Legislature(2001 - 2002)
01/25/2001 08:02 AM House STA
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
January 25, 2001
8:04 a.m.
COMMITTEE CALENDAR
OVERVIEW OF WORKERS' COMPENSATION
TAPES
TAPE 01-7, SIDES A & B
TAPE 01-8, SIDE A
CALL TO ORDER
REPRESENTATIVE JOHN COGHILL, Chair, convened the House State
Affairs Standing Committee meeting at 8:04 a.m.
PRESENT
Committee members present were Representatives Coghill, Crawford,
James, Hayes, Fate, Stevens, and Wilson.
SUMMARY OF INFORMATION
PAUL GROSSI, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development, addressed the
committee. He gave a brief history of workers' compensation,
saying it came about at the turn of the century (1901) as a
compromise between industry and labor because of large backups
of cases in the courts. He said there are three ways to be
covered by workers' compensation. First is to purchase a
workers' compensation policy from an existing insurance
provider. Second, a company that has at least 100 employees and
a net worth of $5 million can be self-insured. The State of
Alaska is such an entity. Third, there are industry pools, such
as in the forest industry.
MR. GROSSI said that when the workers' compensation board is
asked to review a claim, the board looks at two basic issues:
(1) Did the injury happen in the course and scope of employment?
(2) Did the injury happen or become aggravated or accelerated
because of the employment? If it is determined that the injury
or condition is work related, the board must look at whether or
not there are benefits due and what those benefits are. He said
the board gives the employee the benefit of the doubt.
REPRESENTATIVE FATE asked who sets the fee schedule for medical
payments.
MR. GROSSI said the board contracts with a provider to do a
statistical analysis of fees. The agency drops off the ten top
rates and ten bottom rates, then averages the remaining rates to
arrive at a reasonable, usual, and customary rate.
REPRESENTATIVE FATE asked is all medical services providers are
obliged to take workers' compensation patients.
MR. GROSSI said no, but if the provider accepts the patient, he
accepts the rate.
MR. GROSSI said self-insurers are audited every year by Workers'
Compensation. He said there ate approximately thirty workers'
compensation providers in Alaska. He gave an annual injury
profile, stating that in one year, there were approximately 28,
200 injuries with 4,000 controversions. Of those
controversions, 15 percent are approved by the staff, 1,700 came
to the board, 600 to 700 cases were settled before a hearing,
and 300 cases went to the board for a formal hearing. Fifty to
seventy-five of the board's decisions go to court. The board's
decisions go 50-50 to the employee and the employer. Disputes
arise from contradicting medical evidence.
MR. GROSSI said that if the independent medical exam is
disputed, the Board has a list of doctors who will conduct a
second exam.
REPRESENTATIVE HAYES asked about doctors coming from the Lower
48 to conduct examinations.
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Community and Economic Development, said that the
doctors who come to Alaska to conduct independent medical
examinations have to be licensed in their home state.
REPRESENTATIVE HAYES commented that these doctors are biased
because they work for profit-based insurance companies.
MR. GROSSI said there are employers and insurers complaining
that employees go to certain doctors.
MR. GROSSI said the board keeps an annual list of second IME
providers that comes from a panel of two employee attorneys and
two employers' attorneys.
REPRESENTATIVE HAYES asked what happens if the State of Alaska
is the employer.
MR. GROSSI said the state has to follow the same laws as a
private employer.
BRAD THOMPSON, Director, Division of Risk Management, Department
of Administration, said he has to file an annual report with the
Division of Workers' Compensation just like a private insurer.
MR. GROSSI said there is a 25 percent penalty if benefits are
not paid on time. He said there is a presumption of coverage
when an injury occurs and medical treatment is necessary.
Workers' compensation is highly regulated with explicit filings.
It is not like tort law. He said every compromise and release
has to be approved by the board. When there is an argument
about whether the employee is physically able to go back to
work, the board must determine the settlement in the best
interest of the worker.
REPRESENTATIVE CRAWFORD said he was working on Providence
Hospital when a grinder came loose and hit him in the face. For
two years, he received bills from Providence. He said that if a
physician charges more than reasonable rates for services,
neither the employer nor the employee is obligated to pay.
Although he thought the law said he would get 80 percent of his
wages up to $760, he received only $249 a week, less than one-
fourth of his wages.
REPRESENTATIVE COGHILL asked how an employee who doesn't
understand the process can use the system to get satisfaction.
MR. GROSSI said the phone number is on all forms.
MR. GROSSI said there are twelve board members: one from labor,
one from industry, one commercial labor designate, two people
from Anchorage, one from Fairbanks, one from Juneau, and one at-
large.
MR. GROSSI said 100 percent of workers' compensation funding
used to come from the General Fund, but the legislature passed
legislation last year to place it on a fee-based budget. The
division doesn't have enough hearing officers. There was a 95-
day lag time in FY '99 but in FY '00 the lag time increased to
135 days. They lost one hearing officer due to budget cuts.
MR. GROSSI said there was a total of $144 million in workers'
compensation payment made last year.
MR. GROSSI said he prefers the fee-based budgeting, but pointed
out that self-insurers will pay more.
REPRESENTATIVE HAYES requested information on the Freemont pull
out.
ANNOUNCEMENTS
There were no announcements.
COMMITTEE ACTION
The committee took no action.
ADJOURNMENT
CHAIR COGHILL adjourned the House State Affairs Standing
Committee meeting at 9:42 a.m.
NOTE: The meeting was recorded and handwritten log notes were
taken. A copy of the tape(s) and log notes may be obtained by
contacting the House Records Office at State Capitol, Room 3,
Juneau, Alaska 99801 (mailing address) (907) 465-2214, and after
adjournment of the second session of the Twenty-Second Alaska
State Legislature this information may be obtained by contacting
the Legislative Reference Library at (907) 465-3808.
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