Legislature(2001 - 2002)
03/13/2001 01:30 PM Senate L&C
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
SENATE LABOR & COMMERCE COMMITTEE
March 13, 2001
1:30 pm
MEMBERS PRESENT
Senator Randy Phillips, Chair
Senator Alan Austerman
Senator Loren Leman
Senator John Torgerson
Senator Bettye Davis
MEMBERS ABSENT
All Members Present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 37(JUD)
"An Act relating to collective negotiation by physicians with
health benefit plans, to health benefit plan contracts with
individual competing physicians, and to the application of state
antitrust laws to agreements involving providers and groups of
providers affected by collective negotiations."
MOVED CSSB 37 (L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 37 - See Judiciary minutes dated 1/22/01 and 2/21/01.
WITNESS REGISTER
Mr. George Rhymeer
Alaska Physicians and Surgeons Member
3340 Providence Dr.
Anchorage AK 99508
POSITION STATEMENT: Supported SB 37.
Dr. Mike Carroll
No address provided
Fairbanks AK
POSITION STATEMENT: Supported SB 37.
Mr. Mike Haugen, Executive Director
Alaska Physicians and Surgeons
3340 Providence Dr.
Anchorage AK 99508
POSITION STATEMENT: Supported SB 37.
Mr. Clyde Sniffen, Assistant Attorney General
Department of Law
1031 W 4th, #200
Anchorage AK 99501
POSITION STATEMENT: Commented on SB 37.
Ms. Laura Sarcone
Alaska Nurses Association
Alaska Nurse Practitioners Association
Alaska Chapter, American College of Nurse Midwives
1444 Hillcrest
Anchorage AK 99503
POSITION STATEMENT: Commented on SB 37.
ACTION NARRATIVE
TAPE 01-10, SIDE A
Number 001
SB 37-PHYSICIAN NEGOTIATIONS WITH HEALTH INSURE
CHAIRMAN RANDY PHILLIPS called the Senate Labor & Commerce
Committee meeting to order at 1:30 pm and announced SB 37 to be up
for consideration.
SENATOR KELLY, sponsor of SB 37, said that this bill does not
include nurses and it was never his intent to include them. He said
the nurses' associations were satisfied with the language that
removes them.
MR. GEORGE RHYMEER, Alaskan Physicians and Surgeons Board member,
said he is a cardiologist from Anchorage and strongly supported SB
37. He said:
The physician community is very keen on this bill for a
number of reasons, one of which is that it allows
physicians in the state to talk with one another about
medical concerns, about clinical practices, about what is
best medical care for their patients without being afraid
of being attacked by the Federal Trade Commission.
He said participation is voluntary and the bill has a sunset
clause.
DR. MIKE CARROLL, Fairbanks physician, supported SB 37. He said
that recently the Alaska Health Care Network was investigated by
the federal government for price fixing. He wanted to clarify that
they have never dealt with financial aspects in regards to the cost
of health care. They have spent more than $100,000 to try and set
up an organization that would avoid price fixing. They, then, had
to spend $75,000 to deal with the federal government because more
than 30 percent of Fairbanks physicians were involved in their
network. "They did not have an appreciation for the practice of
medicine, the isolation, the way specialties are directed in some
of our communities."
He thought that patients and businesses in Fairbanks suffer because
competition on the insurance side of things went away when the
Network was asked to stop trying to direct the contracts.
Small insurers have elected to not come to Fairbanks at
this point, because they have no means of directing some
of their queries to an organized group of physicians.
That left just the large insurance companies and it's to
their advantage not to have any competition. I don't
think health care costs for the State of Alaska or other
organizations in the Fairbanks area have gone down over
the last year as a result of the limits the federal
government put on the physicians in Fairbanks.
MR. MIKE HAUGEN, Executive Director, Alaska Physicians and
Surgeons, explained what are in the contracts that could be
negotiated between physicians and health insurers:
There is some confusion about would a list of potential
covered services be allowed to be negotiated by doctors.
In other words, would the doctors be able to tell the
insurers that you must provide a certain list of benefits
or covered areas to your patients before the doctors will
consider doing a contract with you. And I wanted to
clarify that those are not terms that would be
negotiated. Terms that would be negotiated would be
things like what is the medical necessity - the
definition of it. What are covered services. Often in
these contracts, the doctors don't even know what the
complete list is. We're not talking about defining what
the list is, just they would like to know what the list
is. What's the appeals process. Is mutual written consent
required on both parties parts before the contract can be
amended? In many of these contracts that's not the case.
The insurance carrier can unilaterally change the terms
of the contracts with some sort of notice, but the
doctors' only option at that point is to try to terminate
the contract, going through that process or live with the
changes. That's just a short list of some of the types of
things that may be negotiated, but we're certainly not in
any way trying to lead you to conclude that the doctors
are trying to define for the health care insurers what
their list of covered services would be.
Number 700
SENATOR DAVIS asked how this bill would increase competition and
efficiencies.
MR. HAUGEN answered that, "In two areas, it may. That's why there
is a five-year sunset and I view it as an experiment, particularly
in the State of Alaska.
It might increase competition, because right now this
state has difficulty in attracting outside health
insurance carriers. We have a relatively small population
base and we're separated from the rest of the country by
a great distance. It is attractive to health care
insurers to be able to get an instant panel of doctors if
they can arrive at a contract with the doctors. In other
words, it's very expensive for the carriers to come up
and do it one doctor at a time and try to build a
network. If we were in a position where we could go to a
carrier and say, "If we can come to a contract that is
acceptable to the doctors, you will instantly have a
panel of 150 or 200 doctors." That automatically makes
that new carrier a player up here. That can't help, but I
think, increase competition, because right now there are
really only two large ones.
The second issue, and Dr. Rhymeer touched on it, was that
there are many areas where doctors see inefficiencies in
the system. They don't feel comfortable, because of what
happened in Fairbanks and the general climate, in
discussing those inefficiencies.
MR. HAUGEN continued to explain:
If they were in a position as a group to say, "Look, what
you're doing here is crazy. You're wasting all kinds of
money. Try this. That may lower costs."
SENATOR DAVIS asked if it had been 30 percent of the doctors in
Fairbanks, not 60 percent, would they have been targeted.
MR. RHYMEER answered that he really didn't know the answer to that.
Part of the problem is that they have never been able to get the
guidelines and rules from the FTC about what they can do and how to
do them. "Physicians are basically operating in the dark when it
comes to talking with one another about anything more than what you
had for lunch, basically."
MR. RHYMEER said that the rules could change along with the
administration in Washington D.C. at this point.
SENATOR DAVIS asked him to point out some of the inefficiencies
that he envisions would be corrected.
MR. RHYMEER answered:
There are numerous instances of duplication of services,
because physicians are dealing with different insurance
companies with different carriers and if there was a more
business orientation and a greater business association
between physicians, there would be a greater incentive
and a much easier time to do things that are less
duplicative. Information transfer would be better. I see
people all the time who've had a chest x-ray three days
ahead of time, but it's unavailable for one reason or
another… There are many instances of that. Plus the fact
that a large amount of money is spent in the emergency
room now, physicians think unnecessarily. Part of the
reason is because of the way medicine is paid for. We
think physicians working together with people who pay the
bills is distinctly the way to go to get efficiencies.
The physicians' community desperately wants to do that.
SENATOR DAVIS asked if the emergency room charges he was talking
about were for reasons other than emergencies.
MR. RHYMEER answered that was what he was talking about.
SENATOR DAVIS asked if he was referring to incidents in Fairbanks
where doctors might consider situations emergencies and insurance
companies might not consider them to be, because the people were
not hospitalized. Would this bill correct those situations?
MR. RHYMEER answered that he couldn't say the bill would correct
them, but it would make it easier for physicians to talk to one
another and come to some consensus about what the best way to
practice medicine and take care of certain disease processes might
be and deal with the carriers and with the people who pay the bill
in taking care of that.
MR. CARROLL added that on the emergency issue, he partly misspoke
when he said physicians in Fairbanks were not involved in price
fixing.
If defining emergency care represents price fixing, then
I would say we were probably guilty at that point, but
our interests were in working with the patient so he
could be part of the definition of emergency care rather
than just the insurance carrier. It all depends on if
you're having chest pains, you don't know if that's a
heart attack or acid valve cap. Things like that were
reasonable to get involved with.
The other issues were areas of inefficiency. There are
several areas we started to address and would have like
to addressed on a wider network basis, but now cannot
address those. One of them is information systems. We
were trying to put together a system so that the
computers around the physicians in the hospital would
talk to each other and, as a result, eliminate some of
the unnecessary testing or duplication of testing that
would occur, eliminate some of the paper work that may be
generated in that situation. In order to do that, it gets
expensive, but we had actually gotten to the point where
we were staring to get compatible computer systems
throughout the medical community. I think that was a
really big step forward that a whole fleet of patients
would have been the benefactor of. We can't get involved
in that any more, I'm sorry to say.
As far as dealing with efficiencies of service, we have
established committees that looked at pharmaceutical drug
usage and try to address through an educational process
with the physicians and ultimately with the patients the
proper use of pharmaceutical agents both on the proper
indications and their costs. Sometimes there are three or
four drugs that have equivalent actions, but have
radically different costs. We thought by educating
physicians and patients along those lines and started a
process of bringing up expert speakers from the
University of Washington and other parts of the country,
even as far away as Dallas, Texas, that we could improve
on and make the cost more efficient in the use of
pharmaceuticals. It's an issue that's got immense
publicity on the federal level. We can't involve
ourselves in that anymore, I'm sorry to say.
He added that they were trying to address the issue of quality
care, but they can't address that any more, either.
MR. CLYDE SNIFFEN, Assistant Attorney General, responded that all
the concerns raised by the physicians who have testified today have
been non-price related issues. One of the Department's
recommendations was to eliminate those.
He explained that under the current system there is a way doctors
can get to health benefit plans. "There's nothing to prohibit
individual physicians from expressing concerns to health benefit
plans and in limited circumstances with the integration model or
the messenger model, groups of physicians can get together and give
that information to the plans. I don't know if SB 37 in its current
form would necessarily provide any more ability to do that."
MS. LAURA SARCONE, Alaska Nurses Association, Alaska Nurse
Practitioners Association, and the Alaska Chapter of the American
College of Nurse Midwives, said her concern was on page 2, lines 16
- 17 of the committee substitute, where the competing physicians
meet and communicate concerning critical practice guidelines and
coverage criteria. They would like language that clarifies that
physicians may communicate using physicians' clinical practice
guidelines, not nurse practitioners' or nurse midwife or another
other practitioners' clinical practice guidelines.
SENATOR LEMAN moved to adopt the committee substitute, 3/8/01 to SB
37. There were no objections and it was so ordered.
SENATOR AUSTERMAN moved on page 2, line 17 to add amendment # 1
that would clarify that during negotiations, physicians may
communicate concerning their specific clinical practice guidelines
and not those of other health care providers.
MS. SARCONE indicated her approval of that language. There were no
objections and to the amendment and it was adopted.
SENATOR LEMAN moved to pass CSSB 37 (L&C) from committee with
individual recommendations. There were no objections and it was so
ordered.
CHAIRMAN PHILLIPS adjourned the meeting at 1:55 pm.
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