Minutes ID: 606

*CM606*

MINUTES OF THE MEETING OF THE

ASSEMBLY COMMITTEE ON COMMERCE AND LABOR

Seventy-Ninth Session March 29, 2017

The Committee on Commerce and Labor was called to order by Chair Irene Bustamante Adams at 1:02 p.m. on Wednesday, March 29, 2017, in Room 4100 of the Legislative Building, 401 South Carson Street, Carson City, Nevada. The meeting was videoconferenced to Room 4401 of the Grant Sawyer State Office Building, 555 East Washington Avenue, Las Vegas, Nevada. Copies of the minutes, including the Agenda (Exhibit A), the Attendance Roster (Exhibit B), and other substantive exhibits, are available and on file in the Research Library of the Legislative Counsel Bureau and on the Nevada Legislature's website at www.leg.state.nv.us/App/NELIS/REL/79th2017. COMMITTEE MEMBERS PRESENT:

Assemblywoman Irene Bustamante Adams, Chair Assemblywoman Maggie Carlton, Vice Chair Assemblyman Paul Anderson Assemblyman Nelson Araujo Assemblyman Chris Brooks Assemblyman Skip Daly Assemblyman Jason Frierson Assemblyman Ira Hansen Assemblywoman Sandra Jauregui Assemblyman Al Kramer Assemblyman Jim Marchant Assemblywoman Dina Neal Assemblyman James Ohrenschall Assemblywoman Jill Tolles

COMMITTEE MEMBERS ABSENT:

None GUEST LEGISLATORS PRESENT:

Assemblywoman Lesley E. Cohen, Assembly District No. 29

Assembly Committee on Commerce and Labor March 29, 2017 Page 2 STAFF MEMBERS PRESENT:

Kelly Richard, Committee Policy Analyst Wil Keane, Committee Counsel Earlene Miller, Committee Secretary Olivia Lloyd, Committee Assistant

OTHERS PRESENT:

Robert Ostrovsky, Private Citizen, Las Vegas, Nevada Jason Mills, representing Nevada Justice Association Rusty McAllister, Executive Secretary-Treasurer, Nevada State AFL-CIO James P. Kemp, representing Nevada Justice Association Jim Werbeckes, Vice President, Government and Regulatory Affairs, Employers

Insurance Company of Nevada Paul J. Enos, representing Nevada Self-Insurers Association Les Lee Shell, Director of the Office of Risk Management, Department of Finance,

Clark County Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public

Agency Compensation Trust Robert Balkenbush, General Counsel, Public Agency Compensation Trust Thomas Dudas, Private Citizen, Las Vegas, Nevada Mark Joseph, Private Citizen, Fallon, Nevada Tyre L. Gray, representing Las Vegas Metro Chamber of Commerce Morgan D. Davis, Assistant City Attorney, Office of the City Attorney, City of

Las Vegas David Cherry, Communications and Intergovernmental Relations Manager, City of

Henderson Jeff Fontaine, Executive Director, Nevada Association of Counties Ronald P. Dreher, Government Affairs Director, Peace Officers Research Association

of Nevada Todd Ingalsbee, Legislative Representative, Professional Fire Fighters of Nevada Mike Ramirez, Director of Governmental Affairs, Las Vegas Police Protective

Association Metro, Inc. Michael Sean Giurlani, President, Nevada State Law Enforcement Officers'

Association Richard P. McCann, Executive Director, Nevada Association of Public Safety

Officers Kevin Ranft, representing American Federation of State, County and Municipal

Employees Local 4041, AFL-CIO Steven Thompson, 1st Vice President, Clark County Firefighters Union Local 1908 Evan Beavers, Administrator, Office of the Nevada Attorney for Injured Workers,

Department of Business and Industry Paul J. Moradkhan, Vice President, Government Affairs, Las Vegas Metro Chamber

of Commerce

Assembly Committee on Commerce and Labor March 29, 2017 Page 3

Nancy M. Paulson, Chief Financial Officer, Carson City Department of Finance Ana M. Andrews, Risk Manager, Risk Management Division, Department of

Administration Michael Flores, Director of Government Affairs and Communications, College of

Southern Nevada Steven Cohen, Private Citizen, Las Vegas, Nevada

Chair Bustamante Adams: [The roll was called.] We are going to refer a bill to the Assembly Committee on Commerce and Labor Subcommittee on Energy. It is Assembly Bill 452. Assembly Bill 452: Directs the Legislative Committee on Energy to conduct an interim

study concerning energy choice. (BDR S-1113) Kelly Richard, Committee Policy Analyst: Assembly Bill 452 directs the Legislative Committee on Energy to conduct an interim study concerning energy choice. The sponsor is the Assembly Committee on Commerce and Labor. Chair Bustamante Adams: Are there any objections? [There were none.] It is so referred. We will have a presentation on workers' compensation in Nevada from a historical perspective. Robert Ostrovsky, Private Citizen, Las Vegas, Nevada: Nevada's first workers' compensation act was placed into law in 1913. Nevada was one of the first states to adopt an industrial relations act. Wisconsin was the first state. Prior to such statutes being enacted, injured workers had no recourse. You could attempt to sue your employer. That was difficult, and it was very difficult for the injured worker to receive any benefits. If you look at our statutes, particularly Nevada Revised Statutes (NRS) 616A.010, the preamble says these statutes, ". . . must be interpreted and construed to ensure the quick and efficient payment of compensation to employees who are injured or disabled at a reasonable cost to the employers who are subject to the provisions of those chapters." Further, it says it must not be interpreted or construed broadly or liberally in favor of an employee or in such a manner as to favor the rights or interests of the employer. It is supposed to be an even-handed system that protects both the employee and the employer. We started with the Nevada Industrial Commission (NIC). It was composed of one representative each from management, labor, and the public. That system was replaced with the State Industrial Insurance System (SIIS) in the early 1980s. We had a single system that was run by a state agency which provided these benefits. In 1987, we allowed the first self-insurance to enter the marketplace. We allowed certain large employers and governmental entities to self-insure. That is where we first bifurcated the management of workers' compensation.

Assembly Committee on Commerce and Labor March 29, 2017 Page 4 At this point, the Department of Insurance had the responsibility for assuring that the self-insured employer had the financial wherewithal to provide the benefits. The Department of Industrial Relations made sure that the benefits were delivered appropriately. In 1993, we approved group self-insurance, which allowed smaller groups of employers with common interests to provide self-insurance in a group setting by getting a certificate from the Department of Insurance. In 1995, we began to open the marketplace to competition for SIIS and self-insureds. That market opened in 1999. In 1993, it was determined that SIIS was $2.4 billion in debt, which was at the time as big as the entire state budget. The system had less than 60 days of operating capital based on an actuarial study that was requested by then Governor Robert Miller, and later, by Governor Kenny Guinn. They faced the same issues that employee benefits were too high, which was for the benefit of employees, and rates were too low, which was for the benefit of the employers. The system was running out of money. A decision was made to allow the privatization of SIIS. In 2000, SIIS became Employers Insurance. That company assumed all the assets and liabilities of the old system and through a very structured financial system was able to sell off the long-term debt and eventually become a public company. That company now represents less than 10 percent of the marketplace. We now have a two-way system—self-insurance and insurance. Everyone is covered by one or the other. We were not alone during the 1980s and 1990s. Many states, which had one-way systems, switched because of indebtedness. In 2003, the State of California looked at Nevada law to help guide the restructuring of its workers' compensation system. We have a system, which includes the terms "grand bargain" and "exclusive remedy." They are really important legal points in the way the system works. We have a statutory set of benefits that employees have to accept, and the employees do not have to prove that the employer was responsible for their injury. When you look at the statutes, it is broken into NRS 616A, 616B, 616C, and 616D. The Legislative Counsel Bureau divided that up some years ago because the statute got so thick and complicated. It was easier to identify the various sections of the statutes and what they did—A for administration, B for provision of coverage, C for benefits, and D for penalties. You will also hear about NRS Chapter 617, which is the statute that covers occupational disease, and you will see how detailed and difficult it is to make some of these decisions. I would urge you to do what the statute asks, to be even-handed with both employers and employees so everyone is treated fairly. Jason Mills, representing Nevada Justice Association: The "grand bargain" is essentially a concept that came before workers' compensation when you had to sue your employer in tort. You had to find something that your employer did wrong in order to recover anything for your injury. This could often result in scenarios where there was nothing the employer did wrong, or if the employer did something wrong, it would take years to litigate. From the employers' perspective, it could expose them to large jury awards about which people in the business community always worried. However, the concept of the "grand bargain" was to remove the fault-based blame of a traditional lawsuit and create

Assembly Committee on Commerce and Labor March 29, 2017 Page 5 a no-fault-based system. In exchange for the employee's inability to sue the employer, the employee would get some defined benefits. The employers would get the protection of knowing that they would not have to worry about large judgments for any fault they may have had in causing an accident. It is important to understand this is very different from other areas of law. This is no-fault. If they are to blame, it does not matter. It is about getting the employee back to work, treatment, and moving forward. The notion of the "excusive remedy" is that the workers' compensation claim as an injured worker is exactly that; it is the exclusive remedy to proceed to get any type of recovery. You cannot sue your employer for negligence-based bodily injuries on the job. That has not happened in this state since 1913. There are four defined benefits for the injured worker. There is medical treatment by the employers' panel list of doctors whom the employee must use until he or she is stable. The second benefit would be short-term disability pay for the time the employee is off work and recovering from the injury, which is 66.6 percent of the gross wage, and there is a state cap. The third benefit is a disability compensation payment if you are permanently impaired from the accident. In this state, injured workers do not receive compensation for pain and suffering as they would in a judicial-based claim. You do not receive any type of disability award for what you went through, such as trauma. You are paid a disability award for whatever permanent injury your body sustained at the end of the claim after all medical treatment. If you are completely cured and recovered, there is no permanent disability award. If the injured worker is permanently restricted from going back to his or her old job in the same capacity, the worker would then be placed in a vocational rehabilitation system for between 9 and 18 months of retraining where they are paid the 66.6 percent while they are going through vocational rehabilitation. Those defined benefits are in the program. Workers have the right to reopen the claim if they received a permanent disability or were incapacitated from their work for more than five days. This is not like health insurance or automobile insurance. This is workers' compensation. If it is not in the statutes, it does not exist. This is a defined benefits system. The time frame to bring a claim is also important to understand. In Nevada, you must give notice of a workers' compensation injury within seven days of your injury. Failure to do so is a bar to a claim, subject to very limited exceptions. It is a two-step process. The employee must then file a claim for compensation after giving notice within 90 days on a C-4 document, the initiating claim document. The employee fills out the top half and a treating doctor fills out the bottom half listing the diagnosis and whether he or she believes it is industrially related. The insurers would then accept or deny a claim. Rusty McAllister, Executive Secretary-Treasurer, Nevada State AFL-CIO: There are benefits covered in NRS Chapter 617, which are about occupational diseases. The provisions within that section of the statute apply only to police, firefighters, and emergency medical technicians. There are heart and lung benefits for firefighters and police officers. This is not a new concept. The benefits for firefighters for lung disease were put in

Assembly Committee on Commerce and Labor March 29, 2017 Page 6 the statutes in 1965 and heart disease in 1969. In 1975, police officers were added to both of those benefits. If the employees comply with the requirements of the statute, they will be eligible for the benefits. The requirements include being employed for five years, having an annual physical, and making good-faith efforts to correct any predisposing conditions that are within his or her ability to correct. If the employee meets these requirements and has a heart or lung problem, it is conclusively presumed that he or she is eligible for these benefits. Police and firefighters were having a difficult time getting claims accepted, so in 1989 they looked for the strongest language they could find. The term "conclusively presumed" is about as strong as you can get. That was put in statute for those 2 laws in NRS 617.455 and NRS 617.457. It is conclusively presumed if an employee followed the requirements and had a heart or lung problem, it would be conclusively presumed that it arose out of his or her job. Those two statutes have been amended ten times since they were put into place. Each time they have been amended, they have been made stronger. In 2015, the statute changed so the benefit continues after retirement for one year for each year of service up to 20 years of service and after 20 years, it is lifetime coverage. There were two Nevada Supreme Court cases that had a big influence on that. Gallagher v. City of Las Vegas, [959 P.2d 519 (1998)], determined that the benefits went with the employee into retirement. In 2005, the Nevada Supreme Court in Howard v. City of Las Vegas, [120 P.3d 410 (2005)] said the employee was only entitled to the medical benefit and not any permanent total disability payments. If someone files a claim after they retire, they are only entitled to get medical benefits to take care of them. Volunteer firefighters are included in that benefit also. They have to show a causal relationship between their exposure and the injury they have. Another benefit for firefighters is cancer protection, which is covered in NRS 617.453. This was added to the statute in 1987. In 2003 and 2009, the statute was amended to enhance the benefit to help with the causal relationship. Again we were having difficulty getting claims paid because it said you had to be exposed to a carcinogen, and we were being denied claims based on the concept that there was no causal relationship of a specific incident. The Legislature put into statute the provision that if the firefighter was exposed to certain things and had cancer, it is covered. That is not a lifetime benefit; it is for five years after the firefighter leaves employment. If there is no claim within five years of retirement or leaving employment, he or she is no longer eligible for that benefit. The other more specific benefits that are in place for police officers and firefighters are in NRS 617.485 and 617.487. In 2001, firefighters were granted coverage for hepatitis and exposure. In 2003, police officers were added to that benefit. Employees are tested when they start employment, and one year after they leave employment. If they do not have it then, they did not get it on the job. When this was passed, every police officer and firefighter in the state was tested. It was up to the insurer to show that it came from outside employment for anybody who tested positive. There is a benefit for tuberculosis because a lot of the people we work with on a daily basis have tuberculosis, and it is very contagious. There were some provisions that were put in statute in 2001 regarding testing after exposure

Assembly Committee on Commerce and Labor March 29, 2017 Page 7 and there were some legal ramifications that could be employed to get a blood sample from someone who might be contagious. Firefighters and police officers are tested annually during their physical examinations for tuberculosis. They also have an annual hearing test because of exposure to noise. Those are the specific diseases that we have that are separate from everybody else. Chair Bustamante Adams: I will open the hearing on Assembly Bill 458. Assembly Bill 458: Revises provisions governing industrial insurance. (BDR 53-489) Jason Mills, representing Nevada Justice Association: Assembly Bill 458 deals with workers' compensation. We have been working with the various stakeholders for months and have put together a bill that we believe is going to be quite helpful for all parties concerned. Section 2 of the bill deals with a Nevada Court of Appeals case, which caused a particular problem with language in the C-4 document. The language in the document says, "Directly connect this injury or occupational disease as job incurred." That is a question being posed to the initiating doctor on whether he or she thinks the claim is industrially related. Because of the Court of Appeals decision, they took that language and said it did not meet the legal burden as defined in the previous Nevada Supreme Court case from 1993, United Exposition Service Co. v. SIIS [851 P.2d 423 (1993)]. The language in that case uses the phrase, ". . . a degree of reasonable medical probability that a condition in question was caused by the industrial injury." That is and has been the industrial standard in this state since 1993. The C-4 language has been in place even longer. In the Sands v. MGM Resorts International [No. 68926 2017 WL881894 (Nev. App. Feb. 28, 2017)] case, they said the language in the C-4 form is insufficient to essentially prove the claim. That leads us to a problem. If the language in the C-4 form does not prove a claim or generate the basis to bring a claim, even if the doctor says yes, it is directly connected as job-incurred, then how does a person bring a claim? We are now seeing defense counsels in the litigation field advancing the notion that even when a doctor says yes, they say that is not sufficient. Because this is a defined benefit plan program, the claimant has no ability to go get a doctor outside of the system because he often does not have the money to do it. You cannot hire a doctor on a lien. Liens are illegal in workers' compensation cases. The person could essentially be cut out from the beginning and unable at all to prove his claim; he could be boxed out of the workers' compensation system altogether. We think the Court of Appeals attacked the C-4 form, and there was no need to do it. All they had to say was the evidence was not sufficient. That is done all of the time. The insurers and the employers have the right to do that. We do not contest that at all. The issue is by causing damage to the C-4 form, it could cause catastrophic problems to the

Assembly Committee on Commerce and Labor March 29, 2017 Page 8 state. We came up with the notion of saying the language on the C-4 form is the same as the language the Nevada Supreme Court has already accepted in the past; thereby circumventing the notion the C-4 form is no good. Section 3 of the bill deals with giving the injured employee a second opinion for his or her medical condition in a workers' compensation case. Currently, an injured worker has no such right. The employer and insurer have a specific statute that empowers them as often and as regularly as they like to perform independent medical examinations. We are seeking, on an open claim, that the claimant have the right once per calendar year to have an independent medical examination. These are often already obtained after 6 to 15 months of litigation when a judge orders it. We think it makes sense to allow it at the front end of the case. There was some suggested amended language to section 3, subsection 6 where the insurers aptly pointed out that if we have to pay for this, we should also be entitled to the report (Exhibit C). We concur. Section 4 of the bill is about vocational rehabilitation counselors. If you have a permanent restriction and you cannot go back to your old job and your employer does not have a permanent light-duty position for you, you will end up in the vocational rehabilitation program. This is a big thing for a person to change his or her career due to an injury or a disease. Currently, the law does not give claimants any say whatsoever on who the vocational counselor may or may not be on their claim. We have proposed in this section that the insurers with their own lists provide a list of no fewer than three vocational rehabilitation counselors from which, within 14 days, the claimant must select his or her choice. That way the person can research the person who will do the vocational rehabilitation and perhaps also be more invested in the process. This process is very similar to how the treating physicians work in this state. When we are treated on a claim, we must use the insurers' panel of doctors, but the law allows us to choose in the first 90 days which doctor from their sublist we can pick. This is a similar concept. We use their list, the insurer/employers' closed panel list, to hand to the injured worker to select a vocational rehabilitation counselor. There were some concerns, and we addressed them. They did not want this to be a serial change, so section 4, subsection 5 says they get one choice. Section 5 is going to be amended to have language struck (Exhibit C). We think this happened inadvertently in drafting. This was not requested by any parties. It looked like it created some type of penalty for failing to allow the independent medical examination to happen. All of section 5 will be deleted. Section 6 has nothing substantive in it. Section 7 has a similar problem to what happened in section 5. It looks like there was inadvertent language added. We will delete all of section 7. James P. Kemp, representing Nevada Justice Association: Section 8 of A.B. 458 is going to address the effects of a Nevada Supreme Court case called Public Agency Compensation Trust (PACT) v. Blake [127 Nev. Adv. Op. No. 77]. It has to

Assembly Committee on Commerce and Labor March 29, 2017 Page 9 do with subsequent injuries to the same body parts. If an employee strains their back in year one and in year fifteen, they suffer a herniated disc to the same body part, their disability compensation has to be apportioned for the previous award that they received. Under a prior regulation of the Division of Industrial Relations (DIR), it was simple: You took the original percentage and subtracted it from the new percentage, and the employee would receive the remainder percentage. This case added some complications to that very simple system based on the Nevada Supreme Court's reading of the statutes. They said the American Medical Association's Guides to the Evaluation of Permanent Impairment, Fifth Edition would have to be used, and therefore, a rating doctor has to go back and predict what the percentage would have been based upon an earlier version of the guides. It makes it very complicated and very confusing because, oftentimes, the ratings from the earlier time period may not have taken all of the correct measurements and may have not considered all of the same kinds of medical information that the new guide requires, so it has caused some confusion. Section 8 essentially codifies into statute the former DIR regulation that you subtract the original percentage from the new percentage, and that is the percentage of the disability compensation that is awarded. This is what the parties have relied on for many years, and it would return to the system that was easy for everybody to understand. There has been an issue that has been raised by the Nevada Chapter of Associated General Contractors. They have a question about rating evaluations that are done in other states. Our understanding is that they want to propose some language. We are looking forward to receiving that. In section 9, in the 2015 Session the insurers brought forth a bill, Senate Bill 232 of the 78th Session that was enacted and permitted the DIR to increase the maximum lump sum payout of disability compensation from 25 to 30 percent. Standard compensation for workers' compensation is a monthly amount that you receive until age 70. Under NRS 616C.495, you can receive the benefit in a lump sum, but there are maximums. If you have a 35 percent permanent partial disability, under the current regulation, you would only be able to take 25 percent of that in a lump sum, and the additional 10 percent you would have to take in payments over time. Everybody last session agreed that it should be raised to 30 percent. Thus far, I do not think it has been implemented. Within NRS 616C.495, there were a lot of time periods and percentages that were used. We think it would be simpler, rather than by regulation, to do this by statute and identify that it is 30 percent for any claims that are made after July 1, 2017. This would put simplicity back into the system. Everybody would be able to refer to the statute and be able to calculate what the maximum lump sum would be. There is another issue with lump sum permanent partial disability evaluations. The DIR is supposed to look annually at a table that is used to calculate the lump sums. It has not amended the regulations since 1997, and they have been using the same mortality rates since 1987 and the same 6 percent interest rates. Clearly interest rates are much lower than 6 percent now, and people live longer now than they did in 1987. We want to specify that the DIR is to look at this every year and make the adjustment every year. We want to make

Assembly Committee on Commerce and Labor March 29, 2017 Page 10 sure that is done, and they use a mortality standard that is used by the Internal Revenue Service. We also want them to use an average 30-year treasury constant maturity rate for the interest rates that are used to calculate the lump sums. If injured workers get an amount of money today and they invested it in very conservative investments, when they reached age 70, they would have the same amount of money. The idea is to have an actual present value. This is designed to give direction to the DIR and make sure injured workers are receiving actual present value. Jim Werbeckes, Vice President, Government and Regulatory Affairs, Employers

Insurance Company of Nevada: We have worked with the Nevada Justice Association to craft some legislation. I have some clarifications. In section 3, subsection 6, we submitted some amendments (Exhibit D). I agree with the amendment submitted by Mr. Mills on this section (Exhibit C). In section 9, subsection 2, paragraph (d), it is my understanding that the DIR has adopted that regulation, but if we are going to put this in statute, we probably should include the 30 percent as well. We would like to amend NRS 616C.235. This is the medical benefits-only claims. Currently, medical benefits only are $300. We would like to increase the amount to $800. This statute was originally put in place in 1971 and has not been increased since. We would also like to add to NRS 616C.475 which addresses temporary total disability payments (TTD). Temporary total disability payments are basically wage replacement benefits. The amendment would clarify that if a person has retired or taken himself or herself out of the workplace, and subsequently reopened his or her claim, he or she would not be entitled to TTD benefits because he or she is retired, so there should be no income to be replaced. Chair Bustamante Adams: What do you want to do on that amendment? Jim Werbeckes: If an employee has retired and no longer has income coming in and he or she reopens the claim, there is no entitlement to TTD benefits. Chair Bustamante Adams: Are there any questions from the Committee on sections 2 and 3? Assemblyman Kramer: In section 3 it talks about an independent medical examination, which sounds like you are going to hire another firm. How does that differ from a second opinion, which might be from the same firm, and why was this language chosen rather the term second opinion? Jason Mills: An independent medical examination is defined in the workers' compensation statute and in the Nevada Medical Fee Schedule. We use that language to remain consistent. If we start using other phraseology, it becomes problematic. When we have litigation on these issues, ultimately a judge orders an independent medical examination on the case. This is routinely

Assembly Committee on Commerce and Labor March 29, 2017 Page 11 done and is in other parts of the statute, for example, NRS 616C.140, which says the employers and the insurers have a right to an independent medical examination. We are trying to keep internal consistency, and it is in the fee schedule. Assemblyman Kramer: Is that essentially a second opinion? Jason Mills: That is exactly right. Assemblyman Hansen: Are there some existing problems that are not being addressed for workers? Jason Mills: Yes, there is a problem. There is contention sometimes over what treatment should or should not happen on a claim. Regularly, we end up in long, protracted litigation over this precise issue that ultimately a court tells them to do this. We are attempting to unwind the litigation aspect of it that happens regularly. A lot of the litigation that my colleagues and I deal with is on this exact issue when the parties are fighting over what treatment should or should not be done on a claim. Chair Bustamante Adams: Are there questions on section 4, which is about vocational rehabilitation counselors? This would allow the worker to pick from up to three counselors? Jason Mills: That is correct. The insurer and the employee could mutually agree on anyone. If they cannot mutually agree, then the employer/insurer would hand the employee a list of no fewer than three vocational rehabilitation counselors from the insurers' provider list, so the employee can choose, much the same as the treating physicians are done in the first 90 days. Chair Bustamante Adams: Are there questions on sections 5 and 7, which are proposed to be deleted? Assemblyman Daly: In section 5, subsection 2, it needs to be left in the bill because they are adding new sections. Where it says, "An employee who is aggrieved by a determination of an insurer made pursuant to subsection 1 may appeal the determination pursuant to NRS 616C.315 to NRS 616C.385 . . . ," section 3 is going to fit within there, and they did not want to leave it out. Jason Mills: With specific regard to section 5, there is a big problem. Current statute in NRS 616C.225 is dealing with penalties that are assessed against insurers if they fail to do specific actions. It looks like drafting added this new section to penalize them if they do not give an

Assembly Committee on Commerce and Labor March 29, 2017 Page 12 independent medical examination. That was not our intent. It is only specific areas that are penalized under this specific area of the law. We do not know how it ended up there. Assemblyman Daly: Are you speaking specifically to NRS 616C.225? Jason Mills: Yes, sir. Assemblyman Daly: Within NRS 616C.225, there is a reference to other statutes, NRS 616C.315 to NRS 616C.385, into which section 3 will fit. So not only will those sections apply, but also section 3? Jason Mills: The statute that we are amending is NRS 616C.550, so the issue is that they do not have to put it there. Wil Keane, Committee Counsel: Assemblyman Daly analyzed this correctly. The drafters put that reference to section 3 because they believed that section 3 would be codified in that clump. If it is not your intent to have it codified, we should take it out and find a different reference to indicate where it should be placed. This was just to indicate where section 3 would be placed when it was codified after being passed. Assemblyman Hansen: In section 3, subsection 4, it says, ". . . a physician or chiropractor selected by the injured employee . . . ," but in section 4, subsection 2 where it talks about the selection of the vocational rehabilitation counselor, it adds in, ". . . or personal or legal representative . . . ." Why is it changed to include the legal representative? Jason Mills: Typically, when the selections are made, if the employee is represented by counsel, the intent was that they also have to provide the counsel the notification. This is to avoid circumventing the legal representation. In other sections of the law, if a person is represented by counsel, you must also provide their counsel a copy of what you are sending them. Assemblyman Hansen: It does not say that. There are two different selection processes. I am a little afraid of having the legal representative make this selection rather than the employee. What do the two sentences in section 2, subsections 1 and 2, mean exactly? Why are we putting those interchangeable phrases in this bill?

Assembly Committee on Commerce and Labor March 29, 2017 Page 13 Chair Bustamante Adams: As to your first question, the intent is that the legal representative would also get a copy. Jason Mills: Precisely. Wil Keane: This does seem unusual, but there does not seem to be anything problematic about it. If there is a phrase that is being used on a form that we want to make sure coincides with a phrase that is in an important case historically and the Legislature wants, as a matter of policy, to say that these two phrases may be used interchangeably, they can do that as a way of directing the court in the future to correct a problem which is going on in the court. Assemblyman Hansen: So is this clearing up an ambiguity that is occurring in legal cases? Wil Keane: This does not seem to be a matter of clearing up a problem in statute. It is a matter of other court cases. Chair Bustamante Adams: Any questions on section 6? Seeing none, we will go to section 8. We have noted that the Nevada Chapter of the Associated General Contractors might have a possible amendment, so we will wait to hear what they would like to change. That is where we subtract the new percentage from the original percentage. Is that correct? James Kemp: That is correct. It is to address a complication that was introduced in this court case and return it to the simplicity that parties enjoyed for years and years. You subtract the percentage that was found on a previous claim from the percentage for a new claim on the same body part to determine the amount of the disability compensation for the injured worker. Chair Bustamante Adams: Are there questions on section 9? Assemblywoman Neal: It is my understanding that states vary widely on whether they are going to stop workers' compensation claims upon retirement. Some states actually give the option to continue the workers' compensation. I would like to understand the amendment based on that reason, and if it is a preexisting injury, why do you want this language in amendment No. 3 (Exhibit D)? Jim Werbeckes: Today in Nevada, disability benefits are paid to age 70. In this case, we are talking about when an employee reopens a claim after he or she has retired. Currently, he or she would get

Assembly Committee on Commerce and Labor March 29, 2017 Page 14 temporary disability even though he or she was not working. This language says if the employee is not working, he or she would not be entitled to TTD. The employee is eligible for medical benefits, but there is no wage loss. Temporary disability is for wage loss. Assemblywoman Neal: What other states are doing exactly what you are proposing? Jim Werbeckes: I would have to get you that information. Assemblywoman Carlton: Just because you are retired, it does not mean there is no income. Are you defining retired as totally unemployed? Jim Werbeckes: We defined wages as money, goods, services received by an employee for his or her employment to compensate for his or her time and services. With police and firefighters, it works this way as well for heart and lung benefits. If they retired today and they reopened their claim, they do not get benefits. Assemblywoman Tolles: The purpose of TTD is that if I am injured on the job, workers' compensation would cover not only my medical bills, but also the lost wages. If I reopen a claim when I am retired, I can still have my medical coverage, but I would not be compensated for wages because I am not earning any wages. Jim Werbeckes: You are absolutely correct. Jason Mills: The way the language is drafted, it is only on reopened claims. The person must be retired, which is defined as getting some form of pension, social security, or 401(k) benefits, not having a job, and not earning any wages. It does not have to be the same job. If the employee is working, the employer has to pay TTD. It does not cut off any compensation award, the permanent partial disability evaluation. That is not removed by this language. Permanent total disability is not removed from this language. The only thing that is removed from this is TTD with a person who is receiving retirement income and has no other job or form of wages. We define wages as anything of valuable remuneration a person could get. It is for a truly retired person. Assemblywoman Tolles: Could you explain why a person would reopen a claim?

Assembly Committee on Commerce and Labor March 29, 2017 Page 15 Jason Mills: There is a statute in place that says you can reopen your claim if your condition has worsened. If you had an old disability award, your claim can be reopened for life. The injury could degenerate some more. A doctor then says you need more care and puts it in writing. It is determined to be a worsening condition under NRS 616C.390, which is the reopening statute. The claim is reopened. If the person is working, this statute does not apply. Chair Bustamante Adams: We will move into opposition. Paul J. Enos, representing Nevada Self-Insurers Association: We have an issue with the language in section 2. By checking the box on the C-4 form for the initial medical visit, we are asking the doctor to state that there is a medical probability that this is caused by an industrial injury without a diagnostic test. We would like to see a diagnostic test in there. In section 3, there is a difference between a second opinion from a physician and an independent medical examination. That difference is costly. It is difficult to get an independent medical examination in a short time period. Once you get to that point, the physicians know they are going to be testifying in court, and it is tremendously more costly. We would like to have a second opinion from another physician with potentially a records review, so we can hopefully forestall any further litigation. That does not preclude an independent medical examination from taking place, but we would like at least to have a second opinion from a physician instead of having an independent medical examination be that second opinion. In section 4, regarding the vocational rehabilitation counselors, we think seven days is inadequate time to be able to choose that counselor. We have issues in section 8. This change is due to the Nevada Supreme Court decision in Public Agency Compensation Trust. It is complicated because it deals with the different rating guides we use. We think the Nevada Supreme Court made the correct decision that we are doing an apples-to-apples comparison, instead of a differing comparison with different ratings guides. That ultimately should result in a windfall for that injury because we are choosing those rating guides. In section 9, while we do not disagree that the DIR needs to review those annuity tables annually, we think this could result in a windfall benefit to that injured employee and ultimately those attorneys. We would like to do some kind of review to see what that means and what DIR is going to do with it and what the financial impact will be with those tables. We appreciate the amendments and we like the amendments from Employers Insurance Company of Nevada (Exhibit D), but we still have some concerns. Assemblywoman Carlton: You have been involved in the discussions, so a number of your concerns were addressed.

Assembly Committee on Commerce and Labor March 29, 2017 Page 16 Paul Enos: Some of our concerns have been addressed. Those that have not, I am addressing today. Assemblywoman Carlton: When I see the industry, the trial lawyers, and labor all sitting at the table together, that has a pretty big impact in this room. What is your issue under section 2? Paul Enos: Under section 2, we have concerns that a physician is checking the box on the C-4 form to say that there is a medical probability that this injury occurred as an industrial injury without doing a diagnostic test. Assemblywoman Carlton: There is currently something similar to that on the form. This is making sure that in regard to the discrepancies that the court noted, everyone is using the same language. There is a spot for that now. I am not sure where the issue is with changing this. This is step one, so there is no guarantee of benefit with a C-4 form. We are clarifying what the Court asked us to do to make sure that the employee gets fixed. That is the goal. Paul Enos: We believe that checking that box is subjective without having that diagnostic test. That is the rub for the physician to make a statement regarding that probability on the condition in question. We believe they do need that diagnostic test, otherwise it is subjective. Having the test makes that more objective. Assemblywoman Carlton: Your proposal is for more testing, which is more costly. I think doctors can make the opinion—if I have a big piece of bamboo skewer in my hand, that it probably happened—I have a hard time handling your categorization that when an employee receives a benefit for an injury, that it is a windfall. They are just supposed to get fixed, and they should not have to go to court anyway. To insinuate that people are making money off their injuries, I think you should clarify that. Paul Enos: We want them to get fixed too. When we talk about impairment guides for permanent partial disabilities, it is not necessarily about getting fixed; it is about the benefit. Unfortunately, it comes down to money. That is why we move forward in section 9, where we are looking at changing the tables, we need to take a look to see what that really means. Our actuary says this could result in a windfall, but they really do not know. Should DIR take a look at those tables on an annual basis and update them? Definitely, but we need to look at that and see what it means. Assemblywoman Carlton: Those tables are 30 years old. Please do not use the term windfall. This is money that goes to someone who has been injured to support their families to make up for the wages that they

Assembly Committee on Commerce and Labor March 29, 2017 Page 17 have lost because in the "grand bargain" they are not allowed to sue you. Nobody goes out to get hurt to make money. Workers' compensation is not about making money; it is about making the worker whole. It sounds like there is a lot of litigation now, and we are getting to the point where the "grand bargain" is going to tip. Let us make sure we get these people fixed, and they can support their families; and they do not have to apply for other benefits, so they can survive. It is the employers' responsibility to get these people fixed. Paul Enos: I agree. Assemblyman Ohrenschall: A second opinion is not defined in NRS Chapter 616C, whereas an independent medical exam is, and I am not sure about the fee schedule. Paul Enos: We believe if we allow another physician to look at that injury, if there is a disagreement, we can hopefully resolve the issue and get the individual on a path to rehabilitation. An independent medical examination is a lot different than going to a physician. That doctor knows he is likely to go to court, and the case is likely to be litigated, so it takes a lot longer for us to get our people to see a physician. It takes longer to do an independent medical examination because the physician makes sure he is doing everything completely by the book, because it is likely he will have to testify. If we allow the worker to go to a physician for a second opinion, it is our hope that it can be resolved at that point. If not, then there is still the option for an independent medical examination. Les Lee Shell, Director of the Office of Risk Management, Department of Finance,

Clark County: We have some of the same concerns with the independent medical examination and the second opinion. I think some of our concerns are about the timeliness issue, and the same concerns as expressed by Mr. Enos. Chair Bustamante Adams: Is there other opposition? Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public

Agency Compensation Trust: We are generally in opposition to most of the provisions in the bill (Exhibit E). In section 9, the 30 percent that was approved last session was not implemented by DIR but was done through regulations. If it needs to go into statute, we support that. We are in support of the amendments that delete sections 5 and 7. We have significant concerns with section 3. Section 2 deals with medical causation, and the terms are not the same. Robert Balkenbush, General Counsel, Public Agency Compensation Trust: We are in opposition to section 2 because the section is completely unnecessary. The subject of this section is medical causation opinions. Whether a medical causation opinion is

Assembly Committee on Commerce and Labor March 29, 2017 Page 18 admissible or legally sufficient to prove legal causation of an injury under the Nevada workers' compensation law is already governed by other law. That law is NRS 50.275 which deals with expert opinions. It is also dealt with by the Hallmark v. Eldridge case [124 Nev. 492, 498-504, 189 P.3d 646, 650-54 (2008)]; and Higgs v. State [126 Nev. Adv. Op. No.1, 222 P.3d 648, 654-59 (2010)]. Admissibility or legal sufficiency of a medical opinion to prove legal causation is not a matter of mere language. It is whether the opinion of the conclusion is supported by reliable methodology. If the opinion or conclusion is not supported by reliable methodology, it is of no assistance to the trier of fact on the matter of legal causation. To state it another way, the use of the words “reasonable degree of medical probability” or “directly connect this injury or occupational disease as job-incurred” does not in itself make a medical causation opinion either admissible or legally sufficient to prove legal causation. Hence, this proposed amendment to existing law is completely unnecessary and should be deleted. If you had someone who had a fractured femur and was hit by a vehicle at work, in the medical record that supported the diagnosis of a fractured femur, that information would be contained. Whatever is on the form C-4 that goes with the medical record, which is usually filled out by the doctor who completes that medical record, there is going to be some consistency in terms of methodology as to how the doctor made that determination. On the other hand, if you have a person who goes into an emergency room and has an MRI done in connection with an injury and there is a disc that is discovered in the process of evaluating, if the doctor puts down there is a disc issue and checks the box, the question of whether that proves that the disc issue was caused by the accident, you would have to look at the record to see if there is reliable methodology to reach that conclusion. Sometimes doctors make conclusions without any methodology. The trier of fact has to be able to understand the methodology. If it happens at work, it does not necessarily mean it is caused by work. Assemblywoman Carlton: You need to clarify if it happens at work: it does not mean it was caused by work. Robert Balkenbush: Section 2 deals with medical causation opinions. The aim of that is to use a form C-4 effectively to make a conclusion that whatever is listed on the form C-4 is going to be covered under the claim. That is separate from the issue of whether what is on the form C-4 can actually be deemed to arise out of the course of employment. You can be at work and go to a doctor, but there is a whole body of law in NRS 616C.150 which says, ". . . arise out of and in the course of employment . . ." and we have a body of Nevada case law that defines what that means. You can have a situation where the condition is discovered while the person is at work, but it is not caused by the work. That is a whole separate issue from the medical causation, which is part of section 2. I think the object of this was to change the C-4 form and put magical language in there that would be legally sufficient to prove legal causation. The doctors need to be able to do what doctors do. They need to state what they see; what they diagnose; and what they think caused it. Whether that is going to be a legally sufficient medical causation opinion is for the

Assembly Committee on Commerce and Labor March 29, 2017 Page 19 courts to determine. This section is unnecessary. Doctors need to fill out their reports and the process needs to be followed. In a situation as Assemblywoman Carlton described where a person has a bamboo skewer through their finger and the form C-4 is filled out as it is today, people are not going to disagree that the bamboo through the finger is a work-related injury. There are many medical conditions and injuries that do not fit in that category. This will not cure that. Doctors need to give their own opinions, and their opinions need to be reviewed by the court for legal causation. Assemblywoman Carlton: Workers' compensation is not supposed to be a court issue, and it seems like almost every opportunity is taken to drag the injured worker through the legal process. We are getting numbers on how many claims are filed and denied. I am concerned that we are putting injured workers through this, and all I hear are ways and issues on denial. Chair Bustamante Adams: Do you have other problems, Mr. Carlson? Wayne Carlson: We have problems with section 3. Section 8, subsection 10 is reversing the court's decision that was in the Public Agency Compensation Trust's favor. Thomas Dudas, Private Citizen, Las Vegas, Nevada: I had to seek medical attention for prolonged driving as a semi-truck driver. My case was more about a legal fight to see who would pay the bill. I was asking for attention for the pain and suffering that I was experiencing after 10 hours of driving in stop-and-go traffic. I asked many coworkers and this is a common occurrence. Chair Bustamante Adams: On the bill, is there a section that is problematic? Thomas Dudas: I am in total approval with the opinions that are stated by Assemblywoman Carlton as to the amount of legal activity that occurs in order to get some medical attention. Chair Bustamante Adams: Are you in support? Thomas Dudas: I am in support of proper medical activity of reevaluation. In my process of talking to attorneys, I learned that 96 percent of these claims are denied by our state review board. It means that you have to go into another battle to prove something like this. It is not an obvious injury such as a broken leg. It is a repetitive industrial-caused injury of which there are thousands for commercial drivers. The insurance companies have all their actuary tables and want to deny paying for medical attention.

Assembly Committee on Commerce and Labor March 29, 2017 Page 20 Chair Bustamante Adams: If you have written testimony, please submit it. Mr. Dudas is in support of this bill. Is there anyone else here in opposition? Seeing none, are there any here to testify from a neutral position? [There were none.] Are there any in support with the amendment? Robert Ostrovsky, Private Citizen, Las Vegas, Nevada: I want to thank the parties who came to the table. Every word matters in this statute. Every word ends up in an appeals officer's lap on a contested claim. Not all claims are contested and most are accepted. We will continue to work together and words matter. Chair Bustamante Adams: I will close the hearing on A.B. 458 and open the hearing on Assembly Bill 267. Assembly Bill 267: Revises provisions governing industrial insurance. (BDR 53-650) Assemblyman Nelson Araujo, Assembly District No. 3: Assembly Bill 267 would ensure that if a claim was denied for firefighters, arson investigators, and police officers suffering from cancer, lung disease, and heart disease, and ultimately, that claim was found to be legitimate, the party who denied the claim would be required to pay legal fees and back pay to the claimant. This bill would limit the dissemination and usage of physical examinations done on firefighters, arson investigators, and police officers suffering from cancer, lung disease, and heart disease. This bill exempts firefighters, arson investigators, and police officers suffering from cancer, lung disease, and heart disease from the requirement that an occupational injury and/or disease incapacitate an employee for at least 5 consecutive or cumulative days within a 20-day period from earning full wages. Rusty McAllister, Executive Secretary-Treasurer, Nevada State AFL-CIO: Under section 1, it amends Nevada Revised Statutes (NRS) 616C.400 to say that temporary compensation benefits cannot be paid unless a person has been incapacitated for at least 5 consecutive days or 5 cumulative days in a 20-day period from earning full wages. We want to add to that section, under section 1, subsection 2, paragraph (c), that the period prescribed in this section does not apply to "A claim which is filed pursuant to NRS 617.453, 617.455, or 617.457," which is cancer, heart, and lung. We are asking for this because when the statute was put in place, the vast majority of people worked an eight-hour shift. Five days off is 40 hours. Firefighters work 24-hour shifts. Five days of 24-hour shifts is an extensive period of time with days off in between. To reach 5 cumulative days, it may take you the entire 20 days. Under this scenario, we have seen various things under the heart, lung, and cancer provisions where people would file a claim under those statutes and get treated on their days off. The issue may not be so severe that it incapacitates the employee from work. If the individuals have atrial fibrillation and they have symptoms on their first day off, they go to the hospital and get treated. The doctor determines what the cause is and gives them medication and says they are able to go back to work. They file a claim for a disability, and

Assembly Committee on Commerce and Labor March 29, 2017 Page 21 it is denied because they say you were not off for 5 days. That person is on medication for the rest of their life. That is a disability, but they say because he or she did not fulfill that portion of the statute, he or she is not entitled to any disability. Skin cancer is a benefit that is covered for firefighters. If you get treated for skin cancer on your days off-duty, it will be denied for disability. Occupational asthma can be diagnosed and treated on the employee's days off, but it can be an issue for life. Those are the situations we are considering. Section 2 relates to NRS 617.420 and is also about the 5 days off in a 20-day period. We are asking for those claims filed under NRS 617.453, 617.455, and 617.457 not to be included in the provisions of that part of the statute. It is not for any other workers' compensation claim, only for those three statutes. Firefighters and police officers are required to have annual physicals. Some of the entities that I have dealt with in regards to the firefighters have taken the results of those physicals and used them to try to coerce employees. An example, in a vote of no confidence on the fire chief, the fire chief said to the employee that he knew, from a form he should not have had, that the employee was overweight, and he hoped he did not lose his job. This provision says the results of the required physicals can only be shared with the patient, the physician, and the designated person from the employer who reviews them. In the case that I mentioned, the physicals were shared not only with the fire chief but town board members. We are trying to prevent that from happening. They have to follow the Health Insurance Portability and Accountability Act (HIPAA), which says that information may not be shared. Section 4 is about NRS 617.455, which is lung disease, and section 5 is about NRS 617.457, which is heart disease. For claims filed under these sections, the only two conclusively presumed benefits in the NRS are heart and lung disease. If you deny a claim for those benefits and the claimant prevails, then the claimant should be reimbursed for his or her attorney's fees and associated costs. There were some concerns about running up the fees. The fees we pay an attorney are a contracted amount. There are a few bad actors who make a living off of denying claims. They sell their services based on the concept of denying claims. The vast majority of insurers do a great job and manage claims well. I have a presenter to tell his experiences with this. Mark Joseph, Private Citizen, Fallon, Nevada: I am here in support of A.B. 267 (Exhibit F). On July 28, 2014, while I was employed as a Captain with the Churchill County Sheriff's Department, I became ill and went to the doctor, who diagnosed me with aortic stenosis and aortic regurgitation. He informed me that heart surgery would be inevitable, and I had five to six years before I would need surgery if my heart progressed as expected. My doctor completed a C-4, and I was denied on August 29, 2014. I had a hearing on November 14, 2014. The hearing officer affirmed the denial pending the completion of a medical investigation by the insurer. The insurer took three months to make a decision, and they submitted another denial on March 11, 2015. I had another hearing, which I requested on May 6, 2015. The hearing officer reviewed the

Assembly Committee on Commerce and Labor March 29, 2017 Page 22 medical evidence and determined my claim should be accepted, and she reversed the denial. After my claim was accepted at the hearing level, the insurer filed a stay for an appeal. After not paying the medical benefits, I filed for another hearing. A hearing was held on July 16, 2015. The hearing officer remanded the case back to the insurer to either pay the medical bills or make a new determination. The insurer denied my claim again. Prior to November 9, 2015, which is the date I had an appeal, there had been five denials and three hearings. After the hearing on November 9, 2015, the appeals officer decided on April 26, 2016, that my heart disease was unquestionable. Because she determined that I was not disabled, they would not pay any medical care. Six months after my appeals hearing, I had another battery of cardiac tests, including a nuclear cardiac stress test completed on May 5, 2016, and another C-4 and D-39 certificate of disability were submitted. Since then, I have received two denials, and I have attended one more hearing. Nearly three years after my diagnosis, I am still in need of further medical care, and my heart is progressively getting worse. I was hospitalized in the cardiac care ward at Saint Mary's Regional Medical Center in January 2017, because my heart was not pumping properly, yet medical benefits continue to be denied. I support A.B. 267 because it is urgently needed for those people who are truly only seeking medical care and to be treated fairly. Chair Bustamante Adams: Thank you for your testimony. Are there any questions from the Committee? Assemblywoman Carlton: I know it is hard to go through all of those things because it takes over your whole life. It is very frustrating when you think as a municipal employee that you have a benefit that is supposed to be there for you and your family when you need it, to have to go through two and a half to three years which is supposedly conclusively presumed. Where did you work? Mark Joseph: I worked 23 continuous years with the Churchill County Sheriff's Department in Fallon, Nevada. Assemblywoman Carlton: So you were under the Public Agency Compensation Trust (PACT) group? Mark Joseph: Yes. Assemblyman Hansen: I have a question on section 3 of the bill, where you are going to limit who gets to see the

Assembly Committee on Commerce and Labor March 29, 2017 Page 23 physical examination. If you are going to have a consistent physical examination to make sure the employee is in good health, why would you not want to share that? Do the insurance carriers have a legitimate reason to know what the health of the employee is? Rusty McAllister: This is for your annual physical to maintain heart and lung benefits, not applying for a health insurance policy. The health insurance policy has already been provided to the employee when they came on to the department. The health insurance is typically provided by the employer or a self-insurer's trust. Assemblyman Hansen: I would think this was something you would want to share. It makes it sound like there is a secret. Who is it being shared with now? Rusty McAllister: It is only being shared with the physician who conducts the physical exam, who, if there were a problem, would recommend the employee see his or her personal physician to correct a predisposing condition; and is shared with the employee and someone from the employer. The employer knows, but within the provisions of HIPAA, they know they cannot share that information with other people. Assemblyman Hansen: What are we trying to solve? Rusty McAllister: We are trying to keep that information from going outside of those three people. It is being shared with people who should not have that information. Assemblyman Hansen: I want to err on the side of the worker, but I also want to make sure there is some equity in the process. Chair Bustamante Adams: Are there any other questions from the Committee? Seeing none, I will move to opposition. Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public

Agency Compensation Trust: I submitted written testimony on this bill [(Exhibit G) and (Exhibit H)]. There is not much in this bill that we can support. There is no evidence to support a need for the amendments to sections 1 and 2. The removal of the disability requirement makes it inconsistent with all other employees who have a 5-day waiting period in 20 days. That makes this particularly discriminatory against other employees. Plenty of those employees work in shift work as well. In terms of section 3, this appears to be an issue that is more a right for bargaining between the employee and the employer in terms of who should seek physical examinations.

Assembly Committee on Commerce and Labor March 29, 2017 Page 24 We represent rural Nevada, and they often have people who wear multiple hats. The obligation is on the employer in the statute to review the physical with the employees and to advise them of the consequences of not correcting a predisposing condition. This bill would take away the choice of the employer as to who is in the best position to do that. In some cases, we have employers who have contracted with a specialist to assist them with reviewing and explaining to the employees the consequences of the physical and the corrections they need to do. The PACT funds a wellness program for those employees which is voluntary (Exhibit I). That outside firm offers that wellness assistance to help the employees comply, so they do not lose their benefits. Chair Bustamante Adams: That was in section 3? Is it ever the intent to share the information with the town board members? Wayne Carlson: Yes, that is in section 3. It is the intent under the statute that the employer chooses who is in the position to get that information. It may be the fire chief or the sheriff; often, it is one of their subordinates. In other cases, it might be the human resources department, which might be one of the multiple hats a recorder might wear. It varies by entity. This bill restricts it to positions that a lot of entities may not have. None of my members have a formal risk manager, so it is always a part-time function. This bill would remove the ability of the employers to contract with a specialist to assist them. In the process they are using presently, that firm sends a letter to the employer and the employee explaining the results of the physical and gives the employer support on how to explain the medical problem and the solution to it. The employee can chose to fix the predisposing issue on his own or he can request the assistance of the wellness program. Chair Bustamante Adams: I do not read that the way you do. Is there anything in section 4? Assemblywoman Carlton: On section 3, you had mentioned that you have small entities. Do you represent all of municipalities and the counties? Wayne Carlson: I represent most of those, but not all. Assemblywoman Carlton: Who do you have? Wayne Carlson: There are about 125 local governments (Exhibit J), some of which have police and fire, and some do not, but not Clark County or Washoe County.

Assembly Committee on Commerce and Labor March 29, 2017 Page 25 Chair Bustamante Adams: Section 4. Wayne Carlson: Inserting HIPAA into this bill is inappropriate in that HIPAA specifically exempts workers' compensation. Workers' compensation is a state law and HIPAA is a federal law and does not address workers' compensation, but it does apply to the medical provider in terms of what they can do. Tying a federal law into a state law is not appropriate. It puts the issue between the employer and employee to decide whom within the organization is the right person to take on the responsibility for the employer of the employee review. The goal is for the employer to help the employee comply with the law and not lose benefits because they do not correct them. That is what the wellness program is designed to do. When you limit the ability of the employer to designate who is best able to do that within the organization, it creates a problem. If a town board was given a copy of a physical, I agree that is inappropriate unless that is the only supervisor. We do not have those in most cases, but you may have a situation where you have a small department where one of the board members happens to serve that function. Sharing with the other board members would not be something we would encourage. It should be limited to internal information. In sections 4 and 5, the order of attorney's fees, there really is not enough evidence to support a need for this provision, and I would like our general counsel to speak to those issues. Robert Balkenbush, General Counsel, Public Agency Compensation Trust: Addressing sections 4 and 5, which have to do with the award of attorney's fees, this body has had a law on the books for 40 or more years. The only situation where this body has determined that attorney's fees should be awarded is when there is a petition for judicial review that is filed and a district court makes the determination that the petition is frivolous. I did not see a strong evidentiary basis to change 40 years of law. The insurers pay to fund the Nevada Attorney for Injured Workers. The lawyers in those offices are highly trained and very competent. Mr. McAllister talked about the removal of the disability in sections 1 and 2. We provided written testimony (Exhibit G) on that. Regarding this issue of the inability to work, doctors do not make determinations based on work schedules. They make the determination based on the nature of the injury. It is the doctor's script versus the statutory requirement. It is not the work schedule versus the statutory requirement. The five consecutive days has been on the books for years, and we do not have an evidentiary metric to indicate that that determination by this board is anything that needs to be fixed. The conclusive presumption that governs heart/lung disease, conclusively presumes that the disease at issue arises out of the course of employment. It does not conclusively presume disability. People have heart disease and lung disease who are not disabled from working. Those situations happen commonly. The courts and the Legislature have determined that unless the employee gets disabled, it is not a conclusive presumed benefit. You have to have both components.

Assembly Committee on Commerce and Labor March 29, 2017 Page 26 Assemblywoman Carlton: On the conclusively presumed, I can speak from personal experience. When you are a peace officer in this state and end up with a heart condition, you usually cannot keep your job. People lose their jobs because of heart conditions. It happened to my husband. Someone may say you can work, but when they want you to do the ropes course, defensive training, and deal with all of the other things a police officer has to do, you may be able to work, but they are not going to keep you because you are not at the level that you need to be. That is where people fall through the gap. There is a lot of gray area, but a lot of people end up losing their jobs. It ends up being a disability for them because they are no longer allowed to work. Paul J. Enos, representing Nevada Self-Insurers Association: The members of the association act as third-party administrators for some of these municipalities. We agree with the reasoning behind section 2. We agree that if there is a compensable medical injury, it should not be denied because the individual has not had a total temporary disability (TTD). We agree with the intent of that part of the bill. Those medical claims should be covered if that is a compensable injury. We have issues with other sections of the bill. We want to be sure, as insurance companies and third-party administrators, that we can have access to those medical records, so we can do our job in properly administering those claims. I agree with the previous testimony on the attorney's fees, especially when it is open-ended. In some statutes it says reasonable attorney's fees, but we do not see that here, so we have issues with sections 4 and 5 of the bill. Tyre L. Gray, representing Las Vegas Metro Chamber of Commerce: I agree with the comments of Mr. Balkenbush and Mr. Enos, in sections 4 and 5 specifically, about the attorney's fees being open and not confined to reasonableness. Morgan D. Davis, Assistant City Attorney, Office of the City Attorney, City of

Las Vegas: We are in opposition to this bill. We echo the comments that have been previously made. In relation to the 5-day rule in sections 1 and 2, I have checked with our third-party administrator. We are not applying that over a shift period. It is a day period. If an employee is incapacitated for three days, whether it is two days on and a day off, we are not using that as a bar. We have not had any, so we would not have a need for that. Section 3 that deals with the dissemination of the annual physical, I worry that it might be unintendedly drawn too narrow. I agree wholeheartedly in privacy and HIPAA rights, as do all the people with the City of Las Vegas. As written, there may be a number of people managing claims and making a determination, including outside legal counsel or a representative from the third-party administrator. If there was contestation taken to an illogical extreme, does this prevent an appeals officer from looking at the examination? We believe that proper administration and management of claims requires certain people in the know to have that material. We agree it should not be

Assembly Committee on Commerce and Labor March 29, 2017 Page 27 with the fire chief for a threatening reason or a town board member. Maybe you could fashion a remedy, so if those violations happen, there is a penalty for that, but not handicap the people who need to manage, administer, and make the determination on claims. As it relates to sections 4 and 5 dealing with the attorney's fees, I appreciate Mr. McAllister's comments that we are dealing with a few bad apples. We are talking about a narrow body of really hard claims. We are not talking about the frivolous claims. We are talking about a real, legitimate, good-faith determination. Sometimes, we need to contest those. It would be a shame for those, when you do not prevail, automatically to have an award of attorney's fees. We think it is more appropriate, like in a judicial review, if it is absolutely frivolous or groundless to file a denial, to consider having a penalty. In those honestly hard cases, it is not appropriate to have that award of attorney's fees when you prevail. David Cherry, Communications and Intergovernmental Relations Manager, City of

Henderson: We are also concerned that our third-party administrator would not be able to review any of the information that the bill addresses. That is the system we utilize, and our concern is that by eliminating our ability to share this information, the potential could be that it would result in delays and potentially additional denials. This is due in part to the limited staff that we have in our human resources and risk management department who would be forced to take on that responsibility now fulfilled by our third-party administrator. If the bill sponsor would be open to modifying the language in the bill, we would appreciate the opportunity to participate in any discussion. Les Lee Shell, Director of the Office of Risk Management, Department of Finance,

Clark County: I agree with the people who oppose the bill. We know that the system does not work perfectly. Regarding the removal of the period of disability, which is the 5 consecutive or 5 cumulative days in a 20-day period, I could not find a state that had a 0-day period. It is usually between 3 and 10 days. Jeff Fontaine, Executive Director, Nevada Association of Counties: Mr. Carlson indicated that the rural counties are members of the Nevada Public Agency Insurance Pool (POOL)/Public Agency Compensation Trust (PACT) and certainly rely on his association in these matters. We have reviewed and agree with his comments. We agree with Ms. Shell's comments on the 0-day waiting period. We have not seen it in any other state, so we would have concerns about it as well. Chair Bustamante Adams: Is there anyone else in support of this bill? Ronald P. Dreher, Government Affairs Director, Peace Officers Research Association

of Nevada: We presented Mr. Joseph today on purpose, because there is a pretty good chance that he is not going to survive to hear this bill completed. We talked about a company that has

Assembly Committee on Commerce and Labor March 29, 2017 Page 28 frivolously made his life miserable. He had two more claims pending. Both have been overdone and denied repeatedly. Assembly Bill 267 and sections 4 and 5 are there to compensate someone like him, because this bill, even if it is passed, will not be retroactive and help him. The Committee needs to know there are people out there who believe when we have heart and lung claims, we are making these things up. There is a big hill we have to climb to get these things done. The document we have (Exhibit F) goes through the hell he has been through for three years. It is ridiculous, when it says we have a conclusive presumption, that they continue to deny claims when his medical doctors have proven that he has a disease. It is atrocious and insulting. That is why sections 4 and 5 are there. The end does not come for people like Mr. Joseph other than to die. That is too bad, when we have legislation that has been around all these years, this man has to go through that, and other law enforcement people and firefighters have to go through the misery that some of these insurers, including POOL/PACT, have put these officers through. Todd Ingalsbee, Legislative Representative, Professional Fire Fighters of Nevada: The original bill was put in place to protect the rights of our members when they come down with an illness directly caused by the line of work and the hazards we are exposed to every day while trying to protect the citizens and guests of our state. When the words, "conclusively" and "presumed" were put into statute, they were used because "conclusively presumed" was the strongest language we could find to protect our members. However, we have municipalities all over the state denying claims. We are not here asking for any additional coverage. We are here to have the original intent of the bill followed and to eliminate the games being played with our members' lives. Over the last several years, there have been at least 24 claims denied with an average cost to our members of $5,000 to $7,000 per occurrence in attorney's fees with claims ranging from 9 to 24 months before a ruling is made. When time is important for our members to get the treatment they need and deserve, claims are being denied with the way the current language is being written. This is why this bill is important for our members. Mike Ramirez, Director of Governmental Affairs, Las Vegas Police Protective

Association Metro, Inc.: We have well over 50 percent more claims being denied through our department. I would like to echo the testimony in support and request your support. Michael Sean Giurlani, President, Nevada State Law Enforcement Officers'

Association: I am a retired 25-year state trooper with the Nevada Highway Patrol. I retired three years ago. In January 2012 while on a traffic stop on duty, I suffered a heart attack. That day, while in the intensive care unit, a representative from the insurance company from the state's third-party administrator came into the hospital to speak to me. I declined. I spent two days in the hospital. On the third day after the event, I was contacted on the phone by a Cannon Cochran Management Services, Inc. representative. I felt I was badgered by this individual and was told that my claim would be denied, and I would have to fight this.

Assembly Committee on Commerce and Labor March 29, 2017 Page 29 Knowing I was protected under the law, I questioned this. The situation went downhill from there, so I contacted an attorney and subsequently hired Ray Badger as my attorney. After 2 denials, 3 hearings, and 14 months of jumping through the hoops, it was finally approved. To have to go through that process for something that was conclusively presumed to have occurred on the job and was proven by testimony from my own physician, who was an epidemiologist. This bill is what is needed to protect people like Mr. Joseph and me from the abuses of certain individuals within this system who make it a badge of merit to deny these claims. When I was represented by Ray Badger, he indicated to me something they indicated in his industry as the 80/20 rule. Of the totality of the claims that were denied, they suspected that 80 percent of those people would not appeal those claims and only 20 percent would fight them. That is what they bank on. From a monetary standpoint, more money was wasted on fighting a legitimate claim than on the awards and the payment process for the medical bills. Richard P. McCann, Executive Director, Nevada Association of Public Safety Officers: I am a member of the Statewide Law Enforcement Coalition. Heart and lung coverage is like workers' compensation coverage: it is defined as a benefit. Unfortunately, it has become an obstacle and a barrier. It is a fight-and-fight-and-fight situation. Law enforcement and firefighters are right there with them. Assembly Bill 267 attempts to level the playing field for those police officers and firefighters who have demonstrable industrial-related heart or lung disease but have been subjected to an unfair, protracted process to prove their case. Assemblywoman Carlton said workers' compensation is not supposed to be a court matter. Sadly, it has become that. I am disheartened that PACT said it cannot support any part of this bill. That is sad. They said an award of attorney's fees and costs is unjustified and unnecessary. I submit that it is both justified and necessary. If you look at the 2016 occupational disease claim data that was submitted by the Department of Business and Industry in February 2017, it says exactly two-thirds of the claims that have been made and denied have been overturned. They have been reversed, modified, or remanded. That means there is a problem somewhere with why these claims are being denied. We need to be able to level that playing field. We believe A.B. 267 does that, and we support it. Kevin Ranft, representing American Federation of State, County and Municipal

Employees Local 4041, AFL-CIO: We support A.B. 267 and agree with the testimony from the Peace Officer and Firefighter Coalition of which American Federation of State, County and Municipal Employees Local 4041 is a member. We represent correctional peace officers, Highway Patrol troopers, probation and parole officers, and firefighters for Nevada Division of Forestry. These employees work hard. There are certain things that happen in state government that are not expected. These jobs carry a weight of risk, and ultimately, there need to be the protections provided to them. This bill does that. We ask for your support.

Assembly Committee on Commerce and Labor March 29, 2017 Page 30 Steven Thompson, 1st Vice President, Clark County Firefighters Union Local 1908: I am in support of A.B. 267 based on the removal of the 5-day disability timeline. What I found is that after employees' physicals, they are given a referral to a cardiologist or a pulmonologist who tells them they have heart or lung disease. By statute, they have to notify their employer with a C-1 form and follow it up with a C-4 form. They get denied based on that information because there is no disability as of yet. The employees have two options. They can let it be denied and hope it can be appealed later, but as their representative, I am concerned that the timeline issue would become a factor because I will be outside of the 7-day notification if I try to appeal and my 70-day appeal window if I wait for 10 or 15 years when I become disabled. I hope then, that I can go through the court process and get it approved through the court. It is always a lengthy time, and it takes a lot of energy and effort for the employee to get through that process. Currently, I have five cases in different states of litigation through my union that I am trying to handle with this exact situation. I have been told by my legal advisor and my colleagues that this bill would address that problem. Chair Bustamante Adams: Is there anybody to testify in neutral? Seeing no one, I will close the hearing on A.B. 267. I will open the hearing on Assembly Bill 3. Assembly Bill 3: Makes various changes relating to the administration of workers'

compensation claims. (BDR 53-161) Evan Beavers, Administrator, Office of the Nevada Attorney for Injured Workers,

Department of Business and Industry: When someone is injured at work, they go to their employer and report the injury. They are sent to the doctor, and eventually, they end up in the hands of the workers' compensation insurer. Eventually, they are treated and returned to work. If there is any dispute that arises during that relationship, the injured worker's only recourse is to file an appeal in the Hearings Division, Department of Administration. The first level of the administrative hearing process is the hearing officer level. It is informal. The hearing officer is often not a lawyer. It is relaxed. The claimants show up and represent themselves and often do not have a lawyer. If either party objects to what the hearing officer decides, the only recourse is to appeal into the second level, which is the appeals office level. At that point, if the injured workers want legal representation, they ask, and they are appointed a lawyer from the Office of the Nevada Attorney for Injured Workers. There are 34 full-time employees and 14 lawyers who do nothing but represent injured workers. We receive thousands of informational calls during the course of a year and many walk-in inquiries. Those are people who have not been appointed to a representative, but know how to find us and ask questions. With that overview, I will present Assembly Bill 3. This bill is in the spirit of transparency.

Assembly Committee on Commerce and Labor March 29, 2017 Page 31 Section 1 of the bill presents this scenario: A worker is injured at work, gets treated and the treating physician is successful and at some point deems the claimant has reached maximum medical improvement. At that point the claim can close. If, however, the treating physician determines that although he or she has done all that can be done for this patient, the patient may still have some permanent disability, the rules allow for that injured worker to be sent to yet a different doctor for a permanent impairment rating. Under this section in the bill, it presently has become a pattern of practice that the claims adjuster sends a letter to the injured worker with the appointment date for the permanent disability impairment rating with the doctor's name and address. In that letter, it says the claim is going to close as of the date of this letter or the date of the rating. This bill seeks to break that information into two clear declarations. The injured worker needs to be told very clearly the claim is closing and what the consequences are and, separately, the insurer may want to take the opportunity to send a separate letter with the date and time of the permanent impairment evaluation. With the amendment to Nevada Revised Statutes (NRS) 616C.235, we seek to achieve the clear intent that the claim is closing. That is a critical time in the administration of the claim. Once the claim closes for medical treatment, if the injured worker does not appeal that within a certain period of time, generally 70 days, he or she is time barred from ever appealing it again. There is no one who can help them. The courts have said that the administrative hearing officers do not have the jurisdiction to even offer a remedy. They cannot provide the injured worker a hearing if they do not meet the deadlines. It needs to be set up quite clearly: your claim is closing; here is your deadline. One of the things that we seek with this bill is to get a clear declaration of the scope of the claim. You have heard testimony about the C-4 form. When someone is injured, they go to an emergency room and an emergency doctor quickly sees them, gives an evaluation that is a little short, and a diagnosis that is a little short. Eventually the doctor has to put somewhere on the form exactly what the nature of the injury is. Quite often, the initial evaluation is nothing more than a strain/sprain. Over the history of the treatment, there are more diagnoses, more MRIs, and more X-rays. It becomes apparent that there is more to the scope of the injury and the scope of the claim than was initially identified. There is no good reason why the insurer does not declare to the injured worker, "We are going to close your claim and we recognize this is the scope of your claim." The insurer has been paying for the treatment and ought to know that. It is important because the injured worker has been treated over time, may still be hurting, and the doctor is not ready to stop treatment. This is the time for the two parties to get an agreement as to what is being treated, why it is being treated, and whether it needs more treatment. That is why the scope of claim needs to be in the declaration of the claim closing. Section 2 of the bill is also in the spirit of transparency. More and more, insurance companies are using nurse case managers in the administration of these claims. It makes sense. I do not think the claims adjusters who normally make these determinations on whether a doctor's recommendation should be followed or more treatment is needed necessarily have a medical background. It makes sense that they would introduce skilled nursing staff into that decision-making process. Nurse case managers get involved in the

Assembly Committee on Commerce and Labor March 29, 2017 Page 32 case. They get into the claimant's medical records. They meet with the claimant's doctor, and sometimes meet in the examination room. All this bill seeks to do is to identify that they are agents for the insurer or the employer. It needs to be explained to the injured worker, because they think every nurse in the room is there at the doctor's request. The injured worker has the right to exclude the nurse from the examination room. Section 3 provides that everyone who is involved in workers' compensation litigation, with the exception of case managers, is obligated to maintain logs. If you call the treating physician, you are supposed to keep a log of that oral communication, should anyone ask what did you say to the doctor and when did you have the conversation. It also says that if you are exchanging written documents with the doctor, you need to maintain those records. Chair Bustamante Adams: Are there any questions from the Committee? Assemblyman Araujo: Why in the change in section 1, subsection 1, paragraph (a), subparagraph (1), did you think it was necessary to add, ". . . scope of the claim and the . . . ?" Evan Beavers: When the claim closes, the injured workers may very well think they know what is being treated and what the scope of their injury and the scope of their claim is, but the insurer may have a different idea. This is an opportunity for the insurer to declare in print to the injured worker, "Here is what we are recognizing as the scope of your claim." You heard earlier about reopening a claim. What that is about is if you injured your lumbar spine, you get treated. Your doctor says you reached maximum medical improvement, and your claim closes. At some point in his or her life, the worker starts suffering more pain or a bigger problem in his or her lumbar spine, and a physician writes a certification that says the condition has worsened and the primary cause of the worsened condition is the original injury, and the claim can be reopened for more treatment. That is why we would like to see in the declaration to the injured worker that the claim is being closed, and there is also a declaration as to the scope of the claim. If the claim is to be reopened later, that has to be a very clear before-and-after picture to be sure if the insurer is obligated to reopen. Chair Bustamante Adams: Is there opposition to A.B. 3? Jason Mills, representing Nevada Justice Association: We support everything in this bill. I am here in opposition because of six words. I have litigated thousands of these claims. The problem here is that identifying the scope at the end of the claim is going to create a problem. There is already case law that exists that supports an injured worker when his or her claim closes down if an insurer had treated more than what was in the original scope of the claim. That is a case called Dickinson v. American Medical Response, [124 Nev. 460, 186 P.3d 78 (2008)]. We do not want this language to undermine that case. It is a phenomenal case that favors injured workers. This gives the insurer the

Assembly Committee on Commerce and Labor March 29, 2017 Page 33 opportunity at the end of the claim to try to truncate what they have done in the weeks, months, and years prior in the claim. We do not want that to happen. We submitted an amendment to strike those six words (Exhibit K). Paul J. Enos, representing Nevada Self-Insurers Association: We agree with Mr. Mills. We believe that the scope of the claim is not something that should be litigated at the end. That is something that should be determined at the beginning and can be expanded throughout the course of the treatment for the injury. We are also concerned with the word "agent" as it refers to that nurse case manager. They are not an agent of the insurer; they are somebody who is contracted by the insurer. Paul J. Moradkhan, Vice President, Government Affairs, Las Vegas Metro Chamber of

Commerce: We have some concerns regarding section 2 of the bill. We are concerned that it could interfere with care provided and could actually cause a strained relationship between medical care and the injured employee. [(Exhibit L) was submitted but not discussed and will become part of the record.] Chair Bustamante Adams: Is there other opposition? [There was none.] Is there any support for A.B. 3? Seeing none, are there any in neutral? [There were none.] I will close the hearing on A.B. 3. I will open the hearing on Assembly Bill 300. Assembly Bill 300: Revises provisions governing vocational rehabilitation.

(BDR 53 759) Assemblywoman Lesley E. Cohen, Assembly District No. 29: Assembly Bill 300 increases the amount of time for a program of vocational rehabilitation for injured employees. When I met with instructors from one of the community colleges, I learned that although injured employees are eligible for living expenses and retraining dollars, their time limits may encourage them to take the money and go to online schools or private schools. The injured workers cannot go through our community college programs within the time limit. To me, that is a problem because the money is often leaving Nevada or at best leaving our state education system. Under current law, the duration of a program to train or educate the injured employee ranges from 9 to 19 months depending on their percentage of permanent impairment incurred. If an injured employee is determined to be eligible for vocational rehabilitation benefits under Nevada Revised Statutes 616C.590, he or she is entitled to the vocational rehabilitation plan and the length of the plan as described under the statute based on the degree of residual physical impairment caused by the industrial injury. In order to receive the job training or education, the vocational rehabilitation counselor developing the plan must find that the injured employee does not have any marketable skills compatible with the injured worker's age, sex, and physical condition.

Assembly Committee on Commerce and Labor March 29, 2017 Page 34 Under the current law, the length of the job training or education plan is limited. If the permanent disability results in permanent restrictions imposed on the ability of the injured employee to work, but no permanent physical impairment rating has been issued or permanent disability with a permanent physical impairment of 1 percent or more but less than 6 percent, then they have 9 months for training. If the injured employee has incurred a permanent physical impairment of 6 percent or more but less than 11 percent, they have 12 months for training. If the permanent physical impairment is 11 percent or more, it is 18 months. We are dealing with a limited subset of injured workers. The training program may be extended up to two and a half years under certain circumstances, but it is not clear how often those extensions are granted. There is also a buyout option which allows the injured worker to forego job training for a cash payout. That is negotiable with the insurer. The statutes related to vocational rehabilitation plans were put in place with the passage of Senate Bill 7 of the 66th Session. The bill was passed as the result of an audit of the State Industrial Insurance System conducted by the audit division of the Legislative Counsel Bureau following the 1989 session. Before 1991, vocational rehabilitation services were not mandatory, but every injured employee who was released to light-duty work by a treating physician, but not reemployed by his or her previous employer, received vocational rehabilitation services. The audit found adequate cost controls were not in place, vocational rehabilitation plans were not properly investigated or improved, and the total cost for fiscal year 1990 was $23 million. There were many anecdotal stories shared in committee testimony about injured employees receiving exorbitant benefits such as purchasing businesses which were failing. There was a general agreement among the legislators that vocational rehabilitation needed to be limited to retraining only for those injured employees who could not return to their original line of work and who lacked other marketable skills. I understand wanting to have time limits and cost controls on vocation rehabilitation services. However, 1991 was a different time. We did not have online and for-profit schools. They were not as abundant as they are now, and they could be very expensive. Those schools can range from $10,000 to $20,000 per semester. Because of the time limits, a student who has 18 months to try to fit in 4 semesters of school to get an associate's degree will hear from these private schools that they can get the program done in 18 months. That is part of their selling points. If they cannot finish the program, the school still gets the money. They do not care about the education; it is a for-profit school. The bottom line is to make money. Alternatively, community colleges cost about $2,500 per semester. The private schools answer to shareholders. Their goal is to make money for their shareholders. Alternatively, College of Southern Nevada's (CSN) mission statement is, "The College of Southern Nevada creates opportunities and enriches lives with inclusive learning and working environments that support diversity and student success. The College fosters economic development, civic engagement, and cultural and scientific literacy, while helping students achieve their educational, professional, and personal goals."

Assembly Committee on Commerce and Labor March 29, 2017 Page 35 Because it can take up to two years to complete a program at one of our community colleges, vocational rehabilitation plans that include formal education must be shortened or undertaken at an accelerated pace. In these cases, injured employees are being forced into these online and for-profit programs, or they are taking the buyouts. The private programs cost significantly more, and they are taking money from Nevada. They prevent our students from utilizing our community college system, and it is depriving them of participating in the networking and other social connections that would help them thrive in their new occupations. For example, CSN has had great success with the Nevada Grow program. It is a great small-business pilot program shepherded by Assemblywoman Neal. At Western Nevada College, nine students have recently received a Siemens Mechatronic Systems Certification Program certification. Those are things we want to encourage Nevada students to do. That is what comes from our community colleges. These are schools that are striving to have better educational opportunities for their students and to better our communities in general because it is not about the bottom line for them. That is why I brought this bill. It is to help our students so they get the benefit of our in-state schools, because we know the in-state schools are looking out for them and for our communities. It is also to make sure our communities get the benefit of that money staying in Nevada. There is opposition to this bill. Insurers, self-insured employers, and self-insured groups allege that the cost for vocational rehabilitation programs will skyrocket if this law passes. However, there may only be a small number of injured employees who actually enter into vocational rehabilitation programs involving formal education. A lot of people take the buyout. I have had a lot of meetings with people who are in opposition. They seem to appreciate my goal of keeping money in Nevada and with our state schools. I will continue to work with the opposition toward an agreement. The opposition does not want to focus on the buyout. They want them getting the education. I want the injured workers to get well, be retrained with new skills, and help our new Nevada economy. The bill doubles the time frames for the vocational rehabilitation. Chair Bustamante Adams: There are no questions from the committee, so we will hear the opposition. Paul J. Enos, representing Nevada Self-Insurers Association: We are in opposition to A.B. 300. We spoke with Assemblywoman Cohen. We believe this will double the cost of vocational rehabilitation for insurers and employees. We have had success sending our injured workers to state colleges and private colleges, so they can be retrained for physically appropriate jobs for whatever their injury is. We had no instances of anybody, or it is very exceptional, for anybody to be in a program longer than two years. If they cannot get a class or they cannot finish their training, we work with them. If we do not, everything that we have invested in that person to that point is for naught. If somebody cannot get a class, we work with them.

Assembly Committee on Commerce and Labor March 29, 2017 Page 36 A lot of the private colleges which are certified by the Department of Education are good. They cater to injured workers. I appreciate wanting to stay with state schools, but we also have a private sector option that helps these people. My fear is—and we do have an exhibit (Exhibit M) on the Nevada Electronic Legislative Information System—that the lump sum buyout is going to be a lot more attractive than taking the vocational rehabilitation and retraining program. If you look at my field, an injured truck driver, for an 18-month training program, would receive over $26,000 for a buyout. If we increase the period of the rehabilitation to 36 months, you are looking at a lump sum buyout offer of $53,195. It scares me when you have very few injured employees taking the vocational rehabilitation training and taking the lump sum buyout instead. I think the bill will do the opposite of what the sponsor intends because the lump sum buyout is now a lot more attractive. About 75 percent of people are not going into vocational rehabilitation and are taking the lump sum. If you consider $26,000 opposed to $53,000, I think you could have fewer people. That is for a truck driver. If you have an unskilled worker who may work at a fast-food restaurant, you are looking at a vocational rehabilitation minimum of $5,400 which would increase to almost $11,000. There is a range for awards for different jobs in industry. We have issues with that and would be willing to work with Assemblywoman Cohen to make sure our injured workers get trained and are going to the vocational rehabilitation programs. Maybe we should look at the lump sum buyouts. Assemblyman Ohrenschall: How often do you grant extensions? If there is a denial, can that person appeal it under current law? Paul Enos: They have already been approved for a vocational rehabilitation program, and in order to finish that training so they are employable in a physically appropriate job for that injury, we work with them to ensure they can get into the class, even if it is going to be another several months. If we do not, then all the money that was invested was for naught. We want to make sure they are finishing the program. It is in everyone's best interest to make sure they are completing it. Assemblyman Ohrenschall: What if they are denied getting into a program at the beginning? Is there a process for them to challenge or appeal it? Paul Enos: Vocational rehabilitation has the same appellate rights as for all workers' compensation. Les Lee Shell, Director of the Office of Risk Management, Department of Finance,

Clark County: We are in opposition to the bill as written. We have had a conversation with the sponsor and

Assembly Committee on Commerce and Labor March 29, 2017 Page 37 understand her intent. We are willing to work with her to meet those goals. We believe the goals are good, and we want to get our employees retrained at Nevada schools and use that money in-state if we can do that. Paul J. Moradkhan, Vice President, Government Affairs, Las Vegas Metro Chamber of

Commerce: I would like to reiterate the comments from the two previous speakers. We reached out to the bill sponsor, and we appreciate her clarifying her intent. We have some concerns, but we committed to her that we would meet after this hearing to clarify our concerns. Nancy M. Paulson, Chief Financial Officer, Carson City Department of Finance: Carson City also opposes this bill because of the fiscal impact. Recently, we have had two employees in vocational rehabilitation programs and both were able to complete the program under the time frames currently allowed by the Nevada Revised Statutes (NRS). The cost per employee was $62,000, so if this bill passes, the cost would potentially be doubled. Chair Bustamante Adams: Is there anybody in support? Kevin Ranft, representing American Federation of State, County and Municipal

Employees Local 4041, AFL-CIO: I was a former correctional peace officer with the state. I had a medical retirement. I had a strange experience with the vocational rehabilitation. The state risk management was great, the insurer was great. The vocational rehabilitation was very concerning to me when I was trying to succeed after I found out that I could never work as a correctional peace officer again. I cannot run, and there are certain things I cannot do. I wonder if I could have bettered myself with receiving further education to ensure that I am successful for my family and myself. The information I looked through with the vocational rehabilitation person assigned to me was a joke. I was given opportunities to learn things I already knew, but there was nothing that I thought would help me succeed, so I took the buyout. I would rather have better educated myself. I think this is a great bill to recognize that education is needed. It is sad that we do not have the proper education to better the employee and the state. Chair Bustamante Adams: Is there testimony in neutral? David Cherry, Communications and Intergovernmental Relations Manager, City of

Henderson: After speaking with the sponsor about her intent, we are here to testify in the neutral position in hopes that we can further the goal of keeping our students here in Nevada. We are the proud home of College of Southern Nevada, Henderson; Nevada State College; as well as private institutions including Touro University Nevada and Roseman University of Health Sciences.

Assembly Committee on Commerce and Labor March 29, 2017 Page 38 Ana M. Andrews, Risk Manager, Risk Management Division, Department of

Administration: [Ana Andrews spoke from prepared text (Exhibit N).] Assembly Bill 300 is a bill that would potentially double the cost of all vocational rehabilitation benefits which are provided to injured workers under NRS 616C.530 through NRS 616C.600. The Risk Management Division, Department of Administration, has calculated the average cost of vocational rehabilitation benefits provided to state injured workers during calendar years 2014, 2105, and 2016 to be $752,000. Passage of this bill will require an additional fiscal allocation to the Division's budget in the amounts shown in the fiscal note that was submitted. Michael Flores, Director of Government Affairs and Communications, College of

Southern Nevada: We know the challenges that people face in meeting the deadline of getting trained in time. We are concerned about the fiscal impact, so we will work with the bill sponsor. Last year, ITT Technical Institute lost its accreditation in Las Vegas, and there was a serious issue of students needing to go somewhere to be trained. They came to us and our doors are always open. Chair Bustamante Adams: We will go back to the testimony in opposition. Steven Cohen, Private Citizen, Las Vegas, Nevada: My chief concern is before we can look at the insurance piece or risk management piece, we need to look at the system design of vocational rehabilitation as a whole. Some of the institutions, such as the College of Southern Nevada and the University of Nevada, Las Vegas, currently have a career connect model that accomplishes the same thing. When I spoke to the University of Nevada, Reno, they had no clue what I was talking about. With the majority of the population in southern Nevada, we need to look at vocational rehabilitation as a whole in the south before we can address the insurance or risk management piece of it. Chair Bustamante Adams: Are there any questions from the Committee? Assemblywoman Carlton: When I read the bill, I did not see the fiscal impact because I read the bill as extending the time to allow for someone to complete, not an extension of the total program. If you have an injured worker, they may not be able to get all those classes in that amount of time. So maybe there is a disconnect between the time and the dollar amount. I have always had a concern about the buyouts. I understand they are part of the give-and-take. With all the training that is needed and the need for a new force, it may take more time. Chair Bustamante Adams: The Assemblywoman made a valid point that since vocational rehabilitation started in 1991, we might have to look at how we connect these individuals back to employment.

Assembly Committee on Commerce and Labor March 29, 2017 Page 39 Assemblywoman Cohen: Vocational rehabilitation is a very complex field, and I understand that the insurers are right to have concern. If an extension is denied, there is no right to appeal. I will continue to work with the opposition and those in neutral, so we can work out something. [(Exhibit O) and (Exhibit P) were submitted but not discussed and will become part of the record.] Chair Bustamante Adams: I will close the hearing on A.B. 300. Is there any public comment? [There was none.] The meeting is adjourned [at 4:32 p.m.].

RESPECTFULLY SUBMITTED: Earlene Miller Committee Secretary

APPROVED BY: Assemblywoman Irene Bustamante Adams, Chair DATE:

Assembly Committee on Commerce and Labor March 29, 2017 Page 40

EXHIBITS

Exhibit A is the Agenda. Exhibit B is the Attendance Roster. Exhibit C is a proposed amendment to Assembly Bill 458 presented by Jason Mills, representing Nevada Justice Association. Exhibit D is proposed amendments to Assembly Bill 458 presented by Jim Werbeckes, Vice President, Government and Regulatory Affairs, Employers Insurance Company of Nevada. Exhibit E is written testimony presented by Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public Agency Compensation Trust, regarding Assembly Bill 458. Exhibit F is testimony presented by Mark Joseph, Private Citizen, Fallon, Nevada, in support of Assembly Bill 267. Exhibit G is written comments presented by Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public Agency Compensation Trust, in opposition to Assembly Bill 267. Exhibit H is Nevada Revised Statutes information regarding Assembly Bill 267 submitted by Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public Agency Compensation Trust. Exhibit I is a document listing frequently asked questions by SpecialtyHealth, Inc., submitted by Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public Agency Compensation Trust. Exhibit J is a document titled "PACT Named Assured Endorsement" presented by Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public Agency Compensation Trust. Exhibit K is a proposed amendment to Assembly Bill 3 presented by Jason Mills, representing Nevada Justice Association. Exhibit L is written comments presented by Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public Agency Compensation Trust, in opposition to Assembly Bill 3. Exhibit M is a chart submitted by Paul J. Enos, representing Nevada Self-Insurers Association, regarding Assembly Bill 300.

Assembly Committee on Commerce and Labor March 29, 2017 Page 41 Exhibit N is written testimony submitted by Ana M. Andrews, Risk Manager, Risk Management Division, Department of Administration, regarding Assembly Bill 300. Exhibit O is a letter dated March 29, 2017 in support of Assembly Bill 300 to the Assembly Committee on Commerce and Labor, Assemblywoman Bustamante Adams, Chair, and Assemblywoman Maggie Carlton, Vice Chair, authored and submitted by Kent M. Ervin, Legislative Liaison, Nevada Faculty Alliance. Exhibit P is written comments presented by Wayne Carlson, Executive Director, Nevada Public Agency Insurance Pool/Public Agency Compensation Trust, in opposition to Assembly Bill 300.