Legislature(1997 - 1998)

03/05/1998 08:02 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HB 359 - HEALTH INSURANCE REGULATION                                           
                                                                               
Number 0225                                                                    
                                                                               
CHAIR JAMES announced the next order of business to be HB 359, "An             
Act relating to regulation of health insurance plans; and providing            
for an effective date."                                                        
                                                                               
Number 0225                                                                    
                                                                               
REPRESENTATIVE RYAN read the sponsor statement into the record:                
"This bill is offered to impose requirements on managed care                   
providers to enhance patient care, including advocacy of patient               
care and prohibiting financial incentives to withhold care.                    
                                                                               
"Requires insurer to disclose terms and conditions of the health               
insurance plan upon enrollment, annually and upon request.  This               
information shall provide for but not be limited to a current                  
provider directory and referral information.                                   
                                                                               
"Provides for a designated medical director and imposes his/her                
duties and responsibilities and provides for the establishment of              
a notice and hearing procedure for the termination for a health                
care provider.                                                                 
                                                                               
"Requires the option to allow covered persons to receive health                
care form any nonparticipating heath care provider with a caveat               
that they pay a higher premium if they chose to do that.                       
                                                                               
"Establishes an appeals board to review decisions by an insurer to             
reduce, deny or terminate benefits and requires written decisions."            
                                                                               
Number 0254                                                                    
                                                                               
REPRESENTATIVE RYAN gave his reasoning for bringing this froward.              
His wife is a registered nurse and he has seen the options for                 
plans and premiums.  It is a dartboard, someone is supposed to pick            
someone he has never heard of, there are no qualifications listed              
or what their experience levels are.  Representative Ryan stated               
that he has a congenital problem called hammertoe that causes him              
to see a podiatrist on a regular basis.  He stated that he has been            
insured by the state plan and he still does not understand the                 
options.  He stated that after going to the podiatrist he received             
a letter stating that he had not been given a referral and                     
therefore, they would not pay.  He explained that under some plans             
there is a discount offered for services but conversely the                    
insurance agencies have offered them a volume of patients to make              
up for the discount.  He stated that under this he was supposed to             
go to the primary care physician and pay him $70 to tell him what              
he already knew; that he had to go to a podiatrist.  He asserted               
that he did not understand how this was supposed to save money.  He            
was informed that he has to abide by the regulations of the plan or            
else the insurance company will not pay.                                       
                                                                               
Number 0321                                                                    
                                                                               
REPRESENTATIVE RYAN stated that these people pay a premium, for a              
wage benefit, therefore there is an obligation for insurance.  Yet,            
the insurance companies structure the system so it is difficult to             
get care.  He referred to the authorization process and he referred            
to a Tennessee company and phone diagnoses, that are receiving                 
$62.50 per phone call.  He stated that there is a process called               
utilization review which is basically after authorization is given             
and there is a diagnosis, the insurance companies look at the                  
record and look at how it was utilized and can decide that it is               
not appropriate after the fact and therefore refuse to pay.                    
                                                                               
REPRESENTATIVE RYAN stated that this bill addresses these problems.            
It sets up an appeals board for people that feel they have been                
unjustly denied.  He stated that the providers are holding health              
care down and saying that participants are saving a lot of money.              
He stated that this health care system is requiring participants to            
go to the lowest bidder.  Managed care is inadequate to provide                
quality service for the patient.                                               
                                                                               
Number 0369                                                                    
                                                                               
CHAIR JAMES stated that she understood the problem.  She stated                
that she has had several conversations with New York Life Care                 
about managed care versus deferred provider.  She asked                        
Representative Ryan if he could explain the difference.                        
                                                                               
REPRESENTATIVE RYAN stated that he has a business which provides               
psychiatric services and in order to be a Preferred Provider                   
Organization (PPO) they have to give a discount, which means that              
they lower fees to the Medicare rate and that fee structure is                 
acceptable so they will send them patients under that scenario.  If            
they were to charge the normal fee for the service they would not              
get the contract.                                                              
                                                                               
CHAIR JAMES asked from the position of the insured it is then                  
managed care.                                                                  
                                                                               
REPRESENTATIVE RYAN replied yes it is.  He stated that the big                 
point is that no choice is given, you must chose a physician from              
the list of providers in order to be reimbursed.  He stated that               
the bill allows the option to go to any specialist in the group or             
to go to whoever you choose.                                                   
                                                                               
Number 0415                                                                    
                                                                               
CHAIR JAMES asked if he has heard from any health insurance                    
companies on the bill.                                                         
                                                                               
REPRESENTATIVE RYAN stated that there is letter from Providence                
Insurers in the packet, stating that they do not like the bill.  He            
stated that he received a call from Blue Cross asking if they had              
done something to make him angry.  He stated that he is not trying             
to single out any insurance company.  He is just trying to mitigate            
what he thinks is an approach by people to better take care of                 
their bottom line at the expense of the average individual in                  
Alaska.                                                                        
                                                                               
Number 0425                                                                    
                                                                               
CHAIR JAMES asked that the part of the compensation in Alaska was              
the insurance policy but now in order to have that same policy they            
have to pay because it is under a different system now.  She stated            
that she has a problem as an employer and as an employee saying                
that insurance is part of your wages.  She explained that to her it            
is a benefit and she has mixed feelings about what the employer is             
required to do.  She asked if he thought it is something that                  
citizens are entitled to or is it a benefit that is provided by the            
employer.                                                                      
                                                                               
REPRESENTATIVE RYAN replied that it is a benefit but it is part of             
the total compensation package.  He stated that the market place               
has determined that if this additional compensation is not offered             
then the company will have difficulty finding qualified employees.             
He stated that some CEO's negotiate health care plans as part of               
their compensation package.  Therefore, it would be fair to say                
that a health care service is part of one's compensation.                      
                                                                               
Number 0470                                                                    
                                                                               
CHAIR JAMES asked if the bill requires health insurance plans to               
have the option to choose to go to whatever doctor you want                    
although the participant would then have to pay more for that                  
option.                                                                        
                                                                               
REPRESENTATIVE RYAN replied yes.                                               
                                                                               
CHAIR JAMES asked if it was true that not everyone is going to be              
forced into this box.                                                          
                                                                               
REPRESENTATIVE RYAN replied that is correct.                                   
                                                                               
Number 0487                                                                    
                                                                               
REPRESENTATIVE ELTON stated that what makes sense is that if there             
is someone who is outside the state who is reviewing decisions made            
by a medical provider in the state and has the ability to deny or              
to change the treatment, that they be licensed here in the state.              
However, he stated that there may be a glitch.                                 
                                                                               
REPRESENTATIVE RYAN stated possible but it would be resolved in the            
local appeals court.  He stated the problem with out of state                  
reviews is that at his community mental health center 45 percent of            
the kids are Natives and the people in Tennessee do not understand             
the situation at all.  He stated that they are just following a                
model of institutionalized care.  Alaska does not have those                   
facilities, therefore, that model does not work here.  He stated               
that he is trying to ensure that there is a quality of care and                
people will have some assurance of who they are seeing.                        
                                                                               
Number 0548                                                                    
                                                                               
CHAIR JAMES asked if when he referred to the providers did he mean             
the doctors and the clinics or the insurance companies.                        
                                                                               
REPRESENTATIVE RYAN replied that he is talking about both.  He                 
reiterated that the incentive that the clinics have to offer is a              
discounted rate in exchange for a large pool of people to do                   
business with.  He stated that the bill has a cost containment                 
provision in it, meaning that a financial incentive could not be               
given.                                                                         
                                                                               
Number 0550                                                                    
                                                                               
REPRESENTATIVE ELTON asked if either scenarios mentioned before;               
the Tennessee situation and the New York Life situation, are they              
managed care entities and would they fall under this provision                 
where the medical officer would have to be licensed in Alaska or               
are they outside of this umbrella.                                             
                                                                               
REPRESENTATIVE RYAN stated that New York Life Care has hired a                 
company to administrate their health program and they are enforcing            
what the Commissioner of Administration has asked them to do.  He              
stated that in regard to the Tennessee scenario, there is a lot of             
grey area.  There is a statute that says that the Department of                
Health and Social Services cannot delegate their "prerogative of               
overseeing and making these decisions".  He stated that this is                
converse to what they have done by contracting it away to the                  
organization in Tennessee that is definitely managed care.  He                 
stated that with cost containment and utilization review the                   
providers are trying to ensure that the treatment is necessary.                
                                                                               
Number 0588                                                                    
                                                                               
REPRESENTATIVE ELTON stated that it was his understanding that New             
York Life Care is not managed care but the Tennessee contractor is             
managed care.                                                                  
                                                                               
REPRESENTATIVE RYAN stated that yes the Tennessee contractor could             
be very easily classified as managed care.                                     
                                                                               
Number 0591                                                                    
                                                                               
CHAIR JAMES stated that part of New York Life Care's agreement is              
to reduce cost by trying to get as many providers as they can to               
reduce the expense.  She stated that Representative Dyson had a                
children's caucus on this issue and received a lot of testimony.               
She asked if that testimony is available.                                      
                                                                               
REPRESENTATIVE DYSON replied that he did not know, it was done at              
the Anchorage LIO and was recorded.                                            
                                                                               
CHAIR JAMES stated that she would like the tapes.  There is no one             
here to testify today and in order to make a decision to move the              
bill out that testimony needs to be heard.  She stated that HB 359             
would be held over because she would like to have that testimony on            
the record.                                                                    
                                                                               

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