Legislature(1997 - 1998)
04/27/1998 03:28 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 27, 1998
3:28 p.m
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative Bill Hudson
Representative Jerry Sanders
Representative Joe Ryan
Representative Gene Kubina
MEMBERS ABSENT
Representative John Cowdery, Vice Chairman
Representative Tom Brice
COMMITTEE CALENDAR
HOUSE BILL NO. 300
"An Act relating to health insurance; and providing for an
effective date."
- HEARD AND HELD
HOUSE BILL NO. 486
"An Act relating to the Alaska Securities Act; and providing for an
effective date."
- MOVED CSHB 486(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 350
"An Act requiring that the cost of contraceptives and related
health care services be included in health insurance coverage."
- HEARD AND HELD
Confirmation Hearing for Boards and Commissions
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 300
SHORT TITLE: ALASKA PATIENTS' BILL OF RIGHTS
SPONSOR(S): REPRESENTATIVES(S) BUNDE, James, Rokeberg
Jrn-Date Jrn-Page Action
1/12/98 2023 (H) PREFILE RELEASED 1/2/98
1/12/98 2023 (H) READ THE FIRST TIME - REFERRAL(S)
1/12/98 2023 (H) HES, LABOR & COMMERCE
2/19/98 (H) HES AT 3:00 PM CAPITOL 106
2/19/98 (H) MINUTE(HES)
2/24/98 (H) HES AT 3:00 PM CAPITOL 106
2/24/98 (H) MINUTE(HES)
2/25/98 2423 (H) HES RPT CS(HES) NT 1DP 2DNP 2NR
2/25/98 2423 (H) DP: BUNDE; DNP: PORTER, VEZEY;
2/25/98 2423 (H) NR: DYSON, GREEN
2/25/98 2423 (H) ZERO FISCAL NOTE (DCED)
2/25/98 2423 (H) REFERRED TO L&C
3/20/98 (H) L&C AT 3:15 PM CAPITOL 17
3/20/98 (H) MINUTE(L&C)
3/20/98 (H) MINUTE(L&C)
3/23/98 (H) L&C AT 3:15 PM CAPITOL 17
3/23/98 (H) MINUTE(L&C)
4/27/98 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 486
SHORT TITLE: ALASKA SECURITIES ACT
SPONSOR(S): LABOR & COMMERCE BY REQUEST
Jrn-Date Jrn-Page Action
4/16/98 3014 (H) READ THE FIRST TIME - REFERRAL(S)
4/16/98 3014 (H) LABOR & COMMERCE
4/24/98 (H) L&C AT 3:15 PM CAPITOL 17
4/24/98 (H) MINUTE(L&C)
BILL: HB 350
SHORT TITLE: INSURANCE COVERAGE FOR CONTRACEPTIVES
SPONSOR(S): REPRESENTATIVES(S) CROFT, Phillips, Bunde, Green,
James, Berkowitz, Davies, Elton, Kemplen, Rokeberg; SENATOR(S)
Wilken
Jrn-Date Jrn-Page Action
1/26/98 2133 (H) READ THE FIRST TIME - REFERRAL(S)
1/26/98 2133 (H) HES, L&C
2/04/98 2223 (H) COSPONSOR(S): ELTON
2/10/98 (H) HES AT 3:00 PM CAPITOL 106
2/10/98 (H) MINUTE(HES)
2/16/98 2336 (H) COSPONSOR(S): KEMPLEN
2/19/98 (H) HES AT 3:00 PM CAPITOL 106
2/19/98 (H) MINUTE(HES)
2/20/98 2380 (H) HES RPT 3DP 2DNP 1NR
2/20/98 2380 (H) DP: GREEN, BUNDE, KEMPLEN;
DNP: DYSON
2/20/98 2380 (H) PORTER; NR: BRICE
2/20/98 2380 (H) LETTER OF INTENT WITH HES REPORT
2/20/98 2381 (H) ZERO FISCAL NOTE (DCED)
4/24/98 (H) L&C AT 3:15 PM CAPITOL 17
4/24/98 (H) MINUTE(L&C)
4/27/98 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE CON BUNDE
Alaska State Legislature
Capitol Building, Room 104
Juneau, Alaska 99801
Telephone: (907) 465-4843
POSITION STATEMENT: Sponsor of HB 300.
PATTI SWENSON, Legislative Assistant
to Representative Con Bunde
Alaska State Legislature
Capitol Building, Room 106
Juneau, Alaska 99801
Telephone: (907) 465-6824
POSITION STATEMENT: Answered questions on the proposed CS for
HB 300.
JACK McRAE
Blue Cross of Washington and Alaska
(Address not provided)
Telephone: (Not provided)
POSITION STATEMENT: Testified on the proposed CS for HB 300.
KATHY VOLTZ, Physical Therapist
President, Alaska Chapter
American Physical Therapy Association
P.O. Box 140351
Anchorage, Alaska 99514
Telephone: (Not provided)
DR. ROBERT H. BANKS, President
Alaska Chiropractic Society
(Address not provided)
Telephone: (Not provided)
POSITION STATEMENT: Testified in support of HB 300.
TOM TIERNEY, Director
Employee Relations
Municipality of Anchorage
(Address not provided)
Anchorage, Alaska
Telephone: (Not provided)
POSITION STATEMENT: Testified against the proposed CS for HB 300.
DR. ROBINSON
(Address not provided)
Wasilla, Alaska
Telephone: (907) 373-0747
POSITION STATEMENT: Testified in support of HB 300.
CYNTHIA DODGE
Alaska Psychological Association
2550 Denali Street, Suite 1606
Anchorage, Alaska 99503
Telephone: (Not provided)
POSITION STATEMENT: Testified in support of CS for HB 300.
JACQUELINE HUTCHINS
(Address not provided)
Anchorage, Alaska
Telephone: (907) 345-2063
POSITION STATEMENT: Testified on CS for HB 300.
DR. MICHAEL SAGE, Dentist
(Address not provided)
Anchorage, Alaska
Telephone: (907) 243-3810
POSITION STATEMENT: Testified on CS for HB 300.
DR. GEORGE M. HANSEN, Retired Dentist
(Address not provided)
Anchorage, Alaska
Telephone: (907) 563-7518
POSITION STATEMENT: Testified on CS for HB 300.
ROSS BLAKER
AETNA Health Care
4300 "B" Street, Suite 500
Anchorage, Alaska 99503
Telephone: (Not provided)
POSITION STATEMENT: Testified on CS for HB 300.
QUINN McKENNA, Operations Administrator
Providence Health System
3200 Providence Drive
Anchorage, Alaska 99508
Telephone: (907) 261-3055
POSITION STATEMENT: Testified in opposition to CS for HB 300.
TOM HIPSHER, Dentist
Alaska Dental Society
800 East Dimond Blvd.
Anchorage, Alaska 99515
Telephone: (907) 349-5585
POSITION STATEMENT: Testified in support of CS for HB 300.
ED BURGAN
Brady and Company
9960 Lone Tree Drive
Anchorage, Alaska 99516
Telephone: (907) 346-1991
POSITION STATEMENT: Testified on CS for HB 300.
MANO FREY, President
Alaska AFL-CIO
2501 Commercial Drive
Anchorage, Alaska 99501
Telephone: (907) 272-4571
POSITION STATEMENT: Testified in opposition to CS for HB 300.
TERRY ELDER, Senior Securities Examiner
Division of Banking, Securities and Corporations
Department of Commerce and Economic Development
P.O. Box 110807
Juneau, Alaska 99811-0807
Telephone: (907) 465-2521
POSITION STATEMENT: Testified in support of HB 486.
GORDAN EVANS, Lobbyist
Health Insurance Association of America
211 Forth Street, Suite 305
Juneau, Alaska 99801
Telephone: (907) 586-3210
POSITION STATEMENT: Testified in opposition to CS for HB 300.
MARIANNE BURKE, Director
Division of Insurance
Department of Commerce and Economic
Development
P.O. Box 110805
Juneau, Alaska 99811-0805
Telephone: (907) 465-2515
POSITION STATEMENT: Answered questions on CS for HB 300.
TOM ATKINSON, Researcher
to Representative Eric Croft
Alaska State Legislature
Capitol Building, Room 430
Juneau, Alaska 99801
Telephone: (907) 465-4998
POSITION STATEMENT: Presented HB 350 on behalf of Representative
Eric Croft.
ACTION NARRATIVE
TAPE 98-52, SIDE A
Number 0001
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce
Standing Committee meeting to order at 3:28 p.m. Members present
at the call to order were Representatives Rokeberg, Hudson, Ryan
and Sanders. Representative Kubina arrived at 3:28 p.m.
HB 300 - ALASKA PATIENTS' BILL OF RIGHTS
Number 0211
CHAIRMAN ROKEBERG announced the first order of business would be HB
300, "An Act relating to health insurance; and providing for an
effective date," sponsored by Representative Bunde.
REPRESENTATIVE CON BUNDE came before the committee. He thanked the
committee for hearing the bill again. He stated that the bill, in
its current form, CSHB 300(HES), allows consumers to hold
organizations liable that are negligent in making medical decisions
for patients. It puts some protections in place for health care
providers who participate in managed health care plans. It
protects small business owners and consumers with respect to
emergency room visits, pharmacy needs, dental services and gives
recourse if claims are denied. He stated the legislation ensures
the availability of point-of-service plans for all consumers if
they want that type of coverage, and makes sure consumers can
obtain information about the availability of medical treatment
options and utilization review decisions that must be reviewed by
a physician or a medical practitioner licensed in Alaska. He
pointed out that he has worked to accommodate concerns that other
organizations, including Providence Hospital and unions, have
regarding the legislation. Representative Bunde noted that
organizations that are covered by the Employee Retirement and
Income Security Act (ERISA) would not be affected by the bill.
Number 0422
REPRESENTATIVE BILL HUDSON made a motion to adopted Version J, 0-
LS1248\J, dated 4/27/98. There being no objection, Version J was
before the committee.
PATTI SWENSON, Legislative Assistant to Representative Con Bunde,
Alaska State Legislature, came before the committee to explain the
changes in the committee substitute in comparison to the original
version of the bill. She stated the only section that is the same
is Section 1, "SHORT TITLE. Section 4 of this Act may be known as
the Alaska Patient's Bill of Rights." Ms. Swenson explained that
Section 2 is the liability section. If a managed care organization
acts negligently, they would take on some liability if something
happens to a patient. She referred to Section 3 and said it adds
a new regulation of health care insurance plans which is a new
Chapter 7. The section gives managed care providers some
protection as well as patients. She referred to line 22, (5)(A)
through (E), and said all health care services to be provided must
clearly be identified. Health care services will be provided by
contractors. She noted that which health care services provided by
contractors has to be clearly identified. Provider compensation
rates, termination procedures and usual and customary reimbursement
schedules must be clearly identified to both the patient and the
provider. Ms. Swenson explained under Section 21.07.020, regarding
required contract provisions, a health insurance plan offered to
residents of the state must provide coverage for medical procedures
that have been preapproved. She noted that in previous testimony,
there was a lot of complaining over people going to a doctor or any
health care provider and having a procedure done, and then later
the preapproval was taken back, and the doctor or provider was not
paid at all. The section would fix it so that once it is approved
it can't be changed. Also, included in the section is emergency
room visits for people who reasonably believe they should go the
emergency room. They will be covered. That would assist in that
if you were out of town, got in an accident, and went to an
emergency room that is not covered by your managed care agreement,
or if you're really sick and you go to the emergency room, they
can't say that it wasn't necessary to go to an emergency room.
Number 0759
MS. SWENSON referred to the wording on page 3, line 4, "(3)
copayment requirements shall be uniform between health care
providers;", and said the wording was added because the nurse
practitioners have recently been notified by their insurance group
that in order for a patient to see them, there is a $200 copay. In
order for the patient to see a doctor, there is a $10 copay. The
bill was changed so that copayment requirements shall be uniform.
Number 0833
REPRESENTATIVE JOE RYAN questioned the justification for that.
MS. SWENSON responded that she was not able to get any
justification for that.
MS. SWENSON referred to page 3, line 6, "(4) pharmacy and dental
services shall be located in the community in which the covered
person resides." She said she believes Chairman Rokeberg has an
amendment he would like to offer.
Number 0904
CHAIRMAN ROKEBERG stated his amendment would change the word
"located" to "provided", because in certain instances there may not
be dental or pharmacies in the area.
MS. SWENSON explained that page 3, line 8, (5), is utilization
review language. She stated a consumer can't have their benefits
reduced or their health care insurance terminated unless there has
been a conversation with another physician or another trained
health care provider in that specialty. There has been testimony
that health care providers are getting on the telephone to talk to
utilization review organizations, and the only person they get to
talk to is somebody at the front desk with a check list. That
person says, "Well it doesn't meet the requirements on this check
list, so these benefits are denied." She said hopefully (5) will
keep that from happening. There has to be a peer review. They
have to be able to speak to an equal person trained in that
specialty or close to it.
Number 1048
MS. SWENSON referred to the next section, "Choice of health care
provider," on page 3, line 13. She said insurance plans will now
need to offer a point-of-service plan that will allow people to go
outside of their preferred provider network. They don't have to
pick that plan. It doesn't say anything about it costing more or
less, but the point-of-service should be offered. Ms. Swenson
stated the next section, page 3, line 30, is definitions. She
referred to Section 4, page 4, line 27, "Required health insurance
coverage provisions, "(a) A health care insurer may not include in
the health care insurance plan or contract a provision that (1)
prohibits a covered person from obtaining health care services from
a health care provider of the person's choice, including a
specialist;". She stated this doesn't say that they would have pay
more if they went outside the plan. It just says that they would
have their choice. Ms. Swenson referred to page 5, line 1, (2),
and said it would prevent anybody from not being able to talk about
what the treatment options are with the patient. She indicated
page 5, line 4, (b), is utilization review. The language says,
"licensed to practice in the state", which was added so that
utilization review would remain in the state for some specialities.
Number 1228
MS. SWENSON referred to page 5, line 8, "(c) A health care insurer
may not directly or indirectly reimburse a covered person at a
different rate because of a person's choice of provider;". She
said that relates to the nurse practitioners. She read the wording
on page 5, line 15, (d), "A covered person may bring a civil action
against a health care insurer to enforce the person's rights under
this section." She said that stands for itself.
MS. SWENSON referred the committee to page 4, line 31, and said
Chairman Rokeberg has requested an amendment. Following
"specialist," insert "This paragraph does not apply to a health
care insurance plan or contract if the covered person signs a
written waiver of the provision of this paragraph." If a person
was offer a preferred provider organization (PPO) plan, they could
sign or waive this provision of they wanted to. It may be in
statute that they would have their choice, but a person can sign a
separate waiver and says they would waive this right.
Number 1411
CHAIRMAN ROKEBERG stated the purpose is to allow the PPO plans to
exist, survive and be able to provide that form of managed care.
He asked if it is not true that the definitions section of the
managed care, Chapter 7, provisions would include a PPO type of a
plan as defined as managed care.
MS. SWENSON responded in the affirmative.
CHAIRMAN ROKEBERG asked if the provisions under AS 21.42.390
actually applies to all health insurance.
MS. SWENSON responded in the affirmative.
CHAIRMAN ROKEBERG asked for a motion to adopt Amendment 1.
Number 1508
REPRESENTATIVE HUDSON moved and asked unanimous consent that
Amendment 1, J.1, Ford, be adopted. On page 3, line 6, delete
"located" and insert "provided". There being no objection,
Amendment 1 was adopted.
CHAIRMAN ROKEBERG noted the amendment would allow for those
pharmacy and dental services that aren't available in a community
to be obtained elsewhere. You would have to use the local services
unless they're not available.
Number 1618
REPRESENTATIVE HUDSON moved and asked unanimous consent that
Amendment 2, J.2, Ford, be adopted. On page 4, line 31, following
"specialist", insert, "This paragraph does not apply to a heath
care insurance plan or contract if the covered person signs a
written waiver of the provisions of this paragraph."
CHAIRMAN ROKEBERG objected for the purpose of discussion. He said
he asked the staff of the sponsor to look into the potentiality as
far as this allowing PPO-type structures in insurance to be
allowed, but there would have to be consent on the part of the
individual. He indicated he finds the entire Section 4 troublesome
because of its far-reaching impacts on all type of insurance in the
state. Chairman Rokeberg then withdrew his objection. There being
no further objection, Amendment 2 was adopted.
Number 1821
REPRESENTATIVE RYAN referred to page 4, line 2, regarding the
health care services definition, and said it talks about injury and
illness. He asked if it includes mental health or if it just
relates to just physical health.
MS. SWENSON said she believes it includes all health care services.
REPRESENTATIVE BUNDE said currently many insurance plans do not
provide parity. While mental illness is covered in the bill, it's
not covered under parity and that's yet to be addressed.
CHAIRMAN ROKEBERG asked Representative Bunde if his testimony is
that it doesn't include mental health.
REPRESENTATIVE BUNDE responded that it does include mental health,
but mental health is not yet at parity.
CHAIRMAN ROKEBERG questioned where it is included in the
definition.
Number 1926
MS. SWENSON said, "It doesn't specifically say that."
REPRESENTATIVE BUNDE explained mental health and mental services
are included in various insurance programs.
JACK McRAE, Blue Cross of Washington and Alaska, testified via
teleconference. He said, "The concept of any willing provider ...
we've opposed that consistent throughout the nation, and feel that
there is such a possibility and reality of increasing health costs
that we believe strongly that any time we do that we push people
out of the insured marketplace. (Indisc.) type of legislation like
that. There is also some other issues with the amendment that [HB]
300, that in our opinion, makes it more onerous for us than what it
was before, dealing with the liability issue."
CHAIRMAN ROKEBERG noted the committee substitute is substantially
different. However, it does provide the point-of-service for a PPO
type plan.
KATHY VOLTZ, Physical Therapist, President, Alaska Chapter,
American Physical Therapy Association, testified via teleconference
from Anchorage. She stated her organization supports HB 300. She
informed the committee that they work to establish good
communication between a patient and a therapist. Ms. Voltz
referred to contract provisions and said she believes it is an
excellent idea for utilization review decisions to be made in
consultation with health care providers trained in that specialty.
She commended the legislature for establishing fair rights for
patients.
Number 2455
DR. ROBERT H. BANKS, President, Alaska Chiropractic Society,
testified in support of HB 300 via teleconference. He said he
believes the legislation is the most significant legislation
relating to health care this year. The abuses of managed care are
atrocious. He pointed out that the American Chiropractic
Association has a web site that documents the abuses of managed
care. Dr. Banks said the major argument that insurance companies
are using against the legislation is that it is too expensive to
implement, and this is simply untrue. The Patient Access to
Responsible Care (PARC) bill is currently before the U.S. House of
Representatives. The PARC bill is an extremely comprehensive bill
and it is much more complex than HB 300. Kaiser (Indisc.) is
perhaps the largest managed care corporation in the country has
estimated that the PARC legislation will only cost less than 1
percent to implement. Mr. Banks referred to those people against
HB 300, whose insurance company plans are administered by nonprofit
corporations, and said, "Your plans are exempt from this
legislation. You're plans are protected by federal ERISA laws.
You're being manipulated by pawns to defeat legislation that does
not affect you." Mr. Banks thanked the committee for allowing him
to testify.
CHAIRMAN ROKEBERG asked if the chiropractors in the Alaska are
currently denied reimbursement for any kind of PPO or managed care
plans that may currently exist.
MR. BANKS responded that he believes there is a PPO that pertains
to Providence employees that will not allow for chiropractic
services.
Number 1755
TOM TIERNEY, Director, Employee Relations, Municipality of
Anchorage, was next to testify via teleconference from Anchorage.
He stated that any change that the legislature decides to make to
existing law may have a significant impact to both the tax payer of
Anchorage, as well as the municipality's employees. He referred to
wording on page 3, (2) [he stated page 4], of the proposed CS, "all
emergency room services shall be covered if the person covered
reasonably believes the services are required;". Mr. Tierney said,
"I heard the explanation that was given. On the other hand, that
means, the way I read it, that if Ms. Jones goes into the emergency
room at Providence Hospital and she feels that an x-ray ought to be
taken and no matter what she feels, the doctors do not get a vote
in the matter because the ... patient is going to be totally in
control of the deal and that is contrary to the way the rest of our
plan works." Mr. Tierney referred to (3), regarding the copayment
requirements, and said that is directly opposed to their existing
PPO. He referred to (4), regarding pharmacy and dental services,
and indicated concern that it may require that all the dental work
must be provided in the community. Mr. Tierney referred to page 5
and said there is wording that says a health care provider has to
be trained and be licensed to practice in Alaska. He pointed out
their utilization review firm is in the Lower 48. He said, "They
do this for a living, they're quite good at it and we're pleased
with it. While we're occasionally had some complaints, it has
clearly, we think, saved us a great deal of money and I see no
reason to change that." He stated the Municipality of Anchorage is
opposed to the legislation.
REPRESENTATIVE HUDSON asked if the municipality and the employees
pay the monthly premiums.
MR. TIERNEY indicated it varies. He stated they have five
bargaining groups plus a plan for non-bargaining groups. Each plan
is a little different. In some cases, the municipality pays 100
percent of the premium. In some cases the employees pay a portion.
CHAIRMAN ROKEBERG referred to the wording regarding the emergency
services and asked Mr. Tierney if that is too broad.
MR. TIERNEY pointed out that his reading of the language is that
the patient is going to be able to say, "Well I want this, or I
want that," whether it's medically necessary or not. At times, a
patient may not be in the best position to always determine what
the level of care ought to be.
Number 3746
REPRESENTATIVE BUNDE asked if the Municipality of Anchorage is
partially self-insured and partially insured.
MR. TIERNEY responded in the affirmative.
REPRESENTATIVE BUNDE asked how ERISA affects their self-insured
portion.
MR. TIERNEY stated they are not affected by ERISA.
Number 3816
DR. ROBERT ROBINSON was next to testify via teleconference from
Wasilla. He spoke in favor of HB 300. He said he has heard
comments that the legislation is an any willing provider bill and
he believes that it is not. He said, "We are not trying to limit
anyone's ability to form a closed panel. I do not see how this
will raise insurance rates. If the insurance company has agreed to
pay a discounted rate, then the premium should stay the same. I do
feel that is an employee's benefit and if they elect, themselves,
to pay the difference, that should be their choice. It will not
raise the premium because the insurance company is paid the same
amount. I do believe, especially in the case that I just heard
testify, that if an employee is paying part of the premium, they
have that right. And as far as the discounts of $2 million that I
heard testified, again, ... the insurance company would not be out
any additional money. The patient has a right to pay the
difference and the incentive for keeping them into a closed panel
is that there is not a difference, they receive a discount. So,
again, I would like to speak totally in favor of this bill." Dr.
Robinson referred to the person that reviews utilization and said
they should be licensed in Alaska. They don't have to be located
in the state, nor do they have an office in Alaska, but they should
be licensed in Alaska.
Number 4019
CYNTHIA DODGE, Alaska Psychological Association, testified via
teleconference from Anchorage in support of CSHB 300, Version J.
She referred to comprehensive health care and said the association
would like to have mental health services to be included. She said
the Alaska Psychological Association would support legislation even
without mental health being included. Ms. Dodge said the
association is particularly pleased to see the planned service
option. In terms of mental health, the legislation is very
important because the consumer (indisc.) have let their health
insurance companies know that they are particularly interested in
choice when it comes to their health care services. Trust is
critical to the the patient/provider relationship. When
relationships are established, and businesses switch insurance
plans, they want the option to continue a relationship with the
provider they have come to trust and count on. Ms. Dodge referred
to the wording regarding emergency room services and said she
doesn't see anything that would suggest that consumers would be
allowed to dictate the level of care or determine medical
necessity. She said, "If they show up to the emergency room asking
to be seen, and there are complaints to be heard, that they have
the opportunity to do that without being charged additionally for
showing up and turning out to knock out a serious complaint. In
terms of mental health, again I would just speak to a common
problem which is panic disorder, and patient who has panic attacks,
who don't know what they are often misinterpret those symptoms and
assume that they're having a heart attack and frequently go to the
emergency room looking for care for potential heart attack. And
occasionally it turns out that they did indeed have a panic attack.
We would not want them to be penalized for misdiagnosing - coming
in for something that was deemed unnecessary or not an emergency."
She said she would answer any questions the committee may have.
Number 4350
JACQUELINE HUTCHINS came before the committee to testify. She
informed the committee members she has lived in Alaska for eight
years. Ms. Hutchins said when she chooses a health care provider,
she goes to the hospital and asks for recommendations for doctors.
She also talked to friends. She stated she tries to find somebody
that she is comfortable with and is going to give her the care she
needs. Sometimes when she gets to their office, she finds out they
are a PPO provider, sometimes they're not. She said she is willing
to pay the 80/20 after her deductible because those are the people
who are going to meet her needs. She explained when she came to
Alaska, she chose a dentist who wasn't in a PPO arrangement, but
now he is. He was forced into a PPO arrangement, through the
backdoor, by the insurance company. It isn't working out real well
because the insurance company doesn't like to reimburse him any
more quickly than 90 days after services are received. She stated
she believes that is unreasonable, but that is often required of
health care providers who are in the arrangements. Insurance
companies don't like sharing information such as usual and
customary reimbursement schedules and provider compensation rates
with patients. She said she likes to see those kinds of things so
she can make better choices in terms of dollars and cents and in
terms of the people who are helping her. She stated an informed
patient is a patient who makes good decisions.
TAPE 97-52, SIDE B
Number 0022
MS. HUTCHINS referred to page 3, line 6, and said it talks about
care being provided or being available in the community where the
person is covered. She said there are a lot of small communities
in Alaska. Ms. Hutchins stated that she had an experience with
this in California which is not a small community. She said she
had a friend who was very ill, who was part of Kaiser (Indisc.) and
she had to drive for an hour. She spent three and a half hours in
a managed care office where she didn't even see the person who had
seen her previously. People shouldn't be put through that when
they're ill. They should be able to have somebody in their
community to take care of them. She informed the committee that
she has a problem with the provision on page 4, Section 4, line 30,
"(1) prohibits a covered person from obtaining health care services
from a health care provider of the person's choice, including a
specialist;". If you're preferred provider network does not have
a specialist who is listening to you or is capable of taking care
of your problem, you need to be able to go outside. The insurance
company should not be able to say to you, "Oh well, gee, we've got
nothing for you, so pay for it yourself." Ms. Hutchins said in a
previous committee, there was testimony from somebody who was
really worried that the legislation would decrease competition in
that it would make it so that nobody would want to sign up with an
insurance company with a PPO arrangement. She said she keeps
hearing that this bill would decrease competition in that it would
make it so that nobody would want to sign up with an insurance
company in a PPO arrangement. She stated she doesn't think price
is the only thing drives why people go to a doctor, a hospital, or
a dentist. There is a question of quality and not just a question
of price.
Number 0333
DR. MICHAEL SAGE was next to come before the committee. He said
most of the testimony that he was going to give has already been
given. He said the national news has indicated that people feel
that HMOs and PPOs are not providing quality care. The legislation
provides an opportunity to address that. The bill is a
nondiscrimination bill which he feels is appropriate. Most of the
health care providers in Alaska are small business people. He said
they don't especially feel that they need to have control and
decisions made by administrators that affects the health care of
the citizens of Alaska. He stated he would be happy to answer
questions.
Number 0500
CHAIRMAN ROKEBERG pointed out that there has been testimony that a
number of dentists may be forced into some type of managed care
arrangement. He asked if that is true and how does it happen.
DR. SAGE informed the committee there has been talk of that
continually from some of the larger companies and corporations that
have offices in Anchorage. He stated he has not received any
mailings recently, but you hear about it constantly.
CHAIRMAN ROKEBERG asked Dr. Sage what type of problems he has
experienced.
DR. SAGE said patients are being denied. He said he might
recommend a particular treatment for a patient and it is denied
under a clause called, "least expensive alternative treatment
(LEAT)." It said he may recommend a root canal to save a tooth.
The least expensive alternative treatment is to remove the tooth.
CHAIRMAN ROKEBERG asked if most dental plans are relatively limited
in what they pay.
DR. SAGE explained virtually all dental insurance plans will have
a yearly maximum, which can vary tremendously.
Number 0814
REPRESENTATIVE HUDSON asked if Medicare plans cover emergency
dental treatment.
DR. SAGE informed Representative Hudson that Medicare doesn't cover
dental. He noted if you're involved in a car accident and you have
facial injuries, things will overlap.
Number 0849
REPRESENTATIVE RYAN asked Dr. Sage if he has experienced long
periods for reimbursement.
DR. SAGE responded in the affirmative. He noted he has found that
a dentist is not required to provide the utilization review -
someone who has some knowledge of dentistry.
REPRESENTATIVE RYAN asked, "Is this horrible prior authorization
crept into your business yet?"
DR. SAGE responded, "Yes and no. It crept in a few years ago and
now it seems that it's not impacting us as much as it has."
Number 1044
REPRESENTATIVE JERRY SANDERS referred to the 90-day payment lag and
asked if it is addressed in the bill.
DR. SAGE responded not to his knowledge. He noted he believes
there are statutes that address that.
Number 1123
DR. GEORGE M. HANSEN, Retired Dentist, was next to come before the
committee. Dr. Hansen said it seems to him that the insuring
agent on one side, and practitioners on the other side are arguing
about this, but the only patient he has heard is Ms. Hutchins. He
referred to Mr. McRae saying that the legislation is an any willing
provider bill, but in his mind, an any willing provider means that
anybody who wants to work for that price can join that
organization. He said he doesn't read anything like that in the
bill and he believes it is a smoke screen. Dr. Hansen said he
thinks the bill says that the patient gets treated by the person
who they choose to treat them. To him, the bill says to the
insurance company, "You're going to cover this group of people and
you agree to do that." Dr. Hansen referred to the emergency
treatment wording in the bill and said, "I can see how that could
be read that a person who was hypochondriac could be charging into
the emergency room ... be expecting insurance to pay, but I don't
think that's it." He stated he would answer any questions the
committee may have.
Number 1436
REPRESENTATIVE HUDSON referred to testimony where there might be a
$2 million additional cost and said, "Now I could see where we
would want to try to expand services for patients through an
insurance by ... requirements through the insurance providers. How
do you view that statement about increased costs?"
DR. HANSEN said he would like to see the accounting statistics
because he can't see how it would cost any more. He said, "If you
have a bock of 100 people and you estimate that it's going to cost
$100 a person to treat them through the year, who cares who treats
them? I mean who cares?" Mr. Hansen explained several years ago
there was a plan where you got 50 cents per patient, per month,
which was called a capitation plan. He said some of his class
mates made their money with that plan because they would have 5,000
patients and everybody knows you can't treat more than 2,000 a
year. So they didn't treat them, but they still got the money for
them. He stated, "That is the only place that the insurance
company can lose money is if they deny benefits. And I say this
bill should be written such, and I believe it is written such, that
it will not deny benefits. It will open benefits up so that
insurance companies pays no more per procedure no matter who does
it, but it is patient's choice about who does it."
Number 1733
ROSS BLAKER, AETNA Health Care, testified via teleconference from
Anchorage. He referred page 2, line 29, Section 21.07.020,
regarding the preapproval of the unitization review and said they
want to make sure that when the payment is actually due, that
(indisc.) change from what they've been presented with for
recertification. He explained that also in Section 21.07.020, they
are also opposed to the subsection that mandates that they cannot
have a separate copayment. Mr. Blaker said he believes the
employers, or policy holders, wants the ability to customize their
plan.
CHAIRMAN ROKEBERG asked Mr. Blaker to expand on his concern
regarding the wording, "(3) copayment requirements shall be uniform
between health care providers;".
MR. BLAKER explained that currently they have different co-
insurance. He noted they don't have copayment requirements in
anything but their prescription drugs. They do have differentials
under their prescription drug plan. He referred to the difference
in copays and said there should be design ability.
CHAIRMAN ROKEBERG asked Mr. Blaker how he interprets the wording.
MR. BLAKER responded, "You have to pay the same for - like an
office call for a M.D. the same as like x-ray and lab - that kind
of thing. Is that correct?"
REPRESENTATIVE ROKEBERG said he isn't sure and that is why he is
asking Mr. Blaker.
Number 2032
MR. BLAKER stated his interpretation is that you would have
different copayments. There should be the ability to design a
different deferential. He referred to the July 1, 1998, effective
date and said they would prefer January 1, 1999, or July 1, 1999.
CHAIRMAN ROKEBERG referred to Chapter 07, page 2, line 10, and
asked Mr. Blaker what type of insurance they are underwriting that
relates to the Chapter 07 issue as far as managed care. He also
asked if they have any PPO plans that would qualify as managed care
in Alaska.
MR. BLAKER responded, "We do have PPO plans. I think it's kind of
what you determine as managed care. To (indisc.) managed care
(indisc.) HMOs don't have any managed care."
CHAIRMAN ROKEBERG referred to page 4 and said he believes the bill
defines a managed care entity as something that would bring a PPO
under that. He asked if AETNA deals with closed panel type of
situations where they restrict the members to specific physicians
and hospitals.
MR. BLAKER explained they provide a financial incentives to use the
panel such as Providence Hospital. Their plan designs typically
have 80/60 co-insurance. If you use Providence Hospital, you get
80 percent. If you go to another hospital, it's 60 percent.
CHAIRMAN ROKEBERG asked if it is 60 percent of what they charge or
whatever AETNA's reimbursement schedule is.
Number 2419
MR. BLAKER explained that with Providence Hospital they have what
is called per diem rates. He said, "So it would be 80 percent of
that discounted rate. If they go to another hospital, then it
would be 60 percent of what they had charged."
CHAIRMAN ROKEBERG said the copayment requirement in subsection 3,
page 3, would prohibit that type of differential between the 80
percent and the 20 percent.
MR. BLAKER indicated that is how they read it.
CHAIRMAN ROKEBERG asked how that would impact AETNA.
MR. BLAKER responded, "It'll impact the business, but I think it's
going to adversely impact it. Not going to have some of the
discounts. I think that you're going to raise the cost of
insurance because (indisc.) discount. I think the overall cost of
insurance is going to go up."
CHAIRMAN ROKEBERG said if he went to Virginia Mason Hospital in
Seattle for some tests, AETNA would only pay 60 percent for a
hospital stay.
MR. BLAKER said he believes Virginia Mason Hospital is in their
network. He said if somebody opted to go outside of the network,
they would pay 60 percent of the usual and customary charge.
CHAIRMAN ROKEBERG questioned who sets the usual and customary
charge.
MR. BLAKER said, "Though on hospitals, typically we do not have a
usual and customary charge. Usually what we do is reimburse what
the hospital charges. We do under -- our physicians have usual and
customary charges."
CHAIRMAN ROKEBERG asked how many people AETNA covers in the state
of Alaska. He asked how many are individual policies.
MR. BLAKER said he believes AETNA covers about 41,000 people. They
do not have any individual insurance policies.
Number 2744
CHAIRMAN ROKEBERG called for a brief at-ease at 4:43 p.m. He
called the meeting back to order at 4:44 p.m.
REPRESENTATIVE RYAN referred to when AETNA decides to reduce the
amount they are going to pay if someone chose to go to a provider
where AETNA didn't have an agreement and asked if they also reduce
the premium they're charging a person.
MR. BLAKER responded they do not.
Number 2838
QUINN McKENNA, Operations Administrator, Providence Health System,
was next to testify via teleconference from Anchorage. He said,
"As I've listened to some of this testimony today, I think we've
got a little bit of a definitional problem with (indisc.) testimony
several times that this is not an any willing provider legislation.
As I look at any willing provider legislation, the main purpose of
that form of legislation is to limit an insurance company's ability
to direct enrollees to a panel of providers, and that form of
legislation attempts to ensure enrollees with free access to any
provider they choose and that is willing to accept reimbursement
from the insurer. The basic (indisc.), under that definition,
still exits in this bill and our position, Providence Hospital's
position, is to continue to be in opposition of this bill." Mr.
McKenna referred to Section 21.07.030, "Choice of health care
provider," mandates there should be a point-of-service plan. Also,
under the point-of-service option, it allows the insurer to charge
a higher deductible or copayment and higher premiums if there is
increased cost caused by the use of a out-of-network provider. He
stated as he reads the language, the intent is to ensure that the
contract holders may have a free choice in selecting their health
care provider. This ability already exists in Alaska today as
every contract holder, under any plan, can choose to see whatever
health care provider they wish. He said, "The price that we pay
today for choice is either a higher premium when you select
(indisc.) such as a traditional indemnity plan, or higher
copayments and benefit reductions for products such as managed care
plans when you choose provider that are out of the network. The
intent of this legislation already exists." He stated that we
don't need to legislate what we already have. Mr. McKenna added
that Version J continues to preclude insurance from reimbursing
health care providers at a different rate, depending upon the
network status. He explained Section 21.42.390(c)(1) states that
a health care insurer may not directly or indirectly reimburse a
covered person at a different rate because of a person's choice of
provider. This prohibition is the core foundation of any willing
provider legislation. It takes away the managed care plan's
ability to negotiate discounts with providers in exchange for
volume. Without this ability, health care costs will increase.
Mr. McKenna referred to Section 21.07.030 and said, "It is allowed
that an insurer could charge higher copayments (indisc.) number of
utilization. However, in Section 21.07.010(3)(C) states that
copayment requirements shall be uniform between health care
providers. This seems inconsistent to me as it does not address
the in and out-of-network utilization." Mr. McKenna urged the
committee not to pass the legislation.
REPRESENTATIVE BUNDE asked Mr. McKenna if he heard him say that the
general tenor of the bill currently exists in Alaska today.
MR. McKENNA responded, "With regards to the any willing provider
portion, yes. For the other components, I'm sorry, you're right,
a lot of detail in this that probably do not exist today." He
noted the language that exists today is in Section 21.07.030, which
mandates a point-of-service coverage and allows the insurance
company the ability to have a higher deductible and copayment or
higher premium. He referred to emergency room provisions and said
it is a high cost area, and he believes it is best to keep it
specifically for emergency and accident cases that really need to
have access.
Number 3822
TOM HIPSHER, Dentist, Alaska Dental Society, testified via
teleconference from Anchorage. He said after hearing all the
testimony, especially from the insurance industry and the labor
groups, he would like to say that this has got to go down as the
most highly misunderstood bill in the history of the state of
Alaska. He stated the legislation is not any willing provider
legislation. The patient has to pay additional funds out-of-pocket
in order to go a non-network provider. He reiterated the
legislation is not any willing provider legislation. Mr. Hipsher
referred to PPO networks and said there was discussion about a
difference in the percentage reimbursement to patients based on
whether they go to a PPO provider or a non-PPO provider. He said
to him, that is financial discrimination to the patient. They are
basically dictating to the patient who they must go to based on
monetary difference in the payment of plan. Mr. Hipsher said, "All
we're saying here is that if a patient becomes disgruntled with
their PPO provider, with the decisions that are handed down by that
provider or by the insurance company, then they can select to ...
step outside a network and be reimbursed for a procedure at the
same level that they had, had they gone to a PPO provider. In
addition, it allows a guarantee with that person if they have been
harmed either by the physician or by the insurance company, but it
(indisc.) to remain that they had legal recourse against the people
that harmed them. And the reason it needs to be reviewed by a
provider registered in the state of Alaska is so that person can
handle their complaint through the attorney general's office. As
it stands right now, if a complaint is handled by someone outside
-- it's reviewed by a provider outside the state, the attorney
general's office, as I understand it, cannot get involved. I, as
a provider, I have to rely on my skill ... I have to provide my
patients with the highest quality of care that I can. And if I
don't, then people don't come to me. There are no guarantees in my
practice." Mr. Hipsher urged that the committee move the bill. It
is a nondiscrimination bill and it protects the rights of patients.
Number 4325
ED BURGAN, Brady and Company, was next to testify via
teleconference from Anchorage. He noted Brady and Company are
insurance consultants. Mr. Burgan said he has have several
discussions about whether the bill will or will not have a cost
impact. He suggested that a majority of group insurance plans are
paid for, in the majority, by the employers who sponsor to those
plans. For example, the state of Alaska pays probably 75 percent
to 90 percent of a state of Alaska employee's health insurance and
they should be a party to this. A larger employer can self-insure
and they can deal with this financially on their own, but small
employers cannot. He informed the committee members that most of
their plans are self-funded; however, they do have those with
insurance contracts. Mr. Burgan stated the employer should be a
serious part of the discussions because it will have an impact on
them. Lastly, in terms of alternatives, it would be simple enough
to merely require that an insurance company, for those who buy
insurance, offer two types of plans for that employer every year.
One should be with a managed care network and one should be
without. The employer should pick. If the cost differential is
significant, some employers will say, "We will let our employees
have freedom of choice, otherwise this is all I can afford." The
employees can make up their mind whether or not they want to pay
the difference to go out of the network. Mr. Burgan referred to
the differentials on the reimbursement and said he offered an
amendment to the bill that relates to what is currently Section 5,
and changing Section 5 to Section 6. It is in terms of the Mental
Health Parity Act.
Number 4604
CHAIRMAN ROKEBERG called for an at-east at 5:02 p.m. in order to
change the tape.
TAPE 98-53, SIDE A
Number 0007
CHAIRMAN ROKEBERG called the meeting back to order at 5:03 p.m.
MR. BURGAN said he would like to suggest an amendment to the bill
that is related to an increased cost exemption. The suggested
amendment reads as follows:
"This Act shall not apply with respect to a group health plan
or health insurance coverage offered in connection with a
group health plan. If the application of this Act is such
plan or to such coverage results in an increase in costs under
the plan, or for such coverage of at least 1 percent."
MR. BURGAN said if everybody is convinced the legislation won't
increase costs, insert the amendment. He thanked the committee for
listening to him.
Number 0100
REPRESENTATIVE BUNDE asked if he could then assume that the only
factor in increasing health care costs in the state of Alaska would
be the bill.
MR. BURGAN said he isn't sure he understands the question.
REPRESENTATIVE BUNDE responded, "You wanted us to indemnify you
from any potential increased costs. There are a lot of things that
would increase cost."
MR. BURGAN said he could assure Representative Bunde he is not
indemnifying him. The people who are paying the costs of providing
health insurance coverage would be indemnified. He noted that for
the most part, it would be employers of the state of Alaska and not
him.
Number 0149
CHAIRMAN ROKEBERG said, "I think what Representative Bunde is
referring to, he wanted to take you up on you're challenge but
didn't want to have ... any other escalating heath costs impact the
1 percent."
MR. BURGAN explained that they are not allowed to differentiate in
either copayments or deductibles under the PPO agreements that are
in effect as those a measurable and quantified.
CHAIRMAN ROKEBERG asked if Mr. Burgan objects if he to the
copayment requirements in Section 21.07.020 on page 3 and page 5.
MR. BURGAN stated that is correct.
CHAIRMAN ROKEBERG said the bill does provide for increased costs
for the point-of-service provisions. He asked Mr. Burgan if he
objects to that.
MR. BURGAN said he isn't sure it would allow for increased costs
for point-of-service.
CHAIRMAN ROKEBERG referred to page 3, lines 17 and 18, and said the
option may require that a subscriber pay a higher deductible or
copayment and a higher premium for the plan if the higher
deductible or copayment (indisc.) premium results from increased
costs caused by the use of out-of-network providers.
MR. BURGAN said, "Not being an attorney, I'm not too sure that's
not taken away by item (3) above that - item (c)(1) on page 5.
CHAIRMAN ROKEBERG stated that is something that needs to be looked
at.
Number 0340
MANO FREY, President, Alaska AFL-CIO, testified via teleconference
from Anchorage. He noted he is also a trustee of the Alaska
Laborer's health trust land plan and they are fortunate to be self-
insured. He said as he understands, the current version of HB 300
would not affect them. He stated that there are many unions that
have trust funds that don't have the financial wherewithal to be
self-insured and they are insured plans. He noted the committee
has noticed the apparent inconsistencies with several parts of the
bill so he won't repeat them. Mr. Frey said one of the things that
the legislature has strived for is fair competition. It is beyond
his comprehension why the legislature would try to restrict the
ability of some of the trust funds and advisors to be creative in
trying to set up plans that would give the participants possibly
better health care plans that may be a little bit restrictive in
their choice. He stated he would give an example. "The laborers
belong to a health care coalition primarily here in the Anchorage
area. We have been negotiating, for many months, between the two
primary hospitals in Anchorage and we're going to get a tremendous
package that's going to benefit our participants. Part of that
agreement, however, because it's both hospitals, we had to
reimburse just based the same amount of money for the covered
service without any disincentive to not go to the other hospital
that wasn't the preferred provider. It would take any of the
financial incentives that our trust fund is going to gain - it
would take away benefits from our members, from our participants
and their families, because we would not be able to negotiate the
same kind of dollar savings that we're going to enjoy. So I'm at
a loss to see why this bill is even being considered because it
flies in the face of open fair competition."
Number 0653
CHAIRMAN ROKEBERG asked Mr. Frey if one of the largest problems and
complaints that they receive from the private business sector is
that they have to constantly address the high cost of health care
insurance.
MR. FREY said they take it up every time they have negotiations.
He noted he can't imagine that the legislation wouldn't increase
the cost of insurance. They won't be able to put the same kind of
packages together. He referred to the negotiations between
Providence Hospital and the Alaska Regional Hospital and said they
are going to benefit the members and their families because of the
cost savings.
CHAIRMAN ROKEBERG asked, "Aren't the people that aren't members of
your union, or other groups, that can take advantage of those
discounts, going to be paying a higher rate and subsidizing your
contract?"
MR. FREY explained that it is the volume that will make the
difference. If they are able to direct their members to go to one
of the selected providers, the volume will make up for what they
would have to charge otherwise. He said it is true that they are
getting a benefit because of their size. Mr. Frey noted that they
have spoken to other groups regarding joining the coalition so that
they could benefit as well. He indicated there is strength in
numbers when you're bargaining for health care services.
Number 0957
REPRESENTATIVE BUNDE said, "Just a statement, we've had a number of
medical professionals say this is not a preferred provider bill and
now we have a union professional say it is, a professional from the
union that will not be impacted directly by this bill. So beauty,
like many things, is in the [eye of the] beholder." Representative
Bunde referred to the proposed 1 percent amendment. He said the
state health care costs is about $450 a month. If that 1 percent
amendment were to pass, all the insurance costs would have to do is
go up $4.50 a month and they could skate. He said he doesn't think
the legislature should be in the business of providing incentive
for insurance companies to try to increase their costs $4.50 a
month.
MR. FREY stated that he and the Alaska AFL-CIO opposes the bill.
He said he didn't want a misunderstanding.
Number 1130
REPRESENTATIVE SANDERS said he would point out that all of the
professionals who testified that this wasn't an any willing
provider bill were testifying in favor of the bill. He noted that
is just their opinion.
Number 1158
CHAIRMAN ROKEBERG announced he would recess the hearing on HB 300
in order to take up another order of business. He said the hearing
on HB 300 would continue after the other order of business.
HB 486 - ALASKA SECURITIES ACT
Number 1227
CHAIRMAN ROKEBERG announced the committee would hear HB 486, "An
Act relating to the Alaska Securities Act; and providing for an
effective date." He stated that there is a committee substitute to
the bill and an amendment by Representative Ryan.
Number 1242
REPRESENTATIVE RYAN stated that the amendment has been further
refined by the Administration. He made a motion to adopt CSHB 486,
0-LS1426\E, dated 4/27/98, for discussion purposes.
CHAIRMAN ROKEBERG asked if there was an objection. Hearing none,
the proposed CS for HB 486, Version E, was before the committee.
Number 1325
REPRESENTATIVE RYAN made a motion to adopt Amendment 1, 0-
LS1426\A.2, dated 4/27/98.
CHAIRMAN ROKEBERG objected for purposes of discussion. He asked
Mr. Elder if Amendment 1 is consistent with the recommendations
from the department.
Number 1401
TERRY ELDER, Senior Securities Examiner, Division of Banking,
Securities and Corporations, Department of Commerce and Economic
Development, replied yes it is.
CHAIRMAN ROKEBERG asked if the amendment was acceptable to
Representative Ryan.
REPRESENTATIVE RYAN replied that it was.
CHAIRMAN ROKEBERG removed his objection. He asked if there was a
further objection to Amendment 1. Hearing none, Amendment 1, 0-
LS1426\A.2, dated 4/27/98, was adopted.
Number 1423
CHAIRMAN ROKEBERG referred to Section 45 and Section 57 and asked
Mr. Elder if he could describe what that does and how it fits into
the scheme of things.
MR. ELDER stated that Section 45.55.170 covers unlawful
representations concerning registrations. It states that just
because something is filed, it does not mean that the administrator
has ruled it correct, true and not misleading. He stated that
section codifies current practice, it has always been that way but
it has never been in statute.
Number 1604
CHAIRMAN ROKEBERG asked if it was true that there is nothing in the
bill that makes a substantive change to Alaska Native Claims
Settlement Act (ANCSA) Corporations and the disposition of their
corporate structure.
MR. ELDER replied that is correct. He stated that it simply
codifies current practice.
REPRESENTATIVE RYAN stated that when you file your exemption letter
for registration of corporation limited liability company, a
letter is sent to the filer from the director, stating receipt of
the letter. He asked if it was correct that the letter does not
mean that the exemption is valid, it is just to document receipt of
filing.
MR. ELDER replied that is correct.
Number 1650
MR. ELDER replied that on page 55, Section 57, refers to the right
to have a notice of an opportunity for hearing. He stated that
they have added "respondents named", if the order deals with
something other than securities. He pointed out that this codifies
current practice as the department has always afforded the
opportunity of hearings for people they issue orders against.
CHAIRMAN ROKEBERG stated that he wanted to put that on the record,
because it is in some of the summaries and it might alert a red
flag.
MR. ELDER stated that any of the sections in the bill that refers
to ANCSA Corporations simply codifies current practice and does not
extend...
CHAIRMAN ROKEBERG asked if it was true that there aren't any
substantive changes that would effect the stockholder or
shareholder rights from the ANCSA Corporations.
MR. ELDER replied that is correct.
CHAIRMAN ROKEBERG stated that he has complied a list of questions
for the department to answer that will be part of the floor
package. There being no further questions or comments, he asked
what the will of the committee was.
Number 1902
REPRESENTATIVE HUDSON moved and asked unanimous consent to pass
CSHB 486(L&C), 0-LS1426\E, dated 4/27/98, as amended, out of
committee with the attached zero fiscal note.
Number 1947
CHAIRMAN ROKEBERG asked if there was an objection. There being
none, CSHB 486(L&C), Version 0-LS1426\E, dated 4/27/98, as amended,
was moved out of the House Labor and Commerce Standing Committee.
HB 300 - ALASKA PATIENTS' BILL OF RIGHTS
Number 1951
CHAIRMAN ROKEBERG indicated the committee would continue the
hearing on the proposed committee substitute for HB 300, "An Act
relating to health insurance; and providing for an effective date."
Number 2005
GORDAN EVANS, Lobbyist, Health Insurance Association of America
(HIAA), came before the committee. He informed the committee he
hasn't had a chance to review the draft bill in detail or ask his
client what their opinion is, although he believes he has a good
idea of what their opinion is. He said HIAA thought the original
bill was bad and he believes the current version is just as bad.
He stated there are too many inconsistencies in the bill and it
also discourages business relationships. Mr. Evans referred to
page 3, line 2, Section 21.07.020, "(2) all emergency room services
shall be covered if the person covered reasonably believes these
services are required;". He indicated there may the hypochondriac
who reasonably believes services are required. They're going to
keep going to the emergency room and these services are going to
have to be paid for because it says "shall." He stated that is
completely unreasonable. Mr. Evans referred to page 3, line 6,
"(4) pharmacy and dental services shall be located in the community
in which the covered person resides;", and said suppose there is a
covered person who lives in Egegik. Egegik may not have a pharmacy
or dentist that resides there, but if the person is covered, the
services have to be provided in that community according to the
wording in the legislation. Suppose somebody lives in Palmer or
Wasilla and they usually go to a doctor in Anchorage. The
legislation says the service has to be provided in the community in
which the covered person resides. He indicated the bill still
needs a lot of work. Mr. Evans referred to the wording on page 2,
line 25, and said there is the word "and". He questioned "and"
what. Mr. Evans urged the committee not to pass the bill. He
noted it has been pointed out that some of the provisions go right
to the core foundation of PPOs. He said on page 5, (c)(1), would
kill any PPOs in Alaska. He said he would like an opportunity to
present more testimony in the future.
Number 2431
CHAIRMAN ROKEBERG asked Mr. Evans to provide the committee with
some written comments regarding the current amended version of the
legislation after he speaks to his clients.
MR. EVANS responded that he would.
REPRESENTATIVE RYAN referred to waiting 90 days for the insurance
companies to send out reimbursements and said that has been a
practice of insurance companies ever since inception. He said,
"This bill, whether it passes or not, I can tell you I think you're
going to see a lot more of this coming and somebody is going to
have to change their ways or it's going to get jammed at you. I
started out and the more I look at the bill and the more I hear
people testify, the more I'm inclined to agree that some of this
stuff isn't bad stuff."
MR. EVANS pointed out that he doesn't have any personal knowledge
of the 90-day delays in payments. He said there is a state law
that says that payments have to be made within so many days.
CHAIRMAN ROKEBERG asked Mr. Evans to provide the committee with a
citation on that.
MR. EVANS said he believes Ms. Burke can provide that.
CHAIRMAN ROKEBERG asked Mr. Evans to provide the committee with his
comments and criticisms on the bill. He also asked him to comment
on each specific section. Chairman Rokeberg noted he is
particularly concerned about how Section 4 relates to the balance
of the bill. He asked him to review the utilization review
procedures and the clause on page 5 about the fact that they are
licensed in the state.
Number 2955
MR. EVANS referred to the issue of being licensed in the state and
said HIAA has taken the position that being licensed in the United
States may be better as there are not, in certain professions,
licensed people in Alaska.
CHAIRMAN ROKEBERG questioned his position regarding the peer group
level or the level of competency to make a judgement.
MR. EVANS responded, "I'd have to check with my client. My ...
personal feeling is that I think that's what they try to do. They
just don't go to any particular person who happens to answer the
phone. They try to find somebody who knows the procedure."
Number 3222
MARIANNE BURKE, Director, Division of Insurance, Department of
Commerce and Economic Development, came before the committee to
testify. She stated she has heard a lot of contradictory
testimony. Ms. Burke said, "We absolutely support the patient
rights issues. On page 2, under Section 3, I do have some
suggestions. The (5)(B) and (C) are applicable to HMOs only. And
that is not clear because the health care services to be provided
by contractors would apply to an HMO. And this is language that I
am familiar with in HMO patient right protection, as well as the
provider compensation rates. Currently, all contracts from
insurance must stipulate all of the covered care services to be
provided and the termination procedures. I would suggest under
Section 3, again 5(E), that that be clarified. It refers to usual
and customary reimbursement schedules. As you, Mr. Chair, have
pointed out there are any number of different schedules. Some are
in percentages, some are in dollars. If the intent of this wording
was to refer to the usual and customary in the sense of 80 percent
for the following procedures, or 100 percent for the following
procedures - if that's the intent, that needs to be clarified."
CHAIRMAN ROKEBERG said he believes the intention is to know that
they would be willing to reimburse. He said there is a controversy
about the particular schedules. There seems to be an inconsistency
of what is usual and customary in a particular jurisdiction or
area. He stated he believes one of the objectives is to make sure
there is not a huge distinction between the level of reimbursement
for a dollar for dollar premium level. Chairman Rokeberg asked Ms.
Burke if she has any recommendations.
Number 3455
MS. BURKE responded, "I understand and that's absolutely true. In
fact in statute right now in regulations it's required that the
UCRs, the usual and customary, be updated ... every six months."
CHAIRMAN ROKEBERG questioned what UCR stands for.
MS. BURKE pointed out that it stands for usual, customary and
reasonable charges. She continued, "That currently, in the state
of Alaska, is being determined by insurer to insurer to plans.
Self-insurance plans are in fact determining and shopping for usual
and customary charges. To me, this is a oxymoron. If it usual,
reasonable and customary, you can't shop for it. It's either that
or it's not. However, that is the case in the state of Alaska.
Number 3637
CHAIRMAN ROKEBERG said, "If there is a schedule, I assume that some
of the provisions of this bill and some of the testimony today has
to do with the copayment or reimbursement level of that. So
wouldn't that be a bargaining point then or what?"
MS. BURKE said she believes topics are being confused. She said,
"This particular section is saying what they must disclose in their
arrangement -- and the disclosure here of usual and customary
reimbursement schedules. And the reason I'm suggesting that be
clarified, from my reading, would be we'll pay 80 percent for
inpatient procedures or 100 percent for inpatient procedures.
We'll pay 60 percent chiropractic or whatever the contract may call
for. My comment here and my point is that this is very nebulous
and very misleading."
CHAIRMAN ROKEBERG asked Ms. Burke if she would provide the
committee with some corrective language.
MS. BURKE indicated she would provide the committee with corrective
language.
Number 3753
REPRESENTATIVE RYAN indicated he has a problem in trying to figure
this out. He said, "You and I and business know we have a certain
amount of overhead. We have an office, people we hire, electricity
and so forth. Then we want to charge a certain amount for our
skills depending on our level of education and expertise. And so
that's our usual and customary charge, and if you go to a physician
or a dentist, it would be the same thing - except an insurance
company comes in and drives it down by offering deals, 'We will
give you a volume if you take a cut rate.' That's what a PPO is.
So if we're going to give you this volume by you cutting your rate,
where do we establish what's customary, usual and reasonable?
Because you've got people with a skill level and can justify on a
spreadsheet what they're worth versus what the ... insurance
companies are forcing them to charge and to make it up on the
volume. What does that do to the quality of the care when it's in
one door and out the other and you got 10 minutes because that's
all I'm being paid?"
MS. BURKE said, "Usual, customary and reasonable applies to, for
instance, you, Mr. Chairman, being a physician and you,
Representative Ryan, being a physician. You may charge 'X' number
of dollars for a procedure, say $100 for a procedure. And
Representative Ryan charges $60 for a procedure. And Marianne
Burke charges $200 for a procedure. The usual and customary and
reasonable charges are not $200. That's the high end, nor the low
end of the $60. What is attempted here is to get enough procedures
provided in the state of Alaska to say the high end, the low end,
in the middle, the usual and reasonable charges are $95."
REPRESENTATIVE RYAN asked Ms. Burke if that is the department's
determination.
MS. BURKE informed Representative Ryan that is done by a number of
different groups across the country. Different people purchase
that service from different organizations.
Number 4036
CHAIRMAN ROKEBERG questioned whether there are rate setting private
sector firms that provide that type of information to the insurers.
He also asked if they provide it to the health care providers.
MS. BURKE explained they collect the information from the health
care providers. Contrary to what is generally believed, they do
not manipulate this data, they collect it. She noted she has
reviewed what they do. They accumulate all of this raw data and
then it is provided to the insurance companies. The insurance
companies and the self-insurance plans determines what they
consider to be usual and customary. Ms. Burke informed the
committee members that the state of Alaska has very few procedures
that are statistically valid. For example, there aren't that many
people having heart transplants in Alaska.
CHAIRMAN ROKEBERG asked Ms. Burke if there is more than one firm
that does this.
MS. BURKE responded in the affirmative.
CHAIRMAN ROKEBERG asked if an insurers can select one over another
and use that as a reimbursement benchmark.
MS. BURKE said that is correct. She said, "On page 3 there has
been quite a few different ... interpretations of what all
emergency room services shall be covered if the person covered
reasonably believes the services are required. ... I can testify
from personal experience on this and I'll try to do it very
quickly. This is an opportunity to gain the system. I know from
personal experience of having set up insurance plans where we in
fact encouraged people to abuse the system. In that, if you went
to your doctor during the day, we would reimburse you 80 percent,
but if you would wait and go to the emergency room that night, we
would reimburse you 100 percent. Now it's clear what happened.
Once we changed that to say we would reimburse you if, in the
opinion of the emergency room physician, it was necessary. We took
it out of our hands and out of the patients hands and just said,
'in the opinion of the physician.'"
CHAIRMAN ROKEBERG asked where that standard came from.
MS. BURKE responded that they actually had it in their contract
with their employees. She noted this was based on statistics they
gathered.
CHAIRMAN ROKEBERG asked what language they used.
MS. BURKE responded, "If in the opinion of the attending physician,
the emergency room services were necessary." The belief is that
the physician was in a better position to determine whether it was
necessary than anyone else.
CHAIRMAN ROKEBERG asked Ms. Burke to continue.
MS. BURKE referred to earlier testimony regarding nurse
practitioners being compensated differently from physicians and
said if that is the case, she would like to know as it is clear
violation of AS 21.36.090(D). She said she would like to bring
appropriate action if that is true.
Number 4520
CHAIRMAN ROKEBERG asked Ms. Burke to inform the committee of her
interpretation of the wording, "(3) copayment requirements shall be
uniform between health care providers."
MS. BURKE responded that PPOs, as we know them, and HMOs if they
come to the state of Alaska, would not be permitted. She pointed
out that it says, "copayment requirements shall be uniform." We
would not permit, in the case of a HMO, in-network rate versus an
out-of-network rate. With PPOs, it would not provide the
differential. Ms. Burke referred to the wording, "(4) pharmacy and
dental services shall be provided", and said her reading is that a
health care provider or a contract must provide that service in
each location. She said she doesn't believe that was the intent.
TAPE 98-53, SIDE B
Number 0045
MS. BURKE stated, "...it is interpreted, as was testified to
earlier, that if there is a pharmacy in that community, that
pharmacy must be included. You would have the impact of
eliminating volume discounts. For example, the state of Alaska's
plan, you can mail off and get a prescription for $2 ... if it's a
non-generic drug, or free if it's generic."
Number 0128
REPRESENTATIVE RYAN explained that there is evidence that the mail
pharmacies are owned by insurance companies. There was testimony
on different insurance legislation from a pharmacist in Alaska who
said under insurance plans he was losing money. He couldn't buy
the drugs at the volume to get the discounts. Representative Ryan
said, "All these things seem to be set up to the people who are
providing the insurance, through their multiple investments, to
enhance their own bottom line. All the cost provisions don't
benefit the consumer as much as it does the insurance company.
They own the pharmacy places and mail order, that benefits them.
Where in the heck does this end? I keep hearing this cost
containment and yet, nobody seems to benefit - the physicians, the
patients, but the insurance company is not doing too bad if you
look at their final reports."
MS. BURKE noted she was specifically referring to the state plan,
which is not insured. Ms. Burke said she believes utilization
review is critical. She referred to the AETNA plan and said the
medical necessity was being second guessed by a registered nurse.
A market conduct examination of Blue Cross and AETNA was done
shortly after she was appointed to her position. They were the
first market conduct exams that had ever been performed by the
state of Alaska on a health care insurer. It was found that a
registered nurse on the AETNA contract was making determinations on
medical necessity. Ms. Burke noted the document is a public
document. She said, "We have given them the word, if you will,
stop it. We will be back in and we will determine whether or not
there are any further violations."
Number 0403
CHAIRMAN ROKEBERG asked when that occurred.
MS. BURKE responded in the later part of 1996.
CHAIRMAN ROKEBERG asked Ms. Burke to provide the committee with the
document. He asked if there has been any follow-up since that
time.
MS. BURKE responded that they have followed up on it. Until the
report is issued, it is confidential. She said by statute, we have
to give them a time period to respond to the report and that time
frame has not run as of yet.
Number 0458
REPRESENTATIVE RYAN asked Ms. Burke if it would be helpful to the
department if the legislature were to give the department the
ability to access a civil penalty and/or press criminal charges
when things like that happen.
MS. BURKE responded that they presently can't do criminal
penalties. However, they do have the authority to assess civil
penalties. If they are still doing it, the full weight of those
penalties will come down on them.
CHAIRMAN ROKEBERG asked Ms. Burke if she has any comments on the
point-of-service provisions. He also asked if she believes the
definitions that would encompass PPOs or any other type of managed
care are adequate.
MS. BURKE responded that her concern is with any definition that
conflicts with another definition within Title 21. To that extent,
she is not comfortable as there are some conflicts. She referred
to the amendment to section 4 and said the term "covered person" is
problematic in that with group insurance policies, you would be
requiring every participant to sign that waiver when the policy is
with the employer. It might be an administrative nightmare. It
certainly would be extremely difficult for the employer.
CHAIRMAN ROKEBERG agreed it should be reviewed and asked Ms. Burke
to forward a recommendation to the committee.
Number 0905
MS. BURKE stated, "For the record, I met with the Alaska Dental
Society about the 90-day issue. When ... the dentists and my staff
looked into that, those were all federal plans. They were CHAMPUS
plans and they were the federal employee plans without exception.
And in fact there is statute, currently, on the books that requires
a company to pay a claim, now again this is insured claims, within
30 days. And if there is a questioned portion, they must give full
disclosure on what is questioned and what ... additional
information must be provided. If the consumer feels that this is
not reasonable, we are more than happy to step in with them on
(indisc.).
CHAIRMAN ROKEBERG referred to the way Section 4 is drafted
regarding utilization review and said it would affect every health
care plan written in the state of Alaska. He asked what the
ramifications would be.
MS. BURKE responded that she sees nothing wrong with it.
CHAIRMAN ROKEBERG asked if there are ramifications.
MS. BURKE stated that there could be ramifications in that if a
company or an insurer is out there using this sort of arrangement
to reduce cost, it would eliminate it.
CHAIRMAN ROKEBERG asked Ms. Burke if she has a problem with the
level of training.
MS. BURKE referred to the requirement of having to be licensed in
the state and said it should be peer to peer. We don't have all
the specialties in the state to make these determinations. In some
areas, there may be one person that may be a specialist in a very
esoteric area. She said if it is peer to peer and they are
licensed and certified to practice in that speciality, then she
feels the patients' rights would be protected and she would
wholeheartedly support that. She suggested they be licensed to
practice in the United States.
Number 1702
CHAIRMAN ROKEBERG said he thinks the effective date does seem to be
a little tight. He asked Ms. Burke if she has comments regarding
the July 1, 1998, effective date.
MS. BURKE suggested that the effective date be for contracts
entered into or renewing after that date.
CHAIRMAN ROKEBERG questioned whether that is in current statute.
MS. BURKE said it is in Title 21, but this body could change that.
CHAIRMAN ROKEBERG asked if the current transition provisions in
statute already provides for that.
MS. BURKE responded, "I would bow to the attorney general on that
because I had tried to guess that one before and was totally
wrong."
CHAIRMAN ROKEBERG asked, "Is the July 1, problematic? Assuming
that's the case - that the normal expiration in those contractual
obligations would be end of the termination and the pick up of any
new provisions."
MS. BURKE stated she does not see that would be a problem.
CHAIRMAN ROKEBERG thanked Ms. Burke and asked her to get back to
the committee regarding previous questions asked. House Bill 300
was held over for further consideration.
HB 350 - INSURANCE COVERAGE FOR CONTRACEPTIVES
Number 1842
CHAIRMAN ROKEBERG announced the last order of business would be HB
350, "An Act requiring that the cost of contraceptives and related
health care services be included in health insurance coverage,"
sponsored by Representative Croft.
TOM ATKINSON, Researcher to Representative Eric Croft, Alaska State
Legislature, came before the committee to explain the bill on
behalf of Representative Croft. He said the bill is a mandate that
would require insurance to cover contraceptives for employees.
CHAIRMAN ROKEBERG questioned wether it includes all contraceptives.
MR. ATKINSON indicated it covers all types of contraceptives.
Number 1958
CHAIRMAN ROKEBERG said when the bill was before the committee
previously he had asked the sponsor to obtain evidence that would
show that insurance companies would actually save money. He asked
Mr. Atkinson whether he was successful in acquiring evidence.
MR. ATKINSON responded, "I believe we have."
CHAIRMAN ROKEBERG said he looks forward in hearing the bill the
following Wednesday. House Bill 350 was held over until the
following Wednesday.
ADJOURNMENT
Number 2018
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Committee
meeting at 6:10 p.m.
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