04/23/2001 03:25 PM House L&C
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 23, 2001
3:25 p.m.
MEMBERS PRESENT
Representative Lisa Murkowski, Chair
Representative Andrew Halcro, Vice Chair
Representative Kevin Meyer
Representative Pete Kott
Representative Norman Rokeberg
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 37(FIN)
"An Act relating to collective negotiation by competing
physicians with health benefit plans, to health benefit plan
contracts, to the application of antitrust laws to agreements
involving providers and groups of providers affected by
collective negotiations, and to the effect of the collective
negotiation provisions on healthcare providers."
- HEARD AND HELD
HOUSE BILL NO. 106
"An Act relating to the authorizations for state financial
institutions; relating to confidential financial records of
depositors and customers of certain financial institutions;
relating to the Alaska Banking Code, Mutual Savings Bank Act,
Alaska Small Loans Act, and Alaska Credit Union Act; and
providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: SB 37
SHORT TITLE:PHYSICIAN NEGOTIATIONS WITH HEALTH INSURE
SPONSOR(S): SENATOR(S) KELLY
Jrn-Date Jrn-Page Action
01/12/01 0073 (S) READ THE FIRST TIME -
REFERRALS
01/12/01 0073 (S) JUD, FIN
01/22/01 0137 (S) L&C REFERRAL ADDED AFTER JUD
01/22/01 (S) JUD AT 1:30 PM BELTZ 211
01/22/01 (S) Heard & Held
01/22/01 (S) MINUTE(JUD)
02/21/01 (S) JUD AT 1:30 PM BELTZ 211
02/21/01 (S) Moved CS(JUD) Out of
Committee
02/21/01 (S) MINUTE(JUD)
02/22/01 0467 (S) JUD RPT CS 2DNP 3NR NEW TITLE
02/22/01 0467 (S) NR: TAYLOR, COWDERY,
THERRIAULT;
02/22/01 0467 (S) DNP: ELLIS, DONLEY
02/22/01 0467 (S) FN1: (LAW)
02/22/01 0467 (S) FN2: (CED)
02/22/01 0467 (S) FN3: INDETERMINATE(ADM)
02/22/01 0467 (S) FN4: ZERO(HSS)
03/01/01 (S) L&C AT 1:30 PM BELTZ 211
03/01/01 (S) Heard & Held
03/01/01 (S) MINUTE(L&C)
03/08/01 (S) L&C AT 1:30 PM BELTZ 211
03/08/01 (S) Heard & Held
03/08/01 (S) MINUTE(L&C)
03/13/01 (S) L&C AT 1:30 PM BELTZ 211
03/13/01 (S) Moved CS(L&C) Out of
Committee
03/13/01 (S) MINUTE(L&C)
03/14/01 0653 (S) L&C RPT CS 2DP 3NR NEW TITLE
03/14/01 0653 (S) NR: PHILLIPS, DAVIS,
TORGERSON;
03/14/01 0653 (S) DP: AUSTERMAN, LEMAN
03/14/01 0653 (S) FN1: (LAW)
03/14/01 0653 (S) FN2: (CED)
03/14/01 0653 (S) FN3: INDETERMINATE(ADM)
03/14/01 0653 (S) FN4: ZERO(HSS)
03/28/01 (S) FIN AT 9:00 AM SENATE FINANCE
532
03/28/01 (S) Heard & Held
03/28/01 (S) FIN AT 6:00 PM SENATE FINANCE
532
03/28/01 (S) Moved CS(FIN) Out of
Committee
03/28/01 (S) MINUTE(FIN)
03/28/01 (S) MINUTE(FIN)
03/29/01 0853 (S) FIN RPT CS 3DP 1DNP 4NR NEW
TITLE
03/29/01 0853 (S) DP: KELLY, WILKEN, LEMAN;
03/29/01 0853 (S) NR: DONLEY, AUSTERMAN, OLSON,
GREEN;
03/29/01 0853 (S) DNP: HOFFMAN
03/29/01 0853 (S) FN1: (LAW)
03/29/01 0854 (S) FN2: (CED)
03/29/01 0854 (S) FN4: ZERO(HSS)
03/29/01 0854 (S) FN5: ZERO(S.FIN/ADM)
04/04/01 0932 (S) RULES TO CALENDAR 1OR 4/4/01
04/04/01 0933 (S) READ THE SECOND TIME
04/04/01 0933 (S) FIN CS ADOPTED UNAN CONSENT
04/04/01 0933 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/04/01 0933 (S) READ THE THIRD TIME CSSB
37(FIN)
04/04/01 0933 (S) PASSED Y13 N6 E1
04/04/01 0934 (S) ELLIS NOTICE OF
RECONSIDERATION
04/04/01 (S) RLS AT 10:45 AM FAHRENKAMP
203
04/04/01 (S) MINUTE(RLS)
04/05/01 0961 (S) RECONSIDERATION NOT TAKEN UP
04/05/01 0962 (S) TRANSMITTED TO (H)
04/05/01 0962 (S) VERSION: CSSB 37(FIN)
04/06/01 0875 (H) READ THE FIRST TIME -
REFERRALS
04/06/01 0875 (H) L&C, JUD, FIN
04/06/01 0875 (H) REFERRED TO LABOR & COMMERCE
04/23/01 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
DAVE JOHNSON, Pediatrician
Alaska State Medical Association
4107 Laurel Street
Anchorage, Alaska 99508
POSITION STATEMENT: Testified on behalf of the Alaska State
Medical Association on SB 37.
SENATOR PETE KELLY
Alaska State Legislature
Capitol Building, Room 518
Juneau, Alaska 99801
POSITION STATEMENT: Testified as sponsor of SB 37.
JIM JORDAN, Executive Director
Alaska State Medical Association
4107 Laurel Street
Anchorage, Alaska 99508
POSITION STATEMENT: Testified on SB 37.
MICHAEL HAUGEN, Executive Director
Alaska Physicians & Surgeons, Inc.
4120 Laurel Street
Anchorage, Alaska 99508
POSITION STATEMENT: Testified on SB 37.
LAURA WALDEN
Nulain Sisterhood
(No address provided)
POSITION STATEMENT: Testified in opposition to SB 37.
CLYDE "ED" SNIFFEN, Assistant Attorney General
Fair Business Practices Section
Civil Division (Anchorage)
Department of Law
1031 West 4th Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Answered questions on SB 37.
BOB LOHR, Director
Division of Insurance
Department of Community and Economic Development
3601 C Street
Anchorage, Alaska 99503
POSITION STATEMENT: Testified on SB 37.
KRISTOPHER KNAUSS, Staff
to Senator Pete Kelly
Alaska State Legislature
Capitol Building, Room 518
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of the sponsor of SB
37.
ACTION NARRATIVE
TAPE 01-65, SIDE A
Number 0001
CHAIR LISA MURKOWSKI called the House Labor and Commerce
Standing Committee meeting to order at 3:25 p.m. Members
present at the call to order were Representatives Murkowski,
Halcro, Meyer, Crawford, and Hayes. Representatives Kott and
Rokeberg joined the meeting as it was in progress.
SB 37-PHYSICIAN NEGOTIATIONS WITH HEALTH INSURE
CHAIR MURKOWSKI announced that the committee would consider CS
FOR SENATE BILL NO. 37(FIN), "An Act relating to collective
negotiation by competing physicians with health benefit plans,
to health benefit plan contracts, to the application of
antitrust laws to agreements involving providers and groups of
providers affected by collective negotiations, and to the effect
of the collective negotiation provisions on healthcare
providers."
CHAIR MURKOWSKI called for an at-ease at 3:27 p.m. The meeting
was called back to order at 3:28 p.m.
Number 0234
DAVE JOHNSON, Pediatrician, Alaska State Medical Association
(ASMA), came forth and stated that [ASMA] would appreciate the
committee's support for SB 37. [The Alaska State Medical
Association] believes the bill is important and is balanced with
many safeguards.
REPRESENTATIVE CRAWFORD asked Dr. Johnson what he feels the
reason for this bill is. He asked whether the system is
presently breaking down, or whether this is something for the
future.
DR. JOHNSON answered that he thinks this is filling a pressing
need. He stated that the insurance industry is consolidating
and will continue to do so. In small communities such as
Ketchikan, switching from one insurance company to another can
quickly involve a large percentage of an employer's practice.
He said physicians are barraged with things from insurance
companies, asking them to sign agreements. Right now, with the
way legislation and the antitrust issues stand, physicians can't
discuss the facts of situations like that with each other; they
are very "gun shy" about the Federal Trade Commission. He said
he thinks that having an explicit and regulated process would
give individual physicians the opportunity to talk amongst
themselves and then collectively with insurance companies with
state oversight.
Number 0547
REPRESENTATIVE HALCRO stated that some physicians bill [the
patients'] insurance for them, while others require that
[patients] pay at the time of service. He referred to page 2,
AS 23.50.020, and asked Dr. Johnson whether the intent of the
bill is for physicians to get together and discuss pricing,
reimbursement, policies, and claim disputes.
DR. JOHNSON responded that the list of things on page 2, lines
15 through 27, addresses some of the issues. A common thing
physicians discuss is what the definitions are of "standard
medical practice" and of "reasonable and prudent person." For
example, he said he had [a patient] who went to the hospital
with chest pains. Fortunately, she didn't have a heart attack;
however, the insurance company said it was not reasonable and
prudent to go to the emergency room for chest pains, and that
she should have waited and gone to the office another day. With
the issue of clinical guidelines - whether something is standard
medical practice or experimental - the insurance companies
choose their definitions of those things. For administrative
procedures, insurance companies try to set it up so [the
patient] be make referred to one physician but not to another.
If there are economic issues and fees, insurance companies right
now do that on a "take it or leave [it] basis." This [bill]
would give [physicians] the opportunity to talk about fees after
nonfee issues have been addressed in a voluntary negotiation
process.
REPRESENTATIVE HALCRO asked what would happen to those
physicians who don't bill insurance carriers on behalf of their
patients. For example, if patients pay a physician cash for
their visits, that physician would still be allowed to
[participate in the negotiations] although they really don't
affect the physician.
DR. JOHNSON explained that there are two levels of
participating. A physician can simply sign up as a courtesy to
patients and agree to provide billing services as part of his or
her service. Physicians are already required to do that for
Medicare and Medicaid patients. Some offices will provide
billing services for all insurance companies, others will bill
for primary but not for secondary, and others will bill for
primary and secondary. That is different from signing up as a
special deal. Insurance companies come and say, "We provide
insurance for 5,000 people in your community, and if you sign up
with us, then you'll be on our list as a preferred provider, and
we'll encourage people to go to you." In exchange for that, the
insurance companies have requirements of the providers. An
individual physician, he said, may agree to be a participating
provider or not, but that's a separate issue beyond providing
billing services.
DR. JOHNSON remarked that he thinks Representative Halcro was
talking about when somebody chooses to be a participating
physician with an insurance company. The good news with that is
[the insurance company] will promise prompt payment and minimize
the paperwork; the bad news is they typically ask for a
discount, ask that [the physician] accept their fee as payment
in full, and bind [the physician] to an agreement for a finite
period of time, often in excess of the time the [insurance
company] is bound to [the physician]. In those situations, he
said, it seems to be fairer for the physicians to be able to
talk with one another before talking with the insurance company.
Number 1010
REPRESENTATIVE HALCRO stated that it is his understanding that
this bill allows for physicians to sit down in a room and say,
"XYZ Insurance came to me and gave me a proposal, and I don't
think the terms are that good. What do you think?" The
physicians can then say, "We're not going to take this from XYZ;
we'll make them come back to us with a better offer."
DR. JOHNSON responded that that's not the bottom line, because
the bill limits the percentage of physicians in the community
that can get together.
REPRESENTATIVE HALCRO referred to page 3, line 21, which defines
that this can only be done with a company that has market power.
Blue Cross, he said, is the only one with any market power; it
has 54 percent of the market, followed by its next competitor
which has 5.3 percent. Basically, he said, this is only talking
about one provider.
DR. JOHNSON clarified that the numbers Representative Halcro is
providing are statewide numbers. A single major employer in a
small community may have more market power than that. For
example, in Ketchikan, with several major employers, a shift
from one insurer to another can give an individual insurance
company a substantial market share.
REPRESENTATIVE HALCRO remarked that market power is not defined.
DR. JOHNSON replied that he thinks it is because it says [the
insurer] is presumed to have market [power]. That can be
disproved if [the insurer] has less than 15 percent of the
market [share] in that area.
REPRESENTATIVE HALCRO asked Dr. Johnson whether he is defining
market power as market power in individual communities.
DR. JOHNSON answered, yes.
Number 1226
CHAIR MURKOWSKI stated that it is her understanding that it was
not necessarily in individual communities but in geographic
service areas. She asked whether a "geographic service area"
can be defined as the whole state, a community, or the Interior.
DR. JOHNSON responded that if he were paying a fee to a third
party to negotiate, he would not be interested if an insurer was
not providing services to his practice. The practical effect of
the process's being financially self-sustaining is that it would
prevent people from attempting to "muscle" outside areas. He
noted right now the insurance companies have that power and that
interest.
CHAIR MURKOWSKI remarked that it's probably easier, for example,
in the Ketchikan area, while it might be more "muddy" in
Southcentral [Alaska] where there is road access.
REPRESENTATIVE CRAWFORD stated that in his trade, when he
negotiates an agreement he does "pattern bargaining." For
example, his company may only sign a contract with four steel
erectors, but every steel erector gets the same deal. He asked
Dr. Johnson, when [a physician] signs this agreement with his or
her major insurer, whether all the other smaller entities that
come into his or her office would be able to get the same
contract.
Number 1474
DR. JOHNSON responded that as it stands right now, the answer is
no. He said he does not sign side deals with insurance
companies. He explained that if he signs up for the federal
Medicare program, Medicare allows 41 percent of his bill and
pays 34 percent; he collects 7 percent from the patient. That's
true whether the patient is "a multimillionaire on a cruise ship
or indigent Aunt Tilly (ph) that I've known and taken care of
for the whole time I've been in Ketchikan." Medicaid, the state
federal partnership, has another fee schedule that is
substantially higher than Medicare's. He stated that the third
level of billing he does in his office is the same for
everybody. He added that there is a possibility under this bill
that the physicians will get together and agree on a side deal
with an insurance company. As it is now, he can't ask other
physicians in Ketchikan what they are doing because that is a
violation of antitrust [laws].
REPRESENTATIVE CRAWFORD commented that he didn't realize that
this is not a collective bargaining bill.
DR. JOHNSON stated that it's a collective bargaining bill with a
lot of constraints. It exempts independent plans supervised
under ERISA (Employee Retirement and Income Security Act) and is
a voluntary process on both sides.
REPRESENTATIVE CRAWFORD asked whether this would allow for
[physicians] to negotiate with somebody collectively.
DR. JOHNSON answered that it would.
REPRESENTATIVE CRAWFORD asked Dr. Johnson with whom he would
negotiate.
DR. JOHNSON responded that he would [negotiate] with health
benefit plans that have a 15 percent or greater market share in
a defined area.
REPRESENTATIVE CRAWFORD asked Dr. Johnson, if he decided to
negotiate collectively with some insurer, whether those people
not covered under Medicare or Medicaid would be covered under
the "pattern," or would have to negotiate with him on their own.
DR. JOHNSON answered that this doesn't disturb the current
situation in which each one "stands alone." This would allow
negotiation with plans that have a significant market share.
Most plans, he stated, will have a clause in their agreements
whereby the [physician] will provide services on the [insurance
company's] behalf at [the physician's] lowest rate.
Number 1669
REPRESENTATIVE PETE KELLY, Alaska State Legislature, sponsor of
SB 37, came forth and addressed some of the previously asked
questions. He stated that what constitutes a geographic area
will be determined by the attorney general. If a group of
physicians wants to get together, and only 30 percent of them in
that market can get together under a plan like this, they can
approach the attorney general once they have decided on a third
party to represent them. At that point, they fall under
oversight of the Office of the Attorney General. The specifics
of what a market is will be the scope of the agreement, and some
of the discussions of the fees will be determined by the
attorney general. He noted that the insurance company could
veto the whole idea from the beginning, because nothing in this
bill is mandatory. If [the physicians] do get together and they
agree on the conditions, the attorney general could still veto
the negotiation. He added that this bill doesn't apply to
Medicaid and Medicare.
REPRESENTATIVE ROKEBERG stated that in the bill it defines a
"geographic area" as consisting of 40 or fewer practicing
physicians. He asked whether Juneau, Anchorage, and Fairbanks
would be the only communities that would qualify.
SENATOR KELLY answered that there probably would not be others,
but that would be determined by the Office of the Attorney
General when defining what a geographic area is. He added that
because this is voluntary, any community in the state could
participate. However, he said, "What we don't want to have is
for 100 percent of the physicians in Anchorage under a group
negotiating with an insurance company. That, to me, gives
market power too far the other way." In response to the
question about collective bargaining, he said this is not a
collective bargaining agreement; this is strictly the ability
for negotiations within the terms of the State Action Doctrine.
The [U.S.] Supreme Court realized there would be cases in which
the antitrust provisions wouldn't work well; rather than let
them get out of hand on a case-by-case basis, however, [the U.S.
Supreme Court] made sure there was state oversight.
REPRESENTATIVE CRAWFORD asked, if a large insurance company
negotiates with the doctors in Ketchikan but there are
individuals who are not covered under that insurance company,
whether the agreement would set a "pattern" for individuals
without insurance.
SENATOR KELLY responded that nothing in the bill creates that or
requires that. In the overall question of people negotiating,
there may be changes in demand, but that would be indirect.
REPRESENTATIVE CRAWFORD stated that with [his company's]
collective bargaining agreements, he is required under law to
offer the same agreement to any other contractor that wants to
use his [union] workers.
DR. JOHNSON remarked that Representative Crawford is mistaking
this for a collective bargaining agreement.
REPRESENTATIVE CRAWFORD replied that it seems like a collective
bargaining agreement to him.
Number 1920
CHAIR MURKOWSKI referred to the article, "Insurance Gap Causes
Big Shift in Health Cost," from the Anchorage Daily News.
According to the article, when there are agreements, the
uninsured pay the most and patients with insurance plans are
charged the least. She said:
The comment is that you've got these agreements that
are being made to keep the health cost down, which is
what we're all trying to do. ... As a consequence of
the agreements that are made in an effort to ...
maintain a steady flow of patients, the doctors find
themselves scrambling to maintain their cash flow.
They have to then charge the patients ... who are
uninsured perhaps at a higher level than the
negotiated agreement that they have with their insured
patients.
CHAIR MURKOWSKI asked Representative Crawford if that is what he
is referring to when he speaks of "pattern."
REPRESENTATIVE CRAWFORD answered, yes.
CHAIR MURKOWSKI stated that she wonders how the bill would
affect the gap between the insured and the uninsured.
Number 1998
REPRESENTATIVE HALCRO asked Senator Kelly, if one of the
conditions is that the geographic service area consists of 40 or
fewer physicians, whether there are communities that would
qualify other than Anchorage, Fairbanks, and Juneau.
SENATOR KELLY reiterated that this is voluntary and limits the
number of people in an area who can come together to negotiate.
REPRESENTATIVE MEYER stated that his concern is to keep costs
down for his constituents. He remarked that some of the fiscal
notes seem high - the one from the administration being the
highest - and asked Senator Kelly whether he agreed with them.
SENATOR KELLY responded that the fiscal note for the
administration should be zeroed out. He explained that there
were some problems with the fiscal notes in the Senate Finance
Committee, because some of the assumptions were "ridiculous."
He remarked that there is a great deal of opposition to this
bill with the administration. Since it has never been properly
explained, he thinks the costs associated with it probably don't
make sense.
REPRESENTATIVE MEYER asked Senator Kelly whether he agrees that
the employees' costs would be anywhere from $35 to $88 per
month.
SENATOR KELLY replied that Representative Meyer's question deals
with self-insurance, which the bill does not address.
REPRESENTATIVE ROKEBERG asked Senator Kelly what his
understanding is of ERISA versus non-ERISA coverage plans in the
state. He also asked whether this bill would not affect ERISA
plans in Alaska.
Number 2160
SENATOR KELLY responded that self-insured was specifically
exempted [from the bill], and 95 percent of ERISA deals with
self-insurance. He remarked that [this does not effect ERISA
plans in Alaska], and referred to page 8, line 24, of the bill,
which reads:
(2) "health benefit plan" has the meaning given in AS
21.54.500, but does not include a health benefit plan
that is a self-insured health benefit plan.
REPRESENTATIVE ROKEBERG asked if Senator Kelly has an estimate
on how many people this would cover who aren't on ERISA.
SENATOR KELLY answered that it is currently about 10 percent.
REPRESENTATIVE ROKEBERG remarked that according to Senator
Kelly's testimony, this will only cover a small percentage of
the people in the state.
SENATOR KELLY responded that with removing the self-insured,
that would be correct.
REPRESENTATIVE ROKEBERG asked, if this were implemented, and
those positions in a larger market entered into negotiations
with Blue Cross - which would in essence increase fees - what
the impact would be by setting a pricing pattern.
SENATOR KELLY replied that he doesn't think this would increase
costs because it is voluntary. If the office of the Attorney
General sees that it is getting to be a problem with fees going
up, the attorney general could veto that.
REPRESENTATIVE ROKEBERG asked Senator Kelly why he introduced
the bill if fees are not going to be increased.
Number 2241
SENATOR KELLY responded that there may be an insurance company
that requires a certain procedure. For example, Dr. Johnson
spoke about a patient who had chest pains and went to the
emergency room. The insurance company didn't want to pay for
that. These kind of issues, he said, are probably the major
portion of what will be discussed in the negotiation. He added
that there must be an agreement before prices are even
discussed.
REPRESENTATIVE ROKEBERG remarked that he thinks those issues
were covered in House Bill [211] last year, including the
ability to enter into the contract negotiations, exclusive of
the fee issue.
JIM JORDAN, Executive Director, Alaska State Medical Association
(ASMA), stated, "some [issues] but not all."
REPRESENTATIVE HAYES remarked that it seems to him that the
State Action Doctrine is the linchpin of this legislation. He
asked Senator Kelly whether he heard from Legislative Legal and
Research Services or from any other competing interests on
whether the State Action Doctrine will "hold water" if someone
decided to take this to court for antitrust [violations].
SENATOR KELLY responded that the State Action Doctrine was
created by the U.S. Supreme Court, and this follows the
directives that were given. He stated that there has been
opinion from the AMA (American Medical Association), and through
the process there have been legal opinions on specific parts of
the bill, but not the entire bill.
Number 2359
CHAIR MURKOWSKI stated that she noticed there were a couple of
letters to the FTC (Federal Trade Commission) in the committee
packets from Texas and Washington, D.C. She asked whether that
is something that is done when seeking an exemption to the State
Action Doctrine.
MR. JORDAN responded to previous questions. In reference to
Representative Crawford's remarks about collective bargaining,
he said he does not believe this bill deals with that situation.
A major difference is that Representative Crawford, in his
collective bargaining situation, falls under the National Labor
Relations Act and has the ability to strike. There is no
ability to strike or to engage in any type of boycott in this
bill.
TAPE 01-65, SIDE B
Number 2470
MR. JORDAN continued, stating that, as Chair Murkowski mentioned
earlier, Texas and Washington, D.C., are two entities that have
had experience with this. He said there have been no court
cases having to do with ERISA preemption with such a law. The
first "cut" in looking at whether ERISA preempts the application
of state law is whether or not the state law impacts the
employee benefit plan. Decisions along those lines have not
been made involving the State Action Doctrine.
MR. JORDAN explained that as in most antitrust situations, what
the law says is not determinant; it's what the facts actually
present as to whether or not there are violations in the federal
or state antitrust laws. The bill was patterned after the AMA
model, which was put together by the AMA's legal staff with
counsel from an outside firm that specializes in antitrust
issues; their feeling is that it "passes muster." He stated
that there are two basic tests that any law providing this
exemption must pass. First, there has to be a clearly
articulated policy by the state, and second, there has to be
active state oversight. He added that the bill that was passed
in Washington, D.C., was modeled by the AMA.
CHAIR MURKOWSKI asked whether there is any requirement to get an
advisory opinion in advance from the FTC.
MR. JORDAN responded that physicians entering into this are
making a large "leap of faith" because they are depending on the
state to provide sufficient and active oversight. The FTC can
come in with "20-20 hindsight" and say the oversight wasn't
provided, thereby putting those physicians at risk for violation
of federal antitrust laws.
Number 2249
CHAIR MURKOWSKI remarked that the letters provided to [the
committee] were apparently submitted to the FTC prior to
implementation of their legislation. She said she wasn't clear
whether that was a requirement or not.
MR. JORDAN responded that it is his understanding that it is not
a requirement; however, it is probably advisable.
CHAIR MURKOWSKI asked Mr. Jordan if he could comment on
Representative Rokeberg's concern about House Bill 211, and how
this does or doesn't tie in.
MR. JORDAN replied that there were items in House Bill 211 that
dealt with certain physician services provisions; however, it by
no means was an exhaustive "laundry list" of those areas that
could be part of such an agreement.
REPRESENTATIVE HALCRO stated that last year when House Bill 211
was in the committee he had some huge concerns. He said his
biggest concern was that he didn't think the bill was needed;
however, House Bill 211 passed and those rule changes don't take
effect until July 1 [2001]. He said it seems to him that
without giving enough time to see how they play out in the
market, [the legislature] is looking for more rule changes. He
explained that federal legislation H.R. 1304 was opposed by the
Federal Trade Commission, which issued a report saying it
thought such an exemption would be "bad medicine" for consumers.
The FTC also felt that both health insurance and provider
markets need to function competitively. Another area discussed
was the rationale that there wasn't the desired ability of the
antitrust exemption. He stated that there is a tremendous
amount of concern on whether this is needed and what the overall
effect on the marketplace will be.
Number 2102
REPRESENTATIVE HALCRO remarked that he had asked Mr. Jordan what
the genesis of this bill was, and Mr. Jordan had commented that
a couple of doctors in Fairbanks got together, somebody tipped
off the FTC, and [the doctors] got in trouble for talking about
these things. Representative Halcro said it appears to him that
it was more elaborate than that. According to the FTC web site,
there were 86 physicians, and the director of FTC's Bureau of
Competition said, "AHN [Alaska Healthcare Network, Inc.] members
engaged in a conspiracy to set prices and hamper the entry of
managed care plans into the Fairbanks market, resulting in
higher prices and limited choices for physician services."
Representative Halcro asked where the need is for this piece of
legislation.
MR. JORDAN responded that the ASMA's interest in this
legislation as well as in other types of legislation that
provide for a physician-friendly environment is that they feel
there needs to be a friendly environment to deal with what is a
looming problem with the physician workforce in Alaska. Right
now, in excess of 51 percent of physicians in Alaska are over
the age of 51. Dr. Sam Cullison, an AMA delegate from
Washington State, put together some statistics having to do with
physician workforces in the Pacific Northwest, including Alaska.
The number of physicians in Alaska per 100,000 population was
about 170; compares with the national average of 282. Mr.
Jordan noted that in Alaska there is no medical school, there
are 10 slots per year in the WAMI (Washington, Alaska, Montana,
Idaho Medical Education Program) program, and there is one
residency program. Nationally, 70 percent of physicians coming
out of training practice in the area where they do their
residency.
Number 1801
MICHAEL HAUGEN, Executive Director, Alaska Physicians &
Surgeons, Inc., came forth and added that he just read in the
AMA newsletter that even Canada has a higher per capita number
of physicians than Alaska. He stated that it is important for
Alaska to maintain as positive an atmosphere for physicians as
possible, and he thinks this bill will do that. In response to
Representative Halcro's question concerning the [need for this
legislation], he stated that this bill really relates to
contracts between doctors and insurance companies, and isn't an
issue the public may be aware of. He added that between the
ASMA and [Alaska Physicians & Surgeons, Inc.] this is their
number one priority. There is an enormous amount of paranoia
after what happened in Fairbanks. He stated that he thinks the
question to ask is, "At what point is this insurance
consolidation going to be enough so that effectively we have a
single paired system, and at that point how [do] the doctors
advocate for their patients?"
MR. HAUGEN stated:
We just feel that ... all [the doctors] really want is
the opportunity to get together and discuss some of
these nonfee-related terms as well as [potential]
fees. And when I talk about fees, I'm really talking
about maybe just holding the line on what they're
currently getting. There's a constant desire on the
part of the insurance companies [to] ratchet down
costs. So, we may not be talking about fee increases
or cost increases from the physician standpoint; we
may simply be trying to tread water. ... Again, the
attorney general has absolute authority to say no.
REPRESENTATIVE HALCRO referenced a newspaper article dated
August 1, 2000, from the Juneau Empire that discusses the
healthcare needs expanding to meet the need in Alaska. He read:
More doctors are practicing in Alaska now than in
previous years. The number of licensed medical
doctors in Alaska grew from 1,419 active licenses in
fiscal [year] '95 to 1,810 in fiscal [year] 1999. One
of the reasons for that is that people are fleeing the
managed care system in [the] Lower 48. Doctors moving
to Alaska prefer the fee-for-service rather than
managed care procedures.
REPRESENTATIVE HALCRO said this was his argument last year with
House Bill 211. The argument for both bills is that doctors are
at a disadvantage in the marketplace, yet all of the facts seem
to point in the other direction.
Number 1689
MR. JORDAN responded that the numbers [Representative Halcro
quoted] probably came from the Division of Occupational
Licensing, while the numbers from Dr. Cullison came from the
Alaska State Medical Association's database. He said the
database, from the end of December 2000, shows 1,036 physicians
practicing in Alaska, up from 1,024 from December 1999. He
added that he thinks some of the number of "managed-care
refugees" has gotten smaller.
REPRESENTATIVE ROKEBERG asked Mr. Jordan whether his estimate of
the number of doctors includes whose with the Indian Health
Service or Public Health Service.
MR. JORDAN answered that [the numbers] indicate private
practice.
REPRESENTATIVE ROKEBERG referred to his earlier question about
the impacts on non-ERISA people. He stated that he has come to
the conclusion that Alaska probably has the smallest amount of
uninsured people in the country. He added that if this bill is
implemented it will set a pricing pattern. He remarked that he
would have more comfort with this legislation if a year were
given to implement House Bill 211.
Number 1437
MR. JORDAN responded that this will only impact the insured
plans. He stated that he expects, down the road, that there
will be further delineation in the courts having to do with
ERISA preemption. That will clarify whether or not self-insured
plans, without being preempted by ERISA, will be impacted by a
bill like this. He remarked that the courts have been moving in
the direction of giving the states, as well as some
administrative agencies, more authority in that area. For
example, the Department of Labor came up with a new definition
of multiple employer welfare associations (MEWAs). He said he
has heard it theorized that 61 percent of the Fortune 500
companies will be included as a MEWA. The significance is that
MEWAs are subject to state regulations. As to the timing, he
stated that realistically it will take a year following the
effective date of the bill for regulations to be drafted. He
added that it will probably be another year before a group of
physicians get together to negotiate.
REPRESENTATIVE ROKEBERG asked what the latest word is on the
federal Patients Bill of Rights, and any possible impact or
expansion of the state's ability to enforce regulations on these
groups.
MR. JORDAN answered that the only information he has is that it
is embroiled in presidential politics.
REPRESENTATIVE ROKEBERG commented that he recalls that the
committee is very adroit at providing delayed effective dates on
legislation, with the ability to write the regulations in the
bill.
Number 1277
REPRESENTATIVE HAYES asked, if SB 37 passes and the doctors use
it without an advisory opinion from the FTC, and then the bill
is ruled unconstitutional, whether there are any safety nets in
the legislation that would cover, for example, the doctors who
were "crucified" in Fairbanks. He stated that only the three
geographical areas [Anchorage, Juneau, and Fairbanks] can use
this bill, and it seems as if only one insurance company can be
a player - Blue Cross. He asked what other carriers would be in
play. He remarked that he is curious about the statement that
[Alaska] is not competitive. He said it sounds as if this
legislation has only been done in one state and one district.
He asked, if no other states have done this, what is making
[Alaska] so noncompetitive that this legislation alone would
make [Alaska] as competitive as other states.
MR. JORDAN answered, first, that there is no safety net. He
stated that keeping in mind that it is the physicians who are at
risk when entering into this, presumably, they will have
appropriate legal help. Second, it may or may not be true that
this would impact only one insurance company, and he thinks that
will depend on the particular location. He added that he thinks
the Matanuska-Susitna area is the fourth geographic area.
Third, he clarified that Texas is the only place where this has
been implemented. He stated that it is his feeling that
[Alaska] needs to be "out front" about this and other issues
involving a physician-friendly environment.
REPRESENTATIVE HAYES asked, if this legislation passes, is ruled
to be unconstitutional, and there is no safety net for doctors,
how being "out front" would make [Alaska] more physician-
friendly, without an advisory opinion from the FTC.
Number 1017
MR. HAUGEN responded that currently, he thinks physicians feel
that because of what happened in Fairbanks and the general
climate of not being able to talk with each other, this is a
relatively unfriendly state. He stated that the physicians [at
the ASMA] feel that if they are allowed to talk to each other
about these contracts without the threat of being sued, the
general environment for healthcare in Alaska will improve. [The
doctors] are willing to take the risk that the implemented
regulations may be found in violation of the law. It is in the
physicians' vested interest to make sure the attorney general
writes the regulations so that they are protected. He stated
that he suspects that the ASMA's legal counsel will be
submitting substantial input to the attorney general on what
should constitute adequate state oversight. He added that the
probable future head of the U.S. Department of Justice's
antitrust division was instrumental in writing one of these
bills, and President Bush signed one of these bills.
REPRESENTATIVE HAYES stated that it seems to him that the vested
interest of the doctors would be to have the advisory opinion
beforehand.
MR. HAUGEN emphasized that the AMA's legal counsel, the Texas
Medical Association's legal counsel, the probable future head of
the antitrust division of the U.S. Department if Justice, and
the ASMA's legal counsel have reviewed this. The attorney
general of the State of Alaska gets to write these regulations
and can seek whatever counsel is needed. He remarked that
Representative Halcro referred to an article that outlined what
happened in Fairbanks, and stated that after the anonymous phone
call was submitted to the FTC, the group of doctors "were off to
the legal races." After six figures in legal fees, they decided
to "throw in the towel." He said he believes the consent decree
on the wording is boilerplate and is the minimum the FTC
requires to get off of a potential defendant's "back."
CHAIR MURKOWSKI stated that she would like to hear how this
would also benefit the consumer.
Number 0680
MR. HAUGEN answered that he thinks its most direct benefit for
consumers is that it will allow physicians as a group to go to
an insurance carrier and start to identify where the
inefficiencies in the system are. He stated that members of his
board see incredible duplication of services that are required
because the doctors' ability to communicate amongst themselves
to identify these overuses of services is limited. Many members
have said that there are better, cheaper ways of doing this for
the patients. Another example, he said, is medical necessity,
an issue that can only be discussed between a carrier and small
groups of physicians. If the carrier has a firm idea of what
medical necessity is, there is very little a doctor can do;
that's a patient-centered issue of whether a service will be
covered or not. He noted that this refers to nonfee issues.
CHAIR MURKOWSKI stated that she thinks it is easier to grasp the
benefits to the consumer when talking about the nonfee-related
issues. However, when the discussion is about the specific
fees, she said she does not understand how the consumer
benefits.
MR. HAUGEN explained that he was told through the executive
director of the group [of physicians] in Fairbanks that their
legal counsel, Mr. Doug Ross (ph), was told by the FTC
investigators that the FTC's opinion regarding the distinction
between nonfee- and fee-related issues was moot. The FTC's
position was that if a nonfee-related item in a contract
affected costs, it was effectively a price issue. The feeling
when drafting this bill was if the FTC was going to come after
[the physicians] about nonfee- or fee-related issues, both
should be included.
CHAIR MURKOWSKI commented that that raises an interesting point,
because as it is set up now, the nonfee-related issues have to
be resolved before addressing the fee-related issues. However,
according to Mr. Haugen, there is probably a logical tie-in with
almost all the nonfee-related issues that will have some
influence on the fees ultimately.
MR. HAUGEN remarked that it may not relate to fees directly, but
it may relate to costs. For example, if "medical necessity" is
defined liberally, there may be many more procedures an insurer
would have to include under a plan.
Number 0494
SENATOR KELLY referred to the statement by Mr. Haugen that the
FTC had said the difference between fees and terms was moot, and
stated that that is the most "crying" public benefit he could
think of. At that point, physicians could not advocate as a
group with any kind of market power for their patients. He
expressed that that is the essence of this bill.
REPRESENTATIVE HALCRO remarked that this is addressing those
healthcare providers that cover non-ERISA plans, which is a
relatively small portion of the insurance pool. He said this
reminds of him of two years ago when the Mental Health Parity
Task Force gave a presentation and stated that the legislature
should require that all policies have mental health coverage.
They were just talking about non-ERISA, which are small
employers that are struggling to provide health coverage for
their employees. He remarked that if his carrier's costs
increase, he will have to absorb those cost.
MR. HAUGEN responded that the State of Alaska has no power to
affect ERISA plans. That automatically shrinks the pool.
MR. JORDAN stated that he thinks one of the hopes is that a
couple of things will happen: one, that there will be more
federal court cases allowing state regulation to impact the
areas that are thought to be hands off, and two, that there will
be groups of self-insured people who may want to negotiate.
TAPE 01-66, SIDE A
Number 0018
LAURA WALDEN testified via teleconference on behalf of the
Nulain Sisterhood, and stated that she is a consumer as well as
an advocate for patients. She remarked that she sees this bill
as being very destructive as far as the consumer is concerned.
If doctors can set the fee scales, which the consumers are
already having a problem meeting, that puts those fees out of
the reach of the consumers. She stated that she thinks the
legislature should take a good look at how this is going to
affect people who do not have insurance. She suggested that
[the committee] not look at this bill, but at why the doctors
have to be on a contract, which interferes with the physicians'
giving proper care to the patients. The insurance companies,
she said, are already dictating to the doctor what he or she can
and cannot do.
CLYDE "ED" SNIFFEN, Assistant Attorney General, Fair Business
Practices Section, Civil Division (Anchorage), Department of
Law, testified via teleconference. He stated that the
Department of Law still has serious concerns with SB 37 for a
variety of reasons. The State Action Doctrine has always been a
concern. He explained that the State Action Doctrine is
something that has been set by the U.S. Supreme Court, and there
are cases starting in the early '80s defining what that doctrine
needs to do in order to insulate state activity from antitrust
scrutiny. He stated that there are two elements to the
doctrine. One, there needs to be a clearly expressed state
policy favoring the type of anticompetitive behavior, and two,
there needs to be active state supervision over the process. He
remarked that it is this second reason that [the Department of
Law] thinks is missing from SB 37.
MR. SNIFFEN explained how SB 37 would work in reality. He
remarked that on page 2, line 10, it allows 100 percent of the
physicians in any area to get together and talk about things;
there is no 30 percent restriction on the ability of physicians,
by themselves, to get together and talk. The only time the
state has an opportunity to come into the process is after an
authorized third-party representative has been selected by the
physician. The third-party representative is not required to
give very much information to the attorney general before those
negotiations are required to proceed. The attorney general, he
said, can only stop those negotiations under very limited
circumstances, which are set out on page 5, lines 23 to 29. He
stated that the level of active state supervision that [the
Department of Law] believes the State Action Doctrine requires
isn't present in the bill.
MR. SNIFFEN remarked that with the price negotiations the role
of the attorney general is reduced to reviewing contracts that
have been proposed. There is no involvement of the attorney
general in the negotiation process itself. He remarked that
[the Department of Law] is sympathetic with the doctors, if they
really don't have the kinds of negotiating power that they would
like to have with the insurance companies, but this bill clearly
brings the balance way over to the other side, to the point
where perhaps the insurance companies are at a disadvantage.
Number 0813
MR. SNIFFEN, in response to comments made earlier, stated that
he doesn't think there was any testimony about how this bill
will correct any perceived flaws in the system. Currently,
physicians can negotiate with insurance companies and health
benefit plans on an individual basis. He remarked that there
are also opportunities under different models that the FTC has
recognized for clinically integrated enterprises to negotiate
collectively. Another problem [the Department of Law] has with
the bill is the notion that there is substantial market power.
When an insurance company has a 15 percent share of the market,
this presumption doesn't seem to be based on reality. He stated
that market power is a very complicated thing and requires the
analysis of many different factors. He remarked that he is not
sure that this bill allows the attorney general to make that
initial determination. If it does, if should be clarified.
MR. SNIFFEN continued, stating that the definition of a
geographic area in this bill is fairly vague, and could be
tightened up so that it is clearer. Finally, he commented that
ERISA is not preempted by this bill. He said he read the
definition of "health benefit plan" in the bill, and the bill
does exclude self-insured plans, which might take care of a lot
of the ERISA plans, but there are other ERISA plans that may not
be self-insured that could also be subject to the definition of
"health benefit plan." He stated that there was some testimony
about how the State Action Doctrine could perhaps exempt some of
the ERISA issues; however, preemption is not the same as the
State Action Doctrine.
CHAIR MURKOWSKI asked Mr. Sniffen whether he deals with
antitrust issues on a general basis.
MR. SNIFFEN answered, yes.
Number 0976
CHAIR MURKOWSKI asked whether going to the FTC with the shell of
SB 37 in advance of enactment is appropriate or generally done.
MR. SNIFFEN responded that it is something that [the Department
of Law] would have liked to have done in this case. He noted
that [the department] did submit information with some written
comments on the FTC's position on the Texas and the Washington,
D.C., legislation, and the FTC did testify against those bills.
The attorney general in Texas testified strongly against the
Texas legislation.
CHAIR MURKOWSKI stated that she has looked at what has been
presented in terms of what constitutes active state supervision,
and it sounds as if in order to meet the requirements of that,
more involvement is better. She asked Mr. Sniffen how [the
committee] can make it so that there is active state
supervision.
MR. SNIFFEN responded that [the department] submitted the
statutes and regulations from Washington [State], because [the
department] thinks the process Washington has established comes
closest to satisfying the State Action Doctrine. He explained
how the process works in Alaska right now with the Regulatory
Commission of Alaska. There are utilities with monopoly power,
but that power is offset by regulatory review of prices and
contracts through a commission that has hearings and takes
testimony. Washington has a system that doesn't allow
negotiations of price terms at all. As for non-price terms,
there is a system in place that goes through the Washington
Department of Health, which works with the Office of the
Attorney General to receive and review applications.
REPRESENTATIVE HALCRO asked Mr. Sniffen whether he has been
involved with following the bill on the Senate side.
MR. Sniffen answered that he has.
REPRESENTATIVE HALCRO stated that in a letter of opposition [in
the committee packets], a lady wrote that the version from the
[Senate] Labor and Commerce Standing Committee was far more
acceptable to her. That version, in addition to a sunset
clause, had language that provided for review and comment by
interested parties. It also stated that the attorney general
must include a review of any harm to consumers or non-physician
providers that might be contained in any contract. He stated
that is seems to him that the version that came out of the
Senate Labor and Commerce Standing Committee had a little bit
more consumer protection. He asked Mr. Sniffen if he could
speak to that.
Number 1261
MR. SNIFFEN responded that he thinks the Senate version did have
some provisions that allowed for review of the contracts by
interested parties. Those provisions were changed somewhat in
the Senate Finance Committee.
REPRESENTATIVE HALCRO asked if there has ever been a point in
time in this bill's process when the Department of Law had felt
it would be acceptable.
MR. SNIFFEN answered that there hasn't.
CHAIR MURKOWSKI stated that one of the protections the sponsor
is asserting is that this would not allow for a group of doctors
to strike or engage in a boycott. She said as she read the
bill, it does indicate, with regard to the non-price terms, that
competing physicians may not engage in a boycott [subsection (a)
on page 2]; it doesn't say anything about strikes. That
language is not included anywhere else in the bill. However,
she said she reads subsection (a) as being specific to
subsection (a) only. She remarked that she does not have the
assurance that the provision that competing physicians cannot
compete in a boycott or strike is included in the price terms.
MR. SNIFFEN remarked that there is not a similar restriction
under the price section, page 3, line 18, subsection (d), as
there is in the non-price section. He stated that it remains
one of [the department's] main concerns.
Number 1422
CHAIR MURKOWSKI asked whether or not this has been addressed at
some point, and what the purpose was for not having the boycott
or strike language in the price terms area.
MR. SNIFFEN responded that he doesn't know why they weren't
included.
REPRESENTATIVE HALCRO asked Mr. Sniffen if he was familiar with
the FTC's action on the position in Fairbanks.
MR. SNIFFEN answered that he was not that familiar with it.
REPRESENTATIVE HALCRO stated that one of the complaints the FTC
alleged was that through certain actions these doctors
"succeeded blocking the entry of several health plans into the
Fairbanks area and substantially delayed others." He remarked
that basically, through their actions, it was a de facto
boycott.
MR. SNIFFEN responded that that is what he understood as well.
Number 1740
BOB LOHR, Director, Division of Insurance, Department of
Community and Economic Development, testified via
teleconference. He stated that the division has two concerns
with SB 37. The first is the cost to Alaskans and the second is
the impact on the insurance market. In terms of the cost
concerns, he said all of the studies regarding legislation like
SB 37 predict an increase in the cost of healthcare and
therefore of health insurance, if physicians are allowed to
collectively negotiate. Increased costs would mean more
uninsured Alaskans and reduced benefits for others. Small
employers and individuals are particularly vulnerable.
MR. LOHR explained, in terms of the insurance market concern,
that this legislation was developed in response to managed care
organizations, primarily HMOs [health maintenance organizations]
and healthcare providers in the Lower 48. Alaska does not have
any HMOs at this time, and the number of health insurers and
their market shares have remained relatively stable over the
past six years. He stated that with the exception of the
entrance and then exit of employers' health [plans], the big
players in 1994 are still the big players in the health
insurance market today. The health insurance market in Alaska
is small, which makes it difficult for new insurers to come into
the market and operate profitably. He remarked that there has
been testimony in other committees as well as today that this
might attract additional insurers to the market; however, the
insurers that [the division] has talked to have not indicated
that would be the case. They have other barriers to entry into
the Alaska market such as its small size and its relative
remoteness. He concluded that the division believes that if
this bill accomplishes what its supporters seek to accomplish,
it will increase the cost of health insurance, increase the
number of uninsured Alaskans, and hurt an already vulnerable
health insurance market.
MR. LOHR added that he thinks the remark made about the number
of doctors per 100,000 being substantially lower in Alaska than
in other markets is a concern from the point of view of cost,
because basic economics suggest that a shortage of supply would
inflate the cost and the price of the physician services. A
proposal to allow increased fees to be negotiated probably seems
to go the wrong direction from the point of view of that market
tendency.
Number 1740
REPRESENTATIVE ROKEBERG asked what the latest count is on the
number of non-ERISA-covered individuals in terms of the total
insurance market in Alaska.
KATIE CAMPBELL, Life and Health Actuary, Division of Insurance,
Department of Community and Economic Development, came forth and
responded that [the division] has the most recent health
insurance survey, but it does not survey to find out who is
self-funded. She added that [the division] has worked with [the
Department of Health & Social Services] on portions of its
report based on federal surveys.
REPRESENTATIVE ROKEBERG stated that he would guess [the number
of non-ERISA-covered individuals] is probably less than 20
percent but could be more than 5 or 10 percent.
MR. LOHR remarked that he believes 10 percent would be a
ballpark figure.
Number 1825
CHAIR MURKOWSKI stated that she read a figure of somewhere
between 15 to 30 percent increase in the cost of insurance. She
asked if those were Alaska's figures.
MR. LOHR responded that there has not been a study of Alaska
specifically. However, the figure in the national study looking
at H.R. 1304 came up with a range of cost increases between 5
and 13 percent.
REPRESENTATIVE HAYES asked Mr. Lohr if he foresees other
insurance carriers, other than Blue Cross, that would fall into
this percentage market share of 15 percent in any community.
MR. LOHR referred to page 8, lines 24 and 25, and stated that
with the choice of definition for "health benefit plan", it may
effectively be that neither Aetna nor Blue Cross is covered by
the provisions of this bill.
REPRESENTATIVE ROKEBERG asked whether that is because Blue Cross
is nonprofit and regulated under a different statute.
Number 1965
MS. CAMPBELL responded that it has to do with the fact that a
"health benefit plan" under chapter 54 of [Alaska's] statutes is
defined as an "employee welfare benefit plan", which is a
specific employer plan and not an insurance company. She added
that Blue Cross is under a different statute.
REPRESENTATIVE ROKEBERG stated that that was his point;
therefore, it is not even covered by this bill.
MS. CAMPBELL responded that the "health benefit plan" definition
doesn't reference an insurance company either.
REPRESENTATIVE HALCRO asked how it would be determined on a
community-by-community basis who has the majority of market
share.
MR. LOHR answered that "geographic service area" is a defined
term in the bill, and it seems to focus on the geographic area
of the physician.
REPRESENTATIVE HALCRO asked whether [the division] collects the
information by geographic areas.
MS. CAMPBELL answered no, for insurance companies it is just the
total premium for the state. Therefore, it would be information
[the division] would have to collect.
Number 2102
REPRESENTATIVE ROKEBERG commented that it has taken six years
and "we" still can't figure out how many people are insured and
uninsured in the state, and now the Division of Insurance is
supposed to figure who has 15 percent market share in a regional
area. He stated that it's a real "jump shift."
REPRESENTATIVE HAYES asked whether [the division] has any
suggestions to make this bill doable.
MR. LOHR responded that he thinks Representative Rokeberg hit on
a point that this is a bill that needs some time to determine
its actual need and whether it will be effective. He added that
no plan has yet been approved under Texas; as a result, there is
no track record.
CHAIR MURKOWSKI referred to her earlier question about boycotts.
She stated that in subsection (a) on page 2, it states that
[physicians] can't engage in a boycott for nonprice terms, but
that same provision is absent when discussing price terms. She
asked Kristopher Knauss, staff to Senator Kelly, if that has
been a subject of discussion in other committee hearings, and
whether it is absent for a reason.
KRISTOPHER KNAUSS, Staff to Senator Pete Kelly, Alaska State
Legislature, responded that it is his understanding that the
sponsor's intent was to keep it throughout the bill. The fees
were taken out by the Senate Finance Committee. He added that
this discussion [on boycotts] has not come up throughout the
committee discussions on the Senate side.
REPRESENTATIVE HAYES asked why the fees were taken out in the
Senate Finance Committee.
MR. KNAUSS explained that the fees have been restructured so
that both parties have to come together to meet on the service
issues. Once those are agreed upon by both parties, they can
then negotiate specifically on fees. Basically, the process is
tiered.
REPRESENTATIVE HALCRO asked what the reasoning was behind taking
out the sunset clause.
MR. KNAUSS responded that he thinks Senator Kelly's thought was
that since there were so many safeguards added throughout the
legislative process, some of the insurance companies would wait
the five years out and not engage in any negotiations.
[SB 37 was held over.]
CHAIR MURKOWSKI called for an at-ease at 5:45 p.m. The meeting
was called back to order at 5:46 p.m.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:47 p.m.
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