Legislature(2009 - 2010)BARNES 124
02/24/2010 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB342 | |
| HB346 | |
| HCR19 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 342 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HB 346 | TELECONFERENCED | |
| *+ | HCR 19 | TELECONFERENCED | |
HB 346-WORKERS' COMPENSATION ADVISORY BOARD
3:55:50 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 346, "An Act establishing the Workers'
Compensation Advisory Board; and providing for an effective
date."
3:56:19 PM
REPRESENTATIVE NEUMAN made a motion to adopt Amendment 1,
labeled 26-LS1447\R.1, Bailey, 2/15/10, as follows:
Page 1, line 1:
Delete "Board"
Insert "Council, and abolishing the Medical
Services Review Committee"
Page 1, line 5:
Delete "Board"
Insert "Council"
Page 1, line 6:
Delete "Board"
Insert "Council"
Delete "board"
Insert "council"
Page 2, line 10:
Delete "board"
Insert "council"
Page 2, line 13:
Delete "board"
Insert "council"
Page 2, line 16:
Delete "board" both places
Insert "council" both places
Page 2, line 17:
Delete "board"
Insert "council"
Page 2, line 19:
Delete "board"
Insert "council"
Page 2, line 20:
Delete "board"
Insert "council"
Page 2, following line 23:
Insert new bill sections to read:
"* Sec. 2. AS 23.30.095(j) is repealed.
* Sec. 3. AS 23.30.275, enacted by sec. 1 of this
Act, is repealed June 30, 2015.
* Sec. 4. Section 82, ch. 10, FSSLA 2005, is
repealed."
Renumber the following bill sections accordingly.
Page 3, line 8:
Delete all material.
Renumber the following bill section accordingly.
3:56:55 PM
REPRESENTATIVE HOLMES objected for purpose of discussion.
3:57:05 PM
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, paraphrased from the sponsor's statement, inserted,
as follows [original punctuation provided]:
Since the mid-1980's an informal workers' compensation
advisory committee has operated in Alaska. This "Ad-
Hoc" committee was comprised of representatives from
organized labor and from the Workers' Compensation
Committee of Alaska - an industry group organized to
lobby for changes to Alaska's Workers' Compensation
Act. The Ad-Hoc Committee was instrumental in
effecting the huge changes made to the Act in 1988.
However, since then, the committee has been unable to
achieve any success in large part due to their lack of
any statutory legitimacy. In 2005, the legislature
amended AS 23.30.095 to create a Medical Services
Review Committee to advise the commissioner of the
Department of Labor and Workforce Development in the
area of medical costs and related services in workers'
compensation. In November 2009, the Committee issued
its final report and recommendations. One of the
recommendations was the establishment by statute of a
Workers' Compensation Advisory Council to advise the
commissioner and legislature in the area of workers'
compensation.
Similar councils have been created and operate quite
effectively in other states. These councils are
charged with recommending statutory changes to the
legislature as well as regulations to departments in
the area of workers' compensation. The purpose of the
council is to improve workers' compensation systems by
drawing together representatives from all workers'
compensation stakeholders who gather and analyze data
and information, discuss and debate options and make
recommendations regarding problems facing the
effectiveness of workers' compensation systems.
This bill creates a council similar to that found in
many other western and mid-western states. The Council
is comprised of 11 voting and 5 non-voting members:
four voting members drawn from organized labor, four
voting members drawn from various employer groups, and
three voting members from the various medical
societies. Non-voting members provide expertise and
are drawn from the insurance industry (2 members) and
the legislature (one from each legislative body).
MR. JACKSON remarked that in the haste to have the bill drafted
the council was inadvertently named a board. Amendment 1 would
correct that discrepancy. He referred to page 2, lines 18 - 20,
of Amendment 1, and noted one additional change in Sections 2 -
4, repeal the Medical Services Review Committee, since it is
replaced by this new council.
3:58:49 PM
REPRESENTATIVE NEUMAN asked for the purpose of the Medical
Services Review Committee.
MR. JACKSON explained that in 2005, the legislature amended AS
23.30.095 to create a Medical Services Review Committee (MSRC),
whose purpose was to advise the commissioner of the Department
of Labor and Workforce Development (DLWD) in the area of medical
costs and related services in workers' compensation.
REPRESENTATIVE NEUMAN restated that the committee reviewed
medical services. Thus, if a person was injured on the job, the
MSRC would determine whether treatment is necessary.
MR. JACKSON related that the MSRC does not review cases on a
case-by-case basis, but the committee would review items such as
the entire medical fee schedule.
4:01:21 PM
REPRESENTATIVE T. WILSON asked whether the composition of the
board is well rounded or if it should be changed.
MR. JACKSON explained that during the course of the MSRC
meetings, the Alaska State Medical Association and others
provided input as interested parties. He offered his view that
the recommendations seem fairly balanced, and although the final
composition may not be perfect, the larger a council or a board
becomes the more cumbersome it also becomes. The proposed
Workers' Compensation Advisory Council (WCAC) would be comprised
of 11 voting members, which seemed to be a reasonable size. A
number of ex-officio members can also provide input. The WCAC's
meetings are public so people will have an opportunity to make
comments at the regular WCAC meetings.
4:02:53 PM
CHAIR OLSON explained that it has taken four and a half years to
arrive at this point and a significant amount of work was
accomplished in the past six months.
4:03:03 PM
REPRESENTATIVE LYNN referred to page 2, line 4, of HB 346 to the
two members of the legislature that would be appointed to the
WCAC. He asked whether it would be useful to have a minority
and majority viewpoint on the WCAC, and select members that have
garnered the most votes and the least number of votes in the
election process.
MR. JACKSON answered that the MSRC recommended that the
leadership from each body of the legislature make appointments
for membership serving on the proposed WCAC.
REPRESENTATIVE LYNN suggested again that perhaps both political
parties should be represented.
4:04:37 PM
REPRESENTATIVE NEUMAN recalled that typically the leadership
from each body of the legislature makes appointments for
membership serving on councils, boards, or task forces.
REPRESENTATIVE LYNN maintained his concern.
MR. JACKSON agreed it is a policy call.
CHAIR OLSON recalled that the Ethics Committee is the only
committee he is aware of that makes that distinction.
REPRESENTATIVE LYNN expressed interest in hearing the viewpoint
from other committee members.
4:06:02 PM
REPRESENTATIVE BUCH related that if the sponsor was amenable,
that he would not oppose the change.
CHAIR OLSON remarked that he would need to consult with the
legislative legal drafters as to the appropriateness.
4:07:00 PM
LINDA HALL, Director, Division of Insurance, explained the
history of the advisory committees on workers' compensation.
She related that the committee members received some letters and
the sponsor statement also references an ad hoc committee. The
ad hoc committee produced numerous proposals for workers'
compensation reform in the late 1980s. The past few years the
ad hoc committee has had difficulty in reaching agreement to
address workers' compensation issues. When the MSRC met this
summer, it tried a different approach to find ways to improve
the workers' compensation system, particularly since it had
difficulty in reaching a good outcome. She recalled other
states have had similar success, such as in Oregon. While
Oregon's committee composition is a little different, some of
their members have advised the Alaska legislature on their
success in working on workers' compensation issues.
4:09:11 PM
MS. HALL said that it seemed to her a body with some statutory
authority might bring a different level of credibility to the
process. She offered her support for the composition of the
proposed WCAC and for establishing this type of an advisory
council.
4:09:42 PM
TRENA HEIKES, Director, Division of Workers Compensation,
Department of Labor & Workforce Development, stated that she is
also speaking as Chair of the Medical Services Review Committee
(MSRC). She stated the bill is much needed. She restated
background information, relating that HB 346 came out of the
recommendations made by the MSRC. In November 2009, the MSRC
submitted its final report to the Department of Labor &
Workforce Development (DLWD). The MSRC recommendations
contained cost containment measures, as well as recommending the
creation of the Workers' Compensation Advisory Council (WCAC).
Since the mid-1980's an informal Workers' Compensation Ad Hoc
Committee has operated in Alaska in an advisory capacity This
"Ad Hoc" Committee, without any statutory authority, was
comprised of representatives from organized labor and from the
Workers' Compensation Committee of Alaska - an industry group
organized to lobby for changes to Alaska's Workers' Compensation
System. Thus, out of "labor" and the WCCA came the ad-hoc
committee, which was instrumental in effecting the huge changes
made to the Workers' Compensation Act in 1988. Since then the
committee has been unable to achieve any success in large part
due to inadequate public input. She surmised that likely
happened due to the lack of any statutory legitimacy for the Ad
Hoc Committee. The meetings were not public, generally were
held behind closed doors, and consequently lack public input.
During her time as a workers' compensation attorney, she
assisted in making proposed changes to the workers' compensation
laws. Although little was accomplished, some of what surfaced
got passed into law since labor and industry both supported the
legislation.
4:13:33 PM
MS. HEIKES offered her belief that at least one administration
ignored the ad hoc committee since it was not formalized in
statute. Thus, the need arose to formalize the MSRC. In 2005,
the legislature amended AS 23.30.095 to create a Medical
Services Review Committee to advise the Department of Labor and
Workforce Development's Commissioner in the area of medical
costs and related services in workers' compensation.
MS. HEIKES stated that this past summer and fall larger issues
loomed and the MSRC began to examine councils in ten other
Western states to view how their councils functioned and to
review their respective statutes. She reiterated Ms. Hall's
comments, that these councils were comprised of labor and
management with the rest acting in an advisory capacity. They
work very effectively in "drilling down" into workers'
compensation issues and making recommendations to the
legislature. She thought they were successful because once the
issues passed through the council, both labor and industry put
their "stamp of approval" on the issues. Generally these
councils have been successful, she remarked. The proposed WCAC
is most closely based on the Wisconsin model. She referred to a
letter in members' packets from Frances Huntley-Cooper of the
International Association of Industrial Accident Boards and
Commissions (IAIABC), describing how the Wisconsin model
operates. The MSRC drew from that model as well as from Oregon,
Washington, and Montana, compiling recommendations that may work
well in Alaska. The intent of the MSRC was to gather workers'
compensation stakeholders together to analyze data and
information, discuss and debate options, and make
recommendations to transform Alaska's Workers' Compensation
System into a first-class system.
MS. HEIKES stated that the MSRC did not want to include people
with a specific agenda since committees comprised of single
agenda members do not work well. Instead, it is desirable to
have people serve who possess a single goal of working to
improving the workers compensation system, healing the injured
worker, and returning the worker to a productive life as soon as
possible, to minimize the impact on their lives.
MS. HEIKES stated that under HB 346, the proposed WCAC would be
comprised of 11 voting and 5 non-voting members: 4 voting
members drawn from organized labor, 4 voting members drawn from
various employer groups, and three voting members from the
various medical societies. Non-voting members would provide
expertise and were drawn from the insurance industry. In fact,
every council the MSRC reviewed had industry as a non-voting
participant. One member from the DLWD and one from each
legislative body would also serve on the proposed WCAC. The
primary purpose of legislative membership would be to apprise
the legislature on matters, such as on issues being reviewed by
the WCAC. She related the MSRB expressed concern about voting
members and committee members should have received letters to
that effect.
4:17:32 PM
MS. HEIKES related that of the 10 states examined, only
employees and employers were given a vote on the council.
Doctors were members but were non-voting members. This bill is
different, since the MSRB voted by a slim majority to give
doctors a vote. The MSRB took the view that doctors should have
a vote since workers' compensation comes down to a "three-legged
stool" consisting of employers, employees, and doctors, due to
the personal injury aspect. The MSRC expressed concern that if
doctors did not have a vote, they would just not show up, and
obtaining their perspective is important. She pointed out that
the insurance industry was not given a vote, although their
expert assistance will also be required, but no other state
council gave them a vote. She said that they really "don't have
a dog in the fight." She recalled one MSRB member stating that
the industry just passes the savings on to the system. She
remarked that the insurance industry also did not specifically
request a vote on the proposed WCAC. She concluded that this
bill creates a WCAC that has been needed in Alaska for some
time, and through the proposed WCAC, the state may be able to
garner more public input to a degree never experienced in
Alaska. She urged members to vote in support of HB 346.
4:19:43 PM
MS. HEIKES, in response to Chair Olson, said she leaves it up to
the legislature as to whether it wants a bi-partisan council.
She stated that these members really serve as messengers to the
legislature to inform them of emerging issues.
CHAIR OLSON remarked he is unaware of any party affiliation on
other boards.
MS. HEIKES agreed that the remaining seats are not examined by
party affiliation.
4:21:09 PM
KENTON BRINE, Northwest Regional Manager; Assistant Vice-
President, Property Casualty Insurance Association of America
(PCI), thanked the industry members and the MSRC for their
recommendations. He stated that Alaska has the highest workers'
compensation rate in the nation, which is driven in large part
by medical costs. In Alaska, medical costs represent about 72
percent of workers' compensation losses, in comparison to the
national average of 58 percent. He offered PCI's support for HB
346. He suggested the committee may wish to consider the make-
up of the proposed council. The Oregon system is a little
different, he stated. The Oregon Workers' Compensation System
was engaged in a major overhaul in 1990. One critical outcome
has been that employers have seen workers' compensation
insurance rates decline, in every year except one, since
enactment of the laws about 20 years ago. In comparison,
Washington State has a state run monopoly and the costs for
workers' compensation and the rates paid by employers have
increased almost every year. The state auditor predicts that
without higher rates or serious benefit cuts, the fund to pay
for injured workers will go broke in two to five years. One
feature unique to Oregon is that its advisory board, called a
Management Labor Advisory Committee (MLAC), is a 10-member
committee comprised of 5 representatives of organized labor, and
5 representatives from management or the employers. There is no
tie-breaking vote and no other entities are allowed into the
advisory committees. It is simply "the two sides battling it
out." He related that the tacit agreement by the legislature
and the governor's office is that unless a major piece of
legislation relating to Workers' Compensation benefits or
procedures has the MLAC seal of approval, the legislature will
not pass it and the governor will not sign it.
4:25:34 PM
MR. BRINE continued. He stated that this is an important tool
to be certain that fairness is had in terms of changing public
policy related to Workers' Compensation claims and benefits. He
suggested that members consider balancing out the current makeup
of the voting members of the proposed council. He said he does
not want to suggest, necessarily that insurers should have votes
on proposed council. However, he understood the rationale for
the voting and non-voting members. He reviewed the 11 members,
of which 4 are employers, noting the other 7 members may have a
different interest, which might be to expand benefit levels to
injured workers or the amount of money available for their care.
He offered his belief that this may not have the effect of
lowering the ever-increasing medical costs. He offered to
provide language if the committee is interested in doing so.
With those changes to HB 346, his organization could
wholeheartedly support the bill. Otherwise, he said, they would
have some concerns, but would still like to see HB 346 move
forward.
4:27:56 PM
VINCE BELTRAMI, President, American Federation of Labor and
Congress of Industrial Organizations (AFL/CIO), stated that he
has served as one of the members of the MSRC for the past six
months. He affirmed the MSRC's unanimous support to establish a
Workers' Compensation Advisory Council (WCAC), which is
relatively consistent with the proposal contained in HB 346. He
stated that creation of the proposed WCAC will place into
statute a function that the Ad Hoc Committee has had limited
success in performing. This proposed WCAC will resolve some
conflicts encountered in the Ad Hoc Committee process and will
consolidate the function of the Ad Hoc Committee and the MSRC.
It should streamline issues to have all the parties at the table
in a construct that should properly serve the two principal
interests, the injured workers and their employers. This should
eliminate some perceived profit motive from the process, he
stated. The MSRC reviewed the models from several other states
as Ms. Heikes mentioned, and uses one most similar to the
Wisconsin model, which have resulted in greater efficiencies for
Workers' Compensation Systems in other states by reducing costs,
improving protection for the injured worker, and setting
policies to return workers back to their jobs more quickly. He
agreed with the basic structure of the composition. He related
that the MSRC held considerable debate on who should have voting
rights. One member from the medical care providers was adamant
about doctors having voting rights. He stated that other states
had limited their voting rights, and although he expressed some
concern, he offered a willingness to hear the doctors make their
case, and acknowledged that doctors provide a key component to
the system.
4:31:21 PM
MR. BELTRAMI expressed concern with the language on page 1,
lines 9 - 11, of HB 346 on the make-up of the employer
representatives. It is conceivable that the oil industry could
occupy all four employer positions since some general
contractors perform oil field work. He suggested amending the
language to assure a more diverse pool of employers. He also
would not object to language that also diversified the organized
labor pool, as well, perhaps a certain number of building
trades. While he did not object to partisan representation, he
thought since the legislative representatives are ex officio,
and provide an advisory role to the legislative bodies. He
strongly urged adoption of HB 346, with some clarifying
amendments that insure Alaska's injured workers will be treated
fairly and in the most efficient manner.
4:33:05 PM
REPRESENTATIVE HOLMES related that all of the members except the
legislators are appointed by the DLWD commissioner. She asked
whether that was acceptable.
MR. BELTRAMI recalled some discussion by the MSRC. The MSRC
thought the appointment process might be less politicized than a
Governor's appointment. He recalled the MSRC agreed uniformly
that the appointment method was adequate.
4:34:16 PM
PATRICIA WILSON, Workers Compensation Committee of Alaska,
stated that the committee submitted written comments. She
offered that the WCCA does not disagree with the council
approach. She related that she spent time at the MSRC meetings
this past year and was impressed with their report and
recommendations. In workers compensation, the "players" are the
employees, the injured workers, and their employers. While
other parties with financial interests, ranging from vocational
rehabilitation counselors, medical providers, and attorneys,
However, she offered her belief that the interested parties
should not be voting members. Instead, those with the ultimate
interest, the employees and employers, should be involved since
they are directly affected. She recalled that the MSRC worked
on cost containment issues with very difficult concepts that
required outside expertise and testimony. This type of format
allows for subject matter experts and the medical community
serves a valuable role. However, the voting members should be
restricted to the employers and the employees. She suggested
that the management appointments be recommended by a group that
can draw from a pool of people specifically experienced in
Workers' Compensation issues, which is a fairly arcane system
with many nuances.
4:38:42 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 346.
REPRESENTATIVE HOLMES removed her objection.
There being no further objection, Amendment 1 passed.
4:39:07 PM
The committee took an at-ease from 4:39 p.m. to 4:43 p.m.
4:43:51 PM
CHAIR OLSON stated the amended bill is now before the committee.
REPRESENTATIVE T. WILSON moved to report HB 346, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, the CSHB
346(L&C) was reported from the House Labor and Commerce Standing
Committee.
The committee took an at-ease from 4:43 p.m. to 4:47 p.m.
4:47:10 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB342 ver A.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
| HB342 Sponsor Statement ver A.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
| HB342 Legislative Audit Summary.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
| HB342-Legislative Audit Report.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
| HCR19 AIDEA ppt Testimony.pdf |
HL&C 2/24/2010 3:15:00 PM |
HCR 19 |
| HB346 Lettter ASMA 2-22-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |
| HB346 Lettter ASMA 2-24-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |
| HB346 Letter IAIABC 2-23-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |
| HB342 Fiscal Note-CED-CBPL-2-18-10.pdf |
HL&C 2/24/2010 3:15:00 PM |
HB 342 |
| HB346 Letter NFIB 2-17-10.PDF |
HL&C 2/24/2010 3:15:00 PM |
HB 346 |