02/22/2006 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| Overview: Medicare Prescription Drugs - Department of Health and Social Services | |
| SB250 | |
| SB299 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 299 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 250 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE
February 22, 2006
1:28 p.m.
MEMBERS PRESENT
Senator Fred Dyson, Chair
Senator Gary Wilken, Vice Chair
Senator Kim Elton
Senator Donny Olson
MEMBERS ABSENT
Senator Lyda Green
COMMITTEE CALENDAR
Overview: Medicare Prescription Drugs - Department of Health
and Social Services
SENATE BILL NO. 250
"An Act extending the termination date of the Council on
Domestic Violence and Sexual Assault; and eliminating statutory
references to the network on domestic violence and sexual
assault."
HEARD AND HELD
SENATE BILL NO. 299
"An Act relating to preventing unfair discrimination against a
health care provider who is willing to meet a health insurer's
terms and conditions for participation in the insurer's plan,
policy, or contract for health care services; amending the
definition of 'provider' as it relates to authorized collective
negotiations by physicians affecting the rights of providers
under health benefit plans; and providing for an effective
date."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 250
SHORT TITLE: DOMESTIC VIOLENCE/SEXUAL ASSAULT COUNCIL
SPONSOR(s): RULES BY REQUEST OF LEG BUDGET & AUDIT
01/26/06 (S) READ THE FIRST TIME - REFERRALS
01/26/06 (S) HES, FIN
02/17/06 (S) HES AT 1:30 PM BUTROVICH 205
02/17/06 (S) Heard & Held
02/17/06 (S) MINUTE(HES)
02/22/06 (S) HES AT 1:30 PM BUTROVICH 205
BILL: SB 299
SHORT TITLE: NONDISCRIMINATION HEALTH CARE PROVIDERS
SPONSOR(s): SENATOR(s) SEEKINS
02/14/06 (S) READ THE FIRST TIME - REFERRALS
02/14/06 (S) HES, L&C
02/22/06 (S) HES AT 1:30 PM BUTROVICH 205
WITNESS REGISTER
Rod Moline, Director
Division of Senior and Disabilities Services
Department of Health and Social Services (DHSS)
PO Box 110680
Juneau, AK 99811-0680
POSITION STATEMENT: Commented on overview of Medicare
Prescription Drugs.
Essien Ukoidemabia
SeniorCare Information Office
Division of Senior and Disabilities Services
Department of Health and Social Services
3601 C Street
Anchorage, AK 99503-5684
POSITION STATEMENT: Presented overview on Medicare Prescription
Drugs.
Bill Tandeske, Commissioner
Department of Public Safety
PO Box 111200
Juneau, AK 99811-1200
POSITION STATEMENT: Testified on SB 250.
Bill Hogan, Deputy Commissioner
Department of Health and Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Testified on SB 250.
Susan A. Parkes, Deputy Attorney General
Criminal Division
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Testified on SB 250.
Pat Davidson, Legislative Auditor
Division of Legislative Audit (DLA)
Alaska State Legislature
PO Box 113300
Juneau, Alaska 99811-3300
POSITION STATEMENT: Commented on SB 250.
Tom Maher, Staff
to the Legislative Budget and Audit Committee
Alaska State Legislature
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified on SB 250.
Peggy Brown, Executive Director
Alaska Network on Domestic Violence and Sexual Assault
130 Seward Street
Juneau, AK 99801
POSITION STATEMENT: Commented on SB 250.
Barbara Mason, Executive Director
Council on Domestic Violence and Sexual Assault
Department of Public Safety
PO Box 111200
Juneau, AK 99811-1200
POSITION STATEMENT: Testified on SB 150.
Senator Ralph Seekins
Alaska State Legislature
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 299.
George Rhyneer, MD
Alaska Physicians and Surgeons
Anchorage, AK
POSITION STATEMENT: Supported SB 299.
Mike Hogan, Executive Director
Alaska Physicians and Surgeons
Anchorage, AK
POSITION STATEMENT: Supported SB 299.
Greg Loudon, Health Care Consultant
Willis of Alaska
Anchorage, AK
POSITION STATEMENT: Opposed SB 299.
Colleen Savoie
Willis of Alaska
Anchorage, AK
POSITION STATEMENT: Opposed SB 299.
Jack McRae, Senior Vice President
Blue Cross Blue Shield of Alaska
POSITION STATEMENT: Testified on SB 299.
William Pfeifer, DC
Alaska Chiropractic Society
Anchorage, AK
POSITION STATEMENT: Supported the concept of SB 299.
Rose Kalamarides, Administrator
Alaska Teamster-Employer Trust
Anchorage, AK
POSITION STATEMENT: Opposed SB 299.
ACTION NARRATIVE
CHAIR FRED DYSON called the Senate Health, Education and Social
Services Standing Committee meeting to order at 1:28:28 PM.
Present were Senator Gary Wilken and Chair Fred Dyson. Senators
Kim Elton and Donny Olson joined the meeting in progress.
^Overview: Medicare Prescription Drugs - Department of Health
and Social Services
CHAIR DYSON announced that the committee would hear an overview
on Medicare prescription drugs.
1:33:32 PM
ROD MOLINE, Director, Division of Senior and Disabilities
Services, Department of Health and Social Services (DHSS),
explained that his division has oversight responsibility for the
Medicare Part D prescription drug program. He introduced Essien
Ukoidemabia, the program coordinator and primary presenter.
ESSIEN UKOIDEMABIA, SeniorCare Information Office
("SeniorCare"), Division of Senior and Disabilities Services,
Department of Health and Social Services, informed members that
SeniorCare houses the Medicare office and ensures there are
competent Medicare counselors; these are volunteers, 53
throughout the state. They received three days of training in
Anchorage, and after certification returned to their communities
to do face-to-face work. SeniorCare then set up enrollment-
assistance networks, sites at which enrollment for Medicare
Part D occurs.
She offered a statewide listing of enrollment sites, year-round
volunteers and related information. She said SeniorCare
counsels Medicare recipients on anything involved with Medicare.
Recipients include those who are dual-eligible for Medicare and
Medicaid; Medicare recipients who have other health care
insurance and thus need to compare coverage; and those who have
Medicare only. The latter may need extra help from Social
Security to pay their premiums, deductibles and co-insurance if
their income is limited. If their income isn't limited enough
for Social Security to help, however, SeniorCare is brought to
their attention, since it may pay deductibles and premiums for
Medicare Part D for those over 65 years of age.
1:37:45 PM
MS. UKOIDEMABIA said her organization realizes not everyone has
a computer and thus offers personal contact to such people.
CHAIR DYSON called an at-ease from 1:39:25 PM to 1:39:50 PM.
MS. UKOIDEMABIA, in response to Chair Dyson, explained that
Medicare was implemented in 1965 as a health care program for
individuals 65 and over. It didn't include prescription drugs.
Dual-eligible participants got their prescription drugs under
the Medicaid program run by the state. Now, however, they must
get them from Medicare. Only a couple of drugs are excluded by
Medicare that Medicaid still takes care of.
She noted this will be administered by private companies - 11
prescription drug plans that are contracted to sell their drugs
to Medicare recipients. Those 11 plans have 28 options. Dual-
eligible participants cannot choose among all options, however,
because the premiums for some are higher than the $34.66 cap
that has been set. Instead, the Centers for Medicare and
Medicaid Services (CMS), U.S. Department of Health and Human
Services enrolled dual-eligible individuals, as of December 31,
into a plan that took effect January 1, 2006.
1:42:29 PM
MS. UKOIDEMABIA reported that her job is to get hold of anyone
missed by the computer to ensure people are on track and don't
do without their prescriptions drugs for even a day. Enrollment
began November 15, 2005, and goes until May 15, 2006. Normal
enrollment, however, will be November 15 through December 31 of
each year after this - 45 days. No prescription drug plan
existed before January 31, 2006. A transition program, the
"discount card," began June 1, 2004; it still exists, and if a
person didn't use all of his or her benefit in 2005, then
whatever was left on that discount card was rolled over into
this year, but cannot be used after May 15, 2006.
CHAIR DYSON asked what seniors can do to get help.
MS. UKOIDEMABIA described the medicare.gov website, where a
person can be guided through the plans. Someone who wants to
talk to a living person can phone the senior center or meal
site, and will be told who in their community serves as a
volunteer. The state hotline is also available.
1:46:43 PM
MS. UKOIDEMABIA provided details about seniors near the federal
poverty level. In response to Chair Dyson, she said senior
citizens should know the following: the number of her office,
1-800-478-6065; the dosage of their prescriptions; and the
information on their red, white and blue Medicare card.
1:51:25 PM
CHAIR DYSON remarked that he didn't see any counselors at the
Chugiak senior center.
MS. UKOIDEMABIA affirmed that, saying her job is to try to
recruit and establish offices in that area.
1:53:57 PM
MS. UKOIDEMABIA offered some details relating to a hypothetical
scenario posed by Senator Wilken.
CHAIR DYSON thanked the presenters.
SB 250-DOMESTIC VIOLENCE/SEXUAL ASSAULT COUNCIL
CHAIR DYSON announced SB 250 to be up for discussion. He opened
public testimony.
1:56:11 PM
CHAIR DYSON interpreted Commissioner Tandeske's written comments
to be saying he agrees with the auditor's conclusions about the
composition of the board, but not with the proposed Amendments 1
and 2, offered and discussed at the 2/17/06 hearing. Chair
Dyson asked whether that is a fair summary.
BILL TANDESKE, Commissioner, Department of Public Safety (DPS),
replied, "Almost." He clarified that he doesn't take issue with
the finding of an appearance of a possible conflict in requiring
that the governor consult the Network for Domestic Violence and
Sexual Assault (Network). However, as a practical matter, he'd
be inclined to consult it anyway. He also doesn't oppose the
designation of a rural position, which he has advocated for.
However, excluding some small communities such as Pelican or
Angoon - connected only by the Alaska Marine Highway - perhaps
was overly restrictive. He emphasized having true public
members that bring a wide variety of life experiences to the
Council on Domestic Violence and Sexual Assault (Council) - or
to any board or commissioner, for that matter.
1:58:48 PM
BILL HOGAN, Deputy Commissioner, Department of Health and Social
Services (DHSS), referenced his letter regarding Senator
Therriault's position on the auditor's comments and the proposed
amendments. Noting his own comments would be similar to
Commissioner Tandeske's, Mr. Hogan said DHSS doesn't believe the
Network should have exclusive consultative authority - the
system has many other stakeholders including police, hospitals
and other providers from whom input is important. He concurred
with having a designated rural member, but suggested the
language in the proposed amendment is restrictive. He also
suggested, in general, that the pool of potentially qualified or
competent candidates for the Council shouldn't be limited; he
noted that his written comments reflect that.
CHAIR DYSON asked whether Mr. Hogan agreed with the
recommendations of the auditor, put forth in SB 250, and
disagreed with the proposed amendments.
MR. HOGAN affirmed that.
CHAIR DYSON called a brief at-ease.
2:01:25 PM
SUSAN A. PARKES, Deputy Attorney General, Criminal Division,
Department of Law (DOL), noting that she is the DOL
representative on the Council, expressed support for extending
the Council and offered to answer questions.
CHAIR DYSON referenced an e-mail from Ms. Parkes that stated,
among other things, opposition to the amendment to SB 250 that
would exclude state employees from serving as public members.
2:03:42 PM
PAT DAVIDSON, Legislative Auditor, Division of Legislative Audit
(DLA), informed the committee that after the last hearing and
review of amendments, she'd gone back to look at the sunset
reviews conducted by DLA in the past. She'd been looking for
any findings and recommendations in those reports that had, at
their core, a concern about the composition of the Council. She
reported that none of them identified the actual composition of
the Council as a core problem.
SENATOR ELTON arrived at 2:04:22 PM.
MS. DAVIDSON, in response to Chair Dyson, explained that the
amendments discussed at the previous [2/17/06] hearing seemed to
address who was on the Council. Therefore, she'd wanted to
determine if there had been problems with the Council's
composition or the qualifications of appointees in the past,
given the old rules. She'd found no problems relating to the
composition of the Council as it currently exists.
2:05:49 PM
TOM MAHER, Staff to the Legislative Budget and Audit Committee
(LB&A), reported that he'd checked with Senator Therriault on
the amendment and that Senator Therriault had also reviewed the
departmental responses. Mr. Maher noted that LB&A had
eliminated the reference to the Network. Although Senator
Therriault was quite supportive of putting back a Network member
on the Council as an ex-officio, nonvoting member, after
reviewing the departmental responses he feels much less strongly
about it because the departments were opposed to that and
indicated it would be a conflict. He added that, in general,
Senator Therriault doesn't support a complete rewriting of the
Council's composition.
PEGGY BROWN, Executive Director, Alaska Network on Domestic
Violence and Sexual Assault, supported the extension of the
Council. She said the suggested language that was submitted by
the Network regarding its elimination from statute was merely a
response to a request, and the Network would be happy to place
the matter entirely in the hands of the Council.
She referred to a letter to Ms. Davidson from the chair of the
Council. Ms. Brown reported that it basically says the
following: the Council recognizes and understands the merit of
this issue; it's important to note that the governor is not
bound by any recommendation by the Network; and because of this
safeguard, the Council believes obtaining input from the
Network, which has significant knowledge and expertise,
outweighs any limitations or theoretical conflicts.
2:08:25 PM
MS. BROWN reminded members that in late 1978 the Network formed,
and in late 1981 the Council was formed at its behest, because
of a perceived need for a state agency with pass-through
capabilities for funding. She said the Network put forth the
items in the amendments to formalize existing beneficial
interactions between the Network and the Council. For instance,
the Council currently invites the director of the Network to
participate in its meetings.
She explained that the idea behind establishment of an ex-
officio position for a Network member is to provide
institutional knowledge. This applies not only to programs
statewide, but also to work with the governor's Council on
Disability and Special Education, Office of Children's Services
(OCS), and the Division of Public Assistance. "We're very tied
in to other state systems," Ms. Brown pointed out. She
disagreed that being an ex-officio member would be a conflict,
and offered that it would be an asset instead, providing
stability and knowledge of domestic violence and sexual assault
issues across the state. It just formalizes what already
happens and ensures continuity, she concluded.
2:10:26 PM
MS. BROWN emphasized the Network's expertise, citing her own
background in both law enforcement and medicine as an example
and mentioning the varying backgrounds of other staff; she
highlighted their desire to be at the governor's service and to
provide a screening process for potential candidates for
membership.
2:12:39 PM
MS. BROWN remarked that the criteria for public members in the
amendments were put forth to ensure a broad perspective within
the Council. Expressing reservations about the exclusion of
state workers from serving as public members on the Council, she
offered to work with anyone on that part of the amendment.
SENATOR OLSON arrived at 2:14:53 PM.
SENATOR OLSON asked Ms. Brown to relate her position on the
proposed amendments.
MS. BROWN replied that the Network should remain at the service
of the governor in making recommendations of potential
appointees, and that the director of the Network should be an
ex-officio member of the Council. She supported the designation
of a rural public-member seat on the Council, as well as a seat
for a survivor of domestic violence or sexual assault, or the
advocate of such a survivor.
SENATOR OLSON asked her position on the amendment that has two
public members, one a survivor and one an expert in the field.
MS. BROWN replied that she supports the amendment.
2:18:26 PM
BARBARA MASON, Executive Director, Council on Domestic Violence
and Sexual Assault, Department of Public Safety, reported that
she'd contacted all Council members and that much of her
testimony would be a synopsis of their comments. The first
question almost every member had asked was the purpose of the
amendment and the situation it was trying to fix. Most were
also concerned about whether the bill would create problems.
For example, it would remove from consideration over 14,000
public employees that are Alaskan residents with expertise in
the field of sexual assault and domestic violence. There are
some inconsistencies with the public-employment pieces in
differentiating between government employees among the
municipalities, boroughs, cities, tribal entities and so forth,
Ms. Mason said, which asks the question of defining "state
employee."
She said the Council supports extending the sunset audit to 2014
and doesn't oppose having one public member from rural Alaska.
However, the Council is concerned about the exclusion of members
from communities on the Alaska Marine Highway and asks to keep
that option open. The Council opposes restricting the election
of the other two public members for several reasons, such as how
to define an expert in this field - there are no university or
college degrees in domestic violence or sexual assault, and no
standard qualifications to identify such a person. Many of the
current committee members have achieved expertise through
informal means, Ms. Mason noted.
She reported that the Council is concerned about subsection (c)
of the amendment due to its limitation; the Council would prefer
to keep the pool as large as it can. The Council does not
support having the executive director of the Network as an ex-
officio member - the Network is composed of the programs that
are funded, and it receives grants issued by the Council, so a
conflict-of-interest issue is the cause for concern. The
Council is pleased with its current relationship with the
Network, Ms. Mason said, and works to include their opinions.
2:23:55 PM
MS. MASON emphasized that all the meetings are public and
everyone is more than welcome to participate. The Council
opposes excluding state employees as public members, since they
often have a great deal of experience and expertise in the
field. Domestic violence victims receive services from law
enforcement officers, emergency medical people, OCS,
prosecutors, legal advocates, courts, tribal courts, judges,
housing authorities, batterers' programs, treatment programs,
and so forth. A number of people working for these agencies are
government employees.
2:25:55 PM
SENATOR ELTON asked why the Council prefers to have a majority
of state employees, rather than looking for additional outside
perspective from the municipalities, nonprofits organizations
and so forth.
MS. MASON claimed state workers have a unique expertise, given
their positions within the state, and said the Council hesitates
to limit the positions to advocates for the victims. She asked
where the expertise would come from when dealing with offenders.
2:28:14 PM
SENATOR ELTON explained that his proposed amendment doesn't
limit the public seats to nonprofit employees or the medical
profession. Instead, it merely prevents the possibility of
overrepresentation by one common category of people.
MS. MASON remarked that in some ways the Council's purpose is to
address some state government entities that deal with domestic
violence issues. He suggested state workers have valuable
insight into the operation of the aforementioned entities.
SENATOR ELTON responded that it seems stacked in favor of the
state, however.
CHAIR DYSON advised Senator Elton that if he wished to modify
any of his amendments, the committee would hear them at the next
bill hearing. [SB 250 was held over.]
SB 299-NONDISCRIMINATION HEALTH CARE PROVIDERS
2:32:37 PM
CHAIR FRED DYSON announced SB 299 to be up for consideration.
SENATOR RALPH SEEKINS, Alaska State Legislature, sponsor, began
by paraphrasing the full title, which read:
An Act relating to preventing unfair discrimination
against a health care provider who is willing to meet
a health insurer's terms and conditions for
participation in the insurer's plan, policy, or
contract for health care services; amending the
definition of 'provider' as it relates to authorized
collective negotiations by physicians affecting the
rights of providers under health benefit plans; and
providing for an effective date.
He said AS 21.36.090(d) pertains to unfair discrimination
against a person who provides services covered under a group
health insurance plan. It comes into play as a function of the
relationship between health care providers and group health care
systems. Recently, the U.S. Supreme Court upheld Kentucky's
"any willing provider" (AWP) law, which offers a more robust
alternative to Alaska's current law. Thus SB 299 would replace
AS 21.36.090(d) with case-tested AWP language, Senator Seekins
told members.
He noted that the move towards AWP language also required a
change to the definition of "health care provider."
Consequently, the original definition as used in Title 23 had to
be restored. This is found in Section 2 of the bill. Senator
Seekins said the AWP concept promotes the individual's ability
to choose a health care provider. The AWP law says a health
insurer cannot discriminate against any provider that is willing
to meet the terms and conditions for participation established
by the health insurer, assuming the provider is located within
the geographic coverage area of the health benefit plan.
He explained that this is especially pertinent when, for
example, a woman in the second trimester of pregnancy changes
jobs and may be forced to change health care providers if her
current provider isn't recognized by her new health insurance
plan. If the patient's non-network physician is willing to
accept the network fee schedule - and meets the insurance
company's licensing and credentialing standards - the patient
should be able to continue to see the known and trusted doctor.
He concluded by saying SB 299 adopts into Alaska law the "any
willing provider" concept, thereby promoting and preserving
Alaskans' ability to choose their own health care providers.
Senator Seekins informed the committee that a number of experts
were present to testify and offer examples.
2:36:13 PM
SENATOR SEEKINS, in response to Senator Wilken, said there was
no fiscal note that he knew of.
SENATOR OLSON asked how the "638" contractors in rural Alaska
would be affected. He explained that this relates to Public Law
638, which applies to health corporations in Bush Alaska that
receive federal funds.
SENATOR SEEKINS deferred to one of the experts.
2:38:09 PM
GEORGE RHYNEER, MD, Alaska Physicians and Surgeons, informed
members that he is a cardiologist from Eagle River, in practice
in Alaska for 35 years. He noted that Alaska Physicians and
Surgeons is a Southcentral physician group that, in this case,
is representing its patients.
He suggested all patients would support this because it provides
freedom of choice. He gave examples. For instance, he prefers
to refer patients to a certain endocrinologist, but finds some
cannot see that doctor because they'd be severely penalized
economically by the insurance company. Furthermore, people with
life-threatening illnesses aren't benefited by switching
physicians. Not having the ability to choose one's own
physician is counter-therapeutic. For best outcomes in illness,
Dr. Rhyneer said, it's imperative that the patient trust the
physician and have choice.
He also talked about the economic effect on physicians when an
insurance company can select or deselect doctors to be on the
panel. He said it makes it especially difficult to recruit
physicians to come to Alaska if, after they set up business and
establish patients, an insurance company can threaten
deselection unless the doctor kowtows to an onerous economic
relationship. Dr. Rhyneer concluded by saying there are
innumerable good reasons for having this legislation.
2:42:51 PM
CHAIR DYSON asked about the relationship between Alaska
Physicians and Surgeons Group and the Alaska Medical
Association.
DR. RHYNEER explained that the latter is a professional
organization, partnered with the American Medical Association.
The first organization was started six or seven years ago as
more of a business and legislative group. They are separate
organizations, although many members of one belong to the other.
CHAIR DYSON referred to unspecified documentation he'd been
given that says passage of this law will drive up costs. He
offered his understanding that the bill says whoever the
provider is must agree to the fee schedule offered by the third-
party payer. He asked whether that is Dr. Rhyneer's
understanding of what is being done.
DR. RHYNEER affirmed that.
CHAIR DYSON asked Dr. Rhyneer to clarify his statement that
doctors would have to agree to an onerous remuneration schedule.
DR. RHYNEER explained that when an insurance company has a large
share of the business in a community and can direct its patients
from one group of physicians to another - by having or not
having them on its panel - then it's hard for a physician to
refuse the offered pay scale, even if it's less than overhead
costs, because all those patients could be sent elsewhere.
CHAIR DYSON related his understanding that in this bill a doctor
would give a group discount for having all those referrals. If
one patient decided to stick to another doctor, however, then
the other doctor would have to agree to this discount schedule
in order to be paid by the third-party payer.
DR. RHYNEER affirmed that. He suggested in larger communities
such as New York City or Chicago, with thousands of physician
groups and perhaps hundreds of hospitals, it's easier to defend
that kind of predatory activity by insurance companies.
2:46:40 PM
SENATOR ELTON said it seems if an employer cannot negotiate a
price break on health care, then either the employer's health
care costs could rise or changes could be made to employees'
benefits.
DR. RHYNEER responded that in other jurisdictions there has been
no apparent change in the cost to companies or providers of
insurance, through their premiums, when AWP laws have been
established; it appears, from "observations and measurements,"
that AWP has no deleterious effect on that relationship.
SENATOR ELTON expressed interest in the observations cited by
Dr. Rhyneer. He noted that others have cited observations
pointing to the opposite conclusion.
DR. RHYNEER said in Alaska almost all money spent on health care
remains in Alaska. It goes towards improving care, machinery,
modernization and the availability of nurses; very little goes
elsewhere to shareholders and so forth. He pointed out that so-
called managed care has had a serious effect on the
availability, and probably the quality, of health care delivered
outside of Alaska.
SENATOR ELTON reiterated that data would be helpful.
SENATOR OLSON remarked that he thought money from Providence
Alaska Medical Center went back to the main offices outside the
state, which helped to ensure that other health care ventures
were put in place.
DR. RHYNEER replied that he has heard that rumor, both in the
past and recently. However, he is on the board for that
institution, and every month they get a rundown of the finances.
He said he has never seen evidence that money is transferred to
the Seattle office, which is an owner. He added that the
corporation does require remuneration for the services it
provides to the local hospitals - the outsourcing, the billing,
and so forth, which are done in Seattle. However, the majority
of the "margin" money is used for capital improvements.
SENATOR OLSON expressed concern for owners of small businesses,
who often have trouble affording health insurance for employees.
DR. RHYNEER said he believes there is a far more elaborate
answer than he could provide. "I think this, from observations,
plays a very small part in that issue," he added.
SENATOR OLSON asked whether the concept in this bill works
against that, however.
DR. RHYNEER replied that there is no evidence it does.
SENATOR SEEKINS returned to earlier discussion, saying, "I think
the answer to your question about whether or not your physician
has to accept that fee is correct, but you get to go and say,
'Will you do this for me?' It's not that you have to accept the
entire panel of people that you send to that physician."
2:53:12 PM
SENATOR WILKEN asked whether this legislation will help attract
physicians to Alaska or will deter them.
SENATOR SEEKINS opined that it will help, expanding the universe
of available physicians.
2:54:15 PM
MIKE HOGAN, Executive Director, Alaska Physicians and Surgeons,
noted that his organization is a 170-member physician group in
Anchorage. He spoke in strong support of SB 299. In answer to
Senator Wilken's question, he said his group has been working
with other entities to create the most favorable health care
environment in Alaska to attract new physicians - this is one of
their chief goals, and this bill is one piece among several
pieces of legislation over the years. He said the likely
relationship with insurance carriers is one criterion that new
doctors will look at. Now that the Supreme Court has cleared
the AWP idea, he surmised there will be an increase in
legislation in other states. He offered his belief that this
will attract new physicians and be good for patients.
SENATOR ELTON pointed out an element not being discussed: the
ability of employers of large numbers of people to negotiate
health care costs, which also would benefit patients. He said
it seems the AWP system will give less incentive for any health
care provider to negotiate a fairly significant break for the
employer - and thus for the employee.
MR. HOGAN referred to the group-discount model, called
"steerage," saying it works much better in states with an
overabundance of physicians. The state medical association has
calculated Alaska to be 400 physicians short, out of a private
physician population of about 1,200. Some plans other than Blue
Cross have had trouble establishing significant panels in this
state. He asked Senator Elton to elaborate on his concern.
SENATOR ELTON explained that he understands the benefit of
patients' ability to choose their doctors. However, this also
reduces employers' ability to negotiate lower rates, and that
ability would benefit patients through either lower costs or a
broader menu of health care options.
MR. HOGAN reported that Kentucky has looked at this issue and
costs for the last ten years; he indicated he could provide that
information, and said the state contends that it hasn't
significantly affected costs. Acknowledging that legislators
will have to weigh the argument posed by Senator Elton when
deliberating, he nonetheless emphasized focusing on patients'
ability to choose their health care providers.
SENATOR ELTON requested that Mr. Hogan provide the information
from Kentucky.
CHAIR DYSON pointed out that when there is are negotiated lower
prices for one group of employees, it works against people who
don't have insurance and thus pay their own way.
3:00:12 PM
SENATOR OLSON asked how this bill would affect the "638"
contractors.
MR. HOGAN said he didn't know, but could provide an answer.
CHAIR DYSON asked to hear from any testifiers who had time
constraints or wouldn't be available the following Wednesday.
3:01:12 PM
GREG LOUDON, Health Care Consultant, Willis of Alaska, spoke in
opposition to SB 299. He began by discussing cost containment,
a broad term for a toolbox of methods to reduce costs for health
plans. He said contracting with a select group of providers is
one of the best methods his organization has for limiting costs.
They can't expect discounts from providers without offering them
directed health care dollars in exchange. He related examples.
He explained that contracting is key to offering and using cost-
containment methods; he mentioned the quality of the provider
and ongoing care. Mr. Loudon said it isn't just a matter of
price. When choosing health care providers, they check the
background and experience as well as any complaints. Health
plan members know there has been a basic level of quality
assurance, and can choose providers outside of the contract -
but at a lower reimbursement level.
He said health savings accounts and health reimbursement
accounts are dependent on getting good data, including price and
quality data. The contracts provide good data. These
management programs are another way to contain costs, he
suggested, and should work with the contractor providers to try
to improve the quality of care and decrease the time people
spend in hospitals or other high-cost treatment options.
3:04:13 PM
SENATOR OLSON asked how to ensure health maintenance
organizations (HMO) don't become a predominant provider of
health care in Alaska.
MR. LOUDON replied that he doesn't see how this bill would
prevent that. He offered his understanding that the reason
Alaska doesn't have HMOs is that any provider which wants to
take risks is required to file as an insurance company. He said
there are lots of hoops to jump through besides the contracting
issue this bill addresses.
3:05:10 PM
COLLEEN SAVOIE, Willis of Alaska, noted that her organization
represents a number of insured plans and large (indisc.)
entities. She spoke in opposition to SB 299 because it would
result in increased medical costs. She pointed out that
employers are struggling with the increased cost of health care.
They are reducing benefits, increasing the employee contribution
rate or eliminating it altogether. Using a preferred provider
network has been very successful so far in helping to control
health care costs, Ms. Savoie said. She gave an example, noting
that SB 299 would include hospitals as well as other providers.
She asserted that AWP-type legislation will affect costs. She
cited a 2001 study published in the Journal of Health Economics
as saying health expenditures are higher when AWP laws are
enacted. Ms. Savoie also noted that the National Association of
Health Underwriters in 2003 identified AWP legislation as a
threat to market stability.
She told members the Federal Trade Commission (FTC) opposes AWP
legislation. Directing attention to a report by the FTC and the
Department of Justice, published in July 2004, Ms. Savoie
encouraged members to review this report. She noted that it
says AWP laws have anti-competitive effects; make provider
discounts less likely; and restrict the ability of health
insurers and plans to structure offerings with varying levels of
choice. Thus they actually reduce the options.
3:09:58 PM
SENATOR ELTON requested copies for the committee of the 2001,
2003 and 2004 reports Ms. Savoie had referenced.
JACK McRAE, Senior Vice President, Blue Cross Blue Shield of
Alaska (Blue Cross), informed the committee that his company has
about 50 percent of Alaska's physicians on contract now, and
believes this saves the membership hundreds of thousands of
dollars. With the contracts, the company is able to negotiate
with the physicians.
He emphasized that his company does pay when people go to non-
contracted physicians, though it may pay less. Furthermore,
regarding continuity of care, Mr. McRae said Alaska's
legislature addressed the issue in 2000 by passing a so-called
patients' bill of rights, which Blue Cross supported. Under
that, a patient continues to be seen by the physician until
treatment is completed, and Mr. McRae said Blue Cross continues
to pay the bills as before; he gave an example. Mr. McRae
mentioned the FTC study and concluded by highlighting another
study by Arthur Andersen (ph), completed for 1998-2002 that
showed AWP legislation would increase costs by 12 percent.
3:12:57 PM
WILLIAM PFEIFER, D.C., Alaska Chiropractic Society, thanked
Senator Seekins and the committee for bringing up this bill,
which he believes is needed in Alaska. However, he pointed out
language concerns that he hadn't yet had time to address with
the sponsor.
He referred to page 1, line 12, through page 2, line 1, which
read, "This subsection does not affect different reimbursements
to different types of health care providers, nor does if affect
coverage for the service of a particular type of health care
provider." Saying it seems to reverse the intent of the
legislation, Dr. Pfeifer proposed exploring that further with
the sponsor in order to clarify it or have it deleted.
He referred to page 2, line 9, "(B) does not include insurance
under the Alaska Workers' Compensation Act, AS 23.30. He said
there may be some good rationale for that. However, having sat
on the medical services review committee for workers'
compensation this last year, he'd filed a minority report
because the recommendation was to allow the insurance company or
employer to choose the treating physician of an injured worker.
Dr. Pfeifer expressed concern that the aforementioned language
might have some other meanings, and requested clarification.
He also voiced concern about the redefinition of "health care
provider", which includes facilities. Dr. Pfeifer said it's not
that he thinks hospitals and such should be protected under AWP.
However, classifying them as providers removes the existing
language that says (indisc.). Dr. Pfeifer pointed out that
facilities don't have an occupation or a license, and said there
is no reference back to that. He cited the example of an
insurance company that contracts with a hospital for x-rays; he
expressed concern about excluding small facilities (indisc.) and
mentioned financial agreements and absorption by broader bases.
Dr. Pfeifer expressed hope that he'd have an opportunity to work
with the sponsor before the bill moved forward.
CHAIR DYSON requested that Dr. Pfeifer work with the sponsor
before next week, when the bill would likely move from
committee.
3:16:50 PM
ROSE KALAMARIDES, Administrator, Alaska Teamster-Employer Trust,
spoke briefly in opposition, saying Mr. Loudon and Ms. Savoie of
Willis of Alaska had summed up her organization's position.
CHAIR DYSON thanked participants. He held SB 299 in committee.
There being no further business to come before the committee,
Chair Dyson adjourned the Senate Health, Education and Social
Services Standing Committee meeting at 3:17:50 PM.
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