04/08/1994 02:07 PM Senate JUD

 SENATOR TAYLOR brought  SB 367  (HEALTH CARE REFORM COMMITTEES)               
 before the committee as the next order of business.                           
                                                                               
 SENATOR STEVE RIEGER, prime sponsor of SB 367, said the legislation           
 is a number of provisions that deal with proposals for health care            
 reforms. In general, they can be categorized as either measures to            
 improve public health, measures to increase the efficiency and                
 reduce the cost of delivery of health care, or measures which speak           
 to the pooling of risk aspects of health care.                                
                                                                               
 Senator Rieger then presented a section-by-section analysis of the            
 bill.                                                                         
                                                                               
 Senator Rieger directed attention to an attached amendment adopted            
 by the Senate Health, Education & Social Services Committee, which            
 is the .08 alcohol content language which replaces the .01 language           
 in the bill.   He also noted that committee had received a                    
 memorandum from Mike Ford, a legislative legal counsel, addressing            
 a concern with single subject provisions.  He asked that the                  
 Judiciary Committee take a look at the single subject issues, and,            
 if it deems it advisable, to break out the recommendations as                 
 listed in Mr. Ford's memo into separate bills and have them move              
 forward.                                                                      
                                                                               
 SENATOR TAYLOR commented that the committee does have some real               
 concerns about violations of the single subject rule, and that it             
 would make a careful examination of Mr. Ford's memo.                          
                                                                               
 Number 225                                                                    
                                                                               
 SENATOR TAYLOR thanked Senator Rieger for his presentation on SB
 and stated the committee would take further testimony on the              
 bill upon completion of the next item on the agenda.                          
 SENATOR TAYLOR stated the committee would again take up  SB 367               
 (HEALTH CARE REFORM COMMITTEES).                                              
                                                                               
 RUPE ANDREWS, representing the American Association of Retired                
 Persons, said SB 367 proposes to establish a system of mandatory              
 arbitration and AARP policy supports institution of voluntary                 
 rather than mandatory arbitration programs of state sponsored tort            
 reform legislation.  They do support the option to proceed to court           
 adjudication should arbitration not succeed.  They support state              
 efforts to require approval of insurance rates before the rates               
 take effect and to encourage that provider prices be made available           
 to the public.  Further, they support state efforts to facilitate             
 the development of health care data systems in both the public and            
 private sectors.  Rationalizing the system of insurance                       
 coordination of benefits is usual and AARP recommends that the                
 state work with such groups as the National Association of                    
 Insurance Commissioners and the American National Standards                   
 Institute in the process.                                                     
                                                                               
 Concluding, Mr. Andrews said SB 367 is neither an insurance reform            
 bill, nor a health care reform bill.  SB 367 would establish a                
 time-limited study commission charged with the analysis of one                
 specific health care reform plan for Alaska with the option to                
 examine other models as well.  AARP believes that from a policy               
 prospective, SB 367 is deficient in a number of areas.                        
                                                                               
 Number 390                                                                    
                                                                               
 JEFF FELDMAN, President of the Alaska Academy of Trial Lawyers,               
 addressing specific areas of the bill, said Section 3, which                  
 requires that malpractice actions involving individuals less than             
 two years of age be brought before that individual reaches the age            
 of eight, has a serious constitutional problem.  It will deny some            
 citizens equal protection by giving some claimants different                  
 periods of time within which to bring their claim than other                  
 claimants.                                                                    
                                                                               
 Speaking to Section 5, which is the mandatory arbitration                     
 provision,  Mr. Feldman said the mandatory portion of it is                   
 objectionable because there are some very practical problems in               
 terms of how these provisions will stack the deck against the                 
 person who has been the victim of medical malpractice.                        
                                                                               
 Number 490                                                                    
 SENATOR TAYLOR stated he would request that staff send a memo to              
 the Division of Insurance requesting a report on any malpractice              
 claims that have been brought after age 4, age 6, age 10, etc., as            
 well as justification on why they are billing doctors for a risk              
 that has never occurred, as far as he knows, in the history of the            
 State of Alaska.                                                              
                                                                               
 Number 534                                                                    
                                                                               
 Mr. Feldman clarified that the trial lawyers organization is not              
 adamantly opposed to arbitration.  They believe that arbitration of           
 all cases voluntarily is fine, and there are things the Legislature           
 can do to make arbitration more available to parties.  He noted               
 they submitted a bill that in the malpractice area would have                 
 required mandatory binding arbitration of all claims less than                
 $200,000.                                                                     
                                                                               
 Mr. Feldman also spoke to concerns with Section 6 and Section 23.             
                                                                               
 Number 690                                                                    
                                                                               
 CHRIS CHRISTENSEN, General Counsel, Alaska Court System, stated the           
 Supreme Court takes no position on SB 367, but there are three                
 sections that cause the court some concern.  The first is with                
 Section 4, which relates to a floating interest rate for                      
 prejudgment and postjudment interest, and would cause a tremendous            
 clerical burden to the court.                                                 
                                                                               
 TAPE 94-33, SIDE A                                                            
                                                                               
 Number 005                                                                    
                                                                               
 Mr. Christensen said the second concern is with Section 5, relating           
 to mandatory arbitration.  One significant problem is that since              
 arbitration is mandatory, since it is a cost of going into court,             
 any indigent person, generally the plaintiff, is going to be                  
 entitled to state-payed arbitration.  At this time, the court                 
 system is not certain what that cost will be, but they are                    
 preparing a fiscal note.                                                      
                                                                               
 Mr. Christensen said the third concern is with Section 6, relating            
 to expert advisory panels, which will also have a fiscal impact on            
 the bill.  Right now, half of these panels don't submit any bills             
 and the other half average $150 a case.  Section 6 provides that              
 the expert is entitled to a fee of $500 and that could add up to at           
 least an extra $25,000 a year of costs that the state would have to           
 pay, costs which he does not believe are necessary since doctors              
 are doing it right now, many of them for free.                                
                                                                               
 Number 040                                                                    
                                                                               
 REED STOOPS, representing AETNA, directed attention to three                  
 amendments to SB 367 which had been provided to the committee.                
                                                                               
 The first amendment would delete Section 7 of the bill, which sets            
 up a prior approval system for insurance rate regulation, and                 
 replace it with the version of rate regulation which was adopted by           
 the House in HB 414, which is called the file and use system.  He             
 pointed out that Alaska is one of a half dozen states that have no            
 health insurance rate regulation.  AETNA believes the file and use            
 is the better system for Alaska to adopt.                                     
                                                                               
 The second amendment is to Section 16 and relates to the structure            
 of the kind of universal care that the advisory committee is                  
 instructed to look at and provide a price tag for next year.  The             
 amendment requests that the committee look at a pool of all the               
 uninsured Alaskans who wish to acquire insurance through the pool.            
                                                                               
 The third amendment would delete the sections of the bill that                
 relate to coordination of benefits.  Essentially, this amendment              
 takes SB 201 and rolls it into SB 367.  AETNA thinks that there               
 should be an analysis by the Division of Insurance to show the                
 difference between the current regulations dealing with these same            
 issues, as well as an analysis to determine whether the cost of               
 doing that is worth the changes that are being made.                          
                                                                               
 Number 130                                                                    
                                                                               
 SENATOR TAYLOR closed the public hearing on SB 367 and stated the             
 committee consider amendments to the bill at its next hearing.  He            
 then adjourned the meeting at 3:55 p.m.