Legislature(1993 - 1994)
03/01/1994 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE
STANDING COMMITTEE
March 1, 1994
3:00 p.m.
MEMBERS PRESENT
Rep. Bill Hudson, Chairman
Rep. Joe Green, Vice Chairman
Rep. Brian Porter
Rep. Eldon Mulder
Rep. Bill Williams
MEMBERS ABSENT
Rep. Joe Sitton
Rep. Jerry Mackie
COMMITTEE CALENDAR
*HB 476: "An Act relating to insurance for services
performed by a dentist; and providing for an
effective date."
HEARD AND HELD IN COMMITTEE
*HB 439: "An Act enacting the Uniform Fraudulent Transfer
Act."
PASSED OUT OF COMMITTEE
Confirmation hearings:
Alaska Labor Relations Agency
Board of Marine Pilots
Board of Certified Real Estate Appraisers
Real Estate Commission
Alaska Public Utilities Commission
Alaska Workers' Compensation Board
(* First public hearing.)
WITNESS REGISTER
REP. GARY DAVIS
Alaska State Legislature
State Capital
Juneau, Alaska 99801-1182
465-2693
Position Statement: Sponsor of HB 476
STEVE LEBRUN
Aetna Life Insurance
P.O. Box 21645
Seattle, Washington 98111
1-800-426-3211
Position Statement: Opposed HB 476
DON KOCH, Chief
Market Surveillance
Division of Insurance
Department of Commerce
P.O. Box 110805
Juneau, Alaska 99811-0805
465-2577
Position Statement: Gave overview and answered questions
on HB 476
JERRY STRANIK
2601 Boniface Parkway
Anchorage, Alaska 99504
337-9474
Position Statement: Supported HB 476
FRANK THOMAS-MEARS
12541 Atherton
Anchorage, Alaska 99516
345-7181
Position Statement: Supported HB 476
JERRY KURTZ
1050 Beech Lane
Anchorage, Alaska 99501
258-6051
Position Statement: Supported HB 439
MARY ELLEN BEARDSLEY
Assistant Attorney General
Department of Law
1031 W. 4th Ave.
Anchorage, Alaska 99501
265-5213
Position Statement: Supported HB 439
PREVIOUS ACTION
BILL: HB 476
SHORT TITLE: DENTAL INSURANCE COVERAGE
SPONSOR(S): REPRESENTATIVE(S) G.DAVIS BY REQUEST
JRN-DATE JRN-PG ACTION
02/14/94 2376 (H) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2376 (H) LABOR & COMMERCE, STATE AFFAIRS
03/01/94 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 439
SHORT TITLE: UNIFORM FRAUDULENT TRANSFER ACT
SPONSOR(S): JUDICIARY
JRN-DATE JRN-PG ACTION
02/04/94 2256 (H) READ THE FIRST TIME/REFERRAL(S)
02/04/94 2256 (H) LABOR & COMMERCE, JUDICIARY
03/01/94 (H) L&C AT 03:00 PM CAPITOL 17
ACTION NARRATIVE
TAPE 94-17, SIDE A
Number 001
CHAIRMAN HUDSON convened the meeting at 3:15 and invited
Rep. Gary Davis to present HB 476.
HB 476 - DENTAL INSURANCE COVERAGE
Number 005
REP. GARY DAVIS, Prime Sponsor of HB 476, stated that HB 476
will require that health insurance policies and employee
benefit plans which provide dental care benefits shall
permit beneficiaries to select the dentist of their choice.
REP. DAVIS added that it had been expected to be a fairly
clean bill until the last minute, but he has been informed
that the insurance industry has some problems with HB 476.
Rep. Davis asked the committee to listen to all sides of the
issue and then he would work with the various sides and come
back to the committee with a cleaned up version of the bill.
Number 064
STEVE LEBRUN, Account Manager, Aetna Health Plan, testified
against HB 476. Mr. LeBrun stated that it appears HB 476
was primarily directed at managed dental care plans. Mr.
LeBrun stated that managed dental care plans have four main
features:
1) health insurers such as Aetna make arrangements with
selected providers to furnish comprehensive services to
members;
2) the organization of these plans involve explicit
criteria, providers are credentialed and are reviewed for
participation;
3) managed plans also involve formal programs for ongoing
quality assurance and review of services;
4) managed plans incorporate financial incentives for plan
members to use the contracted providers associated with
those plans.
MR. LEBRUN asserted that HB 476 would prevent or prohibit
insurers from offering managed network products in Alaska.
He added that Aetna currently offers a preferred dental
network in the Anchorage area. Much of the growth of
managed care has been at the request of employers who are
seeking ways to better manage cost and assure quality.
MR. LEBRUN felt that managed plans have been proven over
time to be valuable in controlling costs, at the same time
they promote appropriate utilization and quality standards.
MR. LEBRUN outlined a few of the specific provisions that
Aetna thinks would be detrimental to the development and
growth of managed dental care plans and would essentially
prohibit insurers from continuing to offer or explore
managed health care opportunities:
1) HB 476 would appear to allow any licensed dentist to
participate in our dental network. Essentially this
would eliminate the credentialing currently in place and
might even be interpreted to say that the provider need
not comply with the terms of the contract. Aetna
believes its important that they have the ability to
selectively contract with dentists who share a common
treatment philosophy and will abide by certain treatment
guidelines and protocols.
2) HB 476 contains a provision that insurers give full
freedom of choice to enrollees concerning provider
selection and that insurers pay network and non-network
providers the same rates. This would prevent insurers
from steering patients to network providers and from
negotiating favorable rates from providers based on that
volume.
3) HB 476 contains provisions that appears to prohibit
insurers from working with providers to implement
standards of treatment and utilization. Language in
HB 476 would prohibit interfering or intervening in the
diagnosis or treatment of patients. This language could
be interpreted to mean the insurers could also be barred
from communicating with providers regarding advanced
certifications of care or specialty care referrals.
4) HB 476 contains provisions that don't address managed
care plans and provision that require disclosure of
certain information on lines 9 through 17. Aetna has no
issue with those areas.
MR. LEBRUN concluded by saying that more effort should be
geared toward promoting the quality and cost efficiency that
is found in managed care arrangements and not in restricting
or prohibiting same. Mr. LeBrun asserted that the employers
feel that managed dental care programs are valuable and feel
that giving up some choice is worth it to gain the cost
savings and other benefits in managed care.
Number 200
CHAIRMAN HUDSON asked Mr. LeBrun who is being left out
currently.
Number 208
MR. LEBRUN stated that most of the dental coverage Aetna
provides in Alaska is traditional dental coverage, fee for
service. The percentage of people covered under managed
dental plans is small in Alaska and HB 476 would make it
nonexistent.
Number 235
REP. DAVIS asked if the testimony could be provided in
writing.
Number 245
MR. LEBRUN responded that he would provide Rep. Davis with
written comments.
Number 260
DON KOCH, Chief of Market Surveillance, Division of
Insurance, Department of Commerce, stated there are four
different ways to provide dental care service in Alaska
today:
1) private insurance companies authorized under AS 21.09
2) self insurance - employer assumes total risk
3) dentists form an HMO (not currently used in Alaska)
4) hospital or medical service corporation (for example,
Blue Cross).
MR. KOCH stated that an insurance company authorized under
AS 21.09 can't contract with a provider. A self-insurer is
not blocked from contracting with a provider. An HMO will
only provide the care with the dentists that are part of an
HMO. A medical service corporation goes out and contracts
with the providers then sell access to the public to that
contract.
MR. KOCH stated that HB 476 provides for a number of changes
and requirements that will necessitate some statute changes
to the insurance code.
Number 454
CHAIRMAN HUDSON asked if there needed to be statutory
changes in order to fix the problems in the bill as he
perceives them.
Number 460
MR. KOCH answered that if the bill is aimed towards
providing a Preferred PO mechanism for insurance companies
it would require a statutory fix. Mr. Koch added that there
are provisions in HB 476 that address the relationship
between the insurance company and the dentist and that
relationship only comes about by contract, which would also
need a statutory change. Mr. Koch stated that there are
other areas that need to be addressed.
Number 481
CHAIRMAN HUDSON stated that it would benefit the committee
and everyone else if the Division could get together with
the sponsor and others and go over the various problems with
the bill.
Number 503
REP. GREEN asked if it was improper now for an insurance
company to contract directly with a dental provider.
Number 510
MR. KOCH answered yes, if they are providing coverage under
an insurance policy.
Number 523
REP. GREEN stated, "I thought I heard you say something to
the effect that an agreement is reached, not a contract, but
an agreement between some providers and some technicians."
Number 533
MR. KOCH answered that hospital medical service corporations
can enter into agreements referenced above by their
certificate of authority, but an insurance company can't.
Number 549
JERRY STRANIK read the following sponsor statement:
HB 476 is a "freedom of choice" bill. It allows the patient
to be able to choose his or her own dentist. It also allows
the dentist to participate in any dental insurance policies
or plans he is willing to provide services for.
Health care is definitely in the forefront of our national
consciousness. Certain popular buzz words like "managed
care" on the surface sound very good. But we must be very
careful not to lose the good qualities we enjoy in our
present care system.
One of these is the freedom to choose your own dentist and
for your dentist to be able to participate in the plan that
you have. This bill provides for that.
In addition, HB 476 prevents the insurance company from
interfering with the diagnosis and treatment plan that the
patient and dentist have agreed upon. The patient must be
the final judge of what is best for them.
Finally, HB 476 helps prevent needless exposure to x-ray
radiation by allowing only necessary x-rays be taken to
diagnose and treat dental disease. The insurance company
will not be able to demand additional x-rays for it's
purpose.
HB 476 is good for health care and for the public. It
increases access and promotes competition.
Nineteen states protect the rights of patients to receive
care from the dentist of their choice.
The Supreme Court without comment left standing a similar
Virginia law that was challenged by Aetna Life Insurance Co.
Number 605
CHAIRMAN HUDSON asked if Mr. Stranik's clinic would like to
have the legal authority to be able to negotiate with an
insurance carrier to provide exclusive services to their
insured.
MR. STRANIK replied no, he believes the patient should have
the freedom of choice who they can go to.
Number 615
FRANK THOMAS-MEARS, insurance agent, testified that the
random choice of allowing the patient to choose any one
dentist is what allows free market competition to exist.
MR. MEARS stated that in 1991 Aetna sent out solicitations
to approximately ten dentists in the Anchorage area asking
them to provide managed care to their subscribers. Many of
these dentists called Mr. Mears for help in reading the
contract. Mr. Mears contends that contrary to what Aetna or
other large insurers may say, the contracts have little to
do with quality of care and everything to do with the
economic bottom line.
TAPE 94-17, SIDE B
Number 001
MR. MEARS advised the dentists that they were in short
supply and high demand and should ask for 100% of their fees
and to strike some of the less attractive parts of the
contracts.
CHAIRMAN HUDSON interrupted Mr. Mears and suggested that he
give a layman's outline of what he was talking about in
regards to HB 476.
MR. MEARS replied that the bottom line was that a patient
should be able to choose the dentist they want, and the bill
allows the dentist and patient to decide between them what
kind of treatment they want without interference.
Number 108
MR. KOCH stated that HB 476 would not have any effect on a
third party administrator's actions, which is basically what
Aetna is.
Number 130
CHAIRMAN HUDSON suggested that a working group should get
together and clarify this issue and bring it back to the
committee at that point.
HB 439 - UNIFORM FRAUDULENT TRANSFER ACT
Number 170
CHAIRMAN HUDSON brought up HB 439 and invited Mr. Kurtz to
testify.
Number 175
JERRY KURTZ, Attorney and Commissioner on the National
Conference of Commissioner on Uniform State Laws, testified
in support of HB 439. He stated that HB 439 is aimed at
bringing Alaska in line with other states in the field of
fraudulent transfer. Fraudulent transfer is not a criminal
fraud, although some have gotten close. Mr. Kurtz explained
that creditors advance money to an individual after looking
at the person's apparent financial strength. A typical
situation is where a debtor owes money and realizes he is in
serious trouble so he transfers assets to others so that
creditors will be deprived of their value.
MR. KURTZ stated that current Alaska law in this area was
adopted from the state of Oregon and has received little
legislative attention. Mr. Kurtz gave an overview of the
history of the Uniform Fraudulent Transfer Act (UFTA) in the
United States.
MR. KURTZ stated the importance of HB 439 is to bring Alaska
business practices between creditors and debtors under the
same rules and into conformity of the federal bankruptcy
act.
Number 277
MARY ELLEN BEARDSLEY, Assistant Attorney General, Department
of Law, testified in support of HB 439. She stated HB 439
is extremely beneficial to the state as it will assist the
state in collecting debts.
MS. BEARDSLEY noted that under current law the plaintiff has
the burden of proving the existence of fraudulent intent and
this can be extremely hard to prove. She said UFTA would
eliminate the present Alaskan necessity of finding actual
intent by a property transferor to hinder, delay or defraud
a creditor in many situations where the transferor is
obviously transferring assets solely to keep them out of the
reach of the transferor's creditors.
MS. BEARDSLEY stated that UFTA also sets out specific
factors that can be considered by the court when determining
if there is intent on the part of the debtor.
MS. BEARDSLEY added that current law allows an insolvent
debtor to convey all or some of his property to one
creditor, but in HB 439 this would be considered fraud.
MS. BEARDSLEY explained that HB 439 also provides remedies
to creditors against the debtor, the property that has been
transferred, and against the transferee and the transferee's
property in some circumstances.
MS. BEARDSLEY added that HB 439 also addresses a statute of
limitations.
Number 361
REP. PORTER stated that his staff has put in considerable
amount of work on HB 439 and supports the bill in total.
Number 381
REP. MULDER moved HB 439 with zero fiscal note and
individual recommendations. No objections were heard; it
was so ordered.
CONFIRMATION HEARINGS
Number 390
CHAIRMAN HUDSON read the following names and their
nominations to boards and commissions:
ALASKA LABOR RELATIONS AGENCY
Stuart H. Bowdoin Jr.
Sally A. DeWitt
Karen J. Mahurin
Alfred L Tamagni Sr.
BOARD OF MARINE PILOTS
Michael J. O'Hara
BOARD OF CERTIFIED REAL ESTATE APPRAISERS
Chris Anderson
REAL ESTATE COMMISSION
Audrey J. Foldoe
Kristan Tanner
ALASKA PUBLIC UTILITIES COMMISSION
Alyce Hanley
Dwight D. Ornquist
ALASKA WORKERS' COMPENSATION BOARD
Twyla Barnes
John Giuchici
Steve Hagedorn
Florence S. Rooney
Patricia Wollendorf
Number 443
CHAIRMAN HUDSON stated that hearing no objections from the
committee all the names above were confirmed by the Labor
and Commerce Standing Committee.
CHAIRMAN HUDSON adjourned the meeting at 4:30 p.m.
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