Legislature(1995 - 1996)

01/23/1996 03:00 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 60 - IMPAIRMENT RATING GUIDES FOR WORKERS COMP                           
 Number 740                                                                    
 CO-CHAIR BUNDE said HB 60 was sponsored by Representative Bettye              
 Davis and asked Jonathan Sperber to present the bill.                         
 JONATHAN SPERBER, Legislative Aide to Representative Bettye Davis,            
 said that House Bill 60 would provide that the Department of Labor            
 use the most recently published edition of the American Medical               
 Association Guides to the Evaluation of Permanent Impairment,                 
 including the most recent supplementary materials in making                   
 impairment rating determinations.  He said this legislation is                
 supported by the medical community, the Department of Labor and               
 more specifically, the Workers' Compensation office.  Mr. Sperber             
 referenced the Department of Labor's position paper available in              
 committee packets, which stated in part, "Allowing the use of the             
 current edition of the publication in effect at the time of the               
 impairment rating will reduce the need for Board hearings and                 
 ensure that those applicants who meet current requirements will               
 qualify for benefits.  The older version of the AMA guides do not             
 include some injury types and do not reflect current thinking on              
 degrees of injury given new medical technology and prognosis for              
 recovery."  He directed the committee's attention to a letter in              
 their packet from Dr. Roy Schwarz who stated the AMA's position was           
 clearly stated on page 5 of the Guides 4th edition published in               
 June 1993.  That position being "The American Medical Association             
 strongly discourages the use of any but the most recent edition of            
 the Guides, because the information in it would not be based on the           
 most recent and up-to-date material."  Dr. Schwarz went on to say             
 in his letter that the position of the AMA quoted above reflects              
 advice that the AMA's staff provided in May 1992 to the staff of              
 each state medical society.  Also, it is AMA's practice to sell or            
 provide only the most recent Guides edition.                                  
 MR. SPERBER read the following statement from Representative B.               
 Davis' sponsor statement:  "There have been significant changes in            
 diagnostic and evaluation procedures over the six years.  One of              
 the most important, that the Alaska Guide does not address is how             
 the injury affects the patient's daily activity."  He noted that              
 Alaska regulations currently specify that the 1988 AMA guidelines             
 were to be used, although there has been a subsequent edition                 
 Number 910                                                                    
 CO-CHAIR TOOHEY inquired as to the cost of the Guides, including              
 the supplemental, and how often it is published.                              
 MR. SPERBER said each new edition costs approximately $75.  The               
 Division of Workers' Compensation requires three copies of the                
 latest edition.  The last two editions published were the 3rd in              
 1988 and the 4th edition in 1993.  He wasn't sure how much time               
 elapsed between the 1st and 2nd editions, and the 2nd and 3rd                 
 editions, but noted there was at least a five year period between             
 the publication of the 3rd and 4th editions.  Mr. Sperber said he             
 would defer the question regarding the cost of supplementary                  
 materials to the representative from the Department of Labor.                 
 CO-CHAIR BUNDE commented there were individuals in Anchorage                  
 waiting to testify via teleconference.                                        
 Number 978                                                                    
 TOBY STEINBERGER, Assistant Attorney General, Governmental Affairs            
 Section, Department of Law, said at the request of Paul Grossi,               
 Director, Worker's Compensation Division, she was available to                
 answer questions.                                                             
 CO-CHAIR BUNDE said the regulations require the use of an outdated            
 version of the AMA Guide, but apparently there is a need for a                
 statutory change in order to use the current one.  He asked Ms.               
 Steinberger if this legislation should reflect the ability to                 
 update without having to come back for statutory changes.                     
 Number 1010                                                                   
 MS. STEINBERGER responded it is the Department of Law's position              
 that under the current version of the statute when the new edition            
 is enforced or used, public notice has to be given.  She commented            
 she is currently reviewing a proposed regulation which has already            
 been publicly noticed, adopting the 4th edition, 1994.  After her             
 review, the proposed regulation will be sent to Deborah Behr,                 
 Assistant Attorney General in the Legislation & Regulations Section           
 of the Department of Law.  This proposed bill may eliminate the               
 need to adopt a new regulation each time there is a new edition of            
 the Guide.                                                                    
 CO-CHAIR BUNDE said as he understood it, what was being requested             
 in the legislation could actually be accomplished now by statute,             
 but they were looking for a more efficient process.                           
 MS. STEINBERGER said she thought the department, through                      
 Representative B. Davis, was asking for the more efficient process,           
 but reiterated they are currently reviewing a proposed regulation             
 to adopt the 1994 edition.                                                    
 CO-CHAIR TOOHEY referred to the supplementary materials and asked             
 if the supplemental was updated every year and if they were made              
 available to the medical community and the public.  She expressed             
 concern with a regulation like this being implemented and asked if            
 the hands of the Workers' Compensation Division would be tied if we           
 were not able to get the published edition of the 1994 edition or             
 the 1995 edition or the supplemental material.                                
 MS. STEINBERGER responded the proposed regulations adopt the 1994             
 edition and she is not familiar with the supplementary materials.             
 Number 1129                                                                   
 MR. SPERBER said it was his understanding in terms of the                     
 regulatory process, that under the current Department of Law                  
 drafting procedures, a regulation could not be promulgated that               
 would have similar type wording as HB 60, but rather the far slower           
 and more cumbersome process would have to be followed.  He said in            
 this case, about eight or nine months had now elapsed since the               
 request was placed with the Department of Labor to draft a                    
 regulation which required use of the now current 4th edition of the           
 guidelines.  He thought that Co-Chair Bunde was technically correct           
 in that a regulation could address what is being addressed by HB
 60, however, doing so by regulation would be a far slower, more               
 awkward, inefficient process.                                                 
 CO-CHAIR BUNDE commented it is somewhat frightening to think that             
 regulations take longer than statutory changes.                               
 Number 1203                                                                   
 GEOFF BULLOCK, Lobbyist, Alaska State Medical Association,                    
 testified the Alaska State Medical Association supports this                  
 legislation.  The association would like to see the updated                   
 verbiage used in the statutes rather than through the regulation              
 process, in order to make it clearer.  He noted he had just                   
 received the copyright dates of the recent editions, which showed             
 there is anywhere from a few years to many years lapse between                
 REPRESENTATIVE ROKEBERG asked for verification of the fact there              
 were representatives of the industry, workmen's compensation                  
 insurance businesses, that testified in support of this bill before           
 the House Labor & Commerce last year.  He asked Mr. Bullock if that           
 would be a correct statement.                                                 
 MR. BULLOCK responded he had not been at the hearing last year, but           
 noted that doctors at the state level seemed very supportive of it.           
 Number 1273                                                                   
 GARREY PESKA, Lobbyist, Alaska State Hospital & Nursing Home                  
 Association, testified the Alaska State Hospital & Nursing Home               
 Association supports this legislation.  The association would like            
 to see the most current Guideline be effective, rather than having            
 to go through the cumbersome process of changing regulations every            
 time there is a change in the Guidelines.                                     
 Number 1309                                                                   
 PAUL GROSSI, Director, Division of Workers' Compensation,                     
 Department of Labor, testified the Department of Labor supports               
 this legislation primarily because they view it as a way of                   
 streamlining the regulatory process.  They think it is a way to get           
 an automatic adoption of the most current AMA Guides.  The                    
 department is required to do this anyway under the current law                
 because they are required to use the AMA Guides.  The problem is it           
 requires a regulatory change every time there is a change in the              
 AMA Guide.  While the regulatory process is long and cumbersome, he           
 doesn't know that it takes as long as a statutory change, but the             
 fact is once they have the statutory change, it will be there for             
 the duration.  He pointed out the division had proposed regulations           
 to make it the most current Guide, but that process was started               
 last August.  Mr. Grossi said he talked with representatives of the           
 AMA Guide last August and they indicated it would probably be                 
 another two years before a new Guide would be in effect.                      
 Number 1411                                                                   
 REPRESENTATIVE ROBINSON asked Mr. Grossi if he thought "At the time           
 of rating" or similar language should be inserted at the beginning            
 on subsection (b) on line 5.                                                  
 MR. GROSSI said he thought the current language would work fine.              
 He noted they could pass a regulation for an effective date which             
 would provide some lag time after the publishing, so the medical              
 community, insurance community, employers' groups, employees'                 
 representatives, and the division could get copies of the most                
 recent edition.  There would probably have to be a little bit of              
 lag time to allow that to occur.                                              
 REPRESENTATIVE ROBINSON verified that Mr. Grossi didn't feel there            
 was a need for that language.  She understood there were people who           
 thought this should be added.                                                 
 REPRESENTATIVE B. DAVIS interjected it was her understanding based            
 on the information her staff received from Representative                     
 Robinson's office that the request for the language change                    
 originated from the Department of Labor.                                      
 REPRESENTATIVE ROBINSON confirmed that.                                       
 REPRESENTATIVE B. DAVIS said if the representative from the                   
 Department of Labor had stated the language change is not needed,             
 then it is not needed.                                                        
 CO-CHAIR BUNDE asked Mr. Grossi to do some research on the issue              
 and get back to the committee.                                                
 MR. GROSSI replied the Department of Labor would do that.                     
 Number 1524                                                                   
 REPRESENTATIVE VEZEY noted there would be a lag time between the              
 publication of the new edition and the time it would be available             
 in offices in which the department would not be able to effect any            
 MR. GROSSI said he wasn't exactly sure how it would be done.  One             
 of the possibilities was to pass a regulation which stated that               
 quarterly, by way of a bulletin, the division would publish a                 
 bulletin indicating the AMA Guides that would be in use during that           
 quarter.  He reiterated this was just one possibility.  It would be           
 simple in that it would require passing just one regulation and               
 that regulation could be used until the law changed.                          
 REPRESENTATIVE VEZEY differed with Mr. Grossi in that a regulation            
 that conflicts with statute is not enforceable.  He commented he              
 wasn't sure how to define "most recent published edition" and that            
 it may not be considered effective until you can reasonably receive           
 a copy of that edition.  He emphasized there would be some lag time           
 MR. GROSSI said he agreed it would be difficult.  If there was a              
 rating that was occurring in a doctor's office on the day the new             
 Guide was being published, there was no way they could possibly be            
 using the most recent published edition.  He said there would have            
 to be a way to put it in effect and thought it would be relatively            
 simple to just have a three month lag time.                                   
 REPRESENTATIVE VEZEY said an automatic way of handling it would be            
 to work with the material you have and if the effective date of the           
 new material was after your termination, an adjustment could be               
 CO-CHAIR BUNDE said he would like Mr. Grossi to address this lag              
 time issue before the next hearing on the bill.                               
 CO-CHAIR TOOHEY questioned whether the difference would be that               
 great.  She said it didn't seem likely that technology was suddenly           
 going to develop something in a certain area that would totally               
 eliminate a person from workers' compensation.                                
 MR. GROSSI interjected it was the most current science at a given             
 time and added that usually the changes are not dramatic.  There              
 may be new research that comes out, but it was usually incremental            
 CO-CHAIR BUNDE commented on the zero fiscal note and asked if we              
 start using the new manual and it addresses how these definitions             
 would affect a person's normal life, is that likely to introduce a            
 large number of new clients into workers' compensation.                       
 MR. GROSSI said it wouldn't change the number of clients in                   
 workers' compensation.  It would depend on the number of injuries             
 that occur.  If there was a permanent partial impairment that was             
 ratable, then any given injured worker was entitled to a permanent            
 partial impairment rating.                                                    
 CO-CHAIR BUNDE directed Mr. Grossi's attention to the sponsor                 
 statement which states the new guide would now address how the                
 injury affects a patient's daily activity.  He asked if Mr. Grossi            
 didn't anticipate that would significantly increase the number of             
 people on workers' compensation.                                              
 MR. GROSSi said he didn't see how it could.  The number of people             
 on workers' comp is dependent on the number of injuries that occur.           
 CO-CHAIR BUNDE clarified that it would be defining the injury                 
 differently.  In other words, it wasn't defined as a workers' comp            
 injury prior to the new definition, but now it was.                           
 MR. GROSSI didn't think it would have an effect.  He said, "The               
 only possibility would be if there is some new science that came              
 out that would allow for a type of rating system that formerly they           
 didn't have the knowledge to do that, then that could possibly                
 CO-CHAIR BUNDE asked Mr. Grossi to address this issue at the next             
 MR. GROSSI said someone from the medical community would need to              
 address that.                                                                 
 Number 1844                                                                   
 REPRESENTATIVE ROKEBERG said he wanted to clarify the effect of the           
 lag time.  As he understood it, a physician would make a judgment             
 on the rating and depending on which edition that physician is                
 using, it could have an impact on the judgment of whether there was           
 coverage or not.                                                              
 MR. GROSSI said it would depend.  They would have to use a version            
 of the AMA Guide and the rating would have to occur according to              
 those guidelines.                                                             
 REPRESENTATIVE ROKEBERG said one could be out-of-date because of              
 the mail, and that is why it was important for the timing to be               
 precise.  It could have an affect on a judgment which would result            
 in a dispute over whether there was coverage or not based on the              
 MR. GROSSI said it was important that it be established and thought           
 it could be done either through statute or regulation.  it was                
 possible to have a regulation that would allow for some period of             
 lag time.  He said it would need to be done that way to ensure that           
 the ratings would be done systematically.                                     
 REPRESENTATIVE ROKEBERG asked if Mr. Grossi wouldn't prefer to have           
 a specific statutory date certain, to avoid having to publish a               
 MR. GROSSI responded the department would be happy if they didn't             
 have to adopt a regulation on this.                                           
 CO-CHAIR BUNDE closed the meeting to public testimony.  He                    
 reiterated the policy of the House HESS Committee to not pass                 
 bills out of committee on first hearing.                                      
 REPRESENTATIVE ROBINSON reminded committee members the language had           
 been changed from workmens' comp to workers' comp.                            
 CO-CHAIR BUNDE said this bill will be held in committee for an                
 additional hearing.                                                           

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