Legislature(2011 - 2012)HOUSE FINANCE 519
03/08/2011 09:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB13 | |
| HB126 | |
| HB80 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 13 | TELECONFERENCED | |
| + | HB 80 | TELECONFERENCED | |
| + | HB 126 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 8, 2011
9:07 a.m.
9:07:26 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 9:07 a.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Kurt Olson, Sponsor; Representative Alan
Austerman; Representative Mike Chenault; Linda Hall,
Director, Division of Insurance, Department of Commerce,
Community and Economic Development; Mike Monagle, Director,
Division of Workers' Compensation, Department of Labor and
Workforce Development; Rena Delbridge, Staff,
Representative Mike Hawker; Pat Davidson, Legislative
Auditor, Division of Legislative Audit; Don Habeger,
Director, Division of Corporations Business and
Professional Licensing, Department of Commerce, Community
and Economic Development.
SUMMARY
HB 13 WORKERS' COMPENSATION: MEDICAL FEES
HB 13 was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal note
by the House Finance Committee for the Department
of Labor and Workforce Development.
HB 80 SELF DEFENSE
HB 80 was HEARD and HELD in committee for further
consideration.
HB 126 OMNIBUS BOARD EXTENSIONS
CSHB 126(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a new fiscal
note by the Department of Commerce, Community and
Economic Development.
HOUSE BILL NO. 13
"An Act relating to fees and charges for medical
treatment or services as they relate to workers'
compensation; and providing for an effective date."
9:08:33 AM
REPRESENTATIVE KURT OLSON, SPONSOR, discussed HB 13. He
explained that the existing extension to the workers'
compensation fee schedule would have expired on December
31, 2010, but it had been extended by emergency regulation
until June 30, 2011. He communicated that staff and
employees of the Department of Commerce, Community and
Economic Development (CCED) were available to discuss the
bill.
LINDA HALL, DIRECTOR, DIVISION OF INSURANCE, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, addressed the
bill and the purpose of the fee schedule. In 2007
anticipated legislation, which would have addressed the
inadvertent deletion of the fee schedule, had not been
introduced. Over time three provisions had been implemented
that made cost of living increases to the fee schedule. The
procedure codes in the schedule had not been kept up-to-
date; currently there were approximately 2,000 fee codes
that were not covered. She referred to several charts (copy
on file) that showed current medical fees related to
workers' compensation in Alaska. The first handout was
titled "Medical Benefits Constitute the Majority of Total
Benefit Costs in Alaska." She shared that a significant
portion of workers' compensation cost was due to the high
cost of medical care; the chart showed that the total
medical costs in Alaska represented 75 percent of the
system costs compared to the countrywide average of 58
percent. The second graph from the National Council on
Compensation Insurance was titled "Alaska Medical Average
Cost per Case vs. Countrywide." The average cost in Alaska
for a workers' compensation case in 2009 was $37,000
compared to the average countrywide cost of $27,000, which
represented a 37 percent cost differential. She discussed
that it was important to restructure the fee schedule in
order to address the high costs. The third handout was the
"2010 Oregon Workers' Compensation Premium Rate Ranking
Summary." Alaska no longer held the number-one rank in the
study that it had occupied during the prior four years.
There had been rate decreases for the last five years.
Ms. Hall discussed the general overview of the provisions
in the legislation. She detailed that the bill would
replace the past Consumer Price Indexes (CPI) with a
sustainable schedule, which would limit the division's need
to request CPI increases from the legislature every year or
so. A full fee schedule that included the missing procedure
codes would be provided and was a step back to the
methodology that had been in place in 2004. The schedule
was adopted by the Workers' Compensation Board and was
constructed by an outside vendor that collected data based
on geographical areas. The fee schedule was a base schedule
that was not to exceed the usual reasonable and customary
fees that were established by the board; it was based on a
credible profile of billed charges to ensure actuarial
credibility. The schedule reflected the cost differences in
the four geographical areas in Alaska. Categories were
expanded under the bill to ensure that all types of medical
services were incorporated, including transportation costs.
9:16:06 AM
Ms. Hall detailed that some transportation costs such as
emergency medevac and ground transportation were extremely
expensive. She had received a number of anecdotal cases
from Alaskans related to high transportation costs for
health insurance and workers' compensation. She did not
think the transportation costs would be reduced through
their inclusion in the fee schedule. She added that the fee
schedule would be based on the 90th percentile of bill
charges. The number was higher than most medical health
insurance fee schedules and ensured that injured workers
would have access to good treatment.
Representative Neuman asked how the bill would impact
employer insurance costs. He had heard from employers that
unemployment benefits and workers' compensation contributed
to their high insurance costs.
Ms. Hall replied that the bill stabilized the fee schedule.
She did not think that it would reduce costs, but it had
the potential to cap costs. The 2,000 procedure codes that
were not covered in the fee schedule were currently paid at
100 percent and would be capped at the 90th percentile
under the legislation; therefore, a small cost increase
could occur initially. She opined that the stability of the
fee schedule would be beneficial to the system and the
system costs.
Representative Neuman wondered whether the Physicians Board
had been consulted on the proposed fee schedule. He
believed that the stability could help to bring more
insurance companies into the state, which would offer
increased competition and help to stabilize costs.
Ms. Hall responded that HB 13 was identical to a bill that
passed the House the prior year and changes had been made
to the language in response to concerns from the medical
society. She added that she had not heard the concerns
during the current year.
Co-Chair Stoltze observed that North Dakota had cheaper
premiums.
9:20:05 AM
Representative Guttenberg wondered whether there was an
analysis that showed how providers would be impacted by fee
schedule or capping cost shifts related to Medicaid and
other. He asked whether charges would increase in other
areas. Ms. Hall did not believe that an analysis had been
done, given that the division's statistical agent National
Council on Compensation Insurance had not conducted one.
She did not think that any significant cost shifting would
occur with a fee schedule at the 90th percentile. She noted
that a potential reduction to the rates of Medicare and
Medicaid could result in rates that were lower than the
service costs.
Co-Chair Stoltze OPENED and CLOSED public testimony.
Co-Chair Stoltze pointed to the $75,000 fiscal note.
MIKE MONAGLE, DIRECTOR, DIVISION OF WORKERS' COMPENSATION,
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT (DLWD),
discussed that the $75,000 estimated cost associated with
producing a medical fee schedule was based on the costs of
the last contractor the department had used in 2003
(Engenics).
Co-Chair Stoltze asked what the previous fee schedule had
cost. Mr. Monagle responded that it had been ten years
since the last fee schedule had been produced and the
department did not have record of the costs associated with
its production. The department had contacted Engenics for a
general quote on the costs, but did not have specific
details because DLWD was planning to submit a request for
proposal and anticipated that the company may enter a bid.
Co-Chair Stoltze was surprised about the missing record
because workers' compensation had not been a low profile
issue in 2003 and 2004.
Vice-chair Fairclough wondered whether the committee should
zero-out FY 13 through FY 17 on the fiscal note in order to
make it more relevant.
Co-Chair Stoltze thought the recommendation represented a
good compromise.
Representative Doogan wondered whether the first year would
help to provide information necessary for a more complete
fiscal note. Mr. Monagle replied in the affirmative. He
explained that after the department awarded its first
contract bid it would have more solid cost data.
Co-Chair Stoltze remarked that the cost would be at least
$75,000.
9:26:31 AM
Vice-chair Fairclough observed that it was possible the
awarded bid would come in higher than the projected cost on
the fiscal note, which would not look good; however, the
bid could be less than the projected amount.
Co-Chair Stoltze communicated that the fiscal note would be
modified to reflect the committee's changes. The FY 13
through FY 17 columns would be zeroed-out.
Representative Gara commented that medical costs in
workers' compensation and across the board were high in
Alaska. He had been told that most states allowed an
average insurance compensation at the 50th percentile and
that Alaska allowed compensation at the 70th percentile. He
did not know whether the insurance compensation played a
part in Alaska's high medical costs, but he thought it
would be worth hearing about as the committee discussed
Medicare and medical costs.
Vice-chair Fairclough MOVED to report HB 13 out of
committee with individual recommendations and the
accompanying fiscal note.
HB 13 was REPORTED out of committee with a "do pass"
recommendation and with new fiscal note by the House
Finance Committee for the Department of Labor and Workforce
Development.
9:29:34 AM
AT EASE
9:30:45 AM
RECONVENED
HOUSE BILL NO. 126
"An Act extending the termination dates of the Board
of Nursing, the Board of Dental Examiners, the Board
of Barbers and Hairdressers, the Regulatory Commission
of Alaska, and the Alcoholic Beverage Control Board;
and providing for an effective date."
9:30:45 AM
Co-Chair Stoltze discussed that there was a CS for HB 126
that amended the omnibus sunset extension bill and removed
the Regulatory Commission of Alaska (RCA) and the Alcohol
Beverage Control Board (ABC).
Vice-chair Fairclough MOVED to ADOPT Work Draft CSHB
126(FIN) 27-LS0321\I (Kirsh, 3/1/11).
There being NO OBJECTION, it was so ordered.
RENA DELBRIDGE, STAFF, REPRESENTATIVE MIKE HAWKER,
discussed that Representative Hawker was the Legislative
Budget and Audit chairman and that he supported the omnibus
extension. She relayed that Representative Hawker believed
the omnibus was the most efficient mechanism for routine
board and commission extensions.
Co-Chair Stoltze noted that noncontroversial sunset bills
usually came before the committee one at a time and had
individual sponsors.
Representative Gara commented that he did not need a verbal
review of the reports in the file, given that the
extensions were noncontroversial.
Co-Chair Stoltze asked for a brief explanation of the bill.
PAT DAVIDSON, LEGISLATIVE AUDITOR, DIVISION OF LEGISLATIVE
AUDIT, discussed the division's recommendation that boards
should make timely investigations. She explained that
health and safety issues were dealt with first and there
were long periods of inactivity associated with
investigations of complaints for boards.
Ms. Davidson notified the committee that the financial
status of the Board of Barbers and Hairdressers was
generally alright; however, the division recommended that
the public member either resign or surrender their license
because board members were not supposed to engage in the
profession they were actively regulating. The member was no
longer an active hairdresser, but according to statute the
surrender of a license or the resignation from the board
was required. Apart from the timely investigations there
had been no recommendations for the Board of Dental
Examiners. The board's accumulated surplus was addressed by
the reduction of fees during the FY 09 renewal cycle.
Ms. Davidson pointed to the Board of Nursing which had
three specific recommendations. First, the appropriate
entities should be notified when an advanced nurse
practitioner's authority to write prescriptions was revoked
or suspended by the board. Second, the board needed to
improve its oversight of certified nurse's aide training
programs. Sporadic onsite reviews had been conducted;
however, there had been no processing or review of the
self-evaluation forms that were submitted biannually.
Third, the current licensed practical nurse (LPN) appointed
to the board did not meet the statutory qualifications. She
explained that according to statute the board position was
to be held by an LPN working in an institutional nursing
situation, but the current board member was working as an
emergency medical technician. The board had built up a
substantial financial surplus as a result of past
accounting errors and had indicated its intention to drop
fees as much as 20 percent in the FY 11/FY 12 renewal
cycle.
9:36:57 AM
Representative Wilson asked how long the division gave a
board to fill a position when a member was asked to resign.
Ms. Davidson replied that the Division of Legislative Audit
did not have the ability to enforce its recommendations.
She specified that once the issue had been identified that
it was up to the appropriate division to take corrective
action.
Representative Gara wondered whether the boards that had
received recommendations for a member to resign would
report to the committee once the resignation had occurred.
Co-Chair Stoltze explained that Don Habeger with the
Department of Commerce, Community and Economic Development
(CCED) would address the question.
Vice-chair Fairclough wondered whether it would be helpful
for Representative Hawker to issue a letter to the
department on behalf of the House Finance and Legislative
Budget and Audit Committees that requested compliance on
the recommendations and asked it to follow-up with the
committee no later than the end of session or the following
year. She discussed the ability to know whether boards were
in compliance prior to a bill vote on the House floor.
Representative Guttenberg wondered about the purpose of the
prohibition that existed in AS 44.66.050 (e) that prevented
the bill from reestablishing more than one board or
commission.
Ms. Davidson replied that according to statute, a bill
should have no more than one board extension associated
with it. She did not know the history of the statute.
Co-Chair Stoltze remembered a bill that had included 12 to
15 board extensions before his time in the legislature.
9:40:21 AM
DON HABEGER, DIRECTOR, DIVISION OF CORPORATIONS BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, addressed an earlier
question from Representative Gara. He believed that the
member in question had surrendered the license, which
brought the Board of Barbers and Hairdressers into
compliance. He would get back to the committee with an
affirmative answer.
Mr. Habeger examined other issues and concerns that had
been discussed. The division was working diligently to
correct the timely investigation issue that had been
highlighted in each legislative audit. As a result of the
audit the division had replaced an old database that lacked
a mechanism to flag older cases. The division was working
to implement a new system that was specifically made for
licensing activities nationwide. The division hoped to
report the following year that the timely investigation
problems had been resolved.
Mr. Habeger communicated that there had been a $1.4 million
roll-forward related to nurses' fees. Fees were reviewed
and adjusted on an annual basis. Some of the fees he had
reviewed had increased and others had remained the same. He
explained that any existing surpluses were used to amortize
licensing fees.
Representative Neuman recalled that the Board of Nursing
had lacked the ability to resolve a situation in which a
non-licensed nurse practitioner had written prescriptions.
He wondered whether Mr. Habeger was familiar with the
situation.
Mr. Habeger replied that he was familiar with one case that
the division had recently handled. He relayed that
licensing actions had been brought against the individual.
He had worked with the board's chair and executive director
to develop a way to make reporting available to a broader
group. He added that the Board of Nursing website included
information on licensing action.
9:45:12 AM
Representative Neuman asked about the inappropriately
occupied positions on the Board of Nursing that had been
cited in the audit. He contemplated whether a reduction to
the eight-year board term was necessary in order to
increase the legislature's oversight. He wondered how to
deal with the board positions that were filled
inappropriately.
Mr. Habeger responded that he did not recall the issue with
the Board of Nursing. He agreed that it was a challenge to
keep track of the 129 board members on approximately 20
boards. He noted the concern and would keep it in mind.
Representative Wilson cited the Legislative Budget and
Audit recommendation that the director of boards should
fill the LPN position with an individual that was currently
involved in institutional nursing services. She understood
that the current Board of Nursing LPN position was filled
by an individual in the emergency field and asked CCED to
notify the committee when the issue had been corrected.
Representative Gara asked how quickly CCED could let the
committee know about the course of action related to
removing the board member. He noted that once the committee
approved the board that it had no authority to get the
department to replace the position.
Mr. Habeger replied that he would work with the governor's
office, as it was responsible for the appointment of board
positions. He believed that the issue had been rectified
shortly after the legislative audit had been released. He
would provide the committee with a detailed answer as soon
as possible.
Co-Chair Stoltze referenced earlier commentary regarding
the eight-year board term and noted that any member on the
committee could introduce legislation to address a
dysfunction.
Representative Gara requested that CCED notify the
Legislative Audit Division when the issues related to the
Board of Barbers and Hairdressers and the Board of Nursing
had been resolved. He asked the Legislative Audit Division
to let the committee know whether it felt that the concern
had been addressed.
Mr. Habeger responded in the affirmative.
Co-Chair Stoltze observed that the governor's office was
ultimately responsible for making the substantive changes.
Vice-chair Fairclough communicated that the committee could
zero-out the fiscal note or ask the House Rules Committee
chair to hold the bill until the requested answers had been
provided.
Co-Chair Stoltze was comfortable moving the fiscal note
forward. He reflected on more challenging issues related to
boards and commissions in the past. He opined that the
current issues were substantive, but solvable.
9:51:09 AM
Representative Doogan expressed his expectation that
affirmative answers would be provided prior to a bill
hearing on the House floor.
Co-Chair Stoltze responded that the committee would ask the
House Rules Committee chair to hold the bill until the
answers had been received.
Representative Doogan did not anticipate any problems, but
was aware that problems did happen.
Ms. Delbridge responded that the Legislative Budget and
Audit Committee would be happy to make certain that
concerns were addressed and to ensure that audit
recommendations were followed.
Vice-chair Fairclough MOVED to report CSHB 126(FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
Representative Gara OBJECTED for purpose of discussion. He
wanted to make certain that the controversial RCA and ABC
boards were voted on during the current session, given that
both boards sunset in the current year.
Co-Chair Stoltze believed the issues related to the boards
were more substantive, but not controversial. He relayed
that the committee would address each of the boards.
Representative Gara WITHDREW his OBJECTION.
CSHB 126(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a new fiscal note by the
Department of Commerce, Community and Economic Development.
9:54:12 AM
AT EASE
9:57:12 AM
RECONVENED
HOUSE BILL NO. 80
"An Act relating to self defense in any place where a
person has a right to be."
9:57:12 AM
REPRESENTATIVE MARK NEUMAN, SPONSOR, discussed that Alaska
statute provided the right to use deadly force to protect
family, person, and property. House Bill 80 clarified that
the right applied to the home and in any place a person had
a right to be. The bill clarified an individual's right to
protect their life and the lives of their family. The
proposed legislation strengthened the legal recognition of
a human's basic right for self-defense and placed the
responsibility of retreat on the perpetrator. He relayed
that 18 states had introduced similar legislation; HB 80
closely followed language suggested by the other states
which was included in member packets.
Representative Wilson asked whether the bill forced people
to retreat. She referred to email correspondence that had
expressed concern about the issue.
Representative Neuman responded that currently the duty to
retreat was included in Alaska statute, but it was being
examined in the judicial system. The bill put the ability
into the hands of the individual responsible for making a
"split-second decision" and protected their rights.
Representative Wilson asked whether an attempt to retreat
would still be required or whether a person could stand
their ground without worrying about being prosecuted. She
shared that constituents in her community wanted to be able
to protect their families and did not want to be faced with
making a decision to retreat in an emergency situation.
Representative Neuman replied that there was a
justification clause in statute that specifically stated
how self-defense could be applied; however, the duty to
retreat language was somewhat vague. He explained that the
bill worked to clarify a person's ability to stand their
ground.
Representative Gara believed that the current law only
required a duty to retreat in situations that would allow
an individual to retreat safely. He did not want to provide
individuals with the right to shoot someone in all cases.
He wondered what the standard would be if there was no duty
to retreat even in cases where safe retreat would have been
possible.
Representative Neuman responded that AS 11.81.330
specifically listed situations in which self-defense was
justified, including the use of force with mutual combat,
and against death, serious physical injury, kidnapping,
sexual assault in the first and second degree, abuse of a
minor, and robbery in any degree. The statute also stated
that a person may not use deadly force under the section if
a person knew that "with complete personal safety and with
complete safety as to others being defended, the person can
avoid the necessity of using deadly force by leaving the
area." He thought it was up to the judicial branch to
provide interpretation on when deadly force could or could
not be used. The goal of the bill was to clarify that a
person did not have to second guess their right to self-
defense.
10:03:21 AM
Representative Gara wanted to ensure that fair standards
existed that did not allow a person to shoot someone for no
good reason. He stated that the law was circular because
there was a duty to not shoot a person if it was possible
to safely retreat, but the bill allowed a person in safety
to shoot a person. He thought the other circumstances in
which a person was not allowed to shoot someone were most
likely listed somewhere in statute that had not been
provided. He wanted to ensure that a definition was
included in statute.
Co-Chair Stoltze asked Representative Neuman to make the
materials he was reading from available to the committee at
future hearings on the bill.
Representative Neuman responded in the affirmative. He
clarified that the bill did not attempt to change any
existing justification clauses; full justification was
still required for a person to use deadly force.
Representative Gara asked whether the justification clause
was under AS 11.81.330.
Representative Neuman responded in the affirmative.
Co-Chair Stoltze noted that the Department of Law (DOL) and
Department of Public Safety (DPS) would be active
participants in the next committee hearing on the
legislation.
Representative Gara wanted to also hear from the Public
Defender Agency.
Co-Chair Stoltze responded that Quinlan Steiner, Public
Defender was available for questions via teleconference,
but the committee would discuss the bill more thoroughly at
the next hearing.
Vice-chair Fairclough asked to hear from DOL regarding the
proposed two new full-time attorney positions listed in its
fiscal note. She asked the department to provide
information that supported the fiscal note.
Representative Guttenberg wondered whether the bill would
have changed the outcome of any specific situations if it
had been implemented in the past. He did not know whether
the bill made life safer or more complex.
Representative Neuman did not believe there would be
changes in past convictions. He asked for clarification on
the question.
Representative Guttenberg wondered about the impetus for
the bill and whether specific incidents had occurred in the
past that the bill could have helped.
Co-Chair Stoltze notified the sponsor that he could provide
the committee with an answer at the next meeting on the
bill. He believed that the purpose of the bill was to
reduce the amount of prosecutions related to self-defense.
He reiterated that he would talk to DOL.
10:08:39 AM
Representative Wilson asked how the 1,155 cases in 2010
that were listed in the fiscal note were relevant to the
department's calculation of costs. She wondered whether
there were past cases that may not have been prosecuted if
the bill had existed at the time.
Co-Chair Stoltze replied that the committee would get the
answer from DOL and DPS.
Vice-chair Fairclough asked the sponsor to provide a
definition for self-defense in Alaska statute. She thought
it would help to clear up members' questions about the
benefit of the legislation.
Representative Joule referenced the state's law that gave
people the right to conceal a weapon. He wondered how the
bill would impact a person carrying a concealed weapon
without a permit who acted in self-defense in a place they
had a right to be.
Co-Chair Stoltze responded that there was currently a dual
system that allowed individuals with or without a permit
the right to carry a concealed weapon in most
circumstances.
Representative Neuman answered that a person could not use
a handgun for deadly force if they did not have the legal
right to have a handgun. The bill did not protect a person
that was not legally permitted to have a handgun, such as
felons and other.
HB 80 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:11:58 AM
The meeting was adjourned at 10:11 AM.