Legislature(2003 - 2004)
04/13/2004 03:15 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
April 13, 2004
3:15 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Carl Gatto, Vice Chair
Representative John Coghill
Representative Paul Seaton
Representative Kelly Wolf
Representative Sharon Cissna
Representative Mary Kapsner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 543
"An Act relating to medical assistance coverage for prescription
drugs; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 434
"An Act relating to the practice of naturopathic medicine; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 535
"An Act relating to liability for expenses of placement in
certain mental health facilities; relating to the mental health
treatment assistance program; and providing for an effective
date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 72
"An Act relating to the qualifications and appointment of
members of the Board of Regents of the University of Alaska; and
providing for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 176
"An Act providing that certain obligors can receive credit
against their child support obligation for certain types of
noncash child support; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 543
SHORT TITLE: MEDICAID AND PRESCRIPTION DRUGS
SPONSOR(S): HEALTH, EDUCATION & SOCIAL SERVICES
03/25/04 (H) READ THE FIRST TIME - REFERRALS
03/25/04 (H) HES
04/01/04 (H) HES AT 3:00 PM CAPITOL 106
04/01/04 (H) Scheduled But Not Heard
04/06/04 (H) HES AT 3:00 PM CAPITOL 106
04/06/04 (H) Scheduled But Not Heard
04/13/04 (H) HES AT 2:00 PM CAPITOL 106
BILL: HB 434
SHORT TITLE: NATUROPATHIC MEDICINE
SPONSOR(S): REPRESENTATIVE(S) HOLM
02/04/04 (H) READ THE FIRST TIME - REFERRALS
02/04/04 (H) L&C, JUD
02/04/04 (H) HES REFERRAL ADDED AFTER L&C
02/18/04 (H) L&C AT 3:15 PM CAPITOL 17
02/18/04 (H) Heard & Held <Assigned to Subcmte>
02/18/04 (H) MINUTE(L&C)
03/03/04 (H) L&C AT 3:15 PM CAPITOL 17
03/03/04 (H) <Bill Hearing Postponed>
03/24/04 (H) L&C AT 3:15 PM CAPITOL 17
03/24/04 (H) Moved CSHB 434(L&C) Out of Committee
03/24/04 (H) MINUTE(L&C)
03/29/04 (H) L&C RPT CS(L&C) 2DP 2NR 3AM
03/29/04 (H) DP: CRAWFORD, GUTTENBERG; NR: LYNN,
03/29/04 (H) DAHLSTROM; AM: GATTO, ROKEBERG,
03/29/04 (H) ANDERSON
04/13/04 (H) HES AT 2:00 PM CAPITOL 106
WITNESS REGISTER
DWAYNE PEEPLES, Director
Division of Health Care Services
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Testified on HB 543 and answered questions
from the members.
KIM MARTIN, Regional Director
Pharmaceutical Research and Manufacturer of America
[No address given]
POSITION STATEMENT: Testified on HB 543.
BETSY TURNER-BOGREN, Fairbanks District Manager
American Diabetes Association
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 543 and answered questions
of the members.
ELIZABETH LUCAS, State President
AARP
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 543.
MARIE DARLIN, Coordinator
Capital City Task Force
AARP Alaska
Juneau, Alaska
POSITION STATEMENT: Testified in opposition of HB 543 and
answered questions from the members.
JEAN MISCHEL, Attorney,
Legislative Legal and Research Services
Legislative Affairs Agency
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As drafter of HB 543 she answered questions
from the committee.
ROD BETIT, President
Alaska State Hospital and Nursing Home Association
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 543.
ALEX MALTER, MD, President
Alaska State Medical Association
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 543.
VERNER STILLNER, M.D., Psychiatrist
Bartlett Regional Hospital;
Legislative Representative
Alaska Psychiatric Association
Juneau, Alaska
POSITION STATEMENT: Testified on HB 543 and answered questions
from the members.
JOE FULLER, Senior Manager
State Government Affairs
AstraZeneca Pharmaceuticals, L.P.
Juneau, Alaska
POSITION STATEMENT: Testified on HB 543 and answered questions
from the members.
PAT CARTER, Lobbyist
Glaxo SmithKline
Juneau, Alaska
POSITION STATEMENT: testified on HB 543.
REPRESENTATIVE JIM HOLM
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As sponsor of HB 434, presented the bill
and answered questions from the members.
DANIEL YOUNG, ND, LAC
AKANP Legislative Task Force
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 434, and
answered questions from the members.
VERENA NILSSON
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 434.
STEVE COMPTON, M.D.
Alaska Heart Institute
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 434 and answered questions
from the members.
ACTION NARRATIVE
TAPE 04-30, SIDE A
Number 0001
CHAIR PEGGY WILSON called the House Health, Education and Social
Services Standing Committee meeting to order at 3:15 p.m.
Representatives Wilson, Gatto, Wolf, Coghill, Seaton, and Cissna
were present at the call to order. Representative Kapsner
arrived as the meeting was in progress.
HB 543-MEDICAID AND PRESCRIPTION DRUGS
Number 0150
CHAIR WILSON announced that the first order of business would be
HOUSE BILL NO. 543, "An Act relating to medical assistance
coverage for prescription drugs; and providing for an effective
date." She explained that this bill is being sponsored by the
House Health, Education and Social Services Standing Committee.
CHAIR WILSON read the following from the sponsor statement:
The Department of Health and Social Services is
currently in the process of implementing a preferred
drug list (PDL). This limitation on medical
assistance coverage is being done as a cost
containment measure. While we believe that cost
containment measures are a necessary step in achieving
cost savings we believe that we must proceed carefully
and judiciously. To that end, the state will need to
adopt formal regulations in order to ensure that our
efforts to achieve cost saving is not at the expense
of Alaskans' health and well-being.
Under this bill the regulations must include:
standards, opportunity for public comment, an appeal
process, and provision for approved coverage for a
drug that is not on the preferred drug list when it is
deemed medically necessary.
HB 543 provides that the commissioner must appoint a
Prescription Drug Review Advisory Committee prior to
the department establishing a PDL or placing any
limitation on coverage of a medication.
HB 543 places a temporary moratorium on the
implementation of a PDL, or restricted access to
medication coverage, for drugs used to treat mental
illness. This temporary moratorium expires January 1,
2005. Mental health patients are especially
vulnerable to adverse effects from changes to their
medications. HB 543 gives the department ample time
to ensure that the necessary protective measures are
in place prior to discussion of this drug class.
CHAIR WILSON said she understands that at the next meeting [of
the Pharmacy and Therapeutics (P&T) Committee] there will be a
discussion on a temporary moratorium on the implementation of a
PDL or restricted access to mental health drugs. Chair Wilson
noted that an unidentified person is shaking his head that is
correct.
Number 0413
DWAYNE PEEPLES, Director, Division of Health Care Services,
Department of Health and Social Services, testified on HB 543
and answered questions from the members. The Department of
Health and Social Services is undertaking a whole series of
cost-containment refinancing efforts to save general funds, he
said. One significant cost centers in operating the pharmacy in
the Medicaid program. He told the members that the department
anticipates that in FY04 the expenditures will be $100 million.
The FY05 budget has a reduction of $20 million in the pharmacy
expenditure attributed to the full implementation of the
preferred drug list (PDL), Mr. Peeples explained. There have
been a few delays, but the department is targeted for full
implementation during the first half of FY05. He said if the
department cannot maintain adequate saving through the use of
the PDL it will be necessary to look elsewhere to make up any
difference in the $20 million reduction. Mr. Peeples told the
members that some of those areas may be reduced services to
Medicaid beneficiaries and/or reduced payment rates to health
care service providers.
MR. PEEPLES pointed to page 2 of the handout from the Department
of Health and Social Services, titled "Forecast Drug
Expenditure" and told the members that if the department does
not contain costs it is anticipated that the costs will double
by the end of the decade. He commented that the PDL process
itself is not unique. A lot of states have already implemented
them. Alaska is in the last half of the states to do it, he
commented. Mr. Peeples stated that it is anticipated that
within the next 12 to 18 months all but one or two states will
be operating PDLs. There has been a long history of PDL use
around the country including in health maintenance organizations
and health care plans where it has been successful in containing
some costs.
MR. PEEPLES directed the members attention to page 4 of the
handout which shows information from the department's PDL
website. This information basically explains that the PDL is
being implemented to contain costs, provide continuity of drug
utilization in the state's programs, and provide assurance for
patient care.
Number 0652
MR. PEEPLES told the members that the commissioner of the
Department of Health and Social Services has setup a PDL
Pharmacy and Therapeutics (P&T) Committee. It is composed of 14
doctors, 2 dentists, 4 pharmacists, and 1 advanced nurse
practitioner. He told the members that the list of appointees
is in the handout. The P&T Committee procedures are on the
website, and a copy of it is also in the members' packet. This
page lays out how the committee will operate, which is through
public meetings with the agenda advertised before hand.
MR. PEEPLES pointed to the timeline for the public process which
started in August of 2003. The first class of drugs which will
go on the PDL begins on May 21.
Number 0718
CHAIR WILSON commented that she knows the commissioner went
around the state advising the public of the changes that would
be taking place. She asked if there were in-depth discussions
about the PDL at that time.
MR. PEEPLES replied that the commissioner discussed the
department's plans for the PDL with many professional
organizations, such as the Alaska State Medical Association and
the Alaska State Hospital and Nursing Home Association. He
referred to the timeline before the members where it lists
presentations that were made.
CHAIR WILSON asked for clarification that the presentations were
actually on the PDL.
MR. PEEPLES commented that while he did not attend those
meetings because he did not come to work for the department
until October, he understands that the commissioner addressed
both the changes to the department and the PDL. He commented
that he did attend a number of presentations given to the
medical community and hospitals that were done by the Health
Care Services staff. He added that there is a power point
presentation on the PDL that he can make available to the
members if they wish.
MR. PEEPLES explained that the committee listed the classes of
drugs that would be reviewed on the website and provided public
notice in newspapers. To date almost all of the 14 initial
classes of drugs have been reviewed. He directed the members'
attention to the agenda in the members packet dated March 19,
2004. These agendas are available on the website, he added. He
explained that the committee has a contractor who is the
financial intermediary, First Health Services Corporation.
First Health Services Corporation is also under contract to do
an analysis of the PDL, provide the [P&T] committee members with
information, and offer recommendations.
Number 0912
MR. PEEPLES explained that the P & T Committee members received
a packet of the drug class analyses about three weeks prior to
the meetings. Prior to that the department solicits input from
pharmaceutical companies. That information and other comments
are compiled and sent in a second packet to the committee
members approximately 10 to 12 days before the meeting, he said.
The committee members study the material and contact their peers
to get input from them. There is a committee meeting where
public testimony is taken first, then a presentation from First
Health Services Corporation, the committee discusses the
therapeutic equivalents of the drugs, take a motion, and votes
on it. After a final decision is made the cost of the drugs are
considered and it is determined what the supplemental rebate
will be. The department publishes and places on its website
what has been selected by the committee along with detailed
notes, he said. Mr. Peeples told the members that the first
implementation begins on May 21. There will be a 60-day
educational process where pharmacists and physicians will be
advised of the changes.
Number 0994
MR. PEEPLES told the members that currently if a physician wants
to write a prescription for a drug that is not on the PDL,
he/she will be asked to write "medically necessary" on the
prescription as the criteria to override. Some of the criteria
the department would like the physicians to consider when using
the medically necessary override would be first, allergic
reactions, second, contra indications which means an individual
cannot take the drug, and three, the drug has not proven
effective in treatment of the diagnosis. The committee also
asked if the physician would note if the reason for override is
allergic reaction. It is not required, but the committee felt
it would be nice to have that information for the pharmacists to
have for the patient's safety in the future, he added. During
the first 60 days the pharmacists will get an electronic alert
or soft edit coming back from First Health Services Corporation
saying that the medical override note [Medically Necessary]
needs to be on the prescription for those drugs that are not on
the PDL. After that period of time there is an educational
feedback period on that first class of drugs.
Number 1059
CHAIR WILSON asked Mr. Peeples who notifies the doctor that a
particular drug is not on the PDL.
MR. PEEPLES replied it will be the pharmacist. In response to
Chair Wilson's further inquiry he explained that this is an
alert process, it is informal feedback.
CHAIR WILSON asked if the pharmacists will be paid for the
additional work involved.
MR. PEEPLES replied no.
Number 1111
REPRESENTATIVE GATTO asked what the third reason for override of
the PDL is.
MR. PEEPLES responded that the third reason is that the doctor
believes the drug fails to treat the condition.
REPRESENTATIVE GATTO asked why any physician would write a
prescription that had any of those three components.
MR. PEEPLES explained that what is being asked is if a physician
is going to write a prescription for a drug that is not on the
PDL that the medically necessary note be included on the
prescription. These are general criteria that the physician is
asked to consider when overriding the PDL.
REPRESENTATIVE GATTO commented that it shouldn't be necessary
because physicians would do that anyway.
CHAIR WILSON clarified that the "medically necessary" notation
would explain why the physician is using a drug not on the PDL,
because for instance the patient is allergic to other drugs.
Number 1209
MR. PEEPLES explained that after the first 60 days First Health
Services Corporation system goes to what is called a hard edit.
At that point when the pharmacist enters a drug into the system
that is not on the PDL the pharmacists will receive feedback
that says it is a nonpreferred drug, medically necessary
override is not present, it will not be paid, and please contact
the physician to get medically necessary override authority, he
explained. He offered that the pharmacists could still fill the
prescription, but it would not be reimbursed until the medically
necessary documentation was provided. Mr. Peeples said it is a
fairly flexible approach to prescribing drugs outside of the
PDL.
CHAIR WILSON asked if this is commonly done in other states.
MR. PEEPLES said no. He told the members that when setting up
the P&T Committee the department reviewed what a lot of other
states were doing. While Alaska's P&T Committee is function as
many other states, a successful implementation of a PDL in other
states has been a fairly strict interpretation. In other
states, for example, if a physician wanted to prescribe a drug
outside of the PDL one option was requiring preauthorization.
What that meant is that the physician would have to call in to
get authority to fill that drug, he said. Another option would
provide for the physician to call for preauthorization, and
would get the preauthorization automatically, but it would
require talking to whoever is running the program and provide
the reason for using the drug, he added. In this arrangement,
the final control rests with the physician.
CHAIR WILSON commented that most states are putting the burden
on the doctors, and Alaska is putting the burden on the
pharmacists.
MR. PEEPLES responded that the pharmacists is the intermediary.
After the first 60 days if the doctor is writing medically
necessary on the prescription there is no burden for anyone.
CHAIR WILSON clarified that the doctor does not have to make
calls for preauthorization.
MR. PEEPLES said that is correct.
CHAIR WILSON asked what the next step is.
Number 1325
MR. PEEPLES replied that the department is going to monitor this
for the first year after full implementation. He added that he
does not expect it to be fully implemented until the fall or
winter. He suggested that a possible next step might be
requiring physicians to write the specific reason for using a
drug that is not on the PDL.
Number 1371
CHAIR WILSON asked for clarification that it will be fully
implemented in November and no changes will be made until next
November.
MR. PEEPLES said that the department will monitor it to see how
successful it is. If it is found that prescriptions are way
outside of the PDL, the department may look to providing
additional outreach and education in an effort to get increased
cooperation. He commented that he knows the department will be
competing with pharmacy representatives who will be pushing
their own products. Mr. Peeples emphasized that it is essential
to get the costs under control otherwise the costs will continue
to accelerate.
CHAIR WILSON asked Mr. Peeples if he really believes the
department can save $20 million and in what timeframe.
MR. PEEPLES acknowledged that the experience in other states
using a totally volunteer PDL has not been great. He said that
the department estimates that if it uses a totally volunteer
approach it may get 50 percent participation.
CHAIR WILSON asked if he hopes to save $10 million in the first
year.
MR. PEEPLES replied he hopes to have 70 percent to 80 percent
participation the first year. He said that the department will
be heavily relying on the medical community to assist in this
process.
Number 1482
REPRESENTATIVE SEATON expressed concern for the additional
effort pharmacists will be required to make. He asked if
pharmacists have to call doctors for clarification of
prescriptions normally.
Number 1506
MR. PEEPLES replied yes. He explained that there are 14 classes
of prescription drugs and the plan is to stagger the
implementation to see how it goes. During the initial 60 to 120
days there will likely be a higher level of exchange [between
pharmacists and physicians], but once everyone is more
comfortable and familiar with the process that will quiet down,
he added.
MR. PEEPLES wanted the members to note that the last class of
prescription drugs that will be reviewed are the mental health
drugs. It is considered to be the highest level of concern and
anxiety. Mr. Peeples explained that an ad hoc advisory
committee of psychiatrists to the P&T Committee has been
appointed. He added that the ad hoc committee will meet a
couple of times before the May 21st meeting when the full
committee will take up mental health drugs, he said. Mr.
Peeples told the members that there will be meetings this summer
going over the mental health drugs and it is not anticipated
that this class of drugs will be implemented until all the other
classes of drugs have been implemented, probably not until next
year. The department wants to see how the other drug classes do
first because the mental health drugs will be the most difficult
to manage, he explained. Mr. Peeples said that the timeframe
has been setback a little longer than the commissioner
originally wished which was the beginning of the fiscal year.
Number 1590
REPRESENTATIVE SEATON asked if the mental health drugs are the
class of prescription drugs where the most savings can be
accomplished. He asked what the percentage of cost reductions
are attributed to this class of drugs.
MR. PEEPLES replied that 25 percent of the total savings are
represented by the mental health drugs. In HB 543 the
department lacks the leverage to work with the drugs on the PDL,
he said. The leverage the department would need is to say that
if the system is not working it would be necessary to increase
the requirements to use nonpreferred drugs. Mr. Peeples told
the members that other states have a very strict
preauthorization process, but the P&T Committee has chosen not
to go that route. It was done in this way to make it easier on
the prescribing physicians. If it does not work, he said, then
the department will have to slowly increase the requirements.
No work was done on preauthorizations on a drug in the PDL that
has to do with narcotics, he said. Although the department has
not done the mental health drugs, if it were to put in, for
example Oxycodone, a narcotic, on the PDL without allowing any
preauthorization to that, it would cause serious concerns, he
said. In the past there have been serious problems in Alaska
with Medicaid waste and abuse of this drug. Mr. Peeples
explained that right now there is an established
preauthorization and some other controls on those narcotics. If
it was put in the PDL, the department would not be able to
manage those drugs for cost, waste, abuse, and other issues.
Mr. Peeples said that by not being able to manage that type of
activity there could be some other complications with federal
requirements for drug utilization review. In summary, Mr.
Peeples told the committee that he believes the approach the
department is taking in managing the PDL is the best of both
worlds. He commented it is a balance of allowing as much
flexibility on the PDL as possible and trying to get some cost
savings.
Number 1783
KIM MARTIN, Regional Director, Pharmaceutical Research and
Manufacturer of America, testified on HB 543. She told the
members that she is encouraged that this legislation recognizes
the need to allow for a prescriber's ability to opt out of the
PDL and prescribe a medicine or treatment that best fits the
medical condition being confronted. Ms. Martin emphasized that
only when a physician can tailor treatment for their patients
will there be assurance that Alaskans are receiving the best
medical care. She told the members that she supports friendly
amendments that address scientific standards and the appeals
process.
Number 1907
BETSY TURNER-BOGREN, Fairbanks District Manager, American
Diabetes Association, testified in support of HB 543 and
answered questions of the members. She told the members that
the association serves over 40,000 Alaskans who are affected by
diabetes. While the association supports HB 543 this time there
are questions about potential gaps. Ms. Turner-Bogren asked if
the term "prescription drug list" includes the medically
prescribed supplies that are necessary to manage diabetes.
These supplies are, for example, blood glucose monitors or sugar
monitors, test strips, insulin syringes, and (indisc.). Without
these supplies the daily challenges of blood sugar and safe
management cannot be achieved. She said that the association
receives many calls a week and 75 percent of those are focused
on access and availability of supplies. Ms. Turner-Bogren
pointed out that people without sufficient economic resources
often have an impossible time actually managing their disease
because it is impossible for them to buy the blood sugar monitor
and test strips on top of the insulin. She urged the members to
make sure these supplies are covered to protect the 40,000
people in Alaska who are living with diabetes.
Number 1956
CHAIR WILSON commented that this bill does not address the
Senior Care program. She asked Ms. Turner-Bogren to clarify her
concern with respect to HB 543.
MS. TURNER-BOGREN replied that there are some concerns that the
language that refers to "preferred drug list" does not refer to
supplies. With the disease of diabetes the supplies are as
integral in disease management as the insulin itself, she
explained.
MR. PEEPLES stated that the PDL does not address medical
supplies.
CHAIR WILSON surmised that this bill would not change the
process that is now in place.
MR. PEEPLES replied that is correct.
Number 2008
REPRESENTATIVE GATTO asked if an individual who submits an
insurance claim for insulin could also include the medical
supplies to that claim.
MS. TURNER-BOGREN responded that three to four years ago that
issues was addressed. In Alaska insurance companies cover
medication, supplies, and patient education. She said all three
of these components are necessary for effective management of
diabetes.
REPRESENTATIVE GATTO commented that this bill will not affect
those with diabetes if they have insurance coverage.
MS. TURNER-BOGREN agreed with Representative Gatto. She
emphasized that the people who are affected by this bill are
those who have restricted financial resources who are on
Medicaid. She clarified that her concern is that these
individuals would not only get insulin, but also the necessary
supplies to manage the disease. Ms. Turner-Bogren surmised that
this bill will not affect supplies.
CHAIR WILSON confirmed that is correct. This bill will only
address prescription drugs for individuals who have no insurance
and are on Medicaid. There will be no change in the supplies
for Medicaid recipients, she reiterated.
MR. PEEPLES agreed that is correct.
Number 2138
ELIZABETH LUCAS, State President, AARP Alaska, testified in
opposition to HB 543. She told the members that in most
countries, the U.S. Veterans Administration, the Indian Health
Services, more the half of the states, and many private
employers utilized some form of a PDL. It does not make sense
to pay for a more expensive drug when a less costly medication
is just as effective if not more so. A prescription program
under Senior Care will use a PDL. She told the members that
AARP believes this makes sense for consumers as well as the
state. Ms. Lucas stated that AARP was pleased with the benefit
package of Senior Care, but particularly pleased to know that
the PDL would be used for the program. There is a strong
movement in the United States for evidence-based formularies.
She said she appreciates that the PDL identifies the most
effect, appropriate, and least expensive prescription drugs.
MS. LUCAS commented that it is important to understand how a
drug company seeks approval for a new drug from the U. S. Food
and Drug Administration (FDA). These companies are only
required to show that their new product is more effective than a
sugar pill. It is not necessary to prove that the drug is as
good as or better than drugs that are already on the market to
treat a similar condition, she explained. Drug salesmen tell
physicians which drugs are best, but it is important to note
that these salesmen work for the company that manufactures them,
she pointed out.
MS. LUCAS told the members that the Alaska PDL will serve as the
state's consumer report on how effective a prescription is and
how it compares in cost to other medications in the same class.
By using the PDL other Medicaid beneficiaries and their
prescribing physicians will have information that has not been
previously available, she said. This makes sense. Everyone
will benefit from the comparative information that will be
available from the PDL. Ms. Lucas emphasized that the AARP
applauds the medical professionals who are developing the PDL.
MS. LUCAS explained that the AARP looks for consumer protections
whenever PDLs are developed. The Alaska PDL passes all the AARP
checklists and urged the members to support this effort.
However, she said that in order to support the PDL under
Medicaid AARP believes the members should reject HB 543. The
intent of this bill is to slow down the PDL process and if
successful, eliminate it as tool for the Medicaid program. She
explained that the pharmacy companies will say there needs to be
more time in sharing their opinions with the P&T Committee that
develops the PDL. Ms. Lucas said that AARP believes the PDL is
organized properly. It uses evidence based upon scientific
research for decision-making, not the latest marketing pitches.
Physicians and the public hear enough from pharmacy companies
everyday, she added. She stated that the PDL belongs to the
people, not the pharmaceutical companies.
TAPE 04-30, SIDE B
Number 2344
MS. LUCAS urged the members to vote no on HB 543.
REPRESENTATIVE GATTO asked how HB 543 would slow down the PDL
process.
Number 2299
MARIE DARLIN, Coordinator, Capital City Task Force, AARP Alaska,
testified in opposition of HB 543 and answered questions from
the members. She told the members that the transitional
provisions in HB 543 will slow down the implementation of the
PDL. The department has already indicated that there will be
more time spent reviewing psychotropic drugs to ensure that the
first part of the PDL is working. Ms. Darlin rephrased an
earlier statement made by Ms. Lucas by saying that the bill does
not do anything to help implement the PDL. It is for that
reason that AARP does not see a need for the bill, she
explained. She pointed out that this bill only addresses
Medicaid recipients. Those with health insurance already know
that insurance companies already use PDLs. Ms. Darlin said she
knows that one of the highest costs of health care is
prescription drugs and the use of a PDL is an effort to save
money. However, she believes HB 543 is more restrictive than
what the PDL was intended. She said that AARP, as a consumer
organization, is interested in PDLs so its members can become
more aware of what a PDL will tell them. The members will use
the list to help them when making decisions.
Number 2136
REPRESENTATIVE SEATON said he believes that what Ms. Darlin is
referring to is on page 1, lines [5 and 10], which says:
(a) If the department undertakes a cost containment
measure under this chapter that involves a preferred
drug list or limitation of medical assistance coverage
for a drug, the department shall adopt regulations to
the preferred drug list or the limitation of coverage
before the list or limitation maybe implemented.
REPRESENTATIVE SEATON commented that the listed criteria must be
met before a PDL could be implemented. He pointed to the third
item under that criteria [on page 2, lines 2 through 4] which
reads as follows:
(3) an appeal process for a person who is affected by
a decision of the department to place or not to place
a drug on the preferred drug list or to limit medical
assistance coverage for a drug; and
REPRESENTATIVE SEATON pointed out that this appeals process is
not currently in place. He said as he reads the bill, before a
PDL could be implemented there would have to be a
reauthorization of the PDL with the appeals process in place.
Representative Seaton surmised that there would not be time to
reauthorize a new list because the Senior Care list does not
have the appeals process in place. He told the members that he
will offer an amendment to eliminate that section.
Number 2081
CHAIR WILSON explained that all this language does is provide
for an appeals process for an individual who has been denied a
prescription drug. She commented that all HB 543 does is place
the process in law. Most of this plan has already been done by
the department in the last six weeks.
REPRESENTATIVE SEATON responded that he understands the
intention, but he said he believes (3) [on page 2, lines 2
through 4] is under [AS 47.07] which is the statute that covers
the construction of a PDL.
CHAIR WILSON replied the PDL is already in place.
REPRESENTATIVE SEATON said that this is a new PDL. The only PDL
that is currently in place is under the Senior Care bill, he
explained.
CHAIR WILSON responded that the PDL is all one in the same.
Number 2042
REPRESENTATIVE SEATON said he believes that if the department is
required to have regulations for the construction of a PDL, then
it provides that the drug companies have an appeals process if a
drug is not on the PDL. In response to Chair Wilson's comment
that it is a person who has the right to appeal, not the drug
companies, Representative Seaton said this is not a natural
person, "a person" can mean a corporation. The language does
not refer to a patient, he emphasized. Representative Seaton
reiterated that he believes this language would require the
reconstruction of a new PDL because the appeals process was not
in place while the department was doing the Senior Care PDL. He
summarized that he believes that is the root of some of the
concerns that are coming forward.
CHAIR WILSON told the members that when the Legislative Legal
and Research Services attorney wrote this legislation she was
advised that the bill was patterned after other committee
processes.
Number 1961
REPRESENTATIVE CISSNA commented that she would like to hear from
the department on Representative Gatto's question.
REPRESENTATIVE GATTO asked how the Medicaid claim process works.
MR. PEEPLES explained a Medicaid patient would go to the doctor,
get a prescription, go to the pharmacy to get it filled, the
pharmacist would contact First Health Services Corporation, and
fair, quick feedback would come back. The feedback would be
something like accepted, not accepted, and payment status, et
cetera, he said. The patient or Medicaid recipient does not get
reimbursed for the prescription. The payment goes from the
state to First Health Services Corporation to the pharmacy, he
said.
REPRESENTATIVE GATTO asked if there is a PDL in place at the
moment.
MR. PEEPLES responded that there is a PDL. The committee has
reviewed 14 drug classes and the department will begin
implementation on May 21 on the first set of these classes
through the 60-day trial education process. After that 60 days,
then a harder denial process begins if a prescription comes in
for a drug not on the PDL, Mr. Peeples explained. There will
need to be a "medically necessary" notation on the prescription,
he said.
Number 1842
REPRESENTATIVE GATTO surmised that as of today a physician does
not have to look at a PDL before writing a prescription. He
asked Mr. Peeples if he believes HB 543 delays phase I of the
implementation of the PDL.
MR. PEEPLES responded that he does not believe this bill delays
phase I. What it will do is prevent the department from doing
any management of a drug on the PDL. There would be no long-
term incentive on the part of the prescribing community to
participate on the PDL. The physicians would automatically over
ride the preferred drug list. He told the members that other
states have experienced 50 percent participation. That kind of
impact over 18 months would mean that the department would not
be realizing the $20 million savings, he said. There would be a
projected $10 million loss on that projected savings and there
would be a creeping up effect due to inflation and declining
participation in writing against the PDL by practicing
physicians.
CHAIR WILSON asked how this bill would change when the
department plans to put a PDL in place.
Number 1748
MR. PEEPLES replied that the department will have to adopt
regulations which will take some time.
CHAIR WILSON commented that she thought the department already
had regulations in place.
MR. PEEPLES responded that the department currently has
regulations and authorization in statute to move to the
preauthorization PDL system. This is what the department is
doing now. He told the members that he believes this bill would
require the department to codify in regulations everything that
has been adopted as operating procedures by the committee. He
emphasized that establishing regulations is a long drawn out
process.
CHAIR WILSON asked if the department wants to proceed with this
through regulations.
MR. PEEPLES replied that regulations bind the committee to
respond to different changes. He explained that not being able
to manage any drug on the PDL limits the department's ability to
pursue cost-containment.
Number 1703
CHAIR WILSON asked how other states have done this.
MR. PEEPLES said other states have established what can be done
through statute and regulation, just as the department has
obtained authority to proceed. He emphasized that other states
have not codified their P&T Committees and regulations.
CHAIR WILSON asked for clarification that most states have a PDL
in place and of those the majority have not done it through
regulation. It has been accomplished through [standard
operating procedures] so the rules can be easily changed.
MR. PEEPLES responded that he has not done a complete review of
each state and could not answer that question. However, he said
he understands that most states have adopted PDLs through
standard operating procedures.
CHAIR WILSON said she is concerned when rules can be easily
changed. She asked if the department normally adopt regulations
to implement programs.
Number 1642
MR. PEEPLES said yes. The department has a lot of regulations
in and around the Medicaid program; however, the operation of
the P&T advisory committee has occurred through published
operating procedures. He commented that there have been some
changes based upon concerns that have been raised. Mr. Peeples
told the members if all of this was set up in regulations to
change, modify, and improve this process it would be a
elaborate, expensive process.
CHAIR WILSON asked if this is the reason other states have taken
two years to accomplish what the department has accomplished in
six months.
MR. PEEPLES replied no. He explained that the department has
taken advantage of what other states have already done and
adapted it to suit Alaska. The department has emulated a lot of
the processes and used much of the analysis that has been done
on PDLs with respect to therapeutic equivalents. Mr. Peeples
said the department has been using First Health Services
Corporation on much of this, but this week an intergovernmental
agreement was signed with the [Oregon Health and Science
University] to also provide some analysis to supplement what has
been provided by First Health Services Corporation. He told the
members that this will likely be tweaked based upon comments and
the lessons learned. Mr. Peeples reiterated that to do this
process in regulations is expensive and difficult and that is
the primary reason the department believes this bill is
unnecessary. Everything in the HB 543 is already being done, he
stated.
Number 1537
REPRESENTATIVE SEATON read the following portions of the HB 543
[page 1, lines 5 through page 2, lines 4]:
If the department undertakes a cost containment
measure under this chapter that involves a preferred
drug list ... the department shall adopt regulations
relating to the preferred drug list ... before the
list or limitation may be implemented. The
regulations must include ... (1) standards ... (2) an
opportunity for public comment ...(3) an appeal
process ... to place or not place a drug on the
preferred drug list ...
REPRESENTATIVE SEATON asked Mr. Peeples if those three standards
have been in place during the construction of the current PDL
for Senior Care.
MR. PEEPLES addressed (1) by saying that the department has
standards for evaluating the therapeutic equivalents of the
drugs. There is a list of steps that the contractor undertakes
including reviewing the Food and Drug Administration (FDA)
status when the drug went on the market, contra-indications, and
dosage. He explained that (2) is addressed by advertising all
of the meetings, and at the beginning of each meeting there is
an allocated time for public comment. The comment time for each
testifier is limited to 5 minutes to ensure that there is
adequate time to address the agenda. Mr. Peeples said (3) which
is the appeals process is handled through the department's
Division of Health Care Service. There is an established
appeals process all the way up to a fair hearing where the final
determination goes to the commissioner. All these elements are
already in place he summarized.
Number 1442
CHAIR WILSON asked how much has already occurred.
MR. PEEPLES responded that all of it has occurred. The appeals
process is for providers and recipient. The committee has not
dealt with that because there is already an established process
within the department that is long-standing and established in
regulations.
Number 1386
JEAN MISCHEL, Attorney, Legislative Legal and Research Services,
Legislative Affairs Agency, Alaska State Legislature, as drafter
of HB 543 she answered questions from the committee. She
explained that HB 543, Version H, provides for cost-containment
measures within the Department of Health and Social Services,
that specifies the authorization to adopt a preferred drug list.
The bill that passed last session did not specify cost-
containment measures, but did give broad authority to the
department to adopted cost-containment measures. This bill
provides not only specific authority for a preferred drug list,
but sets out specific standards that must be met in adopting a
PDL, she said. It calls for the department to adopt regulations
and standards for placing or not placing a drug on the PDL or
otherwise limiting medical assistance for a drug.
CHAIR WILSON asked Ms. Mischel if she looked at the way other
states have accomplished this.
MS. MISCHEL replied that she did look at other states and found
that the language in the bill is fairly standard language. She
explained that Alaska is unique in that it does not have
specific statutory requirements for state agencies. She
reiterated that many states already have PDLs in place and the
language used to implement it is similar to this bill. The
language is also somewhat based on federal requirements in terms
of establishing a PDL. Ms. Mischel told the members that it was
a policy decision to define the PDL broadly as other states have
a narrower definition. It was decided that a broad definition
of the PDL would give the Department of Health and Social
Services some latitude.
Number 1205
MS. MISCHEL explained that the bill specifies what kind of
public involvement must take place, an appeals process, and an
over ride of the cost-containment measure. She told the members
that the over ride provision is part of a federal mandate for
matching federal funds. She added that when the department
contracts services, as it has done with First Health Services
Corporation, it must be done in compliance with the state
procurement code.
MS. MISCHEL said the bill also defines and requires that the
department set up a prescription review advisory committee,
which is also a federal mandate. In Section 2 of the bill under
Transition Provisions, if the department decides to make the
advisory committee membership smaller it does have that latitude
as long as the membership meets the requirements set out in the
bill. She told the members that the committee would assist in
setting the standards in determining whether a drug was included
in the PDL. After reviewing the minutes of the existing
committee she said she found it difficult to determine what
standards were being applied in reviewing a drug and
establishing the PDL. There was some concern about the
proprietary cost information being publicized, she added. It
appeared that the committee is currently functioning very
heavily on the recommendations of the contractor. In summary,
she said she could not find any standards available in her
review of public documentation. This bill would ensure those
standards are reviewed before being adopted.
MS. MISCHEL told the members that this bill provides for a delay
in the review of all mental health drugs. The bill says that
the department could not place a mental health drug on a cost-
containment list or PDL before January 1, 2005. This would
provide time for the department to set up regulations with
respect to the PDL. There is a delay in the effective date of
the bill up to a six months period so the department's work is
allowed to continue as it is reviewing and adopting regulations
consistent with the bill, she said.
Number 0964
REPRESENTATIVE COGHILL referred to page 3, lines 12 and 13,
which refers to 42 U.S.C. 1396r-8(d), and asked if the members
could be provided a copy of it.
Number 0905
MS. MISCHEL replied that she would provide copies to the
committee. Subsections (A) and (B) [page 3, lines 6 through 11]
are modeled after 42 U.S.C. 1396r-8(d), she added.
CHAIR WILSON confirmed that 42 U.S.C. 1396r-8(d) is a federal
statute and is required in order to get federal funding.
REPRESENTATIVE CISSNA asked if Ms. Mischel could provide a line-
by-line review of language that is required by the federal
government in order to obtain funding.
CHAIR WILSON told the members that Ms. Mischel did not have any
advance notice that she would be testifying today.
MS. MISCHEL explained that there are statutory, regulatory, and
constitutional law which may apply. The public hearing process
is part of a due process right.
Number 0779
CHAIR WILSON commented that she believes some states had to
start the entire process over again because it was found that
the request for proposals (RFP) process was not adhered to. She
asked if Ms. Mischel believes Alaska is in jeopardy on this
point.
MS. MISCHEL replied that RFPs are part of state law. That is
not a federal question, she added. It appears that the state
procurement code would apply to this contract and therefore
there was a bidding process, Ms. Mischel said. If someone
challenged that the contract was inappropriately awarded it
could invalidate the process, she commented.
MS. MISCHEL said that she does not believe there is a [federal]
requirement for an appeals process, but pointed out if one is
not in place the courts would have to decide on any objection to
the placement or procedure. In that regard, the appeals process
helps alleviate any due process complaints, she added.
Number 0646
REPRESENTATIVE CISSNA asked for clarification that on page 2,
line 2, there needs to be an administrative appeals process in
place. She asked if that process is currently in place under
existing law.
MS. MISCHEL replied that arguably there is an administrative
process in place under the Administrative Procedures Act, but
there still needs to be a determination that this is a final
administrative decision. The question that remains is if the
entire adoption of the PDL would be the final decision or
whether each decision to place each drug on the list is the
final decision. There are regulations in place that would
encompass these decisions, she said.
Number 0559
REPRESENTATIVE SEATON referred to the language on page 2, lines
2 through 4, where it refers to "a person" and commented that it
has been read in two different ways. One way is that "a person"
is a patient; however, the way he reads it is "a person", when
talking about placing a drug on the list, is actually a
pharmaceutical corporation.
MS. MISCHEL replied that the language is deliberately drafted
with broad language to ensure that a corporation could take
advantage of the appeals process.
REPRESENTATIVE SEATON clarified that this language would ensure
that a drug company could appeal if its drug were not placed on
the PDL.
MS. MISCHEL replied that is correct.
CHAIR WILSON stated that was not her intention when requesting
the bill be drafted.
MS. MISCHEL proceeded in discussing federally required language,
and referred to subsection (4) on page 2, starting at line 5
[through 10]. She told the members that it is her opinion that
this language is required to obtain federal matching funds. She
commented that subsection(b), page 2, lines 11 through 13, which
refers to a procurement code, is also federally mandated. While
the specific language is not required, some kind of procurement
code is required to be in place.
MS. MISCHEL referred to subsection (c)(3), page 2, lines 25
through 27, and clarified that the language is broader than
federal requirements.
Number 0261
CHAIR WILSON asked for clarification that subsection (c)(3) is
federally required.
MS. MISCHEL agreed. Subsection (d), on page 2, lines 28 through
31 [and page 3, line 1] is all state law, she commented. All
the definitions on page 3, starting on line 2, is Legislative
Legal and Research Services best suggested language on what is
federally intended. Ms. Mischel reminded the members that the
term "preferred drug list" is more broadly defined than the
federal use of the terms.
CHAIR WILSON asked if that definition were narrowed would it be
easier for the department to accomplish cost-containment through
the PDL. If not, what are the ramification of narrowing the
definition.
MS. MISCHEL replied that narrowing the definition would restrict
the discretion of the department.
CHAIR WILSON commented that is not the committee's intent. It
may be better to leave the definition so it is broadly
interpreted.
MS. MISCHEL said under AS 47.07.036 the department currently has
broad authority. This bill restricts the department's cost-
containment authority with respect to PDL. She commented that
if the members restrict the definition of PDL there could be a
legislative intent question; however, by leaving the definition
broad it gives the department more discretion.
Number 0073
REPRESENTATIVE SEATON read subsection (3)(C), on page 3, line 18
and 19, on preferred drug list as follows:
(C) for which the department will not require medical
justification by the prescribe...
REPRESENTATIVE SEATON suggested that subsection actually goes
counter to what the department is trying to accomplish. Doesn't
this prevent the physician from writing "medially necessary on
the prescription", he asked.
Number 0031
MS. MISCHEL replied no. The medical justification in subsection
(4) on page 2, [lines 5 through 10], is an exception to the
medical assistance restriction, she said. The subsection that
Representative Seaton is referring to says that drugs on the
medical drug list do not require that medical justification.
The drugs that are prescribed in paragraph (4) are not on the
PDL, she pointed out. The drugs prescribed under (3)(C) are on
the PDL.
TAPE 04-31, SIDE A
Number 0025
REPRESENTATIVE CISSNA asked what the impact would be if
subsection (3) language on page 3 were removed.
MS. MISCHEL asked for clarification that Representative Cissna
is asking what the impact would be if the entire definition of
"preferred drug list" were removed.
REPRESENTATIVE CISSNA restated her question by saying that if it
were her goal to help the department do a good job in putting in
a PDL, what portion of subsection (3) could be deleted and still
accomplish that goal.
MS. MISCHEL responded that PDL could be defined in a number of
different ways. The definition in this bill is intended to be
inclusive of any PDL for medical assistance coverage. If the
committee restricts that definition or simplifies it, it may
create some ambiguity about what authority the department has
with respect to restricting coverage for prescription drugs.
She suggested that the department address this point.
Number 0227
REPRESENTATIVE CISSNA asked if she misunderstood an earlier
comment made by Ms. Mischel that it would be possible to narrow
the scope of the department's ability to implement a PDL.
Number 0301
MS. MISCHEL suggested that it may be helpful to look at Section
1 of the bill. The authority for the regulations required in
this bill only apply if the department undertakes a cost-
containment measure that involves a PDL or the limitation of
medical assistance for a drug. She pointed out that that
language is broad. Anytime the department undertakes some
action to limit medical assistance for a drug the standards and
regulations would have to be in place, she explained. The
decision to do that would have to go through an advisory
committee.
MS. MISCHEL told the members that the definition for a PDL is
Legislative Legal and Research Services best guess at what this
PDL might look like. The definition is not intended to limit
the department; it is meant to give the department the authority
needed to design a cost-containment measure that makes sense.
REPRESENTATIVE CISSNA said she would like to hear from the
department on this issue. She added that she would like to hear
of any other federally mandated language.
Number 0422
REPRESENTATIVE SEATON commented that Ms. Mischel said that the
standards would have to be adopted by the Prescription Drug
Advisory Committee. If this bill passes by the first of May, he
asked what the timeline would be for a PDL to be implemented
under this bill.
MS. MISCHEL summarized that the normal process is a 30-day
public notice and hearing. The notice is mandatory, but the
hearing is not. The department would be free to adopt the
regulations as written; however, in this bill the Prescription
Drug Advisory Committee is required to participate in reviewing
the regulations, so that could create some delay in reviewing
and adopting regulations. She estimated that 60 days is
probably realistic. Ms. Mischel added that the department does
not normally move that quickly, these are technical issues, and
the regulations could go out for public comment more than once.
The six-month timeframe in the bill was thought to be a
realistic timeframe, she said.
REPRESENTATIVE SEATON said as he understands the bill, after the
clarified regulations are in place, a drug list must be
constructed. He asked if he understands correctly that this
bill would require that the standards that have been adopted
would then have to be applied to each of the drugs on the PDL.
Number 0622
MS. MISCHEL replied yes. That is her interpretation of the
bill. Public notice must be given, usually 30 days, public
testimony is taken, a day or two to review the evidence, and the
committee could make a decision, she added. Ms. Mischel pointed
out that the appeal process could delay the ultimate finality of
the PDL. This is only speculation, which is true of any
administrative decision.
CHAIR WILSON asked if the committee could adopt what has already
done, or would the process have to start all over again.
MS. MISCHEL agreed that the committee could adopt what has been
done. It would be necessary to adopt the standards and
procedures in regulations that would be consistent with this
bill, she explained. She said it would be necessary to hold
additional public hearings, but if the decisions were consistent
with regulation there should not be much of a delay.
CHAIR WILSON emphasized that Ms. Mischel agrees the PDL could be
implemented within the same timeframe.
Number 0777
REPRESENTATIVE SEATON clarified that would be true assuming that
the standards that are adopted within regulation are exactly the
same standards that were used to determine the current PDL. He
pointed out that any difference in the two standards would
require a review of each drug and a public hearing based on the
standards that were adopted under regulation.
MS. MISCHEL replied yes. She said even if the standards are
identical, there would still need to be a review and an
additional public hearing.
CHAIR WILSON commented that this is a policy call. Currently
there is nothing in statute, so the department can do whatever
it wishes, she explained.
Number 0878
REPRESENTATIVE CISSNA asked for the department to address this
point.
Number 0898
MR. PEEPLES noted that there have been quite a few comments as
to federal requirements for state eligibility for federally
matching funds. All of the federal requirements have already
been addressed by the department. The approval process to do
this program is submitted through the federal Center for
Medicaid Services (CMS). It was necessary for the department to
submit a plan amendment before it could proceed in the cost-
containment steps being done now. This has been done and
approved, he stated. As part of the plan amendment the
department had to provide CMS with its contract to do this. He
pointed out that has been done. He reiterated that all the
criteria required by the federal government has already been
approved.
MR. PEEPLES told the members that all procurement procedures
have been in accordance with AS 36.30, the State Procurement
Act, and have been signed off by the state procurement officer.
He summarized that all the basic criteria has been met.
Number 0972
MR. PEEPLES commented on the PDL discussions by saying that
there are some problems with this. The definition of a
restrictive formulary is a problem because the state cannot
offer a restrictive formulary under the federal programs. The
department will provide a PDL which offers therapeutic
equivalent choices, plus a means for approval outside of the
PDL.
Number 1024
ROD BETIT, President, Alaska State Hospital and Nursing Home
Association (ASHNHA), testified in support of HB 543. He told
the members that ASHNHA supports PDLs in the Medicaid program
which is a good tool and is used widely in commercial plans.
The association does not see a problem with the department
moving forward with this plan.
MR. BETIT commented that what needs to be determined is how much
the committee wants in statute and how much in regulation.
There needs to be some assurances through regulation that there
is a predictability to the process with respect to the way the
PDL is managed and changed. He said he sees the tug-of-war
there because of his past experience. There are a lot of
reasons why some things are not put in statute and why an agency
is given a lot of discretion. Mr. Betit explained that Medicaid
has so many areas of complexities and choices for someone to
drive a wedge and create conflict. It is for that reason it is
probably not a good idea to put something in statute where it is
so hard to change it, he commented. So many interpretations can
then flow from the statute in terms of what people believe it
means, Mr. Betit added. The word "person" is a good example of
that.
MR. BETIT told the members that he does not see anything in this
bill that is required to run the PDL, as Mr. Peeples pointed
out. The legislature created Medicaid and assigned it to a
department to manage, and the government then signs a document
declaring it the single state governing agency for the state.
This is all done through a contract with the federal and state
governments, he added. That is where all negotiations occur and
that is what the federal government looks for in terms of
documentation to make sure everything is in order, he explained.
The federal government will not be looking at Alaska's statutes,
Mr. Betit told the members.
Number 1134
MR. BETIT said another important issue to look at is the
possibility of allowing the department the authority to exclude
prior authorization beyond writing "medically necessary" upon
the prescription itself. If this bill would preclude that from
being possible it could be a problem, he said. There are a lot
of reasons why it is important to look at medically necessary
when written on a prescription. It is essential to determine
that it is appropriate. The department has taken a very slow
course in addressing that point, Mr. Betit commented. There may
be a time when the department may need to address it if it is
found that in certain areas and physicians in the state, when
compared to their peers, appear to be out of the "bell curve."
It may be necessary to impose additional requirements. Mr.
Betit said he does not believe limiting the department's
flexibility is a good thing.
MR. BETIT told the members that while he doubts the department
would do anything on mental health drugs before January of 2005,
if the committee doesn't want anything to happen there until
then the fair trade would be to provide the department with the
difference it had hoped to save so that the loss in available
funding does not compromise other services the department is
trying provide.
Number 1208
MR. BETIT told the members that discerning standards relative to
which drugs are in and which drugs are out is difficult. He
said this is a PDL not a formulary. A formulary means that is
all you have, there is no way off of it, he said. The
discerning standards question is a good one, he commented. He
told the members that he believes Alaska's move to connect with
the [Oregon Health and Science University] is a good move. The
program there is being used by more than 16 states and has a lot
of research behind it. It is widely accepted across the country
now, and that brings a lot of credibility to any choices being
made by the Alaska Medicaid Program.
MR. BETIT summarized that he believes it is important to be
concerned about a PDL, where it is going, and who would be
impacted by it. He told the members that from what he has seen
thus far there is a real conscience effort by the department to
manage it in a responsible way and move that program forward
appropriately. The department has shown that there will be many
opportunities to see how this works and to speak to any concerns
that may occur, and come back later with any program changes in
order to fix something if it is felt that the department is not
on the right track, he said.
Number 1279
ALEX MALTER, MD, President, Alaska State Medical Association,
testified in support of HB 543. He read the following testimony
into the record: [original punctuation provided]
Representative Wilson, Committee Members: my name is
Alex Malter. I am an internist in private practice
here in Juneau, Alaska and have the privilege of
representing the Alaska State Medical Association as
this year's current president.
I am here today to express ASMA's support of HB 543.
The Association submitted written testimony to the
Committee earlier this month. Hopefully, you all have
had a chance to look at it. I would like to take a
couple of minutes to elaborate on a few key points of
that testimony.
ASMA understands the budgetary stresses involved with
the Medicaid program and is supportive of the
development of mechanisms to help save money. The
Preferred Drug List is one such appropriate mechanism.
Through time and education, it should encourage
physicians to prescribe less expensive,
therapeutically equivalent drugs and this is a worthy
goal.
Since the PDL's inception, however, ASMA has been
concerned that economics could get in the way of good
patient care, and that the process of adopting such a
program must be appropriate. We have sent letters to
Commissioner Gilbertson, Director Peeples, and the
Special House Finance Subcommittee expressing our
reservations. The Department has been quite
responsive and on March 19, 2004 its ad-hoc P&T
committee adopted ASMA's proposal to streamline the
"medically necessary" override criteria.
Number 1379
ASMA supports HB 543 because it codifies the solution
to some of ASMA's other concerns regarding the
development of the PDL: First, the bill requires the
PDL to be implemented via the proscribed process for
adopting major policy changes-by the formal regulation
adoption process called for in the Administrative
Procedure Act; and second, the bill puts off
implementing the PDL for drugs used to treat mental
illnesses until after January 1, 2005.
As noted, we also support a process by which
physicians can override the PDL by writing "medically
necessary" on a script if a non-preferred drug would
be more appropriate for a particular patient. Indeed,
ASMA appreciates the approach taken by Medicaid's ad-
hoc committee to simplify the override mechanism.
DR. MALTER said he thinks the committee has done a very good
job. He told the members that he has had a chance to sit in on
the committee meetings and was impressed with their level of
professionalism and expertise. Dr. Malter continued reading his
statement into the record:
Mr. Peeples alluded to a valid concern; however, that
once doctors realize the "medical necessity" criteria
has been memorialized into law, they will be less
motivated to change their behaviors. If after two to
three years the Division of Health Care Services finds
this provision substantially weakens the program, we
would support reconsidering this provision of the bill
down the line.
In summary, ASMA supports HB 543 and urges the
Committee to support the bill as well. Please keep in
mind that physicians do not have an income stake in
this issue. Rather, we are primarily concerned that
Alaskan patients receive high-quality health care, and
that as many Alaskans as possible have access to that
care. I would be happy to answer any questions.
Thank you for your attention.
Number 1448
REPRESENTATIVE SEATON commented that the department told the
members that the delay of implementation of a PDL would mean
that the $20 million savings that has been built into the budget
would have to be absorbed either through reduction of services
or reduced payment rates. He asked Dr. Malter if ASMA sees that
as a problem or has any other solutions in where to find these
funds if it is not saved through the PDL.
DR. MALTER replied that he has not had the opportunity to think
that through. Presumably there is a valid concern that a lot of
time is being spent looking at the specific language of the
potential legislation, he said. As a layperson it was his
impression that this could slow down the process. That would be
unfortunate if folks had to come off of the Medicaid roles if it
prolonged the process. He said he believes that if the
legislature enacts legislation it will be done in such as way
that it will slow the department down as little as possible.
Number 1568
VERNER STILLNER, M.D., Psychiatrist, Bartlett Regional Hospital;
Legislative Representative, Alaska Psychiatric Association,
testified on HB 543 and answered questions from the members. He
told the members that those in the mental health community are
experiencing cuts in community health services,
hospitalizations, transportation for the mentally ill, and
facilities that treat them. This bill is very important, he
stated. Medications for the fragile mentally ill and the
Medicaid population are often a life saver, and for that reason
this bill appropriately asks for a regulatory process that makes
this a more rational and transparent system. Dr. Stillner said
his research, through the American Psychiatric Association,
found that the states that have implemented PDLs have gone
through the regulatory process, not the procedural process as
has been suggested. He said he believes the regulatory process
provides some safeguards in spite of the disadvantages that may
occur.
DR. STILLNER told the members that there are many models
throughout the country including those that completely exempt
psychotropic drugs from the PDL process because it is thought
that it would not save the Medicaid budget any money. The
result was that of cost shifting to emergency room visits,
hospitalization, nursing homes, and correctional facilities. He
suggested the exemptions be provided on anti-psychotics, anti-
depressants, anti-anxiety, and mood stabilizers that are used
for bipolar disorders or what was once called manic-depressive
illness, and attention deficit disorder (ADHD).
Number 1662
DR. STILLNER suggested a minor change on page 2, line 14 through
19, where the makeup of the Prescription Drug Review Advisory
Committee is delineated. He suggested the committee have two
public members appointed to the committee. He also recommends
that the members consider changing the makeup of the committee
to more physician members and fewer pharmacists since physicians
are the main prescribers in Alaska.
Number 1735
DR. STILLNER explained that he believes the medically necessary
component of the bill is important because it allows a physician
to grandfather a medication in. For example, one young man who
is schizophrenic is currently employed and has been out of the
hospital for about nine years. Prior to that time he had been
hospitalized five times, both in state and out of state. He
told the members that he would like to continue to keep this
patient on the prescription he is currently on. Should those
medications not be on the PDL, the override provision would
allow him to continue the present treatment. This provision is
a very valuable tool for a better clinical judgment than one
that can be made in a pharmacy or the Juneau Medicaid office, he
stated. There are safety and clinical effectiveness issues that
should prevail, when for instance, a clinician with five years
of experience with an individual has a better understanding of
what is necessary for treatment.
DR. STILLNER summarized that he believes that postponing the
inclusion of psychotropic drugs until March 2005 is a good idea.
He said he wishes the date were 2006. Dr. Stillner told the
members he supports HB 543 in its current form.
Number 1800
REPRESENTATIVE CISSNA commented that it is her understanding
that the department is planning on delaying the inclusion of
Psychotropic drugs already.
DR. STILLNER replied that was his impression also; however, he
said he understands that the May meeting may look at anti-
anxiety, anti-depressants, and ADHD drugs. So three of the five
psychotropic drugs he mentioned will be reviewed.
REPRESENTATIVE SEATON asked for clarification on Dr. Stillner's
comment with respect to the PDL and cost shifting.
Number 1852
DR. STILLNER commented that it is a very appealing notion to
save $20 million from a budget. He suggested that taking money
away from one area, actually shifts the expense to another area.
He told the members that it has been found to be true in
Michigan, New Hampshire, and other states. The ultimate cost
savings to Medicaid may be non-existent, he said. In some
states the PDLs have cut Medicaid expenditures by 15 percent.
However, in those states there has been an increased amount of
utilization of the emergency room, hospitals, nursing homes, and
correctional facilities because people have not been cared for
properly. Dr. Stillner claimed that while the PDL was
implemented with good intentions, it has the potential of cost
shifting to other parts of the Medicaid budget. He emphasized
that his comments are only with respect to psychotropic
medications.
Number 1895
REPRESENTATIVE SEATON responded that he believes the only way
cost shifting could occur is if the team of 20 doctors plus
other professionals on the committee were not effective in
identifying the most effective drugs for the PDL. He pointed
out that the amount of drugs prescribed are not being limited.
Representative Seaton asked Dr. Stillner if there is some other
element that he is missing.
DR. STILLNER commented that it is an appealing notion to say
which drug is the most effective, but most of the drugs on the
market have proven to be more effective than the placebo. He
said that is how the FDA licenses the drugs. There is not a lot
of data out there comparing one drug versus another drug, he
added. It is not always an easy call to say which drug is most
effective. Dr. Stillner explained that one drug could be very
effective for an individual, and another drug that is less
expensive could be more effective for another individual. There
is a variability there. That is the reason he likes the
discretion of a medically necessary over ride, Dr. Stillner
stated.
Number 2022
The committee took an at-ease from 5:25 p.m. to 5:31 p.m.
Number 2038
JOE FULLER, Senior Manager, State Government Affairs,
AstraZeneca Pharmaceuticals, L.P., testified in support of HB
543 and answered questions from the members. He commented that
HB 543 will authorize two primary provisions. The first would
be to put regulations in place for the development of the PDL
and the second, is to allow a simple hassle-free over ride
provision for prescribers. Mr. Fuller commented that the
committee is aware of the fact that PDLs are in place in many
states around the country. Every state that he is aware of has
publicly debated the merits of PDLs and has either passed
statutes or adopted regulations regarding its development and
implementation. Mr. Fuller told the members that regulations
will ensure that there is adequate due process in the
development of PDLs, and that it is an open public and
transparent process. This is good government that Alaskans
including AARP and seniors affected by the PDL should support,
he added. He said that his experience with the current process
is that it needs improvement. It is an evolving process because
there is no regulation in place or road map to follow, it is
always changing, he suggested. Mr. Fuller said the process is
getting better, but by adopting regulations the state will have
an improved process in place.
Number 2120
MR. FULLER explained that the current public testimony allowed
for a manufacturer is five minutes to present any clinical data,
regardless of the number of drugs that are being reviewed. He
said, for instance, if his company has three or four drugs up
for review he is given on 45 seconds per drug to provide input
to the committee members.
MR. FULLER said that while the company has the opportunity to
submit clinical data, it is not [necessarily provided] to the
P&T Committee members, it is to First Health Services
Corporation in Arlington, Virginia. First Health Services
Corporation synthesizes all the information and passes it out to
the committee members to make a decision. Mr. Fuller told the
members that he does not have access to the information that is
provided to the P&T Committee members. There is no other state
in the nation that has a process similar to the one in Alaska,
he commented.
Number 2175
MR. FULLER told the members that in Oregon and Washington there
is much more time taken in the process in reviewing the classes
of drugs. It is taken much more seriously. In Oregon, for
instance, there is a cardiac subcommittee that looks at the
beta-blocker class and there are two to three meetings before
there is consensus on which drug is the preferred drug, he
summarized. There is also adequate public testimony,
opportunities for manufacturers, and other stakeholders. Mr.
Fuller suggested that Alaska look at Oregon's process as a model
that should be consider.
Number 2204
MR. FULLER agreed that the over ride provision is good one. It
ensures that the final decision in terms of what drug is
dispensed is made by the physician. This is the same language
that is in the Senior Care bill which was passed unanimously by
both houses and signed by the governor.
MR. FULLER commented that it is news to him that the state's
plan to CMS has been approved. He questioned whether there was
a request for proposals (RFP) put out to open bid when First
Health Services Corporation received its contract. Mr. Fuller
told the committee that to his knowledge that was never done,
and the reason he mentions this is that the committee's legal
advisor commented that there may be some risk associated with
that. He told the members that both the states of Nevada and
Hawaii had to stop its processes for that very reason.
MR. FULLER urged the committee's support of HB 543 because it
will add clarity and adequate due process before the
implementation of the PDL.
Number 2249
REPRESENTATIVE GATTO asked Mr. Fuller if the state would not use
regulations in implementing the PDL.
MR. FULLER replied that the only regulation that was passed was
signed by the Lieutenant Governor in January of 2003. It was a
one-liner that states that the Department of Health and Social
Services has the authority to prior authorize drugs. That is
the only regulation in place that allows the department to go
forward with the PDL, he explained.
REPRESENTATIVE GATTO questioned that the existing PDL was
created without regulations by a committee.
MR. FULLER responded that Mr. Peeples could better speak to that
point than he could. He told the members that his discussions
with the commissioner last session left him with the impression
that regulations would be promulgated, as is the case of any
other state he is aware of. The next time he heard that the PDL
was going forward there was a memo that provided a very detailed
process and the committee was already a few months into that
process.
Number 2317
REPRESENTATIVE SEATON referred to [page 2, line 2] which
addresses the appeals process, and asked if every company whose
drug is not on the PDL will appeal the decision.
MR. FULLER replied that he could tell the members how other
states worked. In Oregon, for example, if a drug is not
included in the PDL, there is no opportunity to appeal, but
Oregon reviews each class of drugs every six months. That gives
the company another opportunity to voice issues with its
decision or provide any new clinical data that might be
available. He stated that he believed the appeals process in
the bill was specific to patients or physicians who wished to
appeal the choices the state made.
TAPE 04-31, SIDE B
Number 2326
REPRESENTATIVE SEATON asked Mr. Fuller if he would have any
objection to removing the appeals process from the bill which
could result in every drug manufacturer appealing a decision.
MR. FULLER said speaking for AstraZeneca Pharmaceuticals, L.P.
he would not have a problem with this. If the language were
changed to Alaska patients or providers it would clarify the
intent of that language, he commented.
Number 2276
PAT CARTER, Lobbyist, Glaxo SmithKline, testified on HB 543. He
told the members that he has been to every P&T Committee
meeting. Glaxo SmithKline is not opposed to the implementation
of a PDL, but would like assurances that there will be an open
and fair process. Thus far he believes it has been unsuccessful
in that regard. He has talked to department staff and written
letters to the department, but the procedures that have been
adopted, were adopted very recently. While the procedures may
or may not have been in existence from the beginning, Glaxo
SmithKline did not have access to anything that the P&T
Committee members see, he stated. It is not an open process,
Mr. Carter emphasized. For example, the P&T Committee first met
in October and the procedure was loose, the meeting was held in
a small room, it was teleconferenced to members that were unable
to attend via a speakerphone. People in the room could not hear
and the people trying to listen in via speakerphone could not
hear, there were votes taken, and the votes were not even
counted.
CHAIR WILSON asked if that process has been improved.
Number 2193
MR. CARTER agreed that there have been substantive improvements,
most notably having professional equipment available. He
commented that all public testimony is taken at the beginning of
the meeting. For example, there was one meeting where there
were nine different drug classes that were heard, he said. Mr.
Carter told the members to imagine having nine bills in front of
them, all public testimony on those bills were taken at random
at the beginning of that meeting. He asked if the members
believe that they could make a reasonable decision based upon
the information presented on how to move forward with that piece
of legislation. Mr. Carter told the members that he respects
the P&T Committee members and believes they are trying to do a
good job, but the format that is followed is not one that a
reasonable person could come up with a reasonable decision based
upon the input from the public testimony. Mr. Carter pointed
out that this is not sour grapes from Glaxo SmithKline because
every drug that it has tried to get on the PDL thus far has been
placed on the PDL. He said he's speaking only about the process
because the process is what will ensure that Alaskans are
protected.
Number 2137
MR. CARTER told the members that prior to the last meeting
letters were submitted in a timely fashion to the department
from four of the six pulmonologist in Alaska. He added that he
knows one of the letters came in late, but the other three were
submitted well under the wire. These physicians were told that
those letters would be included in the packet, but when
committee members were asked if they saw the letters it was
found that the letters were not in the packets. Mr. Carter
asked Dave Campana [Pharmacy & Ancillary Services, Division of
Health Care Services, Department of Health and Social Services]
where the letters from the pulmonologists were since pulmonary
drugs were being reviewed. Mr. Carter said he thought the P&T
Committee would want to hear from the those that are using and
dispensing these drugs; however, Mr. Campana told him the
letters were not included in the packets. When asked why, the
response was "just didn't." Mr. Carter told the members that he
believes that is unacceptable. The idea that procedures have
been adopted does not mean very much when the rules change from
meeting to meeting. For example, one meeting may allow five
minutes per drug company, one meeting it is five minutes per
testifier, and the next meeting it is back to five minutes per
drug company again. Mr. Carter pointed out that when there are
a group of individuals as highly educated as the group on the
P&T Committee it seems desirable to give them the information in
front of them to make reasoned decisions. He said he believes
the goal should be to make sure the right medication gets
through to the right patient, then after reaching that goal look
to save money.
MR. CARTER suggested that a better way to conduct the meetings
would be to take testimony per drug class and give testifiers a
reasonable time to present information. This suggestion was
sent to the department via a letter and has thus far been
ignored.
MR. CARTER said that after hearing testimony that there were a
number of states that have moved forward without regulations, he
called his boss, who handles most of the western states. He
told the members that his boss does not know of one state that
has moved forward with a PDL without regulations in place. Mr.
Carter told the members that the process that has been
implemented leaves the state open to huge liability
possibilities if someone has a problem with a drug being denied
because of a lack of regulations and good reasoned due process.
If there is a heart attack or stroke or a psychotropic event
which causes a death, the state could be open to liability
because of that and where are the savings then, he questioned.
MR. CARTER emphasized that he is not trying to stop or slow down
the process, he just wants to see a fair and open process.
Since it is not happening thus far, he believes this bill is a
good step in that direction.
Number 1985
CHAIR WILSON announced that HB 543 will held in committee.
HB 434-NATUROPATHIC MEDICINE
Number 1900
CHAIR WILSON announced that the next order of business would be
HOUSE BILL NO. 434, "An Act relating to the practice of
naturopathic medicine; and providing for an effective date."
The committee took an at-ease from 5:55 p.m. to 6:01 p.m.
Number 1805
REPRESENTATIVE JIM HOLM, Alaska State Legislature, as sponsor of
HB 434, presented the bill and answered questions from the
members. He told the members that he offered HB 434 to ensure
professional safe naturopathic health care for all Alaskans. It
will bring an outdated 17-year-old Alaskan statute on the
practice of naturopathic medicine up to date and in line with
about 14 other states that already have these provisions. It
provides quality health care to Alaskans through continuing
education, requirements, and improved services in the practice
of naturopathic medicine. It addresses the shortages of
physicians in Alaska while providing alternative care and
reducing health care costs to Alaskans. The bill places a
continuing education requirement in statute for naturopathic
physicians of Alaska. It specifies that naturopathic physicians
may perform minor surgery based upon their education, training,
and licensure, he said.
Number 1520
DANIEL YOUNG, ND, LAC, AKANP Legislative Task Force, testified
in support of HB 434, and answered questions from the members.
He provided the following testimony to the committee: [Original
text, but some formatting changes were made]
Chair Wilson and Honorable members of the committee.
Thank you for allowing me to testify on behalf of HB
434. Thank you for staying later to hear this.
HB 434 would allow naturopathic physicians to
prescribe substances that they are trained to use and
to perform minor surgery. You all know the issues
before you. You have a packet with all the
comparisons and it is pretty comprehensive packet. We
have all met with you all on an individual basis and
have plead our case.
By now you have heard from naturopathic doctors and
patients of naturopathic medicine that are in support
of this bill. You have also heard from the medical
doctors, doctors of osteopathic medicine, and even the
pharmacy board. I don't think that you have heard
from patients of allopathic or osteopathic doctors.
Unfortunately, I had a nice conversation with Dr. Alex
Malter the head of the Alaska State Medical
Association in the fall and we had a good discussion.
It is too bad he had to leave to care for a patient
because I think it would have been helpful to have the
two of us here would have been helpful in this issue.
With your permission I would like to direct your
attention briefly to facts:
Fact 1: Education
Naturopathic doctors are trained for general family
practice. We are not trained to be specialists and do
not work in hospital environments, but in out patient
in the trenches.
Naturopathic doctors complete 8 years of higher
education. Some receive more, but it is a minimum of
8 years.
Requirements to enter a naturopathic medical school
are almost identical to that of any other medical
school. I almost went to an allopathic medical school
and was ready to do that.
The curriculum of a naturopathic medical school
compares with allopathic (MD) and osteopathic (DO)
schools, in intensity and comprehensiveness.
The clinical studies in naturopathic medical school
also compare to allopathic (MD) and osteopathic (DO)
schools.
Outpatient based clerkships prepare us for how we
practice.
In your packets you can see charts that compare our
education with medical schools.
There has also been expert unbiased testimony by Dr.
Clyde Jenson in previous committee meetings and with
the other body. He has a unique position to comment
on the education between these three areas. He has
been a president or administrator of allopathic (MD),
osteopathic (DO) and (ND) medical schools for long
periods of time and is quite versed to attest to the
nature of their curriculums. Their first two years
are almost identical. That is when you learn your
sciences. That is anatomy, physiology, pharmacology,
clinical physical diagnosis, and the lab diagnosis, x-
ray, radiology, things like that.
The second stage is the clinical sciences that are
learned in the third and fourth years. At this time
naturopathic physicians go through broad based
training. They work in manipulation, botanical
medicine, nutrition, dietetics, homeopathy, and some
pharmalogical therapeutics, though not as extensive as
a pharmalogical therapeutics in a hospital situation.
As you know medical doctors and doctors of
naturopathic medicine work extensively on very
rigorous internships where all that is studied is
pharmalogical therapeutics and they are the experts of
that realm of medicine.
Number 1570
We are skilled in the 40 percent of drugs that are
coming from a natural substance and there are
different generations of that that we are very well
versed in the use of that.
Fact 2: Licensure
Graduates of naturopathic medical schools pass
rigorous nationally administered board exams. These
exams have been examined by federal institutions that
determine the level of education that you would need
to pass them. That is for bio-medical general
practice of medicine.
Fact 3: Federal Regulation
Naturopathic medical institutions are recognized by
Federal and State Accrediting Bodies as well as by the
Council of Naturopathic Medical education. We wish
only to be able to practice how they say we are
trained to practice.
Fact 4: Naturopathic Medicine is Safe
No patient complaints in 17 years of practice in
Alaska. Naturopathic medicine is safe. I have
numbers to show you on a national level in comparison
that and we can talk about that.
Fact 5: Scientific Basis
There is research- see your packet "Naturopathic
Collaborative Events"
In the packet there is a very nice presentation,
Representative Coghill has it. That shows all of the
clinical research and all the things that are being
done in Naturopathic medicine and complimentary care
across the United States.
Number 1497
Fact 6: Naturopathic Physician = Primary Care
The Journal of American Medical Association or
J.A.M.A. in 1998 - there is an article in the packet
by Dr. Cooper. They are saying that we are trained as
primary care and outpatient based, which means we do
not work in the hospitals, but we work seeing patients
in our clinics. And that is how our training is and
it is adequate for that.
Complimentary medicine is the wave of the future;
already Alaska's clinics have MD's, DO's and ND's
working side by side. It is not as much as in the
Lower 48, but it is happening.
We have letters of support from medical doctors who
work with us, as well as other types of practitioners.
We have thousands of signatures from patients in your
districts that want access to complete Naturopathic
scope of practice.
Our current statute is out of date and needs to be
updated to reflect the quality of Naturopathic
education.
Number 1443
These letters of opposition clearly indicate to me
that there is a misunderstanding about the level of
our education as naturopathic physicians in this
state.
Often times these letters indicate that it is a
licensing issue. We have been licensed for 17 years.
All it is expanding our scope to include what should
be rightfully ours. For 17 years we have been
providing service to 30,000 Alaskans. I'm going to
cut this short, and ask you to consider this bill. I
appreciate your time and can answer any of your
questions at this time.
Number 1413
REPRESENTATIVE GATTO asked why the e-mails he has been receiving
have expressed concern that the legislature may take away their
right to practice naturopathic medicine. He commented that he
does not know how that information got into the community, but
for the record, he said, there is nothing in this bill that
diminishes anything naturopaths are doing. He asked Dr. Young
if he would agree with that.
DR. YOUNG replied that he would agree with respect to the intent
of the bill. There is wording in the bill that has been
insulting for 17 years and would like to see that corrected, he
said. He told the members that his main concern is patients who
want their naturopaths to be able to provide the care that they
are trained to provide. For example, natural estrogens, natural
progesterone, and natural thyroids are prescription drugs that
naturopaths are trained to use, Dr. Young stated. He emphasized
that it is not their intent to use schedule 2 drugs;
naturopathic physicians do not use those drugs. Naturopaths
refer their patients to other providers in cases where there is
a need for more specialized treatment. When a patient comes
into the office for a pap [smear], and it is found that the
patient needs a special estrogen prescription that can be made
for her, but the naturopath cannot write the prescription, then
that is a problem. The insurance company gets billed twice;
there is a waiting list; and a patient's health care is at risk.
The same thing applies to patients with diabetes and
hypertension, he added. Dr. Young commented that naturopaths
are not interested in using anti-psychotic drugs because we are
not trained for that. Naturopaths would refer appropriately for
treatment outside of our area of training, he commented. Dr.
Young pointed out that the current bill does not have the [drug]
schedules in it.
Number 1301
REPRESENTATIVE GATTO reiterated that everyone who currently sees
a naturopath will be able to continue to see his or her
naturopaths. If the bill passes there will be additional
privileges that will be available to the public. He asked Dr.
Young for clarification that schedules were taken out of the
bill.
DR. YOUNG replied that he understands the [drug] schedules were
taken out of the bill in order to get it out of the House Labor
and Commerce Standing Committee. He explained that naturopaths
did not want schedules [one and] two because they did not want
drugs that have a high incidence of physiological and
physiological dependence and are hot topics. Drugs that are
listed on schedules three, four, and five are far below
naturopaths' level of training, he commented. There are only
certain drugs within those levels that a naturopath would use
anyway. The bill was originally written with the intent that
naturopaths would have access to drugs they would use, he said.
CHAIR WILSON asked if Representative Holm would point out where
the language was removed from the bill.
Number 1234
REPRESENTATIVE HOLM referred to CSHB 434(L&C), Section 08.45.120
(4), page 5, line 23, language addressing scheduled drugs was
after the following:
(4) prescribe and implement barrier devices for
contraception;
REPRESENTATIVE HOLM commented that in the original version of
the bill, the above language was numbered (5) and the language
addressing scheduled drugs preceded this language as (4).
CHAIR WILSON asked where in the current bill does it authorize
naturopaths to prescribe schedule three, four, and five drugs.
She said she believes all of that language was removed.
REPRESENTATIVE HOLM agreed that all the language authorizing use
of scheduled prescription drugs was removed.
CHAIR WILSON stated that the only thing that is left in the bill
is as follows [page 5, lines 14 through 17]:
(1) prescribe or administer for preventive and
therapeutic purposes the following: food, extracts of
food, vitamins, minerals, enzymes, whole gland
substances, botanical medicines, and homeopathic
preparations;
(2) if authorized under regulations of the department,
prescribe or administer legend or prescription drugs,
CHAIR WILSON told the members that legend drugs are anti-biotic,
drugs for high blood pressure, diabetes, and most medications in
general that can be refilled for one year. She asked if someone
from the Department of Health and Social Services is available
to speak to this part of the bill.
Number 1103
REPRESENTATIVE SEATON asked if legend or prescription drugs
covers schedule three, four, and five drugs.
DR. YOUNG responded that controlled substances represents a
relatively small part of what is in a pharmacy. Since 1971 the
Controlled Substance Act put prescription drugs into schedules
so that there are schedules one, two, three, four, and five.
The schedules are based on the physiological and psychological
dependence. Five being a relatively minimal dependence compared
to one which is only used in research and in governmental
research. Examples of schedule one drugs is heroin, LSD, or
marijuana. Schedule two drugs are primarily narcotics such as
oxycodone. Schedule three, schedule four, and schedule five
drugs are other controlled substances as well, but they are of
less physiological and psychological dependence. Dr. Young
explained that legend drugs is an old term for the legend that
use to be on the side of foods which was instituted by the FDA.
He clarified that legend drugs are prescription drugs that are
not controlled substances.
Number 1029
REPRESENTATIVE SEATON asked for further clarification on the
term "legend drugs" and asked if it refers to all five scheduled
drugs.
DR. YOUNG replied no. He told the members that his
understanding of this terminology is that this language would
not allow naturopaths to provide any legend drugs. However,
natural thyroid or anti-biotic could be prescribed.
CHAIR WILSON noted that naturopaths would not be allowed to
prescribe those drugs unless the department authorizes it.
DR. YOUNG agreed with Chair Wilson's statement.
REPRESENTATIVE SEATON said he is trying to ascertain whether the
department's authorization would include schedule three, four,
and five drugs. He asked if legend or prescription drugs are
something other than schedules three, four and five drugs.
CHAIR WILSON replied that prescription drugs cover any schedule
drug. That is a pretty broad category which could include
morphine. She commented that she would like to discuss this
point with the department.
Number 0935
REPRESENTATIVE HOLM clarified that without an FDA license
naturopaths cannot prescribe a prescription drug.
Number 0905
DR. YOUNG pointed to the original bill and told the members that
the language was changed. He read from HB 434, 23-LS1574\D,
page 5, lines 16 and 17 as follows:
(4) after becoming registered with the federal Drug
Enforcement Administration, prescribe a controlled
substance;
DR. YOUNG commented that this language is no longer in the bill
that is before the committee. The original intent was that
naturopaths could use prescription drugs, but not controlled
substances, he explained. Dr. Young added that there is a
misconception that prescription drugs are controlled substances.
He summarized that the language was removed from the bill in
order to get it out of the House Labor and Commerce Standing
Committee.
CHAIR WILSON commented that by removing that language and
leaving prescription drugs in the bill it allows a doctor to
write a prescription for anything.
DR. YOUNG clarified that doctors can only write prescriptions
for controlled substances if he/she has a Drug Enforcement
Administration (DEA) number.
Number 0871
CHAIR WILSON stated that a DEA number is required in order to
have insurance payment. She questioned how it would be paid.
DR. YOUNG said he has never come across that problem because he
has always worked in states where he has had a DEA license.
CHAIR WILSON responded that whenever completing insurance forms
it is necessary to provide the doctor's DEA number. Without
that number, insurance will not pay for the prescription.
Number 0772
REPRESENTATIVE GATTO pointed to page 5, lines 29 and 30, which
reads as follows:
(7) use the title of "doctor of naturopathy,"
"naturopath," "naturopathic physician," or their
abbreviations.
REPRESENTATIVE GATTO commented that the use of "naturopathic
physician" became a contentious point in House Labor and
Commerce Standing Committee meeting. The thought there was that
the term "physician" means very specific things and it is a
guarded term. Representative Gatto said just because someone is
a doctor, does not make him/her a physician. He suggested that
naturopaths would not want to use the term because it clouds the
issue.
Number 0683
REPRESENTATIVE HOLM responded that Representative Gatto makes a
good point. However, he offered that the term physician in
layman terms means healer. There are different methodologies of
healing. There are illness such as psychosomatic illness which
have no traditional ways of treatment. Those are addressed
through a change in attitude, and can improve an individual's
health and truly be considered physicians. Representative Holm
commented that nurse practitioners are every bit as much a
healer as an allopathic physician. He commented that usually
when a person refers to a physician it is a reference to someone
who has a doctorate degree versus a nurse practitioner. It is
just one level up, he said. Representative Holm suggested the
members might wonder if the level has risen to the place where
naturopaths should be call physicians or true healers. He
stated that he believes it does.
REPRESENTATIVE GATTO replied that if this bill becomes law then
any discipline where healing occurs would merit the term
physician. He questioned whether the legislature wants to make
the term physician so broad that it cannot be used anymore to
identify what is now known as a physician. Currently, this term
is reserved for doctors of medicine, Representative Gatto
commented.
Number 0547
DR. YOUNG agreed that Representative Gatto made some good
points. He explained that the term "physic" is actually a Latin
term for nature. He pointed out that chiropractors are also
called chiropractic physicians. Naturopathic physicians is a
term used in licensed states where naturopaths are
differentiated from those who have gone through a medical school
and have a doctorate in medicine, so they are able to refer to
themselves as physicians. He explained that a naturopath can go
into any unlicensed state and hang a shingle which says
"naturopath," but could not hang out a sign that says medical
doctor or physician. This bill would protect that term for
those who are practicing naturopathy as physicians.
Number 0457
REPRESENTATIVE COGHILL referred to AS 08.02.010, under
Miscellaneous Provisions, which says:
Sec. 08.02.010. Professional designation
requirements.
(a) An acupuncturist licensed under AS 08.06, an
audiologist or speech-language pathologist licensed
under AS 08.11, a person licensed in the state as a
chiropractor under AS 08.20, a professional counselor
licensed under AS 08.29, a dentist under AS 08.36, a
dietitian or nutritionist licensed under AS 08.38, a
marital and family therapist licensed under AS 08.63,
a medical practitioner or osteopath under AS 08.64, a
direct-entry midwife certified under AS 08.65, a
registered nurse under AS 08.68, an optometrist under
AS 08.72, a licensed pharmacist under AS 08.80, a
physical therapist or occupational therapist licensed
under AS 08.84, a psychologist under AS 08.86, or a
clinical social worker licensed under AS 08.95, shall
use as professional identification appropriate letters
or a title after that person's name that represents
the person's specific field of practice. The letters
or title shall appear on all signs, stationery, or
other advertising in which the person offers or
displays personal professional services to the public.
In addition, a person engaged in the practice of
medicine or osteopathy as defined in AS 08.64.380, or
a person engaged in any manner in the healing arts who
diagnoses, treats, tests, or counsels other persons in
relation to human health or disease and uses the
letters "M.D." or the title "doctor" or "physician" or
another title that tends to show that the person is
willing or qualified to diagnose, treat, test, or
counsel another person, shall clarify the letters or
title by adding the appropriate specialist
designation, if any, such as "dermatologist",
"radiologist", "audiologist", "naturopath", or the
like.
REPRESENTATIVE COGHILL clarified that under Alaska statutes the
term is very broad.
Number 0406
REPRESENTATIVE SEATON referred to the Journal of the American
Medical Association (JAMA), 1998 article where there is
discussion about naturopathic physicians. He said he thinks the
distinction that he sees being made through opposing comments is
that naturopath are an unlicensed, unregulated group; whereas
naturopathic physicians are licensed in state and have the
background and training. These are two different groups, he
emphasized. For example, currently a naturopath can practice
right now with no training, but to be a naturopathic physician
an individual must meet the licensing requirements. That is
what is really being discussed here, he commented. He suggested
that the committee look at the policy call of restricting the
word "naturopath" to refer to only naturopathic physicians to
prevent the confusion that has occurred in the testimony the
members have heard.
REPRESENTATIVE COGHILL told the committee that anyone who is
licensed must have the credentials. He added that he has a
friend who is called doctor, but he is not a medical doctor.
Representative Coghill questioned what the committee wants to
define.
Number 0284
REPRESENTATIVE CISSNA asked the committee to look at page 3,
lines 26 through 28, which reads as follows:
(B) addiction or severe dependency on alcohol or a
drug that impairs the applicant's or licensee's
ability to practice safely; or
(C) physical or mental disability; or
REPRESENTATIVE CISSNA pointed out that (C) does not have the
same qualifying terms after the condition that (B) does. She
pointed out that there are physical or mental disabilities that
exist that would not impair an individual's ability to practice
safely. She suggested including the same language in (C) that
is included in (B).
REPRESENTATIVE CISSNA moved Conceptual Amendment 1 as follows:
On Page 3, Line 28, after "disability"
Insert: "that impairs the applicant's or licensee's
ability to practice safely;"
Number 0051
REPRESENTATIVE COGHILL objected for discussion purposes.
REPRESENTATIVE CISSNA told the members that there are many kinds
of disabilities, both mental and physical, that would not be an
impairment. Many disabilities do not affect an individual's
competency in their professional lives.
REPRESENTATIVE GATTO agreed with Representative Cissna. For
example, if a person has had an arm amputated, it would not
affect that person's ability to practice safely.
TAPE 04-32, SIDE A
DR. YOUNG commented that the Division of Occupational Licensing
will regulate naturopaths appropriately. He pointed to the flow
chart in the members' packet.
REPRESENTATIVE COGHILL said the Division of Occupational
Licensing will have a hearing officer and if there is an appeal
it can go straight to the court.
Number 0079
REPRESENTATIVE SEATON pointed to page 3, lines 23 and 24, which
reads as follows:
(6) is [CONTINUED TO PRACTICE AFTER BECOMING] unfit to
practice naturopathic medicine due to
REPRESENTATIVE SEATON commented that he is not really opposed to
the conceptual amendment; however, he said he believes
Representative Cissna's amendment is already covered under (6)
where it says "is unfit to practice naturopathic medicine due
to." He clarified that this language means that it would have
to first be determined that the individual is unfit to practice
due to a physical or mental disability.
Number 0131
REPRESENTATIVE CISSNA questioned why the language is included in
(B). She withdrew her motion to adopt Conceptual Amendment 1.
Number 0204
VERENA NILSSON testified in support of HB 434. She told the
members that she is a patient of Avanti Medical Center in
Anchorage and supports the idea of her doctors being able to
write prescriptions for medicines. Ms. Nilsson explained that
she has had medical problems for the last 12 years and had gone
to traditional doctors; however, it was not until she went to a
doctor of naturopathy that she discovered what was wrong with
her. She is now taking hormones in order to get some of the
problems taken care of. It is still a problem for her because
she has to go back to the conventional doctor to get a
prescription written. Ms. Nilsson told the members that she
would like all of her family go to naturopathic doctors.
Number 0346
STEVE COMPTON, M.D., Alaska Heart Institute, testified on HB 434
and answered questions from the members. He detailed his
training which consisted of four years of college, four years of
medical school, three years of internal medicine residency,
three years of cardiology fellowship, and another year of an
electrophysiology fellowship. Dr. Compton told the members that
he finished training at the age of 33, then taught at the
University of Utah for four years. He said he is pretty
familiar with the research basis behind allopathic medicine.
DR. COMPTON told the members that he is not sure the members are
aware of the profound differences between allopathic medicine
and alternative medicine practices. The single most important
thing that defines allopathic medicine is that it is evidence
based on scientific methods, he explained. Dr. Compton said
what that means is that if patients have a clinical problem and
are considering therapy to treat that problem or disease,
scientific methods are used to design clinical trials.
Randomized placebo controlled trials are used to determine if
therapy will actually benefit a patient, he said. Dr. Compton
told the members that using this approach helps them in
developing new treatment so patients will have longer better
lives.
Number 0526
DR. COMPTON said he believes what is not being understood is
that most naturopathic practices do not involve the scientific
method. It tends to be more of a faith-based practice. He said
that the judgment that a treatment is effective should be based
on the quality of the scientific evidence. Naturopaths are very
good at convincing people that evidence exists when it actually
does not or convincing people to accept substandard evidence.
DR. COMPTON explained that some of the practices of naturopathy
would not stand up to scientific scrutiny. For example,
iridology, which says that it can be determined if something is
wrong with an individuals organs by looking at the color of a
person's eyes. He said that this is no different than palm
reading. Dr. Compton told the members that many of these
practices would be determined to be health fraud if perpetrated
by medical doctors. He added that the differences between
naturopathic medicine and allopathic medicine has not been over
come.
Number 0661
DR. COMPTON said when the Massachusetts legislature considered
licensing naturopaths three years ago it had a special
commission working for fifteen months to study the issue. He
read the conclusion of that study into the record as follows:
For an occupation with little semblance of objective
scientific and ethical basis, licensure legitimizes an
otherwise illegitimate and dangerous activity. It is
the opinion of the Massachusetts Medical Society that
it would be irresponsible and unconscionable for the
commission to recommend the licensure of naturopathy
in the Commonwealth of Massachusetts.
DR. COMPTON said this is an issue because prescription drugs can
be dangerous. It takes a lot of training and judgment to use
them. He told the members that he knows of no medical physician
that learned how to prescribe medications during their medical
school years. He added comparing naturopath training to medical
school training is not appropriate. Prescription training
occurs as an intern, resident, and fellow, Dr. Compton said.
His internship was hardcore training of 90 to 100 hours per
week.
Number 0769
DR. COMPTON told the committee that two patients were
hospitalized in Denver a couple of weeks ago after being treated
by a licensed naturopath. One was a 17 year old girl who had
cardiac arrest after having UV blood irradiation. This is a
procedure where the blood was removed from the girl's body,
irradiated with ultra violet light and then infused back in her.
Another case in 2002, Lawrence Perry, a naturopath, persuaded an
8 year old diabetic girl's parents to stop her insulin. Type I
diabetes requires insulin for survival. There have been several
diabetic deaths, Dr. Compton said.
DR. COMPTON shared another example of a naturopath named
Reginald Fenn who in February of 2004 was jailed because he
persuaded parents of an 18-day old baby with aortic stenosis not
to seek surgery. He told the members the only way to treat
aortic stenosis is through surgical repair. The child died
after treating it with herbs and proclaiming the child was
cured. Dr. Compton continued to share other examples of
naturopathic malpractice in which patients were harmed. After
the death of a young girl following a procedure of a naturopath,
Alberta rescinded all licensing of naturopaths.
DR. COMPTON said that naturopaths will say that this is
mainstream medicine, but it is not. He told the members that
they will be told that naturopaths have these privileges in
other states, but that is not true. He told the members that it
will not be mentioned that two states have outlawed naturopathy,
and only 11 states that even bother with licensure. Whether
licensure should be offered is debatable and he said, in his
opinion prescriptive authority is unconscionable.
Number 0905
DR. COMPTON suggested that the members look on the web site of
the American Association of Naturopathic Physicians. He read a
statement from the web site into the record as follows:
Naturopathic practice excludes major surgery and the
use of synthetic drugs.
DR. COMPTON commented if the members are considering giving
naturopaths prescriptive authority, what is being discussed is
not naturopathy, but medicine. He advised the members to talk
to people who prescribe drugs and understand them before passing
a bill like this. He told the members that there are dozens of
drugs when used aggressively can hurt, maim, or kill people.
The few classes in naturopathy schools is unlikely to provide
the training to prescribe these drugs.
DR. COMPTON urged the members to educate themselves on this
issue and protect Alaskans.
Number 1036
REPRESENTATIVE WOLF commented that Dr. Compton made reference to
iridology. He asked if a patient came to him with yellow itchy
eyes, what would be his first reaction.
DR. COMPTON responded that he believes Representative Wolf is
thinking of liver disease, but that is not the iris. He
explained that iridology suggests that by looking at specific
color patterns of a person's iris and a specific diagnosis can
be made. Dr. Compton agreed with Representative Wolf that a
person with liver disease can get yellow discoloration in the
white part of the eyes called jaundice.
DR. COMPTON said another questionable practice is homeopathy.
Their premise is to take whatever active drug it is believed a
patient needs, and repeatedly dilute it down. The idea behind
this is that by doing this the essence of the drug is captured
and the more diluted it is the more powerful it is. He said
this makes absolutely no sense. He pointed out that homeopathy
won't hurt anyone, but it is promoted as a way to make people
better and there is no basis in physiology or pharmacology for
the effectiveness of homeopathy, but this is another main stay
of naturopathic medicine. He told the member that naturopath is
not based upon science. Dr. Compton told the members that a
great way to blow a lot of money on health care is to spend it
on therapies that have not been proven to be effective.
Number 1212
REPRESENTATIVE WOLF told Dr. Compton of a family member's
experience where after seeing and MD for an itchy condition she
was told to put on calamine lotion and soak in Epson salts. He
took her to a naturopath who immediately had her get a blood
test. It was found that she had a tumor in her bile duct. She
was within a couple of months of dying and it was a naturopath
that saved her life, he stated. The MD did not address her
medical condition.
Number 1263
DR. COMPTON replied that he thinks that there is a lot that
naturopaths can offer. A lot can be said for a good diet and
exercise. He said well-trained physicians do miss diagnose.
REPRESENTATIVE WOLF clarified that he is not talking about diet
and exercise.
DR. COMPTON admitted that there are some naturopaths that are
very sharp and well intentioned. There are also those whose
training does not include science. In allopathic medicine if a
doctor were to provide a patient with a treatment that had no
scientific or rational basis and which had not been shown to
help people, it would be considered malpractice, he said. Dr.
Compton commented that Representative Wolf's mother had an
unfortunate experience, but believes that another allopathic
doctor would have eventually diagnosed the jaundice she was
experiencing.
REPRESENTATIVE WOLF asked if Dr. Compton is familiar with
multiple myeloma and asked what he would prescribe for
treatment.
DR. COMPTON responded that multiple myeloma is usually treated
with chemotherapy. He clarified that he is a cardiologist and
has not worked in oncology in over 12 years so he is not an
expert in that field.
Number 1408
REPRESENTATIVE WOLF said that several treatment centers in the
Lower 48 are now saying that chemotherapy will not touch
myeloma. He explained that a dear friend who passed away had
myeloma and the doctors wanted to prescribe chemotherapy for
him.
DR. COMPTON replied that this is an especially vulnerable group
of people. A good oncology practice will be involved in
clinical trials. The heart of it is that therapies for cancer
are all pretty miserable. He said that if a therapy is offered
it is important to know if it works or not. There are
nationwide protocols to see if survival rates can be improved.
A competent oncologist can tell a patient what the state of the
art treatment is for whatever cancer a person has. He said if a
cancer patient goes to a naturopath he/she could be assured of
getting better with an herb or therapy, but there is no clinical
or trial data available for the treatment. All the data comes
from testimonial studies or belief systems, he added. In
conclusion he said the strength of allopathic medicine is based
on scientific methods. All therapies have a potential for harm
and it is essential to know that a therapy's benefit outweighs
the potential for harm, Dr. Compton stated.
Number 1589
CHAIR WILSON announced that the bill will be held in committee.
ADJOURNMENT
There being no further business before the committee, the House
Health, Education and Social Services Standing Committee meeting
was adjourned at 7:05 p.m.
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