Legislature(2005 - 2006)BUTROVICH 205

03/13/2006 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 299 NONDISCRIMINATION HEALTH CARE PROVIDERS TELECONFERENCED
Heard & Held
+ HB 379 CONTROLLED SUBSTANCES, INCL. ANALOGS TELECONFERENCED
Moved CSHB 379(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 281 SCHOOL DIST. ENROLLMENT SHARING/CORRESPON
Heard & Held
         SB 299-NONDISCRIMINATION HEALTH CARE PROVIDERS                                                                     
                                                                                                                                
CHAIR DYSON announced SB 299 to be up for discussion.                                                                           
                                                                                                                                
1:51:29 PM                                                                                                                    
                                                                                                                                
CHAIR DYSON  asked whether  there was  any objection  to adopting                                                               
Version F as the working document.   Without objection, it was so                                                               
ordered.                                                                                                                        
                                                                                                                                
SENATOR SEEKINS, sponsor  of SB 299, stated that  this bill would                                                               
prevent  insurance companies  from discriminating  against health                                                               
care   providers   who  meet   the   terms   and  conditions   of                                                               
participation in  their insurance  plans, policies,  or contracts                                                               
for health care services.                                                                                                       
                                                                                                                                
1:53:18 PM                                                                                                                    
                                                                                                                                
MIKE HOGAN,  Executive Director, Alaska Physicians  and Surgeons,                                                               
said that he was available to answer questions on SB 299.                                                                       
                                                                                                                                
CHAIR DYSON asked him to summarize his previous testimony.                                                                      
                                                                                                                                
MR. HOGAN  responded that the  passage of this bill  ensures that                                                               
doctors who meet the credential  and licensure requirements for a                                                               
given health  plan could  not be denied  admission to  that plan.                                                               
He  added that  this bill  would  allow Alaska  residents to  see                                                               
doctors who are not members of their health care plans.                                                                         
                                                                                                                                
CHAIR DYSON  asked what it means  for a physician to  be admitted                                                               
into a plan.                                                                                                                    
                                                                                                                                
1:54:20 PM                                                                                                                    
                                                                                                                                
MR.  HOGAN   responded  that  typically,  health   plan  managers                                                               
construct a  panel of providers to  establish well-rounded plans;                                                               
however, certain groups are often  excluded from these panels for                                                               
various   reasons.     This   bill   would   allow  health   care                                                               
professionals to join any plan that they are qualified to join.                                                                 
                                                                                                                                
1:55:02 PM                                                                                                                    
                                                                                                                                
SENATOR SEEKINS  remarked that many  provider types  and services                                                               
listed in the original A version  of the bill were removed in the                                                               
F version.                                                                                                                      
                                                                                                                                
1:55:56 PM                                                                                                                    
                                                                                                                                
SENATOR  ELTON  asked  how  the  bill's  list  of  providers  was                                                               
established.   He asked specifically why  hospital based services                                                               
were removed from the F version.                                                                                                
                                                                                                                                
1:57:09 PM                                                                                                                    
                                                                                                                                
BRIAN HOVE,  staff to Senator  Seekins, replied that some  of the                                                               
provider types  listed in  the original  version were  removed at                                                               
the request of the drafter  because they were not compatible with                                                               
definitions  in existing  statute.   He said,  for example,  that                                                               
statute defines "health  care provider" as a  state licensee that                                                               
is certified or otherwise authorized.                                                                                           
                                                                                                                                
CHAIR DYSON called an at-ease from 1:58:23 PM to 1:58:45 PM.                                                                
                                                                                                                                
1:59:25 PM                                                                                                                    
                                                                                                                                
SENATOR ELTON asked why hospital  services were excluded from the                                                               
bill while rural health services remained in it.                                                                                
                                                                                                                                
SENATOR  SEEKINS  replied he  excluded  them  at the  request  of                                                               
hospital  managers who  asserted that  the bill  should apply  to                                                               
persons and not inanimate objects.                                                                                              
                                                                                                                                
SENATOR ELTON  remarked that the  same argument could  be applied                                                               
to clinics, which are covered under the bill.                                                                                   
                                                                                                                                
SENATOR  SEEKINS  replied  that  while  that  is  correct,  rural                                                               
clinics are generally  not billed by members of their  staff.  He                                                               
added that  when he  made the  list he  tried to  accommodate the                                                               
requests of  health care providers  who requested to  be included                                                               
or excluded from it.                                                                                                            
                                                                                                                                
2:01:34 PM                                                                                                                    
                                                                                                                                
CHAIR  DYSON said  the bill  would be  held in  committee at  the                                                               
request  of the  sponsor.    He added  that  the state's  current                                                               
public   health  director   supports  the   establishment  of   a                                                               
comprehensive public information database  that lists the state's                                                               
health care providers and their track  records.  He said he could                                                               
imagine a circumstance  in which a patient might want  to visit a                                                               
hospital with a better record  of performance when given a choice                                                               
to do so.                                                                                                                       
                                                                                                                                
SENATOR ELTON  remarked that he  appreciated the comments  of the                                                               
chair  and sponsor  and  requested they  contact  his office  for                                                               
further discussion of the matter.   He said he would like to know                                                               
why  long-term  care  facilities  and rural  health  clinics  are                                                               
included in  the bill  while hospitals were  excluded.   He asked                                                               
why respiratory  therapists were removed while  audiologists were                                                               
not.                                                                                                                            
                                                                                                                                
SENATOR   SEEKINS  replied   that  respiratory   therapists  were                                                               
excluded  from the  list because  they do  not fit  the statutory                                                               
definition of "health care providers."                                                                                          
                                                                                                                                
2:04:34 PM                                                                                                                    
                                                                                                                                
SENATOR GREEN  asked why certain  doctors are  granted membership                                                               
in  health   care  plans  while  other   qualified  doctors  were                                                               
excluded.                                                                                                                       
                                                                                                                                
MR. HOGAN  replied that  many physicians  join major  health care                                                               
plans because  they cover so  many potential patients.   He added                                                               
that the  bill would  confer an  advantage to  physicians because                                                               
patients  covered under  major providers  would not  be penalized                                                               
for seeing them.                                                                                                                
                                                                                                                                
2:07:40 PM                                                                                                                    
                                                                                                                                
SENATOR  GREEN asked  him  whether  physicians currently  covered                                                               
under insurance  plans pay less  than 100 percent of  the regular                                                               
cost of insurance.                                                                                                              
                                                                                                                                
MR. HOGAN  replied that  in Alaska  they typically  pay 90  to 95                                                               
percent of the regular cost.                                                                                                    
                                                                                                                                
SENATOR GREEN asserted that insurance  companies offer a discount                                                               
to certain physicians to attract a greater volume of customers.                                                                 
                                                                                                                                
MR. HOGAN replied that is correct in  the case of Blue Cross.  He                                                               
commented that  Alaska is woefully  short of physicians  and that                                                               
insurance  plans further  limit the  access of  many patients  to                                                               
their preferred practitioners.                                                                                                  
                                                                                                                                
2:09:41 PM                                                                                                                    
                                                                                                                                
SENATOR  GREEN  remarked that  the  passage  of this  bill  would                                                               
diminish the  revenue of insurance  providers because  they would                                                               
have to offer  their discounts to every  qualified physician that                                                               
requests membership.                                                                                                            
                                                                                                                                
MR. HOGAN  acknowledged the  concern and  remarked that  the bill                                                               
was drafted in the interest  of making doctors more accessible to                                                               
patients and improving  the continuity of care  for patients when                                                               
they  change their  health care  plans.   He referenced  a letter                                                               
from  the Kentucky  Environmental and  Public Protection  Cabinet                                                               
that indicated it had a similar law  on the books for a while and                                                               
couldn't find any long-term impacts  on the amount employers paid                                                               
for premiums.                                                                                                                   
                                                                                                                                
2:12:15 PM                                                                                                                    
                                                                                                                                
SENATOR WILKEN  stated his  concern over  letters from  AETNA and                                                               
Beach Street  Corporation that  speak markedly  to the  fact that                                                               
this legislation will  increase the cost of  insurance across the                                                               
state. He  added that the  Federal Trade Commission  (FTC) stated                                                               
in a July 2004 report that  they are against any willing provider                                                               
legislation.   He asked Mr.  Hove to consider how  the Department                                                               
of  Justice and  FTC would  respond to  this legislation  per the                                                               
remarks in the aforementioned letters.                                                                                          
                                                                                                                                
MR. HOGAN replied that he did  not have the report or the letters                                                               
before him and could not offer an opinion at the present time.                                                                  
                                                                                                                                
SENATOR  WILKEN  suggested that  he  review  the report  and  the                                                               
letter  and consider  how this  legislation may  run contrary  to                                                               
what   the  FTC,   AETNA,  and   Beach  Street   Corporation  are                                                               
suggesting.                                                                                                                     
                                                                                                                                
2:14:28 PM                                                                                                                    
                                                                                                                                
SENATOR  OLSON  stated for  the  record  that  he is  a  licensed                                                               
medical physician  and is not  on any preferred  medical provider                                                               
list.                                                                                                                           
                                                                                                                                
CHAIR DYSON stated for the  record that his retired wife's former                                                               
profession is listed in the bill.                                                                                               
                                                                                                                                
2:15:23 PM                                                                                                                    
                                                                                                                                
TOM BRICE,  Alaska District Council of  Laborers, Laborer's Local                                                               
942, Local  341, and Public  Employees Local 71, opposed  SB 299.                                                               
He said  that the  organizations he  represents believe  that the                                                               
legislation will hinder their ability  to procure the best health                                                               
care   arrangements  for   their  employees.     He   said  these                                                               
organizations   are  currently   able   to  negotiate   favorable                                                               
arrangements  with health  care  providers by  offering them  the                                                               
patronage of  their members.  He  said that if this  bill passes,                                                               
the organizations will  lose the power to negotiate  and the cost                                                               
of their health care will increase.                                                                                             
                                                                                                                                
2:18:16 PM                                                                                                                    
                                                                                                                                
SENATOR GREEN asked what would be  the eventual outcome if all of                                                               
the  practitioners   qualified  to  become   preferred  providers                                                               
actually became preferred providers.                                                                                            
                                                                                                                                
MR. BRICE  replied that  there would  ultimately be  no preferred                                                               
provider  status because  no  organization  could offer  customer                                                               
volume in exchange for lower rates.                                                                                             
                                                                                                                                
2:21:33 PM                                                                                                                    
                                                                                                                                
GREG LOUDEN, Vice President, Willis  of Alaska, said that Senator                                                               
Green expressed many his organization's  concerns about the bill.                                                               
He  said that  the bill  would limit  the value  of many  current                                                               
contracts.   He added  that in  fiscal year  2004, [Indiscernible                                                               
2:22:51  to  2:22:54] estimated  that  changing  from a  directed                                                               
preferred provider  organization (PPO) to  an open PPO  was going                                                               
to save $1.5  million per year for  the state.  In  the last year                                                               
the estimate  was not  a dollar  figure but  four percent  of the                                                               
gross  cost, which  comes out  to almost  the exact  same amount,                                                               
$1.5 million per year.                                                                                                          
                                                                                                                                
2:23:50 PM                                                                                                                    
                                                                                                                                
ROSE  KALAMARIDES,  Administrator, Alaska  Teamster-Health  Plan,                                                               
said  that  this  bill  was introduced  under  the  preface  that                                                               
individuals  buy  their  own  health care.  However,  of  the  $5                                                               
billion  spent on  health care  in  Alaska last  year, only  five                                                               
percent was paid on individual policies.                                                                                        
                                                                                                                                
She said that  Alaska has the highest cost of  health care in the                                                               
nation and  added that spending  on health  care in the  state is                                                               
expected to  increase at  the rate of  approximately 9  percent a                                                               
year.                                                                                                                           
                                                                                                                                
MS.  KALAMARIDES said  this  legislation  would impact  employers                                                               
directly and negatively because they  would not longer be able to                                                               
offer customer  volume in exchange for  discounts.  Consequently,                                                               
their already  large health  care costs  would increase  and they                                                               
would  undoubtedly  transfer  some  of the  new  costs  to  their                                                               
employees.                                                                                                                      
                                                                                                                                
She  said this  type of  legislation has  been popular  in states                                                               
with managed health care. However,  there is virtually no managed                                                               
care in  Alaska and  therefore the scare  tactics offered  by the                                                               
proponents  of this  legislation are  a smoke  screen.   She said                                                               
this  legislation is  intended  for the  benefit  of doctors  and                                                               
nothing more.                                                                                                                   
                                                                                                                                
MS.  KALAMARIDES said  that according  to recent  I-Search study,                                                               
medical and  surgical procedures in  Alaska cost 18  percent more                                                               
than elsewhere in the United States.   Doctors in Alaska are paid                                                               
well  and  do not  have  to  contend  with  HMOs. She  said  that                                                               
regulating  this industry  through  anti-compete legislation  may                                                               
have made  sense when we were  living in an economy  with heavily                                                               
regulated industries,  but today it  only serves the  interest of                                                               
doctors.  She urged the committee not to pass SB 299.                                                                           
                                                                                                                                
2:28:31 PM                                                                                                                    
                                                                                                                                
CHAIR DYSON held SB 299 in committee.                                                                                           

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