Legislature(1999 - 2000)
03/31/2000 01:22 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
March 31, 2000
1:22 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Joe Green
Representative Norman Rokeberg
Representative Lisa Murkowski
Representative Eric Croft
Representative Beth Kerttula
MEMBERS ABSENT
Representative Jeannette James
COMMITTEE CALENDAR
HOUSE BILL NO. 211
"An Act relating to liability for providing managed care services,
to regulation of managed care insurance plans, and to patient
rights and prohibited practices under health insurance; and
providing for an effective date."
- HEAR AND HELD; ASSIGNED TO SUBCOMMITTEE
HOUSE BILL NO. 244
"An Act relating to disclosure of information by the attorney
general about possible unfair trade practices; and relating to
liability for allegations relating to unfair trade practices."
- MOVED CSHB 244(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 58
"An Act relating to certain audits regarding oil and gas royalty
and net profits and to audits regarding costs relating to
exploration incentive credits and oil and gas exploration licenses;
and providing for an effective date."
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 5
Proposing amendments to the Constitution of the State of Alaska
creating a highway fund and a harbor fund.
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 211
SHORT TITLE: HEALTH CARE INSURANCE
Jrn-Date Jrn-Page Action
4/22/99 914 (H) READ THE FIRST TIME - REFERRAL(S)
4/22/99 914 (H) L&C, JUD, FIN
5/10/99 (H) L&C AT 3:15 PM CAPITOL 17
5/10/99 (H) HEARD AND HELD
5/10/99 (H) MINUTE(L&C)
10/22/99 (H) L&C AT 10:00 AM ANCHORAGE LIO
10/22/99 (H) MINUTE(L&C)
2/04/00 (H) L&C AT 3:15 PM CAPITOL 17
2/04/00 (H) -- Meeting Canceled --
2/16/00 (H) L&C AT 3:15 PM CAPITOL 17
2/16/00 (H) Heard & Held
2/16/00 (H) MINUTE(L&C)
2/16/00 (H) MINUTE(L&C)
3/03/00 (H) L&C AT 3:15 PM CAPITOL 17
3/03/00 (H) Moved CSHB 211(L&C) Out of Committee
3/03/00 (H) MINUTE(L&C)
3/08/00 2446 (H) L&C RPT CS(L&C) NT 1DP 2DNP 3NR
3/08/00 2446 (H) DP: ROKEBERG; DNP: CISSNA, BRICE;
3/08/00 2446 (H) NR: MURKOWSKI, HARRIS, HALCRO
3/08/00 2446 (H) ZERO FISCAL NOTE (DCED)
3/24/00 (H) JUD AT 1:00 PM CAPITOL 120
3/24/00 (H) Heard & Held
3/24/00 (H) MINUTE(JUD)
3/31/00 (H) JUD AT 1:15 PM CAPITOL 120
BILL: HB 244
SHORT TITLE: UNFAIR TRADE PRACTICES/DEFAMATION
Jrn-Date Jrn-Page Action
5/16/99 1486 (H) READ THE FIRST TIME - REFERRAL(S)
5/16/99 1486 (H) JUD
3/31/00 (H) JUD AT 1:15 PM CAPITOL 120
BILL: HB 58
SHORT TITLE: OIL & GAS AUDITS
Jrn-Date Jrn-Page Action
1/22/99 65 (H) READ THE FIRST TIME - REFERRAL(S)
1/22/99 65 (H) O&G, RES, FIN
1/22/99 65 (H) 2 FISCAL NOTES (DNR, REV)
1/22/99 65 (H) GOVERNOR'S TRANSMITTAL LETTER
3/04/99 (H) O&G AT 10:00 AM CAPITOL 17
3/04/99 (H) HEARD AND HELD
3/04/99 (H) MINUTE(O&G)
3/05/99 376 (H) JUD REFERRAL ADDED AFTER RES
3/11/99 (H) O&G AT 10:00 AM CAPITOL 17
3/11/99 (H) -- MEETING CANCELED --
4/20/99 (H) O&G AT 5:00 PM CAPITOL 17
4/20/99 (H) <BILL POSTPONED TO 4/29>>
4/22/99 (H) O&G AT 5:00 PM CAPITOL 17
4/22/99 (H) MOVED OUT OF COMMITTEE
4/22/99 (H) MINUTE(O&G)
4/23/99 943 (H) O&G RPT 4DP 4NR
4/23/99 944 (H) DP: PORTER, SMALLEY, HARRIS,
WHITAKER;
4/23/99 944 (H) NR: OGAN, KEMPLEN, PHILLIPS, BRICE
4/23/99 944 (H) 2 FISCAL NOTES (DNR, REV) 1/22/99
3/06/00 (H) RES AT 1:00 PM CAPITOL 124
3/06/00 (H) Moved Out of Committee
3/06/00 (H) MINUTE(RES)
3/08/00 2444 (H) RES RPT 4DP 3NR
3/08/00 2445 (H) DP: COWDERY, WHITAKER, JOULE, MASEK;
3/08/00 2445 (H) NR: MORGAN, HARRIS, HUDSON
3/08/00 2445 (H) 2 FISCAL NOTES (DNR, REV)
3/31/00 (H) JUD AT 1:15 PM CAPITOL 120
BILL: HJR 5
SHORT TITLE: DEDICATED HIGHWAY AND HARBOR FUNDS
Jrn-Date Jrn-Page Action
1/19/99 17 (H) PREFILE RELEASED 1/8/99
1/19/99 17 (H) READ THE FIRST TIME - REFERRAL(S)
1/19/99 17 (H) TRA, JUD, FIN
2/10/00 (H) TRA AT 1:00 PM CAPITOL 17
2/10/00 (H) Heard & Held
2/10/00 (H) MINUTE(TRA)
3/07/00 (H) TRA AT 1:00 PM CAPITOL 17
3/07/00 (H) Moved CSHJR 5(TRA) Out of Committee
3/07/00 (H) MINUTE(TRA)
3/15/00 2484 (H) TRA RPT CS(TRA) NT 1DP 1DNP 4NR 1AM
3/15/00 2484 (H) DP: HALCRO; DNP: MASEK; NR: COWDERY,
3/15/00 2484 (H) KEMPLEN, KOOKESH, HUDSON; AM: KOHRING
3/15/00 2484 (H) FISCAL NOTE (GOV)
3/15/00 2484 (H) REFERRED TO JUDICIARY
3/24/00 (H) JUD AT 1:00 PM CAPITOL 120
3/24/00 (H) <Bill Postponed To 3/31>
3/31/00 (H) JUD AT 1:15 PM CAPITOL 120
WITNESS REGISTER
JACK C. McRAE, Senior Vice President
Blue Cross Blue Shield of Alaska
A Premera Health Plan
P.O. Box 327
Seattle, Washington 98111-0327
POSITION STATEMENT: Testified on HB 211.
MIKE D. WIGGINS, Vice President
of National Accounts
Aetna U.S. Healthcare
601 Union Street, Suite 800
Seattle, Washington 98101
POSITION STATEMENT: Testified on HB 211.
JIM JORDAN, Executive Director
Alaska State Medical Association
4107 Laurel Street
Anchorage, Alaska 99508
POSITION STATEMENT: Testified on HB 211.
MIKE HAUGEN, Representative
Alaska Physicians & Surgeons, Inc.
4325 Laurel Street, Suite 206
Anchorage, Alaska 99508
POSITION STATEMENT: Testified on HB 211.
GORDON E. EVANS, Representative/Lobbyist
Health Insurance Association of America
211 4th Street, Suite 305
Juneau, Alaska 99801
POSITION STATEMENT: Testified on HB 211.
REGINA C. LEVY, Private Senior Citizen
915 West 22nd Avenue
Anchorage, Alaska 99503
POSITION STATEMENT: Testified in support of HB 244.
THOMAS WARD
12001 Portage Drive
Anchorage, Alaska 99515
POSITION STATEMENT: Testified in support of HB 244.
Julia Coster, Assistant Attorney General
Commercial Section
Civil Division
Department of Law
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501-1994
POSITION STATEMENT: Answered questions in relation to HB 244.
ACTION NARRATIVE
TAPE 00-43, SIDE A
Number 0001
CHAIRMAN PETE KOTT called the House Judiciary Standing Committee
meeting to order at 1:22 p.m. Members present at the call to order
were Representatives Kott, Green, Rokeberg, Murkowski, Croft and
Kerttula. No other committee members arrived after the meeting was
called to order.
HB 211 - HEALTH CARE INSURANCE
CHAIRMAN KOTT announced the first order of business would be HOUSE
BILL NO. 211, "An Act relating to liability for providing managed
care services, to regulation of managed care insurance plans, and
to patient rights and prohibited practices under health insurance;
and providing for an effective date."
The committee stood at ease from 1:24 p.m. to 1:25 p.m. in order to
determine which proposed committee substitute to take up.
Number 0163
REPRESENTATIVE NORMAN ROKEBERG made a motion to adopt the proposed
committee substitute for HB 211, version 1-LS0472\N, Ford, 3/30/00,
as a work draft. There being no objection, Version N was before
the committee.
[THE RECORD REFLECTS THAT THE COMMITTEE WOULD ALSO BE DISCUSSING
CSHB 211(L&C), VERSION 1-LS0472\K.]
REPRESENTATIVE ROKEBERG, sponsor of the bill, started by giving
some background on HB 211. He and his staff, as well as various
people throughout the state and country, have been working on the
bill for about one and a half years. It is a major piece of
legislation. There were four hearings in the House Labor and
Commerce (L&C) Committee, some held during the interim; after
moving out of that committee, the bill generated a renewed interest
and therefore a new committee substitute.
REPRESENTATIVE ROKEBERG called HB 211 the Alaska Patients' Bill of
Rights. He said he does not want to duplicate but dovetail the
Alaska Statutes with a federal law that is in a conference
committee on Capitol Hill right now, which will have a major impact
on ERISA-[Employee Retirement and Income Security Act] covered
health insurance groups that are not necessarily covered by state
law. He believes that it would be appropriate to have the benefit
of the legislation, and it would be consistent in relation to the
regulatory schemes for the non-ERISA and ERISA groups in the state.
In addition, he noted, state legislation and case law have not been
applicable to ERISA groups, and there is a growing trend of cases
which seem to indicate that the fate of issues in relation to
health care may be against ERISA groups. Therefore, in order to
keep the primacy of state insurance regulatory proceedings, he
thinks there needs to be legislation in this area.
REPRESENTATIVE ROKEBERG explained that the bill would establish a
lay standard for payment and access to emergency room services;
would provide for the full disclosure of treatment options and
choice of health care providers; would provide for a PPO [Preferred
Provider Organizations] plan to have a point-of-service option,
which would give the right-of-choice for a physician on the part of
a subscriber to a medical plan; would provide for a statutory
requirement for the procedures to revolve around an in-house, pre-
approval process; and would provide for tight standards in terms of
responses and level of review. He noted that a level of review
could be a peer review or a standard of educational background,
which is controversial. The bill would also provide for an outside
grievance procedure, if the internal review mechanism is denied, by
mandating that each health insurance company operating in the state
have an outside third-party utilization review to make a final
judgment. If there is disagreement with the final judgment, there
is mediation and ultimately the court system. He noted that the
third-party review has to be with a peer specializing in the malady
from which the patient is suffering.
REPRESENTATIVE ROKEBERG noted that there are two contentious issues
in relation to the bill. One is in regard to liability. The
initial drafts of the bill contained a duty on the parts of the
health care provider and insurance entity to perform certain steps,
thereby raising the level of liability and causing action if there
is a breech of those duties. This is really important,
particularly in the Lower 48, where there are health maintenance
organizations [HMOs] and where there have been denials of benefits
and actual suffering as a result of the failure to receive services
in a timely fashion or at all.
Number 0715
REPRESENTATIVE ERIC CROFT asked Representative Rokeberg whether the
bill precludes "it."
REPRESENTATIVE ROKEBERG replied, "No." It establishes a new set of
duties, which would give rise to a new set of actions. In theory,
he said, it raises the ability to make a cause of action against a
managed care entity.
REPRESENTATIVE ROKEBERG further stated the other area of major
conflict is related to a statutory definition of "medical
necessity." It comes about because health care providers wish to
have a statutory definition to give them the right to make
decisions on what is truly necessary for the care of a patient.
The insurance companies by and large want to be in a position for
maximum flexibility to make judgments on what is necessary and what
is not necessary. This is a major point of contention and merits
consideration of this committee and this legislature. The
insurance companies are opposed to including it, while the health
care providers are in favor of it. He has an amendment that
provides for a default definition in the event that there is a
contractual definition. He is not sure, however, that the
definition would work practically.
REPRESENTATIVE ROKEBERG further stated that Version N contains a
number of amendments provided by a summit held recently in Juneau
consisting of the parties involved. Based on recommendations by
Blue Cross Blue Shield of Alaska, the liability and medical
necessity sections have been deleted to help move the legislation
along. He said he is still waiting for input from the Alaska State
Medical Association, but, by and large, Version N reflects most of
what came out of the summit. He would like to see the bill pass
this year because of the federal legislation, even though there are
conflicting reports from Capitol Hill on whether or not it will
come down. He believes that it will, however. In response to
discussion about putting the bill into a subcommittee, he said he
would be happy to do so with a date-certain in order to save the
committee's time and to take up any amendments.
Number 1102
REPRESENTATIVE GREEN noted that the bill has created some heat for
two different groups. He asked Representative Rokeberg whether the
changes from Version K to Version N were mutually agreed to.
REPRESENTATIVE ROKEBERG replied, "No." The majority of the
amendments adopted are a reflection of what was discussed at the
summit, but there are some that don't reflect what was discussed at
the summit. He reiterated that he is still waiting for feedback
from the Alaska State Medical Association. The two primary issues
of liability and medical necessity are not in Version N.
Number 1197
REPRESENTATIVE GREEN indicated that he is concerned because despite
the efforts of the sponsor and the summit there is still
disagreement. He would support putting the bill into a
subcommittee.
REPRESENTATIVE ROKEBERG replied that if the bill is brought back by
Wednesday [April 5, 2000], he doesn't have a problem with putting
the bill into a subcommittee.
Number 1237
CHAIRMAN KOTT concurred with Representative Green's assessment of
the bill, especially given that it would require a vote of more
than a simple majority to pass because it changes a rule of
appellate procedure. In other words, it would require consensus.
Number 1262
REPRESENTATIVE ROKEBERG pointed out that the court rule change is
out of the bill if the liability provisions are kept out.
REPRESENTATIVE CROFT asked Chairman Kott whether he plans to take
testimony and then refer the bill to a subcommittee.
CHAIRMAN KOTT replied, "Yes, that is the intent."
Number 1300
REPRESENTATIVE CROFT asked Representative Rokeberg how he intends
to dovetail this bill with a federal bill that hasn't passed yet.
REPRESENTATIVE ROKEBERG replied the idea is to keep the topics the
same in order to maintain primacy. He doesn't expect the language
to be the same.
REPRESENTATIVE CROFT stated that Congress is trying to work out
major differences in their legislation in a conference committee.
He asked how the state can establish liability when Congress
doesn't know what they are going to do yet.
REPRESENTATIVE ROKEBERG suggested omitting the issue and amending
the statutes next year.
CHAIRMAN KOTT opened the meeting to public testimony.
Number 1407
JACK C. McRAE, Senior Vice President, Blue Cross Blue Shield of
Alaska - A Premera Health Plan [BCBS of AK], testified via
teleconference from an off-net site in Seattle, Washington. The
BCBS of AK fully supports HB 211 as currently drafted with the
liability and medical necessity language removed. The medical
necessity issue is so volatile that the issue has not been taken on
at the federal level. It is an issue that almost every legislature
has set aside and has dealt with it as a contract issue between the
medical community and insurance carriers. In reference to the
issue of liability, the bill - as drafted - would impact the non-
ERISA clients who already have a cause of action for liability, and
the BCBS of AK is opposed to creating another cause of action for
liability.
MR. McRAE further stated that BCBS of AK supports the bill [Version
N] and the concept of a patients bill of rights. They are
comfortable with the external review; the prudent lay person in
emergency rooms, and a variety of other parts of the bill. He
recognizes that small changes would probably be made, as with any
piece of legislation, but the BCBS of AK supports Version N and
would support it through the process.
Number 1511
REPRESENTATIVE ROKEBERG asked Mr. McRae to explain to the committee
members why BCBS of AK rejected the language in the original
version of the bill in relation to medical necessity. The
definition, he noted, came from the American Medial Association.
MR. McRAE replied that there is a lot of confusion related to
medical necessity. BCBS of AK feels that they have to have some
say in what medical necessity consists of, which is why they put
language in their contracts; in turn, some providers sign the
contracts and some don't sign the contracts. For example, there
are differing opinions of providers on what is cosmetic surgery; in
that way, BCBS of AK needs to be involved to communicate to their
medical directors what they feel is cosmetic surgery and what is
not. Another example is experimental and investigative medicine
when a specific procedure hasn't been approved by the FDA [Food and
Drug Administration]. In that way, for some cases BCBS of AK needs
to step in and have some authority over the medical necessity. He
further stated that there have been a large number of studies
conducted on patients bill of rights. There is legislation in
almost every state which does not include language on medical
necessity because of the volatility surrounding the issue. He also
noted that the federal legislation is being assessed. The cost in
relation to medical necessity is also substantial. He cited a
figure in upwards of 6 percent. The goal of BCBS of AK, he said,
is to ensure that health care dollars are going to the subscriber
that needs the service, and to try and keep the cost-drivers out of
legislation, which is what they are trying to do here.
Number 1634
CHAIRMAN KOTT asked Mr. McRae how many other states have
implemented a patients bill of rights.
MR. McRAE replied he doesn't have that information in front of him;
he would provide it to the committee later. He does know that the
state of Washington passed legislation this year.
CHAIRMAN KOTT asked Mr. McRae whether the state of Washington
included or excluded medical necessity.
MR. McRAE replied that they excluded it.
Number 1660
CHAIRMAN KOTT asked Mr. McRae whether the state of Washington
included or excluded liability.
MR. McRAE replied they included a form of liability. He explained
that the insurance industry in the state of Washington has almost
come to a halt this year to the point that an individual cannot buy
a policy. As a result, over 40 insurance companies have left the
state because of statutes passed starting in 1993. In that regard,
a lot of trade-offs were made in the legislative session this year
in relation to the different issues surrounding a patients bill of
rights, and in relation to the opening up of the individual
insurance market.
Number 1700
REPRESENTATIVE GREEN asked Mr. McRae whether medical insurance
companies are limited in their amount of profits or premiums that
they can charge.
MR. McRAE replied that BCBS of AK submits their rates to the
Division of Insurance [Department of Community and Economic
Development] for evaluation in relation to being actuarially sound,
which means that the costs and rates are justified in relation to
the services rendered. There is a check and balance in the system.
He noted that rates have gone up because health care costs and
utilization costs have gone up and are going up, and BCBS of AK
doesn't see that trend stopping.
Number 1751
REPRESENTATIVE GREEN stated that common carrier pipelines have an
upper limit in the amount that they can make, and they are
regulated. He asked Mr. McRae whether the insurance industry has
an upper limit or whether the industry is approved as actuarially
sound.
MR. McRAE replied that he isn't aware of anything in statute that
places a limit on returns.
Number 1797
REPRESENTATIVE GREEN asked Mr. McRae whether he has a disposition
to say what the broad range might be in grouping all the insurance
companies together.
MR. McRAE replied that he has no idea. He couldn't even take a
guess, and he has no idea where that number would come from.
Number 1805
REPRESENTATIVE GREEN asked Mr. McRae whether liability would
automatically increase premiums or whether it would just decrease
profits.
MR. McRAE replied that when BCBS of AK submits regulations for
actuarial approval that are not realistic the Department of
Community & Economic Development responds accordingly. In that
way, the BCBS of AK would not just decrease their profits, but
instead any increase in medical cost and utilization is built in to
the price structure that is given to the Division of Insurance. As
a result, profits would not change, but prices would increase in
the state.
Number 1847
REPRESENTATIVE ROKEBERG stated that, according to his
understanding, under statute the BCBS of AK is a non-profit
organization.
MR. McRAE answered that the BCBS of AK is a non-profit organization
in Alaska and Washington. In fact, all of the BCBS associations
are non-profit. There are no stockholders and any capital that is
reserved is for future claims.
REPRESENTATIVE ROKEBERG asked Mr. McRae whether "any capital" is
profit.
MR. McRAE replied that any funds that BCBS of AK holds above the
premium charged minus the medical expenses incurred are reserves
held for future medical expenses.
REPRESENTATIVE GREEN noted that it is the same as margins for a
cooperative electric company.
Number 1888
REPRESENTATIVE BETH KERTTULA asked Mr. McRae to provide a copy of
a contract, so that the committee members can take a look at the
definitions used.
MR. McRAE replied, "Sure." He requested clarification as to
whether Representative Kerttula is interested in mainly the medical
necessity language.
REPRESENTATIVE KERTTULA said that is what she is most interested
in, but it probably would be helpful to the committee members to
see a copy of a contract.
Number 1943
MIKE D. WIGGINS, Vice President of National Accounts, Aetna U.S.
Healthcare, testified via teleconference from an off-net site in
Seattle, Washington. He is also the account manager for the Alaska
Care Health Plan. He said Version N is the result of compromise
from a number of different factions in the state. The bill, in its
current form, addresses many complex issues including patient
provider protection, a patient's right to choose a provider,
confidentiality of a patient's medical information, and a patient's
right to have complex medical issues reviewed externally to
carriers. The bill also preserves the tools necessary for
insurance companies to help them manage the rapidly increasing cost
of medical services today.
Number 2002
REPRESENTATIVE KERTTULA asked Mr. Wiggins whether he likes the
bill.
MR. WIGGINS replied that it is a bill they think that they can live
with. There have been a lot of compromises made, and they didn't
always get their way.
Number 2030
JIM JORDAN, Executive Director, Alaska State Medical Association,
testified via teleconference from an off-net site in Anchorage.
The physician community is concerned with the issues of medical
necessity and accountability of the managed care entities that make
medical decisions. In relation to the issue of medical necessity,
the physician community thinks that it boils down to a policy
decision in relation to who would practice medicine - the physician
or some insurance company. The physician community feels that the
definition developed by the American Medical Association is
appropriate because it turns the whole arena of medical necessity
in terms of what is prudent health care. In relation to the issue
of accountability or liability and it being a cost-driver, a number
of estimates associated with the federal legislation and the
legislation enacted in the state of Texas, which the language in
Version K was based on, indicate that the costs are not that high.
He noted that in the state of Texas there have been five lawsuits
to date since 1997, a jurisdiction that is much larger than Alaska.
Some may say it is too early to tell, but the state of Texas has a
two year statute of limitations just like Alaska. He doesn't see
the issue of accountability/liability as being a cost-driver.
MR. JORDAN further stated, in relation to comments made on other
causes of actions, that it is his understanding that the cause of
actions that may be available in state courts currently for
decisions made by insurance companies are contractual in nature as
opposed to tort. He's been told by counsel that the differences
between action in tort and action in contract could be the subject
of a law review, which indicates that there are substantial
differences.
Number 2198
MR. JORDAN further stated, in relation to ERISA, that
Representative Rokeberg had indicated there is a change in the
legal environment in relation to the ability of a state to regulate
this area. It currently assumes that, if a person is involved in
a plan, ERISA would preempt state regulations. The result of that
is that any litigation brought forward in regard to a medical
decision made by an insurance company is (indisc.). The only
recompense that would be available is the amount of the denied
service, and frankly, he said, that just doesn't seem fit or a just
manner in which to compensate a person who is injured in such a
manner.
Number 2249
MR. JORDAN further stated, in relation to the summit, that yes,
there was agreement in some of the areas. However, there appears
to be some material changes in Version N, which he just received
this morning, as the result of wordsmithing as Representative
Rokeberg mentioned earlier. Granted, there are areas where there
was agreement, but there are numerous other areas of issue in
addition to the liability and medical necessity issues, which
warrant subcommittee treatment.
Number 2285
CHAIRMAN KOTT noted that the written testimony committee members
have from the Alaska State Medical Association is dated March 17,
2000, and is signed by Dr. Peter Lawrason. He is assuming that the
comments in the letter were directed at Version K, the version
passed out of the House L&C Committee.
MR. JORDAN replied that is correct. The Alaska State Medical
Association continues to support Version K, as opposed to Version
N.
Number 2313
REPRESENTATIVE LISA MURKOWSKI asked Mr. Jordan whether Version N is
a starting point in that the two sides are in agreement but the
differences between liability and medical necessity need to be
hashed out. She also asked Mr. Jordan whether the Alaska State
Medical Association does not support Version N.
MR. JORDAN replied that the Alaska State Medical Association does
not support Version N, and there appear to be other areas of
concern in Version N that need to be discussed at length. He added
that the issue of including or not including medical necessity
works its way back through Version N in a number of ways. As
mentioned earlier, the federal legislation does not include a
definition of medical necessity, which allows for an external
review entity to go outside the four corners of a contract. He
noted that one reason why the medical community feels so strongly
about the definition of medical necessity is to try and provide
some consistency.
Number 2407
CHAIRMAN KOTT commented that he had heard Mr. Jordan indicated that
the "word smith" changes made to Version N might have some
materialistic effects. He isn't sure if that is true, however.
Number 2413
REPRESENTATIVE ROKEBERG stated that he has not received a response
from the Alaska State Medical Association in relation to Version N,
exclusive of the two areas of contention - liability and medical
necessity. He noted that a lot of Version N represents agreements
arrived at during the summit, but that might not be true for
everything in the bill.
Number 2438
REPRESENTATIVE CROFT asked where in Version N it limits the
definition of medical necessity in a contract.
MR. JORDAN answered that the concept of Version N allows for the
provisions of a contract to be entertained and reviewed by an
external appeal agency. It does not allow for this to go outside
the four corners of a contract.
REPRESENTATIVE CROFT stated then a person can only complain to an
external appeal tribunal in relation to not meeting a contract. In
that way, a person cannot complain that a contract is unfair
because it didn't allow for medical necessity.
MR. JORDAN replied, "Yes, that is correct."
TAPE 00-43, SIDE B
Number 0001
REPRESENTATIVE ROKEBERG asked Mr. Jordan whether going outside a
contract on utilization review is linked to the definition of
medical necessity.
MR. JORDAN replied that federal legislation does not define medical
necessity and allows for an external agency to go outside the
contractual definition of medical necessity. Version N only allows
for an external appeal agency to look inside the contract in regard
to the definition of medical necessity, and is bound by it.
Number 0074
REPRESENTATIVE GREEN asked Mr. Jordan whether the Alaska State
Medical Association agrees with Version K. He further asked: Is
that why they don't agree with Version N?
MR. JORDAN replied, "Yes."
Number 0106
REPRESENTATIVE CROFT asked Mr. Jordan whether the following
provisions tie it to the plan rather than to an objective
definition of medical necessity:
... a fair, de novo determination based on coverage
provided by the plan and by applying terms as defined by
the plan ... [page 8, lines 6-7, of Version N]
... an external appeal agency shall determine whether the
managed care entity's decision is (A) in accordance with
the medical needs of the patient involved, as determined
by the managed care entity, ... [page 8, lines 10-12, of
Version N]
MR. JORDAN replied, "Yes."
Number 0140
REPRESENTATIVE ROKEBERG pointed out that the paragraphs
Representative Croft is referring to were written assuming that
medical necessity would either be in or out. For the external
review language, he thinks, it was assumed that it was in. In
trying to interpret what Mr. Jordan said, going outside a contract
in relation to an external review at the federal level is allowed,
but because this bill included medical necessity that type of
language wasn't needed. There is some wordsmithing in the bill
that committee members may find objectionable.
Number 0200
MIKE HAUGEN, Representative, Alaska Physicians & Surgeons, Inc.,
testified via teleconference from an off-net site in Anchorage.
The group, he said, is oppose to some of the changes made in
Version N. [He did not expand on which changes.]
Number 0214
REPRESENTATIVE CROFT asked Mr. Haugen to provide a list of the
wordsmithing changes and/or technical changes that might cause
problems in addition to the medical necessity and liability issues.
MR. HAUGEN replied that Version K [page 3, Section 21.07.010]
provides for patient and health care provider protection. In that
way, physicians know what's expected of them to prevent "fighting"
over whether a service is medically necessary versus what is
covered under a plan. He noted that it has been indicated that the
section is fixable and they are amenable to a shorter version that
would provide for those services that would be excluded from a
plan. The net result would be the same; that being, what is
expected from a physician.
CHAIRMAN KOTT asked Mr. Haugen to provide a written, detailed
analysis to the committee the areas of concern other than the
liability and medical necessity issues.
MR. HAUGEN indicated that he would do so.
Number 0311
GORDON E. EVANS, Representative/Lobbyist, Health Insurance
Association of America, came before the committee to testify. He
said the association agrees with Version N. In response to Mr.
Jordan's earlier comments in relation to Version N, Mr. Evans said
it is important to take a look at all of the language in the
paragraphs because they take into consideration a definition of
medical necessity. He specifically referred to paragraph (4) and
the subparagraphs starting on page 8, line 29, of Version N. The
association believes that a government definition of medical
necessity would undermine utilization management and increase costs
by turning over coverage determinations based on medical necessity
solely to the treating physicians who have both economic and non-
economic incentives to inflate reimbursements.
MR. EVANS further noted that defining medical necessity would
eliminate the utilization review process - a process that is
fundamental to managed care. He explained that for most contracts
medical necessity is referred to but not defined, and the
definition in Version K is far too broad. It should be consistent
with the best practices and guidelines of the appropriate medical
societies, but it doesn't have to be defined, which is what
paragraphs (3) and (4) under the external appeal process refer to
[page 8, starting on line 19, of Version N]. The representatives
of the medical society, he said in conclusion, are only doing what
they usually accuse the insurance industry of doing - cherry
picking.
Number 0417
REPRESENTATIVE CROFT said this whole issue is really not a
disagreement about Version K and Version N or a disagreement
between physicians and insurance companies; it is really a question
of how to define the policy. It seems that there is agreement on
the external appeal process in that it is not limited to the
policy, but there is disagreement on defining the extra "bid." Is
that right?
MR. EVANS replied that that is exactly what subparagraph (D) does
[page 8, line 28, of Version N]. It says that the plan has to be
taken into consideration, but it also says that the external appeal
agency may take into consideration other evidence that goes outside
the plan, as defined in Version N.
Number 0450
REPRESENTATIVE CROFT asked Mr. Evans whether the definition of
medical necessity in Version K is from the American Medical
Association. He further asked Mr. Evans what the problems are with
the definition. The definition of medical necessity in Version K
reads as follows:
"medical necessity" means those health care services or
products that a prudent physician would provide to a
patient for the purpose of preventing, diagnosing, or
treating an illness, injury, disease, or its symptoms in
a manner that is (A) consistent with generally accepted
standards of medical practice; (B) clinically appropriate
in terms of type, frequency, extent, site, and duration;
and (C) not primarily for the convenience of the patient,
physician, or other health care provider; [Page 16,
starting on line 30, of Version K]
MR. EVANS replied that subparagraph (A) is the main problem with
the definition. The Health Insurance Association of America would
prefer the following language from South Carolina:
Consistent with the most appropriate practice guidelines,
which may include generally accepted practice guidelines,
evidence-based practice guidelines or any other practice
guidelines developed by the federal government, national
or professional medical societies, boards and
associations.
MR. EVANS noted that the above language does not limit the
definition to just the generally accepted standards of medical
practice, which is what the physicians want. Otherwise, they think
that people are telling them how to practice medicine when it is
fair to say that not all physicians practice medicine the same.
Number 0558
REPRESENTATIVE ROKEBERG stated that it is well recognized that the
American Medical Association's definition of medical necessity does
not allow for an insurer to put a sideboard on it, which is
necessary in a managed care type of situation. This bill, he said,
is about managed care entities; it is not about fee-for-service.
The idea is to give the best quality and most affordable health
care available in a plan. The ultimate balancing act and goal is
to be cognizant of the cost-drivers, while at the same time ensure
quality care. He commented that he'd like to see a little bit of
a sideboard in relation to the definition of medical necessity.
Number 0664
CHAIRMAN KOTT asked Mr. Evans whether the language from South
Carolina was agreed to by all parties during the summit.
MR. EVANS replied that the language was not brought up at the
summit. He just received the definition today. He was told that
it comes from the National Association of Insurance Commissioners
external review model Act.
Number 0694
REPRESENTATIVE GREEN asked Mr. Jordan and Mr. Haugen whether the
language from South Carolina is acceptable.
REPRESENTATIVE ROKEBERG replied, "No." It may be acceptable, but
it is only part of the issue.
REPRESENTATIVE GREEN stated that the language from South Carolina
only deals with subparagraph (A) in relation to the generally
accepted standards of medical practice.
Number 0692
MR. JORDAN responded that he'd like to see the totality of the
language in context.
CHAIRMAN KOTT indicated that the committee would provide a copy of
the language from South Carolina to Mr. Haugen and Mr. Jordan for
their review.
Number 0825
MR. EVANS clarified that the Health Insurance Association of
America does not want any reference to medical necessity or
liability in the bill.
Number 0860
CHAIRMAN KOTT closed the meeting to public testimony.
CHAIRMAN KOTT assigned HB 211 to a subcommittee consisting of
Representatives Green, Murkowski and Croft in order to "iron out"
some of the differences and unintended consequences. He also asked
that Representative Rokeberg participate by presenting the
amendments. He noted that he had to exclude himself from the
subcommittee because staff [Lesil McGuire] has advised him of a
possible conflict of interest. Ms. McGuire's father is a physician
and there may be some ethical issues in that regard.
Number 0932
REPRESENTATIVE MURKOWSKI remarked that she does not object to
serving on the subcommittee, but it is important to recognize that
the "magic bullet" will have to come from the physicians and
insurers. Unless they are committed to participate in the process,
she's not sure that the subcommittee will be able to report a
solution.
Number 0969
CHAIRMAN KOTT stated that he hopes that the parties can come
together and work out an arrangement. He asked that Mr. Jordan and
Mr. Haugen provide written comments to the committee on the areas
of concern, other than that related to medical necessity and
liability, by Monday, April 2, 2000,.
MR. JORDAN indicated that he would do so.
CHAIRMAN KOTT reminded Mr. McRae to provide the committee with a
copy of a contract.
MR. McRAE indicated that he would do so.
CHAIRMAN KOTT sent HB 211 to a subcommittee and asked that the
subcommittee members report back to the full committee by
Wednesday, April 5, 2000.
The committee stood at ease from 2:37 p.m. to 2:40 p.m.
HB 244 - UNFAIR TRADE PRACTICES/DEFAMATION
Number 1140
CHAIRMAN KOTT announced the next order of business would be HOUSE
BILL NO. 244, "An Act relating to disclosure of information by the
attorney general about possible unfair trade practices; and
relating to liability for allegations relating to unfair trade
practices."
Number 1158
REPRESENTATIVE CROFT, sponsor of the bill, noted that he and
Representative Fred Dyson, cosponsor of the bill, have been
interested in consumer protection issues for some time now. House
Bill 244 is a small fix in two different areas. First, those who
work with consumer protection complaints have been frustrated with
the amount of information available to them from the Department of
Law. The department is prohibited by statute from communicating
with anyone about the status of an investigation. He thinks that
is mainly to protect the business entity from disclosure about the
complaint until probable cause has been determined. In other
words, he said, "You don't want ... everyone using the fact that
[there have] been complaints against Joe Green's roofing company
until you know whether they're substantiated or not." There were
good reasons for the statute, he said, but in his opinion it is too
broad and it doesn't allow the Attorney General to communicate the
status of a complaint, which leads to the feeling that a complaint
has been thrown into a black hole to the point that even good work
isn't apparent to the general public.
REPRESENTATIVE CROFT said that second, there is a lot of worry
among complainants that if they talk about the suit at all they
might be subject to slander or libel actions from the affected
business. In that type of case, he noted, that the complainants
would probably win, because in slander-and-libel law when a matter
is of public concern the courts have held under the Free Speech
Clause that a person can't be held liable for making a mistake. In
other words, if it is important enough for public discussion, which
he thinks is the case with consumer protection, it is not a matter
of making a mistake; it is a matter of knowing or having been
reckless with regard to the truth.
Number 1363
REPRESENTATIVE KERTTULA asked Representative Croft what happens
with the information once the complainant gets it. Can the
complainant divulge it?
REPRESENTATIVE CROFT replied that according to Ms. Julia Coster
[Assistant Attorney General, Commercial Section, Civil Division,
Department of Law] that is a possibility, but it is not a client
situation. It is not protected by the attorney-client privilege
because the client is the state. He's trying to define an area
where a complainant could get some information, but a complainant
would not have an absolute right to everything that's going on.
There is a worry that information the Attorney General tells a
complainant could be deposed because often a complainant is a key
witness. The intent of the bill is to give discretion to the
Office of the Attorney General to communicate limited facts, which
is why the language reads "may" instead of "shall" [page 2, line 1,
of the bill]. He imagines that limited facts would be communicated
rather than everything in order not to compromise the case.
Number 1463
REPRESENTATIVE GREEN asked Representative Croft whether there would
be any divulging of information that wouldn't be a matter of public
record.
REPRESENTATIVE CROFT replied that at this point, no information is
a matter of public record until a determination has been made. The
statute says that the Attorney General cannot communicate with
anyone the identify of who was complained against, which is to
protect a business until they are ready to file a case. He thinks
it is a rational law, but he thinks that it is a little bit overly
broad.
REPRESENTATIVE KERTTULA asked Representative Croft whether the
Attorney General could give the name of the person being
investigated to the complainant, if so-desired, under the new law
[Section 2, of the bill].
REPRESENTATIVE CROFT replied yes, the Attorney General could only
communicate with the person who has filed a complaint - the
complainant.
REPRESENTATIVE KERTTULA pointed out that once the complainant gets
the information, the complainant can divulge the information to
anybody.
REPRESENTATIVE CROFT replied, "They could." But the complainant
has an interest in seeing the case brought to a successful
completion. The complainant, he thinks, doesn't have an interest
in ruining the case. A little bit of information helps the
complainant feel like something is being done. He doesn't think
that the risk of using that information to compromise the case is
very significant.
Number 1570
REPRESENTATIVE MURKOWSKI asked Representative Croft whether there
would be any concern in relation to assigning rights to a claim,
for example. In other words, would anybody be excluded that should
not be?
REPRESENTATIVE CROFT deferred the question to Ms. Julia Coster of
the Department of Law.
CHAIRMAN KOTT opened the meeting to public testimony.
Number 1617
REGINA C. LEVY, Private Senior Citizen, testified via
teleconference from Anchorage in support of HB 244. She has been
waiting for "Lady Justice" to come her way for over five years now.
She continues her long fight for justice in consumer protection
issues despite the fact that she is almost 72 years old. She
firmly believes that consumer protection, as well as the
contracting laws of the state are inadequate at best. Instead,
they protect the corrupt contractors and do nothing for their
victims.
MS. LEVY further stated that she has ambivalent feelings about
testifying today. One side is eager to tell her story again, while
the other side says, "What for?" It is nothing but a complete
waste of time if the past is to prove true once again. But when
common sense takes control of her she realizes that the committee
members need to know what victims like herself have gone through.
Only then can they debate the bill fully aware of the experiences
that victims have endured, the lessons learned, and the horrors of
the cost of litigation with nothing to show for it but a worthless
piece of paper called a judgment. But, most importantly, she feels
that the current laws in statute protect the corrupt contractors
and leave the victims with no recourse whatsoever. That is a fact
that leaves her angry, frustrated, helpless and mad against the
current legal system and the legislators that support the system
with no thought for the victims.
MS. LEVY explained that she contracted-out with J&B Roofing in the
fall of 1994, at which point she knew nothing about roofing or
roofing contracts. The contractor came to her home and presented
himself as an "expert," and put a $20,000 roof on her home with a
rating of a 2 on a scale of 1 to 10, with 10 being the best rating.
The price to her was $18,000 because of a senior citizen discount,
and it will have to be completely redone at her expense. She filed
an official complaint with the Better Business Bureau in the spring
of 1995, which was taken to the Office of the Attorney General, but
she never heard anything more about it. She asked: Doesn't the
Attorney General want to do something to protect the people from
being taken just like her? But at that point she was still very
young and naive about the legal system, Ms. Levy said.
MS. LEVY further stated that on December 1, 1998 she gave an in-
depth testimonial at the very first consumer protection round
table, at which time, she spoke to the assistant attorneys general
in attendance - Julia Coster and Daveed Schwartz. When she asked
about speaking out in fear of retaliation, Representative Dyson had
clarified the concern with Mr. Schwartz, who indicated that it is
a possibility. In support of HB 244, she feels that she has every
right to know the status of her complaint, and what the Attorney
General is doing, if anything, or did he just trash-can it? She
spent more than $28,000 on attorney fees to get a judgment that is
nothing more than a worthless piece of paper, and now that she has
filed an official complaint she cannot know what's going on. Why
not?
MS. LEVY continued. After all this time, she has no idea what the
courts have done in relation to her complaint. As the victim,
there should be some means of disclosure by the Attorney General to
keep her informed rather than push her to the side, wipe her off
and take her out of the picture. In other words, treat her like
she was nothing when in fact she is one of thousands of people in
Anchorage who have been taken by corrupt contractors. She further
noted that J&B Roofing has changed their name to avoid all
accountability for their criminal actions, which left hundreds of
creditors without any recourse to get what is rightfully due. The
corporate veil that this company hides behind protects and shields
them from all intruders. Corporation laws, she said, protect the
criminal, for she can't reveal information on the company to anyone
even if asked for fear of being sued. That is why she will not
speak of their new name. She has had enough of the legal system
and how it protects the corrupt contractors and leaves the victims
with anger, frustration and out of funds. House Bill 244 would
take some of the pressure off of those who have the courage to
speak out, which would give victims who have judgments against
corrupt contractors the ability to speak out to warn the innocent
and unsuspecting without any fear of repercussions. She said, "Put
yourself in my place. Wouldn't you be grateful that somebody who
had a very unpleasant experience with a contractor speak out and
save you years of litigation, many thousands of dollars in attorney
fees, and also the cost that you along would have to bear to make
good again the damage done to your property by a corrupt
contractor?"
MS. LEVY further stated that after she went public at the consumer
protection seminar and the Senior Voice and the Eagle River Star
published articles in the paper, she was immensely afraid that she
would be found in some ditch or that her home would be fire bombed
or that her tires would be slashed. The only reason that did not
happen is because the contractor would be a prime suspect, for she
has no enemies; she is a law-abiding senior citizen. Since this
has happened she has been working as a researcher at the local
court house, and has put together a database of lawsuits the
company is involved with. The company has been involved in 26
lawsuits from September 1, 1994 to January 27, 1999 under different
names. She often wonders how less litigation there might have been
if HB 244 was in effect back then. It is imperative that the
people have HB 244 in place and working for them. She has
downloaded the various name changes the company has made trying to
distances themselves from the Johnson name, but it is easy to see
that the company remains the same regardless of how many name
changes have been made. That information was faxed earlier to the
committee. She hopes that it is used by the committee members when
debating the bill, for it is imperative that victims are able to
speak out. She's not talking about rocket science; it is just
plain common sense.
MS. LEVY further stated that since she started her quest for
justice, she has become well known with local public officials and
have written numerous letters to the Governor and on down to no
avail. House Bill 244 is the first and only positive legal script
dealing with consumer protection that has come out of Juneau in
years. It would protect victims of corrupt contractors so that
they can keep abreast of any complaints made to the Attorney
General and can speak up freely without any fear of repercussions,
and hopefully it would put the fear of God into some of the corrupt
contractors. House Bill 244, she said, is not the answer to all
consumer protection problems, but is a start in the right
direction. She urged the committee members to pass the bill
without hesitation. The people need it for their protection. She
thanked Representative Eric Croft and Representative Fred Dyson for
drafting the bill, and the committee members for listening to her.
In closing, she has been a one-person campaign for over five years
now to bring these creditors to the bar of justice and be held
accountable for their criminal activity, yet despite her best
efforts she has been left with bitter disappointment, total
frustration and completely disillusioned with the legal system.
She has found out the hard way that those who have the power and
authority to do something just turn and look the other way. Thank
you very much.
Number 2406
CHAIRMAN KOTT thanked Ms. Levy for her excellent testimony.
TAPE 00-44, SIDE A
Number 0060
THOMAS WARD testified via teleconference from Anchorage in support
of HB 244. The bill is long overdue to protect the citizens of
Anchorage. First of all, contractors should have a better criteria
for licensing. As an ex-real estate person, he had to take
numerous classes and continuing education classes to make his job
acceptable to the public. Contractors, on the other hand, only
need to provide $25 for a license to be in business. There is also
no way to cancel insurance after obtaining it, when it is a known
fact that in the event of an accident the consumer is sued, if the
contractor doesn't have insurance. He agrees with HB 244 in that
the Attorney General should inform the consumer on what is going
on. He further noted that it only takes a $500-bond for $10,000
and the contractor is in business.
MR. WARD told members he also had testified in 1998, along with Ms.
Regina C. Levy, because he had been trying for a year to get money
back from a bond. He didn't get it all back, but it cost him only
$8,000 to talk to an attorney at $150 an hour. It is important for
the consumer to get his money in due time. He even threatened the
insurance company with litigation to pass on the money that he was
entitled to, for he too has a judgment against a contractor. He
firmly agrees with HB 244. It is a small step for the legislature
to take, but a large step for the citizens who should be informed
at all times and who should have a way to investigate these
contractors. It is a shame that more people aren't testifying.
Ms. Regina C. Levy has a list indicating that there are $136,000
out of several contractors in the last year. Lord only knows, he
said, how many thousands of dollars have been stolen from the
people. Thanks you very much for listening. He hopes that this is
a step in the right direction.
Number 0383
JULIA COSTER, Assistant Attorney General, Commercial Section, Civil
Division, Department of Law, testified via teleconference from
Anchorage. She does not have formal testimony to present; she is
prepared to answer any questions.
Number 0407
REPRESENTATIVE KERTTULA asked Ms. Coster whether she feels
comfortable that the Office of the Attorney General would have
enough latitude to discuss the matter but that they would be
careful enough not to provide too much information so that it could
conceivably hurt a case later on [Section 2(c), of the bill].
MS. COSTER replied, "That's right." The Department of Law in
concerned in that they would not want to disclose information that
would compromise an investigation. She feels comfortable because
the language in the bill is permissive as opposed to mandatory.
She thinks that the department could disclose information on
whether or not they were investigating [an act or practice], and
that probably wouldn't compromise an investigation.
Number 0480
REPRESENTATIVE ROKEBERG asked Ms. Coster what the practice is now
legally in terms of warning the public about potential fraud. It
seems to him that people may come to the state from outside, start
their activities and move around the state, at which time, the
Department of Law may become aware of them. Is the department
restrained from warning the public because an action has been filed
against an act or practice? How does the department reconcile that
conflict with the same concept of not talking about an alleged
perpetrator?
MS. COSTER replied the confidentiality provisions in the Consumer
Protection Act allow the Office of the Attorney General to issue a
warning relating to conduct constituting an unlawful act or
practice under the Act. The Department of Law uses that provision
when they see conduct that is illegal on its face. She cited a
telemarketer selling goods or services so that the department can
tell the conduct is a violation of the Act as an example. In that
case, the department may issue a warning relating to a systematic
type of violation, but they probably would not disclose the name of
the business; they may just disclose the type of conduct that is
the violation. The department has that right, but they use it
carefully.
Number 0621
MS. LEVY said, according to her understanding, the criteria that
the Attorney General sets forth to take on a case or initiate
action is related to the number of people involved, the amount of
money involved and the egregious behavior of those involved. The
company that she had dealings with has more than met every one of
the criteria. In fact, the company has exceeded every one of the
criteria. She wondered what her recourse is after going to the
Attorney General who responds negatively to pursuing a case. The
people have a right to know and be protected from corrupt
contractors, and the only way to do that is to get them out of
business.
CHAIRMAN KOTT deferred Ms. Levy's question to Representative Croft.
REPRESENTATIVE CROFT stated the frustration is because the statute
prohibits Ms. Julia Coster of the Department of Law from
communicating to anyone the status of a complaint. He's not sure
what to do about a complaint that has been rejected after the bill
is passed and after the Office of the Attorney General is allowed
to communicate to a complainant freely about the investigation of
an act or practice. But the first thing to fix is to allow the
Office of the Attorney General to communicate whether or not they
are pursuing a complaint.
Number 0797
MS. LEVY said she agrees with allowing the Office of the Attorney
General to tell her the status of a complaint, but she would like
to know what to do when they reply in the negative to pursuing a
case. She wants to know for the people who are at risk.
REPRESENTATIVE CROFT replied, "I think then we raise holly heck."
MR. WARD stated, even though he and Ms. Levy are two small voices
in the wilderness, he just talked with a woman the other day who
got hoodwinked on her driveway because she trusted someone. He
noted that he was a contractor for twenty-five years, but he can
still walk in his hometown with his head held high.
Number 0866
MS. LEVY stated a big problem for the state in relation to this
issue is because there isn't a consumer protection agency. There
are 1.5 attorneys working on consumer protection now, but when
there was a consumer protection agency there were 15 attorneys and
a full staff. Alaska, the largest and wealthiest state, is the
only state without a consumer protection agency in the country.
That is why the state is a haven for crooks and scammers. They
know nobody will do anything about it. She cited the roofing
company that she has been dealing with had been operating in the
state since 1970. They just kept changing their name when things
got too hot, or if things got really bad they left. But they
always returned because they know that they can get away with it.
The state needs a consumer protection agency.
Number 0942
MR. WARD noted that AARP is behind this issue. He and Ms. Levy
volunteer as part of a task force that is willing to work for free
to help do research, the leg work. It wouldn't cost the state any
money.
MS. LEVY interjected and stated it would cost the state some
attorneys, but the task force members would do the leg work. Her
experiences have turned her into a mini-paralegal.
CHAIRMAN KOTT commented that Ms. Levy is not a force that he would
want to deal with based on what he has heard today.
MS. LEVY replied nobody wants to come up against her because she
believes in truth in justice. She treats the other person the way
she wants to be treated. In this case, she is speaking for
thousands of victims in the Anchorage area, not just for herself.
Number 0990
REPRESENTATIVE ROKEBERG pointed out that both general and
speciality contractors of the state have to be licensed with the
Division of Occupational Licensing [Department of Community &
Economic Development] but there is no board or method for a
consumer to file a complaint to revoke a license. He noted that HB
418, which removes program receipts from the general fund and
designates them as program receipts, gives future legislators the
opportunity to enact a regulatory scheme that would allow for
consumer protection. He also noted that the Alaska Association of
Home Builders is very interested in establishing a board.
REPRESENTATIVE CROFT suggested that he work with Representative
Rokeberg on the issue.
Number 1076
REPRESENTATIVE CROFT offered Amendment 1, which reads as follows:
Page 1, line 13 after "about the", insert "status of the"
REPRESENTATIVE CROFT explained that Amendment 1 would take care of
Ms. Coster's concern in relation to the intent language being too
broad.
CHAIRMAN KOTT asked whether there was any objection. There being
none, Amendment 1 was adopted.
Number 1110
REPRESENTATIVE CROFT stated that Ms. Coster also wants language at
the end of Section 3 to indicate that it doesn't limit any other
defense. Section 3 reads as follows:
Sec. 45.50.525. Limits on cause of action for statements.
A person may not bring an action for defamation of
character, libel, slander, or damage to reputation
against a person who makes an allegation that an act or
practice is or may be unlawful under AS 45.50.471 unless
the person who made the statement knew that the statement
was not true, made the statement with reckless disregard
for the truth of the statement, or made the statement to
obtain a competitive business advantage.
MS. COSTER told members she wants language that says this section
doesn't extinguish any existing defense in law to the actions
listed in the section.
REPRESENTATIVE CROFT made a motion to adopt the foregoing as a
conceptual amendment [Amendment 2].
CHAIRMAN KOTT asked whether there was any objection to the
conceptual amendment; there was no response. [Although the
adoption of conceptual Amendment 2 was never ordered, no objection
was ever stated.]
Number 1165
REPRESENTATIVE MURKOWSKI asked Ms. Coster to comment on the reason
why this is being limited to disclosing information to the
complainant.
MS. COSTER replied that it is a policy call that Representative
Croft can address. She commented that the Department of Law really
doesn't want to disclose information on an investigation to hardly
anyone because it could be compromised. For instance, a witness
could be contaminated for asking questions, or the defense could
get rid of evidence as the result of the press asking questions.
She believes that Representative Croft focused on the complainants
so that they would know whether or not an investigation was being
pursued.
Number 1245
REPRESENTATIVE CROFT stated that the bill is narrow so that the
Office of the Attorney General can only tell a narrow class of
people - the complainant(s). Yes, that class of people could
divulge the information, but they seem like the least likely to
want to compromise the investigation. In that regard, he is
comfortable in letting them have some information about the case.
Number 1289
REPRESENTATIVE KERTTULA asked what the standard is for libel now.
Number 1300
REPRESENTATIVE CROFT answered that, according to his understanding,
there are two constitutional restrictions in relation to the
statement of libel. There has to be some sort of malice. After
that, if it is a matter of public concern, the New York Times
standards apply. If it is not a matter of public concern, simple
negligent standards apply. But, if it is a matter of public
concern, it has to be a person knew of a falsehood and was reckless
about the falsehood. In effect, the bill declares consumer
protection a matter of public concern and apply the actions in
Section 3, of the bill.
Number 1367
REPRESENTATIVE GREEN made a motion to move HB 244, as amended, out
of committee with individual recommendations and attached zero
fiscal note. There being no objection, CSHB 244(JUD) moved from
the House Judiciary Standing Committee.
HB 58 - OIL & GAS AUDITS
CHAIRMAN KOTT announced the next order of business would be HOUSE
BILL NO. 58, "An Act relating to certain audits regarding oil and
gas royalty and net profits and to audits regarding costs relating
to exploration incentive credits and oil and gas exploration
licenses; and providing for an effective date."
CHAIRMAN KOTT brought up HB 58 in order to set it aside
temporarily. [HB 58 was held.]
HJR 5 - DEDICATED HIGHWAY AND HARBOR FUNDS
CHAIRMAN KOTT announced the next order of business would be HOUSE
JOINT RESOLUTION NO. 5, Proposing amendments to the Constitution of
the State of Alaska creating a highway fund and a harbor fund.
CHAIRMAN KOTT brought up HJR 5 in order to set it aside
temporarily. [HJR 5 was held.]
ADJOURNMENT
Number 1413
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:25 p.m.
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