Legislature(1993 - 1994)
03/11/1994 01:37 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE March 11, 1994 1:37 p.m. MEMBERS PRESENT Senator Steve Rieger, Chairman Senator Bert Sharp, Vice-Chairman Senator Loren Leman Senator Mike Miller Senator Jim Duncan Senator Johnny Ellis Senator Judy Salo MEMBERS ABSENT All members present. COMMITTEE CALENDAR SENATE BILL NO. 201 "An Act relating to coordination of insurance benefits and to determination and disclosure of fees paid to an insured or a health care provider; and providing for an effective date." SENATE BILL NO. 270 "An Act creating the Alaska Health Commission; relating to the delivery, quality, access, and financing of health care; relating to review and approval of rates and charges of health insurers; relating to certain civil actions against health care providers and health insurers; repealing Alaska Rule of Civil Procedure 72.1; and providing for an effective date." SENATE BILL NO. 284 "An Act establishing the Alaska Health Insurance Corporation and requiring licensed health care providers to comply with certain statutes and regulations relating to the corporation; relating to disability insurance claims processing and to approval of rates for disability insurance, including health insurance; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 201 - No previous action to record. SB 270 - See Health, Education & Social Services minutes dated 2/9/94, 2/18/94, 3/2/94 and 3/9/94. SB 284 - See Health, Education & Social Services minutes dated 2/14/94, 2/18/94, 3/2/94 and 3/9/94. WITNESS REGISTER Frank Thomas-Mears Multiple Risk Managers, Inc. 12541 Atherton Anchorage, Alaska 99516 POSITION STATEMENT: Reviewed SB 201. Rob Robinson, Chairman Alaska Dental Board P.O. Box 871687 Wasilla, Alaska 99687 POSITION STATEMENT: Reviewed SB 201. Dan Pitts Alaska Dental Society 155 Smith Way Soldotna, Alaska 99669 POSITION STATEMENT: Supported SB 201. David Walsh, Director Division of Insurance Juneau, Alaska POSITION STATEMENT: Reviewed SB 201, SB 270, SB 284. Barbara Thurston, Chief Actuary Division of Insurance Juneau, Alaska POSITION STATEMENT: Reviewed the fiscal notes for SB 270, SB 284. . Nancy Usera, Commissioner Department of Administration P.O. Box 110200 Juneau, Alaska 99811-0200 POSITION STATEMENT: Reviewed SB 270, SB 284. ACTION NARRATIVE TAPE 94-17, SIDE A Number 005 CHAIRMAN RIEGER called the Senate Health, Education and Social Services (HESS) Committee to order at 1:37 p.m. He introduced SB 201 (INSURANCE RATES & BENEFIT COORDINATION) as the first order of business before the committee. FRANK THOMAS-MEARS, Multiple Risk Managers, Inc., testified on behalf of the prime sponsor, Senator Kelly. He stated that SB 201 addresses, in order for the public to understand, how a health care insurer determines "usual, customary and reasonable fees" (U.C.R.) and the meaning of that process. SB 201 also addresses how insurance companies coordinate benefits between themselves when more than one insurance policy applies to a claim. He suggested that less ambiguous language would end many of the current complaints. He also suggested that a more specific contractual U.C.R. provision would help dismiss the common misconception that a U.C.R. payment mechanism means claims settlement will be based on the full amount charged by medical care providers for a certain procedure. He noted a trend towards ambiguous language. He stated that the attempts to correct these problems have not resolved them. SB 201 would clearly communicate the meaning of the U.C.R. provision to the purchaser and user of the insurance. Mr. Mears referred to a 1990 report of nationally recognized experts in insurance and actuarial science provided to the National Association of Insurance Commissioners which addressed similar abuses of the "usual, customary and reasonable fees" concept. The report cited two specific inconsistencies: the purchaser cannot ascertain that two programs identified as U.C.R. may produce materially different levels of reimbursement for the same services, and beneficiaries under these programs do not understand that a reimbursement level identified as reasonable and customary is based on the carriers definition of those terms which may differ substantially from the common meaning or other carriers meanings of those terms. Mr. Mears said that currently, the Division of Insurance only enforces the birthday rule which is no longer sufficient. He noted that the Division of Insurance have technical changes which he believes are reasonable. He recognized the need to assist consumers with filing and collection of insurance benefits, although, that adds considerably to the cost of running the insurance companies. That assistance would increase consumer access to health care. He concluded that if SB 201 does not move forward, it would probably result in physicians not accepting insurance benefits and the consumer will have to pay for the service and file the claim themselves. Number 116 ROBERT ROBINSON, Chairman of the State Board of Dental Examiners, viewed SB 201 as a freedom of information, a right to benefits and access to health care necessary to the public. SB 201 is essential to the consumer and the employer. He pointed out that SB 201 would allow the public to know their coverage from the beginning. He explained that the coordination of benefits of SB 201 establishes rules for multiple coverage. Currently, the system practically penalizes those who have multiple coverage. He expressed concern that if SB 201 does not pass, some of the dentists would return to a cash up front payment system which would leave the patient to file and obtain their insurance. The coordination of benefits in SB 201 would ease that problem and help increase the access of public health care. He did not believe that SB 201 mandates prices for insurance companies; SB 201 only requires public disclosure, freedom of information to employees and employers regarding their policies. DAN PITTS, general dentist and Alaska Dental Society representative, supported SB 201. SB 201 is an information bill which should avoid a lot of confusion and streamline patient treatment. He spoke to the coordination of benefits. He urged passage of SB 201. CHAIRMAN RIEGER held SB 201. He placed SB 270 (COMPREHENSIVE HEALTH CARE) and SB 284 (COMPREHENSIVE HEALTH INSURANCE ACT) before re the committee for discussion. Number 194 DAVID WALSH, Director of the Division of Insurance, stated that he did not have the final fiscal note on SB 201. The draft fiscal note shows zero impact. He explained that he was not capable of any further statements. He thanked everyone who was willing to sit down with the division and work on SB 201. CHAIRMAN RIEGER asked if SB 201 tied into review and approval of rates. DAVID WALSH said that they do not tie in with SB 201. SENATOR SHARP asked what was the Division of Insurance's policy or state regulations regarding coordination of benefits and determination of primary and secondary coverage; would it be similar to what is in SB 201. DAVID WALSH said that each policy could be different. If one has two full coverage group policies, generally the primary coverage would be the one in force the longest. He noted that sometimes large employers will have a policy stating that they are to be the primary coverage. That is often the result of a collective bargaining agreement. He clarified that normally the policy in effect the longest would be the primary coverage. SENATOR SHARP mentioned the problem with the 90 day filing expiration. An individual cannot hold claims in order to save the expense of processing; they expire after 90 days. DAVID WALSH agreed that was a problem for the insurance company and the individual. The insurance companies would like the claims in a timely manner so they can be processed and their reserves can be paid. Mr. Walsh also acknowledged that there is a consumer protection issue. Mr. Walsh explained the possibility of having uncoordinated benefits between a group policy and an individual policy, which could make money for an ill individual if both policies were full coverage policies. That loophole is not good for the system as a whole. Mr. Walsh stated that they would be working towards a more global solution for the coordination of benefits. He specified that the Division's efforts are not a statement of pro or con regarding SB 201. SENATOR SHARP pointed out the coordination of benefits problem when both policies require that their individual deductibles be met. CHAIRMAN RIEGER asked how would this work under the coordination of benefits; would each policy have its own deductible as it does for its reimbursement. DAVID WALSH said that it depends upon the specific language of the policy and whether the policy speaks to the deductible when that policy becomes the secondary coverage. Number 274 CHAIRMAN RIEGER directed the committee to the issues of review and approval of rates and charges regarding SB 270 and SB 284. SENATOR DUNCAN said that under SB 284 the regulation of private insurance rates is on page 4 of the bill. DAVID WALSH noted that both bills contain prior rate approval. Under SB 270 the Division of Insurance would do the actuarial work, but the Commission would give ultimate approval. Under SB 284 the Division of Insurance would do the actuarial work and give the final decision as well. Mr. Walsh explained that currently, there is no rate approval regarding rate filings by health insurers. Except for health insurance rates, Alaska uses the prior approval mechanism for rate approval which means that companies must file their rates with the Division of Insurance. The Division of Insurance has thirty days to review the rates and make a decision. He noted the extension provision which allows another thirty days for the division to review the rates. The prior approval mechanism is the most stringent type of review from a consumer protection point of view. Mr. Walsh discussed the various other rate approval mechanisms. The file and use mechanism means that the rates must be filed with the Regulatory Authority before one could use it. Then the thirty day review begins and the rates can be recalled if they are not approved. He explained the use and file mechanism which is the opposite of the file and use mechanism. The last rate approval mechanism is open rating which does not require any review by the Regulatory Authority at all. He noted that health insurance in Alaska does not have rate approval which is essentially classified as an open rating while all other insurance uses the prior approval mechanism. Mr. Walsh stated that both SB 270 and SB 284 bring the approval of health rates in Alaska in line with the regulatory review of other forms of insurance. The mechanism proposed differs in each bill. Under SB 270 the health rates would be filed with the Division of Insurance who would do the actuarial and market work. They would make a recommendation to the Health Commission who would then hold public hearings and decide to approve or disapprove the rate change. He explained that under SB 284, the method of review would be the same as under SB 270; however, the Division of Insurance would make the final decision. SENATOR DUNCAN asked what difference there would be regarding the work load for the Division of Insurance under these bills. DAVID WALSH said there would not be a significant difference in the work load under either of the bills. Number 352 SENATOR DUNCAN restated Mr. Walsh's belief that the work load for the Division of Insurance under both bills would be about the same for rate review. He reviewed the components of the fiscal notes for SB 270 and SB 284. He asked why the fiscal note for SB 284 was higher than the fiscal note for SB 270 if the work load was the same. DAVID WALSH pointed out that the difference was the consumer complaint positions. The fiscal note for SB 284 includes the consumer complaint specialists due to the Division of Insurance's additional requirements of handling consumer complaints which are not present under SB 270. SENATOR DUNCAN asked if the three consumer complaint specialists in SB 284 deal with rate approval, why are those positions under the rate approval section of the fiscal note for SB 284 and not SB 270. He cited other discrepancies in the components of each fiscal note when the work load was the same. BARBARA THURSTON, Chief Actuary of the Division of Insurance, explained that under SB 284 the Division of Insurance makes the final decision of rate approval which means that consumer complaints would be directed to the Division of Insurance. Under SB 270 the consumer complaints would be directed to the Health Commission since the Commission makes the final decision. She acknowledged other contractual and equipment differences between the fiscal notes. She said that those differences were due to the number of people posed in each fiscal note; if more people are added those costs increase. SENATOR DUNCAN maintained that there would be complaints no matter who makes the final decision, therefore, consumer complaint specialists would be needed under either bill. He suggested that the fiscal note for SB 270 should have three consumer complaint specialists for the Health Commission; now SB 270 does not have any consumer complaint specialists. He determined that the fiscal note for SB 270 must be understated. DAVID WALSH said that neither he nor Ms. Thurston could comment. He clarified that they could only comment on their portion of the fiscal note with regard to its effect on the Division of Insurance. SENATOR DUNCAN expressed the need for the fiscal note on SB 270 to ask the same questions that the Division of Insurance asked of SB 284. He reiterated that the consumer complaint specialist would have to be present in SB 270 under the Commission or the Division of Insurance. He stated that the fiscal note for SB 270 lacks the same intense scrutiny and credibility of the fiscal note for SB 284. He asked if Mr. Walsh agreed that there should be consumer complaint specialists. DAVID WALSH agreed that those positions are essential because any time there is approval of rates some people will not be pleased. CHAIRMAN RIEGER asked how the number of consumer complaint specialists under SB 284 would compare to the number in the Division of Insurance. DAVID WALSH informed the committee that currently, the division has four full-time consumer complaint specialists and a clerk. They are now handling more complaints than ever. Mr. Walsh explained that the fiscal note was in draft form because a significant amount of work needs to be done at all levels. He recommended that the fiscal note stay in draft while these problems are addressed. Number 436 SENATOR DUNCAN asked Mr. Walsh if he was asked by the preparers of the fiscal note for the Commission to prepare a fiscal note for the Commission. DAVID WALSH said no. SENATOR DUNCAN asked if Mr. Walsh had been asked by the Governor's office what effect rate approval would have on the Commission activities. DAVID WALSH said that he did not believe so. CHAIRMAN RIEGER asked if Mr. Walsh favored rate approval and if so which of the two approaches. DAVID WALSH favored rate approval. Mr. Walsh supported SB 270. Mr. Walsh explained that there should be some type of approval, but who makes that approval would ultimately be the decision of the Governor and the Legislature. CHAIRMAN RIEGER asked how other rate approval costs of the Division of Insurance were paid. DAVID WALSH noted that Alaska was one of the few states with no filing fee; however, there is an expensive certificate of authority fee. Every year every company pays $2500 in order to do business in Alaska. Mr. Walsh indicated that the lack of a filing fee is a bargain for companies who write a lot of insurance in Alaska. Mr. Walsh explained that a filing fee would become a costly administrative burden. The cost has been shifted to those companies who want to be admitted in all fifty states which would benefit companies who serve Alaskans. All of the Division of Insurance's budget comes through license and certificate of authority fees. CHAIRMAN RIEGER asked if there are other aspects of the regulation of insurers, besides rate approval, that the division has authority over. DAVID WALSH stated that they have full sovereignty regulation of the companies which would be essential to any regulatory entity. He said that it was only a question of rate approval. SENATOR ELLIS inquired as to who would have more expertise in rate approval issues; the Division of Insurance or the Commission. He asked Mr. Walsh to characterize rate review in SB 270 and SB 284. DAVID WALSH stated that the Division of Insurance employees do a good job. He noted the difficulties in comparing the qualifications of people he knew to those of the proposed Commission. He asserted that the Legislature and the Governor would have the ultimate decision. He explained that whatever the Governor and the Legislature decide the Division of Insurance would regulate. Number 490 CHAIRMAN RIEGER expressed concern with giving regulatory powers of the state to another commission. He said that he was inclined to keep this in the Division of Insurance. SENATOR SHARP asked how review and approval of rates would work if the ability to approve rates was present while there would be no control of expenditures. DAVID WALSH clarified Senator Sharp's concerns. The regulation of premiums that accompany charges should be part of the fees medical communities charge. He did not have an answer. He explained that from a regulatory view, insurance consumers are best protected with rate review authority and approval. Most states now regulate health premiums. He noted that due to Blue Cross' non profit status the Division of Insurance has more rate authority than with other providers. CHAIRMAN RIEGER asked why health coverage is commonly excluded while other types of insurance are included in rate review. DAVID WALSH said that he did not know. A large portion of that response could be due to the historical decisions made by the legislature at the time. SENATOR SHARP discussed the problems that California faced when they required mandatory auto insurance; major auto insurance companies pulled out of the market. He asked what would stop such a situation in Alaska. DAVID WALSH agreed that was a serious issue. In Alaska there are three companies, AETNA, Blue Cross and Great West, who write approximately 80 percent of the business. He noted the four auto insurance companies who also have about 80 percent of that market. He said the Division of Insurance's goal was to increase the number of players in the market because the Division believes that would lead to more stability and lower rates. There has been success with such an approach. He did not know what effect rate approval would have on the Alaskan market. He believed that rate approval was needed and probably would not have a drastic effect on the Alaskan market. Number 554 NANCY USERA, Commissioner of the Department of Administration, spoke to the differences in approach and cost of the two bills. SB 270 recognizes current fiscal constraints and attempts to do things on an incremental basis. She explained that the rate approval portion of SB 270 intended to address the lack of process for verifying the rates that insurance companies present. As an employer, she expressed interest in having an independent third party review to verify and approve or disapprove the insurance companies' rates. The Commission would not duplicate the Division of Insurance's work. She said that the work of the Commission and the Division should enhance each other because of the information derived from the rate review process as well as enhancing the public process through public hearings. Ms. Usera maintained that SB 270 did not anticipate the consumer complaint issue. She noted the key difference in the bills; one is general and the other more explicit. She explained that they would suggest amending SB 270 if that was necessary for rate approval to be minimally effective. She reiterated that SB 270 wants to move forward while recognizing financial constraints. TAPE 94-17, SIDE B Number 594 SENATOR DUNCAN stated that rate approval should be done whether there is any reform at all. He asked if Ms. Usera supported rate approval and was it something that must be in SB 270. NANCY USERA said no. Without rate approval, there are still other good things in this bill. Ms. Usera acknowledged that rate approval is an important piece. Ms. Usera explained that SB 270 has pieces that would stand alone to advance health care reform, unlike the package approach of SB 284. SENATOR DUNCAN pointed out that rate review and approval of charges are very specific; however, the fiscal note of SB 270 does not reflect the explicit charges to the Commission on this issue. He asked if Ms. Usera had requested that the Division of Insurance report what might be involved in rate review and approval. He stated that the merits of a bill are nothing without funding to do the tasks. He emphasized the need to treat the bills fairly regarding the fiscal notes. NANCY USERA noted that SB 270 uses "may" which is permissive language. The permissive approach of SB 270 was built-in due to the belief that a lot of latitude for growth must be in place. She said that the Division of Insurance was asked what their piece would be in the fiscal note; however she did not know the specific instructions or assumptions. She asserted that the cautious attitude of SB 270 was intended to provide various options and still be financially responsible. SENATOR DUNCAN scrutinized the permissive language of SB 270 and pointed out that the Commission is charged with issuing a decision on the filing which could be approved or disapproved. A decision is made which does not seem to support Ms. Usera's interpretation of the permissive language. He asked if the administration was committed to rate approval. NANCY USERA emphasized that every provision in SB 270 is important and each of them could stand alone. She stated that if rate approval was omitted from the bill, the Governor would continue to support SB 270. She acknowledged that they believed SB 270 was a better bill when rate review and approval were included. SENATOR DUNCAN requested a legal opinion on the permissive language of SB 270. He asserted that only the approval portion of the rate review section was permissive, the other aspects use the word "shall" which is mandatory language. Number 523 SENATOR SALO asked if under rate approval, would the Commission deal with "usual, customary and reasonable" fees. NANCY USERA informed the committee that an amendment was adopted in House HESS which provides for disclosure. That moves toward more consumer interest. Ms. Usera said she would share the House CS. SENATOR ELLIS asked if there is currently a problem with doctors refusing to provide rates for their services. He did not feel that was a problem. NANCY USERA said that as a consumer, shopping for a procedure is very difficult. The House Amendment requires rate disclosure of normal procedures and a consumer estimate before an actual procedure is conducted. She noted the fine placed on a provider who does not follow the amendment which makes providers accountable to their consumers. SENATOR ELLIS recognized that informed consumerism is an incredible force to be used in moderating the rates. He felt much more could be done. SENATOR DUNCAN asked how disclosure of rates would benefit a small community such as Fairbanks. He inquired of the intent or of the benefit of the House Amendment. NANCY USERA said knowing the options would empower the consumer when making decisions. SENATOR SALO was concerned that often consumers do not find out until afterwards that their insurance does not consider a procedure "usual, customary and reasonable." For some this would be a problem. She asked if there is any enforcement for a provider to come close to an estimate given when there is prior approval. DAVID WALSH agreed that was a problem. Currently, the insurance company and the health care provider work that out. He explained that companies use prior approval in order to get an estimate that hopefully the provider would stay with that target. On the other hand, sometimes there are complications that would raise costs from the original estimate. He stated that part of the problem was making the estimates stick, which is beyond the division's ability. SENATOR SALO suggested that health care providers should be made more accountable for their estimates. Number 446 CHAIRMAN RIEGER referred to page 5, lines 23 & 24, when addressing the community rates provision of SB 284. He inquired as to how prudent a policy that would be or should there be a differentiation of rates at least for those things in the control of the individual. He emphasized that the community rates provision seems to eliminate a lot of individual responsibility. He asked why that provision was present and if that provision was a good policy. SENATOR ELLIS suggested that Mr. Walsh explain community ratings and experience ratings. DAVID WALSH explained that experience ratings break down the different segments of the population based upon activities, lifestyles, etcetera. The theory of experience ratings is that an individual should pay related to that individual's demographics. He posed auto insurance as an example of successful experience rating. From a public policy view of experience ratings, an individual should only pay for the risk they are incurring. He did recognize that experience ratings could lead to reverse discrimination because companies would tend to write policies for only safe risks. A pool of individuals who do not fit a demographic profile are left without coverage. He informed the committee that fiscal restraints lead to tighter demographic profiles which also leads companies to cover only the best risks. Mr. Walsh stated that community rating has been limited to the health insurance field. If one believes that health care access is a public policy right and some type of insurance system would be a good vehicle, then because everyone pays for individual lifestyle risks, community ratings would be suitable. He explained that the theory behind community ratings is that there is a cost for health care which would be divided on a per capita basis. That would even out marketplace fluctuations and take care of those at the bottom. He emphasized that the issue of uncompensated health care must be addressed. Mr. Walsh discussed a Fairbanks example someone had testified on at a previous hearing. A 3 1/2 percent bad debt ratio in a retail service provider would not be considered bad. He asserted that in handling uncompensated care, realizable goals should be reviewed. Historically the experience rating has been proven inadequate for a major portion of the population, which leaves the Legislature and the Governor to determine how best to handle the situation. He recognized some progress with the small employer and high risk pools. He stated that both bills attempt to address the issue, but they begin with different points of view regarding how, when, and in what manner it would be done. Number 349 CHAIRMAN RIEGER asked if SB 284 used a community rating approach and SB 270 used an experience rating point of view. DAVID WALSH did not believe that SB 270 took a position on the type of rating approach. CHAIRMAN RIEGER questioned the merit of the community rating point of view which does not create incentives or penalties for health factors within the control of the individual. SENATOR SALO pointed out that accounting for those factors is almost impossible. There is no way to police people regarding those health risks. CHAIRMAN RIEGER asked what would happen if someone who had checked the non smoker box on a life insurance policy layer died of lung cancer. DAVID WALSH said that if it can be proven that the person smoked two or three packs a day, then the insurance would be negated because that would amount to lying. SENATOR ELLIS asked for an example of those at the bottom of the pool. DAVID WALSH described the first type of individual as one with a genetic condition which would omit them from the demographics through no fault of their own. The second type of individual at the bottom of the pool would be an individual who chose an inherently dangerous consequence or lifestyle. He stated that it is difficult to design a system acceptable to the general population while the system takes in dangerous activities and lifestyles with no premium for healthy lifestyles. He described the third type of individual in this category as children of families without coverage or individuals who do not take out coverage. Number 275 SENATOR ELLIS asked for examples of businesses who pay disproportional rates based on occupations. DAVID WALSH pointed out the timber industry, some health care providers and the fishing industry as examples. SENATOR ELLIS reiterated the question clarifying that he was referring to unexplainably high rates for certain occupations such as ministers. DAVID WALSH noted a fencing company with this difficulty as well as small transportation companies. SENATOR DUNCAN informed the committee of the list of such industries. Senator Duncan explained that most of these businesses were low paid, high turnover jobs with a high administrative cost with which the insurance companies do not want to bother. SENATOR SALO believed that this discussion was time well spent. She stated that many things under an experience rating system seem inherently unfair and the decisions would be difficult. She stated that we all pay in the end and she would rather start with the community rating philosophy. CHAIRMAN RIEGER noted that at the national level individual responsibility is high on the list. He expressed reluctance to give anyone a free ride when they engage in a lifestyle that increases health costs. He read lines 23 & 24, on page 5 of SB 284 as saying that people with dangerous lifestyles are not dealt with separately, they receive the same premium as everyone else. That would be poor public policy in his opinion. SENATOR SALO stated that there are other ways besides the insurance rate to compensate or not compensate for lifestyle choices. She indicated that the Clinton plan's individual payment for doctor's visits could be a way to penalize those who chose a dangerous lifestyle since such lifestyles often result in more doctor visits. SENATOR ELLIS agreed that community rating made sense in order to capture everyone; however, risk factors can be taken into account. There should be incentives for healthy lifestyles and Senator Ellis noted that those incentives are not precluded in SB 284. He welcomed discussion on SB 284 becoming more specific on healthy lifestyles. Number 161 NANCY USERA corrected her previous testimony on insurance rate approval. She explained that rate approval was required with "shall" language. She asserted that her other testimony was consistent. SB 270 is based on incremental steps. She reiterated that if SB 270 has miscalculated due to an inherent assumption that they had not included in their process they could review the issue. SB 270 does not intend to design elaborate bureaucracies. SENATOR ELLIS said that rate review authority was the most important portion of the data collection of SB 270. Rate review acquires the data on health insurance that the Department of Health and Social Services needs. He believed that rate review would be the quickest thing that could be done for consumers. NANCY USERA felt that rate review or a portion of it could be done without consumer complaint specialists. She did not believe that rate review and consumer complaint specialists have to go together. SENATOR ELLIS clarified that the consumer complaint specialists of SB 284 would not create an elaborate bureaucracy. NANCY USERA said that she was not being comparative. SENATOR DUNCAN observed that if the consumer complaint specialists were not needed then those positions could be eliminated in SB 284. SENATOR SALO asked if Ms. Usera meant that without consumer complaint specialists, the appeal process would be in the courts. NANCY USERA explained that appeal for an insurance company provision places the appeal in the courts. SENATOR DUNCAN noted that Ms. Usera had said she would re-evaluate the rate review language. NANCY USERA stated that she would review that language and the fiscal note. Number 073 CHAIRMAN RIEGER referred to page 5, lines 27-31 of SB 284 when asking how the claims processing section would fall under regulations or laws governing other forms of insurance. DAVID WALSH believed that the section was similar, except for the time period. In response to Chairman Rieger, Mr. Walsh clarified that other forms of insurance process claims by regulations and laws. CHAIRMAN RIEGER asked for a description of the standardized claims form and how the form would work under SB 270. NANCY USERA pointed out that section 44.19.628 on page 5 of SB 270 addresses this issue. SB 270 directs the Division of Insurance to consult with the Commission in order to determine the type of information necessary to aid the data collection process. The Division would provide regulations which adopts that and all the health insurers should comply with the use of the universal claims form. CHAIRMAN RIEGER asked if the standardized claims form already exists. NANCY USERA noted that many providers use fairly standard claims forms through an electronic system. She explained that a uniform claims form would contain useful information regarding the collection of data. The same approach is anticipated in the public health sector. Ms. Usera stated that they do not anticipate the Commission collecting data from individual claims forms nor that the forms would be sent directly to the Commission. TAPE 94-18, SIDE A Number 002 DAVID WALSH said, in response to Chairman Rieger, that whether there is a commission or not there is a national push to have a universal claims form. He suggested that the form would exist in a few years probably using the Medicare, Medicaid form as a template; however, with some changes. He believed that this universal form could be achieved in a finite time. SENATOR DUNCAN stated that both bills essentially do the same thing, create and implement a uniform claims form. DAVID WALSH agreed. SENATOR DUNCAN asked why the difference in costs of the claims form in the fiscal notes; SB 270 does not have costs listed for the claims form. DAVID WALSH did not know the answer. Mr. Walsh said that their fiscal note on SB 284, assuming the Division of Insurance would do such things as the claims forms, was prepared on their experience and the experience of other states who were facing the same issues. SENATOR DUNCAN pointed out that the Division of Insurance was charged under SB 270 to do the claims form; why then would the creation of this uniform claims form not cost them anything under SB 270. DAVID WALSH said that he would have to review the draft. Mr. Walsh noted that there probably were different priorities considered regarding SB 270 and SB 284. SENATOR DUNCAN asserted that the uniform claims form was yet another example that SB 270 would cost more than the draft fiscal note projects. Number 077 SENATOR SALO suggested that part of the problem was that the fiscal notes were done in two different places at two different times by two different people. DAVID WALSH agreed with Senator Salo. He said that he would review the fiscal notes and inform the committee of the results. SENATOR SALO requested that the fiscal note drafters get together and review both the fiscal notes. NANCY USERA expressed the importance to clearly state the assumptions of each bill when dealing with the fiscal notes. She believed that the major difference was the assumptions applied to each bill and their fiscal note. SENATOR DUNCAN did not understand how there could be different assumptions present if both bills require establishment of a uniform claims form within a specified time. He agreed with Senator Salo and suggested that SB 270 should have the same in depth fiscal note that SB 284 has now. CHAIRMAN RIEGER asked if the uniform claims form provision of SB 270 was also the data collection section or is data collection a separate section. NANCY USERA noted that page 2, line 13, addresses the purpose of the Commission. She explained that SB 270 considers the uniform claims form a tool, but not necessarily the source of the information that the Commission collects and analyzes. SB 270 uses the uniform claims form as a processing convenience, an administrative streamlining of the process, and also requires certain information that could be collected in aggregate. She said that the data collection is not specifically set out as to how that would be done under the Commission. SENATOR DUNCAN was impressed with the detail of the fiscal note. Number 162 CHAIRMAN RIEGER noted that the last issue before the committee regarding SB 270 and SB 284 was the fiscal notes of each. SENATOR DUNCAN agreed that the data of the universal claims form may be used for two different purposes under SB 270 and SB 284; however, the development of the claims form will still cost. He pointed out that the fiscal note for SB 284 dealt with the cost of development of the form and the use of its data separately. SENATOR ELLIS asked if Ms. Usera's previous point was that the universal claims form would be developed because it was easy to use, but that the form would not be used for data collection and analysis to better health care. NANCY USERA said no. The use of the universal claims form has a duo-fold purpose: assist in the more efficient processing of claims, and certain information on the form can be used as a tool for getting information. She explained that if she were filing a claim with her provider on this universal claim form, she nor her provider would have to send a copy to the Commission. She said that they anticipated that the provider would aggregate the information and provide it in a periodic report. The universal claims form would be a vehicle for acquiring information. SENATOR ELLIS indicated that SB 270 stops short and does not specify what would be done with the data collected while SB 284 goes further to state what would be done with the data and therefore would be more expensive. NANCY USERA said that she understood that SB 284 would require the individual to file the claims form which the Corporation would receive. SENATOR ELLIS clarified that the process was electronic. Number 229 CHAIRMAN RIEGER said that on Monday he planned to review data collection, publication of fees and anti-trust provisions, and also the claims clearinghouse at Senator Duncan's request. There being no further business before the committee, the meeting was adjourned at 3:25 p.m.