensen
No address provided
POSITION STATEMENT: Supports SB 306.
Dr. Dan Young
Eagle River AK
POSITION STATEMENT: Supports SB 306.
ACTION NARRATIVE
TAPE 04-12, SIDE A
SB 311-INSURANCE & WORKERS' COMPENSATION SYSTEM
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 1:35 p.m. Present were Senators
Gary Stevens, Ralph Seekins, Hollis French and Chair Con Bunde.
Senator Bettye Davis was excused. The first order of business to
come before the committee was SB 311.
MS. LINDA HALL, Director, Division of Insurance, Department of
Community & Economic Development (DCED), opened her comments by
reiterating that the purpose of the bill is to create a stable
environment that is sustainable and will allow affordable,
available workers' compensation insurance for employers. In a
previous meeting, she was asked how Oregon workers' compensation
reforms would work in Alaska and she had discussed this with the
director of the Division of Workers Compensation, Mr. Paul
Lisankie.
In the 15 years from 1986 until 2002, Oregon went from
th
the sixth highest premium in the country to 35. Just
th
by reference, in 2000, Alaska was the 28, I could say
highest or lowest, whichever the case may be. In 2002,
th
we have gone up to 14 highest premium and I would
guess with our 2004 rate increases, we're probably
higher than that.
Oregon did some reforms that I think would have
potential to look at the cost of claims in Alaska.
Some of those dealt with requiring safety and loss
prevention programs. That would certainly contribute
to a decrease in the number of claims. There are
requirements that employers with 11 or more employees
have a safety and health committee. Oregon statute
allows the use of managed care organizations. They
have expanded their administrative dispute resolution
process; they've created an ombudsman for small
business; they've also defined the definition of
'compensability.' In Oregon, the injury must be the
major contributing cause for the treatment to be a
covered compensable claim.
They've created some incentive programs for employers
to hire injured workers and to get injured workers
back more quickly. They have requirements that
insurance carriers provide loss-prevention plans to
employers and that even small employers, if they're in
the top percent of lost workday rates, are required to
have a safety committee. So, the emphasis is on
prevention and cost containment. They have also looked
at managed care; they've looked at mandated bill
reviews and case management provisions. I think each
of these provisions should be explored for Alaska. I
don't know that in the remaining months of this
legislative session there's actually time to do that,
but I think there's potential to look at other options
that may affect how we handle claims and what claims
cost in Alaska.
With that, I would like to go back to SB 311, which is
what we're hearing today. Kristin Knudsen from the
Attorney General's Office has prepared remarks on the
workers' comp section of the bill.
CHAIR BUNDE said his layman's reading of the Oregon report made
it obvious that Alaska would want any claims to be based on an
injury that was principally caused by the work.
MR. CHUCK LUNDEEN, Chief Counsel, Liberty Northwest Insurance
Corporation, said his company is an independent operating
subsidiary of Liberty Mutual Insurance and has operated in the
Northwest for the past 20 years. It is a multi-line insurer with
workers' compensation insurance as the primary line and does
over $400 million of premium in Montana, Idaho, Oregon and now
Alaska, which totals about $23 million total. Liberty Northwest
currently processes over 20 percent of Alaska's assigned risk
pool claims and wants to "become a larger player in the Alaska
market...."
MR. LUNDEEN supported SB 311. He noted that the director's role
takes over some of the board's duties and other duties are
shifted to the new Workers' Compensation Appeals Commission. The
proposed changes will produce a faster, more cost-efficient
means to resolve disputed claims. He recalled that the workers'
compensation system, unlike the tort system, is supposed to be
no-fault. Before Oregon reformed its system, there was a lot of
litigation, which takes a long time to work through the system.
The same thing is happening in Alaska. SB 311 shortens the time
by eliminating the appeal process to the Alaska Superior Court
where cases now could go to one of 30 sitting Superior Court
judges for a complete de novo [a brand new look] review. It also
mandates an experienced professional group of hearing officers
who will have to be Alaska Bar members with significant workers'
compensation experience. Both changes will produce better
quality decisions. Additionally, he noted, these officials, as
Bar members, would be subject to the ethical rules of
professional attorney conduct.
MR. LUNDEEN said this bill contains very clear legislative
intent language that all participants in the dispute resolution
system should receive impartial, fair treatment. Another feature
of the bill states that the decisions of the Workers'
Compensation Appeal Commission will have precedential value
whereas decisions currently don't and may or may not be
published. This will help system participants to know ahead of
time which way the commission has ruled on benefit and
compensability issues. Plans can be made accordingly,
settlements will occur with more frequency and maybe some cases
would not go as far down the road. Appeals to the Supreme Court
would be allowed for rules, errors of law or for lack of
substantial evidence. He felt that greater predictability makes
a healthier insurance environment.
SENATOR GARY STEVENS asked if cost-containment and prevention
programs need legislation to be enacted.
MS. HALL responded that some statutory changes are needed.
However, insurance companies provide loss control programs and
help with inspections.
CHAIR BUNDE recognized the $380,000 fiscal note remarking that
the commissioners would be substantially compensated and asked
her to comment on that.
MS. HALL said Ms. Knudsen would address that question in her
presentation.
MS. KRISTIN KNUDSEN, Assistant Attorney General, said she had
been an assistant attorney general for 15 years and had
approximately 20 years of experience with workers' compensation
in the State of Alaska in addition to years of workers'
compensation experience elsewhere. She has worked for a labor
law firm, on the Alaska board as a hearing officer and on an
appeals board in Oregon. She has also been a hearing officer
with a union law firm. Since February 1989, she has been working
almost exclusively on workers' compensation issues in the
Attorney General's office.
She provided the committee with a flow chart that illustrated
how SB 311 changes the system in a very fundamental way.
Currently, it is called the unified board system, which she
likened to an old-fashioned public utility in that the board
does everything, has no executive director or separation of
functions. All actions having to do with investigation,
enforcement, hearings and decisions are done by that board.
MS. KNUDSEN said the board originally had three people who could
take care of everything, but after the pipeline arrived, it
became completely overwhelmed and decided to develop panels so
that the whole board did not have to sit at each hearing. A
hearing officer from within the Division of Workers'
Compensation would sit with each panel. As it became difficult
to get all the panel members together, the board decided to go
to a quorum system and the Workers' Compensation Board was then
changed to six labor members, six management members and the
hearing officers. A quorum of at least two people and no more
than three was needed to have a hearing. If a worker appeared in
front of a panel without a labor member on it, he had no right
to ask for one. The same thing went for an employer who had a
quorum without a management member.
What you do have a right to, though, and this has also
created some logistical problems, is that you do have
a right to, in any subsequent hearings on that same
case - there will still be a quorum and the original
panel - they will try and get the same people on your
case all the way up.
In the current system, what you've got is the board,
whether it's through a panel of the board or the board
itself, doing everything. There's no division director
in the statute. The board is the one that
investigates; the board is the one that charges
uninsured employers and files notices of accusations.
The board is the one that decides whether or not the
person has been uninsured and then assesses the
penalty.
What we are proposing... is a system that is more like
the systems that you get in the rest of the United
States. I would say having done, now, a state-by-state
analysis of all the processes throughout the rest of
the United States, we are unique. This system moves us
to a system more like the United States. You have a
hearing division, if you will, you have a completely
separate function of adjudication and you have a very
strong executive that goes out there, investigates and
enforces the law and you have a separate adjudication.
What this is really like is essentially... the people
who create the law and determine whether or not there
is probable cause to pull you over and who will pull
you over, shouldn't be the same people who are
deciding whether or not you violated the law. It's as
basic a concept as that.
So, what we've done here in this bill is we've created
this commission. Now, for administration purposes, it
still resides in the Department of Labor, but the
commissioner of [the Department of] Labor is not a
member of the commission. It's kind of just there for
budgetary purposes and everything, whereas the
commissioner of [the Department of] Labor now has a
director of Workers' Compensation, who is going to be
accountable for the performance parts of the
enforcement parts and the administration parts of the
law. It's essentially kind of separating, if you will,
the policeman from the judge. That, we think, will
result in a stronger and much more agile enforcement
of the law, as well as an essential element of
fairness in the application and development and
interpretation of the law.
Now, when I say an agile enforcement, what I'm talking
about here what this bill does is, it does create a
very strong director. They're going to have powers to
act more quickly; they're going to be able to - there
are new civil penalties to encourage them to be able
to go out and get stop work orders on uninsured
employers and not just get stop work orders, but be
able to assess them a civil penalty, if they are
uninsured. They are going to be able to look much more
closely and quickly at things like self insurance
certificates or other aspects of the law where it's an
enforcement type of an issue.... We'll have a more
accountable kind of a way of counting just exactly
what is going on in this division, what is happening,
what kind of product are you producing in terms of the
people's business and the enforcement of these laws.
We've also sped up some of that enforcement. For
example, on a penalty, the director can declare a
default after seven days. If they haven't paid that
penalty within seven days, they can declare a default
and go to the Superior Court for enforcement through
writ of execution.
MS. KNUDSEN explained that the administration wanted an
accountable director and more vigorous enforcement of the law,
but it was also looking for cohesion in development of the
interpretation of it. Currently, each panel considers an
individual case and those decisions are not binding on other
panels. Instead, parties have to wait for someone to take the
issue up to the Supreme Court. The board doesn't do it, and that
means the action falls on the employees and employers who have
enough interest vested in an issue to get it to the Supreme
Court and for the Supreme Court to recognize exactly what the
issue is in terms of the workers' compensation system as a
whole.
The commission would take appeals from the hearing officer
decisions and those appeals would interpret the law and those
decisions would be binding in subsequent adjudications. Instead
of waiting three or four years for an answer to a question, a
person would get an answer within a half year, a significant
advantage to this system. Most states have some form of appeals
commission and this concept with the power to give binding
guidance to the hearing officers below is not particularly
novel.
SENATOR RALPH SEEKINS asked if she meant that getting through
the Supreme Court would take six months or just getting through
the adjudication.
MS. KNUDSEN replied that she meant the commission would have an
answer in approximately six months. Currently, Superior Court
decisions are not binding on anybody other than the parties in
that case. SB 311 provides a mechanism for a system-wide
interpretation of the law to occur on a quicker basis than is
currently the standard.
One of the other issues is that we wanted also to make
sure that people understood that there was access into
this system. One of the common complaints that's often
heard is that people don't have access to appeals all
the way up. In other words, the board makes an
astonishing effort, they bend over backwards to
provide access to unrepresented employees during the
course of the initial hearing at the board level.
Going up on appeal, however, is another issue. And,
it's an issue not just for the unrepresented worker,
it also represents a significant cost to employers and
the cost of appeal is something they have to consider.
In a particular case, the money involved may not be
worth the cost of appeal, although the principle may.
This is not necessarily a decision that is easily
made, to go all the way to the Supreme Court on a
particular principle.
What this does is give a less expensive alternative to
go to get a system-wide interpretation and make
specific provision for unrepresented employees. The
director may file an appeal on behalf of an
unrepresented employee where there's a unsettled issue
of law.... So this gives something that increases
access to the commission level. In addition, the
director has powers to intervene at the commission
level in cases that are very important, for example,
to the administration of the system, where there may
be severe impacts on how things are done, say, within
reporting requirements or numbers of filings or
service issues or things like that that may have some
importance to the director directly.
So, in one way what this bill does, is it tries to
give a voice in adjudication to people who don't have
a voice now - in this appeal process.
Now, the bill does represent something that is very
important, because workers' compensation is really an
incredible industry in this state. When you think
about it, it was responsible for $210 million of
transfers of payments to or on behalf of Alaskans last
year. Of that, the state, and by the state I mean the
state just for its executive employees, pays $1.2
million to $1.5 million a month in workers'
compensation. That's a lot of money and the cost of
workers' compensation just isn't in the benefits. In
other words, for the state, it's the people of the
state, it's in the cost of other programs that can't
be delivered because there's money going to workers'
compensation. But, it's really also the cost of the
premiums - you have to add that in, too. It's a very
large industry. There's lots of money that moves
through this industry and as a result, the
administration views this as having something that
really needs to come into a more stable kind of an
environment and a more stable and accountable kind of
system than what we have now.
Because the bill does give the director the power to
raise these administrative questions, then you have
also got some consideration being given to, if you
will, the systemic balance in costs that will be
looked at, which now really doesn't occur. There's
very rarely at this stage, in this current system...
occasion when the board, itself, even though it's
technically a named party on appeal... participates in
the appeals. The idea was here to give more
opportunity for that to happen sooner.
What the administration is trying to do here is bring
the State of Alaska into the same process format as
the rest of the United States, and because there will
be a familiar forum for the resolution of disputes and
a more rapid resolution of unsettled areas of the law,
that there will be developed more certainty in the
system and it will be the kind of environment that
insurance companies are used to working in. This will
increase the global participation in the market, we
hope; but at the same time, not really impacting, we
hope, benefits that are delivered to Alaskan injured
workers.
The administration did not want to look at having to
address some of the kinds of reforms that have
occurred in other states, for example, California,
which notably just capped medical benefits at 125% of
Medicaid. Other states have also capped benefits or
indexed them in that way. We first want to give this
system a chance to right itself and develop some kind
of cohesion without having to go to the idea of having
to look at any kind of benefits reduction to Alaskan
workers.
CHAIR BUNDE said the hearing officers would be substantially
compensated and asked if it was on par with the expertise
expected of them.
MS. KNUDSEN replied yes. She explained that there are two
levels, hearing officers and commission officers.
Hearing officers in this system are being asked to
have a higher level of expertise than is currently the
class specification. The range 24 class of hearing
examiners of that ilk that we have now is what we're
trying to push these hearing officers into. We're also
looking at having a statutory level of expertise of
being admitted to the Alaska Bar and those kinds of
things. The commissioners - we're asking even more of.
We're asking for even a higher level of expertise....
SENATOR SEEKINS said it looks like some hearing officers are
being reclassified as administrative law judges and asked if
they would be separate from the pool of hearing officers.
MS. KUNDSEN replied that they are separate in the current bill,
but in earlier versions, provisions were made for a "flip over,"
which means the hearing officers would go into the pool. It was
decided that the legal provisions for the flip over were so
complex that the anticipation was that the officers would be on
the same level as the pool.
SENATOR HOLLIS FRENCH said he understood that the thrust of the
bill is to reduce the cost of dispute resolution, but not to
reduce benefits.
MS. KNUDSEN replied that it seeks to reduce the overall time-
span of litigation and, hopefully, reduce the number of cases by
having more settled questions to work from.
SENATOR FRENCH followed up asking what it costs now to conduct
the panel system up to the Supreme Court and what percentage of
a workers' compensation premium that represents.
MS. KNUDSEN replied that she could get him information on the
cost of appeals to the State of Alaska, but she didn't have
experience with the insurance premiums.
SENATOR FRENCH said he just wanted to know how much money was at
stake. He asked who would the hearing officers in SB 311 report
to.
MS. KNUDSEN replied the chief commissioner would act as the
executive of the staff.
SENATOR FRENCH asked if the pool is the same thing as the
appeals commission.
MS. KNUDSEN replied yes.
SENATOR FRENCH asked how the commissioners would be selected.
MS. KUNDSEN replied the commissioners are appointed by the
governor and confirmed by a majority of the Legislature in joint
session. That is also the way the present board members are
selected.
SENATOR FRENCH mused:
It seems we are reinventing the wheel. It seems as if
one of the benefits of this appeals commission is that
it is going to have binding precedent on the parties
below through the power of their opinions that they
release. But that does happen now in the Supreme
Court. It's not as if the panels can ignore
controlling Supreme Court precedent before them....
They have a fairly big body of law that governs where
they are going. Maybe you can help me understand why
this is such a good idea by telling me what sorts of
areas of law it is that are the most unsettled and
that you think the panel members now need guidance on.
MS. KNUDSEN replied:
The Supreme Court cases do take a long time to get an
announcement and while that's happening, issues have
come up that need to be resolved... for example of
something off the bat, interpretation of what
constitutes personal attendance. It's an issue that
there are differing opinions on and it hasn't been
announced by the Supreme Court - an interpretation,
for example, of what constitutes good faith in the
context of a mental stress claim. As you may or may
not be aware, one of the 1988 amendments provided that
mental stress that is the result of discipline or
evaluations or promotions, demotions, transfers or
other employer action taken in good faith are not
covered under the act. So, the issue of good faith in
that context is something that hasn't been addressed
at the Supreme Court level. There are other kinds of
issues along that line. The Workers' Compensation Act
is enormous and it has enormous impact as I just told
you. There's hundreds of millions of dollars in it
every year. It does have enormous impacts. This
process, we hope, would compress the time for
obtaining some of the answers to these kinds of
questions. I will tell you also, frankly, Senator
French, it may not be economical for some of these
small unanswered questions to go all the way to the
Supreme Court from either parties' point of view.
Hopefully, they would be much more economical for
obtaining commission guidance.
MR. JOHN GIUCHICI, IBEW Local 1547, said he also represented
himself as a current Workers' Compensation Board member. He
thought Ms. Knudsen had a lot of good ideas. [END OF SIDE A]
TAPE 04-12, SIDE B
MR. GUICHICI explained that in 1988 and again in 2000, Workers'
Compensation ad hoc committees, composed of 50 percent
management and 50 percent labor, reviewed these bills beforehand
and came up with unanimous joint support, but that didn't happen
this time. However, the ad hoc committee has now been
resurrected and it is going to meet on Monday in Anchorage to go
over this legislation point by point.
MR. GUICHICI thought the board should be preserved because it
structurally guarantees that labor and management participate in
the process.
Having board members from the workplace participating
in the decision-making process provides a reality
check for the whole system. We should not remove from
the decision-making process the only people who are
enmeshed in the workplace. The board does have a 45-
year track record and it has worked very well.
A politically appointed appeals commission tribunal
may not provide the balance or fairness or
consistency, which a lot of people are advocating
right now. Even if one administration appoints a very
highly qualified appeals commission tribunal, without
regard to partisan politics or financial influence,
there's no guarantee that the next administration
would do the same. Predictably, the commission rulings
would change like a weathervane with every
administration. Present board members do provide
institutional balance. They are guaranteed to have
different institutional perspectives coming from both
labor and management. A unified review of all cases
consistent rule of law is provided by the Alaska
Supreme Court, which is very stable and fairly well
protected from the winds of political change.
Another point that I'd like to make is that the
hearing officers should not be removed from classified
service. If the hearing officers are made exempt or
partially exempt, they will have reason to fear for
their livelihood, promotions, etc., if they rule
against a powerful or politically connected party. At
present, people who actually hear the evidence and
observe the witnesses decide what the facts in the
case are, if the courts greatly defer to the board's
evaluation of the evidence. This provides a guarantee
of some degree of fairness if parties really have been
heard and the people who heard the evidence actually
decide the case. In the proposed legislation, cases
would be heard and decided by a single hearing officer
and it allows review of the decisions by an appeals
commission tribunal. This means that the tribunal does
not have to give any weight to the fact-finding of the
person who actually heard the case. I believe this
undercuts the fairness of the process. [Indisc.] with
the exception that anyone who has political
connections with the appointed appeals commission
tribunal may be able to get a decision overturned by a
phone call. [Indisc.] undercuts the actual fairness
and accurateness of the process by allowing people who
did not hear or see the witnesses to substitute their
judgment for the judgment of the person who actually
did hear it and see it.
MR. GIUCHICI said this would also be a very expensive change and
thought that it wouldn't be fair to the injured worker or the
citizens of Alaska.
MS. SYLVIA CARLSON, Anchorage resident, said she is currently a
claimant in the Amchitka case that has been before the Workers'
Compensation Board for many years. These cases began when
workers were knowingly exposed to ionizing radiation during the
U.S. Atomic Energy Commission's detonations of nuclear devices
over 30 years ago. Her husband was 32 years old when he was
exposed and died when he was 40. Four years ago, Congress
enacted a provision that compensated workers of nuclear weapons
productions sites throughout the country. The Department of
Energy (DOE) is required to assist eligible applicants in filing
state workers' compensation claims. Qualified applicants may
have their medical records and supporting documentation reviewed
by a panel of three independent physicians. The panel applies a
federally adopted standard and issues a determination on whether
or not the illness or death was caused by exposure at the
workplace. It also assists applicants by instructing contractors
not to contest the state workers' compensation claims that arise
from a favorable physician panel determination and may also
reimburse or indemnify contractors to the full extent of the
claims.
She received a positive determination from DOE in April, but DOE
was unable to assist her further by instructing the contractor
not to contest her claim or to reimburse it for reasons that she
still doesn't understand. Her claim under the Workers'
Compensation system is currently being contested by the
contractor, [indisc.] Centennial, and two insurance companies,
Travelers Insurance Company and the Alaska Insurance Guaranty
Association. Contractors appealed to the Alaska Superior Court
to stay the case and review it. The stay was denied and the
review has not been addressed, yet. Another decision was made
yesterday and she felt it, too, would be appealed to the Alaska
Superior Court. She felt that the board would take 90 to 120
days to decide the merits of her case.
If SB 311 becomes law by the end of this legislative
session, its effect on my case could be very
detrimental in that assuming the board finds in her
favor, will their decision be appealed to the Superior
Court or to the new Appeals Commission? Will my case
have to wait until members of the new commission are
appointed and ready to hear cases? If so, how long
will the startup process take...?
There are over 90 former Amchitka workers and their
survivors with cases waiting to be heard. On average,
the Amchitka claimants are in their 70s and 80s. Many
are very sick with cancer right now. It seems to me it
would be unreasonable to ask them to wait yet again
while the system is being revamped. I'm asking that
this committee consider the effects the new law will
have on the Amchitka cases. Perhaps the changes can be
made gradually rather than immediately.
MS. CARLSON recommended a mandatory mediation process before the
case reaches the appeals stage.
CHAIR BUNDE responded that he was waiting for the director of
the Division of Insurance to get back to him with information on
how the pending Amchitka claims would be transitioned if this
legislation would be adopted.
MS. TRENA HEIKES, defense attorney, said she had been practicing
in workers' compensation since 1985. She reported that general
views of SB 311 from others in the field are favorable, because
it raises the bar in experience requirements for hearing
officers. Currently, they don't even need a license to practice
or even a law degree. She explained that workers' compensation
is a "statutory creature" and is very complex and convoluted; it
is not taught in law school. She repeated that this issue is
well-received by attorneys on both sides of the table.
The appeals commission is well-received, too, because the bar is
being raised on experience for the administrative tribunals.
Currently, appeals are handled at the Superior Court level and
from there, go to the Alaska Supreme Court. She didn't know of
any judges currently on the bench who had any experience in
workers' compensation. That whole appeal level slows the process
down. This bill streamlines that process and puts the initial
appellate level before attorneys who have experience in workers'
compensation.
The only negative that we can see, and I think it's
been expressed before, is what we see as a
politicalization, if you will, of the appeals
commission by a direct appointment by the governor.
Workers' comp, at least the board, is an adjudicatory
body and as such it needs to maintain a separateness
from the Legislative branch and the administrative
branch as best it can, understanding that it is under
the administrative branch....
Instead, what I think is being discussed is perhaps a
modification where you have the equivalent of
selection through the process that we select our
district and superior court judges, which is some sort
of a commission setup comprised of attorneys and lay
members who interview prospective candidates for the
appeals commission position and select through the
interviewing process three names for each position and
submits those to the governor. That's the equivalent
of what we now do for our district and superior court
judges. There's also a Bar poll, but I don't think
that would be something that you would need for
workers' compensation. But that is one way to
depoliticize that selection process.
MR. DOUG WOOLIVER, Administrative Attorney, Alaska Court System,
said the Court doesn't take a position on the merits of the
bill, but he wanted to explain the impact that one provision
would have. It is the provision that allows appeals from the new
appeals commission to go directly to the Supreme Court bypassing
the Superior Court.
In the past number of years, the court system as a
whole has seen about 36 workers' comp cases a year on
appeals from the agency to the Superior Court. About
75 percent of those are resolved at the Superior Court
level. About 25 percent of those, or about 9 cases per
year, are appealed on further to the Supreme Court.
The court doesn't believe that by changing the
commission process, they are likely to reduce very
much of that total number of 36 cases a year. We
believe that for a couple of reasons. One, you're
always going to have a certain level of appeals
anyway. Right now the board averages 275 final
resolutions each year and we get about 13 percent of
those....
There are different types of appeals. You get a merit
appeal simply because regardless of how good the new
expert panel is, they are just like Superior Court
judges.... There will always be a novel legal issue
that is raised each year. Those will continue to come
to the Supreme Court. Additionally, even though this
body seeks to be independent, it's still under the
administrative proceeding. Some people simply don't
trust administrative proceedings; they don't trust the
final outcome. It's a small percentage of people, but
we're only talking about 36 cases a year.
MR. WOOLIVER said that some people want their day in court and a
certain percentage are tenacious and would appeal regardless.
"So, the difference will be that rather than having 75 percent
of them resolved in Superior Court, we will see all 36 of them
at the Supreme Court."
He said that an important feature of the current system is the
attempt at balancing the interests of labor and the interests of
management on the panels. Nothing in the current bill attempts
to strike a balance between those two, sometimes competing,
interests. The court's concern is there might be more appeals if
one side or the other feels the commission benefits the other
guy. The fiscal note does not assume that increase. There will
be a savings from the 25 percent of Superior Court cases that
are appealed to the Supreme Court, because the Superior Court
will be cut out.
He is concerned about the other 75 percent of the cases that get
resolved at the Superior Court level, because the Superior Court
is a committee of one while the Supreme Court is a committee of
five. Opinions are drafted, circulated, amended by other members
and recirculated until there is a consensus. "You will save time
in 25 percent of the cases, but add on time to the other 75
percent."
MR. WOOLIVER explained that the fiscal note adds staff at the
Supreme Court level to more quickly resolve those cases and to
offset the inevitable impact additional cases at the Supreme
Court level will have on all of the other matters before the
court.
SENATOR FRENCH commented:
I would just remark in your committee of one at
Superior Court level, you left out the all-important
law clerk, who actually writes that opinion and just
gets the judge to sign off on it, but I agree that
they are hard-working and they get the job done.
SENATOR GARY STEVENS said the proposal seems to professionalize
the commission by bringing in more attorneys and asked:
Wouldn't the fact that precedence is being set and a
record established, wouldn't that ease the number of
cases that are appealed to the Supreme Court in the
proposed structure or do you think they would not be
of any assistance at all?
MR. WOOLIVER replied that he just didn't think changing the
professional level of the board would reduce the caseload.
Judges have said their view is not that they are seeing cases
because they are incompetently decided. "They are seeing cases
for the reasons that I've explained."
MR. DON ETHERIDGE, American Federation of Labor-Congress of
Industrial Organizations (AFL-CIO), asked the committee to hold
SB 311 so that the ad hoc committee could have a chance to look
at its Monday meeting. He was incensed that labor and management
had been entirely left out of discussions on this issue so far.
He was also alarmed about the speed with which this bill is
being heard.
SENATOR FRENCH asked how long he anticipated the ad hoc
committee would take to come to a position on the bill.
MR. ETHERIDGE replied that it is meeting on Monday and he had no
idea how long it would take them to look at it.
CHAIR BUNDE said he hoped the committee would expedite its
review of the bill and said he would hold it for the time being.
SB 278-LABOR & WORKFORCE DEVELOPMENT FEES
CHAIR CON BUNDE announced CSSB 278(L&C), version D, to be up for
consideration.
MR. GREY MITCHELL, Director, Division of Labor Standards and
Safety, Department of Labor and Workforce Development (DOLWD),
said the CS doesn't impact his office. The word "agreement" was
added on page 2, line 9, and he doesn't have a problem with
that.
SENATOR RALPH SEEKINS moved to pass CSSB 278(L&C), version D,
from committee with individual recommendations and attached
fiscal note. Senators French, Seekins, Stevens and Chair Bunde
voted yea; and CSSB 278(L&C) was moved from committee.
SB 263-EXTEND ALASKA COMMISSION ON AGING
CHAIR CON BUNDE announced SB 263 to be up for consideration. He
recognized that the following people from the Commission on
Aging were present in the audience: Steven Ashman, Frank Appel,
Doris Bacus, Ella Craig, Jesse Gardner, Betty Keegan, Banarsi
Lal and Priscilla Thorsness.
MR. RICHARD BENAVIDES, staff to Senator Bettye Davis, sponsor of
SB 263, said this legislation would extend the Alaska Commission
on Aging until June 30, 2008 and would make changes to statute
that reflect the transfer of the commission from the Department
of Administration to the Department of Health and Social
Services.
The changes basically have the effect of making the
actual commission more of a planning and advocacy
organization while allowing the department to actually
be the reviewer and decision maker on the actual
grants. The Senator believes that these changes are
for the good and believes that the Alaska Commission
on Aging has continued to help older Alaskans lead
dignified, independent and useful lives.
MR. STEVEN ASHLAND, Director, Division of Senior and Disability
Services, Department of Health and Social Services (DHSS)
supported reauthorization of the Commission on Aging, which has
put together some very good programs for seniors and elders
throughout the entire State of Alaska.
MS. MARIE DARLIN, AARP Capitol City Task Force, fully supported
extension of the Commission on Aging.
MS. PAT DAVIDSON, Legislative Auditor, said the audit recommends
a four-year extension of the commission. Other than overwhelming
support for the commission, the reasonableness of the granting
process was noted, but it wanted more services and more funding.
CHAIR BUNDE asked if a move to HESS would help grant monitoring
opportunities.
MS. DAVIDSON replied that she believed so.
I believe you're going to have a little bit more
professional eye towards just overall grant
management. This is an issue that came up during our
statewide single audit. Because of that, this will be
one of those recommendations that we continue on until
it has been resolved.
MS. NANCY BURKE, Program Officer, Alaska Mental Health Trust,
supported SB 263. She said:
The Alaska Commission on Aging is a critical part of
the trust budgeting finance and advocacy procedures.
We value and require their support in watching out for
the most vulnerable Alaskans, which they do.
SENATOR SEEKINS moved to pass SB 263, version A, out of
committee with individual recommendations and attached fiscal
note. Senators Stevens, Seekins, French and Chair Bunde voted
yea; and SB 263 moved from committee.
SB 306-NATUROPATHIC MEDICINE
CHAIR CON BUNDE announced SB 306 to be up for consideration.
MR. BRIAN HOVE, staff to Senator Seekins, sponsor of SB 306,
said it updates current law relating to naturopathic medicine
and, as a result, Alaskans' accessibility to safe,
comprehensive, high-quality health care will be significantly
enhanced.
The key elements of this legislation include:
1. Safeguarding Alaskans' use of naturopathic medicine
by insuring that the highest quality of care
possible from licensed, well-trained and
professional naturopathic physicians.
2. Mandating continuing education requirements so that
practitioners are subject to a state and national
examination process.
3. Establishment of scope of practice to include the
use of natural substances, homeopathic medicine,
dietary, nutritional and health counseling, minor
surgery and all necessary diagnostic and imaging
studies.
4. Providing prescriptive writing authority to those
naturopathic physicians earning licenses.
5. Establishment of a qualified trade association of
naturopathic physicians to work with the Division of
Occupational Licensing towards the implementation of
regulations requiring specific state and federal
examinations and licensure requirements.
He explained that naturopathic physicians go through four years
of undergraduate pre-professional training followed by an
intensive four-year natural program emphasizing both academic
and clinical studies. The practice of naturopathic medicine was
first licensed in Alaska 17 years ago and the proposed
legislation updates the statute where needed. Similar
legislation exists in 14 other states.
CHAIR BUNDE said that complaints about a regular M.D. get taken
up with the State Medical Board and asked if naturopathic
physicians follow that same route if a complaint was filed.
MR. HOVE replied that he thought that complaints would be
circulated through the Division of Occupational Licensing.
CHAIR BUNDE asked if the Division of Occupational Licensing
would act like the Medical Board.
DR. SCOTT LUPER, Fairbanks naturopath, stated support for SB
263. [END OF TAPE]
TAPE 04-13, SIDE A
DR. LUPER said he has had a lot of experience with naturopathic
education and has practiced in Fairbanks for the past 3.5 years.
The central issue of SB 306 is whether naturopathic physicians
have enough education to have prescription rights and do minor
surgery. He referred the committee to a Journal of American
Medical Association (JAMA) article that said naturopathic
physicians are trained as primary care providers (family
doctors).
Naturopathic doctors are trained to take a history, do
physical exams, order the appropriate tests or
diagnostic images and come up with a diagnosis and a
treatment. Naturopathic physicians are also trained to
refer when necessary. We're trained in all the basic
things that family doctors are trained to do including
minor surgery, including the use of
pharmaceuticals.... Their [naturopathic] clinical
education, which is entirely outpatient-based, is
designed to prepare them to be primary care providers.
Another handout from Dr. LUPER showed that the number of course
hours required by the three leading naturopathic and the three
leading allopathic colleges are comparable and run around 4,000
hours. Another article averaged the pharmacological training of
126 allopathic, naturopathic and osteopathic schools across the
country and indicated that they all provide about 100 hours of
instruction.
Instructors at the naturopathic colleges are comparable in
training and experience to the instructors at the allopathic
colleges. When he was in school, his instructor also taught at
the local medical school. Clerkship hours, for hands-on
training, are comparable for both naturopathic and allopathic
colleges at about 3,000 hours. The last thing he pointed out was
a comparison of the pharmacology catalogues from the College of
Naturopathic Medicine and Stanford University, which indicated
that they basically have the same courses and cover the same
material.
CHAIR BUNDE asked why naturopaths would not have their
disciplinary problems addressed by the Medical Board if doctors
and naturopaths have similar training and now begin to do
similar duties.
DR. LUPER said that is a good question and explained that the
original intention was to create a naturopathic board. However,
the Legislature as well as the governor's office are reluctant
to create new bureaucrats. Director, Rick Urion, of the Division
of Occupational Licensing, said that the division already
functions in an oversight capacity for the naturopathic
profession, as well as others. "If there is a complaint, they
hear the complaint."
CHAIR BUNDE interrupted to say that the division hears
complaints from barbers and hairdressers. "You're talking about
medicine. Why wouldn't you want this to be under the State
Medical Board?"
SENATOR RALPH SEEKINS remembered that originally a separate
board was discussed, but the department recommended that
oversight be contained within the administration at this time.
"It's not that these folks were trying to avoid any kind of
oversight of professional practices."
CHAIR BUNDE said he wasn't indicating that at all; rather let
doctors be judged by doctors.
DR. LUPER agreed and said that Mr. Urion suggested creating an
advisory board. The complaints would go to the advisory board
first, and it would let the division know if a particular
complaint is valid. "It takes the people who would have been on
the board and takes them out of state government and puts them
in the private sector to act as an advisory board."
SENATOR HOLLIS FRENCH asked why naturopaths would not fall under
the purview of the State Medical Board.
DR. LUPER replied:
I think it's because the State Medical Board doesn't
have the expertise and knowledge to know what's
appropriate in the practice of naturopathic medicine.
Naturopathic doctors will do things which are outside
the educational scope and experience of M.D.s - for
example, the use of herbs or the use of homeopathics,
the use of physical therapy modalities, those kinds of
things.
SENATOR FRENCH asked if that problem would be solved if
naturopaths had better representation on the board, itself.
DR. LUPER said the M.D.s would have to be asked if they would
want naturopaths on the Medical Board. He concluded saying that
his real passion is for giving quality care to his patients. He
spoke about one of his patients who needed an anti-hypertensive
medication right away and while Dr. Luper has the training to
write it, he can't legally do that in Alaska.
In Fairbanks, where I practice, it's difficult for him
to get an appointment with another doctor. It's three
weeks out. And, I know exactly what he needs. I've
been trained in knowing what he needs. In Arizona I
can write the prescription, because I have a DEA
license that allows you to write prescriptions,
already. But only in Alaska am I prevented from doing
what is best and appropriate for my patients.
So what did he do? He went to another doctor; he spent
the money. The doctor took his case and said, 'Oh
yeah, Doctor Luper is right; that's exactly what you
need.' He complained. It's stories like his that drive
me to sit across from you. I don't have any monetary
gain in this. I'm a busy doctor. I'm seeing as many
patients as I can see, but I want to provide the best
care I can to my patients. Right now one of my hands
is tied behind my back. I don't use drugs very much, I
don't need to. But every once in a while, in cases
like that, it's in the best interests of public
health, I think, to do that.
DR. CLYDE JENSEN, Juneau, said he is frequently called upon to
speak at hearings comparing educational programs because of his
leadership experiences at naturopathic, osteopathic and
allopathic colleges. He has a doctorate in pharmacology and has
been a faculty member and chief executive officer at
osteopathic, allopathic and naturopathic medical schools. The
requirements to get into these medical schools are all the same,
the basic sciences are taught at the same level of intensity and
for the same number of hours. Clinical education of naturopaths
differs in some instances from training for physicians.
Naturopaths receive stronger training in areas of nutrition,
botanical medicine, physical medicine (with the exception of
osteopaths), preventive medicine and referrals. Medical and
allopathic schools have an advantage over naturopathic schools
in that much of their training takes place in inpatient
facilities. Naturopathic physicians typically don't have
hospital privileges. They don't have the opportunity to do
residencies or other types of post-graduate medical education
because there is no federal reimbursement for those types of
programs for naturopathic physicians.
In summary, I have learned naturopathic medical
students have some areas of training that are superior
to, and other areas of training that are not as strong
as, conventional medicine, but most areas of training
I've learned were quite comparable.
CHAIR BUNDE thanked him for his comments.
DR. DAN YOUNG, Eagle River, said that Dr. Jensen's resume' is
very unique and comprehensive. Dr. Young reviewed his own
credentials, which were quite extensive, as well. He said that
Alaska is the only state that does not allow naturopaths a full
scope of practice. The main issues are inclusion of minor
surgery and prescriptive rights. He noted several letters of
support from medical doctors, nurse practitioners, physicians'
assistants and dentists and the letters keep coming in. The goal
is complementary medicine so patients get the best care
possible. He wanted the committee to understand that some M.D.s
attend naturopathic medical schools, under an advanced standing,
to learn naturopathic therapies.
We are the foremost experts in drug and nutrient
interactions. My wife [another naturopathic doctor]
specifically who does women's health, is really
limited because when she needs to do conjugated
estrogen for one of her patients, she cannot write for
that and that is absolutely absurd. We are very well
trained in these cutting edge therapies and it serves
Alaskans for us to be able to do this.
DR. YOUNG pointed out that naturopaths have been licensed for 17
years in Alaska and have been regulated by the Division of
Occupational Licensing. There have been very few disciplinary
actions. And, of the 601 practicing naturopaths in Portland,
Oregon, two have committed improprieties, a very low percentage.
So, we practice safe medicine, our patients like us,
we have very low malpractice rates and we are very
good at what we do. We are trained to refer to those
people who do the thing that we don't do, just like
any primary care would do.
CHAIR BUNDE thanked him for his comments and said the committee
would take this bill up again, but time had run out. He
adjourned the meeting at 3:33 p.m.
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