Legislature(2001 - 2002)

01/18/2001 09:05 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
GENERAL SUBJECT(S):                                                                                                             
         Overview: Update on Federal and State Medical Issues                                                                   
                     American Medical Association                                                                               
                                                                                                                              
The  following overview  was  taken  in log  note  format.   Tapes  and                                                         
handouts will be on file with the Senate  Finance Committee through the                                                         
21st  Legislative   Session,   contact  465-4935.     After   the  22nd                                                         
Legislative  session they  will be  available  through the  Legislative                                                         
Library at 465-3808.                                                                                                            
                                                                                                                              
Time Meeting Convened:  9:05 AM                                                                                                 
                                                                                                                                
Tape(s):  SFC-01 # 3, Side A                                                                                                    
                                                                                                                              
                                                                                                                              
       PRESENT:                                                                                                             
                                                                                                                                
x      Senator Donley                                                                                                         
x      Senator Kelly                                                                                                          
x      Senator Austerman                                                                                                      
       Senator Green                                                                                                          
x      Senator Hoffman                                                                                                        
x      Senator Leman                                                                                                          
x      Senator Olsen                                                                                                          
x      Senator Ward                                                                                                           
x      Senator Wilken                                                                                                         
                                                                                                                                
ALSO PRESENT:                                                                                                               
JIM JORDAN; Executive Director, Alaska State Medical Association                                                              
PETER LAWRASON, MD; President, Alaska State Medical Association                                                               
DONALD J PALMISANO MD, JD; Member, Board of Trustees, American                                                                  
Medical Association                                                                                                           
BECKY DADURA, Attorney, Advocacy Resource Center, American Medical                                                              
Association                                                                                                                   
                                                                                                                              
                                                                                                                              
                                                                                                                              
                                                                                                                              
                                                                                                                              
                                                                                                                                
LOG SPEAKER                DISCUSSION                                                                                       
0    Co-Chair Kelly        Introduction                                                                                         
                           Medical professionals in the capital, so I                                                           
                           invited them to update the Committee on the                                                          
                           status of medical issues                                                                             
                           Noted that the entire membership of the                                                              
                           Senate Health and Social Services                                                                    
                           Committee, which also have an interest in                                                            
                           this matter, also serve on this Committee.                                                         
34   Jim Jordan;           Introduced speakers                                                                                
     Executive Director,                                                                                                        
     Alaska State                                                                                                               
     Medical Association                                                                                                        
46   Peter Lawrason, MD; OB/GYN practicing in Fairbanks                                                                         
     President, Alaska     Hoping the Committee will consider SB 37,                                                            
     State Medical         Physicians Negotiations With Health                                                                  
     Association           Insurer.                                                                                             
                           Listed the credentials of Dr. Pamisano,                                                              
                           including law degree. General and vascular                                                           
                           surgeon in New Orleans, Louisiana, Member,                                                           
                           American Medical Association (AMA) Board of                                                          
                           Trustees, Member, AMA Executive Committee                                                            
                           and it's board, the finance committee and                                                            
                           Chair of its Compensation Committee. Former                                                          
                           president, Louisiana State Medical                                                                   
                           Association and serves as AMA's point                                                                
                           person on privacy confidentiality as well                                                            
                           as anti-trust reform to allow negotiations                                                           
                           by self-employed physicians.                                                                         
                           Listed credentials of Becky Dadura,                                                                  
                           Attorney, AMA's Advocacy Resource Center,                                                            
                           who also testified before the Committee the                                                          
                           previous year.                                                                                     
95   Donald J Palmisano    Discussed with medical students that this                                                            
     MD, JD; Member,       is an exciting time in medicine with the                                                             
     Board of Trustees,    gene projects and the potential for curing                                                           
     American Medical      many diseases during their lifetimes.                                                              
     Association                                                                                                                
118                        Spoke of potential future system of                                                                  
                           identifying and curing patient with cystic                                                           
                           fibrosis through gene technology                                                                   
124                        Technical advances allow us to diagnose and                                                          
                           cure conditions quicker as opposed to only                                                           
                           being able to offer comfort.                                                                       
130                        Other side is issues that impede the                                                                 
                           process                                                                                              
                           On national level, there is an increase in                                                           
                           regulations and increased burdens on                                                                 
                           practicing physicians                                                                                
                           Interference with the patient/physician                                                              
                           relationship by many insurance companies.                                                            
                           AMA position on insurance is a "system of                                                            
                           plurality"                                                                                           
                           We are in favor of "letting the patients be                                                        
                           in control"                                                                                          
                           AMA favors letting them chose the doctor                                                             
                           and insurance companies                                                                            
141                        Have seen the rise in large companies that                                                           
                           have interfered and presenting "take it or                                                           
                           leave it "contracts to doctors.                                                                      
                           Physicians look at the contracts and see                                                             
                           onerous problems, such as the different                                                              
                           types of offerings.                                                                                  
                           Insurance making the decision for patients                                                           
                           and doctors                                                                                        
148                        Physicians are forced in the position to                                                             
                           have to deny care to patients when the                                                               
                           physician believes the patient needs care.                                                           
                           Physicians are finding they are not                                                                  
                           effective patient advocates.                                                                         
                           Insurance companies control so much of the                                                           
                           market place that a physician has no                                                                 
                           choice.                                                                                              
                           If the physician quits the plan, the                                                                 
                           physician is unable to care for his or her                                                           
                           patients.                                                                                          
160                        Meanwhile, more regulations are coming out.                                                          
                           There is a big issue of privacy before the                                                           
                           US Congress currently.                                                                               
                           AMA believes patients have a right to                                                                
                           privacy and they should control the                                                                  
                           information that the physician has in his                                                            
                           or her chart.                                                                                        
                           We see wholesale transfer of this                                                                    
                           information by insurance companies for                                                               
                           reasons other than health care.                                                                    
170                        Congress had to take action on this matter                                                           
                           by a certain date, but failed.                                                                       
                           As a result, the regulatory branch issued                                                            
                           in December, 1535 pages, much of which is                                                            
                           commentary, but over 600 pages of                                                                    
                           regulations, that we are studying to see                                                             
                           what affect it will have.                                                                            
                           There are many entities that "escape".                                                               
                           Life insurance companies are exempt from                                                             
                           the privacy information requirement and can                                                          
                           still transfer information for marketing                                                             
                           purposes.                                                                                          
180                        Patient safety issue - we want every                                                                 
                           patient to be safe.                                                                                  
                           We founded the National Patient Safety                                                               
                           Foundation, with several other                                                                       
                           organizations.                                                                                       
                           Has been very successful.                                                                            
                           The Institute of Medicine report, "To Err                                                            
                           is Human" repeatedly mentions the good work                                                          
                          of the foundation.                                                                                    
                           Concerned about regulations that focus on                                                            
                           punishment of the physicians who cause the                                                         
                           errors. That will not work.                                                                        
188                        Need a culture of candor, truth and sharing                                                          
                           of information.                                                                                      
                           Over 20 states have mandatory reporting but                                                          
                           nothing is being done with that                                                                      
                           information.                                                                                         
                           Not enough to collect information.                                                                   
                           Need someone knowledgeable about the                                                                 
                           analysis of that information to ask what is                                                          
                           the system that set the physician or nurse                                                           
                           up for that problem.                                                                                 
                           The Joint Commission on Accreditation of                                                             
                           Health Care Organizations, which the AMA                                                             
                           places seven members on, has come out with                                                           
                           standards for hospitals.                                                                             
                           They are saying that regardless of whether                                                           
                           you have voluntary or mandatory reporting,                                                           
                           the information has to be confidential,                                                              
                           shared and analyzed properly.                                                                      
202                        Seeing a number of practices closing down                                                            
                           in California, which we told Congress when                                                           
                           we testified on HR 1304                                                                            
210                        HR 1304 passed with overwhelming bipartisan                                                          
                           support in the US House of Representatives                                                           
                           but couldn't get through the Senate                                                                
217                        Things at national and state level affect                                                            
                           the treatment of the patient                                                                       
222                        AMA believes two things must happen at the                                                           
                           state and federal level                                                                              
                           1. Meaningful patients bill of rights                                                                
                           We have hopes that such a bill will                                                                  
                           actually pass this congressional session.                                                          
231                        2. There has to be an ability for                                                                    
                           individual practitioners who are not                                                                 
                           eligible to join a collective bargaining                                                             
                           unit on the National Labor Relations Act,                                                            
                           to get together to say "this is hurting my                                                           
                           patient, this is inappropriate and needs to                                                          
                           be changed" without the fear of anti-trust                                                         
239                        Supreme Court in 1943 decided, "if the                                                               
                           state action doctrine, (if a state actually                                                          
                           passes a law allowing these negotiations,                                                            
                           and also actively supervising it) then the                                                           
                           matter doesn't fit under the national                                                                
                           Sherman/Clayton Act.                                                                               
243                        Long term solution is to make sure everyone                                                          
                           is insured, particularly children.                                                                   
                           43 million people are not insured,                                                                   
                           including 11 million children.                                                                       
                           Our website details a system that changes                                                            
                           the framework of insurance.                                                                          
                           Instead of the employer having to decide                                                             
                           between staying in business and converting                                                           
                           to offering managed care to their                                                                  
                           employers.                                                                                           
                           Instead, we propose a system where the                                                               
                           employer makes defined contributions that                                                            
                           would allow individual employee to have the                                                          
                           choice to choose the type of insurance                                                               
                           policy.                                                                                              
                           Employee who pays more to get higher                                                                 
                           coverage would get a tax credit.                                                                   
273                        Meanwhile problem with patients being                                                                
                           denied care by insurance company and                                                                 
                           physicians having to go through hoops to                                                             
                           provide care.                                                                                        
                           We think SB 37 would give physicians the                                                             
                           opportunity to advocate for their patients,                                                          
                           which is their ethical obligation.                                                                   
                           We think the bill would benefit the people                                                           
                           of this state and would be an example                                                                
                          around the nation.                                                                                  
                           Texas and Washington State have laws                                                                 
                           similar to that we are proposing.                                                                    
                           Washington DC almost had a bill, but ran                                                             
                           out of time and are reintroducing it again                                                           
                           this year.                                                                                           
                           Over a dozen states introducing similar                                                              
                           legislation.                                                                                       
289                        Would like to get something done at                                                                  
                           national level but we can't wait.                                                                    
                           Patients are the ones suffering.                                                                   
294 Co-Chair Kelly         Texas legislation: we referred to that                                                               
                           several times last year. What is the status                                                          
                           of that law?                                                                                         
                           Explain bill before this legislature the                                                             
                           previous session that protected doctors                                                              
                           from some provisions of the anti-trust law                                                           
                           when negotiating with insurance companies.                                                         
304 Dr. Palmisano          Texas law was passed but then ran into                                                               
                           obstruction in its implementation                                                                  
308 Becky Dadura,          Law passed then went through lengthy                                                                 
     Attorney, Advocacy    regulatory process, completed last Spring.                                                           
     Resource Center,      Caused consternation because they are                                                                
     American Medical      onerous.                                                                                             
     Association           Potential for similar situation in other                                                             
                           states as well that adopt similar laws.                                                              
                           Oversight authority with attorney general                                                            
                           in Texas.                                                                                            
                           Political implications with last year's                                                              
                           presidential election.                                                                               
                           Concern is that regulations would actually                                                           
                           serve as a deterrent with physicians who                                                             
                           may want to utilize the law.                                                                         
                           The way the regulations are written,                                                                 
                           applications would never be complete.                                                                
                           We are drafting revisions to the law to                                                              
                           streamline the regulations.                                                                          
                           Will keep you apprised.                                                                            
341 Co-Chair Kelly         So the Texas law concept was not flawed but                                                          
                           rather conflicts between its legislature                                                             
                           and executive branch                                                                               
345 Ms. Dadura             Correct.                                                                                             
                           The bill sponsor and other Texas                                                                     
                           legislators wrote a letter to the attorney                                                           
                           general stating, we think you are exceeding                                                          
                           the scope of your authority. Your                                                                    
                           regulations go far beyond just implementing                                                          
                           the law and in fact are writing additional                                                           
                           law.                                                                                                 
                           Regulations written do not allow physician                                                           
                           to use the law in the manner it was                                                                  
                           crafted.                                                                                           
256 Senator Ward           Is there already tightened language                                                                  
                           proposed for the Texas law that we could                                                             
                           use here, to avoid having to go through the                                                          
                           same regulatory problems?                                                                          
366 Ms. Dadura             Intent of the legislation is very clear.                                                             
                           Texas legislature plan is to limit the                                                               
                           regulatory process to the language in the                                                            
                           statute.                                                                                             
                           Won't necessarily benefit other states,                                                              
                           rather a matter of the political dynamics                                                            
                           in that state.                                                                                       
                           More a reflection on how the regulatory                                                              
                           process works in that state                                                                        
380 Senator Ward           Any generalized language to keep that from                                                           
                           happening in the first place?                                                                      
392 Ms. Dadura             That has not happened yet.                                                                           
                           They are considering vesting the oversight                                                           
                           authority of this law with a different                                                               
                           agency.                                                                                              
                           They have not considered any specific                                                                
                           language for this issue.                                                                           
399 Co-Chair Kelly         We will look to you to watch that case so                                                            
                           we can prevent similar problems here.                                                              
402 Ms. Dadura             Have looked at other states and found it is                                                          
                           very specific to how each state handles its                                                          
                           regulatory authority.                                                                              
411 Co-Chair Kelly         Even though we do not have the legislation                                                           
                           before us, I did not want to miss the                                                                
                           opportunity to meet with you and have you                                                            
                           speak to the Committee.                                                                            
414 Senator Hoffman        Patient bill of rights - do you know what                                                            
                           Senator Hillary Rodham Clinton's position                                                            
                           is on your proposal?                                                                               
420 Dr. Palmisano          Our belief is that bill would have been                                                              
                           signed by the Clinton Administration.                                                                
                           Issue raised in presidential debate where                                                            
                           Al Gore challenged George W. Bush.                                                                   
                           President-Elect Bush responded that he                                                               
                           signed the bill in Texas and would also                                                              
                           sign a national law.                                                                               
                           Regarding Senator Clinton, we think she                                                              
                           would support, although she hasn't stated                                                            
                           such publicly.                                                                                       
                           Only opposition has been raised by the                                                               
                           insurance industry who has spent a lot of                                                            
                           money fighting this                                                                                
439 Co-Chair Kelly         600 pages of commentary on one bill?                                                               
441 Dr. Palmisano          Yes. There are different interpretations of                                                          
                           what they mean.                                                                                    
446 Co-Chair Kelly         So the medical community is getting                                                                  
                           overwhelmed with regulations?                                                                      
449 Dr. Palmisano          No question.                                                                                         
                           We have fought to have the fraud and abuse                                                           
                           statutes in the "American spirit of fair                                                             
                           play so the physician is not considered                                                              
                           guilty - people swoop into your office,                                                              
                           take your records. You would be astounded                                                            
                           that such things happen."                                                                            
                           We are against fraud, but the regulations                                                            
                           have become so burdensome.                                                                           
                           Relayed experience with own practice and                                                             
                           the amount of paperwork necessary to meet                                                            
                           regulations.                                                                                         
                           New physicians will be unable to afford to                                                           
                           establish their own practices.                                                                       
                           Relayed instance of prohibition of waiving                                                           
                           co-payment for those patients who cannot                                                             
                           afford it. Physicians who do this are                                                                
                          accused of fraud.                                                                                     
                           Relayed instance of emergency situation                                                              
                           with a patient and the difficulty getting                                                            
                           insurance approval for hospitalization.                                                              
                           Difficulty in getting to speak to another                                                            
                           physician at the insurance company to fully                                                          
                           explain situation. If he went to the                                                                 
                           patient telling of the insurance approval                                                            
                           difficulty, this would have caused more                                                              
                           stress leading to a possible stroke in this                                                          
                           instance.                                                                                          
516 Co-Chair Kelly                                                                                                            
517 Dr. Palmisano          Wish to leave written information that                                                               
                           further details.                                                                                   
520 Co-Chair Kelly         Adjourn 9:44 AM                                                                                    
                                                                                                                                

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