The Minutes of the August 28, 2001, meeting were approved as written.

Subcommittee Reviewing Insurance Fraud Statutes: John Greenfield reported that the subcommittee met once and has received a research memorandum from Sandra Shaw, the Industrial Commission’s Deputy Attorney General, on the difference between "false statement" and "material misrepresentation." The subcommittee needs to meet again. John Greenfield agreed to serve as chairman of the subcommittee and contact the Commission Secretary to schedule the next meeting.

Child Support Garnishments on Workers’ Compensation Benefits: John Greenfield reported that he is still working on this project and would like to have a subcommittee look at the issue. After discussion, a subcommittee was appointed. Alan Gardner will chair. Jack Barrett, John Greenfield, and Keith Hutchinson will serve as members. It was suggested that Kirsten Ocker, the Deputy Attorney General from Health & Welfare, be invited to participate.

Industrial Commission Letter Re: In-State Adjusting Requirements: Committee members commented on the Commission’s letter to Idaho insurers regarding in-state adjusting requirements and discussed the need for clarification of the term "fronting." The Commission indicated that its focus in using the term "fronting" is not on the insurer whose business practices require consultation between the in-state adjuster and an out-of-state specialist. It is on those insurers that maintain an in-state adjuster in name only and do all the decision-making and claims adjusting in another state. The designated in-state adjuster is given no real authority and has little or no knowledge about the claims filed in Idaho against the insurer. After discussion, it was agreed that there is no need to clarify "fronting". The Committee asked the Industrial Commission to report at the next meeting on any comments it receives in response to the November 28 letter and on what actions the Commission is taking to enforce the in-state adjusting requirements. Copies of written responses will be made and distributed to Committee members with the agenda, prior to the next meeting.

Public Comment: Leann Lewis of Concentra Managed Care Services, Long Beach, California, asked the Commission to reconsider it position on bill review services that are done outside the state. Concentra works for Idaho insurer Fremont Compensation, represented at the meeting by Lucia Diegel. Ms. Lewis will submit written comments for the Commission’s consideration.

ISIF Report: Lonna Gray, Manager of the Industrial Special Indemnity Fund, distributed copies of the Fund’s annual report and the report for the current quarter. Ms. Gray reviewed the annual report and responded to questions.

Problem with Medical Release Form on Complaint: Alan Gardner reported that since HIPAA went into effect, hospitals have become more strict about the format of the medical record release and will not always accept the one on the Commission’s Complaint form. Mr. Gardner suggested that the release be separated from the Complaint and redrafted in a way that would be acceptable to all medical providers. A subcommittee was formed, with Steve Millard as Chair and Alan Gardner, Sue Dokken, and Keith Hutchinson as members. Steve Millard indicated he would ask the Hospital Association to draft a form.

Perception of Referees as Mediators: Alan Gardner reported that he has heard some concern in the workers’ compensation community about the Commission having Referees do mediation. He indicated his information is second hand and no one provided him with specific instances of improper conduct. He said people have complained that they felt pressured by the Referees during mediation. They have also expressed concern about possible breaches of confidentiality among the Referees and about whether the Referee will be affected by knowing a party’s strategies in mediation might influence his/her decision-making when a case involving the same parties came up for hearing. Commission Chairman Jim Kile assured the committee that while those perceptions may exist, the reality is quite different. The Commission feels it is important to use its limited resources as productively as possible. In recent months, the number of mediations has risen and the number of hearings has declined. The Referees are well trained in mediation and are fully versed on the importance of neutrality and confidentiality. If there are specific complaints, please report them to the Commission.

Public Comment: Industrial Special Indemnity Fund Manager Lonna Gray commended the Commission for finding ways to utilize its resources.

NCCI Presentation: Mike Taylor spoke to the committee about the effects the terrorist acts of September 11 have had on workers’ compensation. Updated information is available on the NCCI website. In addition, if the Committee needs to have an issue researched, they should contact Mr. Taylor.

Replacement of Industrial Commission Director: In response to an inquiry from the Committee about refilling the Industrial Commission Director position, the Commissioners indicated they would probably wait until some time after the legislative session to begin the selection process.

Legislation: Steve Millard reported that IACI probably will not introduce any workers’ compensation legislation this session, but he has asked IACI to let the Advisory Committee know if they do. Keith Hutchinson reported that the Idaho Trial Lawyers Association had no legislation for the upcoming session. Commissioner Tom Limbaugh advised that he met with Representative Lee Gagner and Division of Building Safety Administrator Dave Munroe regarding the Commission’s and the Division’s safety programs. Representative Gagner is working a resolution for a problem with inspections in places of public employment at the local level. He wants to stop annual inspections of local public entities unless the Commission is notified of a safety hazard.

Constituent Complaint Re: Idaho Code § 72-223: Committee members reviewed and discussed a complaint received from an employer regarding the problems he has encountered under the provisions of Idaho Code § 72-223. The Committee agreed that the complaint was legitimate and the letter was accurate, but there was a question as to whether the Committee could address the problem or whether the constituent should be referred to his local legislator. This is a problem that occurs when there is clear third party liability. It places a financial burden on employers that they have no way of recovering. Even though the insurance carrier ultimately may recover the full amount it has expended for the workers’ compensation claim, the employer’s premium increases the same as it would if there had been no recovery from the third party. Mike Taylor of the NCCI reported that Oregon has a rule that prevents this predicament for employers. He will obtain a copy from Oregon and provide it to Jack Barrett. Copies will be made for Committee members prior to the next meeting.

The next meeting is scheduled for February 12, 2002, at 9:30 a.m. The agenda will include a report from the subcommittee reviewing the fraud statutes (John Greenfield), a report from the subcommittee on garnishments for child support (Alan Gardner), a report on the medical release form (Steve Millard), and a report from the Industrial Commission on how the process of enforcing the instate adjusting requirements is working, how the issue of "fronting" is being handled, and what public comments have been received in regard to the Commission’s letter. The Commission will also provide copies of legislation on safety and on the Crime Victims program, if it has been printed.

The meeting was then adjourned.