Legislature(1993 - 1994)

03/18/1994 01:15 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 472 - REFERRALS INVOLVING DENTAL SERVICES                                 
  REP. GARY L. DAVIS, Prime Sponsor of HB 472, addressed the                   
  committee.  He said, "HB 472 will prohibit the receipt of                    
  compensation by dentists for referring a person to another                   
  dentist or dental practice.  The American Dental Association                 
  code of ethics forbids dentists from profiting from                          
  referrals.  This legislation codifies the ethical concern                    
  related to referrals.                                                        
  "Section 2, the receipt of compensation by a person or                       
  advertisement referring a dental service, is prohibited                      
  unless the compensation for referral is disclosed at the                     
  time of referral.  This legislation will help ensure that                    
  patients are being referred to a dentist or dental practice                  
  as a result of their quality service.                                        
  "In simple terms, this is simply codifying a section in the                  
  American Dental Association's Code of Ethics into statute.                   
  There is some testimony.  I believe Julie Robinson should be                 
  on teleconference.  I believe she is President of the Alaska                 
  Dental Society.  She will go into detail as to why the                       
  Association feels this ethical procedure is confronting                      
  problems to the degree that they feel it needs to be                         
  codified in statute.  So, I think she will probably have the                 
  most valid testimony.  And I'll answer questions, if I may."                 
  CHAIRMAN PORTER said he saw no immediate questions, but                      
  invited Rep. Davis to remain for questions that might arise.                 
  Number 087                                                                   
  DR. JULIE ROBINSON, President, Alaska Dental Society,                        
  testified via teleconference from Anchorage on behalf of HB
  472.   She thanked the committee for the opportunity to                      
  address them, and particularly thanked Rep. Davis and his                    
  staff.  Dr. Robinson said that HB 272 was easily understood                  
  and to the point.  She related the circumstances of its                      
  origins, which was primarily a response to misleading                        
  advertising by so-called referral services purporting to                     
  guide individuals towards appropriate dental practitioners                   
  in good standing with the Alaska Dental Association.  In                     
  fact, the only referees were a few dental practitioners who                  
  were paying in to the referral "services" towards whom calls                 
  would be channeled regardless of the type of dental services                 
  required; the standing of these practitioners, moreover, had                 
  not been determined by the referrers.  Dr. Robinson                          
  described the experiences of consumers seeking appropriate                   
  dental care and receiving faulty and misleading information.                 
  DR. ROBINSON concluded, "The benefits of advertising depend                  
  on reliability and accuracy.  This type of ad is deceptive                   
  and faulty.  Because the public is easily deceived by this                   
  sort of advertising, and generally has a lack of                             
  sophistication regarding dental services, we feel that the                   
  agency should disclose to the public that the dentist                        
  receiving the referral has paid a fee for this service.  The                 
  dentists also feel that it is important to avoid misleading                  
  the public about services we provide."  She said HB 472                      
  would apply the Dental Society's Code of Ethics regarding                    
  advertising and fee splitting and noted that other states                    
  have enacted or are considering similar legislation.                         
  Number 171                                                                   
  REP. JAMES focused on the extent of the legislation, asking                  
  if it would ban all advertising by dental practitioners.                     
  Number 173                                                                   
  DR. ROBINSON replied that it would not; in fact, there were                  
  many perfectly legal advertisements for dentists currently                   
  in the Yellow Pages.  She explained that HB 472 would                        
  regulate only dental referral services for dentists.  She                    
  noted that the paid referral services limited inclusion in                   
  any particular area to certain practitioners who paid large                  
  Number 216                                                                   
  REP. PHILLIPS asked if there were other, open-ended referral                 
  services, and wondered how to determine if they were                         
  operating in a lawful fashion.                                               
  DR. ROBINSON described the referral service of the Alaska                    
  Dental Society, which provides several referral options for                  
  every caller, as an example of a legitimate service.                         
  Number 252                                                                   
  REP. NORDLUND posed a question regarding Section 2 of HB
  472, which makes referral fees illegal.  He asked if that                    
  meant that a dentist to whom a patient came for examination                  
  could not charge that patient a fee for services if the                      
  dentist, having determined that he was not the appropriate                   
  person for the service, referred the patient on to another                   
  DR. ROBINSON explained that this was not so; the section                     
  meant that one dentist could not receive a fee from another                  
  dentist for referring a patient.                                             
  discussed the language and Section 2 and agreed that it was                  
  acceptably clear.                                                            
  CHAIRMAN PORTER observed, "In its most negative form, we're                  
  prohibiting kickbacks."  He asked if there were further                      
  REP. JAMES expressed discomfort with the legislature                         
  policing the ethics of the members of the Board of Dental                    
  Examiners, an entity which might be considered to be capable                 
  of self-policing.  She cautioned against an excess of                        
  REP. DAVIS responded to this concern by characterizing the                   
  legislation as forward-looking; a way of obviating problems                  
  such as those, for example, which might be coming into being                 
  through the plethora of 800 and 900 telephone numbers which                  
  provide the means for referral businesses to operate without                 
  familiarity with the professional ethics involved.                           
  REP. JAMES reiterated her concerns and remarked, "I feel                     
  it's really improper for the state to go out and try to                      
  police everybody's ethics.  I think that we have a hard                      
  enough time policing our own."                                               
  Number 318                                                                   
  REP. GREEN expressed, in counterpoint, his concerns over the                 
  ramifications of untrained persons in paid referral services                 
  making recommendations.                                                      
  REP. JAMES responded that the guilty party would not be the                  
  referral system, but rather the participating dentist.                       
  CHAIRMAN PORTER asked Dr. Robinson to tell the committee if                  
  the board of the Alaska Dental Society was capable now of                    
  doing this policing without the statute.                                     
  DR. ROBINSON believed that it was not so capable, given its                  
  current burdens.                                                             
  CHAIRMAN PORTER asked, "Is there any other discussion?"                      
  REP. PHILLIPS said, "I would move that we move HB 472 out of                 
  committee with individual recommendations and zero fiscal                    
  CHAIRMAN PORTER stated, "We have a motion to move the bill.                  
  Is there a discussion?  Is there objection?"  There being no                 
  objection, HB 472 was adopted and moved out of committee.                    

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