1. 2014 Legislative Session ASIA Legislative Agenda January 15, 2014

2. Arizona Self Insurers Association January Luncheon Jeff Gray, R&R Partners Government & Public Affairs January 15, 2015

3. Agenda 1.In Lieu Fee/Tax 2.Bad Faith 3.Narcotics 4.Physician Dispensing 5.Fall Protection 6.Sole Proprietor 7.I.W.P. 8.Evidence Based Medicine

4. / NAME OF PRESENTATION (CHANGE IN MASTER) In Lieu Fee Prior to 2013, calculation of SI taxes were based on a premium that would have been paid if fully insured by an SCF plan. SCF became a private insurance company in 2013 and the calculation is no longer based on an SCF plan. Now based on an insurance carrier authorized to transact business in Arizona. Deviation rate set at 10% through 2015. After 2015, ASIA is proposing to calculate the deviation based on individual underwriting submitted by a SI or on the average deviation filed by the top three insurers that file such deviations with ADOI. 4

5. / NAME OF PRESENTATION (CHANGE IN MASTER) Bad Faith Workers’ compensation bad faith tort claims filed in either state superior court or federal district court are increasing. Plaintiff’s are avoiding the Industrial Commission as the remedy for alleged bad faith claim handling. The courts are being cast in the role of regulator over the workers’ compensation insurance industry, effectively usurping the Industrial Commission’s regulatory role. A coalition of employers and insurance carriers will advocate for legislation that directs bad faith complaints in the workers’ compensation system to the Industrial Commission as the exclusive jurisdiction. Increased penalties for injured workers coupled with clearer guidelines as to what constitutes bad faith, will also be included. 5

6. / NAME OF PRESENTATION (CHANGE IN MASTER) Narcotics & A.R.S. 23-1062.02 Follow up to two previous efforts to continue to decrease the abuse of dangerous narcotics in the workers’ compensation system. Physicians must take all actions specified by the statute (23-1062.02) without the carrier or employer requesting that it be done. Mandatory check with the Prescription Drug Monitoring database prior to prescribing opioids for 30 days or more. Pre-authorization required when prescribing 120 MED or more and any subsequent escalation of dose. No authorization for continued opioid prescriptions if database inquiry is positive and claimant has not previously revealed to the physician, pending review by carrier, employer. No authorization for continued opioid prescriptions if drug test reveals presence of illicit drugs, pending further review by carrier, employer. More substance to the change of physician provision when physician refuses to comply. Section does not apply to in-patient hospitalizations. 6

7. / NAME OF PRESENTATION (CHANGE IN MASTER) Physician Dispensing Legislation to limit physician dispensing to a specified number of days will be introduced. 7

8. / NAME OF PRESENTATION (CHANGE IN MASTER) Fall Protection Legislation setting residential fall protection construction standards for ADOSH was passed a few years ago. Since then, the US Dept of Labor has indicated that they are “not as effective as” the Federal standard. If the US Dept of Labor makes such a determination, it begins a 90 day window that concludes with a hearing before a federal ALJ and possible loss of state oversight of construction activity. This means that employers could face federal OSHA oversight rather than ADOSH is they are engaged in construction activity. The previous bill was introduced by the Homebuilders Association, but some contractors may to attempt a repeal of the new state standards over fear of the loss of state oversight. Proponents, however, are concerned that the federal government has not given AZ sufficient reason as to why the standards are “not as effective as” the federal standards. 8

9. / NAME OF PRESENTATION (CHANGE IN MASTER) Sole Proprietor Legislation will be introduced to ensure that sole proprietor LLCs are covered by the work comp act. 9

10. / NAME OF PRESENTATION (CHANGE IN MASTER) IWP Injured Worker Pharmacy (I.W.P.) will introduce legislation to mandate that an injured workers have the right to select the pharmacy or pharmacist of their choice. After a conversation with the proponents, they will exempt self insured employers and pools from their bill, but the legislation will still impact insurers. 10

11. / NAME OF PRESENTATION (CHANGE IN MASTER) Evidence Based Medicine Interim report sent to the Governor and Legislature in Dec. 2013 highlighting areas of consensus. 11