Legislature(2007 - 2008)BELTZ 211
05/08/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB155 | |
| HB205 | |
| HB228 | |
| SB165 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 155 | TELECONFERENCED | |
| + | HB 228 | TELECONFERENCED | |
| *+ | HB 205 | TELECONFERENCED | |
| *+ | SB 165 | TELECONFERENCED | |
| + | HB 217 | TELECONFERENCED | |
| + | TELECONFERENCED |
CSHB 228(L&C)-WORKERS' COMP. MEDICAL TREATMENT FEES
2:05:20 PM
CHAIR ELLIS announced CSHB 228 (L&C) to be up for consideration.
DEREK MILLER, staff to Representative Kelly, sponsor of HB 228,
said in 2005 the Alaska Legislature passed SB 130, which was a
major rewrite of the Workers' Compensation statutes. As a part
of that, medical payments were frozen at the 2004 fee schedule
so that a review could be done to find the underlying reasons
for premium increases. This review was to be jointly done by a
special workers' compensation legislation task force in concert
with the Department of Labor and Workforce Development (DOLWD)
Medical Review Committee. The task force was to develop
recommendations to moderate program increases in the future as
part of the conditions of this medical rate freeze and to
complete its work by February of 2006. The rate freeze would
sunset in August 2007 and a plan is not yet in place for the
post rate freeze sunset period and that is why this legislation
was introduced.
MR. MILLER said under HB 228 the medical rate freeze would be
extended for two years to allow time for recommendations to be
developed and it also implements an annual rate increase based
on the medical component of the consumer price index (CPI). In
closing, he said this is not meant to be a long-term fix, but a
stop-gap measure.
2:07:36 PM
He said this bill is supported by the Alaska State Hospital and
Nurses Home Association, the Alaska Physicians and Surgeons, the
Alaska State Medical Association, the Alaska Municipal League
Joint Insurance Agency, the State Chamber of Commerce, the
Department of Labor and Workforce Development (DOLWD), the
Division of Insurance and Bradner's Alaska Legislative Digest
that on page 6 said this bill is a "must have" for the Palin
administration.
2:07:56 PM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), said she
supported HB 228 and that she wanted to highlight some of its
points. She stated with the freeze having been in place,
Attachment 1 shows the portion of workers' compensation system
cost nationally is 58 percent - comprised of medical expenses.
In Alaska, that percentage is at 69 percent and rising. System
cost means what is paid out for treatment of injured workers and
indemnity as lost wages. They are not the same thing as premium,
but they are a component of premium.
MS. HALL explained that in her premium calculations that she
ultimately approves through public rate hearings, she looks at
historical system costs and their trending. For example, if she
charged $10 for a single workers' compensation claim today and
trended that over the next 10 years, potentially it would likely
to trend up to $15 or $20. On top of that, she explained,
insurance companies have what is called an "expense factor" that
they put on top of that.
2:10:12 PM
MS. HALL urged them to look at Exhibit 4 and said as of October
2006, an Oregon study shows that the workers' compensation rates
in Alaska are the highest in the country - and they might climb
even higher unless some better controls on medical expenses are
found. This is not to imply that people are necessarily charging
too much; medical costs in Alaska are higher than in the rest of
the country, also. This is seen in all the state's systems.
2:11:38 PM
The last attachment in her presentation she said is a review and
evaluation of this bill by the National Counsel on Compensation
Insurance. The second paragraph predicts what would occur
without this legislation and it projects a 4.5 to 5.8 percent
increase in system costs overall. HB 228 holds it at a minimal
1.3 percent. Ms. Hall said the system costs are compounded by
other parts of the rate making process. So, it is critical to
look at this additional freeze.
2:12:50 PM
SENATOR BUNDE said she mentioned the medical costs were around
60 percent in Alaska and lower in other states and asked if that
is a factor of the cost of the medical procedures in Alaska or
does something else in the system make that percentage higher.
MS. HALL responded that she just recently reviewed a two-year
National Counsel on Compensation Insurance study on that and
found that, in general, the cost of doing business in Alaska is
more expensive than in other areas of the country.
SENATOR BUNDE recalled seeing something recently saying that the
cost of living in Anchorage is probably less than it is in
Portland and Seattle and yet the cost of medical treatment is so
much higher. A chart showed that a colonoscopy costs $2,500 in
Alaska and $1,400 in the Lower 48. He found it hard to believe
that the cost should be that much higher in Alaska.
MS. HALL said she didn't disagree with that.
CHAIR ELLIS said he shared that concern and he hoped to get to
the bottom of that. He asked if building inflation-proofing into
the bill was reasonable
MS. HALL replied that it was an objective way to make an
increase and she didn't think it appropriate or fair to continue
to freeze the medical fee schedule at the December 2004 level.
To use objective criteria is the most appropriate way to do
that.
CHAIR ELLIS asked Senator Bunde if the base is fair and the
mechanism is reasonable, could he support inflation proofing so
the legislature didn't have to spend time revisiting it.
SENATOR BUNDE said it's hard to find doctors for Medicare
patients because of the federally mandated level of
reimbursement. He asked if she could envision injured workers
having problems with finding someone to treat them at these
rates.
2:17:06 PM
MS. HALL replied that her division hadn't received a complaint
about access to medical care and she didn't envision this
legislation having an impact on people getting medical care.
MIKE HOGAN, Executive Director, Alaska Physicians and surgeons,
supported HB 228.
2:18:45 PM
SENATOR STEVENS moved to pass CSHB 228(L&C) from committee with
individual recommendations and attached fiscal notes. There were
no objections and it was so ordered.
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