Legislature(1995 - 1996)
03/07/1996 09:15 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 193
An Act requiring insurance coverage for certain costs
of birth; and providing for an effective date.
Co-chairman Halford directed that SB 193 be brought on for
discussion. BRUCE RICHARDS, aide to Senator Judy Salo, came
before committee. He explained that the bill would require
48-hour mandatory coverage of postpartum hospitalization and
medical care for a mother and new-born baby for regular
vaginal delivery and 96 hours for a Cesarean section. The
legislation was introduced in response to a call from a
constituent who was not authorized to remain in the hospital
after 24 hours and did not believe she was ready to be
discharged. Review of the situation indicates this is
becoming a nationwide issue. Six states have passed similar
legislation, and it is under consideration in 16 others.
Mr. Richards referenced subsection (c), commencing at page
1, line 13, and stressed that the bill does not require
mothers and infants to remain in the hospital for 48 or 96
hours. If the mother and physician are in agreement,
discharge may occur prior to stated time frames. Senator
Donley expressed concern over "to what great lengths
insurance companies go to avoid providing coverage" and
noted that statutory language has previously been twisted in
dramatic ways.
GORDON EVANS, Health Insurance Association of America, came
before committee voicing opposition to the bill. He said
the association opposes all legislation which mandates
coverage since it tends to raise costs. The instant bill
would merely add another law to cure a non-existent problem
in Alaska.
Mr. Evans pointed to great strides made by the health care
industry in providing and delivering quality care at reduced
costs. One means of achieving the reduction was to lower
the number of in-patient hospital stays for a variety of
illnesses, including the length of maternity stay. The
average stay for maternity is not the result of a change in
policy by insurance companies but the result of a long trend
of steady decline. The average stay for vaginal delivery
was 4 days in 1970, 2.2 days in 1988, and 2 days in 1993.
That decline is consistent with the decline for other
services, due to increased medical knowledge and advances in
patient care.
Mr. Evans acknowledged that the health care industry has not
gotten across some key points in "this mostly emotional
issue." The issue does not involve debate about "covering
medically necessary care." If hospital care is necessary,
insurers will cover it for as long as needed. The real
issue is whether, and how, insurers and policy holders
should cover care that is not medically necessary or which
does not need to be provided in an unduly expensive setting
such as a hospital versus a home or hotel. Critics of early
discharge fail to understand that not paying for unnecessary
care or care in unnecessary settings is what enables
insurers to offer numerous other services managed care
programs provide. Mr. Evans cited "well-baby," dental, and
vision coverage as examples. He stressed that "nobody wants
a discharge program that jeopardizes the health of a mother
or child." The industry would not be utilizing early
discharge programs if they were not medically safe. There
is a lack of data indicating that early discharge before 48
hours after vaginal and before 96 after a Cesarean section
is harmful or unsafe for the mother or baby. Advocates of
proposed new mandates within CSSB 193 (L&C) have provided no
evidence that insurance companies doing business in Alaska
are systematically requiring mothers and infants to be
discharged before they are medically ready. There is no
empirical evidence to suggest how long a hospital maternity
stay should be. The American College of Obstetricians and
Gynecologists suggests that:
There is relatively little scientific data on the
ideal length of hospital stay for delivery.
The American Medical Association has taken a similar
position. The Health Insurance Association of America
believes that services and length of hospital stay for
mothers and infants should be determined on a case-by-case
basis and on medical necessity for both mother and child as
determined jointly by a mother and her doctor.
Co-chairman Frank voiced his understanding that if a doctor
now determines that a woman should remain hospitalized for
longer than 48 hours following a regular birth, no insurance
company now doing business in Alaska would refuse to cover
that care. Mr. Evans concurred in that understanding.
Discussion followed concerning the situation which gave rise
to introduction of the legislation. Mr. Evans advised that
one of Senator Salo's constituents indicated she was forced
to leave the hospital before 24 hours. He acknowledged that
an isolated case of early discharge might have occurred, but
he said he had no knowledge of such a case. No complaint
was filed with the Division of Insurance.
NANCY WELLER, Medical Assistance Administrator, Division of
Medical Assistance, Dept. of Health and Social Services,
came before committee in response to a question from Senator
Rieger asking if the proposed bill would impact Medicaid.
She explained that while it is unclear whether or not there
will be impact, and the sponsor has requested a legal
opinion, impact is not anticipated because the legislation
does not require hospitalization. The bill speaks to
hospitalization or medical care for a certain number of
hours following delivery. The Medicaid program provides 24
hours of in-patient care for vaginal delivery and 72 hours
for a Cesarean section without a request for prior
authorization for extended stay. If the physician feels the
mother needs to remain hospitalized for a longer period, the
professional review organization is called, medical
information is shared, approval is obtained, and Medicaid
pays for the care. Medicaid also provides for "any
medically necessary services for the pregnant woman and the
child following delivery." If the mother is only Medicaid
eligible because she is pregnant, she "gets two months of
all health care services covered by the program following
discharge from the hospital."
Senator Rieger voiced his understanding that should Medicaid
be impacted by the proposed bill, current program procedures
would remain unchanged. Mrs. Weller concurred, advising of
her understanding that the bill does not require 48 hours of
hospitalization. In response to a question from the
Senator, Mrs. Weller said that children born to women on
Medicaid receive "an automatic one-year coverage of Medicaid
without reapplying for coverage."
In response to questions from Co-chairman Frank, Mrs. Weller
explained that Medicaid policies are similar to those of
insurance companies in terms of provision of 24 hours of
care for vaginal delivery in a hospital. If the mother
requires additional care, the physician calls and requests
permission for an extended stay. The Co-chairman advised of
his understanding that the legislation would require that
the mother remain in the hospital for 48 hours unless she
and the physician agree on earlier discharge. Since that
appears to differ from present Medicaid policy in terms of
length of stay and pre-approval for an extended stay, it is
difficult to understand why no cost would be involved. Mrs.
Weller reiterated that the bill does not mandate an in-
patient setting. It is thus questionable whether there will
be impact on the program. Co-chairman Frank referenced the
sponsor's intent that the patient remain in the hospital
rather than merely under a doctor's care.
Bruce Richards returned before committee to explain that the
term "medical care" would cover home visits and return
visits to the doctor. Co-chairman Frank again questioned
the fact that the bill appears to mandate 48 hours while
Medicaid specifies 24 hours, with prior approval for
exceptional cases. He suggested that should the proposed
bill pass, there would be an inconsistency between what
private health care providers are required to cover and what
Medicaid provides. At the present time, private insurance
and Medicaid appear to be comparable. Should the proposed
bill pass, Medicaid would become substandard relative to the
new mandate. Mr. Richards voiced his belief that the
proposed bill would cover Medicaid. He suggested there
would be no increase in costs because Medicaid is living up
to the spirit of the law at the present time. Authorization
after 24 hours is forthcoming under Medicaid. Medicaid also
pays for medical care once the patient is discharged.
In response to additional questions from Co-chairman Frank,
Mr. Richards explained that the proposed legislation
responds to "a small problem in Alaska." It is more
prevalent in the "Lower Forty-eight" due to health
maintenance organizations. The intention is to "nip this
problem in the bud." Some places in California are
discussing discharge as soon as six hours after delivery.
While no evidence indicates 48 hours is the "magic number,"
there is also no evidence to suggest that early discharge is
safe. The American Academy of Pediatrics has asked for a
moratorium on the issue.
Co-chairman Frank advised of difficulty envisioning a
situation in which a doctor recommends continued
hospitalization but the hospital nevertheless discharges the
patient. Mr. Richards said that the question is not whether
the individual will be discharged but "Who is going to pay
for the coverage if they stayed longer." People pay for
medical insurance to cover situations such as that.
Amendments contained within the proposed bill relate to the
insurance title rather than health codes.
Senator Rieger asked if reference to "insurer" would cover
HMOs. Mr. Richards responded affirmatively.
In response to a further question from Senator Rieger, Mr.
Richards stressed that the proposed bill does not require a
patient to remain in the hospital for 48 hours. Under bill
language, the decision to leave earlier would be made by the
patient and her doctor. Language commencing at page 1, line
14, and carrying over to page 2, lines 1 and 2, reflects the
sponsor's intent that the decision be made by both the
patient and doctor in consultation with one another.
Senator Rieger referenced correspondence from a pediatrician
who indicated that the best way to ensure a baby gets off to
a healthy start is follow-up visits, especially in the first
week. That is what is most commonly not covered by
insurance. Mr. Richards explained that lack of bill
provisions relating to follow-up care reflects Alaska's
geography and the manner in which health care is provided
across the state.
Co-chairman Frank voiced reluctance to place arbitrary time
periods in statute. He then questioned why the decision on
length of stay should not be left to the doctor to decide.
END: SFC-96, #33, Side 1
BEGIN: SFC-96, #33, Side 2
The Co-chairman next asked how a stay beyond 48 hours would
be covered. Mr. Richards responded that most insurance
companies would cover medically necessary costs.
Co-chairman Frank suggested that the focus of the bill is
"this feeling that the mother may not be ready to leave"
rather than reliance on a medical professional's opinion.
Mr. Richards explained that the physician would consult with
the patient prior to making a decision. That is why bill
language relates to a decision by the mother and the "health
care provider" rather than the doctor alone. Co-chairman
Frank suggested that a specific time frame might not be
necessary if the decision is left to the doctor. That
appears to be more logical than placing an arbitrary limit
in statute. Mr. Richards reiterated that the bill deals
only with who is going to pay for the initial 48 hours. Co-
chairman Frank again voiced concern over legislative mandate
of a specific time frame, saying that it moves away from the
professional judgment aspect of individual cases.
Individuals want insurance to cover costs, and costs should
be medically reasonable and necessary.
Senator Sharp inquired regarding the frequently of
incidences in which a physician has recommended a stay
longer than 24 hours for which an insurance company has
refused to pay. Mr. Richards described that occurrence in
Alaska as "very small." The problem is growing outside of
Alaska and only starting to show here.
BOB STALNAKER, Director, Division of Retirement and
Benefits, Dept. of Administration, next came before
committee. Co-chairman Halford referenced fiscal note
information estimating a monthly per-employee charge of
$1.78. Mr. Stalnaker explained that the $104.0
note (dated 2/21/96) stemmed from analysis of potential
impact of increased hospital stays. Numbers were predicated
on what the department thinks experience will be. State
plans are experience rated. In such situations, it is
common for the department to show costs in the analysis
section. Mr. Stalnaker directed attention to an updated
zero fiscal note and referenced amounts set forth within
analysis language.
The current plan pre-certifies pregnant women for one day
for a vaginal delivery. If complications arise, coverage is
not denied, regardless of the length of stay, if there is
medical necessity. Experience shows that most women who go
to the hospital for delivery want to leave as quickly as
possible. Mr. Stalnaker said he was unaware of individuals
or physicians disagreeing with the present approach. He
subsequently noted that he knew of one case where the
individual was upset because she was not pre-certified for
two days. Mr. Stalnaker acknowledged attempts in California
to bring the time down to six hours. With increased managed
care there is a "tendency to try to squeeze it as much as
possible." What is happening nationally is a reaction to
that. There is a reasonable point somewhere. That is why
the department is neutral on the proposed bill. Mr.
Stalnaker advised that he was not aware of any cases where
the state disagreed with a doctor on what was prescribed for
a particular patient.
Co-chairman Frank said he was more comfortable leaving the
decision on length of stay to the doctor's discretion rather
than mandating a minimum.
Senator Rieger inquired concerning the co-payment for an
extended stay. Mr. Stalnaker advised of an 80% co-payment
per the state health plan. A state employee can purchase an
addition 10% coverage. The co-payment applies to any
services, including delivery. Senator Rieger suggested that
at a market cost of $600 a day for hospitalization, mothers
would not frivolously remain if the extended stay would cost
them $120. Mr. Stalnaker concurred, saying that the
foregoing was considered when the department analyzed the
bill. While experience might raise costs, the department
does not know what those costs might be. It is not
reasonable to assume that a mother would want to incur
additional, unnecessary costs. He acknowledged that the
legislation might not measurably impact the plan. However,
it could increase stays. That will not be known until the
department has some experience with the issue.
Senator Rieger voiced his understanding that under the
status quo, which is policy rather than law, the stay is 24
hours. It is then up to the discretion of the doctor, only,
for the patient to remain beyond that time. Should the
proposed bill become law, remaining for the next 24 hours
would be up to the discretion of the doctor and the patient.
Hospitalization beyond 48 hours would, again, be up to the
discretion of the doctor. Mr. Stalnaker concurred. Senator
Rieger then voiced his belief that, in light of the co-
payment, it is unlikely there will be great impact from the
bill.
Brief discussion of co-payments for insurance plans followed
between Co-chairman Frank and Mr. Stalnaker.
HARLAN KNUDSON, Alaska Hospital and Nursing Home
Association, next came before committee, voicing support for
the bill. He acknowledged pressure on both insurers and
health care providers to lower costs. He questioned the
qualifications of both himself and committee members to deal
with an issue involving women and infants. He further
attested to a lack of understanding of conditions in Alaska
by out-of-state insurance companies when a physician calls
to request authorization for extended hospitalization. He
urged that members discuss the legislation with their wives,
mothers, and sisters prior to a vote.
When Senator Rieger asked about the actual cost of an extra
hospital day, Mr. Knudson noted that, in delivery of care,
hospitals tend to bunch charges into the first day.
Subsequent days are generally less costly.
Co-chairman Halford referenced the updated fiscal note
reflecting impact of $125.0 to $250.0 in the analysis
portion and questioned whether figures should be presented
in that fashion or spread across cost columns. He said he
was not convinced that notation in the analysis portion
meets the letter of fiscal note law. He acknowledged,
however, that that policy issue is not unique to the
proposed bill.
Discussion followed between Co-chairman Frank and Mr.
Stalnaker regarding the impact of health care cost increases
on the state plan. In the course of his comments, Mr.
Stalnaker described deductibles and caps as methods of cost
control.
Further discussion followed concerning insurance provisions
of state agreements with five employee labor unions and the
commissioner's plan which covers non-union employees. Mr.
Stalnaker noted that the state has experienced three years
of no cost increases. The dynamics of health insurance
increases "are starting to hit the plan again." The
proposed bill will not "matter in the big scheme of things."
It will not have material impact on the plan as a whole.
Co-chairman Halford directed that the bill be held for
further review.
| Document Name | Date/Time | Subjects |
|---|