Legislature(2007 - 2008)BUTROVICH 205

02/20/2008 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES


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01:38:09 PM Start
01:38:10 PM SB245
02:56:31 PM Proposed Amendments
03:18:24 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
= SB 245 HEALTH CARE: PLAN/COMMISSION/FACILITIES
Heard & Held
-- Testimony <Invitation Only> --
         SB 245-HEALTH CARE: PLAN/COMMISSION/FACILITIES                                                                     
                                                                                                                                
CHAIR DAVIS announced consideration of SB 245.                                                                                  
                                                                                                                                
1:38:10 PM                                                                                                                    
UNIDENTIFIED SPEAKER  said the  federal government  recognizes it                                                               
is reasonable  that not all  the expense  be paid by  the group's                                                               
physicians   and   allows   partnering  with   a   hospital   for                                                               
radiologist/physician  offices.  Because   of  the  long-standing                                                               
relationship  between   radiologists  and  hospitals,   they  are                                                               
natural  partners in  this type  of venture  and the  partnership                                                               
provides  physician office  access  to sophisticated  information                                                               
technology   systems   which   benefit  patients   by   providing                                                               
communication  between facilities.  The  most  vocal opponent  of                                                               
this  exemption is  the representative  of the  country's largest                                                               
publicly traded  hospital corporation,  and it  is understandable                                                               
why they  would like the  state to cripple their  competition. It                                                               
is impossible to  see how giving them a monopoly  as providers of                                                               
these  scans benefits  the patients  of  the state  or the  state                                                               
itself. One of  the earlier provisions in the  bill would protect                                                               
facilities  in smaller  communities, and  competition that  would                                                               
skim   off  revenues   produced  by   imaging  procedures   could                                                               
jeopardize  the  continued  existence of  these  small,  critical                                                               
facilities.  Facilities in  boroughs  with  a population  greater                                                               
than  60,000   do  not   need  this   type  of   protection  from                                                               
competition.                                                                                                                    
                                                                                                                                
He summarized by saying that,  as a radiologist operating a small                                                               
business,  he   spent  considerable   time  and   money  bringing                                                               
equipment  and  physicians  to  the  State  of  Alaska  and  its'                                                               
patients  and would  like to  see an  end to  the legal  quagmire                                                               
caused by  lack of a  definition of  a physician's office  in the                                                               
existing Certificate of  Need law. The language  in the committee                                                               
substitute  adopts a  definition that  is both  a compromise  and                                                               
consistent with federal regulations.                                                                                            
                                                                                                                                
1:40:46 PM                                                                                                                    
PAUL  FUHS,  Lobbyist, Alaska  Open  Imaging  Center, LLC  (AOIC)                                                               
outlined  the legal  problems  that have  resulted  from lack  of                                                               
definition.  After  HB   511  was  passed,  it   did  not  define                                                               
"independent diagnostic testing facility,"  but did not eliminate                                                               
the physician's exemption either and  that is where the confusion                                                               
lies.  AOIC opened  an office  in Fairbanks  that was  declared a                                                               
"physician's  office" by  the centers  for Medicaid  and Medicare                                                               
and was determined  by the commissioner to be  a legal operation.                                                               
When they opened  another facility in MatSu, a suit  was filed in                                                               
Fairbanks  claiming  that  they were  an  Independent  Diagnostic                                                               
Testing  Facility (IDTF).  The judge  ruled  that, because  there                                                               
were  no  definitions  in  statute   and  they  did  own  imaging                                                               
equipment,  they  were  an  IDTF  and  ordered  the  facility  in                                                               
Fairbanks to close. When an  orthopedist in Juneau was allowed to                                                               
open an  MRI facility, they  transferred ownership  completely to                                                               
the physicians  and reopened in  Fairbanks, but that  could still                                                               
be appealed.  After that, a  hospital filed another  suit against                                                               
the facility  in MatSu because  it was not 100  percent physician                                                               
owned, even  though there  is no regulation  that requires  it to                                                               
be.  The  administrative  law judge  closed  the  MatSu  facility                                                               
despite  two   letters  from  the  commissioner   supporting  the                                                               
legality of the operation.                                                                                                      
                                                                                                                                
This has  completely destabilized investment in  this area, which                                                               
is  adversely impacting  patients because  people are  buying the                                                               
oldest equipment available  in order to stay  below the threshold                                                               
of $1.2 million in equipment so they don't need to get a CON.                                                                   
                                                                                                                                
He said AOIC  had always argued for removal of  CON in the mature                                                               
medical markets; but stressed that  the legislature must clear up                                                               
these definitions and end this legal limbo.                                                                                     
                                                                                                                                
1:44:29 PM                                                                                                                    
ROD  BETIT, CEO,  President, Alaska  State  Hospital and  Nursing                                                               
Home Association,  testified in  support of  the new  language in                                                               
this committee  substitute and encouraged the  committee to adopt                                                               
the CS.                                                                                                                         
                                                                                                                                
SENATOR  THOMAS questioned  the issue  of costs  and what  drives                                                               
them, and how, from a hospital's  point of view at least, removal                                                               
of  the CON  would increase  costs. He  understood that  removing                                                               
imaging or other services from  hospitals would decrease revenues                                                               
and  the loss  would be  spread  over the  entire operation,  but                                                               
statistics  show  that daily  hospital  charges  have doubled  or                                                               
tripled from  1992 to 2006.  If the  CON was holding  costs down,                                                               
then removing  it would  be a major  concern; but  if competition                                                               
might help [to  control costs] he would certainly be  in favor of                                                               
it.                                                                                                                             
                                                                                                                                
1:48:19 PM                                                                                                                    
MR. BETIT  said he had  price comparisons in Fairbanks  for those                                                               
services  inside and  outside  the hospital  and,  in all  cases,                                                               
Fairbanks  Memorial  was lower  than  what  the competitors  were                                                               
charging.  He believed  if  they  had that  data  for the  entire                                                               
state,   it  would   help  them   understand  whether   increased                                                               
competition actually  produced lower costs for  consumers. He did                                                               
not  feel  they  could  really answer  that  question  until  the                                                               
information became  available for  everyone, not  just hospitals.                                                               
That  information  in  combination  with  the  Community  Benefit                                                               
Report should provide  a much clearer picture. He  noted that the                                                               
Community Benefit Report in the  members' packets was their first                                                               
attempt to capture the amount  hospitals statewide were absorbing                                                               
in unreimbursed expenses.                                                                                                       
                                                                                                                                
1:50:19 PM                                                                                                                    
DR. ARTHUR  MANNING, was very  much opposed  to the CON.  He said                                                               
the  cost of  a  procedure  he had  performed  at Providence  the                                                               
previous  summer  was $56,622.71.  A  week  before the  following                                                               
Christmas, he  had that same  procedure performed at  the Pioneer                                                               
Peak Center for  $10,913.00. In addition, there  was no operating                                                               
suite  available  that  week at  either  Providence  or  Regional                                                               
hospitals and a doctor who worked  there said if you came in with                                                               
a broken femur  you could expect to wait until  the following day                                                               
to get  it set.  He wondered  where the  50% excess  in operating                                                               
capacity claimed by  those hospitals might be.  He also disagreed                                                               
with  testimony  presented  the  day   before  to  the  House  of                                                               
Representatives that there was a  shortage of nurses. He observed                                                               
that  there were  plenty of  nurses  in Fairbanks  but, like  his                                                               
neighbor  Cathy  Sullivan,  they  were working  in  other  fields                                                               
because  they  could  make  more than  what  the  hospitals  were                                                               
paying. In  closing, he alleged  that many of  the administrators                                                               
"down there" were not being truthful.                                                                                           
                                                                                                                                
1:53:05 PM                                                                                                                    
DR. BOB BRIDGES, Owner, Aurora  Diagnostic Imaging Center (ADIC),                                                               
supported the  repeal of CON  and the  provisions in SB  245, and                                                               
applauded the legislature for the  definitions that were included                                                               
in  HB 345.  He  stated  that physicians  also  absorb  a lot  of                                                               
unreimbursed expenses; he takes care  of charity cases as well as                                                               
Medicaid  and Medicare  patients. He  liked the  idea of  posting                                                               
prices and the  quality of care that goes along  with that online                                                               
so people could shop around,  but cautioned that the costs posted                                                               
should allow  for a realistic  comparison, noting  that hospitals                                                               
break out costs while his billings are all-inclusive.                                                                           
                                                                                                                                
CHAIR DAVIS thanked Dr. Bridges  for his testimony and for taking                                                               
Medicaid  and Medicare  patients.  She assured  him  she had  not                                                               
heard anyone  say that only  the hospitals  provide uncompensated                                                               
care.                                                                                                                           
                                                                                                                                
1:55:37 PM                                                                                                                    
SENATOR THOMAS said  he understood that 80 percent  of doctors in                                                               
Fairbanks  and  many  in  the Anchorage  area,  were  not  taking                                                               
Medicare. He commented that when  he looked at the huge increases                                                               
in charges  per adjusted patient  day over  a 14 year  period, it                                                               
caused him  to wonder whether  competition would  actually reduce                                                               
prices, and  asked Dr. Bridges  if he  felt he would  continue to                                                               
take Medicare and Medicaid patients.                                                                                            
                                                                                                                                
DR.  BRIDGES responded  that he  could not,  in good  conscience,                                                               
turn  people  away;   he  donated  a  pet  scan   each  month  to                                                               
Alzheimer's patients and was a  member of Access Anchorage, which                                                               
provides  services to  those who  cannot  not afford  to pay  for                                                               
them.  He  added  that,  as  one of  the  original  WAMI  medical                                                               
students he felt  he owed the people of Alaska  for his education                                                               
and was looking forward to paying it back.                                                                                      
                                                                                                                                
1:59:00 PM                                                                                                                    
JILL  THORVALD  echoed  Dr Bridges'  comments  regarding  charity                                                               
cases.  She  stated that  she  is  the  Executive Director  of  a                                                               
medical clinic in Fairbanks that  wrote off in excess of $100,000                                                               
during the  prior year because they  treated everyone, regardless                                                               
of their ability to pay. She  further attested that they were one                                                               
of the only providers locally  that would take Medicaid and their                                                               
doctors were on  call with the hospital 24 hours  a day, 365 days                                                               
per year.                                                                                                                       
                                                                                                                                
SENATOR THOMAS  commented that Fairbanks Memorial  Hospital built                                                               
a  wonderful extension  to  their facility.  It  is an  expensive                                                               
operation to run  and has to be  manned 24 hours a day,  7 days a                                                               
week. He  asserted that no one  else provided that level  of care                                                               
for serious accident victims and  asked whether or not she agreed                                                               
that  if the  CON were  repealed,  an expansion  like that  would                                                               
receive less emphasis in the  hospital's list of priorities based                                                               
on their  bottom line, thus  reducing access to  life-saving care                                                               
for people injured in serious accidents.                                                                                        
                                                                                                                                
MS.  THORVALD   replied  that,  in  her   personal  opinion,  the                                                               
emergency room's bottom line profit  would not be affected at all                                                               
by loss of the  CON. As a matter of fact,  she felt repealing the                                                               
CON could enhance the operation as  it would free more doctors to                                                               
rotate through  those calls, which  would mean a wider  choice of                                                               
specialties and better rested doctors.                                                                                          
                                                                                                                                
SENATOR ELTON  guessed that the  emergency room at  the Fairbanks                                                               
hospital was not  a profit center so there  wouldn't be community                                                               
competition with  the emergency room.  He was concerned  that the                                                               
hospitals would continue to provide  services that do not provide                                                               
profit, while the profitable services leave the hospital.                                                                       
                                                                                                                                
2:03:28 PM                                                                                                                    
SENATOR ELTON asked if he had misunderstood her answer.                                                                         
                                                                                                                                
MS. THORVALD responded that he did  pose a good point however, if                                                               
the  CON went  away making  this a  more attractive  community to                                                               
other  providers,  it  would enhance  other  departments  in  the                                                               
hospital that are profitable.                                                                                                   
                                                                                                                                
2:04:53 PM                                                                                                                    
CORONE STURM  supported SB 245,  specifically repeal of  the CON.                                                               
She acknowledged  that they have  a wonderful hospital that  is a                                                               
valuable  resource  to  the  community,  but  stressed  that  the                                                               
doctors are  also important,  and they  were leaving  "in droves"                                                               
because it  was no longer  profitable for them to  practice here.                                                               
She said she  had been listening to testimony on  these bills for                                                               
a   couple  of   weeks  and   had   heard  a   lot  of   hospital                                                               
representatives  present   their  positions;  she   exhorted  the                                                               
committee  members to  listen to  their  constituents, to  people                                                               
whose medical bills  are skyrocketing and have had  to leave town                                                               
or the  state to get care.  She said she heard  testimony the day                                                               
before in a  House committee meeting from people  who were turned                                                               
away for  care and who  couldn't see their own  providers because                                                               
they did not  have privileges at the hospital. And  for those who                                                               
could  get  care, the  cost  was  very  high. She  attested  that                                                               
competition  was  recognized  in  health   care  as  vital  in  a                                                               
community of their size to prevent a monopoly.                                                                                  
                                                                                                                                
She encouraged the  committee to move forward with  SB 245 saying                                                               
that, unless they create a  more conducive environment, they will                                                               
continue to lose quality providers.                                                                                             
                                                                                                                                
2:07:53 PM                                                                                                                    
KARLEEN JACKSON,  Commissioner, Department  of Health  and Social                                                               
Services (DHSS) made herself available for questions.                                                                           
                                                                                                                                
SENATOR  DYSON confirmed  that Commissioner  Jackson was  working                                                               
from version  /L and  asked her to  turn to page  5, line  24. He                                                               
said  he  would  like  the  state to  encourage  people  to  take                                                               
responsibility for  their own health  care and was looking  for a                                                               
place to  insert that. He  assumed that  if the bill  passed, her                                                               
department  would promulgate  regulations  to  implement it,  but                                                               
wondered  whether  the  bill  should be  amended  to  place  more                                                               
responsibility on the individual.                                                                                               
                                                                                                                                
COMMISSIONER  JACKSON   assured  Senator  Dyson   that  promoting                                                               
personal responsibility  was at the  core of the bill.  She asked                                                               
whether he was asking for  more specific verbiage in that portion                                                               
of the bill.                                                                                                                    
                                                                                                                                
SENATOR  DYSON suggested  that after  the "and"  they insert  the                                                               
words "health  care" and "healthy  living." He wanted to  be sure                                                               
that would not be counter to her intentions or the governor's.                                                                  
                                                                                                                                
COMMISSIONER JACKSON concurred with Senator Dyson's suggestion.                                                                 
                                                                                                                                
SENATOR DYSON then directed the  commissioner's attention to page                                                               
7, line 20 [21] regarding  hospital ratings. He proposed that, in                                                               
addition  to  "infections  and mortality"  they  should  also  be                                                               
logging medical accidents.                                                                                                      
                                                                                                                                
2:11:25 PM                                                                                                                    
COMMISSIONER  JACKSON  invited  their chief  medical  officer  to                                                               
address the question.                                                                                                           
                                                                                                                                
2:11:44 PM                                                                                                                    
JAY  BUTLER,  Chief Medical  Officer,  Department  of Health  and                                                               
Social Services  (DHSS) agreed that  Senator Dyson raised  a very                                                               
good  point. An  example  of the  type of  things  that could  be                                                               
included there and  were currently being collected  was falls, an                                                               
important  and completely  preventable cause  of injury.  He felt                                                               
this  could  be coordinated  with  the  movement by  Centers  for                                                               
Medicare   &   Medicaid   Services   (CMS)   to   stop   Medicaid                                                               
reimbursement for medical errors.                                                                                               
                                                                                                                                
SENATOR DYSON  asked if Mr.  Butler was suggesting that  they add                                                               
"accidents and medical errors."                                                                                                 
                                                                                                                                
MR. BUTLER  said the question  was whether  to specify it  in the                                                               
bill or defer  to the commission to define that  level of detail.                                                               
He did agree that, in terms of  the types of things that could be                                                               
reported, it fit  very well with the goal of  letting people know                                                               
how safe a given health care facility might be.                                                                                 
                                                                                                                                
SENATOR  DYSON  felt  that,  because   they  had  already  listed                                                               
infections, it might make sense to complete the list.                                                                           
                                                                                                                                
CHAIR  DAVIS interrupted  to  clarify  with Commissioner  Jackson                                                               
that the  commission could specify  that level of  detail without                                                               
including it in the statute.                                                                                                    
                                                                                                                                
MR. BUTLER said that would be his recommendation.                                                                               
                                                                                                                                
SENATOR  DYSON moved  on to  page 8,  line 21  and asked  whether                                                               
everything  listed  under mandatory  reporting  would  be on  the                                                               
website.                                                                                                                        
                                                                                                                                
MR. JACKSON  answered that all of  it could eventually be  on the                                                               
website.   He  was   concerned  that   the  mandatory   reporting                                                               
requirements were very ambitious and he  was not sure how much of                                                               
it was  feasible in the  short-term. He understood that  the goal                                                               
of  the  statute was  to  create  the  authority to  collect  the                                                               
information.                                                                                                                    
                                                                                                                                
COMMISSIONER JACKSON  added that with  the new effective  date of                                                               
July 1, 2009  it might not be  possible to get all  of the listed                                                               
components on the web that quickly.                                                                                             
                                                                                                                                
SENATOR  DYSON  clarified  that  he was  not  talking  about  the                                                               
implementation;  he wanted  to know  whether  the bill  specified                                                               
that the data gathered through  mandatory reporting would be made                                                               
available to the public online.                                                                                                 
                                                                                                                                
MR.  BUTLER  responded  he  was  not  able  to  provide  a  legal                                                               
interpretation.                                                                                                                 
                                                                                                                                
SENATOR DYSON asked  if it was the  administration's intention to                                                               
make that information available.                                                                                                
                                                                                                                                
2:15:36 PM                                                                                                                    
CHAIR DAVIS  interposed that Senator  Dyson was getting  ahead of                                                               
them and she would like him  to hold his question until they were                                                               
ready to consider amendments.                                                                                                   
                                                                                                                                
SENATOR DYSON explained that, before  he could craft an amendment                                                               
he needed to know if one was necessary.                                                                                         
                                                                                                                                
COMMISSIONER JACKSON  said it was the  administration's intention                                                               
to make that information available online.                                                                                      
                                                                                                                                
SENATOR DYSON  asked for clarification  on line  21, "information                                                               
on costs  to the consumer." He  wanted to be sure  this meant the                                                               
public would know the cost of that service for all consumers.                                                                   
                                                                                                                                
COMMISSIONER  JACKSON  advised  that their  attorney  was  making                                                               
careful notes on this.                                                                                                          
                                                                                                                                
SENATOR  DYSON said,  if they  did not  amend it,  he wanted  the                                                               
intention  of the  legislature to  be  clear on  the record  with                                                               
regard to this language.                                                                                                        
                                                                                                                                
2:18:10 PM                                                                                                                    
SENATOR  ELTON  said  he  wanted   to  go  a  step  further  than                                                               
clarifying their  intent; he wanted it  to be a component  of law                                                               
that the  information collected  would be  made available  to the                                                               
public.                                                                                                                         
                                                                                                                                
2:19:19 PM                                                                                                                    
Stacie  Kraly, Chief  Assistant Attorney  General, Department  of                                                               
Law  said  part of  the  problem  is that  the  bill  is full  of                                                               
"shalls"  and "mays"  and "must"  and those  sorts of  things, so                                                               
they  need to  do  a  careful review  of  the health  information                                                               
portion  of  this  to  ensure  that all  of  the  provisions  are                                                               
mandatory; that  there is a  mandatory obligation  to disseminate                                                               
the information to the public.                                                                                                  
                                                                                                                                
She continued  that it was  the administration's intent  and they                                                               
would have to be careful  that any amendments did not unwittingly                                                               
make it more  discretionary. She pointed to page 6,  line 23 "the                                                               
department shall establish and  maintain an information database"                                                               
and said  it flows  back to  the mandatory  reporting provisions,                                                               
which also include "shall" language.                                                                                            
                                                                                                                                
CHAIR  DAVIS  asked if  she  felt  comfortable with  the  current                                                               
verbiage.                                                                                                                       
                                                                                                                                
MS. KRALY  revealed that there was  a proposed change to  page 6,                                                               
line 30, which would change the  "must" to a "may" and would turn                                                               
the  mandatory language  into a  discretionary  issue about  what                                                               
should be included  on the website. Otherwise, most  of the other                                                               
language in  the provision related to  article 2 of the  bill was                                                               
mandatory, not discretionary.                                                                                                   
                                                                                                                                
SENATOR  THOMAS  said it  appeared  to  him that  most  unhealthy                                                               
lifestyles  are developed  early in  life and  he questioned  the                                                               
absence of any  mention of early intervention in  the schools. He                                                               
also noted that the bill had  grown far beyond the Certificate of                                                               
Need issue.                                                                                                                     
                                                                                                                                
COMMISSIONER  JACKSON assured  Senator Thomas  that they  did not                                                               
mean  to  leave  out  what  he recognized  as  a  very  important                                                               
component, which is the time kids  are in school, but she did not                                                               
have the  power to mandate  in the schools, the  school districts                                                               
or  the Department  of Education  (DOE). She  offered to  include                                                               
language  that would  have DHSS  work with  DOE and  provide them                                                               
with  the  same  kinds  of  information  included  in  the  other                                                               
bulleted numbers:  body mass index, diet  and nutrition, exercise                                                               
etc.                                                                                                                            
                                                                                                                                
Regarding Senator Thomas' comment about  the CON being a long way                                                               
from  the  other  two  sections of  the  bill,  she  respectfully                                                               
disagreed. She  believed they were  creating more  effective ways                                                               
to address access to care, quality of care, and cost of care.                                                                   
                                                                                                                                
2:26:47 PM                                                                                                                    
CHAIR DAVIS reminded the committee  this was the third hearing on                                                               
the bill and  they had a number of amendments  before them, which                                                               
she  felt   they  should  consider  before   drawing  up  another                                                               
committee substitute.  She realized  that the  most controversial                                                               
part of the bill  was repeal of the CON and  advised DHSS that it                                                               
was time to state their position on the current CS.                                                                             
                                                                                                                                
2:29:39 PM                                                                                                                    
COMMISSIONER JACKSON  pointed out that  the changes in  section 4                                                               
caused the department  some concern; not all of  the issues would                                                               
be  resolved in  terms  of Certificate  of  Need litigation  with                                                               
those changes.                                                                                                                  
                                                                                                                                
SENATOR ELTON  interrupted to suggest  that people  following the                                                               
proceedings might not know how  the changes in section 4 affected                                                               
the Certificate  of Need  program, and asked  the chair  to allow                                                               
Commissioner  Jackson to  talk  briefly about  what  the new  CON                                                               
program would be.                                                                                                               
                                                                                                                                
COMMISSIONER JACKSON  summarized that  section 4 in  that version                                                               
added  definition   language  around  some  of   the  independent                                                               
diagnostic testing facilities, but was  concerned that it did not                                                               
include  the  ambulatory surgery  centers  and  felt they  should                                                               
consider adding that.                                                                                                           
                                                                                                                                
CHAIR DAVIS said  she had used the language from  HB 345 for this                                                               
section and if the Commissioner  felt amendments were needed, she                                                               
would like the department to get them to her.                                                                                   
                                                                                                                                
COMMISSIONER JACKSON said she would be happy to do that.                                                                        
                                                                                                                                
SENATOR ELTON summarized  the changes: The bill  evolved from the                                                               
original  governor's   bill  that   would  have   eliminated  the                                                               
Certificate  of  Need program,  to  a  Committee Substitute  that                                                               
would change the  CON so that diagnostic  imaging equipment would                                                               
be exempted [from  the program] in communities  with a population                                                               
of 60,000 or more, provided that  it is at least 50 percent owned                                                               
by state licensed physicians.                                                                                                   
                                                                                                                                
2:35:05 PM                                                                                                                    
CHAIR DAVIS thanked  Senator Elton for the  summary and confirmed                                                               
that this  CS was not  asking for repeal of  the CON and  she did                                                               
not think the  committee would go back to version  A and push for                                                               
repeal.  She hoped  that the  language  in the  current CS  would                                                               
still resolve most of the litigation issues surrounding the CON.                                                                
                                                                                                                                
COMMISSIONER JACKSON deferred  to their attorney to  speak to the                                                               
legal issues.                                                                                                                   
                                                                                                                                
2:37:01 PM                                                                                                                    
CHAIR DAVIS  asked Ms. Kraly  to speak  to whether this  CS would                                                               
resolve some  of the legal  issues facing the  department without                                                               
repealing the CON.                                                                                                              
                                                                                                                                
MS. KRALY  responded that inclusion  of the SB 245  exemption for                                                               
diagnostic  imaging facilities  would resolve  a majority  of the                                                               
current  law suits,  as well  as  a pending  application for  two                                                               
facilities in  the Anchorage  area. It would  not resolve  all of                                                               
the issues.                                                                                                                     
                                                                                                                                
2:39:02 PM                                                                                                                    
SENATOR DYSON  said he  had asked Ms.  Kraly earlier  what "cash"                                                               
meant in the  context used on page  7, line 17. She  said that is                                                               
what the  patient/client would pay,  as opposed to  a third-party                                                               
payor. He  wanted to  confirm the "negotiated  price" as  used on                                                               
that line means the actual, total price for the procedure.                                                                      
                                                                                                                                
2:41:00 PM                                                                                                                    
MS. KRALY  admitted that  the pricing  structure for  health care                                                               
reimbursement  is  very  complex,  and Senator  Dyson  raised  an                                                               
interesting  and  appropriate  question  as  to  the  differences                                                               
between  various pricing  methods. She  stressed that  they would                                                               
need to be  careful to be comprehensive enough  in their language                                                               
to  include the  entire range  of associated  costs, and  thought                                                               
they may need  to include an additional phrase to  make sure they                                                               
were  including   not  only  the  negotiated   price  between  an                                                               
insurance company and a facility, but what the actual cost was.                                                                 
                                                                                                                                
SENATOR  DYSON cautioned  that  providers  often give  misleading                                                               
information and  he was not  sure "cost"  was the right  word. He                                                               
was looking  for the  totality of the  value that  transfers from                                                               
the payor to the payee.                                                                                                         
                                                                                                                                
MS. KRALY agreed.                                                                                                               
                                                                                                                                
CHAIR DAVIS  chided that, if  they would begin going  through the                                                               
amendments they  had before  them, they would  get to  the issues                                                               
they were discussing.                                                                                                           
                                                                                                                                
2:43:51 PM                                                                                                                    
EVELYN MOON said  she wanted the CON to go  away because it would                                                               
lower  the  cost  of  procedures and  make  them  more  available                                                               
locally.                                                                                                                        
                                                                                                                                
CHAIR DAVIS recognized SENATOR HUGGINS.                                                                                         
                                                                                                                                
2:45:44 PM                                                                                                                    
JOANNE SMITH,  Wasilla, said  she had worked  in the  health care                                                               
field all of  her life and felt strongly that  CON laws should be                                                               
repealed .  When the  laws were repealed  in Texas,  she observed                                                               
that it did  not appear to create any difficulty  to the hospital                                                               
in  which she  worked  and,  as a  matter  of  fact, it  improved                                                               
efficiency. She  stated that  Alaska has on  of the  highest cost                                                               
and lowest quality  health care systems in the  United States and                                                               
if  they  removed  the  current monopoly  it  would  improve  the                                                               
quality of  care, increase the  number of physicians who  want to                                                               
work  in  Alaska  thereby increasing  construction  and  revenues                                                               
throughout the  state, resulting  in better  services at  a lower                                                               
price.                                                                                                                          
                                                                                                                                
2:47:47 PM                                                                                                                    
CHAIR  DAVIS  proposed  going  through  the  amendments  for  the                                                               
working draft, version L                                                                                                        
                                                                                                                                
DON BURRELL,  Legislative Aid to  Senator Bettye Davis,  read the                                                               
amendments.                                                                                                                     
^Proposed Amendments                                                                                                          
     Page 4,  line 8  [Sec. 18.09.010, Paragraph  (2)] would                                                                    
     be replaced  by "to  improve the department's  plan for                                                                    
     who  shall report  data, what  data  will be  required,                                                                    
     when  each  facility type  will  be  required to  begin                                                                    
     reporting, and the reporting system to be imposed."                                                                        
                                                                                                                                
SENATOR DYSON said he had no problem with the content.                                                                          
                                                                                                                                
MR. BURRELL continued.                                                                                                          
     Page.4, line  12 [Sec.  19.09.020]: Delete  number (1),                                                                    
     "the  state  officer  assigned the  duties  of  medical                                                                    
     director for the department."                                                                                              
                                                                                                                                
SENATOR  ELTON  said  his  understanding  was  that  the  medical                                                               
director is  also a  Centers for  Disease Control  and Prevention                                                               
(CDC) officer, and  wondered why they would delete  a CDC officer                                                               
from the commission.                                                                                                            
                                                                                                                                
CHAIR DAVIS said they had changed all of that section, replacing                                                                
many of them with persons appointed by the governor.                                                                            
                                                                                                                                
SENATOR ELTON said he would mull that over.                                                                                     
                                                                                                                                
MR. BURRELL continued with Amendments.                                                                                          
     Page.4, line 14:  Delete "Department of Administration"                                                                    
     and replace it with "Governor." Make this number (1).                                                                      
                                                                                                                                
     Page    4,   line    15:   Delete    "commissioner   of                                                                    
     administration" and replace it with "Governor."                                                                            
                                                                                                                                
     Page  4,  line  16:  Delete  number  (3),  "one  member                                                                    
     representing  the  Department of  Commerce,  Community,                                                                    
     and    Economic   Development,    appointed   by    the                                                                    
     commissioner  of  commerce,   community,  and  economic                                                                    
     development."                                                                                                              
                                                                                                                                
MR. BURRELL commented that with these amendments they were                                                                      
changing the makeup of the health care commission.                                                                              
                                                                                                                                
     Page  4,  line  21:  Delete "six  public  members"  and                                                                    
     replace  it  with  "three public  members."  Make  this                                                                    
     number (2).                                                                                                                
                                                                                                                                
     Page 4, line  23: Insert number (3)  "three health care                                                                    
     providers,   representing  hospitals,   physicians  and                                                                    
     mental health."                                                                                                            
     Replace "(6)" with "(3)."                                                                                                  
     Delete  "one member  of the  House of  Representatives"                                                                    
     and  replace  it with  "two  members  of the  House  of                                                                    
     Representatives."                                                                                                          
                                                                                                                                
     Page 4, line 25: Replace "(7)" with "(4)."                                                                                 
     Delete "one member of the Senate" and replace it with                                                                      
     "two members of the Senate."                                                                                               
                                                                                                                                
SENATOR DYSON said  he would like to hear  from whomever proposed                                                               
the changes  what the  philosophical base is  for this  change in                                                               
direction, and to hear the administration's comments on it.                                                                     
                                                                                                                                
CHAIR  DAVIS said  the administration  might not  be prepared  to                                                               
comment as they had just received the proposed amendments.                                                                      
                                                                                                                                
2:56:31 PM                                                                                                                    
She said she  brought this forward in order to  bring more health                                                               
care  professionals  to  the  commission  than  the  language  in                                                               
version A provided.                                                                                                             
                                                                                                                                
SENATOR DYSON commended Senator Davis  for her efforts to balance                                                               
the commission,  but encourage  caution to  ensure that  it would                                                               
not be  over-balanced with people who  have a "dog in  the fight"                                                               
and  a profit  motive.  He  also struggled  with  how to  attract                                                               
really informed, experienced consumers  who don't have a specific                                                               
"axe to grind."                                                                                                                 
                                                                                                                                
MR. BURRELL continued:                                                                                                          
                                                                                                                                
      Page 4, line 27: Insert "(6) one member representing                                                                      
     Alaska Tribal Health care System."                                                                                         
        Insert "(7) one member representing health care                                                                         
     insurance."                                                                                                                
     Delete (8)                                                                                                                 
                                                                                                                                
      Page 4, line 28: Delete the word "department's" and                                                                       
     replace it with "Governor's."                                                                                              
     Page 4, line 31: Delete "three", replace with "five".                                                                      
                                                                                                                                
       Page 5 Line 6: Insert immediately after executive                                                                        
         director, "with appropriate health care policy                                                                         
     experience,"                                                                                                               
                                                                                                                                
                                                                                                                                
3:00:57 PM                                                                                                                    
SENATOR DYSON  interjected a proposed  amendment to Page  5, Line                                                               
24.                                                                                                                             
     Insert after "and", "health care and".                                                                                     
                                                                                                                                
SENATOR ELTON expressed concern  that the commission would employ                                                               
an  executive director.  He felt  the chain  of command  would be                                                               
fuzzy if the commission hired the executive director but the                                                                    
department provided the staff.                                                                                                  
                                                                                                                                
CHAIR DAVIS felt this could be handled within the existing                                                                      
language.                                                                                                                       
                                                                                                                                
MR. BURRELL                                                                                                                     
     Page  5,  Line  26:  Insert after  reducing,  "rate  of                                                                    
     growth in  health care costs  for all residents  of the                                                                    
     state" ...                                                                                                                 
                                                                                                                                
     Page 5,  Line 27: Delete "below  the national average",                                                                    
     replace with "make health care more affordable;"                                                                         
                                                                                                                                
     Page  5,  Line  28:  Delete  "ensuring",  replace  with                                                                    
     "improving"                                                                                                                
                                                                                                                                
     Page  5,  Line  31:   Delete  "ensuring,  replace  with                                                                    
     "improving"                                                                                                                
                                                                                                                                
     Page 6,  Lines 19 and 20:  Delete "facilities", replace                                                                    
     with "services, price and quality"                                                                                         
     Delete  "of   health  care  services  of   health  care                                                                    
     facilities in the state; and",  replace with "in making                                                                    
     health care decisions; and"                                                                                                
                                                                                                                                
     Page 6, Line 24: Delete "all"                                                                                              
     The phrase  would now read  "establish and  maintain an                                                                    
     information  database on  the  Internet of  information                                                                    
     about health care facilities" ...                                                                                          
                                                                                                                                
     Page  6,  Line  26: Delete  "facilities,  replace  with                                                                    
     "services"                                                                                                                 
                                                                                                                                
3:04:23 PM                                                                                                                    
SENATOR ELTON asked if the word "all" was deleted because                                                                       
some health care facilities are not under the state's                                                                           
purview.                                                                                                                        
                                                                                                                                
CHAIR DAVIS explained that was part of their reasoning.                                                                         
                                                                                                                                
MR. BURRELL                                                                                                                     
     Page 6, Line 30: Delete "must", replace with "may"                                                                         
                                                                                                                                
CHAIR DAVIS noted that the committee had already heard from                                                                     
Ms. Kraly that this change could be a problem, and                                                                              
suggested they bypass this amendment until they received a                                                                      
decision from the Department of Law.                                                                                            
                                                                                                                                
MR. BURRELL  continued on page 7,  line 4 which read  "(A) health                                                               
care located in the state;"                                                                                                     
                                                                                                                                
     Page 7, Line  4: Insert "care" after  health and before                                                                    
     facilities.                                                                                                                
                                                                                                                                
     Page  7, Line  14: Delete  "(3)a list  of the  100 most                                                                    
     commonly prescribed  medications in  the state  and the                                                                    
     source   and    price,   updated   monthly,    of   the                                                                    
     medications;".                                                                                                             
                                                                                                                                
SENATOR DYSON asked Chair Davis why she was deleting that.                                                                      
                                                                                                                                
CHAIR DAVIS said  she felt it was confusing and  that it would be                                                               
difficult to  identify the most commonly  prescribed medications.                                                               
She proposed to let the department address it.                                                                                  
                                                                                                                                
SENATOR DYSON  responded that the  medical industry  could handle                                                               
that fairly  well and  it would be  very valuable  information to                                                               
consumers.                                                                                                                      
                                                                                                                                
SENATOR  ELTON  thought this  was  one  of  the elements  of  the                                                               
original bill  because the presentation from  Florida did provide                                                               
this information.                                                                                                               
                                                                                                                                
MR. BURRELL went on to line 26.                                                                                                 
     Page  7,  Lines  26  and  27: Delete  "(7)  a  list  of                                                                    
     procedures  approved by  state  agencies for  emergency                                                                    
     response and treatment;"                                                                                                   
                                                                                                                                
SENATOR DYSON asked why.                                                                                                        
                                                                                                                                
MR. BURRELL said  number (7) was a little  ambiguous; they needed                                                               
to clarify what "emergency response and treatment" really meant.                                                                
                                                                                                                                
SENATOR DYSON said that is the  department's role and he would be                                                               
glad to hear from them.                                                                                                         
                                                                                                                                
3:10:52 PM                                                                                                                    
He added  that line  17 should  be amended  to define  price more                                                               
precisely.                                                                                                                      
     Page  7, Line  26, insert  after "infections"  "medical                                                                    
     errors and accidents".                                                                                                     
                                                                                                                                
MR. BURRELL moved to page 8, line 6 to insert a new number 11.                                                                  
     Insert  new number  (11) which  will read,  "a list  of                                                                    
     physicians that accept new Medicare clients."                                                                              
     Move  the current  (11) down  and  replace "(11)"  with                                                                    
     "(12)".                                                                                                                    
                                                                                                                                
SENATOR DYSON asked to amend line 20.                                                                                           
     Insert  after  "AS  18.09.110:"  "this  data  shall  be                                                                    
     posted  on  the department  website"  and  on line  21,                                                                    
     after "consumer" add "and all other consumers"                                                                             
                                                                                                                                
MR. BURRELL read their amendment to line 21.                                                                                    
     Page 8,  Line 21:  Insert after "health  care services"                                                                    
     "which  include facility  and  physician components  of                                                                    
     care."                                                                                                                     
                                                                                                                                
A  five year  sunset section  for  the Alaska  State Health  Care                                                               
Commission  would be  added for  June 30,  2013, in  reference to                                                               
mandatory reporting.                                                                                                            
                                                                                                                                
     Page  11: Add  an effective  date of  July 1,  2009 for                                                                    
     Sec. 18.09.120 which begins on page 8, line 17.                                                                            
                                                                                                                                
     Page  11: Section  4 which  begins on  page 3,  line 18                                                                    
     would take effect immediately.                                                                                             
                                                                                                                                
3:15:28 PM                                                                                                                    
SENATOR ELTON reasoned that a  previous presenter testified there                                                               
was a  lot of work involved  in this mandate and  a starting date                                                               
of July 1, 2009 for reporting  might be too aggressive. He wanted                                                               
to hear from the department regarding the effective dates.                                                                      
                                                                                                                                
SENATOR  DYSON said  he  was impressed  by  the presentation  the                                                               
committee heard  on brain injuries  among returning  veterans; he                                                               
asked Senator  Huggins to think  about including a member  of the                                                               
veterans' or military health providers on the commission.                                                                       
                                                                                                                                
CHAIR DAVIS asked  Senator Dyson to get that to  her office so it                                                               
could be  included in the  new committee substitute. She  held SB
245 in committee.                                                                                                               

Document Name Date/Time Subjects