[LB77 LB222 LB462 LB588] the Committee on Business and Labor

Transcript Prepared By the Clerk of the Legislature Transcriber's Office Business and Labor Committee February 12, 2007 [LB77 LB222 LB462 LB588] The Committee on Business and Labor met at 1:30 p.m. on Monday, February 12, 2007, in Room 1524 of the State Capitol, Lincoln, Nebraska, for the purpose of conducting a public hearing on LB77, LB222, LB462, and LB588. Senators present: Abbie Cornett, Chairperson; Kent Rogert, Vice Chairperson; Ernie Chambers; Steve Lathrop; Amanda McGill; Norman Wallman; and Tom White. Senators absent: None. SENATOR CORNETT: Good afternoon, and welcome to the Business and Labor Committee. I'd like to introduce the members of the committee and the committee staff and briefly explain the procedures we are going to follow today. To my far left is Senator Tom White, from Omaha; next to him is Senator Amanda McGill, from Lincoln; Senator Chambers, when he joins us, will be next; we have legal counsel, Lori Thomas; Senator Kent Rogert, from Tekamah; and Senator Lathrop, from Omaha, will be joining us shortly; and Senator Wallman, from Cortland; oh, and excuse me, and Tessa Warner, our committee clerk. I'm going to go over some of the procedures today. First, if anyone has a cell phone, this is the time to turn the cell phone off or to silence. Please turn it off vibrate because we can hear that and it shows up on the committee hearing tape. As you come up to testify, you need to drop the testifier sheet in the box next to Tessa Warner, it's right there on the corner. When you testify I need you to say your first name and spell your last name; if you don't I will stop you and have you spell your name. The first bill that we are going to be hearing today is LB588. And what I would like you to do is, everyone here that is to testify on LB588 in support, please raise your hand. In opposition? Okay. I thought there would be some more testifiers, so I won't limit the amount of testifying time. This opens the hearing on LB588. LORI THOMAS: Good afternoon, Chairperson Cornett and members of the Business and Labor Committee. For the record, I'm Lori Thomas, T-h-o-m-a-s, and I've been asked to introduce LB588 on behalf of the committee. LB588 addresses the hospital fee schedule for workers' compensation claims under Section 48-120. Currently, the compensation court establishes a schedule of maximum fees for such services. The maximum fee schedule is bill charges minus a set percentage. LB588 states that the fees for hospital services shall not exceed the lowest price negotiated with any private insurance carrier or third-party payer, not including Medicaid or Medicare. Finally, the bill provides prompt pay provisions where there is an incomplete claim submitted by the provider a payer or employer will be required to notify the provider within 20 days after receiving a claim as to what information is needed to process the claim. If a payer or employer fails to notify the provider within those 20 days, it will be assumed that the claim is complete. Payers will have 30 days to pay the claim once all the necessary information has been provided. Failure to pay within the 30 days after the receipt of a complete claim would force the payer to pay normal billed charges as opposed to the scheduled fees. And that completes my opening remarks. [LB588] 1 Transcript Prepared By the Clerk of the Legislature Transcriber's Office Business and Labor Committee February 12, 2007 SENATOR CORNETT: Thank you. Any questions from the committee? Thank you. First proponent? [LB588] DALLAS JONES: (Exhibit 1) Good afternoon, Dallas Jones, D-a-l-l-a-s J-o-n-e-s. Chairman Cornett, members of the committee, I appreciate the opportunity to be here this afternoon. I will try to make this brief, even though you've given us some extra time, more than I anticipated. I am here representing three different organizations today: Nebraskans for Workers' Compensation Equity and Fairness, the NFIB as well as the Nebraska State Chamber, in support of LB588. I'll hand these handouts around. What I want to do today is highlight several items that's in my testimony. I'm not going to read through that, for sake of brevity. First of all, what's most important? The organizations that I am here representing are principally employers. What's most important to employers, I want to say at the outset, is the opportunity for their employees to have high-quality, timely medical care. We don't want to do anything that inhibits the access of the most important resource of our people to that type of care that they need when they are injured on the job. What we want to do is precisely the direction that the committee is taking which is to replace a system that presently is broken that essentially is a system that I refer to as: bill what you will, less a discount. There are numerous problems with that type of system. I won't review all of those but some of the most important or most significant problems will be hospital it encourages significant amounts of dispute because there is no objective standard by which to measure what the appropriate level of reimbursement is for a bill that's incurred. The employer and the hospital may both, in good faith, wish to resolve that issue, but they come at it from completely separate directions. And without an objective standard we're not going to fix that problem. It encourages significant litigation as a result of that built-in problem that exists right now. What we are in favor of is either a system that the committee has come up with or, quite frankly, we would probably prefer a Medicare Plus system because Medicare is a system that everybody understands, both payer and the payee. It's objective, it's revisited regularly. And the only question then is a political one each year which is: what's the plus going to be? How much above the Medicare benchmark should a hospital receive for its services? We are mindful of the hospital's concern about timely payment. There should be a provision which obligates timely payment on behalf of either the carrier or the TPA representing the employer. Some concerns that we have with that, that we would want to make sure that the committee addresses would be the concept of a clean claim. When is it when there is enough information there that the payer should be making the payment and when is there not enough information? It seems to me that that information is the same in every case and we ought to be able to have a system that leaves very little doubt with regard to what that is. Secondly, it's also important to understand, and I know you do, but it's important that the bill makes some recognition of this from our perspective and that is, that workers' compensation, unlike health coverage, has that component of compensability. Is the claim one that is compensable? And that, obviously, has to be a part of this because if we're dealing with a claim where there is legitimate dispute about the compensability of it, obviously, you 2 Transcript Prepared By the Clerk of the Legislature Transcriber's Office Business and Labor Committee February 12, 2007 can't have a time line that's running obligating the employer to pay that if there is a real, legitimate, reasonable basis to dispute that payment. We appreciate the committee introducing LB588. We remain willing to provide any input to the committee to help work through this. Nebraska is at a place where we are paying as employers nearly more than any other state; there will be some folks behind me who will lay that out in particular. There has not been any data that we have seen to suggest that the contrary is true and if there is such data, we are ready to look at that, analyze it, and respond to is as appropriate. But for now, what we know is, unless we are shown differently, we are paying more as a state than almost any other place in this country and that's simply not something that's justifiable under our system. Thank you. [LB588] SENATOR CORNETT: Questions from the committee? Senator White. [LB588] SENATOR WHITE: Thank you for coming here. I note that you prefer or perhaps would prefer, Medicare Plus. That puts us in a situation of negotiating prices in an industry with which we are unfamiliar. As a proponent of private enterprise, doesn't that make you nervous that governments start setting prices that your clients have to pay? We might do a bad job. [LB588] DALLAS JONES: It does, Senator, but we are in that system right now. We are in a captive system. And until we divorce ourselves from that system, I don't think you could have one without the other. [LB588] SENATOR WHITE: And as a captive system we haven't done you very well, have we? [LB588] DALLAS JONES: No. [LB588] SENATOR WHITE: Okay, so don't you think it's about time that we make a change? [LB588] DALLAS JONES: I advocate a change. I am assuming that we will continue to be a captive system when I gave my comments. But I am open to opening it up and allowing employer choice which is about the only way I know to get there.

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