Consumers say lobbyists win again……
Friday, August 15th, 2008Consumers say lobbyists win at their expense
ST. LOUIS POST-DISPATCH
Industry lobbyists in Jefferson City won big-time this week when it came to fire safety equipment at nursing homes and investigations of insurance companies. Consumers weren’t so lucky.
Lobbyists persuaded members of a Missouri legislative panel to block rules requiring sprinklers and new fire safety standards for nursing homes.
Separately, the legislators then rejected pleas from a consumer group warning that buyers of auto and home insurance are losing key consumer protections.
At the center of this tale are the five senators and five representatives who are members of a powerful but obscure panel called the Joint Committee on Administrative Rules.
It’s known as JCAR and membership includes six Republicans and four Democrats.
No state rule can go into effect if JCAR objects. The committee can only reject rules, not enact them, and then only for specific reasons.
The idea, legislators say, is to keep bureaucrats from overzealously enforcing laws.
But critics believe industry lobbyists use JCAR to “veto” regulations behind the scenes that they couldn’t kill in public.
On Monday, the state Health Department brought JCAR regulations to improve fire safety standards at nursing homes, residential care and assisted living facilities.
State Fire Marshal Randy Cole says the new rules included three major improvements in safety standards not already required: sprinklers, fire alarms in smaller facilities and smoke stop partitions (safety walls between two parts of a building.)
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Lobbyists for three influential groups representing nursing homes and assisted living facilities lodged numerous objections.
Kerri Hock, executive director of the Missouri Assisted Living Association, said the state demanded that facilities install commercial-grade smoke detectors and connected sprinklers in both rooms and hallways.
“The cost could be anywhere from $30,000 to $80,000″ per facility, she said. Her group represents half of the state’s 600 licensed residential care and assisted living facilities.
Legislators on JCAR voted 9-0 to reject the Health Department’s fire safety rules.
One member, Rep. Bryan Stevenson, R-Webb City, said he supports safety, “But it’s got to be cost-effective.” He called the proposed rules “so arbitrary and capricious that they created an undue burden.”
He said the Health Department will have to quickly come up with new rules; a 2007 state law requires new fire safety rules to be in place by the end of this year.
After rejecting the rules, JCAR then heard from Jay Angoff, a lawyer and former Missouri insurance commissioner. He spoke on behalf of the Consumers Council of Missouri, one of the state’s few consumer advocacy groups.
Angoff called for JCAR to reject proposed rules from the state Insurance Department for what are known as “market conduct examinations” of insurance companies. The old rules allow state investigators wide leeway to examine records of auto and home insurance companies to enforce consumer protection standards.
In a May press release, the Insurance Department said the new rules will “codify the success of market conduct reforms during Gov. Matt Blunt’s administration,” reforms that recovered more money for consumers.
But Angoff warns that the new rules require a company to agree to a state investigation.
The exams are the most important tool insurance investigators have.
State investigators traditionally use the exams to determine if an insurer is violating the law. The new regulations “appear to take the opposite approach” and require evidence of law violations before an investigation can proceed, Angoff says.
Some senior staffers in the market conduct examination division at the Insurance Department agreed. On June 12, they filed written objections warning that the new rules would bar them from investigating even immediate threats to consumers.
They also said insurance companies could use the new rules to endlessly delay investigations.
A lawyer for the Insurance Department said the staffers later withdrew their written request for what she described as “extreme changes” in the new rules.
At this week’s JCAR meeting, no legislator suggested rejecting the insurance rules. That means they will go into effect.
Sen. Joan Bray, D-University City, said she would have offered such a motion but it was clear there would be no support for it.
Sen. Luann Ridgeway, R-Smithville, JCAR’s chair, wouldn’t discuss the meeting.
So the legislators killed the fire safety rules fought by the nursing home industry and gave an OK to rules welcomed by the insurance industry.
“That’s correct,” Stevenson said. “The industry had a good day.”
msorkin@post-dispatch.com | 314-340-8347