Legislature(2001 - 2002)
03/12/2001 02:37 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 21 - FINES BY THE STATE MEDICAL BOARD Number 0140 CHAIR ROKEBERG announced that the first order of business would be SENATE BILL NO. 21, "An Act increasing the maximum civil fine that may be imposed by the State Medical Board as a disciplinary sanction." Number 0151 DAVID GRAY, Staff to Senator Donny Olson, Alaska State Legislature, testified on behalf of the sponsor of SB 21, Senator Olson. He remarked that SB 21 is a fairly straightforward bill that increases the maximum limit of a civil fine that the State Medical Board can apply to $25,000. He noted that in Senator Olson's view, the maximum fine will make more severe penalties available for the board to use in egregious cases of misconduct. Furthermore, the cost of a lot of the cases the board is asked to investigate exceeds the $10,000 fine. He pointed out that the State Medical Board is supported by [licensure] fees and fines, and therefore increasing the fines will allow the board to recoup some of its costs. MR. GRAY informed the committee that the [current] $10,000 limit has been in statute for 14 years. Mr. Gray also informed the committee that the Senate included a letter of intent, which essentially says "that just because you increased the limit, don't just be automatically increasing the fines that you cover; ... it wasn't supposed to be a penalty for those inadvertent errors that physicians make." This increase is directed at the severe cases of ethical misconduct. REPRESENTATIVE MEYER requested that Mr. Gray provide an example of a gross misconduct case that would warrant a fine of $25,000. MR. GRAY identified sexual abuse of a client and drug abuse as examples that would warrant a $25,000 fine. REPRESENTATIVE MEYER asked if a $25,000 fine is enough for a physician who sexually abuses a patient. MR. GRAY pointed out that the $25,000 fine is just one of the penalties. There are other sanctions, such as the suspension of the [physician's] license. In further response to Representative Meyer, Mr. Gray said Senator Olson felt that $25,000 is appropriate because higher fines result in another level of court action. Number 0457 REPRESENTATIVE OGAN remarked that the letter of intent is not worth the piece of paper that it's written on. He questioned why [the legislation] doesn't create two classifications of infractions with definitions of each type and thus the intent of the legislature would be codified in the statute. MR. GRAY remarked that the Senate Finance Committee chair thought that the letter of intent was "a good idea and we concurred with him." He indicated that in a lot of cases a fee structure isn't applied, and often an [out-of-court] settlement is made. There was no desire to [develop] a fee structure [in SB 21]. The increase [of the maximum fine] was done to parallel what the board is doing in cases of misconduct. REPRESENTATIVE OGAN surmised that if there is any abuse with this, the legislature could fix it. He reiterated that letters of intent are just "feel-good things" that the courts don't always pay attention to. REPRESENTATIVE COGHILL inquired as to the number of $10,000 sanctions that have been levied by the board. Number 0641 CATHERINE REARDON, Director, Division of Occupational Licensing, Department of Community & Economic Development, noted that she had only reviewed fiscal years 1999, 2000, and 2001. From 1999 to date, there has been just one $10,000 fine, which was levied on January 24, 2001. However, there were a lot of $1,000 fines (for continuing education violations), and also some (midrange) $5,000-$6,000 fines. The $10,000 fine is unusual because it is the limit and thus is [used] for the worst offenders. REPRESENTATIVE COGHILL returned the intent language, which he said seems to him to reflect what the board is already doing. He commented that he wasn't sure the intent [language] is necessary. CHAIR ROKEBERG asked if the Senate had considered whether any of the investigations underway were directly attributable to the State Medical Board, and if so, had [the Senate] considered the costs of those investigations. MR. GRAY answered in the affirmative. He related his belief that Ms. Reardon had provided some of the Senators on the Senate Finance Committee with information regarding the cost and experience of the board's activities. Ultimately, the $25,000 limit was agreed upon. However, Mr. Gray indicated agreement with Representative Ogan in regard to the possibility that all disciplinary committees for occupational licensing need to review how fines are imposed. REPRESENTATIVE COGHILL asked if this civil penalty releases [the individual] from other civil liability if [the individual] is fined. AN UNIDENTIFIED SPEAKER replied no. REPRESENTATIVE COGHILL surmised, then, that the sanction could stand separately from other civil issues even if there are other charges. CHAIR ROKEBERG asked, "What are the costs leading to the costs of investigations as they relate to the State Medical Board, in terms of your experience?" MS. REARDON informed the committee that there are two full-time investigators who handle medical investigations [only]. She indicated that their salaries, expert witness costs, and legal services amounted to $237,000 in fiscal year (FY) 1999. In FY 2000, $365,000 was spent. As of February 2, 2001, $113,000 had been spent. She noted that FY 2000 was an unusually high year. In further response to Chair Rokeberg, Ms. Reardon estimated that there were 100 medical cases open at any one time in FY 2000. Ms. Reardon turned to the amount of money brought in by the fines. In FY 1999, $9,000 in fines was collected; in FY 2000, $16,000; and in FY 2001 to February 2001, $17,950. Ms. Reardon clarified that most of the investigations don't result in disciplinary action and thus it makes sense that less is brought in from fines than is spent. Furthermore, looking fiscal year to fiscal year [is not appropriate] because one year the money may be spent on an investigation, while the disciplinary action would not occur until a year or two later. CHAIR ROKEBERG surmised, then, that an investigation could exceed $25,000 in costs. MS. REARDON agreed and specified that to be the case in FY 2000. CHAIR ROKEBERG asked if the Senate had considered those cases in which there are greater costs than [$25,000]. MR. GRAY answered that there was some consideration of that point. The difficulty is the question of how one can differentiate one investigation that costs a lot of money from another investigation that doesn't. He commented, "You get into an equal protection problem right away when you're assigning your penalties based on cost alone." Number 1020 MS. REARDON stated that if fines are to be linked to the costs, then there would need to be a procedure for the disciplined person and the state to [debate] those costs. Ms. Reardon posed an example of investigating how an individual doctor treated 20 different patients, when there was only enough evidence to charge the [doctor] with incompetence in three of the cases, and, furthermore the state only wanted a hearing on two of those cases. She clarified that the issue is whether [the individual doctor] should have to pay for all [20] investigations or just the two that [he/she] lost. Ms. Reardon informed the committee that [the board] had been cautioned that if fines are too high, the courts may perceive that the situation requires a trial. CHAIR ROKEBERG expressed concern that "we would be running substantial deficits." He said he suspected that most practitioners would be willing to spend untold amounts [of money] in order to defend their licensure and reputation. Chair Rokeberg announced that SB 21 could either be forwarded to the House Finance Committee or this committee could review the issues of due process and cost recovery. REPRESENTATIVE COGHILL related his belief that the due process issue has been sufficiently reviewed. At this point, he felt that the board's discretion is enough. Representative Coghill, said, however, that he was not interested in [moving] the Senate's intent language. CHAIR ROKEBERG commented that the letter of intent was the Senate's. Number 1213 REPRESENTATIVE COGHILL moved to report SB 21 out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, SB 21 was reported from the House Judiciary Standing Committee.
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