Legislature(1997 - 1998)

03/02/1998 03:22 PM L&C

Audio Topic
* first hearing in first committee of referral
+ 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            
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                 
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               
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             
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                    
MS. HOOD replied that she would be paid if she was a licensed                  
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                      
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              
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                   
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               
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               
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              
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               
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                
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             
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                 
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                         
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                  
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            
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.                        

Document Name Date/Time Subjects