Nev. Legislature Overrides Veto On AMA Guides Bill

NU Online News Service, June 2, 3:58 p.m. EDT

The Nevada legislature has overridden Gov. Jim Gibbons' veto of a workers' compensation bill that would, in part, dictate the use of the 5th Edition of the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment.

The bill, SB 195, also increases the maximum fines against insurers and grants protections for workers. For example, the bill allows an employee to receive benefits for temporary total disability if they are discharged from employment for reasons other than "gross misconduct."

In vetoing the bill, Gov. Gibbons pointed to the section of the bill that calls for the use of the 5th Edition of the AMA Guides as opposed to the 6th Edition.

Gov. Gibbons wrote: "In 2005 the legislature adopted a bill requiring automatic adoption of the most recent edition of the AMA's guidebook. I have not been convinced of the benefit in using anything other than the most scientifically advanced guide when evaluating permanent impairment for disability claims."

Gov. Gibbons also criticized the bill for allowing for the consideration of stress as a factor when evaluating a person for a permanent partial disability.

The legislature overrode the veto on May 31 by a vote of 20-1 in the Senate and 28-14 in the Assembly.

Janine Gibford, assistant vice president for the American Insurance Association (AIA), said applicant attorneys pushed for the 5th Edition instead of the 6th edition because it is easier to sue under the 5th Edition.

Sam Sorich, vice president of the Property Casualty Insurers Association of America (PCI), said his association was not in favor of using the 5th Edition "but overall PCI did not oppose the bill."

While he said some parts were not desirable, other parts are favorable to the industry. For example, determining a penalty against an insurer currently takes into account the number of instances a company may have been late with a payment or involved in a violation. But the total number of claims a company is handing is not considered.

Under this bill, he noted, the number of overall claims is considered. "We feel that's going to result in a fairer apportionment of penalties," he said.

He also noted this bill is preferable to other workers' comp bills considered by the legislature.

Another insurance bill (SB 426) that changes the funding structure of the Nevada Division of Insurance won Gov. Gibbons' approval and he signed it yesterday.

The bill shifts funding from the state's General Fund to a newly created Fund for Insurance Administration and Enforcement, "allowing the division to completely rely on a fee-based funding structure widely supported by the state's insurance industry," according to Gov. Gibbons' statement.

Ms. Gibford said that, traditionally, all premium taxes and other assessments went into the General Fund, and then a portion was doled out to the division. When budgets are tight, she noted, little went back to the division, causing staffing problems.

Those assessments will still go to the General Fund, she added, but a series of new fees will be put in a dedicated enterprise fund for the division. She said AIA is supportive of this measure, as is the division, as it will allow important vacancies to be filled.

Mr. Sorich said the fees amount to an additional $1,300 per year, per license for insurers, but he noted that PCI did not oppose the bill because, given Nevada's finances, approximately $4 billion from the General Fund was no longer available to the department. "We felt that is not a good thing," he said.