Legislature(1997 - 1998)
03/02/1998 03:22 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 122 - INS.COVERAGE:MARRIAGE & FAMILY THERAPIST Number 1584 CHAIRMAN ROKEBERG announced the committee's next order of business was SB 122, "An Act relating to unfair discrimination under a group health insurance policy for services provided by marital and family therapists; and providing for an effective date." Number 1591 ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman, came forward to present SB 122. She explained SB 122 adds marital and family therapists to the list of providers against whom insurers may not discriminate. The bill does not require insurers to add coverage of marital and family therapists where that coverage is currently provided. It merely adds another option and, hopefully, another lower cost option for folks who are insured to take advantage of. She emphasized that it does not mandate insurance, and it was not the Senate Labor & Commerce Standing Committee's intent to do so. She noted the members' packets should contain copies of a legal opinion from legislative legal counsel concerning that issue. Number 1654 CHAIRMAN ROKEBERG pointed out that the legal opinion was not in the members' packets. MS. KREITZER responded that she would make sure they were provided with copies. Number 1676 REPRESENTATIVE RYAN asked if marital and family therapists are required to be certified or licensed to practice their profession. MS. KREITZER responded that she did not have the answer to his question, but she said others who would be testifying would be able to provide that information. Number 1692 REPRESENTATIVE RYAN commented that in past instances, when there has been this type of legislation, it automatically increased the fees that were charged, and he asked if that would be reflected in this legislation. Number 1720 MS. KREITZER replied that she didn't know, but she thought that it probably depends on the provider. She suggested he pose that question to the two marital and family therapists testifying on the legislation. Number 1742 REPRESENTATIVE RYAN said sometimes by the legislature recognizing and doing something like this it adds to the legitimacy of the profession and then we find judges starting to order these services. In turn, a lot of claims come into the insurance companies and then the insurance premiums go up to reflect that. Number 1804 CHAIRMAN ROKEBERG noted that an amendment had been submitted to the committee from Blue Cross Blue Shield Alaska, and he asked Ms. Kreitzer if she was familiar with the amendment. Number 1824 MS. KREITZER replied that she had not read the amendment, but she spoke with its maker on several occasions. She added that she didn't doubt that the issue of what unfair discrimination is an issue that perhaps the legislature should look at in the future, but the various attempts to append that language to bills that are moving through the legislature have had varying degrees of success. She said it did not succeed in the Senate on this piece of legislation. She related that Senator Leman has been in discussions with the director of the Division of Insurance about addressing the issue of what unfair discrimination actually means, but she wasn't sure if it was appropriate to amend this bill to include something of that nature. Number 1953 BEVERLY LINDELL, Legislative Liaison and Past President, Alaska Association for Marriage and Family Therapy (AKAMFT), came forward to testify. She said marital and family therapists are identified by the National Institute of Mental Health as one of the core mental health provider groups, and they would like to be included as one of the peer groups along with psychologists, social workers, psychiatric nurses and psychiatrists who are already covered under this bill. Marital and family therapists have been licensed in the State of Alaska since 1992 and, as an identified licensed profession by the state legislature, it would seem inconsistent for the legislature to permit barriers that interfere with their members' ability to receive payment for services. Number 1998 MS. LINDELL said SB 122 is important for two primary reasons: it creates a level playing field for their members to be on par with their other peer groups; and it is good for consumers because it allows them a greater range of options in mental health choices. She requested that the legislation be moved on to the next committee of referral. Number 2018 CHAIRMAN ROKEBERG asked Ms. Lindell if she could explain to the committee any instances where their group has been refused payment by insurance companies. MS. LINDELL answered there are insurance companies that do not include marital and family therapists among the list of providers for whom they will reimburse even though it is within their scope of practice to do so, and that is the part they consider unfair. CHAIRMAN ROKEBERG asked if she has been denied payments by insurance companies because an insurance underwriter does not specifically list their occupational licensing speciality. MS. LINDELL acknowledged that she has. Number 2097 CHAIRMAN ROKEBERG asked Ms. Lindell if she believes the legislation would force an insurance company that didn't specifically stipulate her profession to pay her when she made a claim against them. Number 2108 MS. LINDELL explained that it would mean that if the service offered by the insurance was within the scope of their practice, it would be included. Number 2143 CHAIRMAN ROKEBERG commented that it would helpful to the committee if it had examples of instances where there have been problems or where there have not been problems. Number 2238 CHAIRMAN ROKEBERG questioned if any self-insurance programs like those provided by the state of Alaska, the Municipality of Anchorage, or the International Brotherhood of Electrical Workers (IBEW), provide reimbursement for marital and family therapist services. Number 2250 MS. LINDELL answered that the state of Alaska does, but she could not speak to the rest of his examples. Number 2255 CHAIRMAN ROKEBERG said that would be helpful to know because there is a growing concern on the part of the committee that there is only a very limited amount of health insurance coverage left in this state, and it is important to know what is going on out there. He said the issue is whether they would really gain anything by passage of this legislation. He added that he wasn't sure if they were just picking on Blue Cross Blue Shield Alaska because it is the provider of last resort in this state right now. Number 2295 MS. LINDELL said she would be happy to try and find the specifics for that, but she is aware that there are other smaller insurance companies that do not include licensed marital and family therapists on their lists. Number 2326 DIXIE HOOD came forward next to testify in support of SB 195. Ms. Hood stated she is a 23-year licensed marital and family therapist in private practice in Juneau, and commented that the people in their profession are not just marriage counselors. The practice of marriage and family therapy is quite broad and it is part of their training to look at mental health services and diagnosis and treatment in the context of a family system. For instance one of her internships in California was a day treatment program for chronic schizophrenics where she worked for 1 1/2 years. Another internship was with in-patient and out-patient alcohol treatment programs. She said when a marital and family therapist prepares a claim for insurance, it is based on a medical diagnosis; it is seldom that an insurance company will cover just personal relationship problems. After achieving her licensure in California, Ms. Hood returned to Juneau in 1985 and contacted the Division of Occupational Licensing to find out what she needed to do to work as marital and family therapist in Alaska. She was told that there was no professional licensure available and all she needed was a business license. She state, "And this was really shocking to me because that meant that there were no standards whatsoever and I was told by ..." [TESTIMONY INTERRUPTED BY TAPE CHANGE] TAPE 98-22, SIDE B Number 0001 MS. HOOD continued, "... with absolutely no training whatsoever." She said the Alaska Association for Marriage and Family Therapy pursued the establishment of standards and the achievement of licensure, which occurred in 1992. This gives clients who are seeking mental health services some basis to judge the competency of their service provider. A problem she experienced before licensure in treating clients, for example state employees, was that she needed a medical doctor as the identified supervisor of the treatment she was providing in order for AETNA, Incorporated (AETNA), for example, to reimburse the client for her services. After licensure, AETNA, longer required physician supervision of marital and family therapists for reimbursement. However, she noted many employees have contracts with insurance companies that do not recognize licensed marital and family therapists as approved providers, as Ms. Lindell described. Ms. Hood said her difficulties have been mainly with Blue Cross Blue Shield Alaska who does not reimburse for these services in Alaska, although she said Blue Cross in California does. She indicated in Juneau the city employees, police officers, hospital employees and school district employees are not able to receive reimbursement for the services she provides because they have Blue Cross Blue Shield Alaska health insurance coverage, noting this is devastating to her private practice in terms of being able to earn a living here. Number 0134 MS. HOOD related a situation she had experienced. She was contacted by an attorney on behalf of a person in another Southeast Alaska community because of her ability to provide services by phone or other means for people with special needs. The patient in question was in his or her early twenties, had been severely injured in an accident, and was permanently disabled and would not be able to work. This person came to Juneau to meet Ms. Hood and give her some background information and then they had weekly sessions. Ms. Hood said this patient was extremely depressed and suicidal. The counseling services Ms. Hood provided were paid out of the accident settlement. The patient's claim for reimbursement to Blue Cross Blue Shield Alaska was denied because "services by this provider are not covered." Ms. Hood provided the committee with a copy of the denial form both she and the patient had been sent, with identifying material deleted. She said the client terminated counseling because of this denial, feeling unable to afford the services although a counseling relationship had already been established. Ms. Hood said she thought there were many other examples of this. She thinks it is very important to add licensed marital and family therapists to the list of accepted providers, both in terms of being able to compete in the marketplace with other mental health providers, and providing services at a reduced cost compared to psychologists and psychiatrists. She noted Alaskan dentists and other professionals had been very upset about the language of the amendment in the Senate the previous year which was subsequently removed, indicating she did not wish that issue to interfere with the bill's progress. Number 0283 REPRESENTATIVE RYAN noted he was not familiar with her profession per se and asked about her educational background. Number 0299 MS. HOOD answered that her bachelor's and master's degrees were in psychology. She noted she had two master's degrees, the first from San Francisco State University in an academic psychology program with an emphasis in college teaching. Her second master's degree had a complete emphasis on the clinical aspects of psychology dealing with child and adolescent development, historical theories of psychology, family systems, substance abuse, required statistics and research courses and projects, and testing and measurement courses. She said she had an entire program requirement of studying and administering psychological tests, noting that if she had additional training, as psychologists do, she would also be able to administer these tests but that is not within her scope of practice. Number 0375 REPRESENTATIVE RYAN noted these clients have already been diagnosed by a medical professional with a disfunction and she is just one of a group helping to treat this disfunction. He asked, then, didn't she receive referrals or did people just come in off the street. MS. HOOD answered both situations happen, noting that often a person is referred by a physician who suggests that person seek mental health counseling because he or she is having trouble sleeping or is experiencing extreme stress. Number 0406 REPRESENTATIVE RYAN asked if an insurance company would pay a bill she submitted at that point without problem. MS. HOOD answered that Blue Cross Blue Shield Alaska would not pay. She said she also has clients who contact her directly for counseling services. REPRESENTATIVE RYAN asked if she would be paid if she was a psychologist. MS. HOOD replied that she would be paid if she was a licensed psychologist. Number 0430 CHAIRMAN ROKEBERG referred to copy of the denial form Ms. Hood had received from Blue Cross Blue Shield Alaska. He asked if she had asked what the procedure codes meant. MS. HOOD said she knew "90844" meant one hour of individual counseling but she was not sure of the others. She indicated the claim form for reimbursement had been submitted to Blue Cross Blue Shield Alaska by the patient. CHAIRMAN ROKEBERG asked if she contacted Blue Cross Blue Shield Alaska to find out why she was not reimbursed, and what had been the response. Number 0482 MS. HOOD said Blue Cross Blue Shield Alaska told her that licensed marital and family therapists are not covered. The Division of Insurance told her grievance forms are available and she sent one to the client who, however, was too discouraged to pursue it. Ms. Hood added that the person she spoke to at the Division of Insurance told her very few people challenge any of this, noting she has learned in helping clients receive reimbursement from insurance companies, that claims are very often rejected initially, and she urges clients to persist in their efforts to receive reimbursement if they are legitimately entitled to the services. Number 0548 CHAIRMAN ROKEBERG asked her if she could qualify to become a licensed psychologist in Alaska with her current level of education. Number 0558 MS. HOOD replied that if she earned a Ph.D. and passed a licensure exam she could be a licensed psychologist in Alaska, noting a Ph.D. generally involved a research project and dissertation. In terms of her clinical training, she could currently qualify as a licensed psychological associate in Alaska. Number 0583 REPRESENTATIVE RYAN asked if her if she could be licensed as a practitioner if she had a master's degree in sociology. MS. HOOD questioned, "If I was a licensed social worker?" REPRESENTATIVE RYAN said, "Master's level social worker, could you ..." MS. HOOD said she could be reimbursed if she was a licensed social worker for her services. Number 0600 REPRESENTATIVE RYAN asked if she could explain the disparity between a master's level social worker (MSW) and a master's level psychologist. Number 0607 MS. HOOD replied that a master's level psychologist can be licensed as a psychological associate in Alaska and can be reimbursed by insurance, by Blue Cross Blue Shield Alaska, for example. Licensed social workers can also be reimbursed. Ms. Hood said MSWs were added to the list a few years ago, commenting this addition was evidently attached to a bill not closely scrutinized by some of the insurance companies, and licensed marital and family therapists have not been so lucky. Number 0651 JERRY REINWAND, Lobbyist for Blue Cross Blue Shield Alaska, came forward to testify next. He stated Blue Cross Blue Shield Alaska thinks there is a bigger issue related to SB 122 than the group lobbying to be added to the list. He indicated the insurers are being asked to comply with a law that is not defined, noting there is no definition of what constitutes unfair discrimination by statute or regulation, but this list continues to be added to through the years. He said every time one of these bills comes up they are trying to at least let the legislature know that it is somewhat hard to comply with a law when the meaning is unclear. He said they believe this legislature should be the one to examine it and at least define what unfair discrimination is. He noted controversial amendment had been made in the Senate stating what unfair discrimination is not. He indicated the same amendment had passed ten to eight approximately a week before on SB 197, noting that bill section had subsequently been removed. Mr. Reinwand said Blue Cross Blue Shield Alaska doesn't have anything against marital and family therapists or anyone else, the company just thinks there is a bigger issue. He said being asked to comply with a law that is not defined is very difficult situation and is not fair. Number 0722 CHAIRMAN ROKEBERG asked if the amendment Mr. Reinwand provided to the committee was in SB 197. MR. REINWAND commented the amendment was in SB 197 for a short period of time, noting it passed on the Senate floor and then the bill sponsor chose to remove that section of the bill. CHAIRMAN ROKEBERG indicated he would probably examine SB 197. Number 0744 REPRESENTATIVE RYAN asked what kind of impact Blue Cross Blue Shield Alaska expected if licensed marital and family therapist services were covered for reimbursement, commenting that the company obviously looked at its "bottom line." Number 0760 MR. REINWAND replied that was almost impossible to determine because the company does not know what "not being able to unfairly discriminate" means. He commented on his high opinion of Marianne Burke, the current director of the Division of Insurance and said, in example, that Ms. Burke had been asked this question at a House Finance Standing Committee meeting. He said she responded that it was impossible to tell because they don't know what it means and they don't know what the full impact is. Mr. Reinwand indicated that is the main point Blue Cross Blue Shield Alaska has been trying to make. He noted it is a "huge gray area" if they don't know what unfair discrimination means and how it is going to be enforced, and he question the meaning of "scope of service." Through the years he said he has heard many different definitions from Division of Insurance staff, from "any willing provider" to something less than that, explaining he was not trying to be evasive. Number 0818 REPRESENTATIVE RYAN restated his question. He noted population and scope of practice must have limits and asked what the liability would be if Blue Cross Blue Shield Alaska was to reimburse licensed marital and family therapists for their services. Number 0836 MR. REINWAND replied the company has not done that analysis, indicating he didn't know how it could be done. He said he has been unable to find a definition for "scope of service" in the statutes or regulations; he said he did find a definition of the practice of marital and family therapy and he asked if that meant if Blue Cross Blue Shield Alaska received a bill for any the listed services it had to pay that bill. He commented it was "wide open." Number 0868 CHAIRMAN ROKEBERG referred to the reimbursement denial form Ms. Hood had received from Blue Cross Blue Shield Alaska and asked Mr. Reinwand to find out the meaning of the procedure codes for the committee's information. He also asked Mr. Reinwand to explain to the committee that Blue Cross Blue Shield Alaska is not the Blue Cross of California. Number 0895 MR. REINWAND said each plan in each state is different and operated differently with some degree of autonomy, belonging to the national association. He explained that the plans didn't really have anything to do with each other and their reimbursement policies weren't related, noting it depended on the varying state laws and California might have some statute requiring reimbursement for these services. Number 0928 REPRESENTATIVE RYAN said he was wondering if the billing codes were Medicaid codes. He indicated the medical procedure billing codes made up four large volumes, described each individual detailed procedure, and numbered in the millions. He stated that if these particular codes reflected that, then they are part of an accepted medical business standard. MR. REINWAND said they would look into the specified codes. Number 0976 REPRESENTATIVE SANDERS asked why the insurance companies don't currently cover these services. Number 0983 MR. REINWAND said he would have to check, noting this is actually the first time he has heard there was a real problem with this. He commented that perhaps there has been a clerical error or maybe there is just a policy against reimbursing this group. Number 0998 CHAIRMAN ROKEBERG indicated it appeared to be a denial based on the type of occupational licensing, mentioning that the committee would like to know for the record if this was a policy of Blue Cross Blue Shield Alaska. Number 1011 MR. REINWAND indicated there seems to be a close correlation between groups requesting licensure, then wanting to get on this list, then requesting reimbursement from insurance companies for services. Number 1019 CHAIRMAN ROKEBERG referred to Mr. Reinwand's suggested amendment, noting he thought its breadth was very comprehensive. He asked Mr. Reinwand to explain the intention and purpose of the amendment. The proposed amendment reads: Page 1, Line 11, following "subsection": Insert "(1)"; Page 2, line 1, following "midwife"; Insert "; (2) "unfair discrimination" does not include requirements imposed by an insurer for purposes of utilization review, cost containment, or standards of clinically appropriate health care services" Page 2, line 8, following "subsection": Insert "(1)" Page 2, line 11, following "worker": Insert "; (2) "unfair discrimination does not include requirements imposed by an insurer for purposes of utilization review, cost containment, or standards of clinically appropriate health care services" Number 1042 MR. REINWAND noted the numbering, et cetera, of the amendment was incorrect because the bill version before the committee was the House State Affairs Standing Committee's substitute, HCS SB 122(STA). He said Blue Cross Blue Shield Alaska had examined how this situation had been handled by other states, indicating the state of Washington uses a similar type of language concerning "unfair discrimination" and what each health care plan in the state must do. He said at first they attempted to modify Washington's language, but after examination decided that didn't work. He indicated a decision had to be made whether to use a positive or negative definition of unfair discrimination. Mr. Reinwand indicated Blue Cross Blue Shield Alaska felt it was not capable of defining what unfair discrimination is, stating that is a major policy issue the legislature ought to address. He said they have an idea of what it should not be, noting he is sure there will be people who disagree. Number 1109 REPRESENTATIVE RYAN said he thinks the latter part of the amendment, "the standards of clinically appropriate health care services", is appropriate, indicating a provider needs to present the proper credentials. Representative Ryan mentioned the insurer's utilization review or cost containment, noting those are some "catchalls" and he did not know that those would be fair to practitioners of any professions. He commented he would like to see definitions for those terms, noting if they are going to amend this code to tell what something isn't, it would be nice if they include definitions of those terms so that everybody, other than the insurer, knows where they stand on those items. Number 1235 MR. REINWAND said Blue Cross Blue Shield Alaska agrees totally. He indicated that all the company is trying to do is let the legislators, as policy makers, know that there is a problem. They are being asked to comply with a very serious law and there is no definition and they think this is better defined by the elected members of the legislature. Mr. Reinwand agreed with Representative Ryan that this needs a lot of work, noting they are just trying to make a point. Number 1270 CHAIRMAN ROKEBERG asked Mr. Reinwand his personal and professional opinion of whether or not Blue Cross Blue Shield Alaska is fundamentally one of the few, if only, insurance underwriters in the state of Alaska writing individual health insurance policies. Number 1296 MR. REINWAND replied that Ms. Burke, director of the Division of Insurance was present and she probably had a much better feel for that than he did. He thought they were the predominant carrier in the individual market, noting that is a very price-sensitive market and one that tends to have some problems. He said he believed Blue Cross Blue Shield Alaska was also the dominant carrier in the small group market in Alaska, so those two markets are important to them. Referring to the codes on Ms. Hood's denial form, he indicated sometimes mistakes are made in individual cases, giving one example he knew of where reimbursement was denied because preauthorization was not gotten. He said this situation had been resolved and paid. He noted, in his dealings with the Division of Insurance, if there is a problem, the division makes sure it is resolved. He thinks the director could tell the committee about the very active consumer protection aspects of her division and he said the division is not hesitant to call Blue Cross Blue Shield Alaska when there is a problem. Number 1388 SHARON MACKLIN, Lobbyist for the Alaska Psychological Association and the Alaska Physical Therapy Association, came forward to testify next. Providing some general information she thought might be helpful to the committee, she said she had been involved with the addition of the psychologists to this provider list several years ago, so that if someone's health insurance covered mental health services, psychologists and psychological associates could be reimbursed. She commented that one of the main reasons they provided support for the addition of psychologists was that psychologists are located in more diverse areas than psychiatrists. Historically insurance companies were only covering physician services under mental health services, meaning psychiatrists. By expanding the group of allowed providers of mental health services to include psychologists, psychological associates, and social workers, people from smaller communities around the state could access services of these different providers. She also said these providers' fees have historically been less than psychiatrists'. She indicated that before psychologists had been added to this list, Blue Cross Blue Shield Alaska had not reimbursed for their services but psychologists also had problems receiving reimbursement from other companies like Great Western (ph). Ms. Macklin also indicated that they feel this is a very big issue and it should be addressed in the context of health care services, if the legislature chooses to address it. She gave the example of Representative Ryan's bill looking at patient protection and patient choice, noting something of that sort would be the proper place for unfair discrimination to be defined. She indicated the impact of an amendment such as this is unclear when it has not had the opportunity for full discussion in front of the legislature, noting the organizations she represents are very concerned about that. Number 1592 CHAIRMAN ROKEBERG asked Ms. Macklin to refresh his memory on the education levels of psychological associates. Number 1599 MS. MACKLIN replied they were master's level, noting psychologists were at the doctorate level. Number 1610 REPRESENTATIVE RYAN asked if there hadn't been some form of sociologist associate. Number 1618 MS. MACKLIN said there were social workers, commenting that there was a bill designating different licensing levels for social workers but didn't have a lot of knowledge about that. Number 1628 REPRESENTATIVE RYAN referred to a past bill, possibly SB 196 sponsored by Senator Rieger. He asked if that was the one that made psychological associates a couple of years ago. CHAIRMAN ROKEBERG indicated that was correct. MS. MACKLIN asked, "You mean added them on to this?" REPRESENTATIVE RYAN indicated that was his meaning. Number 1642 MS. MACKLIN replied in the negative, noting they had added psychologists, psychological associates and social workers to an "insurance rewrite or a rewrite of the insurance code" four or five years previously, commenting she did not remember the bill number. CHAIRMAN ROKEBERG indicated that was before his time. REPRESENTATIVE RYAN said he just wondered because Senator Rieger had a bill which was passed a couple years previously. CHAIRMAN ROKEBERG said that was the psychological associates' bill. Number 1673 MS. MACKLIN recalled the bill, but noted it was different issue. She said it wasn't Senator Rieger's bill, but the bill changed the amount of supervision time for master's level psychological associates from five years of supervision down to two years which is the same required of social workers. Number 1726 MARIANNE BURKE, Director, Division of Insurance, Department of Commerce and Economic Development, came forward to testify. She commented on the amount of testimony and would like to go back to one fundamental issue. She said she has researched the original legislation that enacted AS 21.36.090(d). AS 21.36.090(d) reads: "(d) Except to the extent necessary to comply with AS 21.42.365 and AS 21.56, a person may not practice or permit unfair discrimination against a person who provides a service covered under a group health insurance policy that extends coverage on an expense incurred basis, or under a group service or indemnity type contract issued by a nonprofit corporation, if the service is within the scope of the provider's occupational license. In this subsection, "provider" means a state licensed physician, dentist, osteopath, optometrist, chiropractor, nurse midwife, advanced nurse practitioner, naturopath, physical therapist, occupational therapist, psychologist, psychological associate, or licensed clinical social worker, or certified direct-entry midwife." MS. BURKE stated the purpose of that section in the unfair trade practices and fraud section of Title 21 was to prohibit discrimination against like-credentialed, like-trained and like- experienced people. For example, it is not possible to pay one cardiologist and deny payment to another cardiologist with the same training, license and experience. That is unfair discrimination and she thinks they can all see the rationale behind that. Number 1793 MS. BURKE said, however, over time this particular section of Chapter 36 has become a "good housekeeping seal of approval." She stated that was not its intent, indicating that the inclusion or exclusion of provider groups relating to this list should not be misinterpreted to mean a provider is or is not reimbursed. The controlling mechanism is the contract of insurance. An employer who goes out to negotiate or purchase a contract of insurance to cover its employees has the right to negotiate for whatever coverage the employer feels is in its employees' best interest, the employer's own best interest, or what the employer can afford. This is an agreement between the insurer and the purchaser of the insurance contract. She stated it is the employer's right to decide it does not want to cover, for example, aromatherapy. She said the division has never had the authority, never sought the authority, and, in her opinion, never wants the authority to dictate to purchasers of insurance what they should or should not purchase. Number 1918 MS. BURKE added, however, there are guidelines. It is not allowed, within this employer's group, to apply the (indisc.) of a coverage to the employer's family and not his or her employees; it must be consistently and fairly applied within that contract. She said there has been talk of mandated versus not mandated. The contract of insurance between the employer and the insurer can have some mandated coverage, noting the legislature has mandated certain coverage: mammograms and prostate examinations for example. These are now required of insured plans. She said there has been discussion as to what the impact of offering a variety of choices to patients may be and she sincerely hopes that giving greater choice will result in lower cost. Ms. Burke noted that is not always the case. There are cases, they know this to be a fact, where once someone is included under this "magic umbrella," the prices have gone up because it is now covered by insurance, commenting she can't say it is specific to Alaska but she knows it is specific to the health care industry. With all due respect to members of the profession, she indicated everyone knows there are people who feel insurance is a "gigantic pot of money" which never needs to be replenished. Ms. Burke said she is not inferring in any way that marital and family therapists would increase their fees, she is simply providing testimony of what could happen to both sides. Number 2094 MS. BURKE noted unfair discrimination has been discussed and she said Mr. Reinwand is exactly right, it is not defined and, in her opinion, it is virtually impossible to define unfair discrimination because unfair discrimination is always based on facts and circumstances. The Division of Insurances's position, at least while she has been there, is that for something to not be unfairly discriminatory, it must be supported by statistical evidence, by data that can be reviewed by the division's analyst and determined whether or not the data supports this particular discrimination. She gave an example, noting it is absurd, but absolutely supported by statistics. She, as a healthy person, would pay more for a life insurance policy than her daughter would for the same amount of coverage because, statistically, she is going to die before her daughter and would therefore pay fewer premiums. She noted that if a decision not to cover someone is based on his or her race, creed or national origin, that is considered unfair discrimination by law, but other basises must be supported by facts - statistics which can be examined. She indicated the division challenges these and it must be proved and supported to the division's satisfaction or the division will not approve it. Number 2270 MS. BURKE said that in response to Senator Leman's questions the previous year, she brought together a task force of industry, agents, brokers, consumers and regulators to try to come up with a definition of unfair discrimination. She indicated that because the definition of unfair discrimination will vary depending on the characteristics of any situation she believes that it is virtually impossible to define, as much as they would all like to have, noting that is why they do have situations which define it in the negative, "it is not this." Ms. Burke said last year she sent a letter to Senator Mackie addressing the amendment currently before the committee. She stated "utilization review," for example, is a very common mechanism in health care delivery. It addresses the frequency and appropriateness of what is going on, and more frequency than anything else. For example, if a medical doctor says he or she has to see a patient once a week for the rest of the year, that could be challenged on whether or not it was appropriate utilization of that service. Ms. Burke noted that, however, it is extremely important that insurance companies, or people who aren't properly qualified, not be allowed to make those decisions. She indicated the judgement regarding appropriateness should be based peer to peer. She stated, "We did find in market examination, a company in this that was doing business ..." [TESTIMONY INTERRUPTED BY TAPE CHANGE] TAPE 98-23, SIDE A Number 0001 MS. BURKE continued, "... peer to peer. That's a professional judgement, one that the insurance companies are not qualified to make, nor is the Division of Insurance." She said she can support this amendment with a very large caveat, that it should never be used as an attempt to force a patient to seek the cheapest service. She said she thinks it should be what is most appropriate for that patient, not the cheapest. Ms. Burke apologized for getting on something of a "soapbox" but noted she feels very strongly about this. Number 0082 CHAIRMAN ROKEBERG referred to the first part of a legal opinion from Mike Ford, legislative counsel, dated April 17, 1997, which reads, "You have asked for an explanation of the effects of CSSB 122(L&C). Under sec. 1 of the bill, marital and family therapists are added as a protected class of health care providers. Under this provision, if a marital and family therapist provides health care services, the services are covered under a group health policy, and are within the scope of the provider's occupational license, then the insurer could not deny coverage. This is primarily the effect of the bill." Chairman Rokeberg asked Ms. Burke if she agreed with that analysis. MS. BURKE said she thought it was a bit of an oversimplification, with all due respect to Mr. Ford. CHAIRMAN ROKEBERG said some of her testimony didn't seem to be quite in line with this statement which was why he brought it up, and he asked her to expand, noting it might be helpful. Number 0163 MS. BURKE said she thinks, again, rather than the provider of the service, it should be kept in mind that it is the service which is being reimbursed for. CHAIRMAN ROKEBERG noted that made sense to him but he asked if the insurance industry categorized things like that. Number 0190 MS. BURKE indicated it was the division's job to make sure the industry does so. She said any insurance policy tells what it covers and what it does not. It doesn't say, "We will cover cardiologists and urologists and obstetricians." It says it will cover heart treatment, urology problems and giving birth. She said she thinks it is not appropriate to try to change the application to the provider, and, if she had her way, with due respect to this body, she would repeal this section in a heartbeat and reintroduce a simple provision that would say that it is unfair discrimination to discriminate against providers who are similarly trained, similarly credentialed, and similarly licensed to provide the covered service. She said if the state of Alaska feels it is appropriate for a veterinarian to provide brain surgery on a human, who is she to question it, noting she would not realistically go to that provider; but she said, nevertheless, it is becoming ridiculous that every legislative session there is another group asking, quite honestly and sincerely, to be added to this list. She said she wonders, "What are we accomplishing?" Number 0358 CHAIRMAN ROKEBERG said, "Then, the burden rests on the insurer to interpret what he meant by the contractual relationship between, say, the employer or the individual contractee with the insurance underwriter. Aren't then we back where we are now, though?" Number 0374 MS. BURKE answered in the affirmative and indicating there is a complaint process if someone is not satisfied, and the division pursues complaints. She noted Mr. Reinwand referred to a particular $12,000 case, and she said another one with AETNA for $186,000 was settled recently. Number 0411 CHAIRMAN ROKEBERG noted testimony indicated Blue Cross Blue Shield Alaska is one provider which has denied coverage for marital and family therapists providing services which the marital and family therapists believe might otherwise have been covered under a particular policy's contract clause. He asked if there had been complaints about Blue Cross Blue Shield Alaska's activity as it relates to these types of licensees. Number 0445 MS. BURKE said she could check, but she would also say that there are going to be complaints against many insurers; it is not limited to one or the other. CHAIRMAN ROKEBERG asked, "No, but is there resolutions where you've in fact -- is there a case for example, where Blue Cross, after a complaint has been investigated by your division and paid a, say, all (indisc.) portion of these particular occupational licensing ... costs." MS. BURKE said she would have to check the database, she does not know all the complaints. CHAIRMAN ROKEBERG noted this would be certainly helpful for the committee. Number 0505 REPRESENTATIVE COWDERY indicated it seems better insurance coverage costs the consumer more, and he commented that in some insurance options like vision and dental coverage can be selected. He asked Ms. Burke if she knew of insurance companies that covered the services of marital and family therapists. MS. BURKE answered in the affirmative, indicating coverage is negotiated. She said that, after all, the insurance companies are providing a product and they are going to respond to the market, indicating that if an employer wants this coverage, there will be an insurance company that will find a way to offer the coverage. Number 0585 REPRESENTATIVE RYAN asked if most of the policies for health coverage in the state of Alaska covered mental health services. He indicated it appears this group has had a professional organization since 1942 and he assumes they have a code of ethics. He said if they hold the same comparable educational backgrounds to people the state already licenses in these particular professions of master's level social workers, psychological associates and so forth, and if they are members in good standing and license in this organization, he is having trouble understanding what the problem is. Representative Ryan said they are delivering the same service with the same professional background, using an "apples and apples" analogy. He indicated he understood the argument from the insurer's business point of view, that the service had not been negotiated. He also indicated, with Ms. Burke's suggestion, it might be something they should take under advisement. Number 0694 MS. BURKE said she agreed with his statement that if they are equally credentialed, licensed, experienced, et cetera, it doesn't make much sense. However, she said unfortunately that is the way it has evolved, and that is why she would like to see the whole thing repealed and get back to a simple statement, "Properly licensed, credentialed, experienced." Number 0732 CHAIRMAN ROKEBERG asked her to explain for the record and the committee, using this bill as an example, the distinction between what insurer underwriters will be affected by this legislation and those who are exempt as far as ERISA (Employment Retirement Income and Security Act), PPO (preferred provider organizations), et cetera, and to make a guess at the percentages in Alaska. Number 0775 MS. BURKE replied that there is a great deal of misinformation circulating. She said self-insurance is exempt from state regulation, laws, statutes, et cetera. It is preempted by ERISA, federal law that has been in effect since 1974. She said the state of Alaska is exempt from ERISA. What Alaska's legislature enacts has no effect on self-insurance, which the division estimates is anywhere from approximately 35 percent up. She noted the larger employers elect to self-insure. She said that even though she is the director of the Division of Insurance, she applauds what they are doing, noting she set up self-insurance programs for NANA Regional Corporation, Incorporated, and all of its subsidiaries. She estimated that when they are talking about insurance for people covered, 30 to 35 percent of Alaskans with coverage will be affected by the legislature's actions. Number 0888 CHAIRMAN ROKEBERG clarified that large companies who self-insure under ERISA are exempt from any insurance statutes the legislature promulgates. MS. BURKE answered in the affirmative. CHAIRMAN ROKEBERG said ARCO Alaska, Incorporated; BP Exploration (Alaska) Incorporated; and the Municipality of Anchorage would all be exempt. MS. BURKE added Carr-Gottstein would be as well. CHAIRMAN ROKEBERG confirmed Ms. Burke believed 30 to 35 percent of covered people could be affected. He said his gut feeling is that might be a little high. Number 0926 MS. BURKE said it is a guess based on the list of large companies in the state, knowing which ones are self-insured and which ones aren't. She referred to the "49-ers" that lists the number of employees of large companies. CHAIRMAN ROKEBERG noted how ironic, commenting that most of those people are either small business people with small group plans and/or individuals that can't otherwise get insurance. MS. BURKE said Chairman Rokeberg was correct. Number 0955 REPRESENTATIVE RYAN asked, if a company or organization is self- insured, is it the group's option to hire someone to administer its program or can it administer its own program. MS. BURKE replied they can even hire an insurance company to act as a third-party administrator which means the insurance company pays the bills according to the plan, it coordinates the benefits, it's not at risk, it doesn't insure. For example, NYLCare Health Plans Northwest is a third-party administrator for the state of Alaska's plan. She said ERISA has strict requirements for disclosure, reporting, et cetera, noting the state plan is exempt from these requirements because it is exempt from state and federal law. Number 1019 GORDON E. EVANS, Lobbyist for the Health Insurance Association of America (HIAA) came forward to testify next. He said he wholeheartedly agreed with everything that Mr. Reinwand and Ms. Burke had said. He said HIAA is a national trade association of approximately 200 national health insurance companies not including Blue Cross Blue Shield Alaska, AETNA, and some of the other major carriers; they represent mostly smaller carriers. He indicated he thinks their biggest company is the Principle Health Care, Incorporated. He said he has watched this anti-discrimination statute at least over the past 15 to almost 20 years, and it has gone from, exactly as Ms. Burke said, what it was intended to be: like-experienced, like degrees, et cetera, "apples to apples," to what it currently is. He said at least ten of the listed providers have been added within the past ten years, indicating it seems a new group comes in each year. He commented acupuncturists even attempted to get added but were not successful. He noted the statute only applies to group health policies, and doesn't really take in individual policies. He reiterated that it doesn't apply to self-insured employers or other entities governed by ERISA: not only state employees, but federal employees, Indian Health Service people, Champus-covered people (military dependents) and large private carriers. Mr. Evans indicated he thought, from a figure used several years ago, that almost 80 percent of the people in the state were not covered by the legislature's actions in this area, noting he had no way to verify that but thinks he received that figure from Mr. Walsh, Ms. Burke's predecessor. Mr. Evans indicated some of the companies he represents might only write one policy in Alaska, so it would be difficult to find out those statistics. He said he agrees with Ms. Burke's suggestion to repeal this and start over with what was intended. He spoke in support of the proposed amendment as a start to defining what is not discriminatory if this particular statute was going to be kept. He indicated the last part of the amendment, referring to "page 2, line 8" of the bill, was no longer necessary because of the passage of the "omnibus insurance bill" the previous year. Number 1236 CHAIRMAN ROKEBERG said Mr. Evans indicated his reading of AS 21.36.090(d) says it only applies to a group health insurance policy that extends coverage on an expense-incurred basis, or under a group service or an indemnity-type contract issued by a nonprofit corporation. He asked, "Wouldn't an indemnity-type contract for an individual be a Blue Cross?" MR. EVANS replied that it says group service or indemnity, and so he wondered whether even Blue Cross Blue Shield Alaska was covered. CHAIRMAN ROKEBERG noted they were getting a yes nod from Ms. Burke that Blue Cross Blue Shield Alaska was covered. MR. EVANS said again, as Ms. Burke pointed out, it also talks about a service that is covered by these policies and not by one of the providers; just because this provider may be listed here, if a policy doesn't cover the service, then he guessed there was no barrier to discrimination. CHAIRMAN ROKEBERG indicated he thought the industry should have figured this out by this time. MR. EVANS said it is impossible to figure it out the way it is written. Number 1326 CHAIRMAN ROKEBERG said the committee would be holding SB 122 and hopefully Mr. Evans would be able to help them "see some light at the end of the tunnel" so they could make sure these people are able to do their work and insurance consumers receive fair coverage. He asked Mr. Evans if any of his clients used this "laundry list" to change their payment policies, noting Mr. Evans made the distinction about providers of service but it seems as if that has been going on here. Number 1355 MR. EVANS indicated as far as he knew, if a group is listed and performs a service similar to another listed provider, the insurers would have to pay for one of these other providers, using the example of psychologists, psychological associates and psychiatrists. Number 1394 CHAIRMAN ROKEBERG asked Mr. Evans if any of his clients deny coverage because they have providers that aren't on this list, as opposed to services. MR. EVANS said he could not answer that question, noting an honest guess would probably be yes. CHAIRMAN ROKEBERG asked, then, did the providers have to be on that list to be able to receive any kind of reimbursement. MR. EVANS replied he wasn't sure and had just given an honest guess. Number 1419 CHAIRMAN ROKEBERG said, "So, is this little subsection become the touchstone for ... who's in and who's out in the state statutory scheme? Is that the problem here we're facing?" He asked Mr. Evans if he could check that out with some of his major companies. MR. EVANS said the companies he represents are very small in the Alaska market. He noted that AETNA was a member of HIAA five years ago, but it and several other larger insurers withdrew from HIAA and formed their own group. Number 1474 MS. HOOD returned to the witness stand. She explained that the procedure codes on the denial form she presented to the committee were the differing amounts of time she spent in counseling with the client. CHAIRMAN ROKEBERG questioned whether it had anything to do with the type of service. Number 1499 MS. HOOD replied in the negative, noting it was just individual counseling. She said she wanted to clarify something Ms. Burke said. Ms. Hood indicated that in terms of mental health services, the benefit booklets do specify the providers that will be covered and if marital and family therapists not listed among those providers, a patient will not receive reimbursement for their services. Ms. Hood said this nondiscriminatory list that licensed marital and family therapists wish to be added to, in Alaska, makes the difference between who the insurance company will reimburse for and who they will not, and so it is strictly because this Act has not added marital and family therapists to it that they are discriminated against. Number 1585 ANNETTE KREITZER returned to the witness stand. She said she wanted the committee to think about it in terms of breaking a leg. If someone breaks a leg, he or she can go to a physician's assistant, nurse practitioner, orthopedic surgeon or a family practitioner. What they are talking about here are services, not providers, and when they start cuing into the provider list, they sort of skew the view of what is going on here. She noted there are some components of medical coverage, such as mental health services, where specific allowed providers are listed, and she indicated adding marital and family therapists to this list allowed another lower-cost provider option. She commented there had not been support on the Senate floor for the proposed amendment or a "letter of intent" containing the same language. She referred to Ms. Burke's testimony about the difficulty of defining unfair discrimination. Ms. Kreitzer said she agrees this may not be the best solution to the problem, but this is where they are, and the reason why people come to the legislature and ask to be added to that list is because they are not being covered when they submit their insurance claims. She noted she had been the administrator for a rural health clinic and has fought on behalf of patients with insurance coverage, talking with the insurance companies about what should or shouldn't be covered. She stated, "For instance, do you want to pay for a mid-level practitioner's service or do you want ... us to put these people on a plane to Anchorage and (indisc.) will cost you $6,000 by the time we're all said and done here, and you can pay for that." She said she appreciated the committee's careful consideration of SB 122. SB 122 was held over.
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