04/29/2004 09:10 AM House RLS
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RULES STANDING COMMITTEE
April 29, 2004
9:10 a.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative Pete Kott
Representative John Coghill
Representative Lesil McGuire
Representative Carl Morgan
Representative Ethan Berkowitz
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 381
"An Act relating to child endangerment."
- MOVED CSHB 381(RLS) OUT OF COMMITTEE
HOUSE BILL NO. 542
"An Act relating to specialty construction contractors and to
construction contractor exemptions."
- MOVED CSHB 542(RLS) OUT OF COMMITTEE
HOUSE BILL NO. 551
"An Act relating to the issuance of teacher certificates to and
revocation of teacher certificates of persons convicted of
felony drug offenses and to the issuance of limited teacher
certificates to persons convicted of certain crimes involving a
minor and felony drug offenses."
- MOVED CSHB 551(JUD) OUT OF COMMITTEE
HOUSE JOINT RESOLUTION NO. 48
Sending a message of goodwill to President Chen Shui-bian, and
reaffirming the Alaska State Legislature's 2003 resolution
urging the United States Congress to support the granting of
official Observer Status to the Republic of China and to support
negotiation of a free trade agreement with the Republic of
China.
- MOVED CSHJR 48(RLS) OUT OF COMMITTEE
HOUSE BILL NO. 543
"An Act relating to medical assistance coverage for prescription
drugs; and providing for an effective date."
- MOVED CSHB 543(RLS) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 381
SHORT TITLE: CHILD ENDANGERMENT DRIVING OFFENSES
SPONSOR(s): REPRESENTATIVE(s) MCGUIRE
01/20/04 (H) READ THE FIRST TIME - REFERRALS
01/20/04 (H) HES, JUD
04/06/04 (H) HES AT 3:00 PM CAPITOL 106
04/06/04 (H) Moved CSHB 381(HES) Out of Committee
04/06/04 (H) MINUTE(HES)
04/08/04 (H) HES RPT CS(HES) 1DP 1NR 3AM
04/08/04 (H) DP: WILSON; NR: COGHILL; AM: SEATON,
04/08/04 (H) WOLF, GATTO
04/13/04 (H) FIN REFERRAL ADDED AFTER JUD
04/14/04 (H) JUD AT 1:00 PM CAPITOL 120
04/14/04 (H) Moved CSHB 381(JUD) Out of Committee
04/14/04 (H) MINUTE(JUD)
04/19/04 (H) JUD RPT CS(JUD) 4DP
04/19/04 (H) DP: SAMUELS, HOLM, GRUENBERG, MCGUIRE
04/28/04 (H) FIN REFERRAL WAIVED
04/29/04 (H) RLS AT 9:00 AM FAHRENKAMP 203
BILL: HB 542
SHORT TITLE: CONSTRUCTION CONTRACTORS
SPONSOR(s): LABOR & COMMERCE
03/24/04 (H) READ THE FIRST TIME - REFERRALS
03/24/04 (H) L&C
04/02/04 (H) L&C AT 3:15 PM CAPITOL 17
04/02/04 (H) Scheduled But Not Heard
04/07/04 (H) L&C AT 3:15 PM CAPITOL 17
04/07/04 (H) Moved Out of Committee
04/07/04 (H) MINUTE(L&C)
04/13/04 (H) L&C RPT 7DP
04/13/04 (H) DP: CRAWFORD, LYNN, GATTO, ROKEBERG,
04/13/04 (H) DAHLSTROM, GUTTENBERG, ANDERSON
04/15/04 (H) RLS AT 9:00 AM FAHRENKAMP 203
04/15/04 (H) Scheduled But Not Heard
04/29/04 (H) RLS AT 9:00 AM FAHRENKAMP 203
BILL: HB 551
SHORT TITLE: DRUG FELONY DISQUALIFIES TEACHER
SPONSOR(s): JUDICIARY
04/05/04 (H) READ THE FIRST TIME - REFERRALS
04/05/04 (H) EDU, JUD
04/13/04 (H) EDU AT 11:00 AM CAPITOL 124
04/13/04 (H) Scheduled But Not Heard
04/15/04 (H) EDU AT 11:00 AM CAPITOL 124
04/15/04 (H) Moved Out of Committee
04/15/04 (H) MINUTE(EDU)
04/19/04 (H) EDU RPT 1DP 1NR 2AM
04/19/04 (H) DP: WOLF; NR: OGG; AM: SEATON, GATTO
04/22/04 (H) FIN REFERRAL ADDED AFTER JUD
04/23/04 (H) JUD AT 1:00 PM CAPITOL 120
04/23/04 (H) Moved CSHB 551(JUD) Out of Committee
04/23/04 (H) MINUTE(JUD)
04/26/04 (H) JUD RPT CS(JUD) NT 3DP 2NR
04/26/04 (H) DP: SAMUELS, OGG, MCGUIRE;
04/26/04 (H) NR: GARA, GRUENBERG
04/28/04 (H) FIN REFERRAL WAIVED
04/29/04 (H) RLS AT 9:00 AM FAHRENKAMP 203
BILL: HJR 48
SHORT TITLE: TAIWAN STATUS AND PRESIDENT
SPONSOR(s): RULES BY REQUEST OF ECON DEV, INT TRADE & TOURISM
04/22/04 (H) READ THE FIRST TIME - REFERRALS
04/22/04 (H) RLS
04/29/04 (H) RLS AT 9:00 AM FAHRENKAMP 203
BILL: HB 543
SHORT TITLE: MEDICAID AND PRESCRIPTION DRUGS
SPONSOR(s): HEALTH, EDUCATION & SOCIAL SERVICES
03/25/04 (H) READ THE FIRST TIME - REFERRALS
03/25/04 (H) HES
04/01/04 (H) HES AT 3:00 PM CAPITOL 106
04/01/04 (H) Scheduled But Not Heard
04/06/04 (H) HES AT 3:00 PM CAPITOL 106
04/06/04 (H) Scheduled But Not Heard
04/13/04 (H) HES AT 2:00 PM CAPITOL 106
04/13/04 (H) Heard & Held
04/13/04 (H) MINUTE(HES)
04/20/04 (H) HES AT 2:00 PM CAPITOL 106
04/20/04 (H) Moved CSHB 543(HES) Out of Committee
04/20/04 (H) MINUTE(HES)
04/26/04 (H) HES RPT CS(HES) 1DP 1DNP 4NR
04/26/04 (H) DP: WILSON; DNP: CISSNA; NR: SEATON,
04/26/04 (H) COGHILL, GATTO, WOLF
04/29/04 (H) RLS AT 9:00 AM FAHRENKAMP 203
WITNESS REGISTER
SUE STANCLIFF
House Majority Office
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the changes encompassed in
Version D of HB 542.
RICK URION, Director
Division of Occupational Licensing
Department of Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Urged passage of HB 542 in its current
form.
MIKE PAWLOWSKI, Staff
to Representative Cheryll Heinze
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HJR 48 on behalf of the House
Special Committee on Economic Development, International Trade
and Tourism.
REPRESENTATIVE PEGGY WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the chair of the House Health, Education
and Social Services Standing Committee, sponsor of HB 543,
presented HB 543.
PAT LUBY, Advocacy Director
AARP Alaska
Juneau, Alaska
POSITION STATEMENT: Testified that AARP is in total support of
the preferred drug list (PDL) the way it's currently operating
in Alaska, and therefore HB 543 isn't necessary.
CHIP WAGONER, Lobbyist
for Alaska Association of Homes for Children
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 543, testified that
the Alaska Association of Homes for Children passed a resolution
in support of the Department of Health and Social Services' cost
containment effort with regard to the PDL.
JOEL GILBERTSON, Commissioner
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 543, explained that
Version Q would restrict the department's ability to adjust the
authorization system for the PDL.
ACTION NARRATIVE
TAPE 04-3, SIDE A
Number 0001
CHAIR NORMAN ROKEBERG called the House Rules Standing Committee
meeting to order at 9:10 a.m. Representatives Rokeberg, Kott,
Coghill, McGuire, Morgan, Berkowitz, and Kerttula were present
at the call to order.
HB 381-CHILD ENDANGERMENT DRIVING OFFENSES
CHAIR ROKEBERG announced that the first order of business would
be HOUSE BILL NO. 381, "An Act relating to child endangerment."
Number 024
REPRESENTATIVE McGUIRE turned to [Amendment 1], which read
[original punctuation provided]:
DELETE (Page 2, Lines 14-15)
(3) knowingly transports a child in a motor vehicle in
violation of AS 28.05.095(b) and the child suffers
physical injury or dies.
DELETE Sec. 4 (Page 2, Line 27 - Page 3, Line 1)
Endangering the welfare of a child in the first degree
under (a)(3) of this section is a
(1) class C felony if the child dies;
(2) class A misdemeanor if the child suffers
serious physical injury; or
(3) class B misdemeanor if the child suffers
physical injury.
Preceding sections are appropriately renumbered.
Note: This amendment will have the effect of removing
all reference to the "failure to restrain" offense and
all resulting criminal penalties.
REPRESENTATIVE McGUIRE explained that although the above
language was left in HB 381 because a few members [of the House
Judiciary Standing Committee] wanted it to remain, she has never
really felt comfortable with it. She explained that [with the
adoption of Amendment 1] the legislation will be limited to a
situation in which a person transporting a child in a motor
vehicle, aircraft, or watercraft while under the influence of an
intoxicant. She informed the committee that of all the children
injured or killed in an automobile accident in which the parent
or the individual transporting the child was intoxicated, 71
percent of the children were not restrained in any way. The
percentages increase as the amount of alcohol consumed
increases.
REPRESENTATIVE McGUIRE clarified that Amendment 1 would
eliminate the provision that would increase the penalties for
transporting a child without proper seating restraints when a
child suffers serious physical injury or dies. The
aforementioned recognizes that there isn't a clear understanding
of what these child restraints are at this time. The Department
of Transportation & Public Facilities has put forth a definition
of different weight and age requirements for children, but those
aren't well understood. Therefore, it's not fair, she opined,
to increase the penalty and criminalize people for provisions of
the law that they may not understand.
Number 069
REPRESENTATIVE McGUIRE moved that the committee adopt Amendment
1 [text previously provided]. There being no objection,
Amendment 1 was adopted.
CHAIR ROKEBERG informed the committee that as a result of
Amendment 1, the committee will be adopting a zero fiscal note.
Number 077
REPRESENTATIVE KOTT moved to report CSHB 381(JUD), as amended,
out of committee with individual recommendations and the
accompanying zero fiscal note. There being no objection, CSHB
381(RLS) was reported from the House Rules Standing Committee.
HB 542-CONSTRUCTION CONTRACTORS
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 542, "An Act relating to specialty
construction contractors and to construction contractor
exemptions."
Number 093
REPRESENTATIVE McGUIRE moved to adopt CSHB 542, Version 23-
LS1874\D, Bannister, 4/9/04, as the working document.
REPRESENTATIVE BERKOWITZ objected for discussion purposes.
Number 098
SUE STANCLIFF, House Majority Office, Alaska State Legislature,
explained that the only change in Version D is the title, which
has been tightened.
REPRESENTATIVE BERKOWITZ withdrew his objection.
Therefore, Version D was before the committee.
CHAIR ROKEBERG asked if there has been any opposition to this
legislation.
MS. STANCLIFF answered that those in the real estate industry
have expressed concern that this would increase the costs for
homeowners who are selling properties that need minor work to
complete the sale. The aforementioned is one of the reasons the
[title] wasn't made any tighter than it is. "We'd like to take
a small bite of the apple, instead of a very big one that's
going to bring huge opposition," she said.
Number 123
REPRESENTATIVE KOTT suggested that he has worked with the
Division of Occupational Licensing to develop a very calculated
way in which to address this issue. The issue is with regard to
handymen working beyond the scope of their authority.
Representative Kott explained that as a contractor he has
certain requirements to be in the business. However, there are
handymen who don't meet the same requirements, although they are
performing the job of a contractor, which is well beyond the
scope of the statute. Representative Kott noted that he
disagrees with the claim that this will increase the cost for
homeowners. Beyond placing some enforcement in the law and
placing these handymen out of business, this legislation offers
a careful way to address the issue on a voluntary basis.
REPRESENTATIVE BERKOWITZ remarked that the $5,000 [ceiling for a
contract price] doesn't allow for much work. Therefore, he
inquired as to why a limit is necessary.
Number 154
RICK URION, Director, Division of Occupational Licensing,
Department of Community & Economic Development (DCED), informed
the committee that the handyman category has caused more
complaints than any other the division licenses. This
legislation will help solve some of the problems, and therefore
he urged the committee to pass the legislation in its current
form.
CHAIR ROKEBERG suggested that the key issue is enforcement.
Therefore, he asked if [the committee] should look at the home
inspectors template and consider licensing handymen in order to
obtain some revenue for enforcement.
MR. URION pointed out that the term "handyman" has been used for
some time, although it doesn't appear in the statutes. He
explained that handymen are no longer licensed under
construction, rather an entire new category has been created.
The problem is that some handymen are acting as contractors
rather than performing small repairs.
REPRESENTATIVE BERKOWITZ returned to the $5,000 ceiling. He
posed a situation in which an individual performs two different
projects on the same job site. In the aforementioned situation
would the two projects be considered separately with each having
the $5,000 limit or does the aggregate cost of the two projects
have to fall under $5,000.
MR. URION answered that it would be the aggregate amount.
REPRESENTATIVE BERKOWITZ asked whether the ceiling would be the
aggregate amount even if the two projects are done at different
times.
MR. URION said that he was sure there are ways to skirt the law.
However, there is a need for handymen to do small repairs and if
a contractor is necessary, then a contractor should be hired.
He stressed that the problem is that [some handymen] are
performing [contractor] work for which they aren't insured and
bonded.
Number 199
REPRESENTATIVE McGUIRE moved to report CSHB 542, Version 23-
LS1874\D, Bannister, 4/9/04, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 542(RLS) was reported from the House Rules
Standing Committee.
HB 551-DRUG FELONY DISQUALIFIES TEACHER
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 551, "An Act relating to the issuance of
teacher certificates to and revocation of teacher certificates
of persons convicted of felony drug offenses and to the issuance
of limited teacher certificates to persons convicted of certain
crimes involving a minor and felony drug offenses."
Number 208
REPRESENTATIVE McGUIRE, speaking as the chair of the House
Judiciary Standing Committee, sponsor of HB 551, explained that
HB 551 doesn't allow one to obtain a teaching certificate if he
or she has a felony drug conviction. The legislation has been
narrowed in CSHB 551(JUD) [such that it doesn't allow one to
obtain a teaching certificate if he or she has] has felony drug
convictions in the first degree. This [legislation is being
taken up] to zero out the fiscal note, she explained. Although
Teaching and Learning Support, Department of Education and Early
Development (EED), offered a fiscal note, she recalled that
testimony that licenses have been revoked for these types of
convictions, even lower-level convictions, for moral
[perpetuity]. Therefore, a zero fiscal note is being offered.
Number 225
REPRESENTATIVE McGUIRE moved that the committee adopt the zero
fiscal [by the House Rules Committee]. [This motion was treated
as adopted.]
REPRESENTATIVE BERKOWITZ inquired as to how many teachers
currently employed in the state would be impacted by this
statute.
CHAIR McGUIRE replied that she didn't know.
REPRESENTATIVE BERKOWITZ inquired as to what would happen to
those holding licenses under this statute.
REPRESENTATIVE McGUIRE stated that the legislation allows for
revocation or suspension. She related that the [Professional
Teaching Practices] Commission assured [the House Judiciary
Standing Committee] that there isn't a single teacher in the
state who has a felony drug conviction, as it is narrowly
defined in the legislation.
Number 242
REPRESENTATIVE KOTT moved to report CSHB 551(JUD) out of
committee with individual recommendations and the adopted zero
fiscal note. There being no objection, it was so ordered.
HJR 48-TAIWAN STATUS AND PRESIDENT
CHAIR ROKEBERG announced that the next order of business would
be HOUSE JOINT RESOLUTION NO. 48, Sending a message of goodwill
to President Chen Shui-bian, and reaffirming the Alaska State
Legislature's 2003 resolution urging the United States Congress
to support the granting of official Observer Status to the
Republic of China and to support negotiation of a free trade
agreement with the Republic of China.
Number 250
MIKE PAWLOWSKI, Staff to Representative Cheryll Heinze, Alaska
State Legislature, presented HJR 48 on behalf of the House
Special Committee on Economic Development, International Trade
and Tourism which requested the legislation of the House Rules
Standing Committee. He explained that HJR 48 is a reaffirmation
of Legislative Resolve 29, which passed both bodies unanimously
last session. The resolution encourages the Republic of China
on Taiwan to be granted Observer Status with the World Health
Organization. The resolution also encourages the United States
Congress to negotiate a free trade agreement with the Republic
of China on Taiwan. Moreover, the resolution sends a message of
goodwill to President Chen Shui-bian on his reelection.
MR. PAWLOWSKI turned to the amendment in the committee packet.
He explained that the amendment would provide clarification by
shortening the technical name of the Republic of China on Taiwan
to Taiwan where appropriate. In response to Chair Rokeberg, Mr.
Pawlowski confirmed that he had checked this with the protocol
officers of the U.S. State Department.
Number 269
REPRESENTATIVE BERKOWITZ inquired as to why a message of
goodwill is being sent to President Chen Shui-bian rather than
the people [of the Republic of China on Taiwan].
MR. PAWLOWSKI highlighted that President Chen Shui-bian has been
and continues to be a very good friend of the State of Alaska,
and therefore this resolution is specific to the president on
his reelection.
REPRESENTATIVE McGUIRE moved that the committee adopt Conceptual
Amendment 1, as follows:
Page 1, line 1, after "President Chen Shui-bian";
Insert "and the people of the Republic of China
on Taiwan"
MR. PAWLOWSKI said he didn't believe [Representative Heinze
would have any problem with Conceptual Amendment 1].
There being no objection, Conceptual Amendment 1 was adopted.
Number 295
REPRESENTATIVE McGUIRE moved that the committee adopt Amendment
2, which read [original punctuation provided]:
Page 1 line 3: add on Taiwan following "China"
Page 1 line 4: add on Taiwan following "China"
Page 1 line 7: add on Taiwan following "China"
Page 1 line 11: delete [the Republic of China, in]
Page 1 line 14: delete [the Republic of China] and
insert Taiwan
Page 2 line 1: delete [the Republic of China] and
insert Taiwan
Page 2 Line 4: delete [the Republic of China] and
insert Taiwan
Page 2 line 9: delete [the Republic of China] and
insert Taiwan
Page 2 line 12: delete [the Republic of China] and
insert Taiwan
Page 2 line 13: delete [the Republic of China] and
insert Taiwan
Page 2 line 16: delete [the Republic of China] and
insert Taiwan
Page 2 line 25: add on Taiwan following "China"
Page 2 line 28: add on Taiwan following "China"
Page 2 line 31: add on Taiwan following "China"
There being no objection, Amendment 2 was adopted.
Number 299
REPRESENTATIVE KOTT moved to report HJR 48, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHJR 48(RLS) was
reported from the House Rules Standing Committee.
The committee took a brief at-ease.
HB 543-MEDICAID AND PRESCRIPTION DRUGS
CHAIR ROKEBERG announced that the final order of business would
be HOUSE BILL NO. 543, "An Act relating to medical assistance
coverage for prescription drugs; and providing for an effective
date."
Number 306
REPRESENTATIVE KOTT moved to adopt CSHB 543, Version 23-
LS1835\Q, Mischel, 4/27/04, as the working document.
REPRESENTATIVE BERKOWITZ objected for discussion purposes.
Number 313
REPRESENTATIVE PEGGY WILSON, Alaska State Legislature, chair of
the House Health, Education and Social Services Standing
Committee, sponsor of HB 543, explained that HB 543 was
introduced because the Department of Health and Social Services
is currently in the process of implementing a preferred drug
list (PDL). This limitation on medical assistance coverage is
being done as a cost containment measure. Representative Wilson
related that she has received numerous complaints with regard to
how the procedure is going and the [Pharmacy and Therapeutics]
committee was accepting testimony. Therefore, this legislation
establishes procedures with regard to how the committee should
conduct its business. As the session has progressed, the
department has reviewed and addressed many of the concerns.
CHAIR ROKEBERG asked if it would be a fair characterization to
say that Version Q is the result of the effort and work done
with the department. He also asked if Representative Wilson
believes that the provisions [eliminated] from Version Q aren't
particularly necessary.
REPRESENTATIVE WILSON commented that a lot of hard work and
compromise has resulted in this legislation.
Number 340
CHAIR ROKEBERG asked if the committee provided for in CSHB
543(HES) is no longer necessary.
REPRESENTATIVE WILSON explained that changes made to the
original legislation were conforming changes to provide
structure and guidelines to the committee. There was no
intention to slow the committee.
CHAIR ROKEBERG surmised that the committee to which
Representative Wilson is referring is the Pharmacy and
Therapeutic Committee of the Alaska Division of Health Care
Services.
REPRESENTATIVE WILSON added that as part of the process of
reviewing each classification of drug, there was concern that
most states wait until the end to do the drugs for mental health
patients because those patients are a more fragile clientele.
Therefore, the idea was to wait a year and allow the drug list
to be used before implementing it with mental health patients.
REPRESENTATIVE McGUIRE asked if Representative Wilson was
comfortable with the legislation before the committee now.
REPRESENTATIVE WILSON specified that she feels much better with
regard to the mental health drugs because the commissioner has
decided to suspend the committee until this fall in order to
allow time for it to work. The mental health drugs will be put
on the list in January, which is what she wanted.
Representative Wilson said she feels comfortable with most of
the legislation, save the cost containment aspect of this. Cost
containment was the primary purpose of the PDL to begin with,
and therefore she was concerned with regard to how tight to tie
the commissioner's hands. At this point, much of this is in the
hands of the physicians. She indicated that the physicians can
determine that the more expensive drugs are necessary.
Number 402
REPRESENTATIVE McGUIRE asked if under the "medically necessary"
provision, the physician would have the discretion to prescribe
a brand name drug.
REPRESENTATIVE WILSON replied yes, specifying that as the bill
stands the physician has the ability to do whatever he or she
feels is necessary. However, she highlighted that the
legislature will have to address this again next year because
the current language doesn't provide any "wiggle room" for the
commissioner.
REPRESENTATIVE McGUIRE recalled discussions last year regarding
timelines that seemed to shift and change. One of the
difficulties with a part-time legislature is that legislators
aren't around for the bulk of the year. Therefore, she said she
feels most comfortable with this method and readdressing it
later. Representative McGuire highlighted that cost containment
includes a variety of things. For instance, if someone isn't
successfully treated, the noneconomic and economic damages to
communities are profound. Therefore, she expressed the need for
that to be considered in regard to cost containment.
CHAIR ROKEBERG surmised that the tension is between the ability
for a physician to prescribe what he or she feels is in the best
interest of the patient and the cost containment measures.
REPRESENTATIVE WILSON agreed.
CHAIR ROKEBERG pointed out that the legislation only speaks to
the ability of the physician [to prescribe] and doesn't really
contain any cost containment measures.
Number 437
PAT LUBY, Advocacy Director, AARP Alaska, announced that AARP is
in total support of the PDL the way it's currently operating in
Alaska. "Alaska is doing everything right," he said.
Physicians, pharmacists, and nurse practitioners are developing
the PDL. Just last week Alaska became one of the first states
to participate in bulk purchasing of pharmaceuticals, which will
save some money. Mr. Luby emphasized that this isn't just about
saving money, it's also about good pharmacology. Alaska has
also signed on to participate in an evidence-based research
project at the University of Oregon. There are three of these
projects throughout the nation, and AARP is encouraging every
state to sign on to them. In the [evidence-based research
project], scientists, free of pharmaceutical company sales
representatives and advertising, are reviewing what are the best
drugs for people to use in particular categories of illness.
Therefore, good scientific information can be used with regard
to therapeutic effectiveness. Mr. Luby acknowledged that cost
savings are great, but pointed out that therapeutic
effectiveness is really what is being looked.
MR. LUBY said, "Alaska is doing this right, we don't need this
bill. We should just continue with what we're doing. We will
save more money if we don't have this bill, there's no doubt
about that." Mr. Luby stated that the intent of HB 543 is to
slow the PDL. He characterized HB 543 as a pharmacy bill, an
industry bill, and related his belief that those in the
pharmaceutical industry are calling Representative Wilson to
complain. He guaranteed the committee that AARP members aren't
calling and complaining. Mr. Luby encouraged the committee not
to forward HB 543 to the House floor.
REPRESENTATIVE McGUIRE cautioned Mr. Luby with regard to
relating motives of the sponsor, which she knew to be a person
who wouldn't introduce legislation for one particular interest
group. Furthermore, Representative McGuire indicated that
members of the legislature, the penal system, and the health
care community share concerns [which led to the introduction of
this legislation].
MR. LUBY acknowledged that everyone has his or her own view of
this issue. However, those voicing concern in the House Health,
Education and Social Services Standing Committee were the
pharmaceutical companies. The pharmaceutical companies don't
believe they have a fair shot at the Pharmacy and Therapeutic
Committee, and AARP doesn't believe they should because an
individual working for a pharmaceutical company tries to
represent that company and get that company's drugs on the list.
What [the state] needs is a Pharmacy and Therapeutic Committee
that operates independently based on scientific research, not
based on marketing strategies for pharmaceutical companies.
Number 473
CHAIR ROKEBERG posed an example in which an individual takes
Lipitor. If the PDL formulary didn't provide for that and there
were other less effective [drugs] available, he surmised that
the individual would be restricted from taking Lipitor.
MR. LUBY clarified that physicians are still in the driver's
seat. If a physician says that a particular medication is the
best for a particular condition in a particular individual, it's
permissible under the PDL.
CHAIR ROKEBERG interjected that the aforementioned is allowed in
the legislation.
MR. LUBY reiterated that such is already allowed [under the
current PDL].
Number 484
CHIP WAGONER, Lobbyist for Alaska Association of Homes for
Children, informed the committee that the Alaska Association of
Homes for Children passed a resolution in support of the
Department of Health and Social Services' cost containment
effort with regard to the PDL. The competing interests are the
health of the patient and controlling state costs. Because
Alaska has an aging population, Alaska has an escalating
population that needs drugs. He related his belief that in
terms of growth, the senior and/or disability population is the
highest area of growth for Medicaid. Mr. Wagoner turned to the
fiscal note, and expressed concern that if the fiscal note
remains the same with Version Q, what was intended to be a $20
million savings will turn into a $10 million savings for the
state. To make up that $10 million difference would result in
cuts to the Department of Health and Social Services' budget.
Those who would be impacted by such would be those served by the
Alaska Association of Homes for Children, which serves children
in state custody who are in residential homes.
MR. WAGONER said he didn't believe the solution is to give the
physicians carte blanche because that would blow a hole in the
concept of cost savings. The solution is in the provision,
which address administrative procedures. If the administrative
procedures are fair, that is provide adequate notice and an
opportunity to be heard by the drug companies, businesses, and
physicians, the proper cost containment could be achieved while
being fair and taking into account the health of the patient.
Number 508
JOEL GILBERTSON, Commissioner, Department of Health and Social
Services, explained that Version Q would restrict the
department's ability to adjust the authorization system for the
PDL. He noted that the committee packet should include
information with regard to the growth trends. The current
growth trend for fiscal year (FY) 2005 is $134 million for
prescription drug expenditures in the Medicaid program. The
aforementioned is the uninterrupted, nonpreferred drug list
growth rate. With the PDL, the growth rate for FY 05 would be
about $114 million.
COMMISSIONER GILBERTSON informed the committee that the
department will begin implementing a PDL at the end of May,
although the mental health drugs have been delayed until the
beginning of next year. Version Q speaks to one portion of the
PDL, the authorization system. The authorization system allows
a prescriber to prescribe a nonpreferred drug, which is a drug
that has been peer reviewed to be a drug that is not the most
effective or the most safe in that drug class. Commissioner
Gilbertson explained that currently, the department is requiring
that physicians document that it's medically necessary for the
nonpreferred drug to be prescribed. He noted that the
authorization systems vary across the nation, with Alaska's
being one of the least intrusive on a provider's practice. The
higher the hurdle, the more likely the preferred drug will be
prescribed versus the nonpreferred.
COMMISSIONER GILBERTSON pointed out that the savings lay in
providing and prescribing more effective drugs that are more
cost efficient. Savings also lay in supplemental rebates with
the pharmacy manufacturers. As Mr. Luby testified, Alaska is
joining the first ever multi-state prescription drug purchasing
pool. Alaska will be joining Nevada, New Hampshire, Vermont,
and Michigan in forming this Medicaid prescription drug
purchasing pool. There will be about one million lives in that
pool, and therefore the state will be able to negotiate better
prices with the manufacturer. The authorization system in the
CS would restrict the state and require, by statute, that the
state must always maintain the lowest level of authorization,
which is simply a documentation on the prescription that the
drug is medically necessary. The state intends to begin the
program with the aforementioned. Physicians and the Alaska
State Medical Association have been notified that the PDL is
beginning and the first 14 drug classes that will be included as
well as the override system. Commissioner Gilbertson said but
[the department] believes in working with the prescribing
community that [the department] needs the ability to increase
the authorization system going into the future if there is
noncompliance with the PDL. The aforementioned ability provides
[the department] the ability to work with the physicians and
prescribers in order to ensure compliance. He pointed out that
if [the physicians, prescribers, and department] don't work
constructively together, the authorization system will have to
be increased. Cost containment, he emphasized, is the money
that will be used to continue care for the children, seniors,
and disabled who receive services from the department. He noted
that the department has submitted a fiscal note for Version Q.
Number 557
COMMISSIONER GILBERTSON turned to Representative McGuire's
earlier comment and said [the department] agrees with reviewing
other areas of cost containment rather than just one. Last year
the legislature included language directing the department to
analyze other cost containment measures before rushing to a PDL.
In fact, the implementation of the program has been delayed to
address concerns, such as those with regard to mental health
drugs. Commissioner Gilbertson highlighted that the department
is expanding provider "lock-in" to ensure that individual
Medicaid beneficiaries go to one physician and one pharmacy
rather than to multiple providers with the potential of
receiving conflicting prescriptions. Furthermore, case
management services have been expanded such that a much larger
segment of the Medicaid population [is covered]. He specified
that the Medicaid population is comprised largely of those with
chronic conditions and mental illness; these individuals use
multiple services from the department and a high utilization of
prescription drugs. Commissioner Gilbertson said, "Cost
containment is going on across the department, this is one piece
of it. And we think it's a responsible piece, and for that
reason we do have concerns with the CS."
Number 570
REPRESENTATIVE COGHILL expressed his interest in cost
containment while allowing the physician to prescribe the proper
medication for the patient. He inquired as to how the
"medically necessary" language requirement would impact the
department. He further inquired as to the increased
authorization anticipated if [Version Q] didn't pass.
COMMISSIONER GILBERTSON explained that [Version Q] would lock-in
the initial authorization system [requiring that every
prescription outside the PDL would simply specify] "medically
necessary" as the sole override system. Noncompliance means a
higher number of prescriptions of less effective and less cost
efficient drugs. Commissioner Gilbertson noted that the
department has reviewed the possibility of continuing "medically
necessary" on the prescription while requiring the provider to
document the reason the prescription is medically necessary.
The department has provided suggestions of valid reasons, such
as contra indications, allergies, failure of the preferred drug,
or an already existing regime on a nonprefered drug that is
effective. Commissioner Gilbertson noted that if, in the
future, the department sees continued prescribing of less
therapeutically efficient drugs, physicians may be asked to
specify the reason the drug is medically necessary on the drug.
The aforementioned isn't very burdensome and there is no actual
review done by the state. He mentioned that some states have
been strong with regard to the authorization system. For
example, Michigan has over 95 percent compliance with its PDL.
TAPE 04-3, SIDE B
COMMISSIONER GILBERTSON remarked that there are a broad range of
authorization systems and Alaska is starting at the simple end.
The desire is to work with the prescribers in good faith in
order to have preferred drugs prescribed and work efficiently.
However, [Version Q] doesn't provide the [department] the
ability to increase "it" if there is noncompliance.
CHAIR ROKEBERG asked if, under Version Q, the department could
provide the regulations to require the medical justifications.
COMMISSIONER GILBERTSON explained that the language "medically
necessary" alone and undefined, without the cause of the medical
necessity, is all that's required to override the PDL. He
acknowledged that in regulation the terms "medical necessity"
could be defined. However, the only way to review that would be
to review patient files, which the department isn't proposing.
CHAIR ROKEBERG surmised that the department doesn't believe it
has the authority under Version Q to [require] the justification
[be written on the prescription].
COMMISSIONER GILBERTSON replied no, not on the prescription pad
itself.
CHAIR ROKEBERG recalled that there is an issue with regard to
what a "brand name" drug is. He asked if the language in
[Version Q] would be harmful and disallow a prescription for a
generic drug that isn't on the formulary.
COMMISSIONER GILBERTSON confirmed that as currently drafted the
override system is restricted to brand name drugs, and therefore
a physician couldn't override with a generic drug. There is
statute which mandates that when a generic drug is available
prescribers must prescribe it unless a medically necessary
override is provided. The aforementioned was a cost containment
measure. This legislation would continue that mandate, although
not in the situation in which there is a generic override of the
PDL. However, he noted that most generics will be on the PDL.
CHAIR ROKEBERG asked if additional language to address the
[generic override of the PDL] would be appropriate.
COMMISSIONER GILBERTSON indicated that the language would need
to clarify that an override for the PDL could be for a generic
or a brand name drug.
Number 565
CHAIR ROKEBERG turned to the April 16, 2004, letter from Dr.
Brodsky, which is in the committee packet. The letter specifies
that effective May 19, 2004, prescribers will be required to
provide the terms "medically necessary" or "allergic to the
preferred drug" as medical justification. Chair Rokeberg
related his understanding that the department wants to start
that way, but have the flexibility to change that.
COMMISSIONER GILBERTSON opined that the department has worked in
good faith with the provider community and the drug industry.
When concerns have been raised, the department has tried its
best to accommodate those concerns. One concern raised by the
physicians was having everyone well versed in the override
system at the start of the program. He explained that the
override system proposed by the department was such that the
terms "medically necessary" would be written on the prescription
itself as well as the reason, such as specifying "medically
necessary, adverse reaction to X." However, some prescribers
expressed concern that getting to that step now, which is
different than the current override system for generic drugs,
isn't something that the entire provider community can be
educated on in day one, and furthermore it isn't something that
the entire provider community supports up front. Therefore, the
department agreed to accommodate the provider community and work
with it in good faith to ensure compliance with the PDL. As
dialogue continues with the physician and prescriber community,
the department believes it should retain the authority to
increase the authorization system if there is noncompliance.
Otherwise, Alaska will experience what has been experienced when
statutorily restricted to medically necessary language. For
example, in Oregon the aforementioned statutory restriction
resulted in a 75 percent decline in expected savings.
Number 546
REPRESENTATIVE McGUIRE inquired as to the percentage of
physicians in Alaska who accept Medicaid patients.
COMMISSIONER GILBERTSON answered between 55-60 percent.
REPRESENTATIVE McGUIRE reminded committee members that the
["medically necessary" language] was what she offered to the
senior care legislation that passed. She further reminded
committee members that [prescribing a drug outside the PDL was
allowed] if the medical reason fell into four categories. The
physicians are concerned because they believe the ["medically
necessary" language requiring the reason to fall within four
categories] is overly onerous and puts their medical license on
the line. Representative McGuire announced her support of the
legislation as it is [Version Q], which she characterized as a
good starting point. She highlighted that every legislature is
free to change this.
REPRESENTATIVE McGUIRE returned to the issue of cost
containment, and said that within the PDL, one has to review
experiments in other states as well. She highlighted that those
who take psychotropic drugs are the poorest in the community.
Therefore, if such individuals are prescribed the wrong drug, it
could result in an emergency room visit for which the hospital
or other [insureds] pick up the tab. Furthermore, if such an
individual commits a crime, many others are picking up the tab.
Representative McGuire encouraged the committee to keep the
language [in Version Q] as it is.
REPRESENTATIVE COGHILL noted that he will support the language
[in Version Q], although he would also support the physicians
providing an explanation or justification [for prescribing a
drug not on the PDL].
CHAIR ROKEBERG remarked that he tended to agree with
Representative Coghill. Chair Rokeberg requested that
Commissioner Gilbertson review Version Q and perhaps bring forth
some amendments in response to some of the issues brought
forward by the committee.
Number 498
REPRESENTATIVE BERKOWITZ withdrew his objection.
There being no further objection, CSHB 543, Version 23-LS1835\Q,
Mischel, 4/27/04, was before the committee.
Number 496
REPRESENTATIVE McGUIRE moved to report CSHB 543, Version 23-
LS1835\Q, Mischel, 4/27/04, out of committee with individual
recommendations and the accompanying zero fiscal note. There
being no objection, CSHB 543(RLS) was reported from the House
Rules Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Rules Standing Committee meeting was adjourned at 10:07 p.m.
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