HB 274- WORKERS' COMP: HEARING/MEDICAL EXAM  CHAIRMAN STEVENS announced HB 274 to be up for consideration. MS. RENIEVA MOSS, Staff to Representative Coghill, said that HB 274 does two basic things. It changes a statute that currently requires a physician who performs an IME to reside in the state that he is licensed in. HB 274 changes it so that he would be required to be licensed in the state that he performs the examination in. The second thing it does is provides that if an injured worker has a medical condition that is not receiving medical treatment, that injured worker can request an expedited hearing from the Workers Comp Board. At the point of that request, it would be up to the staff of Workers' Compensation to determine if there is a need for medical attention and if they make that determination, they may schedule an expedited hearing. Under the existing system, an average hearing takes about 138 days to be heard. If there is a medical condition that needs medical attention, 138 days can make a lot of difference in whether or not that injured worker will recover. It just gives the Workers' Comp. Board a mechanism to prioritize Workers' Comp. cases and to expedite hearings if medical attention is not being received. MS. BARBARA WILLIAMS, Alaska Injured Workers Association, urged them to reconsider the amendments they have requested. The offerings that you have made to workers are very inadequate. I would like offer you some information so that you can make some informed changes that will benefit workers and not insurers. Workers understand the need the insured employers have to have the right to examine workers by their own doctors. We understand insurers and employers want and need a second opinion. This would be an excellent check and balance if the language were adjusted to indicate more protection for workers. What that would look like is a licensed physician licensed in the state of Alaska. Licensing held in Alaska [indisc] for Workers' Compensation. When we leave the state and we use physicians outside the state, they do not know the requirements for Workers' Compensation under the state. This would mean that physicians flying to Alaska must be licensed to practice in this state. Additionally, physicians not licensed outside the state would provide [indisc] proof of license and bond in the state in which the examination occurs. Any sanctions must be noted and the workers informed before the examination commences. A panel of physicians must be approved by the Alaska Workers' Compensation Board before an employee would have to submit to this examination. Right now in their second independent medical process they have over 40 doctors. That's the most doctors they have ever had in a panel since I've been working with workers informally for four years and over the fifteen years I have actively been doing this. Most workers are subject to panels of physicians with many different specialties. Currently, workers do not have the ability to appoint panels of doctors. In the mean time, the workers are subject to [indisc] mental psychiatric examinations and have no idea that they're being seen for these types of mental diagnosis. There's also no legal requirement for anybody to produce or read our medical records for injured workers. Often insurers hire nurse case managers to summarize the medical records or pass the information along to the independent medical examiner. We have found through independent research that workers have questioned these doctors and discovered the independent medical evaluators had never looked at their records in some cases. The legal requirement is only attached for the Board to have to arrange for the second opinion that the employer pays for. A little known fact about this is that the fees and services are under the reasonable and customary fees schedule and an opinion only has a billable rate of $350. Any other fee must be approved by the Board. If, in fact, the insurers [indisc] fees that begin at $1,200 and are moving up into the tens of thousands of dollars. Ensurers are able to manipulate the medical care the injured workers receive. There is currently no protection for workers in this area. There needs to also be a legal requirement that all the records that will be relative the client be reviewed by the independent medical evaluator. There is currently no such regulation for independent medical evaluators. If an employee refuses an examination, a hearing should be held to conclude if the employee had a good reason for not submitting to the examination. In some cases that I'm very familiar with, employees have to struggle to fight to get childcare if they don't have someone to take care of their children while they must leave the state for these independent medical evaluations. MS. WILLIAMS also explained that people with little cognitive brain injuries could experience barriers such as reading, language and cultural barriers absolutely have no protection and they have found that Alaska has the lowest paid attorneys representing employees. CHAIRMAN STEVENS informed her that she was addressing issues outside of the bill that was before the committee. MS. WILLIAMS concluded that she didn't support the legislation because it doesn't offer adequate protection for workers. 2:50 p.m.  MS. LAURA JACKSON, Claims Manager, University of Alaska, said that HB 274 proposed two changes to the Workers Compensation Act. The first is that all physicians performing an examination requested by the employer or the board be licensed to practice medicine in the jurisdiction in which the examination occurs. Although this requirement does not impose that same requirement on the employee, I could think of no adjuster or board member who would object to this requirement. On the contrary, it is in the best interests of all [indisc]… The problematic area of the proposed amendment is section 2 regarding the expedited hearings. It has been noted that the Board does not have a member with medical expertise. I believe it would be extremely difficult to find a competent medical expert willing to volunteer this significant amount of time for the work this amendment would generate. During public testimony, Paul Grossi, the Director of the Alaska Workers Compensation Board, advised the Board it relies on a lot of medical expertise involved [indisc]. "Doctors' testimony and doctors' reports and doctors' depositions." I would like to point out the expedient time frame would preclude the development and provision of such information for the board's use and consideration. In other words, they would only have the information from the employee's doctor with no independent inputs - not even from the boards own independent examination. According to statistics generated by the Alaska Workers Compensation Board, the vast majority of work comp claims are handled quickly by adjusters. There is only a very small percent, possibly about 1%, where a concern arises regarding coverage. I might note in the Act it requires clear evidence in the possession of the adjuster in order to controvert a claim. If the coverage is clearly questionable, how can the employer now be denied their due process? For that is exactly what is being proposed in this amendment. This will increase litigation by denying the adjuster the opportunity to have an independent medical evaluation that can clear up the issue and allow continued coverage without litigation and by encouraging countless more cases to have expedited hearings followed by inevitable appeals. The cost of this amendment is incalculable. First, the Board will have a greatly increased workload to handle these hearings and the litigation, which will follow. Second, the employer will be forced into what may have been the unnecessary litigation of a hearing and possible appeal. This would have a devastating impact on the cost and availability of Workers' Compensation Insurance in the state of Alaska. I have been here during a number of ups and downs in the insurance market. Post [indisc] Workers' Compensation Insurance has become so expensive that it's nearly unavailable already, especially to small employers. I am convinced the increased cost of claims caused by the amendment will have a devastating affect on the availability of insurance and the ability to do business and employ workers in the state of Alaska. Finally, may I ask you to imagine for a moment that you go home tonight and hear a knock on your door. You open the door to find a person there wearing a neck brace and with their arm in a sling. They hand you some papers and tell you, 'I fell in your driveway on Tuesday. No one was home at the time. I wanted to let you know that I'm injured and by the way there will be a trial regarding it in two weeks.' Do you think you would be ready? Do you think you would have due process? Thank you. MS. JACKSON concluded that she was speaking against the expedited hearings in section 2. MR. DAVID TWEDEN said he is an injured worker and wanted to comment on the independent medical evaluations. In his case there was a big difference in opinions on his percentage of impairment and he thought there should be some sort of checks and balance to see if the injured worker was favored or the insurance adjuster. "The fees should be customary and usual, not the insurance adjuster paying these independent doctors a huge amount of money." CHAIRMAN STEVENS said he appreciated his comments about the independent evaluators. MR. TWEDEN added that he knows from his first independent medical evaluation that the doctor was from Oregon and flies to Alaska all the time to do the independent medical evaluations. He didn't know if he was licensed to practice in the state and that should concern everybody. MS. MURLENE WILKES said she has been a licensed Alaska adjuster since 1965 and has grave concerns over section 2. She said that Mr. Grossi has assured everyone that this section would be applied in a very limited fashion and carefully. She didn't see any reason to add that section and objected to the broad based language, which appears to circumvent the intent of AAC 45.070. She understands it was recommended because in some cases failure to authorize medical treatment has caused physical harm to an employee. She reminded them: The ability to deny a controversial work place incident injury has become just next to impossible and to controvert a claim requires "substantial evidence supporting the position of the controversion. MS. WILKES said that even though the definition of injury under AS 23.30.395 does not include mental injury or mental stress, now because of the Harris Eastlake versus State of Alaska case, they just simply cannot deny mental claims without going through extremely costly investigation and medical testing. While that is going on, they have to pay. She said that most employees have decent health coverage, but those who don't often have VA benefits or qualify for Medicaid. If the claim is controverted, these other systems will kick in once they receive a copy of the controversion notice. If the controversion is overturned, those payments are reimbursed. I feel the amendments along with recently passed regulations on hearings is simply a matter to create work for a second and new panel of board positions in Southcentral. She noted that a number of big decisions came down from the board in 2000 and 2001 - Gary Richardson v. University of Alaska Fairbanks, Devita Gray v. State of Alaska, Laurie Walters v. State, to name a few. MS. WILKES said that the board members are not medical professionals and, "To assume that they could make a determination of physical harm seems in credulous to me." She urged them to not pass the bill, but if they did, to make it absolutely clear. MS. SUSAN DANIELS, Northern Adjusters, said that they are concerned on behalf of their insurers with the conflicts that exist with section 2 and the existing provisions of Workers Comp. Act and regulations in terms of the discovery. They are concerned about the cost to employers and the board to add staff and to be such a broad presentation. She urged that the legislature oppose this section and at least reconsider specifying a much narrower focus. Once a claim is disputed, there needs to be enough testimony and research for the board members to make an educated decision of what's at stake. MR. TIM MCKEEVER said he is an attorney who works with a law firm who works with a lot of employers and Workers' Compensation cases. He was concerned about section 1 because it is superfluous and opposed section 2. The Medical Board in this state already believes that an IME doctor who does an independent medical examination in the state has to be licensed in this state and I believe they have communicated that fact to the Workers' Compensation Board. I would encourage the committee to enquire of the State Medical Board if they believe the doctors who do I.V.s for the state have to be licensed. I think you find that they do and the first section is therefore unnecessary. MR. MCKEEVER thought: The second section denies due process to employers because an expedited hearing would be held in a fashion that does not permit employers to have or take advantage of procedures that the legislature has previously enacted which would allow for example the employer to get medical records, to obtain a release from the employee, to obtain an independent medical evaluation or if there's a dispute between the employee's doctor and the employer's doctor, to obtain a second independent medical examination. It is virtually impossible for an employer to defend a claim on very short notice without having due process to be able to conduct appropriate investigation. The standards in the act are also very low. It would simply require a statement from a physician that a person needs medical treatment or they will suffer physical harm and that is all it would take under this bill for them to have an expedited hearing. MR. MCKEEVER said that if an expedited hearing results in a payment of medical treatment, under the current version of the Act, the only remedy an employer has to recover overpayment of improperly paid Workers' Compensation benefits is to recover them from future payments that are paid to the same claimant. If that claimant is not entitled to those future benefits, there's no way to get back the cost of the care that's been provided. "The employer could be paying $50 or $60,000 for a surgical procedure and never be able to get that money back. I think that's a concern." MR. MCKEEVER continued: HB 274 upsets the balance that the legislature has reached over years of tweaking the Workers' Compensation Act. It tilts that balance unfairly in favor of the injured worker and deprives employers of the right of due process and the right to effectively defend themselves. Let me conclude by saying I think there may be cases, and I'm not familiar with any even though I've been doing this for 20 years, where an injured worker has been denied medical care that has resulted in permanent physical harm to that injured worker. But if the legislature, after deliberate consideration, determines that is a problem, that there are people who have been deprived of medical care that they really need to have, then I think there are alternatives to this legislation that would protect the rights of employers and protect the rights of employees. Those alternatives include, as has been mentioned, to explore other options for payment, such as private health insurance, V.A., I.H.S. benefits - all of which have the right to get repaid if the Comp carriers are determined to be responsible. So alternative forms of payment should be explored. Another alternate may be the Second Injury Fund, which is a fund that exists under the jurisdiction of the Department of Labor, which is paid for by contributions, donations, taxes perhaps on benefits that are being paid. It is very possible to set up a system by which the Second Injury Fund would be required to advance the cost of emergency and urgently needed medical care and then to have the insurance carriers pay the Second Injury Fund back if it's determined that the claim is compensible. Fundamentally, the standard needs to be higher. It shouldn't just require an injured worker to come in and say or have a doctor say that there's a risk of physical harm. It should be a risk of significant permanent physical harm rather than relatively miner risk, given the lack of due process that an employer would have under this section if it's enacted. I think the standard for getting emergency hearings needs to be substantial. This bill would change the economics of Workers' Compensation…. TAPE 02-12, SIDE A    3:12 p.m.    MR. MCKEEVER concluded by urging them not to enact section 2 of HB 274, but encouraged them to explore options. MS. KATHY COLLINS, Claims Administrator, ARECA Insurance Exchange, said they are an insurance company for electrical and telephone utilities through the state of Alaska and has 22 members. She said the ARECA is also concerned with section 2 for all the previously stated reasons. Based on her 18 years of experience as a claims adjuster, she could not think of any cases where physical harm resulted to an injured worker because she had denied medical treatment. My experience is that in cases where there's serious physical harm that's imminent, those cases are clear- cut because they are usually tied to traumatic injury and it's obvious the injury is work related. The issue of authorization for medical care often times arises in cases where the relationship to the condition or injury is not clear and by their very nature, these cases require expert medical review often by the injured worker's physician, the independent medical evaluators who have to buy the insurance carrying the employee and often by the [indisc] process. Calling the Board to schedule an expedited hearing when the injured worker is requesting medical care doesn't allow the employer due process… She summarized: It's my experience that the situation for which this amendment was formulated happens very rarely and in complicated cases, which need time for preparation. Furthermore, the amendment is ambiguous and wordy as to what constitutes physical harm to the injured worker. MS. CLAIRE HIRATSUKA, Claim Manager, Umialik Insurance Co., a small company owned by the North Slope Native Corporation, said she couldn't think of a case where an employee suffered because they were denied medical treatment, but several times she has scheduled a second opinion. She has been thanked by employee who has had another treatment suggested during an IME and has benefited from it. She didn't know how a board of non-medical people would have the competence to decide on medical treatment. MR. MIKE KLAWITTER, Director, Risk Management, Anchorage School District, said they have about 5800 employees which they self- insure Workers' Comp for. "I believe HB 274 substantially impacts the Anchorage School District in a negative way." He echoed previous comments regarding the section 2 expedited hearings. It negatively impacts the school district and gains very little for an employee. The physician licensing is also redundant and unnecessary. MR. PAUL GROSSI, Director, Division of Workers' Compensation, said they support this bill, which is just minor changes. SENATOR TORGERSON asked him to comment on section 2 not providing a fair opportunity for one of the other parties have their own doctors look at them or prepare themselves for a hearing. MR. GROSSI replied that occasionally a claim is filed for an injury that occurred a while back and there is need for discovery, but in the vast majority of cases, the employer files a controversion on a claim denying a particular treatment. For a controversion to be valid, they have to have medical evidence or some legal basis for that. I don't understand completely the denial of due process since the employer wouldn't have denied the benefits in the first place, unless they had done some basic discovery on medical treatment in order to deny the treatment in the first place. There may be some instances, but a relatively small number of those cases. MR. GROSSI explained: Basically, the employee gets injured, they file an injury report, they go to a doctor and gets treated, the employer can pay or not pay it and if they are questioning the claim, they'll have the person examined by a doctor of their choice. Choice is what we've heard some testimony on and then they can either pay or deny the claim or the treatment or the various benefits that would surround that. That is they way the vast majority of the cases are dealt with. He pointed out that the law doesn't say that you have to have an examination. SENATOR TORGERSON asked if this only applied to disputed claims. MR. GROSSI replied yes and that in the vast majority of cases controversions are not filed. A small portion of claims are denied and those denials have to be based on evidence or a legal basis. SENATOR TORGERSON asked if they have expedited hearings now and if they do, what criteria would it fall under as far as notification. "What does expedited hearing actually mean?" MR. GROSSI replied that he didn't think the board would rely on its own prognosis or diagnosis, but would rely on medical evidence and reports before they set a hearing. The hearing would have some preferential treatment over other standard types of cases. SENATOR TORGERSON asked if that should be explained in the bill. "Should we put a timeline in here to make sure that all that's covered?" MR. GROSSI replied that the designee would only be determining whether the expedited hearing should be scheduled, not determining the underlying decision as to whether these medical benefits should be allowed or not. SENATOR TORGERSON asked what would happen if they deleted "upon request by a party" and inserted "on request by both parties". MR. GROSSI replied, "If both parties are requesting it, then the payment could be made." SENATOR TORGERSON asked if this was a disputed claim and the Board is helping to negotiate liability. MR. GROSSI replied that mostly there would be a dispute or denial, so one side would want a hearing. SENATOR TORGERSON asked what putting "serious physical harm" would do instead of just "physical harm". CHAIRMAN STEVENS pointed out that someone mentioned "permanent harm". MR. GROSSI said that would indicate what level of harm they should be looking for. He said that all cases are important to the individuals, but sometimes some cases need to be heard sooner than others for many different reasons. This gives the Board a tool of being able to make those kinds of distinctions between cases. MS. MOSS commented that this bill was heard in the House Labor and Commerce Committee where approximately 15 people testified in favor of the bill. It passed the House unanimously. When an employer files a controversion, they do have the medical information to base that controversion on. So, the medical information is available for an expedited hearing. All this intended for is to give Workers' Comp a vehicle to address, and I don't think Representative Coghill would have a problem with adding the word "serious" to address injuries that are not getting medical attention. As far as the Medical Board is concerned, they may think this is redundant, but the fact of the matter is that the law does state that the physician only has to be licensed in the state in which he resides. CHAIRMAN STEVENS said that the bill needed more work before it could pass for committee. He thought both parties agreeing to an expedited hearing had merit.