SB 130-WORKERS' COMPENSATION  CHAIR CON BUNDE announced SB 130 to be up for consideration. SENATOR SEEKINS moved to adopt CSSB 130(L&C), version G. SENATOR ELLIS objected for an explanation. CHAIR BUNDE explained that the CS freezes the rate fee schedule on page 16, line 15, for medical claims to the 2004 rates until 2007 when a medical review committee report (page 28, lines 8 - 13) is released. SENATOR ELLIS asked if the Governor was proposing to set rates back to what they were in 1999. CHAIR BUNDE replied yes, but the CS is proposing to go back to last year. SENATOR ELLIS asked if doctors could have input into the solution where it is not onerous. He asked if they favor this. CHAIR BUNDE responded that one doctor suggested freezing at current rates and the Chair thought that is a good place to start the discussion. SENATOR ELLIS asked if the savings could be quantified and compared to the Governor's proposal. CHAIR BUNDE answered that there is a chart in the committee packet that compares rates, but he based his decision on the notion that you can't limit doctors' rates to the point where there is no treatment available and obviously treatment is available now at current rates. SENATOR ELLIS asked if the CS would have less costs savings than the Governor's proposal. CHAIR BUNDE replied yes, but it would also allow more choice in doctors for an injured worker. "It saves the state less money and costs the doctors less money." 1:42:25 PM SENATOR ELLIS asked what the CS does with the Medical Services Review Committee as compared to the original bill. PAUL LISANKIE, Director, Division of Workers' Compensation, Department of Labor and Workforce Development (DOLWD), observed that the CS language talks about the December 2003 fee schedule, but the fee schedule in December 2003 was published in July 2003 - in case the Chair is intending to use the '03 schedule. CHAIR BUNDE said the report is designed to provide hard data to establish rates in 2007. 1:44:50 PM SENATOR ELLIS asked if the administration supports the changes. MR. LISANKIE didn't know. The commissioner said that he wants the flexibility to get everybody someplace they could agree. "In the spirit of doing that, we wouldn't see this as a roadblock to getting where we need to get." 1:46:08 PM CHAIR BUNDE said the second change on page 8 inserts language that provides for better tracking and oversight of the voc rehab system. The idea here is that the department doesn't have good information like it has in other situations - like AVTEC where people receive training and the Legislature gets a report after one and two years. Voc rehab is rather costly and he wanted a tracking mechanism to see how it is serving workers. 1:47:53 PM CHAIR BUNDE moved on to change 3 in the CS that removes language establishing a new appeals commission and reverts back to the current hearing system - the Superior Court. MR. LISANKIE commented that he didn't have explicit instructions, but thought the administration wouldn't accept the loss of the appeals commission. CHAIR BUNDE hoped the issue could be discussed more thoroughly in the next committee. 1:51:25 PM He said change 4 clarifies language for use of the medical guidelines. He asked for a stronger waiver component as an option for doctors to use when, in their judgment, the best treatment for a workers' comp injury falls outside the purview of the guidelines. It removes the original language that says, "The presumption must be rebutted by a preponderance of scientific evidence." SENATOR ELLIS asked how difficult it would be for a doctor to get a waiver component and how would it work in the real world. CHAIR BUNDE responded that the language is on page 15, line 18. The intent is that the waiver is obtainable by a doctor based on his professional judgment that the service is outside the guidelines. SENATOR SEEKINS envisioned the doctor could certify that the treatment is not available in the manual, which doesn't set forth all conceivable injuries. CHAIR BUNDE read page 16, line 1: The presumption established under (o) of this section may be rebutted by an employee's physician's written certification explaining the nature, extent and scope of provided treatment or the service that is at variance with the applicable guidelines or standards and the basis for the physician's conclusion that the provided medical treatment or service is at variance was a reasonable requirement by the nature of the injury. 1:55:25 PM SENATOR ELLIS asked if the doctor's decision was appealable in any sense. SENATOR SEEKINS said it appeared to him that the claim wouldn't be reimbursable without the doctor's authority. SENATOR ELLIS said he thought there would be cases where the doctor shouldn't have the power to decide that a treatment is required outside the scope of the guidelines. The CS takes out the rebuttable presumption. 1:57:39 PM CHAIR BUNDE responded that the other option would be to have really rigid guidelines and then an injury might go untreated or be treated with something less effective. "At some point, in my mind, we have to fall back and rely on the professional judgment and the willingness of a doctor to put his integrity on the line...." SENATOR ELLIS concluded that they are granting professional discretion, which is not appealable and has no policing mechanism. "It's just we're going to take a chance." CHAIR BUNDE said that Mr. Lisankie could report abuse back to the Legislature and that could be changed. 1:59:25 PM CHAIR BUNDE explained that change 5 of the CS inserts fraud language that was suggested by the Ad Hoc Committee on pages 25 and 26. 2:00:51 PM MR. LISANKIE commented this would be the first time having a provision for punitive damages and he supported it. SENATOR SEEKINS added that this provision doesn't preclude criminal provisions for fraud. MR. LISANKIE replied that is correct. 2:03:02 PM DR. WILLIAM PFEIFER, Vice President, Alaska Chiropractic Society, and delegate for the American Chiropractic Association, had concerns with how the American College of Occupational Environmental Medicine (ACOEM) guidelines would handle chiropractic and other physical medicines that they lack right now. It creates a burden on doctors who might have to file continuous repetitive rebuttals. He suggested creating a variance for situations not covered under ACOEM. He had another concern with the medical services review committee and would prefer a workers' comp review committee that would provide a broader perspective. 2:06:07 PM JIM ROBINSON, Ad Hoc Committee, said it continues to meet and will work into next year on workers' comp issues. 2:07:09 PM NOELL MCCULLOUGH didn't want to switch to a new system. She wanted the Legislature to make the Workers' Compensation Board fully live up to the last legislative audit and then look where changes need to be made. She also asked why the ACOEM guidelines were chosen above AMA guidelines. 2:08:38 PM MR. LISANKIE answered that the American College of Occupational Environmental Medicine is a not for profit organization and its mission statement says, "Physicians interested in promoting the optimal health and safety of workers, workplaces and environments," and their particular focus is on, "Use of evidence-based medicine and a focus on commonly occurring industrial injuries, tasks and treatments with significant incidents, cost and practice variations." 2:09:22 PM MS. MCCULLOUGH said the fraud provisions in change 5 don't include attorneys as a party who can be penalized for making fraudulent statements. CHAIR BUNDE replied, "The quick answer to that is that they will be covered, but it will be examined more thoroughly." 2:10:13 PM COMMISSIONER GREG O'CLARAY, Department of Labor and Workforce Development (DOLWD), said the Senate Labor and Commerce Committee's adjustments make sense. He supported rolling fees back to what they were in 2004 so that doctors will be available to care for people. He also felt that the appeals commission is a key element in the bill. 2:12:56 PM CHAIR BUNDE closed public testimony. SENATOR ELLIS said he supports some of the CS and removed his objection; and CSSB 130(L&C), version G, was adopted. SENATOR ELLIS said he had three amendments that were requested by a large number of voc rehab specialists. SENATOR ELLIS moved Amendment 1. 24-GS1112\A.1 Craver 6/8/05 A M E N D M E N T 1  OFFERED IN THE SENATE BY SENATOR ELLIS TO: SB 130 Page 13, line 14, following "evaluation.": Insert "If the company, firm, or other entity that employs a rehabilitation specialist selected by the administrator to perform an eligibility evaluation under this subsection is performing any other work on the same workers' compensation claim involving the injured employee, the rehabilitation specialist shall inform the administrator, and the administrator shall select a different rehabilitation specialist." CHAIR BUNDE objected for an explanation. SENATOR ELLIS explained that Amendment 1 would prevent conflicts of interest with rehab specialists who have been working on behalf of an insurance company in a particular case or on a particular claim from being selected or assigned to write the vocational plan for the same claimant. 2:15:21 PM MR. LISANKIE reacted favorably. He does not favor conflicts of interest, although he did not have personal knowledge of a problem in this area. He knows it's common for an injured worker to get an evaluation and have a vocational rehabilitation specialist assigned to their case. That person recommends that the injured worker be found eligible for reemployment benefits and that same provider goes on and works up the plan for the injured worker. He wasn't sure what a rehab specialist would be doing for an insurance company that would promote this. 2:17:07 PM SENATOR SEEKINS asked if he seeks to disqualify the insurance company or some other entity that employs or the rehabilitation specialist. SENATOR ELLIS replied that the amendment would preclude the rehab specialist from working for the insurance company. SENATOR SEEKINS said he thought that the language actually disqualifies the company, firm or other entity that employs the injured worker. SENATOR ELLIS responded that those weren't his instructions to the drafter and, further, that the amendments were prepared for the original bill. But, he wouldn't object to making them consistent with the CS. Amendment 1 could be conceptual. CHAIR BUNDE removed his objection with that understanding. 2:20:00 PM SENATOR BEN STEVENS asked if the amendment would prevent the same specialist from doing both the evaluation and the implementation of the plan. SENATOR ELLIS replied yes, "It would prevent the same person [from] doing both jobs." The suggestion came from voc rehab specialists and he thought someone would be present to explain. SENATOR BEN STEVENS said he didn't object to the amendment, but thought someone from the profession should address that question. CHAIR BUNDE announced that conceptual Amendment 1 was adopted. 2:24:28 PM SENATOR ELLIS moved Amendment 2. 24-GS1112\A.2 Craver 6/8/05 A M E N D M E N T 2 OFFERED IN THE SENATE BY SENATOR ELLIS TO: SB 130 Page 13, line 15, through page 14, line 1: Delete all material. Renumber the following bill sections accordingly. Page 35, line 3: Delete "sec. 32" Insert "sec. 31" Page 35, line 4: Delete "sec. 32" Insert "sec. 31" Page 37, line 2: Delete "sec. 23" Insert "sec. 22" Page 37, line 6: Delete "Section 54(a)" Insert "Section 53(a)" Page 37, line 7: Delete "Sections 1 - 4, 32, and 56" Insert "Sections 1 - 4, 31, and 55" Page 37, line 8: Delete "Sections 5, 12, 39, 49, and 55" Insert "Sections 5, 12, 38, 48, and 54" Page 37, line 13: Delete "secs. 57- 59" Insert "secs. 56 - 58" CHAIR BUNDE objected for an explanation. SENATOR ELLIS explained that Amendment 2 adds another disqualifier to the job relocation benefit. The rationale is: Accepting job dislocation benefit from a different case should not permanently disqualify a worker with a new and even more disabling injury from reemployment benefits.... [Voc rehab specialists] are concerned that it would exploit younger workers, workers with disabilities, non-English-speaking workers and those who are desperate for money. There is no oversight by the Division of Workers' Comp on accepting job dislocation benefits as there is on settlement. Also, no legal representation required in the bill. So, this is trying to address that overall concern. CHAIR BUNDE asked if this was going to just protect people from themselves. SENATOR ELLIS answered that people are free to make bad choices in this country, but in this case it potentially drives up costs in the system. CHAIR BUNDE asked what would prevent an injured worker who took a cash settlement from coming back for a second unrelated injury. MR. LISANKIE explained that the current provision says if an injured worker gets the benefit and goes back to work in the same occupation in terms of physical demand, that disqualifies him from a second claim if he gets a second injury. 2:30:32 PM SENATOR ELLIS asked how often that scenario happens and said the money is often much less than the rehab benefit cost would have been. MR. LISANKIE didn't have hard numbers about how often that happens and regarding the second question, the settlement amount might be significantly less or similar to what retraining would cost. "As a rule of thumb there has to be some inducement to settle and inducement is the view that you're saving a little bit of money for your client." 2:31:37 PM SENATOR ELLIS went back to the first question saying that the department wrote this bill based on this concern and he is trying to understand it and justify changing the law. MR. LISANKIE responded that the premise was built into the original act; in 1988 the Legislature felt that there was a potential problem. 2:33:13 PM CHAIR BUNDE said that tracking employment records of people who had gone through rehab would be an ancillary benefit of the CS. MR. LISANKIE agreed. SENATOR ELLIS asked if there would be an answer to this question in the future. CHAIR BUNDE replied that he thought they would have more specific information. There was no further discussion of Amendment 2 and he maintained his objection. MR. LISANKIE said he did not favor Amendment 2. A roll call vote was taken: Senators Ben Stevens, Seekins and Chair Bunde voted nay; Senators Ellis and Davis voted yea; and Amendment 2 failed. 2:35:05 PM SENATOR ELLIS moved Amendment 3. 24-GS1112\A.3 Craver 6/8/05 A M E N D M E N T 3  OFFERED IN THE SENATE TO: SB 130 Page 14, lines 27 - 30: Delete "The form provided by the division for  election shall specify that the employee understands the  scope of the benefits and rights being waived by the  election. The administrator shall serve a copy of the  executed election form on the parties within 10 days after  receiving the form from the employee." Insert "Before accepting an election to accept a  job dislocation benefit in place of reemployment benefits  from an employee who has been given a permanent partial  impairment rating by a physician, the administrator shall  provide the employee planning on making an election with  individualized information including calculations based on  that employee's impairment rating to illustrate the effect  of making an election as well as other information to  clearly inform the employee of the potential consequences  of the employee's election.  (4) The form provided by the division for making  an election of benefits must require that a copy of the  individualized calculations and information provided to the  employee under (3) of this subsection be attached and  incorporated as part of the election and waiver and must  require the employee to acknowledge that the employee  understands the scope of the benefits and rights being  waived by the election. The administrator shall serve a  copy of the executed election form, including the  individualized information attached to the form, on the  parties within 10 days after receiving the form from the  employee.  (5)" CHAIR BUNDE objected for discussion purposes. SENATOR ELLIS explained: The victim or claimant will not know all the risks of waiving the benefit for what could be a relatively small sum of money. There is also a concern by the voc rehab specialists that adjustors will stipulate to the retraining benefit and convince the victim to either waive the benefit or go for the dislocation benefit without communicating it to the claimant the value of the benefit he is waiving or the risk of accepting the job dislocation benefit. CHAIR BUNDE asked if he is referring to an injured employee being offered a cash settlement. SENATOR ELLIS replied yes. MR. LISANKIE elaborated that this amendment referred to Senator Seekins' concern that some people preferred to settle and the board didn't have the authority to stipulate to certain things. The amendment would allow injured workers and their employers and insurers to stipulate that the injured worker is entitled to reemployment benefits and to go forward without having an evaluation report prepared. "We think it is important that they be allowed to stipulate." He was not aware that some of the rehab community feels that their role is to instruct the injured worker about what their benefits are or aren't at any given point. The bill has a proviso saying that the division will get in touch with someone after he has been off work for 45 days to explain what is his rights are, which is something that doesn't happen now. With all due respect to the rehab people that have suggested that, it's more important that we take the time and spend the money to do an evaluation just to make sure that nothing untoward can go forward. I think the system would work adequately if the parties were entitled to stipulate and move forward with getting a plan together. 2:40:29 PM SENATOR STEVENS wanted some clarification on the intent of the amendment. MR. LISANKIE replied the intent is to delete the ability to stipulate. So, it would essentially say that if the injured worker and the employer or their insurer both agreed that the injured worker was entitled to this benefit, notwithstanding their mutual agreement, the reemployment benefits administrator would have to assign the case to a rehab specialist to do an evaluation to confirm the party's belief that the injured worker was entitled to the benefit. SENATOR ELLIS said Amendment 3 is asking for an evaluation and there could be a compelling state interest for knowing what the plan would be. 2:44:25 PM SENATOR SEEKINS countered if a guy has a crushed leg and must hire a voc rehab person to evaluate it, that's not right. I don't see any sense in that. If something is obvious and they stipulate to say, 'Yeah, you're entitled to vocational rehabilitation,' they ought to be able to do it without having to go through that step. SENATOR ELLIS replied, "There's a lot more to it than that, Ralph." SENATOR SEEKINS said they are trying to make sure that someone with the least amount of capacity one way or the other is protected. "However, I think there are times when it's so obvious that we ought to be able to stipulate something rather than having to go through a step that can be needless...." SENATOR ELLIS said he would persist with the amendment and hope for compromise. 2:46:11 PM CHAIR BUNDE asked for a roll call vote. Senators Ben Stevens, Seekins and Chair Bunde voted nay; Senators Davis and Ellis voted yea; and Amendment 3 failed. 2:49:08 PM SENATOR SEEKINS moved CSSB 130(L&C) from committee with individual recommendations and attached fiscal notes. Senator Ellis objected. Senators Ben Stevens, Davis, Seekins and Chair Bunde voted yea; Senator Ellis voted nay; and CSSB 130(L&C) moved from committee.