Legislature(2005 - 2006)CAPITOL 17
03/18/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB147 | |
| HB150 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 147 | TELECONFERENCED | |
| += | HB 150 | TELECONFERENCED | |
| *+ | HB 196 | TELECONFERENCED | |
| *+ | HB 203 | TELECONFERENCED | |
| *+ | HB 216 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 18, 2005
3:27 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Pete Kott
Representative Gabrielle LeDoux
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 147
"An Act relating to the regulation of insurance, insurance
licensing, surplus lines, insurer deposits, motor vehicle
service contracts, guaranteed automobile protection products,
health discount plans, third-party administrators, self-funded
multiple employer welfare arrangements, and self-funded
governmental plans; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 150
"An Act requiring licensure of occupations relating to
radiologic technology, radiation therapy, and nuclear medicine
technology; and providing for an effective date."
- MOVED CSHB 150(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 203
"An Act relating to a motor vehicle dealer's selling certain
motor vehicles as new model motor vehicles or as new model motor
vehicles having a manufacturer's warranty."
- BILL HEARING POSTPONED TO 3/21/05
HOUSE BILL NO. 216
"An Act relating to insurance rate-making and form filing."
- BILL HEARING POSTPONED TO 3/21/05
HOUSE BILL NO. 196
"An Act relating to the alternative energy project loan program
of the Alaska Industrial Development and Export Authority."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 147
SHORT TITLE: INSURANCE
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/14/05 (H) READ THE FIRST TIME - REFERRALS
02/14/05 (H) L&C, FIN
02/23/05 (H) L&C AT 3:15 PM CAPITOL 17
02/23/05 (H) Heard & Held
02/23/05 (H) MINUTE(L&C)
03/02/05 (H) L&C AT 3:15 PM CAPITOL 17
03/02/05 (H) Heard & Held
03/02/05 (H) MINUTE(L&C)
03/16/05 (H) L&C AT 3:15 PM CAPITOL 17
03/16/05 (H) Scheduled But Not Heard
03/18/05 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 150
SHORT TITLE: LICENSING RADIOLOGIC TECHNICIANS
SPONSOR(s): REPRESENTATIVE(s) ANDERSON
02/14/05 (H) READ THE FIRST TIME - REFERRALS
02/14/05 (H) L&C, JUD, FIN
02/23/05 (H) L&C AT 3:15 PM CAPITOL 17
02/23/05 (H) Scheduled But Not Heard
03/02/05 (H) L&C AT 3:15 PM CAPITOL 17
03/02/05 (H) Heard & Held
03/02/05 (H) MINUTE(L&C)
03/18/05 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
PATRICIA NAULT, Trustee
Alaska State Employee Association (ASEA) Health Benefit Trust
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to Sections 28 and
29 of HB 147.
CHRIS PACE
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to the fiscal note
and Sections 28-29 of HB 147.
COLLEEN SAVORI
Public Employees Local 71
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 147.
JON COOK, Director
Alaska Auto Dealers Association
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to Sections 30 and
33 of HB 147.
MIKE COMBS
Alaska Independent Agents and Brokers Incorporated (AIABI)
(No address provided)
POSITION STATEMENT: Proposed amendments to HB 147.
LINDA HALL, Director
Division of Insurance
Alaska Department of Commerce, Community, and Economic
Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding HB 147.
JON BITTNER, Staff
to Representative Anderson
Alaska State Legislature
POSITION STATEMENT: Presented HB 150 and an amendment as staff
to sponsor.
ALEX MALTER, MD
Alaska State Medical Association (ASMA)
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 150.
REPRESENTATIVE PEGGY WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 150.
JIM TOWLE, Executive Director
Alaska Dental Society
Anchorage, Alaska
POSITION STATEMENT: Testified in support of Amendment 1 to HB
150.
STEVEN WAHL, MD,
Tok Community Clinic
Tok, Alaska
POSITION STATEMENT: Testified in opposition to HB 150.
DON SMITH, PA
Wasilla Medical Clinic
Wasilla, Alaska
POSITION STATEMENT: Testified in opposition to HB 150.
TIMO SAARINEN
Alaska Society of Radiologic Technologists
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 150.
ACTION NARRATIVE
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:27:30 PM. Representatives
Crawford, Lynn, Guttenberg, LeDoux (via teleconference),
Anderson, and Rokeberg were present at the call to order.
Representative Kott arrived as the meeting was in progress.
HB 147-INSURANCE
3:28:42 PM
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 147, "An Act relating to the regulation of
insurance, insurance licensing, surplus lines, insurer deposits,
motor vehicle service contracts, guaranteed automobile
protection products, health discount plans, third-party
administrators, self-funded multiple employer welfare
arrangements, and self-funded governmental plans; and providing
for an effective date."
PATRICIA NAULT, Trustee, Alaska State Employee Association
(ASEA) Health Benefit Trust ("the Trust") commented:
The Trust is one of entities that would be subject to
the requirements proposed in Sections 28 and 29 on HB
147. By definition in the Trust agreement, trustees
are members of the Alaska State Employee Association
Local 52, so I'm also a union member and a beneficiary
of the Trust as well as a trustee. Since 2001, the
Trust has been providing employee health benefits
under a self-insured plan to approximately 7,000 ASEA
members and an additional 10,000 dependents of those
members under provisions of the union's collective
bargaining agreement with the state. I am a
relatively new trustee, having been elected to this
responsibility in November 2004 by my fellow union
members. I ran for this seat because I felt that by
virtue of the experience and knowledge I have gained
in 12 years of working in policy and program
development at the [Alaska Department of Health and
Social Services] and my Master's degree in public
administration earned in 1999 from the University of
Alaska Southeast, that I could contribute to the long-
term success of the Trust. In the total of 20 years
that I have worked as a state employee, I have relied
on the health benefits provided to state employees to
take care of my family's health care needs. I'm now
doing my part to make sure future state employees who
are members of Local 52 can continue to count on a
good benefits package as a reasonable out-of-pocket
cost.
MS. NAULT continued:
I am here to express my concern that the requirements
on self-funded government plans proposed in HB 147
will increase the Trust's administrative costs without
improving its financial solvency or the accountability
of the Trust to its beneficiaries. I understand the
fiduciary responsibilities I have assumed for the
benefit of my fellow ASEA members. I made it my
business to satisfy myself to the extent possible at
the beginning of my tenure that the Trust operates in
a financially responsible manner. It appears to me
that the trustees who have served before me and those
who currently serve with me have been diligent in
operating the health benefits plan according to a
responsible and objective set of standards, that being
those established by the Employee Retirement Security
Act of 1974, even though the Trust is not among the
types of plans covered by that federal legislation.
3:31:40 PM
MS. NAULT continued:
Annual audits by an accounting firm ... confirmed that
the Trust is financially sound. Administrative costs
are kept to a minimum. The Trust has set an example
for other state plans with its positive enrollment
policy, which requires members to document that those
they are claiming as dependents do indeed meet the
plan's definition. And the [Alaska] Department of
Administration is currently considering adopting the
Trust documentation standard for the state-
administered health benefit plan dependents. At a
time when the legislature is grappling with a $5
billion shortfall in employee pension plans
administered by the state, it is clear that oversight
by a state agency holds no guarantee of solvency for
employee benefit plans. [Sections] 28 and 29 will
increase the Trust's administrative costs, which will
require the Trust to either reduce coverage for health
care benefits or increase out-of-pocket costs for our
beneficiaries.
3:32:39 PM
REPRESENTATIVE GUTTENBERG asked if the Trust has a federal
reporting requirement.
MS. NAULT replied that the Trust does have reporting
requirements, but she wasn't sure if they were federal
requirements. In reference to Sections 28 and 29, she commented
that she wasn't sure what the purpose of the proposed state
reporting requirements is. She noted that the Trust is already
audited and is capable of meeting standards.
REPRESENTATIVE GUTTENBERG asked what changes Ms. Nault felt
needed to be made to the state system.
MS. NAULT responded:
It appears to me that the complaints that are perhaps
the cause of this legislation ... won't be addressed
by the legislation, and the circumstances of the
people who think they are going to improve what they
get by virtue of this legislation; it's not going to
play out that way. It's just going to cost them money
out of their pockets.
3:34:51 PM
REPRESENTATIVE GUTTENBERG asked if complaints to the state are
forwarded to the Trust.
MS. NAULT responded that when a person complains to the state,
the state is supposed to give the person information to directly
contact the Trust's administrators. Complaints made to the
administrators are passed to the trustees. She explained that
there is also an appeal process for people whose claims were
denied. She remarked that she prefers the current plan over the
previous plan, noting that she has "far better ability to speak
to and impact and make people aware of my needs under this plan
than I did when a large insurance company ... was declaring the
terms of our coverage, and it was much harder to make any impact
on that system."
3:37:28 PM
REPRESENTATIVE GUTTENBERG commented that [beneficiaries] would
not lose the ability to file complaints under HB 147.
MS. NAULT stated:
We're just not even sure actuaries will take on the
kinds of responsibilities that are specified for
them.... There's also some confusion, I think, among
people who have read the legislation itself as to what
impact it will actually have on the trustees' ability
to set policy for the plan versus some other outside
authority having more ability to do that.
MS. NAULT, in response to Representative Rokeberg, clarified
that the trustees are the board of appeal and they have access
to consultants, specialists, medical review, and utilization
review to help them in the decision-making process.
REPRESENTATIVE ROKEBERG asked if the administrator has a part in
the appeal process.
MS. NAULT replied that the administrator makes the initial
determination about whether claims are paid or not, and then any
appeals go to the trustees.
REPRESENTATIVE ROKEBERG asked if the arbitration is binding.
MS. NAULT replied, "It is a binding arbitration and the
arbitrators that they use are people who are specialized in
health benefit claims." In response to further questioning from
Representative Rokeberg, she explained, "[The arbitrators]
consider all of the documentation that has been presented up to
that point to the trustees in the course of the appeal, and that
often includes a complete set of medical records and
determinations by specialists."
3:40:08 PM
REPRESENTATIVE ROKEBERG commented, "If state law were applicable
to the Trust, then they would have, under the Patient's Bill of
Rights, the ability to have a review by a peer review so if
somebody who was in that particular specialty would be able to
review the decision to ... not grant the benefits." He asked if
the Trust has any other outside standards that it is required to
meet.
MS. NAULT replied that there is a Trust agreement that sets the
terms of operation and the responsibilities of the trustees.
She explained that the agreement was a result of collective
bargaining. She clarified that [the Trust] has some significant
fiduciary responsibilities that are spelled out in the trust
agreement.
3:43:12 PM
REPRESENTATIVE CRAWFORD asked if the appeal process is the same
as preauthorization of procedures.
MS. NAULT replied that preauthorization goes through a
contracted utilization review organization. She stated that
this year, the trustees have had six two-day meetings, but in
the past the trustees met via teleconference if there are
appeals in the interim.
CHRIS PACE testified in opposition to Sections 28 and 29 of HB
147, as well as the fiscal note. He commented:
One of the positive reasons I like working for the
state is that we benefit from a self-funded government
health plan sponsored by our union, the [ASEA]. I
believe we enjoy more health benefits from our
precious health care dollars because we've been
successful in our health trust in keeping our
administrative overhead costs down. I think HB 147
would reverse that. This bill would result in [an]
administrative overhead expense that I don't want or
need. My health plan is already being regulated as a
trust under Alaska Statute Title 13, and also through
our collective bargaining agreement, and then through
a letter of agreement between ASEA and the
administration and the health trust that contains
actuarial reporting requirements and ... a report on
the stop-loss coverage it's maintained.
3:45:31 PM
MR. PACE commented that there are several bills currently in the
legislature and in Congress that attempt to cut down health care
costs. However, he said, it seems that HB 147 would drive up
the state employee health care cost. He pointed out, "There's
nothing [in the bill] really to provide anything additional in
the way of doctor visits, prescriptions, or dental care. ... It
looks like it's going to move money out of state employees'
paychecks and into the pockets of actuaries, accountants, and
bond-brokers." He commented that HB 147 would increase health
care costs for thousands of state employees, but has a fiscal
note that only includes funding for one additional regulatory
position. He asked, "Shouldn't the fiscal note also include
funding to pay the union health plans for the additional
actuaries or the cost of buying the huge fidelity bonds that
would be required?" He continued:
These added costs weren't factored into the collective
bargaining agreements that we just negotiated with the
state. Your health plan, the one for the
commissioners, the directors, legislators, and your
legislative staff ... - that health plan [won't be]
burdened with these new costs. It appears to me like
it's only the union health plans, the trust funds that
will have to shoulder these additional costs. So it
doesn't seem like a level playing field. ... My real
concern is that the tab for all these additional
regulatory costs is going to end up on the backs of
state government employees. So I would urge you [to]
either not pass this bill or, better yet, to fix it
here in committee and remove Sections 28, 29 and the
fiscal note.
3:49:28 PM
COLLEEN SAVORI, Public Employees Local 71 (PE 71), commented
regarding HB 147:
This will impose a costly administrative burden.
There are some requirements in this bill that might be
impossible for these trusts to meet; for example, it's
unlikely that any actuary will actually insure a
planned fiscal solvency. I would like to comment on a
couple of the questions that have been asked
previously, because it gets down to the fact that this
is an unnecessary ... regulation by the state. These
trust plans are subject to a number of federal
requirements. The Public Health Service Act [Health
Insurance Portability and Accountability Act (HIPAA)]
is a great example. So the federal government will
come in and make sure that the trusts are following
HIPAA regulations. ... The trusts are also regulated
by the [Internal Revenue Service (IRS)], and the
trusts also have to report to the State of Alaska as
it is through the collective bargaining process;
that's one of the things that happens when a contract
is up for renegotiation. There's a great deal of
information that is provided to the state by these
trusts, including the annual audit that's done by a
third party independent auditor. So there is some
oversight by the trust as it is.
3:50:44 PM
MS. SAVORI continued:
I also wanted to touch upon the fact that these trusts
do have peer review and the utilization review
process. They do hire medical experts to conduct
utilization review; for example, if a participant
needs to go in for a hospitalization [and] the
utilization provider does determine that a portion of
that hospitalization is not medically necessary, there
is an internal review process within that utilization
review provider. If the participant does not agree
with the decision, they can appeal it to the
utilization review provider. And there is a peer-to-
peer consultation, as well as a review by a physician
in the same specialty. So one of the things that the
trusts do, because these trustees are fiduciaries and
they do not have the medical expertise to make these
decisions, they hire medical experts to help them with
that. It is in the trustees' best interest and the
Trust's best interest to hold themselves to the
highest fiduciary standards and make sure that all
participants are treated fairly and appropriately.
3:51:34 PM
MS. SAVORI, in response to Representative Rokeberg, replied that
she is a consultant for ASEA, which undergoes utilization
review, including a peer review. She noted, "It is also my
understanding that the collective bargaining language is similar
to that for PE 71, so when they went through the last round of
collective bargaining, we assisted in providing a great deal of
information to the state, including the financial information
that was discussed."
REPRESENTATIVE ROKEBERG asked for clarification of the annual
audit.
MS. SAVORI replied that the annual audit for both trusts is done
by the same auditing firm, which specializes in employee benefit
plan audits and audits a number of self-funded health plans.
3:53:30 PM
REPRESENTATIVE GUTTENBERG asked what the standards are for the
audits.
MS. SAVORI replied, "It is a financial audit, so they look over
the financial statements and the books; they also comment on the
trust reserves."
JON COOK, Director, Alaska Auto Dealers Association ("the
Association"), explained that the Association represents nearly
every new and used car dealer in the State of Alaska. He noted
that he also is the general manager and treasurer of Aurora
Motors in Fairbanks, Alaska. He commented on Sections 30 and 33
of HB 147, which are enabling legislation with regard to
guaranteed automobile protection products (GAPP) and extended
service contracts (ESC). He explained that a GAPP is a product
that is bought that will pay a deficiency between the balance on
the note of a vehicle and the fair market value in the event the
vehicle is totaled, while ESCs are contracts that essentially go
into effect at the end of a warranty and pay for any repairs on
vehicles that are needed after expiration of the warranty. He
continued:
The Association believes that enabling legislation
such as this merits detailed scrutiny because if it's
granted, it's obviously going to allow the [Division
of Insurance, Alaska Department of Commerce,
Community, and Economic Development] to draw up very
specific rules outside the legislative process. We
believe the effects of the enabling legislation that's
introduced would be damaging to consumers,
dealerships, and the economy of the State of Alaska.
And the Association strenuously opposes Sections 30
and 33 of HB 147....
MR. COOK continued:
The bill states that GAPP is insurance which would
automatically subject automobile dealers to regulation
by the state regardless of what regulations are
issued. ... The definition of [GAPP] in Section 33 of
the proposed statute will not work in any event; the
definition uses the word "insurance" to describe the
product, which is a conclusion rather than a
definition. ... Treating GAPP waivers as insurance
demonstrates a misunderstanding of the nature of the
relationship between the dealer and its customer; debt
cancellation programs are structured very differently
from other types of credit insurance programs. With
GAPP waivers, the dealer, which acts as the
originating lender, enters into a contract with the
customer regarding how the debt may be canceled,
suspended, or otherwise modified under limited
circumstances. It's nothing more than a contract
between the dealer and its customer. The dealer in
turn may then choose to purchase an insurance policy
to cover this potential liability. The insurance
contract, which is between the dealer and the
insurance company, is already subject to regulation by
the Division of Insurance.
3:57:32 PM
MR. COOK continued:
Thirty-nine other states have ruled that GAPP is not
insurance but is actually debt cancellation, which is
not subject to regulation by the insurance division.
... The vast majority of GAPP contracts are issued by
banks and credit unions. However, due to their
federal charter, they are exempt from state
regulation. Contracts are typically sold by highly
trained and compensated finance and insurance managers
in automobile dealerships, versus part-time low-paid
tellers at the banks and credit unions. And we're
certain that our employees are more qualified ... yet
we would be subject to regulations, and the banks and
credit unions would not. We don't feel this is a
level playing field.
3:58:18 PM
MR. COOK continued:
[Guaranteed automobile protection product] contracts
are a minimal cost to the customer and profit to the
dealer, but they provide an enormous benefit to both
parties in the event the customer's vehicle is
totaled. The typical contract sells for approximately
$300, at a profit to the dealer of $150 at the time of
sale. However, let's take an example here and assume
that the customer totals their vehicle one year after
purchase. For discussion's sake, I can assume that
the loan balance is approximately $7,000 higher than
the fair market value of the vehicle, as determined by
their insurance company. ... In the event that that
vehicle's totaled, GAPP will pay the deficiency,
period. If the customer doesn't have GAPP coverage,
they'll be liable for the deficiency in its entirety
and will have to pay off the loan balance. Most
customers do not have this much cash in hand and in
such cases the loan would go into default. The result
of such a default would mean the ruin of the
customer's credit rating, or likely leave them without
reliable transportation, as banks will not finance
someone who's defaulted on a loan. In this scenario,
which occurs quite often, the customer loses, the
dealership loses, and the economy of the State of
Alaska loses.
3:59:32 PM
MR. COOK explained that the director of the Division of
Insurance currently requires dealer personnel who sell GAPP
contracts to have a limited lines insurance license. He
commented:
First off, this license provides no benefit to
dealership personnel or the customers, as it's
irrelevant to the product sold. Secondly, there's no
clear-cut guidance from the director's office
regarding testing, study materials, or accepting
continuing education requirements.
MR. COOK pointed out that Section 30, subsection (c) of HB 147
says:
This section does not apply to a motor vehicle service
contract issued by the manufacturer of the motor
vehicle covered by the service contract.
MR. COOK remarked that he assumes the above statement was
inserted into the bill because the Division of Insurance felt
that it did not need to police the large automobile
manufacturers. However, he pointed out, the wording is flawed
and has several unintended consequences. He explained that the
manufacturers do not issue the service contracts directly; they
issue the service contracts through a subsidiary. He also noted
that the language does not exempt, for example, General Motors
service contracts sold to non-General Motors vehicles. He said:
Every new car dealer in the State of Alaska sells
their manufacturer's service contracts on used
vehicles for which they don't have a franchise, which
means that the exemption provision would not apply.
... The [Division of Insurance] does attempt to exempt
manufacturers, but it does not exempt many other
reputable companies who sell service contracts....
4:01:28 PM
MR. COOK then referred to a particular company that sold service
contracts before it recently failed. He said, "That's the only
company I'm aware of in the State of Alaska that's failed in the
last 10 years." He presented more reasons why the company
failed. He then pointed out that HB 147 only applies to
automobile dealers, even though there are GAPP and ESC sold by
heavy equipment manufacturers, RV dealers, snowmobile dealers,
and motorcycle dealers.
4:03:30 PM
REPRESENTATIVE ROKEBERG asked if there is some existing
statutory protection of consumers under consumer protection law
for these issues.
MR. COOK replied, "Yes, there is. There's unfair trade
practices laws that are on the books, and ... other truth and
lending disclosures and things like that that are already on the
books to deal with us." He noted that he emailed committee
members copies of his testimony.
4:05:41 PM
MIKE COMBS, Alaska Independent Agents and Brokers Incorporated
(AIABI) noted that he serves on the legislative committee for
the AIABI. He proposed that the committee consider an amendment
to clarify its position regarding owners controlled insurance
programs (OCIP) and contractors controlled insurance programs
(CCIP). He stated that OCIPs and CCIPs have been designed in
the past to provide for uniformity in insurance coverage,
limits, and forms for specific large construction projects
involving an array of various industry trades. He said, "There
are some large employers in Alaska that are contemplating the
use of OCIPs and CCIPs in the maintenance and repair of their
existing facilities." He explained that there are several
problems with using this insurance method for maintenance and
repair programs. One problem, he said, was that the removal of
any insurance clients from the already fragile Alaska insurance
market may lead to further deterioration of the competitive
arena. He said:
It's estimated that the payroll right now for some of
these large contractors is in excess of $100 million
in payroll. The total volume of insurance business in
Alaska is so small that any reduction in the available
insurance risk would lead to additional insurance
markets exiting the state. Too many laws in the
current insurance market would adversely affect the
remaining clients' overall bottom line cost. Fewer
insurance markets lead to higher costs for the rest of
the clients not involved in the OCIPs or the CCIPs.
OCIP and CCIP include all owners, contractors, and
subcontractors for all aspects of the construction
project. All ... employers are defined and included
on the insurance program. No dual employer situations
exist. The insurance provided is the sole source of
remedy for the public and employee exposures. [This
is] not so clear when the OCIP form of insurance is
used for maintenance or repair of existing facilities.
4:07:15 PM
MR. COMBS explained that a [construction company] may have jobs
in several locations throughout the state during a year, but
only a small portion is performed at an OCIP facility. He said
that the company would provide worker's compensation benefits to
its employees during travel exposures around the state, but the
OCIP and the CCIP programs would only provide benefits for the
employee while he/she is actually present at the maintenance
site. He asked who would be responsible for the travel exposure
of the employees in this case. He opined that this could lead
to a lot of unnecessary litigation to determine the employee and
employer status at the time of injury. He stated that his
proposed amendment is to change AS 21.12.140 regarding
limitation of OCIPs and CCIPs in Alaska. The amendment would
limit these to construction projects in excess of $50 million
only and not include any repair or maintenance operations.
REPRESENTATIVE ROKEBERG commented that the proposed amendments
were confusing and asked for further clarification. He asked if
Mr. Combs used language from another state as a template for his
amendment.
MR. COMBS replied that the construction project language had
been developed through a committee process. He noted, "The $50
million figure is certainly not cast in stone; ... we feel that
some number has to be given as far as the ... size of the
projects that can go under the OCIP or CCIP projects." He
pointed out that this would not eliminate any additions or
renovations to a large facility that exceeds [$50 million].
REPRESENTATIVE ROKEBERG referred to a letter written to the
committee by Mr. Combs, dated March 14, 2005 in which Mr. Combs
proposed a new Section AS 21.12.140. Representative Rokeberg
said, "I'm confused in looking at your [proposed] subsection 6
that says ... 'includes major renovations involving the
replacement of more than fifty percent of existing structures,
buildings, facilities, or roadways.' It includes major
renovations; you just said you wanted to exclude it."
CHAIR ANDERSON commented that the committee will consider Mr.
Combs' proposal and will consult with the director of the
[Division of Insurance] to see if the proposals are possible.
4:12:06 PM
LINDA HALL, Director, Division of Insurance, Alaska Department
of Commerce, Community, and Economic Development, commented:
[Sections 28 and 29] are included in the omnibus
insurance bill because I feel, as did the
administration when we did this, that this is a policy
decision for the legislature. We have approximately
19,000 state employees who are covered under five
union health trusts and the proposal here is to
determine whether there should be ... some oversight
of these plans. And as I said, I think it's a policy
decision that you as legislators should make and I
will tell you the impetus for it because there's been
some question about that today. I have received over
the year and a half that I've been in this position a
number of complaints.
MS. HALL continued:
In December of 2003, I received a letter from [the
ASEA/American Federation of State, County and
Municipal Employees (AFSCME) Local 52] specifically
quoting statutory language that was passed in 2002 by
this body that indicated that if a person is unable to
show their subjective jurisdiction of another
governmental agency and have not received that
certification, that then they will fall under Title
21, the insurance title. I was asked by that group,
and I would quote from this letter ..., "As the
governing body of ASEA, the executive board expresses
concern that the ASEA/AFSCME Local 52 health benefits
trust is not accountable to any federal or state
agency for the same standards as any unrelated medical
... provider insurer. The level of service and care
that ASEA members receive from its trust should be no
less than what is expected of any unrelated medical
provider or insurer subject to Alaska statutes." I
have received other letters that have indicated to me
that the ASEA convention delegates voted to ask the
state to regulate the plan. This was not something
that the Division of Insurance took upon themselves.
4:14:42 PM
MS. HALL continued:
In receiving these letters, on March 19 of 2004 under
my signature we wrote letters to all five of the union
health trusts quoting the statutory language, asking
them to provide us with documentation that they were
regulated by another entity, as required by statute.
We received a variety of responses which have been
evaluated. We have done follow up letters, and in
that process it has been our intent to clarify some
oversight of these trusts. And I know we've had a lot
of discussion. I believe in your packets I have given
you a handout where I tried to streamline what's very
technical ... of what we require from trust in the
statute, what we would require from an insurer, and
what we require ... [from Multiple Employer Welfare
Arrangements (MEWA)].
4:15:29 PM
MS. HALL continued:
In the second page of that there are some filing
requirements. ... There needs to be actuarial analysis
of rate levels to ensure that the rates being charged
will adequately cover the cost of claims, that the
reserves are set at levels are to ensure solvency.
... No actuary ensures the solvency of the plan. What
an actuarial plan does is certify that they have done
an analysis and that these are appropriate levels of
contributions ... [and] that their reserves are
adequate to ensure solvency.
4:17:54 PM
MS. HALL commented:
[The Division of Insurance] felt it was in the best
interest of the plan participants to have a different
level of oversight because there isn't one elsewhere.
Again, it's a policy decision and if this body chooses
to not have that level of oversight, then I would
assume you would remove these sections from the bill.
4:18:34 PM
MS. HALL noted that she has spoken with Mr. Cook, the Auto
Dealers Association and Alaska State Senator Ralph Seekins,
about ways to make the bill viable for the auto industry and to
provide a level of consumer protection. She remarked, "I want
to make sure that we have standards that apply across the
board." Regarding Mr. Combs' testimony, she said that she
supports the concept behind his proposal and she would be
willing to work on the language with the committee.
REPRESENTATIVE LYNN asked if there is anything in HB 147 that
clarifies what health benefits are and are not covered. He also
asked if prohibition of certain types of benefit coverage could
be put into statute.
4:21:03 PM
MS. HALL responded that on page 17, line 17 of HB 147 there is a
reference to AS 21.42.345-21.42.365, and she explained that
those are the current benefit mandates that have been passed by
the legislature. She said that the inclusion of that line in
the bill would require that those mandates be included; today
there is no such requirement. She stated, "As far as I know
there are no prohibitions [against certain types of coverage]."
REPRESENTATIVE ROKEBERG commented that it seems as though there
is no actual oversight for the health benefit trusts. He asked
Ms. Hall, "Is there a way we can adopt in essence some of our
statutory requirements ... that would mandate at least a
template of minimal baseline requirements within these trust
agreements?"
MS. HALL replied that on page 17, line 12 of the bill there is a
reference to AS 21.07, which she explained refers to a process
that would require both an internal and an external review
process.
4:24:36 PM
REPRESENTATIVE ROKEBERG asked if there is the potential to
change HB 147 to a simplified review process that would be
cheaper.
MS. HALL replied that she doesn't know of any current [health
care] plan that does not have an audited financial statement.
She remarked that she hoped that an outside firm is doing an
audit of the financial standing [of all plans]. She noted, "The
only thing that I see in this list of the really standard
minimum requirements that may not be met, although I do think
most of the plans have, is the actuarial opinion. ... And we
think that is a critical component to any entity who's providing
coverage for medical care." She said that if there is something
in the bill that is overly burdensome, she is willing to review
that issue.
4:28:23 PM
REPRESENTATIVE GUTTENBERG asked if the division had approached
the administration about including [the issues in the bill] in
the collective bargaining agreement.
MS. HALL replied that it had not.
REPRESENTATIVE CRAWFORD commented that he is not sure that the
bill would be fixing a problem, and instead it might just be
adding costs. He said that he was inclined to agree with
Representative Rokeberg; that perhaps there could be a simpler,
cheaper way to deal with these issues.
CHAIR ANDERSON announced that HB 147 would be held over.
4:33:33 PM
REPRESENTATIVE ROKEBERG remarked that the bill deserved to be
moved but needed to be analyzed and amended first. Regarding
the motor vehicle section, Representative Rokeberg asked Ms.
Hall, "You want to assert jurisdiction and take this off the
attorney general's office for consumer protection?"
MS. HALL responded, "No. ... We currently regulate these
products." She explained that the State of Alaska regulates
[GAPP and debt waivers] as insurance and requires auto dealers
to be licensed to sell them.
4:34:48 PM
REPRESENTATIVE LEDOUX commented that the committee ought to make
sure that the bill has the least impact on "the affected
parties."
[HB 147 was held over.]
HB 150-LICENSING RADIOLOGIC TECHNICIANS
4:36:13 PM
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 150, "An Act requiring licensure of
occupations relating to radiologic technology, radiation
therapy, and nuclear medicine technology; and providing for an
effective date."
The committee took an at-ease from 4:36 PM to 4:40 PM.
4:41:08 PM
JON BITTNER, Staff to Representative Anderson, Alaska State
Legislature, in response to concerns that were raised at the
last committee hearing for HB 150, presented an amendment which
would include dental hygienists and dental assistants in the
license and permit exemption on page 2, line 2 of the bill.
CHAIR ANDERSON moved to adopt Amendment 1, labeled 24-
LS0470\Y.5, Mischel, 3/18/05, which read:
Page 2, following line 2:
Insert new paragraphs to read:
"(1) a licensed practitioner;
(2) a dental hygienist or dental assistant
who uses equipment emitting radiation on humans under
the direct supervision of a licensed practitioner;"
REPRESENTATIVE LEDOUX asked if Amendment 1 is simply an
exemption for a licensed practitioner.
MR. BITTNER replied affirmatively and explained that the
proposed paragraphs 1 and 2 add the words "licensed
practitioner" and "dental hygienist or dental assistant" to the
exemption.
[There being no objection, Amendment 1 was adopted.]
MR. BITTNER presented a brief overview HB 150, explaining:
This bill is aimed at protecting Alaskans from
excessive exposure to radiation; not just patients but
also providers as well. This bill is congruent with
nationwide efforts of the Institute of Health Care
Improvement and is supported by efforts of the joint
commission of accreditation of health care
organizations, which is the national accreditation
body for 4,000 hospitals, the American Medical
Association, the American Nurses Association, the
Centers for Medicare and Medicaid services, the
Veterans' Administration, Providence Alaska Medical
Center, the Alaska State Hospital and Nursing Home
Association, and the American Society of Radiologic
Technologists. Both patients and providers deserve
the highest level of safety and training available,
and HB 150 provides that.
4:44:36 PM
ALEX MALTER, MD, Alaska State Medical Association (ASMA), stated
that he is a past president of ASMA and an internist in private
practice in Juneau. He provided the committee members with a
letter from Paul Worrell, MD, President, ASMA, which he read for
the record:
The Alaska State Medical Association represents
physicians statewide and is primarily concerned with
the health of Alaskans. [The Alaska State Medical
Association] has historically supported and advocated
for the best health care for all our patients. House
Bill 150 provides for a system for the licensure of
radiologic technicians. [The Alaska State Medical
Association] supports this effort to attempt to
provide for safe, quality care. However, ASMA is
concerned with an unintended consequence that may
detract from timely access to care. Rural physicians
and small practices may have x-ray capabilities to
provide for the occasional x-ray. However, the volume
of that service is not sufficient to be able to hire
fully certified radiologic technicians. Physicians in
small practices have historically trained other clinic
staff to do those uncomplicated x-rays. House Bill
150 would eliminate that mode of practice. Keeping in
mind that the employing physician is ultimately
responsible legally for the acts of the employee who
takes the x-ray. To eliminate this current practice
will certainly slow down the care provided and
probably add to costs. Perhaps an alternative would
be to provide a registration system (as opposed to
full licensing system) for [such] people providing x-
ray service when in the employ of a physician. This
would allow the current practice to continue, yet
provide for state oversight.
REPRESENTATIVE ROKEBERG commented that the legislature has in
the past used "Bush exemptions" for areas of the state that are
not on the road or ferry system. He noted that this exemption
may not work for HB 150 because there may be small towns that
are on the road system that still need this exemption.
4:47:55 PM
DR. MALTER agreed and remarked that even small practices in
Juneau would run into some of the aforementioned problems. He
noted that he takes one or two x-rays per day in his office, and
currently those x-rays are taken by trained staff members.
REPRESENTATIVE LYNN commented that though the physician is
responsible, a patient can still get injured by an x-ray
machine.
DR. MALTER responded that by taking on the responsibility for
the x-ray operators, the physicians ensure that the lab techs
are doing a good job.
CHAIR ANDERSON remarked that the local universities now have
training programs for the x-ray technicians.
4:51:38 PM
REPRESENTATIVE CRAWFORD pointed out that damage to a body by x-
rays isn't always readily apparent, and "the only thing that
protects people is the knowledge that the [operator] had the
training ... to correctly administer the x-rays in the first
place."
DR. MALTER agreed that people can be exposed to high levels of
radiation while receiving full body x-rays or CT scans, which
are essentially performed by radiologists. However, he remarked
that he didn't think that the people receiving a simple, single
x-ray in a physician's office are exposed to the same dangers.
He explained that he can x-ray an individual in his office to
see if he/she has bronchitis or pneumonia; if HB 147 passed as
is, he would not have this ability. He would instead have to
send the patient to the hospital for the x-ray, which would take
more time and money. He also pointed out that in a small town
like Skagway the patient would have to get on a plane or ferry
and come to the hospital in Juneau for the x-ray.
DR. MALTER continued, "While I understand that it might sound
good that there's going to be a 12 hour internet-based course to
get partial certification, my understanding is that it's not
delineated in this bill; that would be dependent upon whatever
board or group is going to be overseeing this coming up with
that plan or program." He also expressed disappointment that
ASMA was not invited to participate in a working group that met
last summer regarding these issues.
4:56:12 PM
CHAIR ANDERSON read from his original intent letter for HB 150,
which said:
A report prepared for [Department of Health and Human
Services (HHS)] by the national toxicology program,
NTP, at the National Institute of Environmental Health
Sciences said [that] X-radiation and gamma radiation
were listed "because human studies show that exposure
to these kinds of radiation causes many types of
cancer including leukemia and cancers of the thyroid,
breast, and lung." The report added that exposure to
x-radiation and gamma radiation has shown to cause
cancer of the salivary glands, stomach, colon,
bladder, ovaries, central nervous system, and skin.
And finally, it also stated that 55 percent of
worldwide exposures from low-dose medical diagnoses
such as bone, chest, and dental x-rays.
4:57:12 PM
REPRESENTATIVE LEDOUX commented that Amendment 1 exempts dental
hygienists and assistants as long as they are using equipment
under the direct supervision of a licensed practitioner. She
asked Dr. Malter if there is any difference between the amount
of radiation that a dental assistant would be using and the
radiation used by a lab technician in a physician's office.
DR. MALTER replied that he did not know the difference. He
stated, "All these groups come in and start a program and folks
want to have licensure, but if ... we end up requiring licensure
of too many groups ... you end up having a situation where the
cost may become prohibitive for some small practices to keep all
these folks licensed."
REPRESENTATIVE LEDOUX remarked that her doctor in Kodiak had
expressed the same concerns.
REPRESENTATIVE KOTT asked Mr. Malter if he was trained to take
x-rays during his studies to become a physician.
DR. MALTER replied that most [physicians'] programs have a stint
in radiology to learn how to read the simplest x-rays, but do
not do extensive training in taking the x-rays. He said that
when small clinics get their laboratories certified by the
Division of Public Health, the division goes through the lab's
checklists and training lists to ensure that the lab is meeting
statewide standards.
REPRESENTATIVE KOTT commented, "If you were a one-person office,
could you perform the responsibilities of an x-ray technician?"
DR. MALTER replied affirmatively.
5:02:33 PM
REPRESENTATIVE PEGGY WILSON, Alaska State Legislature, testified
in opposition to HB 150. She voiced concern for small clinics
that are on the road system but are still too far from a large
hospital for individuals to travel for a simple x-ray. She
presented the example of the town of Tok, Alaska where she
worked in a clinic for four years. At this clinic, x-rays were
not run every day, but only when there was an accident or
someone was sick. She said that it would be a big hardship for
the patient and the ambulance crew if they had to drive four
hours each way to and from Fairbanks to go x-rays. This would
add cost to the small clinics. Also, the training might cost
around $800, which she pointed out is a lot of money. She
commented, "I just think that you need to be really aware that
it's a hardship in many different ways that maybe the
consequences we don't even know yet."
5:05:18 PM
CHAIR ANDERSON commented that studies in California found that
healthcare costs did not increase when licensure was required.
He noted that 41 other states have passed legislation similar to
this. He said that the licensure process only requires three
on-line courses, and would not be required for another five
years.
REPRESENTATIVE WILSON stated, "Because of the distance and
because of the time that it takes to get different places, we
usually make allowances in ... many areas of things that we do
in this state." She asked if anyone knew how many x-radiation
accidents have been documented in Alaska; she commented that she
didn't think there were many, "if any at all."
5:09:07 PM
JIM TOWLE, Executive Director, Alaska Dental Society, testified
in support of Amendment 1 to HB 150.
5:11:38 PM
STEVEN WAHL, MD, Tok Community Clinic, testified in opposition
to HB 150. He commented:
I feel the burden very likely could eliminate x-ray
technology from Bush and rural clinics including
possibly Tok Clinic, where I practice. That could
have an impact on the level of health care that's
available to the people here, both in acute care and
in long-term care. The burden of traveling 400 miles
to obtain an x-ray that currently is readily available
with treatment that can be rendered with response to
that x-ray, ... is going to have a far greater
negative impact on the overall health of Alaskans than
the few potential situations of excessive radiation
exposure. There is a potential that you could drive
advanced practitioners like myself from the Bush; if I
lost my ability to do x-ray technology in Tok, I very
likely would leave this community and this community
would no longer have a physician. So there are very
widespread ramifications that need to be considered
for Bush and rural Alaska.
DR. WAHL continued:
I think our current practices are safe, and I would
like to hear specific testimony of specific cases of
routine office x-rays that have led to adverse
outcomes to individuals to balance that against the
huge potential for misdiagnosis, minor injuries that
would be neglected because of people who didn't want
to travel the distance to get their treatment, and so
on. ... I'm not saying that there may not need for
licensure in more advanced practices or in more
technical settings, but office-based x-ray, I think,
is currently being practiced safely in numerous
clinics statewide, and that needs to be taken into
account in this bill or you're going to have a very
widespread effect on health care in the Bush.
DON SMITH, PA, Wasilla Medical Clinic, testified in opposition
to HB 150. He noted that he is a co-owner of clinics in Wasilla
and in Anchorage, and opined that the bill will adversely affect
both clinics even though they are in urban areas. He predicted
that if the bill passed, it would create a bottleneck in clinics
with patients coming to the clinic, then going to x-ray
facility, and then going back to the clinic. He also commented
that as a physician assistant (PA), he has had more training for
reading x-rays rather than taking them. He opined that it is a
poor assumption that a PA or any licensed practicioner has the
ability to physically take x-rays.
TIMO SAARINEN, Alaska Society of Radiologic Technologists,
testified in support of HB 150. He commented that Congress has
tried to make sure that all states do "quality care as far as
radiation is concerned" to make sure that all states are on the
same standard. He said that the intent of this bill is to make
sure that everybody is trained to the same level, and that the
operator and the patient receive minimum radiation exposure. He
remarked:
There was a tri-state leukemia survey done which
indicated that children of chronic diseases were at
special risk from low x-rays. ... Children of mothers
x-rayed during pregnancy suffer 1.5 times the leukemia
rate as children of mothers not x-rayed. Another
analysis showed the young adults with asthma, severe
allergies, heart disease, diabetes, arthritis, and so
on, were about 12 times as susceptible to radiation-
related leukemia as were healthy adults.
CHAIR ANDERSON closed public testimony.
5:18:35 PM
CHAIR ANDERSON noted that physicians, physician assistants,
nurse practitioners, podiatrists, osteopaths, dentists, dental
hygienists, dental assistants, and chiropractors can operate x-
ray machinery under this bill.
REPRESENTATIVE ROKEBERG suggested that the committee allow for a
more liberal transition period rather than make a rural
exemption to the bill.
REPRESENTATIVE LEDOUX moved to adopt Conceptual Amendment 2 to
"exempt technicians working under the direct supervision of a
licensed practitioner."
CHAIR ANDERSON objected to Conceptual Amendment 2 because he
said that the amendment would gut the intent of the bill.
5:23:47 PM
A roll call was taken. Representatives LeDoux and Kott voted in
favor of Conceptual Amendment 2. Representatives Crawford,
Rokeberg, Lynn, Anderson voted against it. Representative
Guttenberg was absent for the vote. Therefore, Conceptual
Amendment 2 failed by a vote of 2-4.
REPRESENTATIVE LEDOUX moved to adopt Conceptual Amendment 3,
which would exempt technicians working in communities with a
population of less than 1,000 which are either off the road
system or over 100 miles from a metropolitan statistical area in
excess of 50,000 people.
5:27:42 PM
CHAIR ANDERSON objected to Conceptual Amendment 3.
A roll call was taken. Representatives LeDoux and Kott voted in
favor of Conceptual Amendment 3. Representatives Crawford,
Rokeberg, Lynn, Anderson voted against it. Representative
Guttenberg was absent for the vote. Therefore, Conceptual
Amendment 3 failed by a vote of 2-4.
REPRESENTATIVE KOTT commented that he hopes the bill will be
further amended in the next committees. He said, "If we had a
qualified physician who had a registered technician that was
under the direct supervision of that physician, I don't think
I'd have a problem. Just because someone is certified and
licensed doesn't necessarily mean you're not going to get bad
treatment."
REPRESENTATIVE KOTT moved to report HB 150 out of committee as
amended with individual recommendations and the accompanying
fiscal notes.
REPRESENTATIVE ROKEBERG objected. He stated his support for
Representative Kott's previous comments and he assured
Representative LeDoux and Representative Wilson that "their
concerns are not falling on deaf ears." He withdrew his
objection.
There being no objection, CSHB 150(L&C) was reported from the
House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:31:48 PM.
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