04/13/2000 02:30 PM House FIN

HOUSE BILL NO. 211                                                                                                            
                                                                                                                                
     "An  Act relating  to  liability  for providing  managed                                                                   
     care services,  to regulation of managed  care insurance                                                                   
     plans,  and to patient  rights and prohibited  practices                                                                   
     under health  insurance; and providing for  an effective                                                                   
     date."                                                                                                                     
                                                                                                                                
REPRESENTATIVE NORM  ROKEBERG, SPONSOR provided  members with                                                                   
a letter  from Ed  Burgan, Senior  Vice President,  Brady and                                                                   
Company  (copy on file).  Mr. Burgan  represents a  number of                                                                   
private  sector  employers,  unions  and  trusts  around  the                                                                   
state. He observed  that he was able to  resolve the concerns                                                                   
of  Mr.  Burgan   and  that  Mr.  Burgan   now  supports  the                                                                   
legislation with the addition  of an amendment. The amendment                                                                   
would exempt self-insured employers.  He observed support for                                                                   
the  legislation by  Alaska State  Medical Association,  Blue                                                                   
Cross, Aetna  and representatives  from the Health  Insurance                                                                   
Association   of  America.  He   maintained  that   that  the                                                                   
legislation  is  supported   by  organized  labor  and  other                                                                   
businesses in the state.                                                                                                        
                                                                                                                                
Representative Williams MOVED to ADOPT Amendment 1:                                                                             
                                                                                                                                
     Sec. 21.07.090.  Construction.   This chapter may not be                                                                   
     construed  to supersede or  change the provisions  of 29                                                                   
     U.S.C. 1001 - 1191 (Employee  Retirement Income Security                                                                   
     Act of  1974) as those provisions apply  to self-insured                                                                   
     employers.                                                                                                                 
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Vice Chair Bunde  MOVED to ADOPT conceptual  Amendment 2: add                                                                   
"medical necessity"  back into the legislation.  He expressed                                                                   
concern  regarding   the  removal  of   "medical  necessity".                                                                   
Medical necessity  was removed as  part of a  compromise with                                                                   
the understanding that it would  be included in another bill.                                                                   
He  stressed that  its absence  would  leave the  legislation                                                                   
incomplete.                                                                                                                     
                                                                                                                                
Co-Chair  Therriault  thought   that  the  medical  community                                                                   
supported  the bill  and did  not  want to  risk killing  the                                                                   
legislation.                                                                                                                    
                                                                                                                                
BARBARA   HUFF    TUCKNESS,   DIRECTOR,    GOVERNMENTAL   AND                                                                   
LEGISLATIVE  AFFAIRS, TEAMSTER  LOCAL 959  observed  that the                                                                   
Teamster supports  the legislation  with the addition  of the                                                                   
amendment.                                                                                                                      
                                                                                                                                
DR.   GEORGE    REINEER,   MD,   ANCHORAGE    testified   via                                                                   
teleconference in  support of Amendment 2. He  noted that the                                                                   
definition of "the best care" for patients changes rapidly.                                                                     
                                                                                                                                
Vice Chair  Bunde questioned  if the  inclusion of  the right                                                                   
for  an  external   appeal  would  remove  the   need  for  a                                                                   
definition  of  "medical necessity".  Dr.  Reineer  responded                                                                   
that the right  for an outside appeal should  not exclude the                                                                   
acceptance of something as a medical necessity.                                                                                 
                                                                                                                                
Representative Rokeberg argued  that the statutory provisions                                                                   
for the  external review amount  to a de facto  definition of                                                                   
"medical necessity".                                                                                                            
                                                                                                                                
Representative  Rokeberg  added   that  the  external  review                                                                   
agency   might  also  take   into  consideration   additional                                                                   
evidence.                                                                                                                       
                                                                                                                                
Vice Chair  Bunde referred  to a letter  by the  Alaska State                                                                   
Medical Association  (copy on file.) According  to the letter                                                                   
the  Association  recognizes  that the  legislation  contains                                                                   
some significant protections  for Alaska's patients. However,                                                                   
the letter  continues, "the  job is  not yet completed."  Two                                                                   
major  issues  remain,  managed  care  entity  accountability                                                                   
(liability issue) and the issue  pertaining to the definition                                                                   
of  "medical  necessity"  with  its impact  on  the  external                                                                   
appeal  mechanism  and  with   liability.  The  Alaska  State                                                                   
Medical  Association   acknowledged  the  shortness   of  the                                                                   
remaining   session  and   concluded  that   passage   of  an                                                                   
incomplete bill was better than no bill at all.                                                                                 
                                                                                                                                
Dr. Reiner agreed that something is better than nothing.                                                                        
                                                                                                                                
Representative  Rokeberg   observed  that  the   addition  of                                                                   
"medical necessity"  would remove support of  the legislation                                                                   
by groups that support its current version.                                                                                     
                                                                                                                                
In   response   to   a  question   by   Vice   Chair   Bunde,                                                                   
Representative Rokeberg observed  that there is a three stage                                                                   
level of review  in the legislation to assure  that a patient                                                                   
has a forum for due process before going to the court.                                                                          
                                                                                                                                
Representative Foster  MOVED to report CSHB 211  (FIN) out of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  211 (FIN)  was REPORTED  out of Committee  with  a zero                                                                   
fiscal  note  by the  Department  of Community  and  Economic                                                                   
Development, published date 3/8/00.