Legislature(1997 - 1998)
04/29/1998 03:13 PM House HES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL
SERVICES STANDING COMMITTEE
April 29, 1998
3:13 p.m.
MEMBERS PRESENT
Representative Con Bunde, Chairman
Representative Joe Green, Vice Chairman
Representative Brian Porter
Representative Fred Dyson
Representative Tom Brice
MEMBERS ABSENT
Representative Al Vezey
Representative J. Allen Kemplen
COMMITTEE CALENDAR
HOUSE BILL NO. 44
"An Act relating to admission to an Alaska Pioneers' Home."
- PASSED HB 44 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 197(RLS) am
"An Act relating to health care services provided by, and practices
of, a health maintenance organization; providing that an enrollee
in a health maintenance organization has the right to select a
treating chiropractor; specifying certain chiropractic health care
reports, examinations, and limits on treatment; and prohibiting
health maintenance organizations from limiting free speech of
health care providers."
- PASSED HCS CSSB 197(HES) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 58
Proposing amendments to the Constitution of the State of Alaska
relating to the education fund.
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 44
SHORT TITLE: ADMISSION TO PIONEERS' HOMES
SPONSOR(S): REPRESENTATIVES(S) BRICE
Jrn-Date Jrn-Page Action
1/13/97 39 (H) PREFILE RELEASED 1/3/97
1/13/97 39 (H) READ THE FIRST TIME - REFERRAL(S)
1/13/97 39 (H) STA, HES, FINANCE
3/31/98 (H) STA AT 8:00 AM CAPITOL 102
3/31/98 (H) MINUTE(STA)
4/02/98 (H) STA AT 8:00 AM CAPITOL 102
4/02/98 (H) MINUTE(STA)
4/02/98 2851 (H) STA RPT CS(STA) 6DP
4/02/98 2851 (H) DP: JAMES, ELTON, BERKOWITZ, IVAN,
4/02/98 2851 (H) RYAN, HODGINS
4/02/98 2851 (H) ZERO FISCAL NOTE (ADM)
4/02/98 2851 (H) REFERRED TO HES
4/29/98 (H) HES AT 3:00 PM CAPITOL 106
BILL: SB 197
SHORT TITLE: REGULATING HEALTH MAINTENANCE ORGS.
SPONSOR(S): SENATOR(S) DONLEY, Taylor, Ellis, Duncan
Jrn-Date Jrn-Page Action
5/07/97 1783 (S) READ THE FIRST TIME - REFERRAL(S)
5/07/97 1783 (S) HES
1/14/98 (S) HES AT 9:00 AM BUTROVICH ROOM 205
1/14/98 (S) MINUTE(HES)
1/16/98 (S) HES AT 9:00 AM BUTROVICH ROOM 205
1/16/98 (S) MINUTE(HES)
1/16/98 2224 (S) COSPONSOR(S): ELLIS
1/21/98 (S) HES AT 9:00 AM BUTROVICH ROOM 205
1/21/98 (S) MINUTE(HES)
1/21/98 2250 (S) HES RPT 2DP 1NR 2AM
1/21/98 2250 (S) DP: WILKEN, WARD NR: LEMAN
1/21/98 2250 (S) AM: GREEN, ELLIS
1/21/98 2250 (S) ZERO FISCAL NOTE (DCED)
2/06/98 2428 (S) COSPONSOR: DUNCAN
2/17/98 (S) RLS AT 11:20 AM FAHRENKAMP RM 203
2/17/98 (S) MINUTE(RLS)
2/23/98 2612 (S) RLS CS, NEW TITLE AND CALENDAR
2/23/98
2/23/98 2613 (S) PREVIOUS ZERO FN (DCED)
2/23/98 2613 (S) READ THE SECOND TIME
2/23/98 2613 (S) RLS CS ADOPTED UNAN CONSENT
2/23/98 2614 (S) AM NO 1 ADOPTED UNAN CONSENT
2/23/98 2614 (S) AM NO 2 ADOPTED Y10 N8 E2
2/23/98 2615 (S) ADVANCED TO THIRD READING UNAN
CONSENT
2/23/98 2615 (S) READ THE THIRD TIME CSSB 197(RLS) AM
2/23/98 2615 (S) RETURN TO SECOND FOR AM 3 UNAN
CONSENT
2/23/98 2615 (S) AM NO 3 ADOPTED UNAN CONSENT
2/23/98 2615 (S) AUTOMATICALLY IN THIRD READING
2/23/98 2616 (S) PASSED Y17 N1 E2
2/23/98 2616 (S) WILKEN NOTICE OF RECONSIDERATION
2/24/98 2635 (S) RECON TAKEN UP - IN THIRD READING
2/24/98 2635 (S) PASSED ON RECONSIDERATION Y19 N- A1
2/24/98 2636 (S) TRANSMITTED TO (H)
2/25/98 2417 (H) READ THE FIRST TIME - REFERRAL(S)
2/25/98 2418 (H) HES
4/29/98 (H) HES AT 3:00 PM CAPITOL 106
BILL: HJR 58
SHORT TITLE: CONST AM: EDUCATION FUND
SPONSOR(S): REPRESENTATIVES(S) COWDERY
Jrn-Date Jrn-Page Action
2/12/98 2306 (H) READ THE FIRST TIME - REFERRAL(S)
2/12/98 2306 (H) HES, JUDICIARY
3/31/98 (H) HES AT 3:00 PM CAPITOL 106
3/31/98 (H) MINUTE(HES)
4/07/98 (H) HES AT 3:00 PM CAPITOL 106
4/07/98 (H) MINUTE(HES)
4/29/98 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
SENATOR DAVE DONLEY
Alaska State Legislature
Capitol Building, Room 508
Juneau, Alaska 99801-1182
Telephone: (907) 465-3892
POSITION STATEMENT: Testified as sponsor of CSSB 197(RLS)am.
QUINN MCKENNA
Providence Health System
3200 Providence Drive
Anchorage, Alaska 99519
Telephone: (907) 261-3055
POSITION STATEMENT: Testified on CSSB 197(RLS)am.
GORDON EVANS, Representative
Health Insurance Association of America
211 Fourth Street, Suite 305
Juneau, Alaska 99801
Telephone: (907) 586-3210
POSITION STATEMENT: Testified on CSSB 197(RLS)am.
ANNETTE DEAL, Researcher
to Representative John Cowdery
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801-1182
Telephone: (907) 465-3879
POSITION STATEMENT: Testified on HJR 58.
MARCO PIGNALBERI, Legislative Assistant
to Representative John Cowdery
Alaska State Legislature
Capitol Building, Room 416
Juneau, Alaska 99801-1182
Telephone: (907) 465-3879
POSITION STATEMENT: Testified on HJR 58.
ACTION NARRATIVE
TAPE 98-50, SIDE A
Number 0001
CHAIRMAN CON BUNDE called the House Health, Education and Social
Services Standing Committee meeting to order at 3:13 p.m. Members
present at the call to order were Representatives Bunde, Green,
Dyson and Brice. Representative Porter arrived at 3:29 p.m.
Representatives Vezey and Kemplen were absent.
HB 44 - ADMISSION TO PIONEERS' HOMES
Number 0062
REPRESENTATIVE TOM BRICE, Sponsor of HB 44, said the concept of
this legislation was brought to his attention during the last
campaign by one of his constituents who, while on the waiting list
for the Alaska Pioneers' Home, inquired if he would be denied
admission if the monthly rent increased to a point where he
couldn't afford it. While it is current policy that the Pioneers'
Home will not disqualify a person based on failure to make an
initial payment or provide security for monthly payments, his
concern is that policy could change during the annual policy
update. House Bill 44 would place that policy in statute, thus
protecting the state's senior population from being denied
admission into the Pioneers' Home.
Number 0140
REPRESENTATIVE BRICE made a motion to adopt Amendment 1 which
reads:
Page 1, line 10:
Following "on"
Insert "financial"
CHAIRMAN BUNDE objected for the purpose of discussion.
REPRESENTATIVE BRICE withdrew Amendment 1 because his concern was
addressed on line 13.
Number 0260
CHAIRMAN BUNDE pointed out the Department of Administration had
submitted a zero fiscal note, yet there would be people at the
Pioneers' Home at state expense. He inquired at what point is it
determined that a person cannot pay.
REPRESENTATIVE BRICE said a person would be required to pay as much
as possible based on the current determination process. This
legislation basically states a person unable to provide security or
make an initial payment will not be denied admission.
CHAIRMAN BUNDE remarked the zero fiscal note is misleading in that
it does cost money, just not additional money.
Number 0335
REPRESENTATIVE JOE GREEN asked if that's the case, is HB 44
necessary?
REPRESENTATIVE BRICE responded it is necessary because policy is
just that - policy, and given that policies can change without
legislative approval, he wants that policy codified to statute.
REPRESENTATIVE GREEN said, "Last summer, I visited the Pioneers'
Home in Anchorage and there were several people in there who were
not Alzheimer or dementia people and because they were up to some
80 percent of the people that lived there suffering from some form
of dementia, the costs were escalating extremely rapidly. Now if
that's the case - and these people were saying they were in danger
of being thrown out - if the policy is that if they can't pay, they
get to either come in or get to stay in, there's a confusion factor
here because the people were already there and fearful that they
were going to be thrown out because they could not longer afford
these elevated prices."
REPRESENTATIVE BRICE agreed that was a good point and added the
purpose of HB 44 is to alleviate some of that concern and fear.
REPRESENTATIVE GREEN said, "If that's the case and people will make
application, the costs are going up because you're treating
dementia patients, is that going to exacerbate the problem at the
Pioneers' Home because costs are going up to cover the cost of
operation, but these people are coming in not paying the costs,
which makes them go up even higher."
REPRESENTATIVE BRICE responded this will ensure that individuals
will not be denied admission to the Pioneers' Home because of their
inability to pay. Individuals living at the Pioneers' Home have
never paid the full cost of care, yet it is true that individuals
are helping to pay the increased costs of having to care for
individuals with dementia. He added, "What this might help us with
is possibly ensuring that those - as the prices increase and the
costs are shifted, that folks still have access because frankly, I
don't know too many people who come from the era of the folks who
are involved in the Pioneers' Home, who could afford to pay the
full cost on the fixed level of retirement they're getting out of
jobs they had in the 70s ...."
REPRESENTATIVE GREEN said, "If that's happening - if we're treating
more and more dementia related illnesses, mental illnesses if you
will, in Pioneers' Home, have we lost the idea of the Pioneers'
Home originally, should we go back to having a Pioneers' Home and
if we have that many mental illness faces, then I think Mental
Health ought to come in and take care of those people and not
confuse the issue with the Pioneers' Home."
REPRESENTATIVE BRICE shared Representative Green's point of view
and has drafted legislation that would codify the role of the
Pioneers' Home as a communal living environment, breaking off the
dementia related illnesses to a separate facility so as to become
Medicaid eligible, and refinance their care by 50 percent of
federal funds.
Number 0660
CHAIRMAN BUNDE observed there have been a number of policy
decisions made relating to the Pioneers' Homes. He asked if there
was further discussion on HB 44. Hearing none, he closed public
testimony and asked the wish of the committee.
Number 0697
REPRESENTATIVE BRICE made a motion to pass HB 44 out of committee
with individual recommendations and attached zero fiscal notes.
CHAIRMAN BUNDE asked if there was objection. There being none,
HB 44 moved from the House Health, Education and Social Services
Standing Committee.
CSSB 197(RLS)am - REGULATING HEALTH MAINTENANCE ORGS.
Number 0732
CHAIRMAN BUNDE announced the next order of business would be CSSB
197(RLS)am, "An Act relating to health care services provided by,
and practices of, a health maintenance organization; providing that
an enrollee in a health maintenance organization has the right to
select a treating chiropractor; specifying certain chiropractic
health care reports, examinations, and limits on treatment; and
prohibiting health maintenance organizations from limiting free
speech of health care providers," sponsored by Senator Dave Donley.
SENATOR DAVE DONLEY informed the committee that CSSB 197(RLS)am
limits certain practices of health maintenance organizations (HMO).
First, it prohibits HMOs from initiating the infamous gag rules on
doctors. Additionally, it provides that customers shall be
informed if there are services that are not covered under a
maintenance organization plan to eliminate the element of surprise.
He said the bill also sets out specific provisions for direct
access to chiropractic care rather than requiring all patients to
go through a gatekeeper, as is the practice that has been developed
by HMOs in other parts of the country. CSSB 197(RLS)am also
provides for a point of service option for enrollees in HMOs that
allows an option to choose a different deductible or a higher cost,
if the enrollee wishes to go to the health care provider of their
choice.
SENATOR DONLEY advised the members he has suggested an amendment,
which would add language to an existing statute prohibiting unfair
discrimination against persons who provide a service. He said it
would add HMOs into the existing health insurance so the same
prohibition that exists in statute for all other kinds of medical
insurance would also apply to HMOs. He said Chairman Bunde had
proposed an amendment which he agrees with, which provides that if
an HMO or insurance company decides to deny, reduce, or terminate
a health care benefit to deny payment for a health care service, it
must be based on the recommendation of a licensed health care
provider within that specialty or subspecialty, and also a provider
who is licensed to practice in Alaska.
Number 0868
REPRESENTATIVE GREEN made a motion to move Amendment 1, 0-
LS0905\KA.1, Ford, dated 3/18/98. Amendment 1 reads:
Page 1, following line 7:
Insert a new bill section to read:
"* Section 1. AS 21.36.090(d) is amended to read:
(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 health maintenance organization or
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."
Page 1, line 8:
Delete "Section 1."
Insert "Sec. 2."
Renumber the following bill sections accordingly.
REPRESENTATIVE BRICE objected for purposes of discussion.
CHAIRMAN BUNDE noted that Senator Donley had explained Amendment 1
would include HMOs and the list of other physicians and medical
care providers.
REPRESENTATIVE BRICE said, "They cannot discriminate."
SENATOR DONLEY explained it is already an existing law. Amendment
1 adds HMOs to the existing law.
Number 0935
CHAIRMAN BUNDE called an at-ease at 3:28 p.m. He reconvened the
meeting at 3:30 p.m. He noted the arrival of Representative Porter
at 3:29 p.m.
REPRESENTATIVE FRED DYSON expressed confusion as to the intent of
Senator Donley's amendment.
CHAIRMAN BUNDE explained that Senator Donley's amendment is merely
adding HMOs to the current statute.
SENATOR DONLEY said the language in Section 1 is all in existing
law and applies to all other types of health insurance policies.
The amendment just adds HMOs to the existing law so the same
prohibition against unfair discrimination would also apply to
contracts issued by HMOs.
Number 1010
CHAIRMAN BUNDE asked if Representative Brice maintained his
objection. Hearing no objection, Amendment 1 was adopted.
Number 1020
REPRESENTATIVE GREEN made a motion to move Amendment 2 offered by
Representative Bunde which reads:
Page 4, after line 6
Add a new section.
A utilization review decision to deny, reduce, or
terminate a health care benefit to deny payment for a
health care service because that service is not medically
necessary may only be made by a health care provider
trained in that specialty or subspecialty and licensed to
practice in the state after consultation with the covered
persons's health care provider.
CHAIRMAN BUNDE asked if there is an objection. There being none,
Amendment 2 was adopted.
Number 1032
QUINN MCKENNA, Providence Health System, testified via
teleconference from Anchorage. He said he will not argue that
managed care companies should not be regulated; obviously they
should be. He will not argue against a legislator aggressively
reviewing organizations, especially if there is any fear of
infringing upon the rights of their constituents. Nor will he
argue against the appropriateness of chiropractic services. Those
items he just mentioned are not in question in his testimony.
However, he would like to add testimony on where the line should be
drawn that balances our personal desire to have free and unfettered
access to any care that a person wants to receive and the cost
related to that care. The only issue he was raising with this
legislation is with regard to the mandating of chiropractic
coverage by a managed care company. He recalled back in the early
90s across the country, our society was screaming about the
dramatic increases in health care cost; health care costs were
increasing three times the rate of inflation. He stated
"Subsequent to that, managed care had grown quite dramatically, and
actually health care inflation has come in check during this period
of time. In fact, in 1996, health care inflation was just, I
believe, 1.6 or 1.9 percent above the inflation rate, quite
dramatically down from the double digit inflation of just a few
years prior. A lot of that because of the ability of managed care
companies to come in, do utilization management, promised volume
for discounts, and leveraged the providers into providing lower
costs because they could provide that volume discounts."
MR. MCKENNA continued his testimony. "Health care is such a
strange service and industry. In most other industries -- like if
I were to go buy a car, I would go negotiate with the car salesman
and I would write a check, or I would go to the bank and pick up
money, but be obligated to pay that. In health care we buy
insurance, which the insurance company then pays for the health
care that I receive. And maybe during the year I pay $4,000 for my
health care insurance, maybe I only need $1,000 of coverage, or
maybe I need $100,000. I am, all of a sudden, taken away from my
obligation of paying for that service if someone else is paying for
it. And we need to be careful when our initial desire as people
and society is to get as much as we can and demand as much as we
can and you, as the legislature, need to be careful that we also
balance the cost of that care because as we saw just less than a
decade ago, it can easily spiral out of control."
MR. MCKENNA urged the committee not to pass this amendment, not
necessarily because it's so broad, but because it could set a
precedent on limiting the ability of managed care organizations to
help control health care costs for their community. He asked, "Out
of all the services that are available - health care services, open
heart surgery, treatment for diabetic patients, et cetera - how is
it that this amendment protects chiropractic services and mandates
that all chiropractors have to be (indisc.) and have to be paid for
their services? How is it that out of all of the services
available this is the very first one to come to be protected?" He
indicated he has not heard testimony that out of all of the
services available that chiropractic care is the best one that
would provide (indisc.) services the health of all of the
communities is going to be increased. He said he would encourage
the legislature to go back and say as they start to draw the line,
is this the best place to draw the line.
Number 1271
DR. R. H. BANKS, President, Alaska Chiropractic Society, testified
via teleconference from Anchorage. He said he would like to speak
to the issues just brought up by Mr. McKenna. He believes Mr.
McKenna may be a little confused with the legislation. He said
first of all it's not managed care legislation, it is HMO
legislation. Secondly, the bill does not mandate chiropractic
care. He said in a separate clause the first amendment to mandate
all services, it prohibits discrimination and so the first clause
in the bill would mandate chiropractic care. The separate
chiropractic clause in the bill is to ensure access to chiropractic
care. He reiterated that it does not mandate chiropractic care, it
assures that there would be access to chiropractic care. He said,
"On par with subsistence, health care is the issue on voter's
minds. Voters are concerned with access to quality care. Voters
are concerned with the ability to choose a doctor who is concerned
about them; a professional they can trust. Patients are demanding
that their doctors be able to discuss all treatment options
available to alleviate their health problems. .... We may not see
HMOs in Alaska for several years and now is the time to act on
behalf of thousands of Alaskans who signed a petition and sent
public opinion messages in support of SB 197." He urged the
committee members to move this bill out of committee today.
Number 1400
GORDON EVANS, Representative, Health Insurance Association of
America (HIAA), came before the committee to testify. He told the
committee that HIAA opposes the bill in general because it is
unneeded legislation since there are no HMOs in Alaska and no
prospects for any in the unforeseeable future. He said HIAA is
also concerned about certain managed care initiatives being
proposed in this and other legislation and contrary to the
testimony of Dr. Banks, this is not only a managed care
legislation, it is also a mandate for chiropractors.
MR. EVANS referred to Section 2 of CSSB 197 and read into the
record, "SB 197 proposes to amend current law to require a carrier
to include in his evidence of coverage guidelines explaining when
treatment may be denied. Managed care plans already offer coverage
guidelines in their schedule of benefits. The schedule of benefits
is a legal document filed with the state Division of Insurance that
describes in detail what the plan covers, what it does not cover,
and the rules and procedures governing eligibility, and a copy of
that schedule of benefits is provided to ensure (indisc.)
enrollment. The schedule of benefits does not provide detailed
utilization review or quality insurance criteria, which are very
detailed and, therefore, can be voluminous." He continued, "Also,
utilization review and quality insurance criteria are subject to
change in order to keep up with advancing medical technology.
Health insurers are not opposed to providing, upon request of a
patient or the health care provider, a written explanation of an
adverse determination, that is a copy of the contract basis or
relevant medical rationale used to make that determination." He
said he is prepared to offer a proposed amendment to replace the
current Section 2 with a new Section 2 entitled, "Adverse
Determination" together with a new Section 5 which would then add
a definition of the term "adverse determination."
Number 1500
MR. EVANS said he has a few comments to elaborate on HIAA's
opposition to Section 3 of the bill. He said that section, among
other things, would allow an insured direct access to the services
of a licensed chiropractor of his or her choice without prior
approval of the enrollee's health maintenance organization, a
gatekeeper, or a primary care physician. He said this provision is
a mandated benefit that will directly benefit a specific group of
providers - chiropractors - and he predicts that it won't stop with
them. He said, "Such legislative benefits, as we have noted on
many occasions before this committee, will simply drive up costs
and ultimately limiting the affordability of quality care for
consumers." He said for that reason, HIAA has always opposed
mandating of benefits.
MR. EVANS referred to Section 4, stating that CSSB 197(RLS) am
proposes to add a new subsection (i) that would prohibit HMOs from
imposing limits regarding criticism by a provider of health care
services provided by an HMO; written or oral communications between
a health care provider and an enrollee regarding health care
services; and employment of a health care provider to be terminated
unless the provider receives written notice of the cause for the
termination before being terminated. He indicated HIAA doesn't
object to all of that subsection, but objects to part of it. He
said, "Most managed care firms carefully guard their current
customers and information about their plan that they consider to be
confidential. Consequently, plans will include contractual
provisions asking the health care provider to agree not to
disparage the health plan to enrollees or to attempt to induce
enrollees to leave a plan or join another plan. These types of
contractual provisions are not unique to HMOs, but are imposed by
many other employers through contracts or employment manuals. No
business can tolerate its employees driving customers away. In
addition, there are many legitimate business precautions a managed
care plan must consider when contracting with an independent
professional or organization."
MR. EVANS continued, "These include first, as a general contractor
employing the provider, health plans could be held jointly liable
for libelous statements by a provider or spurious claims, which
impact on other providers' or institutions' business. Secondly,
providers who might have mobile contractual arrangements with
health plans and facilities could attempt to steer patients to
facilities in which the provider has a personal financial stake.
Lastly, the medical community has very jealously protected itself
against any disclosure data which compares physicians or facilities
based upon their clinical outcome. The same level of analytical
objectivity should be required in any qualitative statements made
by contracting physicians." He noted that HIAA does not believe
HMOs should limit or manage clinical discussions between physicians
and their patients regarding treatment options. In fact, most
managed care plans already require language to that effect in their
agreements. He said Section 4 would also prohibit carriers from
denying health care coverage for enrollee unless enrollee has been
examined by at least two physicians. It would also prohibit a
carrier from imposing financial incentives to be given or offered
to a provider for denying or delaying health care services. He
said denial of health care coverage can occur for a number of
reasons: for instance, a particular benefit may not be covered by
an insured's policy. Many procedures are subjected to utilization
review and quality assurance criteria. For instance, the most
expensive treatment is not always the best and sometimes surgery is
not the only available intervention. The insurer is not prohibited
from seeking a second medical opinion, however, the insurer should
not be required to subject every denial of health care coverage to
a second provider's opinion and the law as stated now would require
that.
Number 1667
MR. EVANS told the committee that managed health care plans have
attempted to create reimbursement systems which reward providers
for keeping their patients healthy in the most efficient way
possible, but do not, of course, encourage over-utilization of
scarce health dollars. If a physician provides too few services,
that could be just as costly as providing too many.
MR. EVANS expressed confusion as to where Amendment 2 would fit
into the bill.
SENATOR DONLEY was of the impression that Amendment 2 added a new
section to the bill.
CHAIRMAN BUNDE confirmed that.
MR. EVANS said the problem with having a licensed practice in this
state is a problem because there are some specialties that there
may be only one person licensed in this state. In that context he
asked, "Is he going to consult with himself to do that?"
CHAIRMAN BUNDE replied, "They don't have to live in this state,
they just have to be licensed to practice in this state."
MR. EVANS said, "I understand, but with the professional
utilization review entities that are around the country, they are -
and they are very good whether - I know that some people don't
think they are, but they are."
CHAIRMAN BUNDE said that's not whose profit line we're looking at.
MR. EVANS said, "I can't argue with you on that, if that's your
view." He indicated that the idea is if a person is licensed in
the United States, why not have it that way rather than just
licensed in this state? He pointed out the argument was made the
attorney general can't get to them if they're not licensed in this
state. He contends the attorney general isn't going to bring a
civil lawsuit against them anyway; the patient will file a lawsuit.
He asked, "Where does the attorney general get involved in it?
Jerking their license?"
Number 1776
CHAIRMAN BUNDE responded, "We have our own board that I think
Alaskans are more comfortable with having them at our standards."
MR. EVANS referred to Amendment 1 stating the problem HIAA has with
it is that particular statute is being used now for everything
except what it was intended to when it was originally enacted by
this legislature. He stated originally it was intended to be
comparing physician "A" with physician "B" and now it's gotten to
the point where it compares physician "A" with chiropractor "B," or
if they happen to do the same sort of service, you have unfair
discrimination. He said the best thing the legislature could do
with that statute is to repeal it and start over from scratch and
make it back to what it was intended to be in the first place. He
pointed out he is not the only one saying that; the Division of
Insurance has told the legislature that many times, also.
Number 1829
CHAIRMAN BUNDE announced that public testimony is closed. In
summary, he said health care costs are a challenge. One way to
limit that is through volume, the other way is to reduce services.
He expressed that he understands the concern about limiting health
care costs and he also understands that insurance companies exist
to make a profit and can make profits many ways; one way is by
reducing services.
SENATOR DONLEY concluded by stating the concept of repealing the
whole statute goes way beyond the scope of this legislation. He
said obviously we have this existing statute, which is being
enforced by the Division of Insurance who is going through the
process of developing the criteria to enforce it. He indicated
that it seems completely appropriate that it's there and applies to
health insurance; it should also apply to HMOs.
Number 1987
CHAIRMAN BUNDE made a motion to move HCS CSSB 197(HES) out of
committee. There being no objection, HCS CSSB 197(HES) was moved
from the House Health, Education and Social Services Standing
Committee.
HJR 58 - CONST AM: EDUCATION FUND
Number 1902
CHAIRMAN BUNDE announced the next order of business was HJR 58,
Proposing amendments to the Constitution of the State of Alaska
relating to the educational fund. At the previous hearing, the
committee had asked Representative Cowdery to check into the
possible use of National Petroleum Reserve in Alaska (NPRA) monies.
Number 1950
ANNETTE DEAL, Researcher to Representative John Cowdery, said the
Legislative Legal Division staff has advised those funds are
already spoken for, which basically leaves HJR 58 as it currently
stands.
CHAIRMAN BUNDE called an at-ease at 3:53 p.m. Chairman Bunde
reconvened the meeting at 3:55 p.m.
Number 1985
REPRESENTATIVE GREEN said, "As I read the bill, this would in
effect add another 40 percent dedication to the already
constitutionally dedicated 25 percent and statutorily dedicated 25
percent in addition. This would then constitutionally add another
40 percent, so that there would only be, in effect, 10 percent left
for allocation other than the 90 percent mandated. And my concern
is that when we do that, are we binding ourselves to the point that
-- as I understand the original intent of the permanent fund was
that it would take care of government expenditures when oil revenue
no longer was capable, such as the situation ...."
CHAIRMAN BUNDE interjected, "Earnings of the permanent fund ...."
REPRESENTATIVE GREEN continued, "Yah, not the corpus. This would
take of that which we can now allocate, it would dedicate it to
schools and leave only 10 percent for other allocations because 50s
already spoken for. Is that fiscally responsible?"
CHAIRMAN BUNDE said it becomes a policy call.
Number 2060
MARCO PIGNALBERI, Legislative Assistant to Representative John
Cowdery, said another way to look at it is the money going into
this fund is an offset to other general fund monies that would
otherwise be going to education. For example, if there was $100
million in the fund, that's $100 million less that would have to be
taken out of the general fund to fund education.
REPRESENTATIVE GREEN noted the difference is significant; in one
case it's a constitutional amendment which means going to the
people for a vote if there's a problem in the future; whereas, if
it's done by statute, the allocation is done each year by the
legislature and statutes can be changed each year.
Number 2100
MR. PIGNALBERI said in looking at the first five years of revenue
(indisc.) projections, for example, about $75 million would go into
the fund - the state's current educational expenditures are running
upwards of $700 million. Again, the money going into this fund
means less that would be taken out of the general fund and other
sources to pay for education. He added it would be quite a long
period of time before this fund had enough money in it to be the
primary funding source for education. He said, "The point I'm
trying to make is that you're not locked in - this resolution would
not lock in expenditures until it got to be so large that you had
to go to this fund for all funding for educational expenditures.
And until it gets that large, you could look at it as an offset of
the general fund."
REPRESENTATIVE GREEN said if that's the case, what is to be gained
by making it a constitutional amendment.
MR. PIGNALBERI said it is a way of incrementally getting to a point
where there's a stable source of education funds in the state. It
may take some years to reach the level of $700 million plus, and
may never reach it in our lifetime, but it's a start and future
legislatures may find other revenue sources to add to the fund.
The overall goal is to establish a stable source of educational
funding so it's not so subject to the economic situation of the
state.
Number 2185
REPRESENTATIVE DYSON said he had two fundamental problems; first,
should any government agency have reserved funds and therefore not
have to compete with other government services for funding; and
secondly, if any government organization should have a
noncompetitive standing for funding, is education the appropriate
one? He noted it's a philosophical question, but he would
appreciate Mr. Pignalberi's remarks.
MR. PIGNALBERI said there has been a lot of thought given to the
question and basically, when this approach is compared to the
approach that's been put forth by this Governor, as well as
previous Governors, for an educational endowment, this is a milder,
more incremental approach which is still subject to annual
legislative appropriation.
REPRESENTATIVE GREEN inquired if funds would have to be
appropriated under this approach?
MR. PIGNALBERI responded yes, this is a funding source; funds would
still have to be appropriated to the particular educational
programs.
REPRESENTATIVE GREEN asked if Mr. Pignalberi meant the revenue from
this fund.
MR. PIGNALBERI confirmed that.
REPRESENTATIVE DYSON inquired if the money would simply remain in
the fund and couldn't be used for anything else if it didn't get
appropriated.
CHAIRMAN BUNDE stated his belief that there were two purposes in
the legislation; one was to build a steady source of income for
education and the other was to encourage people to have another
look at their interest in either developing or not developing ANWR.
Number 2279
CHAIRMAN BUNDE observed the committee lacked a quorum at this time.
He expressed his appreciation to Representative Cowdery bringing
the issue up for discussion. He asked if there were further
questions from the committee. There being none, he thanked Mr.
Pignalberi for his comments and indicated HJR 58 would remain in
committee.
ADJOURNMENT
Number 2300
CHAIRMAN BUNDE adjourned the House Health, Education and Social
Services Standing Committee at 4:05 p.m.
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