SB 130-WORKERS' COMPENSATION  CHAIR CON BUNDE announced SB 130 to be up for consideration. BARBARA WILLIAMS, Alaska Injured Workers Alliance, did not support SB 130, because rolling back the rates would lead to a bigger shortage of physicians to treat injured workers. Further, she said it didn't address the problems with the fee schedule. Some health care providers the Alliance surveyed hold a fee schedule and regularly have their bills reduced below the rate set out in it. She stated: This would mean that globally, if insurance review companies are reducing payments, there is no clear idea of how much a company is saving on medical costs. What it does reveal to us is that the medical costs are already being cut. It also tells us that not only are insurance companies saving money, but they are providing little information on what those savings might be. We also have no enforcement of the current fee schedule. It would appear that there is more cost shifting here than enforcement of this current fee schedule. We need reliable data and information to address these costs. Her survey has information from an audit review indicating that the bills are being reduced at Providence Hospital. Regarding medical benefits, she said: We do not believe that a preferred provider list or a drug list would be appropriate for Workers' Compensation. This further limits the care and drugs workers could potentially receive and insurance companies now have control over what they are willing to pay for. The current law does not provide for preauthorization of service and pushing a list of providers and drugs would further complicate an already complex process. Equally, the injured employees would like to suggest the employer is to be held to an independent medical evaluator provider list. Injured workers would like to see only one doctor at a time unless a referral is provided. Right now, currently, injured workers are subject to panels of doctors paid for by employers. Adjudication of claims - We do not feel the proposed education would better serve injured workers or employers. There is currently no education process to explain to them how they should participate in the adjudication process. Complex changes in the proposed bill will, in our view, increase time delay appeals to about the same time that we're currently looking at. Additionally, we do not feel that an over panel should have the authority to set precedence over Superior and Supreme Court. The balance must be restored to the impartial process to create a fair chance for all parties. We're giving a lot of power to an unbalanced board or division and we feel this is wrong. Retraining benefits - We feel that a clear retraining process that provides results for injured workers would be of greater benefit than the proposed bill. Injured workers know little or nothing about the retraining process and this will add more red tape and confusion to an already complex part of the benefits available to injured workers. Workers need to understand and not guess about what benefits they need. Overall, we know that the personnel in the division have little or no training on the complex hearing process, the Workers' Compensation Act and little or no medical training. Yet, they must make complex decisions based on the information that is available to them. We need to encourage training for all staff, make benefits more clear and base rate increases on tangible, factual data. We do not need to make sacrifices for the sake of expediency, but we do need to make informed changes based on facts. We have little or no information on the complex [indisc.] medical costs, rehabilitation, retraining benefits and know the hearing process is far from impartial.... Legal counsel would not become more available unless defense costs are fully reported. Plaintiff attorneys are making approximately 50 cents on the dollar while defense attorneys get dollar for dollar what they bill for. Why not drop the defense costs to match that of injured workers to contain costs? Insurance premiums should be frozen until we can figure out this mess so that employers are not overcharged for their insurance product. Hiring advocates in theory is good, but who wants the job? Legal services is a non-profit and Alaska pro bono programs are not geared for Workers' Compensation. At minimum, it could potentially take up to two years for them to get the nuances of the program as well as the practices and procedures. We urge you not to pass this bill.... MS. WILLIAMS said that a bill from Providence Hospital was $14,000 and by not utilizing the proper fee schedule, it collected only $11,000. She said there is no mechanism to report accurate figures to the Division of Workers' Compensation. 2:37:57 PM CHAIR BUNDE asked who belongs to her organization. MS. WILLIAMS replied that the Alaska Injured Workers Alliance is a non-profit organization educating injured workers. It is partnering with Alaska Public Interest Research Group Alaska Public Interest Research Group (AKPIRG) on this issue, because she feels there are consumer issues involved. 2:38:56 PM JERRY FLOCK, injured worker, said he has fallen through every possible crack in the current system. "Because my employer was uninsured, my employer got to pick what medical it would and would not pay for." He said there have been problems with workers' compensation for a while. An audit report dated October 31, 1999, was written about the insufficiencies of workers' compensation. SB 130 is just a bandaid. The Division of Workers' Compensation already has police powers. In his case, the state had to pay $10,000 for an operation, because his employer wasn't insured. His employer had an annual edit error and there is a $10,000 fine for that and $100 per day fine for 10 days afterwards. That means this employer owes the state a total of $77,000. Will the state go for it? No, they don't go for it. They don't even ask for it, but yet the state will come after me for a $10,000 surgery that they paid for. 2:44:58 PM MR. FLOCK discussed the penalty section and how his employer allowed his insurance to lapse 18 times, but was still able to get a business license. 2:46:03 PM CHAIR BUNDE said his point is well-taken. He said even though Mr. Lisankie couldn't comment on Mr. Flock's case, he wanted to know what enforcement tools the division has and how well they are being used on people who drop their insurance. 2:46:28 PM PAUL LISANKIE, Director, Division of Workers Compensation, replied that he didn't have the specifics of Mr. Flock's case, but it is well-known in the division. This is why he has mentioned to the committee that the division needs some kind of a hammer to get on top of an uninsured employer quickly rather than to try to come in after the fact and clean up the mess. Mr. Flock's testimony indicated how difficult it is to get anything once a problem has transpired. He disagreed that this bill doesn't change anything, however. Under this bill, the director of the division could order a stop work order immediately, as opposed to what happens now where an investigator comes back, gets a hearing scheduled before the Workers' Compensation Board and then there is a hearing to decide if the employer is still uninsured at that moment. I have no doubt that there are employers that do run without insurance for a period of time. If they get detected, their normal response oftentimes is to bring their insurance current and go forward. That can be a recurrent problem and that would be some of the factors that would be considered under this bill...that the board could consider how much to fine that employer. I think also based on Mr. Flock's testimony, which is eloquent as far as what happens when you get court orders and then you try to enforce them in the court system against somebody who may or may not have money.... 2:49:23 PM CHAIR BUNDE remarked that it is hard to collect money from someone who doesn't have it. He said he would continue taking public testimony on Thursday and would address a CS one week from today. There being no further business to come before the committee, he adjourned the meeting at 2:51:19 PM.