Legislature(1999 - 2000)
03/02/2000 09:03 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
March 2, 2000
9:03 AM
TAPES
SFC-00 # 43, Side A and Side B
CALL TO ORDER
Co-Chair John Torgerson convened the meeting at
approximately 9:03 AM.
PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell,
Senator Lyda Green, Senator Pete Kelly, Senator Loren
Leman, Senator Gary Wilken and Senator Phillips.
Also Attending: ANNALEE MCCONNELL, Director, Office of
Management and Budget, Office of the Governor; EDDY JEANS,
Manager, School Finance and Facilities Section, Education
Support Services; ALYSON ELGEE, Deputy Commissioner,
Department of Administration; JANE DEMMERT, Executive
Director, Alaska Commission on Aging; KATY CAMPBELL,
Actuary on Life and Health Issues, Division of Insurance,
Department of Community and Economic Development; DWIGHT
PERKINS, Deputy Commissioner, Department of Labor and
Workforce Development; MIKE HAUGEN, Executive Director,
Alaska Physician and Surgeons; GEORGE RHYNEER,
Cardiologist, President, Alaska Physicians and Surgeons;
JIM JORDAN, Executive Director, Alaska State Medical
Association; NANCY WELLER, Division of Medical Assistance,
Department of Health and Social Services; GORDON EVANS,
Health Insurance Association of America; JEFF DAVIS,
Executive Director, Blue Cross-Blue Shield of Alaska; LEN
SORRIN, Assistant General Council, Blue Cross-Blue Shield
of Alaska; KARL BRIMNER, Director, Division of Mental
Health and Developmental Disabilities, Department of Health
and Social Services
Attending via Teleconference: From Anchorage: BOB LOHR,
Director, Division of Insurance, Department of Community
and Economic Development; SIGNE ANDERSON, Assistant
Attorney General, Fair Business Practices Section, Civil
Division, Department of Law; JULIA COSTER, Assistant
Attorney General, Commercial Section, Civil Division,
Department of Law; JEROME SELBY, Providence Health Systems;
GARY WARD, Licensing Coordinator, Assisted Living Homes,
Division of Senior Services, Department of Administration;
DWIGHT BECKER, Protective Services Coordinator, Division of
Senior Services, Department of Administration; KAY BURROWS,
Director, Division of Senior Services, Department of
Administration; JEFF JESSEE, Executive Director, Mental
Health Trust Authority, Department of Revenue; From
Fairbanks: GARY SWARTZ; DR. MICHAEL CARROLL, Board Member,
Alaska Healthcare Network; MONTA FAYE LANE, President,
Alaska Caregivers Association; From Washington DC: RICHARD
FEINSTEIN, Assistant Director, Bureau of Competition,
Federal Trade Commission; From San Francisco: PAUL SMITH,
Attorney, legal council for the Alaska Healthcare Network;
From Chicago: HELEN JAMISON
SUMMARY INFORMATION
SB 204-EXTEND ALASKA COMMISSION ON AGING
The Committee heard from the Department of Administration
and the Alaska Commission on Aging. An amendment was
considered then withdrawn. The bill reported from
Committee.
SB 256-PHYSICIAN NEGOTIATIONS WITH HEALTH INSURE
The Committee heard testimony from the sponsor, the
Department of Law, the Federal Trade Commission, various
members of the public and organizations. The bill was held.
SB 73-ASSISTED LIVING FACILITIES
The Committee heard from the Division of Senior Services,
the Division of Mental Health, the Alaska Mental Health
Trust Authority and various members of the public and
interested organizations. The bill was held.
Office of Management and Budget Overview: Status of Alaska
Housing Finance Corporation Bonding Projects in Chapter
129, SLA 1998
Co-Chair Torgerson noted an approximate $200 million bond
package that was created under SB 360 from the twentieth
legislative session, with approximately $62 million of that
obligated. He stated the purpose of this overview was to
hear the status of the projects and the schedule for the
issuance of the remaining bonds.
ANNALEE MCCONNELL, Director, Office of Management and
Budget, Office of the Governor told the Committee she had
reviewed the status of the bonds and also asked if the
process was moving along as scheduled. She stated that the
responsibility for processing and managing the projects
remained with the individual departments, which are then
reimbursed from the Alaska Housing Finance Corporation
(AHFC), as necessary. Therefore, she said the information
gleaned from the AHFC only reflects the amount of money
expended on projects to date. She said her office then
looked at each department's assessment of the projects and
learned that most were progressing on schedule.
Ms. McConnell referred to a summary list that showed monies
disbursed to date plus encumbered funds and a status of the
projects. [Copy on file.] She noted that most of the
projects would take two to three years to complete. Schools
take a minimum of three years from planning to opening, she
said. However, she stated most of the other projects would
be complete by the end of upcoming construction season.
Ms. McConnell noted the University of Alaska would speak to
its own projects, which are handled separately. There were
no questions of the Committee on university projects.
Ms. McConnell highlighted the Americans with Disabilities
(ADA) projects as one area of concern, saying there are
still a lot of needs beyond what could be met with the $4
million that was appropriated. She said the Office of
Management and Budget has been working with Department of
Transportation and Public Facilities on how projects could
be sped up, but noted that the department is progressing
slowly to incorporate the changes with other deferred
maintenance projects. She stated that most ADA compliance
projects would be completed by the end of the upcoming
construction season.
Co-Chair Torgerson asked if any projects would not be
completed.
Ms. McConnell was not aware of any projects that would
"fall off" schedule. She noted some of the harbor projects
did have some delays due to the Stellar Sea Lion studies
but were back on track.
Co-Chair Torgerson was concerned about the projects that
had very little expenditures to date. He suggested that
administrative fees had been taken but nothing was spent on
the actual projects. As an example, he referred to the
Iditarod School/Lime Village oil spill and expressed that
this project was one that should get prompt attention. He
also mentioned the $4.6 million allocated to the Kuskokwim
School District water treatment facility, of which no funds
had been spent.
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, did not have specifics on each
project, but noted that when projects are funded the
department issues grants to the school districts and
requires the districts to meet certain milestones before
additional funds are allocated. He added that the projects
the co-chair referred to, have only expended funds for the
planning portion and that the actual construction had not
yet begun.
Co-Chair Torgerson challenged that it was not only the
school projects that had not progressed significantly, but
also the bulk fuel tank projects, which he thought should
be addressed promptly because of the environmental
concerns. He wanted to know if the extent of the situations
were not as serious as earlier portrayed to the
legislature. He requested a more detailed status of the
projects.
Senator Phillips wanted information on the Northway Soil
Remediation project.
Mr. Jeans responded that he would research and report back
to the Committee.
Senator Wilken referred to the Kasayulie case, noting that
SB 360 set aside $25 million for twelve or fourteen
projects and asked if that appropriation was part of the
evidence presented to the judge by the district attorney.
Ms. McConnell did not know and said she would find out.
Senator Wilken commented that over $24 million of the
bonding package was set aside for rural schools in the
Rural Education Attendance Area (REAA).
Ms. McConnell qualified that the state does not do the
school projects, but only oversees the school districts'
work.
Co-Chair Torgerson stated that most projects seemed to be
on schedule but he still had concerns with the
environmental projects. He had been hoping for more detail
in the presentation but would wait for the report on the
school projects.
SENATE BILL NO. 204
"An Act extending the termination date of the Alaska
Commission on Aging; and providing for an effective
date."
This was the second hearing for this bill in the Senate
Finance Committee.
Co-Chair Torgerson noted that a representative of the
Department of Administration was present to answer
questions. There were none.
Speaking to concerns she voiced during the previous
hearing, Senator Green offered some solutions. One option,
she told of, was to relocate the Alaska Commission on Aging
to the legislative branch where it would be under the
direct supervision of the legislature and would be located
in the Legislative Information Office in Anchorage. She
stated that under this method, the commission would
function as an independent ombudsman for issues related to
aging. She thought this would eliminate the potential
conflict of interest with the Department of Administration
and the Alaska Pioneer's Homes that was currently present.
Senator Green continued with her second suggestion, which
would move the long-term care ombudsman from its current
status and place it under the direction of a yet to be
determined state agency. She understood this change would
be reflected on the legislative budget but did not know how
to otherwise deal with her concerns.
Senator Phillips asked why the ombudsman should be moved.
Senator Green responded that she felt there was a need to
have a separation between the overseer of the pioneer's
homes, Department of Administration, and the long-term care
ombudsman. She noted that the ombudsman was charged with
investigating complaints and also being the advocate for
senior citizens, which was in conflict with it's other
charge to oversee the pioneers' home facilities.
Senator Green then offered a third suggestion to have the
ombudsman report directly to the commissioner of the
Department of Administration, saying this solution would
not require a budgetary change.
ALYSON ELGEE, Deputy Commissioner, Department of
Administration stated that the Committee had been briefed
on the work the Commission had done to find an alternative
placement for the long-term care ombudsman, although it was
unable to identify an acceptable location. As a result, she
said the Commission took steps to clarify the reporting
relationship of the long-term ombudsman with the
commissioner and the department to eliminate any potential
conflicts she and others in the department who also serve
on the Commission might have.
Ms. Elgee added that if an acceptable outplacement position
were identified, the Commission would not object to the
change.
Ms. Elgee spoke of the efforts of the Commission to change
the bylaws to remove the commissioner from the reporting
process. She surmised that Senator Green's second option of
having the long-term care ombudsman report directly to the
commissioner would undermine these efforts to avoid the
conflict of interest.
Senator Wilken shared Senator Green's desire to eliminate
the conflicts of having the long-term care ombudsman under
the supervision of the commissioner, who oversees the same
facilities that are sometimes investigated. He understood
the Commission had established a subcommittee that excluded
any members who may be in conflict.
JANE DEMMERT, Executive Director, Alaska Commission on
Aging explained the Commission's bylaw amendment to
establish a standing, long-term care ombudsman committee
with a provision that excludes any commission member that
has any relationship whatsoever to the pioneer homes. She
stated that the subcommittee and the ombudsman have an on-
going relationship and that the subcommittee acts as a
buffer. She felt the Commission already has a workable
strategy in place with this subcommittee, but was open to
improvement.
Senator Wilken talked about the broad representation of the
state with the volunteer members of the Commission. He
shared that the two members from Fairbanks were viewed as
being "in touch" with the senior population in that
community. He suggested giving the subcommittee process a
chance to prove itself before making any changes.
Senator Phillips referred to five recommendations made by
the Division of Legislative Audit it its report on the
Department of Administration Alaska Commission on Aging
[Audit Control Number 02-1462-99, Copy on file,] and asked
which had been completed.
Ms. Demmert described the basic premise behind the
recommendations that there were specific assurances that
needed to be required of the Commission's grantees. She
stated that those were established and in place at the
start of the current fiscal year in which the grants were
awarded.
Senator Phillips asked the witness to list each
recommendation and state whether or not it was implemented.
Ms. Demmert began saying the first recommendation pertained
to the organizational considerations and was addressed by
the aforementioned subcommittee bylaw.
Ms. Demmert said the second, third and fifth
recommendations referred to the development of a cost
allocation plan and were in the final stages and would be
forwarded to the Department of Health and Social Services
within the month.
Monitoring of sub-recipients to ensure that federal funding
was appropriately spent was the fourth recommendation and
Ms. Demmert said that was in place.
Ms. Demmert assured Senator Phillips that the Commission
was tracking the progress of the recommendations.
Senator Green asked if the Commission appointed members to
the standing committee and was told it did.
When asked by Senator Green if the Commission could replace
members of the standing subcommittee or if it could change
the bylaws, Ms. Demmert answered the Commission had the
authority to do both.
Senator Green then asked about the oversight provisions
between the standing committee and the long-term care
ombudsman.
Ms. Demmert replied that the directive of the standing
committee was to provide oversight and guidance, advice
regarding the annual workplan and an annual report focusing
on the proposed cooperative agreements with state and local
agencies and to provide support around the development of a
volunteer cadre. She added that the committee would also
review and advise the full Commission with regard to a
budget for the long-term care ombudsman and make that
request on behalf of the ombudsman to the full Commission.
Senator Green's real concern was not that the Alaska
Commission on Aging would involve itself directly but she
wanted the assurance that when the ombudsman begins an
investigation, the process is unfettered and without
pressure from the Commission. If so, then she deemed this
system acceptable.
Ms. Demmert stressed the current plan has that assurance
and would be respected.
Amendment #1: This amendment changes the bill to add the
following language:
Page 1, line 1, following ";":
Insert "transferring the office of the long-term
care ombudsman from the Alaska Commission on Aging to
the legislative branch;"
Insert a new bill section to read:
"Sec.__ AS 24 is amended by adding a new chapter to
read:
Chapter 57. Office of the Long-Term Care
Ombudsman.
Sec. 24.57.010. Office of the long-term care
ombudsman. There is created in the legislative branch
of the state the office of the long-term care
ombudsman.
Sec. 24.57.020. Appointment of the long-term care
ombudsman. (a) A candidate for appointment as the long-
term care ombudsman shall be nominated by the long-term
care ombudsman selection committee composed of three
members of the senate appointed by the president of the
senate and three members of the house of
representatives appointed by the speaker of the house.
One member of a minority party caucus in each house
shall be appointed to the selection committee.
(b) The long-term care ombudsman selection
committee shall examine persons to serve as long-term
care ombudsman regarding their qualifications and
ability and shall place the name of the person selected
in nomination. The appointment is effective if the
nomination is approved by a roll call vote of two-
thirds of the members of the legislature in joint
session and approved by the governor. However, the
governor may veto the appointment and return it, with a
statement of objections, to the legislature. Upon
receipt of a veto message, the legislature shall meet
immediately in joint session and reconsider approval of
the vetoed appointment. The vetoed appointment becomes
effective by an affirmative vote of two-thirds of the
membership of the legislature in joint session. The
vote on the appointment and on reconsideration of a
vetoed appointment shall be entered in the journals of
both houses.
(c) The appointment of the long-term care
ombudsman becomes effective if, while the legislature
is in session, the governor neither approves nor vetoes
it within 15 days, Sundays excepted, after its delivery
to the governor. If the legislature is not in session
and the governor neither approves nor vetoes the
appointment within 20 days, Sundays excepted, after its
delivery to the governor, the appointment becomes
effective.
Sec. 24.57.030. Term; removal. (a) The term of
office of the long-term care ombudsman is five years.
An incumbent may be reappointed but may not serve for
more than three terms. If the term of a long-term care
ombudsman expires without the appointment of a
successor under this chapter, the incumbent continues
in office until a successor is appointed. If the long-
term care ombudsman dies, resigns, becomes ineligible
to serve, or is removed or suspended from office, the
person appointed as acting long-term care ombudsman
under AS 24.57.040 serves until a new long-term care
ombudsman is appointed for a full term.
(b) The legislature, by a concurrent resolution
adopted by a roll call vote of two-thirds of the
members in each house entered in the journal, may
remove or suspend the long-term care ombudsman from
office, but only for neglect of duty, misconduct, or
disability.
Sec. 24.57.040. Staff; employment policies. (a)
The long-term care ombudsman shall appoint a person to
serve as acting long-term care ombudsman in the
absence of the long-term care ombudsman. The long-term
care ombudsman shall also appoint assistants and
clerical personnel necessary to carry out this chapter.
(b) The long-term care ombudsman is a full-time
position in the exempt service under AS 39.25.110, and
neither the long-term care ombudsman nor the staff of
the office of the long-term care ombudsman is subject
to the employment policies under AS 24.10 or AS 24.20.
Sec. 24.57.050. Financial interests. Neither the
long-term care ombudsman nor the staff of the office of
the long-term care ombudsman may have a financial
interest in a long-term care facility in the state
Sec. 24.57.060. Duties and powers of the long-term
care ombudsman. (a) The long-term care ombudsman shall
investigate and resolve a complaint made by or on
behalf of an older Alaskan who resides in a long-term
care facility in the state if the complaint relates to
a decision, action, or failure to act by a provider or
a representative of a provider of long-term care
services, or by a public agency or social services
agency, that may adversely affect the health, safety,
welfare, or rights of the older Alaskan.
(b) The long-term care ombudsman may investigate
and resolve a complaint made by or on behalf of an
older Alaskan relating to the long-term care or
residential circumstances of the older Alaskan.
Complaints under this subsection may relate to any
issue not covered under (a) of this section, including
the older Alaskan's landlord, senior citizen housing, a
public assistance program, a public grant program for
services to older Alaskans, public utilities, health
care facilities, and health care providers.
(c) The long-term care ombudsman may
(1) subpoena witnesses, compel their
attendance, require the production of evidence,
administer oaths, and examine any person under oath in
connection with a complaint described under (a) of this
section; the powers described in this paragraph shall
be enforced by the superior court;
(2) pursue administrative, legal, or other
appropriate remedies on behalf of an older Alaskan who
resides in a long-term care facility in the state.
(d) The long-term care ombudsman shall adopt
regulations under AS 44.62 (Administrative Procedure
Act) to implement this chapter.
Sec. 24.57.070. Training and certification of
staff. (a) The long-term care ombudsman shall hire and
provide for the training and certification of office
staff, including volunteers and other representatives
of the office of the long-term care ombudsman. Training
must include instruction in federal, state, and local
laws and policies relating to long-term care facilities
in the state and in investigative techniques. The long-
term care ombudsman may require other appropriate
training. The long-term care ombudsman may decertify a
person under this section for goad cause in accordance
with regulations adopted by the ombudsman.
(b) An employee, volunteer, or other
representative of the office of the long-term care
ombudsman may not investigate a complaint under AS
24.57.060 unless the person has been certified as
having completed training under (a) of this section and
approved by the long-term care ombudsman as qualified
to investigate the complaint
(c) The employees of the office of the long-term
care ombudsman are in the exempt service under AS
39.25.110.
Sec. 24.57.080. Access to long-term care
facilities, older Alaskans, and records. (a) A person
may not deny access to a long-term care facility or to
an older Alaskan by the long-term care ombudsman or an
employee, volunteer, or other representative of the
office of the long-term care ombudsman.
(b) Notwithstanding the provisions of AS
24.57.060(c)(l), the long-term care ombudsman may
obtain medical or other records of an older Alaskan who
resides in a long-term care facility in the state only
with the consent of the older Alaskan or the older
Alaskan's legal guardian or, if the older Alaskan is
unable or incompetent to consent and does not have a
legal guardian, only with a court order.
Sec. 24.57.090. Confidentiality. (a) Records
obtained or maintained by the long-term care ombudsman
are confidential, are not subject to inspection or
copying under AS 09.25.110 - 09.25.120, and, except as
provided in (b) of this section, may be disclosed only
at the discretion of the long-term care ombudsman.
(b) The identity of a complainant or an older
Alaskan on whose behalf a complaint is made may not be
disclosed without the consent of the identified person
or the person's legal guardian, unless required by
court order.
Sec. 24.57.100. Immunity from liability. (a) A
person who, in good faith, makes a complaint
described in AS 24.57.060 is immune from civil or
criminal liability that might otherwise exist for
making the complaint
(b) The long-term care ombudsman, or an employee,
volunteer, or other representative of the office of the
long-term care ombudsman, is immune from civil or
criminal liability for the good faith performance of
official duties.
Sec. 24.57.110. Interference with the long-term
care ombudsman and retaliation prohibited. (a) A person
may not intentionally interfere with the long-term care
ombudsman, or an employee, volunteer, or representative
of the office of the long-term care ombudsman, in the
performance of official duties under AS 24.57.060.
(b) If a. person makes a good faith complaint
described in AS 24.57.060, an employer or supervisor
of the person, or a public or private agency or entity
that provides benefits, services, or housing to the
person, may not discharge, demote, or transfer, reduce
the pay or benefits or work privileges of, prepare a
negative work performance evaluation of, deny or
withhold benefits or services, evict, or take other
detrimental action against the person because of the
complaint. The person making the complaint may bring a
civil action for compensatory and punitive damages
against an employer, supervisor, agency, Or entity
that violates this subsection. In the civil action,
there is a rebuttable presumption that the detrimental
action was retaliatory if it was taken within 90 days
after the complaint was made.
(c) A person who intentionally violates this
section is guilty of a class B misdemeanor.
Sec. 24.57.120. Legal counsel for the long-term
care ombudsman. (a) Except as provided in (b) of this
section, the Legislative Affairs Agency shall provide
legal services, including advice and representation, in
connection with any matter relating to the powers,
duties, and operation of the office of the long-term
care ombudsman, and in any legal action brought against
the long-term care ombudsman or an employee, volunteer,
or other representative of the office of the long-term
care ombudsman. If the Legislative Affairs Agency
cannot provide legal advice or representation because
of a conflict of interest or because of the limitation
in (b) of this section, the long-term care ombudsman
may employ private legal counsel.
(b) The Legislative Affairs Agency may not provide
legal services to the office of the long-term care
ombudsman in connection with the office's power under
AS 24.57.060(c)(2).
Sec. 24.57.200. Definitions. In this chapter,
(1) "long-term care facility" means an
assisted living home that is required to be licensed
under AS 47.33 and a nursing home as defined in AS
08.70.180;
(2) "older Alaskan" means a resident who is
60 years of age or older;
(3) "senior citizen housing" has the meaning
given "senior housing" in AS 18.56.799."
Renumber the following bill sections accordingly.
Insert new bill sections to read:
"Sec.__. AS 24.60.176(b) is amended to read:
(b) In this section, "appointing authority" means
(1) the legislative council for employees of
the Legislative Affairs Agency and of the legislative
council and for legislative employees not otherwise
covered under this subsection;
(2) the Legislative Budget and Audit
Committee for the legislative fiscal analyst and
employees of the division of legislative finance, the
legislative auditor and employees of the division of
legislative audit, and employees of the Legislative
Budget and Audit Committee;
(3) the appropriate finance committee for
employees of the senate or house finance committees;
(4) the appropriate rules committee for
employees of
(A) standing committees of the
legislature, other than the finance committees;
(B) the senate secretary's office and
the office of the chief clerk of the house of
representatives; and
(C) house records and senate records;
(5) the legislator who made the hiring
decision for employees of individual legislators;
however, the legislator may request the appropriate
rules committee to act in the legislator's stead;
(6) the ombudsman for employees of the office
of the ombudsman, other than the ombudsman, and the
long-term care ombudsman for employees of the office of
the long-term care ombudsman, other than the long-term
care ombudsman;
(7) the legislature for the ombudsman and the
long-term care ombudsman.
Sec.___. AS 24.60.250(c) is amended to read:
(c) In addition to the sanctions described in AS
24.60.260, if the Alaska Public Offices Commission
finds that a legislative director has failed or refused
to file a report under AS 24.60.200 by a deadline
established in AS 24.60.210, it shall notify the Alaska
Legislative Council or the Legislative Budget and Audit
Committee, as appropriate. For the ombudsman and the
long-term ombudsman, the Alaska Legislative Council
shall be notified.
Sec.__. AS 24.60.990(a)(9) is amended to read:
(9) "legislative director" means the director of
the legislative finance division, the legislative
auditor, the director of the legislative research
agency, the ombudsman, the long-term care ombudsman,
the executive director of the Legislative Affairs
Agency, and the directors of the divisions within the
Legislative Affairs Agency;"
Renumber the following bill sections accordingly.
Insert a new bill section to read:
"Sec.__. AS 39.27.O22 (d) is amended to read:
(d) This section applies to employees of the
legislature only if the committee responsible for
adopting employment policies concerning the employee
adopts a written policy that the section applies. This
section applies to the employees of the office of the
ombudsman only if the ombudsman adopts a policy that
the section applies. This section applies to the
employees of the office of the long-term care ombudsman
only if the long-term care ombudsman adopts a policy
that the section applies."
Renumber the following bill sections accordingly.
Insert a new bill section to read:
"Sec.__. AS 39.90.140(3) is amended to read:
(3) "matter of public concern" means
(A) a violation of a state, federal, or
municipal law, regulation, or ordinance;
(B) a danger to public health or safety;
(C) gross mismanagement, a substantial
waste of funds, or a clear abuse of authority;
[OR]
(D) a matter accepted for investigation
by the office of the long-term care ombudsman
under AS 24.55.100 or 24.55.320; or
(E) a matter accepted for investigation by
the office of the long-term care ombudsman under
AS 2437.060 (a);"
Renumber the following bill sections accordingly.
Insert a new bill section to read:
"Sec.__. AS 44.2l.230(c) is amended to read:
(c) The commission may not investigate, review, or
undertake any responsibility for the longevity bonus
program under AS 47.55 or [,EXCEPT FOR ACTIVITIES OF
THE OFFICE OF THE LONG TERM CARE OMBUDSMAN,] the Alaska
Pioneers' Homes under AS 47.55."
Renumber the following bill sections accordingly.
Insert a new bill section to read:
"Sec.__. AS 44.62.040(c) is amended to read:
(c) Before submitting the regulations and orders
of repeal to the lieutenant governor under (a) of this
section, every state agency that by statute possesses
regulation making authority, except boards and
commissions, [AND] the office of the ombudsman, and
the office of the long-term care ombudsman, shall
submit to the governor for review a copy of every
regulation or order of repeal adopted by the agency,
except regulations and orders of repeal identified in
(a)(l) - (2) of this section. The governor may review
the regulations and orders of repeal received under
this subsection. The governor may return the
regulations and orders of repeal to the adopting
agency before they are submitted to the lieutenant
governor for filing under (a) of this section [,] (1)
if they are inconsistent with the faithful execution
of the laws, or (2) to enable the adopting agency to
respond to specific issues raised by the
Administrative Regulation Review Committee. The
governor may not delegate the governor's review
authority under this subsection to a person other than
the lieutenant governor."
Renumber the following bill sections accordingly.
Insert new bill sections to read:
"Sec.__. AS 44.66.050(a) is amended to read:
(a) Before the termination, dissolution,
continuation, or reestablishment of a board or
commission under AS 08.03.010 or AS 44.66.010, or of an
agency program under AS 44.66.020 and 44.66.030, a
committee of reference of each house, which shall be
the standing committee of legislative jurisdiction as
provided in the Uniform Rules of the Alaska State
Legislature, shall hold one or more hearings to receive
testimony from the public, the commissioner of the
department having administrative responsibility for
each named board, commission, or agency program, and
the members of the board or commission involved. The
hearings may be joint hearings. The committee shall
also consider the proposed budget of the board,
commission, or agency program, prepared in accordance
with AS 37.07.050(f), and the performance audit of the
activities of the board, commission, or agency program,
prepared by the legislative audit division as
prescribed in AS 24.20.271(1). The committee may
consider any other report of the activities of the
board, commission or program, including but not limited
to annual reports, summaries prepared by the
Legislative Affairs Agency, and any evaluation or
general report of the manner of conduct of activities
of the board, commission, or agency program prepared by
the office of the ombudsman or by the office of the
long-term care ombudsman.
Sec.__. AS 44.66.050(c) is amended to read:
(c) A determination as to whether a board, [OR]
commission, or agency program has demonstrated a public
need for its continued existence must take into
consideration the following factors:
(1) the extent to which the board,
commission, or program has operated in the public
interest;
(2) the extent to which the operation of the
board, commission, or agency program has been impeded
or enhanced by existing statutes, procedures, and
practices that it has adopted, and any other manor,
including budgetary, resource, and personnel matters;
(3) the extent to which the board,
commission, or agency has recommended statutory
changes that are generally of benefit to the
public interest;
(4) the extent to which the board,
commission, or agency has encouraged interested persons
to report to it concerning the effect of its
regulations and decisions on the effectiveness of
service, economy of service, and availability of
service that it has provided;
(5) the extent to which the board,
commission, or agency has encouraged public
participation in the making of its regulations and
decisions;
(6) the efficiency with which public
inquiries or complaints regarding the activities of the
board, commission, or agency filed with it, with the
department to which a board or commission is
administratively assigned, [OR] with the office of the
ombudsman, or with the long-term care ombudsman have
been processed and resolved;
(7) the extent to which a board or commission
that regulates entry into an occupation or profession
has presented qualified applicants to serve the public;
(8) the extent to which state personnel
practices, including affirmative action requirements,
have been complied with by the board, commission, or
agency to its own activities and the area of activity
or interest; and
(9) the extent to which statutory,
regulatory, budgeting, or other changes are necessary
to enable the agency, board, or commission to better
serve the interests of the public and to comply with
the factors enumerated in this subsection."
Renumber the following bill sections accordingly.
Insert a new bill section to read:
"Sec.__. AS 44.99.240(2) is amended to read:
(2) "state agency" means
(A) a department, institution, board,
commission, division, authority, public
corporation, or other administrative unit of the
executive branch, including the University of
Alaska and the Alaska Railroad Corporation;
(B) a committee, division, or
administrative unit of the legislative branch,
including the Alaska Legislative Council, the
leadership of each house, [AND] the office of the
ombudsman, and the office of the long-term care
ombudsman;
(C) an administrative unit of the
judicial branch, including the Alaska Judicial
Council and the Commission on Judicial Conduct."
Renumber the following bill sections accordingly.
Insert new bill sections to read:
"Sec.__. AS 47.24.010(f) is amended to read:
(f) A person listed in (a) of this section who
reports to the long-term [LONG TERM] care ombudsman
under AS24.57.060 [AS 44.21.232], or to the Department
of Health and Social Services, that a vulnerable adult
has been exploited, abused, or neglected in an out-of-
home care facility is considered to have met the duty
to report under (a) of this section.
"Sec.__. AS 47.24.013(a) is amended to read:
(a) If a report received under AS 47.24.010
regards the abandonment, exploitation, abuse, neglect,
or self-neglect of a vulnerable adult who is 60 years
of age or older that is alleged to have been committed
by or to have resulted from the negligence of the staff
or a volunteer of an out-of-home care facility,
including a facility licensed under AS 18.20, in which
the vulnerable adult resides, and, if the Department of
Health and Social Services licenses that type of
facility, the Department of Administration shall
transfer the report for investigation to the long-term
[LONG TERM] care ombudsman under AS 24.57.060 [AS
44.21.232] and the Department of Health and Social
Services.
"Sec.__. AS 47.24.013(c) is amended to read
(c) Upon receipt of a report from the department
under (a) or (b) of this section, the long-term [LONG
TERM] care ombudsman and the Department of Health and
Social Services shall
(1) conduct an investigation as appropriate
under AS 24.57.060 [AS 44.21.232] or this title,
respectively;
(2) coordinate and cooperate in their
responses to and investigations of the report if their
jurisdictions overlap;
(3) provide the results of their actions or
investigations to the central information and referral
service of the department within 60 days after the
receipt of the report."
Renumber the following bill sections accordingly.
Insert a new bill section to read:
"Sec.__. AS 47.33.310(b) is amended to read:
(b) An assisted living home shall post in a
prominent place in the home
(1) a copy of the rights set out in AS
47.33.300;
(2) the name, address, and phone number of
the long-term [LONG TERM] care ombudsman appointed
[HIRED] under AS 24.57.020 [AS 44.21.231] and, if
relevant to residents, of the advocacy agency for
persons with a developmental disability or mental
illness;
(3) the telephone number of an information or
referral service for vulnerable adults; and
(4) a copy of the grievance procedure
established under AS 47.33.340."
Renumber the following bill sections accordingly.
Insert new bill sections to read:
"Sec.__. REPEALER. AS 44.21.231, 44.21.232, 44.21.233,
44.21.234, 44.21.235, 44.21.236, 44.21.237, 44.21.238,
44.21.239, 44.21.240(2), 44.21.240(3), 44.21.240(4),
and 44.21.240(5) are repealed.
Sec.__. TRANSITIONAL PROVISION FOR PAY LEVELS. (a)
Notwithstanding other provisions of this Act, if the
person serving in the position of long-term care
ombudsman under AS 44.21.231 on the day before tile
effective date of this Act is appointed as the first
long-term care ombudsman under AS 24.37, added by this
Act, that person shall be compensated under AS 24.57
at the same salary level at which the person was
compensated on the day before the effective date of
this Act.
(b) Notwithstanding other provisions of this Act,
if a person serving as an employee in the office of the
long-term care ombudsman under AS 44.21.231 - 44.21.240
on the day before the effective date of this Act is
retained to serve as an employee with the same duties
under the first long-term care ombudsman appointed
under AS 24.57, added by this Act, that person shall be
compensated under AS 24.57 at the same salary level at
which the person was compensated on the day before the
effective date of this Act."
Renumber the following bill sections accordingly.
Senator Green moved for adoption and Senator Leman
objected.
Senator Green explained that this amendment places the
long-term care ombudsman in the legislative branch and
gives a deeper separation from the funding responsibilities
and authority of the Department of Administration. She felt
the long-term care ombudsman would have autonomy within the
legislative branch.
Senator Phillips noted the provisions appeared to be
similar to those for the state ombudsman.
Senator Green assumed the provisions were identical.
However, she stressed the long-term care ombudsman
advocates for senior citizens, in addition to the
investigative duties as charged to the state ombudsman.
Senator Wilken stated he would support the amendment only
if it were a last resort measure. He expressed that he
hoped this amendment would be set aside.
Senator Green WITHDREW her motion but stressed that she
would follow the long-term care ombudsman closely to ensure
no conflicts arose.
Senator Wilken stressed that the entire Committee would
follow this matter closely.
Senator Wilken offered a motion to move from Committee SB
204, 1-LS8002\A with individual recommendations, four zero
fiscal notes from the Division of Senior Services,
Department of Administration, and a forthcoming $976
million fiscal note from the Protection, Community Services
and Administration component of the Division of Senior
Services, Department of Administration. Without objection,
the bill MOVED FROM COMMITTEE.
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 256(HES)
"An Act relating to regulation of managed health care
and allowing physicians to collectively negotiate with
a health benefit plan that has substantial market
power."
Senator P. Kelly told the Committee he introduced this bill
to address any inequities starting to grow out of the
rapidly changing health care industry. He stated that many
of the mergers of the past few years were changing the
rules for health care providers. He gave an example of the
severity of the problem, saying that since 1994 the leading
18 insurance companies has been reduced to only six and
that more mergers were projected. He asserted that the
bargaining power of the insurance companies has increased
while the bargaining power of the health care providers has
not.
Senator P. Kelly attested that this bill contains a
mechanism called a "state action doctrine" to address the
problem. He shared that this doctrine came out of a US
Supreme Court case and that it allows the states to allow
health care providers to form groups for the purpose of
negotiating with health care companies without being
subject to some anti-trust laws. He noted the groups are
still overseen by the state and must still adhere to other
anti-trust laws.
Senator Phillips declared a conflict of interest due to his
employment with Providence Medical Center.
Co-Chair Torgerson noted the bill has two substantive
sections, one being the patient and health care provider
protection and the other the authority to negotiate with
health care providers. He asked what the first section
accomplishes.
Senator P. Kelly explained it is part of the necessary
structure to enable the negotiation provision.
After receiving verification that there were no Health
Maintenance Organizations (HMO) operating in Alaska,
Senator Green asked if the definition of a "managed care
entity" in the bill applies to a self insured group or a
preferred provider. She wanted to know if the definition
included anything else.
Senator P. Kelly responded that there could be a number of
additional companies that would fall under the definition
of "managed care entity." He deferred to the Anchorage
Independent Physicians organization provide further detail.
SIGNE ANDERSON, Assistant Attorney General, Fair Business
Practices Section, Civil Division, Department of Law
testified via teleconference from Anchorage to answer
questions on the anti-trust issue.
Co-Chair Torgerson asked why there is an antitrust
question.
JULIA COSTER, Assistant Attorney General, Commercial
Section, Civil Division, Department of Law, testified via
teleconference from Anchorage to explain that the
legislation would involve the Federal Trade Commission's
(FTC) enforcement of federal laws.
Ms. Anderson added that there is another legal concern
regarding the Employment, Retirement, Income and Security
Act of 1974 (ERISA) Premption and that she was available to
answer questions on that matter as well. She stated that
this concern was implicated in Sections 2 and 3 of the
bill.
RICHARD FEINSTEIN, Assistant Director, Bureau of
Competition, Federal Trade Commission, testified via
teleconference from Washington DC and clarified that he was
authorized by the Commission to offer views on the
legislation but that the Commission was not taking an
official position nor was he speaking for the Commission.
Co-Chair Torgerson referred to congressional legislation,
HR 1304, the Quality Health Care Coalition Act of 1999
sponsored by Congressman Thomas Campbell, and asked if the
bill was still pending or if it had been enacted.
Mr. Feinstein answered the legislation was still pending.
Co-Chair Torgerson noted that his information claimed that
this US House of Representatives bill would be the "fix of
all fixes" if it were adopted into law. He asked if the
witness shared that view.
Mr. Feinstein replied that while the bill was a "fix in one
sense," the Commission has formally opposed it as detailed
in the written testimony presented before congress by
Chairman Robert Pitofsky. [Copy on file] Mr. Feinstein
clarified that if HR 1304 were passed at the federal level,
it would preempt any effort by a state to address
collective negotiations by physicians and health plans in
any other way.
Mr. Feinstein qualified that he only recently received the
latest version of SB 256 but that this bill was a variation
of a theme seen at the federal level to facilitate
collective bargaining by physicians in their dealings with
health plans. He stressed that several other states are
also considering similar measures.
Mr. Feinstein emphasized that the focus of the FTC is
whether these proposals are in the best interest of
consumers. He understood that there are many concerns about
managed care and how it delivers health care and health
insurance services. However, he said the Commission had
serious questions about whether anti-trust immunity for
providers was the best way to address those concerns.
Mr. Feinstein referred to a list of issues proposed in SB
256 that directly targeted the concerns articulated about
the managed care. He quoted Section 2 (8), "protects the
ability of a health care provider to communicate openly
with a covered person about all appropriate diagnostic
testing and treatment options." He surmised this subsection
was intended to address what was sometimes referred to as a
"gag clause" and that a number of states had already passed
legislation to address this issue. He suggested that if
there were specific concerns about the operations of
managed care organizations, those concerns should be
addressed directly rather than indirectly by creating
circumstances in which groups of providers may be able to
exercise market power in ways that don't benefit consumers.
Mr. Feinstein assured that he completely respected the
states' authority to address the issues in the manner they
felt most appropriate and in the best interest of its
citizens. He stressed that it was not his job to take a
bottom line position on whether or not this is good
legislation, but was more to give advice on the anti-trust
analysis.
Mr. Feinstein pointed out that one provision of the bill is
the notion where health plans, health insurers and managed
care organizations, have at least 15 percent of the market,
there is a presumption that that constitutes considerable
market power. In these instances, he continued, the bill
gives authorization for collective negotiation with those
parties that made up the 15 percent. He warned that this is
only a useful measure if there is clear understanding of
what the percentage of the market is; and in looking at the
geographic or product market in Alaska, he did not think it
was clear. He inferred that a determination of the
percentage of the market could not be done without a
definition of what that would be. He predicted that this
legislation could result in some health plans that have a
relatively small share of the market would find themselves
negotiating with a group that represented 100 percent of
the providers.
Mr. Feinstein spoke about the general boycotts, strikes and
concerted action provisions in the bill as another area
that should be reviewed. He quoted the findings in the
bill; "the collective bargaining will benefit competition
so long as the physicians don't engage in expressed or
implied threat of retaliatory collective action including
boycotts or strikes." Elsewhere in the language, he read,
"competing physicians may not engage in a boycott related
to these terms and conditions." He stated that those terms
are somewhat ambiguous. He gave a scenario of an attempt at
collective negotiations between providers in a given area
and the health plan, which did not lead to a satisfactory
contract. He said a situation could then arise where the
bargaining group would not have contracts, they would
withhold their services to the plan and the patients would
have to pay for the services out of pocket. He noted the
bill did not require health plans to participate in
negotiations.
Tape: SFC - 00 #43, Side B 9:50 AM
Mr. Feinstein next addressed the state action doctrine on
anti-trust, which he felt was relevant to the Committee's
analysis of the bill. He said there were two "prongs" to
the doctrine, first was the need a clearly articulated
policy of the state to displace competition in the sector
that is being regulated and to replace it with regulation.
He did not think there was any question that this bill
would satisfy that requirement. The second "prong" was the
requirement under federal anti-trust law that there be
active supervision by the state of the private parties who
were hoping to benefit from the state action exemption, and
according to Mr. Feinstein, could be more problematic. He
stated that it was unclear whether the regulatory apparatus
in the bill would meet test of active supervision.
Senator Wilken wanted to know how other states have
provided the active supervision.
Mr. Feinstein replied that it was probably too early to
tell since no other state had such a process implemented as
of yet. He told of similar legislation passed the previous
year in Texas and that the attorney general's office in
that state was in the process of adopting regulations to
oversee the private conduct of the bargaining groups.
Co-Chair Torgerson requested the witness submit his
comments as written testimony.
Mr. Feinstein referred to written testimony presented on
behalf of the Commission to address the federal bill plus
two letters written by the Bureau of Competition. One
letter he said related to the Texas legislation and the
other was sent to the District of Columbia. [Copies on
file.]
BOB LOHR, Director, Division of Insurance, Department of
Community and Economic Development, testified via
teleconference from Anchorage focusing on the public cost
of the legislation. He stated that identifying what the
cost would be was difficult, partly because no other state
had established a system that could be used as a model. He
stressed that any factor that might provide more equity or
address an imbalance in bargaining power could also have
the affect of raising consumer prices.
Speaking to the impact on the division, Mr. Lohr referred
to the fiscal note that reflects the addition of one fiscal
analyst position to analyze the estimated number of
contracts that would result from the legislation. He
directed the Committee's attention to Section 3 of the bill
saying that it stipulates, "It is the responsibility of the
division to approve, in advance, the contracts submitted as
having the required elements, in the form that is required
and not having the prohibited elements." He clarified the
amount requested in the fiscal note is very conservative
and is based on the likelihood that the participating
negotiating parties will customize the contracts. These
customized contracts, he stated, would require more
analysis since each one would contain detailed provision
and there would also be time pressure for the division to
make a determination.
Co-Chair Torgerson requested written testimony from all
testifiers, noting the helpful points raised.
Senator P. Kelly asked how many contracts the division
currently reviews.
KATY CAMPBELL, Actuary on Life and Health Issues, Division
of Insurance, Department of Community and Economic
Development replied only two and that they were required
filings from Blue Cross. She explained these were standard
provision contracts and were not specific to the health
plans each employer purchased.
Senator P. Kelly asked if the witness thought the number of
contracts the division would review would change
dramatically if this bill passed into law.
Ms. Campbell referred to the provisions in the legislation
stating that the health care services would be required to
be detailed in the contract, which were complex and
individualized for the groups that were covered. She spoke
of the many variations in health plans such as different
vision and dental services.
Senator P. Kelly thought the fiscal note seemed high and
asked if the division anticipated any standardization of
the new contracts.
Ms. Campbell responded that there would be a significant
increase in the workload because the contracts currently
reviewed by the division do not contain the details for
each individual services package.
JEROME SELBY, Providence Health Systems testified via
teleconference from Anchorage saying he was present to
answer questions.
Ms Coster reiterated her earlier comments that the
Department of Law thought that the definition of "benefit
plan" in Section 3 of the bill would be in conflict with
ERISA.
GARY SWARTZ testified via teleconference from Fairbanks
that because the Alaska Healthcare Network has been under
investigation by the FTC for over a year, they are unable
to enter contracts, etc. and had become dysfunctional. He
noted the network had spent over $100,000 on the
investigation saying there was no merit to the accusations
and no finding of fact. He shared that he had many
discussions with the FTC and that he disagreed with Mr.
Feinstein.
Co-Chair Torgerson noted the Committee did not have the
written testimony Mr. Schwartz had referred to.
DR. MICHAEL CARROLL, Board Member, Alaska Healthcare
Network, testified via teleconference from Fairbanks on
behalf of both physicians and consumers. He spoke to the
uniqueness of Fairbanks in that it has more than one
hospital in the community. He believed if physicians were
prevented from addressing the health care plans in an
organized manner, the consumer is going to suffer. He gave
and example of the question of how to define an emergency
room visit and emergency room care. He was not interested
in interfering with how much money doctors are paid he
stressed that he only wanted physicians to be part of the
process.
PAUL SMITH, Attorney, testified via teleconference from San
Francisco, California as legal council for the Alaska
Healthcare Network. He noted the area of physicians in
collective bargaining groups was "fought with practical
difficulty" because the anti-trust guidelines were not
always clear. He gave an example the discretion between
price related terms and non-price-related terms, which was
difficult to make. He advised that this legislation would
be helpful because it does make that classification.
Mr. Smith then drew attention to the correspondence
submitted by the FTC claiming that under existing anti-
trust laws physicians can comment and express opinions on
proposed contracts, which he thought was a fair statement.
However, he said that in practice, the boundary between
expressing an opinion and engaging in a negotiation was
difficult to recognize. He stated that by setting forth a
regulated procedure that defines the scope of acceptable
conduct, it would provide practical help to physicians and
physician organizations who need to engage in these kind of
activities.
HELEN JAMISON testified via teleconference from Chicago
that she wished to listen and would be available if
something came up needing clarification.
DWIGHT PERKINS, Deputy Commissioner, Department of Labor
and Workforce Development testified that the department has
no expertise to handle such anti-trust matters. He had
heard that because the federal legislation was stalled,
interested parties were attempting to pass new laws in each
state and that to date, they were only successful in Texas.
He asked that the Committee take time to consider this
legislation and that the department had not submitted a
fiscal note because of the uncertainty of the actual affect
on the department. Stated that he met with group that would
be testifying.
Co-Chair Torgerson stated that the department's request to
be excused from this legislation was odd, since this
legislation addresses a labor issue.
Senator Leman stated that he readily agreed with the
witness's testimony saying he did not think it was
appropriate for the department to review the legislation.
MIKE HAUGEN, Executive Director, Alaska Physician and
Surgeons testified that the organization was on the front
lines of dealing with the contracts. He stressed that the
provisions in this legislation were completely voluntary
for all parties. He suggested that if the state, the payers
or the physicians felt uncomfortable about the process,
negotiations would be over. He added that the legislation
requires active state oversight. On the merits of bill, he
stressed physicians would be able to communicate amongst
themselves without a threat of the FTC.
GEORGE RHYNEER, Cardiologist, President, Alaska Physicians
and Surgeons testified that he was available to answer
questions.
Co-Chair Parnell asked Mr. Haugen what would be the benefit
to consumers regarding the availability and affordability
of health care if this legislation passed. He noted that
those opposed to the bill argued that this would drive up
the cost of health care.
Mr. Haugen responded that this bill would allow physicians
to get together and discuss issues such as medical
necessity and who determines what is medically necessary.
He lamented that these decisions were often left up to a
clerk in the insurance company looking at a "cookbook" when
a doctor calls for pre-authorization. His organization felt
these decisions should be made by a physician and that
there should be peer review. Another example he gave was
how to define emergency services and the frustrations of
trying to deal with an insurance company at the time of an
emergency. He concluded that the bill would solve a number
of patient protection and physician issues.
Co-Chair Parnell wanted to know how the witness could
address the concerns of increased costs saying that when
physicians organized, they would talk about their own best
interests.
Mr. Haugen assured that because of the state's oversight,
if the costs got to high, the Division of Insurance could
step in on behalf of the public's best interest. He also
told of "point of service options," which allow a patient
to go outside an established network for services but must
pay the difference. This would not cost the employer but
would give another choice to the consumer.
Mr. Haugen next addressed the concern that the bill will
drive up litigation. He used the Texas legislation of an
example of how this would probably not happen. Although the
new law in Texas includes the right to sue health plans, he
pointed out that in three years there have only been five
lawsuits filed. Because of this and because of the larger
Texas population, he thought the litigation expenses in
Alaska would be minimal.
Co-Chair Parnell thought one benefit to the bill would be
to bring in competition.
Senator P. Kelly asked for an explanation of how the bill
would bring other health care companies into the state. He
also asked the witness to respond to the concern raised by
the FTC representative regarding active state supervision.
Mr. Haugen shared that the State of Pennsylvania drafted
good language to address what is required of the state. He
responded to Senator P. Kelly's first question saying that
it is cost prohibitive for new healthcare carriers to enter
the Alaska market due to the population base and the
established relationships of existing carriers with local
physicians. He stated that if potential carriers could deal
with an organization of physicians, without fear of action
by the FTC, "new players" could come into the market.
Senator P. Kelly wanted to know if Mr. Haugen was confident
that the adoption of the state action doctrine would allow
groups of physicians to enter these discussions without the
threat of being sued by the FTC.
Mr. Haugen was.
JIM JORDAN, Executive Director, Alaska State Medical
Association deferred to written testimony he submitted to
the Committee. [Copy on File.]
NANCY WELLER, Division of Medical Assistance, Department of
Health and Social Services testified that her concern was
the affects this bill could have on the Medicaid program.
However, the division believed the program was exempted
from the bill because it was already heavily regulated by
the federal government.
Co-Chair Torgerson clarified that the division did not
oppose the bill since the division was not involved.
GORDON EVANS, Health Insurance Association of America noted
he had submitted written testimony. [Copy on file.] He
stated that although the previous witnesses did respond to
some of his earlier comments, he felt the responses were
self-serving. He surmised that the physicians in support of
the bill dispute the association's claim that the issue is
economics rather than quality of care. He stated that
stated that this argument gave the physicians leverage to
"prevent the intrusion of a giant third party into the
sacred physician-patient relationship." While Mr. Evans
agreed that this relationship is sacred, he hadn't heard
any physicians turning down insurance payments from this
"giant third party."
Mr. Evans addressed the statements that this legislation
would establish a voluntary arrangement, which any party
could withdraw from if not satisfied. He asked why the bill
was needed saying that if the physicians currently thought
they provide quality care, the insurance companies would
not refuse to work with them. He surmised the answer was to
give physicians leverage, noting that three years ago, the
average income of an Alaskan doctor was $250,000 and that
this bill would only seek to increase their income at the
expense of the consumers.
JEFF DAVIS, Executive Director, Blue Cross-Blue Shield of
Alaska testified about previous testimony given before the
Senate Health, Education and Social Services Committee. He
summarized that the company's perspective was that there is
not an imbalance of market power based on the limited
success in trying to contract with physicians. He stated
that the company has contracts with 700 of the total of
1800 physicians practicing in the state. Aetna, he said,
had approximately 100 contracts and that other carriers had
no contracts.
Mr. Davis qualified that the bill contained some patient's
rights provisions that the company does support, such as
the "gag clause". He stressed that they never have had this
clause. However, he noted that other provisions in the bill
were confusing and unnecessarily costly. He stated that no
carrier in Alaska prohibited patients from obtaining
services from physicians outside of the network of
contracted physicians although the cost to the patient was
higher when he or she did so.
Mr. Davis disagreed with the claim that this bill would
bring more carriers into the market because the true
limitations were economies of scale and distance.
He stressed that the issue with this legislation would
increase costs both regulatory and administrative and that
there was a potential that physician costs would increase.
He noted that FTC regulations already allow physicians to
come to carriers in fairly large blocks to discuss patient
care.
LEN SORRIN, Assistant General Council, Blue Cross-Blue
Shield of Alaska, focused his comments on the collective
bargaining/anti-trust provisions of the bill. He stressed
that the provisions were certain to increase costs to
Alaskan consumers. He pointed out that those provisions are
unrelated to the patient protection issues in the bill and
that there was no consumer benefit to collective
bargaining. He stated that physicians do have the right
under federal guidelines to collectively talk about issues
related to patient care, but also to negotiate prices with
carriers. He admitted that there are some limitations on
the physicians' ability to do so but said consumers deserve
a substantial quid pro quo from those parties to ensure
increased efficiency to the marketplace and improved
delivery of health care.
Mr. Sorrin asserted that the provisions related to market
share were unprecedented in the realm of anti-trust law. He
did not know of any case in the health care services
industry where 15 percent was determined to be a
significant market share. In fact, he added, the US
Department of Justice guidelines established a "two-tier
safe harbor" of 30 percent for physicians grouping
together. He stressed that it makes no economic or legal
sense to impose the negotiating provisions for those
carriers that only have 15 percent of the marketplace.
Tape: SFC - 00 #44, Side A 10:37 AM
Mr. Sorrin continued saying that under the Justice
Department's guidelines, no carrier in the state would fall
under the bill's terms.
Mr. Sorrin concluded that there was no problem and that
this legislation did not offer a solution. He stated that
the regulations being drafted in Texas had generated a
"firestorm of controversy" and suggested that "we
underestimate the regulatory complications that this bill
will bring to everyone's life." He added that problems
would reemerge each time the contracts were up for
negotiation.
Senator P. Kelly rebutted the claim that doctors currently
are allowed to get together and negotiate for both terms
and conditions and price. He said the FTC had ordered the
North Lake Tahoe Medical Group and the Mesa County
Physicians Independent Practice Association, Inc. to cease
an desist from these activities. He read definition
language from one of the two consent decrees, "exchanging
or facilitating the exchange of information among
physicians concerning the terms and conditions including
reimbursement on which any physicians are willing to deal
with payers." [Copies on file.] He said while he had not
been able to find any information to substantiate the claim
that physicians were allowed to gather; he was able to find
information that showed where the FTC did not allow the
activities.
Co-Chair Torgerson ordered the bill HELD in Committee.
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 73(HES)
"An Act relating to assisted living homes; and
providing for an effective date."
This was the third hearing for this bill in the Senate
Finance Committee and the first hearing in the year 2000.
Co-Chair Torgerson announced that due to time constraints,
public testimony would be taken but that there would be no
debate at this meeting.
MONTA FAYE LANE, President, Alaska Caregivers Association,
testified via teleconference from Fairbanks in support of
the bill. She talked about the needs in the assisted living
industry.
DR MICHAEL CARROL testified via teleconference from
Fairbanks that this bill directly applies to the community.
He spoke of the quality and capacity of facilities saying
assisted living was a cost efficient way to care for people
compared to nursing homes.
GARY WARD, Licensing Coordinator, Assisted Living Homes,
Division of Senior Services, Department of Administration
testified via teleconference from Anchorage about an
amendment that the Committee did not have. He explained
this amendment relating to AS 47.33 and concerning
terminating residential services contracts and temporary
management and receivership.
DWIGHT BECKER, Protective Services Coordinator, Division of
Senior Services, Department of Administration testified via
teleconference from Anchorage to answer questions about the
fiscal note that he helped draft.
KAY BURROWS, Director, Division of Senior Services,
Department of Administration testified via teleconference
from Anchorage that she would also be available to answer
questions.
JEFF JESSEE, Executive Director, Mental Health Trust
Authority, Department of Revenue, testified via
teleconference from Anchorage as also available.
Senator Phillips restated conflicted of interest with
healthcare related matters citing his employment with
Providence Medical Center.
ALISON ELGEE, Deputy Commissioner, Department of
Administration testified in support the bill and referred
to documentation to support the rate increase paid by the
state to assisted living facilities. [Copy on file.]
KARL BRIMNER, Director, Division of Mental Health and
Developmental Disabilities, Department of Health and Social
Services testified that the division supports the bill
also.
Co-Chair Torgerson stated his intent to move bill from
Committee soon.
The bill was HELD in Committee.
ADJOURNED
Senator Torgerson adjourned the meeting at 10:48 AM.
SFC-00 (14) 03/02/00
SFC-00 (19) 03/02/00
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