03/09/1994 01:55 PM Senate HES

 CHAIRMAN RIEGER introduced  SB 270  (COMPREHENSIVE HEALTH CARE) and           
  SB 284  (COMPREHENSIVE HEALTH INSURANCE ACT) as the next order of            
 business before the committee.  He stated that he intended to                 
 discuss the liability reform proposals of both bills.  He noted               
 that there had been a hearing on Senator Duncan's bill of last year           
 and it would be available for discussion as well.                             
                                                                               
 SENATOR DUNCAN specified that the Tort Reform bill was left to move           
 on its own.  Therefore, there is no companion bill to SB 284.                 
                                                                               
 CHAIRMAN RIEGER asked Ms. Usera to discuss the proposals of SB 270            
 regarding civil procedures, arbitration.                                      
                                                                               
 NANCY USERA pointed out the two civil provisions of SB 270.  The              
 first provision is, section 4, page 8, a non-binding court ordered            
 arbitration for malpractice suits.  She noted that this alternative           
 dispute resolution has been successfully used in other states.                
 This would resolve a malpractice suit before going through a costly           
 litigation process.  The second provision in section 6 addresses a            
 similar concept for claims against insurance companies.                       
                                                                               
 TAPE 94-16, SIDE B                                                            
 Number 593                                                                    
                                                                               
 NANCY USERA summarized that they are attempting to uncover more               
 cost effective ways to resolve these disputes short of the courts.            
                                                                               
 CHAIRMAN RIEGER asked if the possibility of strengthening the                 
 burden of proof, or the penalties on either party that rejects the            
 arbitrator's claim had been considered.  NANCY USERA said no.  Ms.            
 Usera explained that the premise of SB 270 is to do what can be               
 done now.  This was the first step towards finding alternative                
 dispute resolutions.                                                          
                                                                               
 CHAIRMAN RIEGER indicated that he may want to introduce something             
 similar.  He noted a discussion with the legal counsel who                    
 explained that one cannot mandate that an arbitrator's ruling is              
 deemed to be true nor can the burden be placed on the individual to           
 disprove the ruling.  The stakes, such as court costs and attorney            
 fees, can be raised.  He asked Senator Duncan to discuss SB 123               
 regarding an OB statute of limitations.                                       
                                                                               
 SENATOR DUNCAN explained that there were no recommendations on Tort           
 Reform in SB 284 because of the constitutional single subject rule.           
 He pointed out that there were recommendations in SB 123:                     
 (1) reducing the statute of limitations for birth related injuries            
 from current law to the eighth birthday of the child;                         
 (2) court ordered non binding arbitration process be used to                  
 replace existing pre-trial screening process for medical                      
 malpractice suits; and                                                        
 (3) change the pre-judgement interest rate from 10.5 to the                   
 prevailing interest rate.                                                     
                                                                               
 CHAIRMAN RIEGER inquired of the expert advisor provision.  SENATOR            
 DUNCAN believed that was part of the non binding arbitration                  
 process.                                                                      
                                                                               
 NANCY USERA stated that changes a court rule which requires a                 
 different vote of the legislature to do that.  She explained that             
 SB 270 converts from a three person panel to a one person expert              
 advisor for the resolution.  She referred to an article which would           
 be given to the committee which illustrates the success of                    
 arbitration versus litigation; 89 percent of the cases were settled           
 prior to hearings.  She clarified that the provisions in SB 270 do            
 not limit anyone's liability, but only provide an alternative to              
 dispute resolution; therefore, the single subject rule does not               
 seem to apply.                                                                
                                                                               
 SENATOR DUNCAN requested a legal opinion.                                     
                                                                               
 Number 539                                                                    
                                                                               
 CHAIRMAN RIEGER offered an amendment for discussion regarding                 
 raising the stakes which would clarify that court costs and                   
 attorney fees would go against the party who attempts to appeal the           
 arbitrator's decision if nothing changes.  The amendment was                  
 written for SB 270 because the drafter needed somewhere to start,             
 but Chairman Rieger did not know where it would be used.  Chairman            
 Rieger asked if there were any questions or objections to the basic           
 ideas of the proposals by Senator Duncan, Nancy Usera, and his                
 amendment.                                                                    
                                                                               
 SENATOR ELLIS stated opposition of the proposals being proposed               
 separately.  The recommendations Senator Duncan discussed were                
 adopted in the context of a comprehensive health care reform                  
 package.  He pointed out that many of the recommendations were                
 adopted because other parts of the Task Force's recommendations               
 were adopted.  The Tort Reform recommendations of the Task Force              
 proposed individually would not be supported by the majority of the           
 Task Force.  He stated that he would support the provisions in the            
 context of comprehensive health care reform.                                  
                                                                               
 CHAIRMAN RIEGER acknowledged the need to review the proposals case            
 by case and not always refer to them in context of the entire                 
 package.  He advised the committee that the provisions regarding              
 regulation of insurers, the standardized claims form, and the                 
 fiscal notes of both SB 270 and SB 284 would be addressed at the              
 next meeting.  He said that the civil procedure aspect of the bills           
 could be discussed today.                                                     
                                                                               
 SENATOR DUNCAN clarified that the work group did not endorse any of           
 the Tort Reform proposals even those in SB 123.  There was no                 
 formal recommendation from the work group.                                    
                                                                               
 SENATOR ELLIS added that he believed that most physicians thought             
 Tort Reform was going to pass this year and time should not be                
 wasted discussing or negotiating other liability and compensation             
 limits in the health care reform context.                                     
                                                                               
 CHAIRMAN RIEGER explained that he did not realize that Tort Reform            
 was not part of the work group's proposal.  The February 9, 1994              
 draft of the Health System Reform Work Group, Alaska Proposal SB
 lists Tort Reform as item ten.   SENATOR DUNCAN informed                  
 Chairman Rieger that he had an old copy, there is a newer copy that           
 would be provided.                                                            
                                                                               
 Number 469                                                                    
                                                                               
 SENATOR ELLIS asked if Mr. Walsh would be discussing the Division             
 of Insurance's portion of the fiscal note for both bills.                     
                                                                               
 CHAIRMAN RIEGER reiterated that the standardized claim form, the              
 regulation of insurers, and the fiscal notes would be before the              
 committee on Friday.                                                          
                                                                               
 SENATOR DUNCAN requested that Kim Busch and others of the                     
 Department of Health and Social Services be present on Friday to              
 discuss the various Medicaid claim costs and administrative costs.            
 He expressed concern with a fiscal note being prepared by AETNA; he           
 would review that aspect.