Legislature(1993 - 1994)
04/07/1994 01:01 PM Senate HES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| SB 367 | |||
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
April 7, 1994
1:01 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
MEMBERS ABSENT
Senator Judy Salo
COMMITTEE CALENDAR
SENATE BILL NO. 367
"An Act relating to health care and insurance for health care; to
review and approval of health insurance rates and rating factors;
relating to certain civil actions against health care providers; to
coordination of insurance benefits and to determination and
disclosure of fees paid to an insured or health care provider; to
the rate of interest on certain judgments and decrees; to excise
taxes on cigarettes; amending Alaska Rules of Civil Procedure 26,
27, 68, 79, and 82 and Alaska Rules of Evidence 802, 803, and 804;
repealing Alaska Rule of Civil Procedure 72.1; and providing for an
effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 367 - See Health, Education & Social Services minutes dated
3/28/94, 3/30/94 and 4/6/94.
ACTION NARRATIVE
TAPE 94-28, SIDE A
Number 004
CHAIRMAN RIEGER called the Senate Health, Education and Social
Services (HESS) Committee to order at 1:01 p.m. The only order of
business before the committee was SB 367 (HEALTH CARE REFORM
COMMITTEES). He reminded the committee that Senator Duncan's
amendment, Amendment 17 was before the committee.
AMENDMENT 17
¶
Page 1, lines 1 - 9:
Delete all material and insert:
" "An Act relating to certain civil actions against health care
providers; to the rate of interest on certain judgments and
decrees; 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; amending Alaska Rules of Civil Procedure 26, 27, 68,
79, and 82 and Alaska Rules of Evidence 802, 803, and 804;
repealing Alaska Rule of Civil Procedure 72.1; and providing for
an effective date."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
* Section 1. FINDINGS AND PURPOSE. (a) The legislature
finds that
(1) health care services and health insurance in the
state are becoming prohibitively costly, and a growing number of
our citizens are unable to obtain health insurance or pay for
needed care;
(2) the reasons that health care expenditures are
increasing are complex and are accounted for by general
inflation; by inflation specific to the health care industry or
changes in the cost of labor, capital, and other industry
factors; by population growth; by utilization or the number of
times people use health care services; by increasingly complex
and costly technology and other resources; by the aging of the
population; and the practice of defensive medicine;
(3) the primary responsibility for controlling health
care expenditures in the state should be borne by Alaska health
care providers, particularly physicians, on whose orders and
recommendations most health care expenditures are incurred; at
present, federal and state antitrust laws effectively preclude
health care providers from engaging in voluntary self-regulation
regarding fees and volume of services; this Act mandates the
participation by health care providers in the peer review
process of cost control and volume control to assure that health
care expenditures do not increase faster than the general
inflation rate; if voluntary self-regulation fails to control
health care costs, mandatory cost controls should be imposed;
(4) in order to increase access to health care by
containing the rate of increase of health care expenditures and
by making basic health insurance available to the people in the
state, it is essential that the factors contributing to the
increasing costs of health care and the unavailability of health
insurance be addressed comprehensively and consistently;
(5) there is a compelling need for a strong, clear
focus on public health issues in the interest of protecting and
promoting the public health of the residents of the state;
(6) there are inherent problems in our health system
infrastructure, including the lack of physical access to
services in many areas of the state;
(7) the state should immediately begin to create a
system that will provide health insurance to all residents of
the state, control health care expenditures, preserve the high
quality of care that residents demand, preserve the individual's
choice of health care provider, and, by doing so, avoid the
imposition of a federally mandated health care reform system on
the state;
(8) because the state constitution's single subject
rule precludes the consideration of comprehensive tort reform in
the same legislative enactment as health care reform, tort
reform should be addressed in a separate legislative enactment;
(9) a market based single payer system is preferable
to either an employer mandate or a "pay or play" approach
because
(A) both of the employer mandate approaches are
based on the current mix of public, employer, and
individual financing that inevitably creates coverage gaps
for some people, particularly when their employment status
changes;
(B) health care financing approaches that
require all businesses to provide health care benefits or
that levy additional taxes on those businesses threaten the
economic viability of many small businesses in the state;
(C) multiple payer systems would not necessarily
address the problems of cost shifting that exist in our
current system; and
(D) systems that are built upon the existing
public and private financing arrangements can be expected
to inherit the inefficiencies in those arrangements.
(b) The purpose of this Act is to
(1) increase access to health care by containing the
rate of increase of health care expenditures and by making
health insurance available to the people in the state;
(2) create a market based single payer state health
insurance system that provides health insurance to all resi
of the state, that utilizes market forces to make consumers
aware of the actual costs of health services, and that prov
consumers with information enabling them to make more infor
purchasing decisions;
(3) provide a structure for addressing the health
care needs of the state including
(A) developing a comprehensive long-term care
plan that integrates support services and that promotes
human dignity;
(B) use of preventive and wellness programs to
reduce health care costs; and
(C) the different health care needs of urban and
rural areas of the state.
(c) It is not the purpose of this Act to change the
existing agreements between employers and employees, includ
retirees, in a manner that would diminish health care benef
* Sec. 2. AS08.02 is amended by adding a new section
read:
Sec. 08.02.025. COMPLIANCE WITH REQUIREMENTS OF STATE
HEALTH INSURANCE CORPORATION. A health care provider shall
comply with the required price list availability provisions
of AS21.58.230 and the health care data system provisions
of AS21.58.260 that are applicable to health care
providers including regulations adopted by the Alaska
Health Insurance Corporation under those provisions.
Notwithstanding another provision of law, the license of a
health care provider is not valid unless the health care
provider complies with this section. In this section,
"health care provider" has the meaning given in
AS21.58.400."
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Delete " * Section 1. "
Insert " * Sec. 3. "
Renumber the following bill sections accordingly.
Page 8, line 20, through page 22, line 23:
Delete all material and insert:
" * Sec. 9. AS21.39.020 is amended to read:
Sec. 21.39.020. APPLICABILITY. (a) This chapter
applies to disability insurance, to all forms of casual
insurance, including fidelity, surety, and guaranty bonds,
to all forms of fire, marine, and inland marine insurance,
and to a combination of any of them, or risks or operations
in this state. Inland marine insurance includes insurance
defined by statute, or by interpretation of statute, or if
not defined or interpreted, by ruling of the director, or
as established by general custom of the business, as inland
marine insurance.
(b) This chapter does not apply to
(1) reinsurance, other than joint reinsurance to
the extent stated in AS21.39.110;
(2) [DISABILITY INSURANCE;
(3)] insurance of vessels or craft, their
cargoes, marine builders' risks, marine protection and
indemnity, or other risks commonly insured under marine, as
distinguished from inland marine insurance policies;
(3) [(4)] insurance against loss of or damage to
aircraft or against liability, other than workers'
compensation and employer's liability, arising out of the
ownership, maintenance, or use of aircraft; or, to
insurance of hulls of aircraft, including their accessories
and equipment.
* Sec. 10. AS21.39.030(a) is amended to read:
(a) Rates shall be made in accordance with the
following provisions:
(1) rates may [SHALL] not be excessive,
inadequate, or unfairly discriminatory;
(2) consideration shall be given to past and
prospective loss experience inside and outside this state,
to the conflagration and catastrophe hazards, to a
reasonable margin for underwriting profit and
contingencies, to dividends, savings, or unabsorbed premium
deposits allowed or returned by insurers to their
policyholders, members, or subscribers, to past and
prospective expenses both countrywide and those specially
applicable to this state, and to all other relevant factors
inside and outside this state;
(3) the systems of expense provisions included
in the rates for use by an insurer or group of insurers may
differ from those of other insurers or group of insurers to
reflect the requirements of the operating methods of the
insurer or group of insurers with respect to any kind of
insurance, or with respect to a subdivision or combination
of them [THEREOF] for which subdivision or combination
separate expense provisions are applicable;
(4) risks may be grouped by classifications for
the establishment of rates and minimum premiums;
classification rates may be modified to produce rates for
individual risks in accordance with rating plans that
establish standards for measuring variations in hazards or
expense provisions, or both; the standards may measure any
differences among risks that can be demonstrated to have a
probable effect upon losses or expenses;
(5) in the case of fire insurance rates,
consideration may be given to the experience of the fire
insurance business during a period of not more than the
most recent five-year period for which experience is
available;
(6) when there is an established program to
inspect new and existing dwellings and the program has been
certified by the director as likely to reduce the incidence
of fires in inspected dwellings, then in any rate plan used
in this state, dwellings that have been found by the
inspection to meet the standards established by the program
shall have credits applied to the rate in amounts approved
by the director ;
(7) in the case of disability insurance rates,
rates shall be made on a statewide basis; rates may vary
depending on age and family status .
* Sec. 11. AS21.54 is amended by adding a new section
read:
Sec. 21.54.025. CLAIMS PROCESSING. (a) An insurer
authorized to transact disability insurance in the state
shall
(1) pay each claim within 15 business days after
a claim is received or, within that same time period, give
the person that submitted the claim notice that the claim
is denied; and
(2) adopt a claims grievance procedure and
submit the procedure to the division for approval; after
the procedure has been approved, the insurer shall follow
the procedure.
(b) If a claim form is fully completed and an insurer
fails to pay a claim or give notice that the claim is
denied within the time specified in (a) of this section,
the insurer shall pay interest at the rate specified in
AS45.45.010, from the 16th business day after the claim
was received until paid, on the amount finally determined
to be due.
(c) If an insurer denies a claim, the notice that the
claim is denied must include a statement of the reason for
the denial. The statement must be sufficiently clear to
allow the provider to understand the reason for the denial
and to take corrective action, including resubmission of
the claim, if appropriate.
* Sec. 12. AS21 is amended by adding a new chapter to
CHAPTER 58. ALASKA HEALTH INSURANCE CORPORATION.
Sec. 21.58.010. CREATION AND PURPOSE. (a) The
Alaska Health Insurance Corporation is established. The
corporation is a public corporation and an instrumentality
of the state in the Department of Commerce and Economic
Development but has a legal existence independent of and
separate from the state. The exercise by the corporation
of the powers conferred by this chapter is considered an
essential function of the state.
(b) The purposes of the corporation are to establish
and provide uniform health insurance coverage for all
residents of the state and to monitor and control all
health care expenditures in the state.
Sec. 21.58.020. BOARD OF DIRECTORS. The corporation
is managed by a board of seven directors.
Sec. 21.58.030. APPOINTMENT AND REMOVAL OF DIRECTORS.
(a) The directors of the corporation are appointed by the
governor, subject to confirmation by the legislature. A
director may be removed only for good cause.
(b) In appointing directors to the board, the
governor shall ensure that
(1) a majority of the board are experts in
health care issues and fairly represent the interests of
the general public in having access to quality and
affordable health care;
(2) the interests of consumers and health care
providers are fairly represented;
(3) the director is a resident of the state; and
(4) the board has a gender and geographic
composition that approximates the population of the state.
Sec. 21.58.040. TERM OF SERVICE. The term of a
director is four years. Terms of directors shall be
staggered. A director may be appointed to successive
terms. A director appointed to fill a vacancy serves for
the unexpired term of the director. A term shall be
measured from January1 of the year in which the term of
the vacant position begins, regardless of when the vacancy
is filled.
Sec. 21.58.050. COMPENSATION AND EXPENSES. A
director is entitled to receive compensation at the rate of
$400 for each day spent in performing duties as a board
member and to travel and per diem expenses authorized by
law for boards and commissions under AS39.20.180.
Sec. 21.58.060. OFFICERS. At the first meeting of
each year, the board of the corporation shall elect a chair
and a vice-chair from among its members. The corporation
shall prescribe their duties by regulation.
Sec. 21.58.070. MEETINGS AND QUORUM. The board of
the corporation shall meet at least once every three
months. Four members of the board constitute a quorum for
the transaction of business and the exercise of the powers
and duties of the corporation.
Sec. 21.58.080. ADMINISTRATIVE PROCEDURE. Actions of
the corporation under this chapter are subject to AS44.62
(Administrative Procedure Act).
Sec. 21.58.090. STAFF AND PROFESSIONAL SERVICES
CONTRACTS. The corporation shall employ an executive
director who serves at the pleasure of the corporation as
its chief administrative officer. The executive director
may, with the approval of the corporation, select and
employ additional staff as necessary. The executive
director is in the exempt service under AS39.25.110.
Employees of the corporation other than the executive
director are in the classified service under AS39.25.100.
In addition to its staff of regular employees, the
corporation may contract for the services of consultants
and professional, technical, and financial advisors the
corporation considers necessary for the purpose of
developing information, conducting hearings, studies,
investigations, or other proceedings, or otherwise
exercising its powers.
Sec. 21.58.100. GENERAL POWERS. The corporation may
(1) exercise the powers granted to insurers
under the laws of the state when allowed under
AS21.58.130(c); if the corporation acts as an insurer, the
corporation shall comply with the requirements applicable
to insurers under this title;
(2) sue or be sued;
(3) make contracts and execute all instruments
necessary or convenient for carrying out its business;
(4) establish administrative or accounting
procedures;
(5) acquire, own, hold, dispose of, and encumber
personal property and lease real property in the exercise
of its powers;
(6) establish appropriate levels of reserves to
cover expenses of the corporation;
(7) perform all other acts necessary and proper
to carry out the duties of the corporation.
Sec. 21.58.110. DUTIES. The corporation shall
(1) adopt regulations to implement this chapter;
(2) create and implement the formal public
involvement process required under AS21.58.320, for the
purpose of gathering broad input on the state health
insurance plan, options for financing the cost of coverage,
cost-sharing of the health insurance plan, and the cost of
plan administration;
(3) establish the comprehensive health care data
system required under AS21.58.260;
(4) create and implement a uniform claims form;
(5) develop and update the public health
improvement plan for the state required under AS21.58.310;
(6) establish the claims clearinghouse required
under AS21.58.220;
(7) develop a benefits package of health care
services that enrollees in the state health insurance plan
are entitled to receive and determine the eligibility
requirements for enrollment;
(8) annually determine the appropriate fee to be
paid by an enrollee, after considering the enrollee's
income, assets, financial obligations, or other criteria,
as determined by the corporation;
(9) define acceptable reasons for denial of
claims under the state health insurance plan;
(10) at least annually, review the health care
benefits package and revise it as determined by the
corporation, taking into consideration the health needs of
the state, available funding, and other relevant factors as
determined by the corporation;
(11) establish the cost control system required
under AS21.58.180, 21.58.230, 21.58.250, 21.58.270,
21.58.290, and 21.58.330, and the voluntary cost control
system required under AS21.58.240 and 21.58.280;
(12) periodically review options to finance the
state health insurance plan and present options to the
legislature;
(13) with funds from the state health fund,
provide or procure coverage required under the state health
insurance plan; as provided under AS21.58.130, the
corporation may act as an insurer or procure coverage from
one or more companies licensed to transact health insurance
in the state for all persons who are eligible to be
enrollees of the state health insurance plan;
(14) pursue necessary federal waivers from
applicable federal law or other federal health care payers
in order to incorporate both claims data and revenue
streams into the corporation's data system and additional
revenue into the state health insurance fund;
(15) implement the state health insurance plan
as a market based single payer system;
(16) design a program to give incentives to
primary care providers to practice in the state, especially
in rural and under served areas of the state; incentives
may include added premiums on prices for primary care
providers, a student loan forgiveness program, an in-state
family practice residency program, training and rotations
for midlevel practitioners, and other appropriate
incentives;
(17) impose a mandatory cost control system in
part or overall if the corporation determines that the
voluntary cost control system described under AS21.58.280
has failed to substantially achieve the adopted expenditure
target;
(18) establish committees of experts and others
as needed to make recommendations to the corporation
regarding how to contain the cost of health care, including
incorporating a greater emphasis on healthful lifestyles,
prevention of disease and injury, promoting effective
medical treatments, identifying the optimal provider mix
within the state, or other matters determined by the
corporation;
(19) develop a plan that comprehensively
addresses the needs of residents of the state for long-term
care; and
(20) hold public meetings and annually report to
enrollees, the governor, and the legislature.
Sec. 21.58.120. HEALTH INSURANCE FUND. The state
health insurance fund is established as a separate account
in the general fund. The fund shall be administered by the
corporation and used to provide or to purchase insurance
under AS21.58.110 or 21.58.130. The fund consists of
appropriations by the legislature, individual or employer
contributions, and private or government grants.
Sec. 21.58.130. PROCUREMENT OR PROVISION OF
INSURANCE. (a) The corporation shall
(1) solicit proposals from insurance companies
that are licensed to transact health insurance in the state
under the procurement procedures adopted by the corporation
under AS36.30.015(e); and
(2) if the corporation does not act as an
insurer as provided under (c) of this section, select one
or more companies with which it will contract to provide
insurance, after considering the cost of the insurance, the
availability from the company of program features directed
at reducing the cost of providing health care services, and
other relevant factors as determined by the corporation.
(b) The corporation may contract for insurance
coverage for enrollees for a term that it considers to be
the most advantageous to the corporation and its enrollees,
for a period not exceeding three years.
(c) If, after the proposal process under (a) of this
section has been completed, the corporation determines that
the desired coverage or benefits are not available from
insurers licensed in this state or the corporation can
provide the desired coverage and benefits at a lower cost
per eligible person, the corporation may act as an insurer.
Sec. 21.58.140. ENROLLEES. (a) A person is eligible
to be an enrollee in the state health insurance plan under
this chapter in a given year if the person is a resident of
the state and has complied with the procedures established
by the corporation under (d) of this section. For purposes
of enrollment, the corporation shall by regulation define
residency in a manner that is consistent with AS01.10.055
and with this chapter.
(b) A person who is eligible to be an enrollee shall
be enrolled by the corporation in the state health
insurance plan.
(c) The corporation shall cancel an enrollee's
coverage if, during the fiscal year, the enrollee becomes
ineligible to be an enrollee.
(d) The corporation shall establish by regulation
appropriate procedures for processing applications for
enrollment, for determining the eligibility of enrollees,
for enrolling enrollees, for determining and collecting the
applicable fees, for canceling an enrollee's coverage, and
for processing appeals by enrollees of adverse decisions by
the corporation regarding eligibility, enrollment,
determination or collection of applicable fees, or
cancellation of coverage.
Sec. 21.58.150. DISCRIMINATION AGAINST ENROLLEES
PROHIBITED. A health care provider may not discriminate
against an enrollee with respect to the availability, cost,
or quality of health care services wholly or in part on the
basis of the person's status as an enrollee.
Sec. 21.58.160. CONFIDENTIALITY OF ENROLLEE
INFORMATION. Medical and financial information regarding
applicants or current or former enrollees is confidential
and is not subject to public disclosure. The corporation
by regulation may establish reasonable standards for the
release of limited information in specified circumstances,
including the release of reasonably necessary information
to insurance companies and the release of information with
the written authorization of the applicant or enrollee.
Sec. 21.58.170. HEALTH INSURANCE PLAN. (a) The
corporation shall adopt regulations specifying the health
care services required to be covered by the state health
insurance plan, taking into consideration the services
requested by the public, the needs and characteristics
unique to state residents, the goal of prevention of
illness and promotion of wellness, the cost of providing
the benefits package, the cost of providing or procuring
the insurance coverage, and the funds available in the
state health insurance fund.
(b) The corporation shall conduct a comprehensive
public involvement process designed to solicit information
and opinions regarding the services required to be covered
under (a) of this section.
Sec. 21.58.180. DEDUCTIBLES AND COPAYMENTS. Subject
to AS21.58.170, the corporation shall establish the
deductible and copayment amounts applicable under the state
health insurance plan.
Sec. 21.58.190. PREMIUMS. A premium may be charged
to an enrollee for coverage as established by the
corporation by regulation. In establishing a premium, the
corporation shall establish a standard fee and a sliding
scale fee and shall consider the cost of coverage, funding
available, and other factors the corporation determines are
relevant.
Sec. 21.58.200. PROHIBITED DISCRIMINATION BETWEEN
HEALTH CARE PROVIDERS. The corporation may not
discriminate between health care providers who are licensed
to perform a covered health care service unless the type of
health care service provided is not included under the
state health insurance plan.
Sec. 21.58.210. SOLICITATION OF ELIGIBLE PERSONS.
(a) The corporation, under a plan approved by the
director, shall disseminate appropriate information to the
residents of the state regarding the existence of the state
health insurance plan and the means of enrollment.
(b) The corporation shall devise and implement a
means of maintaining public awareness of the provisions of
this chapter regarding the state health insurance plan and
shall administer this chapter in a manner that facilitates
public participation in the state health insurance plan.
Sec. 21.58.220. CLAIMS CLEARINGHOUSE. (a) The
corporation shall establish a claims clearinghouse in the
state. A provider of health care services shall submit all
claims for payment under the state health insurance plan to
the claims clearinghouse. The corporation may, by
regulation, require providers to submit specified
additional information pertaining to providing health care
services in the state to the claims clearinghouse.
(b) Subject to appropriation, the claims
clearinghouse shall pay claims approved for payment by the
corporation under the state health insurance plan.
(c) The claims clearinghouse shall comply with the
provisions of AS21.54.025, except that the claims
grievance procedure required by AS21.54.025(a)(2) shall be
submitted to the board of directors of the corporation for
approval.
(d) The claims clearinghouse may deny a claim only
for a reason that has been specified as an acceptable
reason by the corporation under AS21.58.110(9).
Sec. 21.58.230. REQUIRED AVAILABILITY OF PRICE LIST.
(a) A health care provider shall prepare a list of the
provider's prices that includes the dates during which the
prices will be applicable. The price list shall be made
available either by posting the price list in a conspicuous
location in the health care provider's office or by
similarly posting a notice that the price list is available
for review upon request. The corporation shall determine
by regulation the contents of the price list required under
this section.
(b) At least annually, a health care provider shall
submit to the corporation copies of the provider's current
price list. The corporation shall specify by regulation
the date for submitting the price lists.
Sec. 21.58.240. INFORMATION ON PRICES FOR HEALTH CARE
SERVICES. The corporation shall at least annually publish
a description of types of health care providers licensed to
provide covered services and a comparative list of provider
prices. The corporation shall make the publications
available to the public upon request.
Sec. 21.58.250. COMPARATIVE LISTS OF PRICES. (a) At
least annually, the corporation shall compile comparative
lists of prices for commonly provided health care services
based on abstracted data provided by the claims
clearinghouse under AS21.58.220, on the price lists
submitted to the corporation under AS21.58.230, and on
other relevant information as determined by the
corporation.
(b) The lists required under this section shall be
prepared to allow identification and comparison of prices
made by individual providers for the listed services.
Hospital services may be compared on the basis of diagnosis
related groups.
Sec. 21.58.260. HEALTH CARE DATA SYSTEM. (a) The
corporation shall develop and periodically update a health
care data system. To the extent practicable, the data
system base year shall be calendar year 1993 and the system
must include
(1) health care expenditures, including capital
expenditures associated with receiving health care;
(2) demographic data;
(3) clinical information, including patient
diagnosis, type of provider, type of service, location and
length of care, referral patterns, quality of care, and
result of care;
(4) billing and payment data; and
(5) public health data, including vital
statistics and health status.
(b) The corporation may, by regulation, require
health care providers, including providers not being
reimbursed by the corporation, to submit claims data and
additional information necessary to develop or update the
data system required under (a) of this section.
Sec. 21.58.270. STATEWIDE HEALTH CARE EXPENDITURE
TARGET. (a) The corporation shall prescribe by regulation
a statewide health care expenditure target, based on the
data obtained under AS21.58.260. To the extent
practicable, the base year for the statewide health care
expenditure target shall be calendar year 1993.
(b) The corporation annually shall adjust the health
care expenditure target established under this section to
reflect changes in the Consumer Price Index and the
following factors:
(1) changes in the size and demographic
characteristics of the state's population including aging;
(2) changes in medical technology;
(3) changes that improve access to health care
services;
(4) changes in the burden of disease resulting
from epidemics, disasters, and reduction or elimination of
disease;
(5) elimination of unnecessary care;
(6) changes in costs associated with
professional liability insurance;
(7) changes in administrative costs;
(8) changes in patterns of utilization.
Sec. 21.58.280. VOLUNTARY HEALTH CARE PROVIDER
COMPLIANCE. The health care expenditure target adopted by
the corporation under AS21.58.270 shall constitute a
recommended target for expenditures within each specified
category or subcategory of health care services or
products. Health care providers may voluntarily comply
with the expenditure target and may take all appropriate
steps not prohibited by law to attempt to ensure that
annual expenditures for health care in the state do not
exceed the expenditure target adopted by the corporation.
Sec. 21.58.290. REVIEW AND REPORT ON HEALTH CARE
EXPENDITURES. The corporation shall annually review and
report to the legislature and the governor on
(1) the total amount of health care expenditures
in the state;
(2) the amount of increase or decrease in health
care and capital medical expenditures in the state;
(3) changes in health care provider prices;
(4) changes in patterns of utilization or
expenditures; and
(5) factors that are responsible for changes in
patterns of utilization or expenditures.
Sec. 21.58.300. MANDATORY HEALTH CARE PROVIDER
COMPLIANCE. (a) Based on the data compiled under
AS21.58.260, the corporation shall monitor the success of
voluntary compliance under AS21.58.280. At any time
beginning three years after the voluntary expenditure
target has been in effect, if the corporation concludes
that voluntary compliance has failed substantially to
achieve the adopted expenditure target, the corporation
shall impose by regulation a mandatory expenditure limit as
provided under (b) of this section.
(b) The corporation may, by regulation,
(1) impose a mandatory expenditure limit on one
or more subcategories or on specific items within the
expenditure limit;
(2) directly assume all or part of the cost
control functions specified under AS21.58.110(11);
(3) establish mandatory price and utilization
controls or guidelines;
(4) annually monitor health care expenditures,
patterns of utilization, and factors contributing to
changes in expenditures or utilization;
(5) establish cost sharing recommendations
relevant to the mandatory expenditure limit.
(c) A health care provider shall comply with the
mandatory cost control provisions that may be established
by the corporation under (a) and (b) of this section. An
enrollee who receives a charge that does not comply with
the mandatory cost control provisions that are imposed
under this section is not required to pay the portion of
the charge that exceeds the mandatory cost control
provisions. A health care provider shall refund an amount
received that exceeds the mandatory cost control
provisions.
(d) The corporation shall establish by regulation
procedures for monitoring compliance with the mandatory
cost control provisions and for providing notice to a
person who is determined to have been overcharged.
Sec. 21.58.310. PUBLIC HEALTH IMPROVEMENT PLAN. (a)
The corporation shall develop and annually update a public
health improvement plan for the state. The plan required
under this section must recognize the need for
(1) community involvement in health care
planning and delivery;
(2) attention to local needs that may vary from
place to place;
(3) accountability for the use of public funds;
(4) equity and stability in the distribution of
public funds;
(5) shared responsibility of all levels of
government for administering and financing public health
care delivery; and
(6) coordination of basic public health
services.
(b) The plan required under this section must include
(1) an analysis of the health status of the
residents of the state;
(2) an assessment of the most appropriate role
for various levels of government to play in addressing the
health care needs of the residents of the state;
(3) a delineation of the standards that should
be used in performing assessment, policy development, and
quality assurance in the delivery of public health
services;
(4) documentation of the extent to which the
current public health system implements or achieves the
standards identified under (3) of this subsection;
(5) identification of interjurisdictional issues
involved in health care access and delivery;
(6) recommendations, including recommendations
for specific legislative action when necessary, pertaining
to the following:
(A) strategies, time lines, financial
needs, and specific sources of stable revenue for
bringing the state public health care system up to
standards identified by the corporation;
(B) appropriate sharing of the
responsibility of local, regional, state, and federal
government entities to deliver public health care
services efficiently and effectively, including
recommendations for organization within state
government;
(C) integration of the public health care
system with state and national health care reform
efforts;
(D) the corporation's estimate of the
optimal share that public health should represent in
the total health care delivery system of the state,
expressed in terms of a percentage of health care
expenditures in the state.
Sec. 21.58.320. REQUIRED PUBLIC INVOLVEMENT PROCESS.
The corporation shall design, implement, and maintain an
extensive community based public involvement process for
the purpose of providing residents with an ongoing
opportunity to participate in decisions made by the
corporation's board of directors regarding
(1) health care services residents want included
in the benefit package;
(2) financing options;
(3) revenue sources that should be used to
finance the health plan;
(4) cost-sharing options; and
(5) administration of the health care plan.
Sec. 21.58.330. PEER REVIEW OF UTILIZATION AND
QUALITY. The corporation shall contract with health care
providers in the state to develop utilization and quality
controls. The contract must include the use of peer
specialty groups that are given the goal of controlling
utilization within a specialty. The corporation shall
ensure that the contract stresses the development of the
use of incentives to control costs.
Sec. 21.58.400. DEFINITIONS. In this chapter,
(1) "clearinghouse" means the claims
clearinghouse designated by the corporation under
AS21.58.220;
(2) "Consumer Price Index" means the Consumer
Price Index for Anchorage, All Items Index, compiled by the
Bureau of Labor Statistics, United States Department of
Labor;
(3) "corporation" means the Alaska Health
Insurance Corporation established in AS21.58.010;
(4) "enrollee" means a person whose application
for coverage under the state health insurance plan has been
accepted by the corporation, who has completed applicable
enrollment procedures, who is covered by insurance under
the program;
(5) "health care provider" means an
acupuncturist licensed under AS08.06; an audiologist
licensed under AS08.11; a chiropractor licensed under
AS08.20; a dental hygienist licensed under AS08.32; a
dentist licensed under AS08.36; a marital or family
therapist licensed under AS08.63; a direct-entry midwife
certified under AS08.65; a nurse licensed under AS08.68;
a dispensing optician licensed under AS08.71; a naturopath
licensed under AS08.45; an optometrist licensed under
AS08.72; a pharmacist licensed under AS08.80; a physical
therapist or occupational therapist licensed under
AS08.84; or a physician's assistant certified under
AS08.64; a physician licensed under AS08.64; a
podiatrist; a psychologist and a psychological associate
licensed under AS08.86; a clinical social worker licensed
under AS08.95; an emergency medical technician certified
under AS18.08.082; a mobile intensive care paramedic
trained as required under AS18.08.082; a hospital as
defined in AS18.20.130, including a governmentally owned
or operated hospital; and an employee of a health care
provider acting within the course and scope of employment;
(6) "health care services" means preventive,
diagnostic, medical, surgical, reproductive, psychiatric,
psychologic, rehabilitative, health maintenance, dental,
podiatric, optometric, optical, audiologic, nutritive, and
chiropractic care; prescription drugs, laboratory and
radiologic services, medical supplies, durable medical
equipment and devices; personal assistance services;
inpatient and outpatient care; home health care; hospice
care; and long-term or institutional care;
(7) "health insurance" means an individual or
group contract or other plan providing coverage of health
care services that is issued by the corporation or by a
health insurance company, a hospital service corporation,
a medical service corporation, or a health maintenance
organization; "health insurance" includes disability
insurance under AS21.12.050;
(8) "health insurance company" means an insurer
that is authorized to transact health insurance;
(9) "market based single payer system" means a
system in which a single entity provides health insurance
to all residents of the state and the insurance is based on
market forces, including provider defined fees, defined
patient copayments, sliding scale copayments for the
indigent, provider fees that are posted or made otherwise
available at the point of services, published or
disseminated fees in comparative lists that allow fee
comparison by consumers, voluntary expenditure targets,
provider peer review and control of volume, utilization,
and quality of health services, and a regularly published
description of the various types of providers licensed to
provide services in the benefit package;
(10) "state health insurance fund" is the fund
established in AS21.58.120.
* Sec. 13. AS24.20.206 is amended to read:
Sec. 24.20.206. DUTIES. The Legislative Budget and
Audit Committee shall
(1) report to the legislature its
recommendations relating to the confirmation of appointees
to the Board of Trustees of the Alaska Permanent Fund
Corporation;
(2) annually review the long-range operating
plans of all agencies of the state which perform lending or
investment functions;
(3) review periodic reports from all agencies of
the state which perform lending or investment functions;
(4) present a complete report of investment
programs, plans, performance, and policies of all agencies
of the state which perform lending or investment functions
to the legislature within 30 days after the convening of
each regular session;
(5) present to the legislature within 30 days
after the convening of each regular session a review of the
report of the governor under AS37.07.020(d) with
recommendations for needed legislation;
(6) in conjunction with the finance committee of
each house recommend annually to the legislature the
investment policy for the general fund surplus and for the
income from the permanent fund;
(7) provide for an annual post audit and annual
operational and performance evaluation of the Alaska
Permanent Fund Corporation investments and investment
programs;
(8) provide for an annual operational and
performance evaluation of the Alaska Housing Finance
Corporation and the Alaska Industrial Development and
Export Authority; the performance evaluation shall include,
but is not limited to, a comparison of the effect on
various sectors of the economy by public and private
lending, the effect on resident and nonresident employment,
the effect on real wages, and the effect on state and local
operating and capital budgets of the programs of the Alaska
Housing Finance Corporation and the Alaska Industrial
Development and Export Authority;
(9) provide assistance to the trustees of the
trust established in AS37.14.400 - 37.14.450 in carrying
out their duties under AS37.14.415 ;
(10) provide for an annual post audit and annual
operational and performance evaluation of the Alaska Health
Insurance Corporation .
* Sec. 14. AS36.30.015(e) is amended to read:
(e) The board of directors of the Alaska Railroad
Corporation , [AND] the board of directors of the Alaska
Aerospace Development Corporation , and the board of
directors of the Alaska Health Insurance Corporation shal
adopt procedures to govern the procurement of supplies,
services, professional services, and construction. The
procedures must be substantially equivalent to the
procedures prescribed in this chapter and in regulations
adopted under this chapter.
* Sec. 15. AS37.07.030 is amended to read:
Sec. 37.07.030. RESPONSIBILITIES OF THE LEGISLATURE.
The legislature shall
(1) provide for a budget review function;
(2) analyze the comprehensive operating and
capital improvements programs and financial plans
recommended by the governor;
(3) adopt legislation to authorize
implementation of the governor's comprehensive operating
and capital improvements programs and financial plans or
appropriate alternatives to those plans;
(4) provide for a post-audit function to cover
financial transactions, program accomplishment, and
compliance with legislative intent;
(5) adopt or revise the estimate of receipts
required to balance the succeeding fiscal year's budget in
order that proposed expenditures do not exceed estimated
receipts for that fiscal year;
(6) adopt, revise, or initiate revenue measures
in order to balance the succeeding fiscal year's budget and
the capital improvements section of the budget for the
succeeding six years ;
(7) appropriate funds for the operation of the
Alaska Health Insurance Corporation .
* Sec. 16. AS39.25.110 is amended by adding a new p
to read:
(30) the executive director of the Alaska Health
Insurance Corporation.
* Sec. 17. AS44.62.330(a) is amended by adding a new
paragraph to read:
(59) Alaska Health Insurance Corporation."
Renumber the following bill sections accordingly.
Page 22, line 25:
Delete "sec.5"
Insert "sec.7"
Page 23, line 1:
Delete "sec. 6"
Insert "sec. 8"
Page 23, line 4:
Delete "sec. 6"
Insert "sec. 8"
Page 23, lines 10 - 11:
Delete all material and insert:
" * Sec. 23. PHASED TRANSITION PERIOD. Notwithstanding the
provisions of AS21.58, the Alaska Health Insurance Corporation
shall implement the provisions of AS21.58 on an orderly and
gradual basis as follows:
(1) by December 31, 1994, the corporation shall begin
to implement the public involvement process required under
AS21.58.320, establish the data system required under
AS21.58.260 and begin collecting data, begin the first public
health improvement plan required under AS21.58.310, determine
the federal waivers necessary to implement AS21.58, and begin
to develop incentives to attract health care providers required
under AS21.58.110(16);
(2) by June31, 1995, the corporation shall complete
the uniform claims form required under AS21.58.110(4);
(3) by December 31, 1995, the corporation shall
establish the claims clearinghouse required under AS21.58.220,
determine the health care services required under AS21.58.170,
begin monitoring health care expenditures and utilization
patterns, and begin collecting fee information required under
AS21.58.230;
(4) by January 1, 1996, the corporation shall
implement the peer review system for utilization and quality
required under AS21.58.330 and shall adopt regulations that
establish eligibility criteria for enrollment in the state
health insurance plan, including a definition of the term
"resident" that is consistent with AS01.10.055 and the purposes
of this Act;
(5) by December 31, 1996, the corporation shall
establish the voluntary cost control system required under
AS21.58.280;
(6) by January 1, 1997, the corporation shall develop
a long-term health care plan required under AS21.58.110(19),
and establish the deductible and copayment amounts required
under AS21.58.180 and present options to the governor and the
legislature on how to finance a state health insurance plan
under a market based single payer system; in considering options
on financing a state health insurance plan the corporation shall
strive to structure the options in a manner that provides
protection for benefits provided to retired employees through
public or private retirement systems;
(7) by January 1, 1998, the corporation shall
establish the statewide health care expenditure target required
under AS21.58.270, and, subject to appropriation, begin to
provide health insurance coverage for state residents as
required under AS21.58.
* Sec. 24. Notwithstanding AS21.58.270(b), enacted in sec.
12 of this Act, the corporation shall increase the health care
expenditure target by the following percentages of the target
established under AS21.58.270:
(1) in 1998, 1.5 percent;
(2) in 1999, 1.0 percent; and
(3) in 2000, 0.5 percent.
* Sec. 25. This Act takes effect July1, 1994."
SENATOR DUNCAN stated that Amendment 17 was a comprehensive
approach to health care reform which represented the consensus
legislation brought together by the CHIPRA group and the task
force proposals. Amendment 17 would accomplish the three major
principals of health care reform: universal coverage, affordable
care, and quality care. He pointed out that Amendment 17
emphasizes preventive health, wellness programs, and under
served areas. Amendment 17 puts the mechanisms in place to
ensure preparedness for a state plan. He discussed the various
responsibilities of the Alaska Health Insurance Corporation
created in Amendment 17. In 1997, the proposed plan comes back
to the legislature which must approve the financing mechanism
and the revenue system at which time a state plan can move
forward or decide to stay under a federal plan.
Number 100
Senator Duncan stated that other options, including SB 367,
would not deliver a health care plan to this point because they
do not create a system that ensures affordable health for
everyone. He felt that health care reform would happen in the
present Congressional session and that universal coverage would
be the underlying principal. He explained that at the latest
universal coverage would be phased in by 1998; therefore,
Alaskans would have coverage. Without Amendment 17, Alaskans may
face a very expensive system because the unique needs of Alaska
probably would not be met by a federal plan. He concluded that
Amendment 17 removes everything from SB 367 except the Tort
Reform proposals and replaces it with language decided upon by
the interim work group.
CHAIRMAN RIEGER acknowledged all the hard work represented in
Amendment 17. He pointed out that the differences in opinion
seem to focus on the statewide health care expenditure target,
the sequence of events leading to the definition of the benefit
package and at what point the costs are known. He felt that in
other ways SB 367 and Amendment 17 were more parallel than
portrayed.
SENATOR ELLIS supported Amendment 17. He felt that the CHIPRA
2 proposal is a significant step forward. He opposed an
incremental approach. He pointed out that the CHIPRA 2 proposal
addresses some of his concerns: the need to have a system that
does not perpetuate the job-lock and the shortage of health care
providers. Amendment 17 represents a commitment to consumer
representation and involvement, more than other proposals. He
also noted that Amendment 17 meets federal guidelines and avoids
a federal take over of health care in Alaska. He thanked
Senator Duncan for offering Amendment 17.
Number 195
Senator Ellis explained that a telephone poll had been conducted
on public television on Wednesday night. The viewing audience
was posed with the following question: "Should every Alaskan be
guaranteed a basic level of health care?" Approximately 1700
Alaskans answered "yes" while 777 Alaskans said "no." Senator
Ellis concluded that the health care issue was a quiet crisis.
He said that small businessmen, loggers, fishermen, etcetera
typically do not come to committee hearings to comment on these
issues. He felt that on a bipartisan level, they could agree
that a federal solution to the unique needs of Alaska would not
be adequate.
SENATOR LEMAN stated that he had continuously heard from small
business people. He noted the polling of NFIB Alaska which were
probably on the other side of the issue due to concerns
regarding employer mandates. He said that of course people
would overwhelming agree that everyone should have a basic level
of health care, but much fewer would want to pay the cost.
SENATOR ELLIS stated that more business people, who are often
more conservative, react to the national reform plan which
relies on an employer based approach to health care. In Alaska,
there are so many people who are not tied directly to jobs which
would pose problems with the federal approach. He noted that
Amendment 17 resists employer mandates. He pointed out that the
single payer system is an alternative to the employer based tax.
He explained that the single payer approach would spread the
burden beyond small businesses. Most of the federal plans do
not spread the burden. He agreed that most businesses want to
provide health insurance, but they do not want to pay for it or
have it mandated. He felt that a federal plan would quickly tax
small businesses and mandate to the employers.
SENATOR LEMAN did not see the difference in Senator Duncan's
"avoiding cost shifting" and Senator Ellis' "spreading the
cost." Both ask that someone else shares the burden which is
cost shifting. He felt that Amendment 17 was a massive cost
shift.
Number 310
SENATOR ELLIS noted that there is cost shifting now, but without
a mechanism to control the cost. Under the CHIPRA proposal
doctors have agreed to voluntarily control costs in return for
everyone being able to pay their bill. He did agree that
Senator Leman's point was intellectually valid. Cost shifting
with controls would seem to be an improvement. He addressed
Senator Leman's concern with the figures regarding the uninsured
and hoped that Senator Leman realized that they had tried to be
as accurate as possible with the number of uninsured. He
suggested that they discuss the calculation of their figures.
SENATOR LEMAN stated that whatever the numbers, their proposal
would probably remain the same. He felt that through the
analysis, the numbers miss individuals covered part of the year
or those who chose not to be covered.
CHAIRMAN RIEGER took a hand vote. Senators Duncan and Ellis
voted "Yea" and Senators Rieger, Sharp, Leman and Miller voted
"Nay." The motion failed.
SENATOR ELLIS moved Amendment 18.
AMENDMENT 18
Page 19, after line 13:
Insert a new subsection to read:
"(c) Notwithstanding any other provision of law, a
committee member is subject to the provisions of AS 39.50
as if the committee member were a member of a state commission
or board described under AS 39.50.200(b)."
Reletter the following subsections accordingly.
Page 20, line 20:
Delete "(d)(1)-(5)"
Insert "(e)(1)-(5)"
Page 20, line 26:
Delete "(d)"
Insert "(e)"
Page 21, after line 31:
Insert a new subsection to read:
"(b) Notwithstanding any other provision of law, a
committee member is subject to the provisions of AS 39.50
as if the committee member were a member of a state commission
or board described under AS 39.50.200(b)"
Reletter the following subsections accordingly.
SENATOR MILLER objected. SENATOR ELLIS explained that Amendment
18 would place the members involved in the health care reform
project under SB 367 to fall under the conflict of interest and
disclosure statutes of the state. SENATOR MILLER removed his
objection. Hearing no objection, Amendment 18 was adopted.
SENATOR DUNCAN moved Amendment 19. SENATOR RIEGER objected.
SENATOR DUNCAN explained that Amendment 19 gives the two
advisory committees a better balance of consumers.
AMENDMENT 19
Page 21, line 26 - page 22, line 4:
Delete all material.
Insert "provided in this subsection. In appointing members
to the committee, the governor shall ensure that a majority of
the members represent the interests of health care consumers.
The governor shall appoint
(1) two persons with experience in providing health
care services;
(2) one person who is an accountant with experience in
health care insurance;
(3) four persons who represent the public."
Page 24, line 19:
Delete "four"
Insert "five"
Page 24, lines 20-24:
Delete all material and insert:
"(1) one person who is licensed under AS 08.64;
(2) one person who is a health care provider licensed
under AS 08 but who is not licensed under AS 08.64; and
(3) three persons who represent the interests of
health care consumers."
SENATOR SHARP asked for clarification of AS 08 and AS 08.64.
SENATOR DUNCAN said that it was the same references as in SB
367.
Number 390
CHAIRMAN RIEGER did not have a strong feeling regarding the
amount of consumer versus provider representation; however,
Amendment 19 may go too far. He opposed Amendment 19, but
offered to work on the concept. He did want public
representation, but was unsure of the design. He was not
convinced that a consumer dominated board would produce the best
plan. SENATOR DUNCAN asked for a roll call vote.
SENATOR SHARP reviewed AS 08 and AS 08.64. CHAIRMAN RIEGER
believed that the statutes referred to anyone other than a
physician or osteopath.
Upon a roll call, Senators Duncan and Ellis voted "Yea" and
Senators Rieger, Sharp, Leman, and Miller voted "Nay." The
motion failed.
CHAIRMAN RIEGER pointed out that there was an error in the draft
CS on page 22. The drafter failed to make the changes as
specified in Amendment 1; it would change "prematernal" to
"prenatal." That would be changed in the final CS. He also
noted that on page 23, line 3 should read "whichever is lower"
not "whichever is higher." Chairman Rieger moved to adopt that
amendment.
SENATOR DUNCAN asked if the premium could not exceed $100.
CHAIRMAN RIEGER said yes. There was no objection to the change
already incorporated in the CS.
Number 444
SENATOR DUNCAN moved a conceptual amendment, Amendment 20, in
response to the single subject violation. He moved that the
provisions relating to the cigarette tax, the changing of the
interest rate, and provisions relating to .08 all be removed.
Those provisions should be forwarded out of the committee in
separate legislation.
SENATOR MILLER objected.
CHAIRMAN RIEGER informed the committee that he had received an
opinion from legal services similar to that of Senator Duncan
and he had also spoken with the Judiciary Chairman. He
explained that he had asked the Judiciary Chairman to review the
single subject rule regarding SB 367. Perhaps, it would be
necessary to separate the subjects as Senator Duncan's amendment
suggests. Chairman Rieger also noted that the Judiciary
Chairman has other .08 language, Tort Reform measures, and
judgement on interest language. SENATOR DUNCAN reiterated that
SB 367 was unconstitutional.
CHAIRMAN RIEGER stated that he was not convinced that SB 367 was
unconstitutional. SENATOR DUNCAN said that if SB 367 passes out
as it is then the Courts would rule against it. CHAIRMAN RIEGER
pointed out that the Alaskan courts have never ruled a bill
unconstitutional for violation of the single subject rule.
SENATOR DUNCAN noted that when there has been a clear opinion of
a violation, the legislature has always corrected that.
SENATOR ELLIS noted his support of the pieces of the
legislation, but the bill seems to be doomed. He supported
Amendment 20.
CHAIRMAN RIEGER reiterated that he would forward Mr. Ford's memo
and the question to the Judiciary Chairman to decide whether or
not the bill should be divided. He opposed the motion.
Upon a hand vote, Senators Sharp, Duncan, and Ellis voted "Yea"
and Senators Rieger, Leman and Miller voted "Nay." The motion
failed.
SENATOR MILLER moved SB 367 HES as amended out of committee with
individual recommendations and accompanying fiscal notes.
Hearing no objection, it was so ordered.
There being no further business before the committee, the
meeting was adjourned at 1:40 p.m.
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