Legislature(1993 - 1994)
03/01/1994 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 476 - DENTAL INSURANCE COVERAGE Number 005 REP. GARY DAVIS, Prime Sponsor of HB 476, stated that HB 476 will require that health insurance policies and employee benefit plans which provide dental care benefits shall permit beneficiaries to select the dentist of their choice. REP. DAVIS added that it had been expected to be a fairly clean bill until the last minute, but he has been informed that the insurance industry has some problems with HB 476. Rep. Davis asked the committee to listen to all sides of the issue and then he would work with the various sides and come back to the committee with a cleaned up version of the bill. Number 064 STEVE LEBRUN, Account Manager, Aetna Health Plan, testified against HB 476. Mr. LeBrun stated that it appears HB 476 was primarily directed at managed dental care plans. Mr. LeBrun stated that managed dental care plans have four main features: 1) health insurers such as Aetna make arrangements with selected providers to furnish comprehensive services to members; 2) the organization of these plans involve explicit criteria, providers are credentialed and are reviewed for participation; 3) managed plans also involve formal programs for ongoing quality assurance and review of services; 4) managed plans incorporate financial incentives for plan members to use the contracted providers associated with those plans. MR. LEBRUN asserted that HB 476 would prevent or prohibit insurers from offering managed network products in Alaska. He added that Aetna currently offers a preferred dental network in the Anchorage area. Much of the growth of managed care has been at the request of employers who are seeking ways to better manage cost and assure quality. MR. LEBRUN felt that managed plans have been proven over time to be valuable in controlling costs, at the same time they promote appropriate utilization and quality standards. MR. LEBRUN outlined a few of the specific provisions that Aetna thinks would be detrimental to the development and growth of managed dental care plans and would essentially prohibit insurers from continuing to offer or explore managed health care opportunities: 1) HB 476 would appear to allow any licensed dentist to participate in our dental network. Essentially this would eliminate the credentialing currently in place and might even be interpreted to say that the provider need not comply with the terms of the contract. Aetna believes its important that they have the ability to selectively contract with dentists who share a common treatment philosophy and will abide by certain treatment guidelines and protocols. 2) HB 476 contains a provision that insurers give full freedom of choice to enrollees concerning provider selection and that insurers pay network and non-network providers the same rates. This would prevent insurers from steering patients to network providers and from negotiating favorable rates from providers based on that volume. 3) HB 476 contains provisions that appears to prohibit insurers from working with providers to implement standards of treatment and utilization. Language in HB 476 would prohibit interfering or intervening in the diagnosis or treatment of patients. This language could be interpreted to mean the insurers could also be barred from communicating with providers regarding advanced certifications of care or specialty care referrals. 4) HB 476 contains provisions that don't address managed care plans and provision that require disclosure of certain information on lines 9 through 17. Aetna has no issue with those areas. MR. LEBRUN concluded by saying that more effort should be geared toward promoting the quality and cost efficiency that is found in managed care arrangements and not in restricting or prohibiting same. Mr. LeBrun asserted that the employers feel that managed dental care programs are valuable and feel that giving up some choice is worth it to gain the cost savings and other benefits in managed care. Number 200 CHAIRMAN HUDSON asked Mr. LeBrun who is being left out currently. Number 208 MR. LEBRUN stated that most of the dental coverage Aetna provides in Alaska is traditional dental coverage, fee for service. The percentage of people covered under managed dental plans is small in Alaska and HB 476 would make it nonexistent. Number 235 REP. DAVIS asked if the testimony could be provided in writing. Number 245 MR. LEBRUN responded that he would provide Rep. Davis with written comments. Number 260 DON KOCH, Chief of Market Surveillance, Division of Insurance, Department of Commerce, stated there are four different ways to provide dental care service in Alaska today: 1) private insurance companies authorized under AS 21.09 2) self insurance - employer assumes total risk 3) dentists form an HMO (not currently used in Alaska) 4) hospital or medical service corporation (for example, Blue Cross). MR. KOCH stated that an insurance company authorized under AS 21.09 can't contract with a provider. A self-insurer is not blocked from contracting with a provider. An HMO will only provide the care with the dentists that are part of an HMO. A medical service corporation goes out and contracts with the providers then sell access to the public to that contract. MR. KOCH stated that HB 476 provides for a number of changes and requirements that will necessitate some statute changes to the insurance code. Number 454 CHAIRMAN HUDSON asked if there needed to be statutory changes in order to fix the problems in the bill as he perceives them. Number 460 MR. KOCH answered that if the bill is aimed towards providing a Preferred PO mechanism for insurance companies it would require a statutory fix. Mr. Koch added that there are provisions in HB 476 that address the relationship between the insurance company and the dentist and that relationship only comes about by contract, which would also need a statutory change. Mr. Koch stated that there are other areas that need to be addressed. Number 481 CHAIRMAN HUDSON stated that it would benefit the committee and everyone else if the Division could get together with the sponsor and others and go over the various problems with the bill. Number 503 REP. GREEN asked if it was improper now for an insurance company to contract directly with a dental provider. Number 510 MR. KOCH answered yes, if they are providing coverage under an insurance policy. Number 523 REP. GREEN stated, "I thought I heard you say something to the effect that an agreement is reached, not a contract, but an agreement between some providers and some technicians." Number 533 MR. KOCH answered that hospital medical service corporations can enter into agreements referenced above by their certificate of authority, but an insurance company can't. Number 549 JERRY STRANIK read the following sponsor statement: HB 476 is a "freedom of choice" bill. It allows the patient to be able to choose his or her own dentist. It also allows the dentist to participate in any dental insurance policies or plans he is willing to provide services for. Health care is definitely in the forefront of our national consciousness. Certain popular buzz words like "managed care" on the surface sound very good. But we must be very careful not to lose the good qualities we enjoy in our present care system. One of these is the freedom to choose your own dentist and for your dentist to be able to participate in the plan that you have. This bill provides for that. In addition, HB 476 prevents the insurance company from interfering with the diagnosis and treatment plan that the patient and dentist have agreed upon. The patient must be the final judge of what is best for them. Finally, HB 476 helps prevent needless exposure to x-ray radiation by allowing only necessary x-rays be taken to diagnose and treat dental disease. The insurance company will not be able to demand additional x-rays for it's purpose. HB 476 is good for health care and for the public. It increases access and promotes competition. Nineteen states protect the rights of patients to receive care from the dentist of their choice. The Supreme Court without comment left standing a similar Virginia law that was challenged by Aetna Life Insurance Co. Number 605 CHAIRMAN HUDSON asked if Mr. Stranik's clinic would like to have the legal authority to be able to negotiate with an insurance carrier to provide exclusive services to their insured. MR. STRANIK replied no, he believes the patient should have the freedom of choice who they can go to. Number 615 FRANK THOMAS-MEARS, insurance agent, testified that the random choice of allowing the patient to choose any one dentist is what allows free market competition to exist. MR. MEARS stated that in 1991 Aetna sent out solicitations to approximately ten dentists in the Anchorage area asking them to provide managed care to their subscribers. Many of these dentists called Mr. Mears for help in reading the contract. Mr. Mears contends that contrary to what Aetna or other large insurers may say, the contracts have little to do with quality of care and everything to do with the economic bottom line. TAPE 94-17, SIDE B Number 001 MR. MEARS advised the dentists that they were in short supply and high demand and should ask for 100% of their fees and to strike some of the less attractive parts of the contracts. CHAIRMAN HUDSON interrupted Mr. Mears and suggested that he give a layman's outline of what he was talking about in regards to HB 476. MR. MEARS replied that the bottom line was that a patient should be able to choose the dentist they want, and the bill allows the dentist and patient to decide between them what kind of treatment they want without interference. Number 108 MR. KOCH stated that HB 476 would not have any effect on a third party administrator's actions, which is basically what Aetna is. Number 130 CHAIRMAN HUDSON suggested that a working group should get together and clarify this issue and bring it back to the committee at that point.
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