Legislature(1999 - 2000)
03/02/2000 09:03 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE March 2, 2000 9:03 AM TAPES SFC-00 # 43, Side A and Side B CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 9:03 AM. PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell, Senator Lyda Green, Senator Pete Kelly, Senator Loren Leman, Senator Gary Wilken and Senator Phillips. Also Attending: ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor; EDDY JEANS, Manager, School Finance and Facilities Section, Education Support Services; ALYSON ELGEE, Deputy Commissioner, Department of Administration; JANE DEMMERT, Executive Director, Alaska Commission on Aging; KATY CAMPBELL, Actuary on Life and Health Issues, Division of Insurance, Department of Community and Economic Development; DWIGHT PERKINS, Deputy Commissioner, Department of Labor and Workforce Development; MIKE HAUGEN, Executive Director, Alaska Physician and Surgeons; GEORGE RHYNEER, Cardiologist, President, Alaska Physicians and Surgeons; JIM JORDAN, Executive Director, Alaska State Medical Association; NANCY WELLER, Division of Medical Assistance, Department of Health and Social Services; GORDON EVANS, Health Insurance Association of America; JEFF DAVIS, Executive Director, Blue Cross-Blue Shield of Alaska; LEN SORRIN, Assistant General Council, Blue Cross-Blue Shield of Alaska; KARL BRIMNER, Director, Division of Mental Health and Developmental Disabilities, Department of Health and Social Services Attending via Teleconference: From Anchorage: BOB LOHR, Director, Division of Insurance, Department of Community and Economic Development; SIGNE ANDERSON, Assistant Attorney General, Fair Business Practices Section, Civil Division, Department of Law; JULIA COSTER, Assistant Attorney General, Commercial Section, Civil Division, Department of Law; JEROME SELBY, Providence Health Systems; GARY WARD, Licensing Coordinator, Assisted Living Homes, Division of Senior Services, Department of Administration; DWIGHT BECKER, Protective Services Coordinator, Division of Senior Services, Department of Administration; KAY BURROWS, Director, Division of Senior Services, Department of Administration; JEFF JESSEE, Executive Director, Mental Health Trust Authority, Department of Revenue; From Fairbanks: GARY SWARTZ; DR. MICHAEL CARROLL, Board Member, Alaska Healthcare Network; MONTA FAYE LANE, President, Alaska Caregivers Association; From Washington DC: RICHARD FEINSTEIN, Assistant Director, Bureau of Competition, Federal Trade Commission; From San Francisco: PAUL SMITH, Attorney, legal council for the Alaska Healthcare Network; From Chicago: HELEN JAMISON SUMMARY INFORMATION SB 204-EXTEND ALASKA COMMISSION ON AGING The Committee heard from the Department of Administration and the Alaska Commission on Aging. An amendment was considered then withdrawn. The bill reported from Committee. SB 256-PHYSICIAN NEGOTIATIONS WITH HEALTH INSURE The Committee heard testimony from the sponsor, the Department of Law, the Federal Trade Commission, various members of the public and organizations. The bill was held. SB 73-ASSISTED LIVING FACILITIES The Committee heard from the Division of Senior Services, the Division of Mental Health, the Alaska Mental Health Trust Authority and various members of the public and interested organizations. The bill was held. Office of Management and Budget Overview: Status of Alaska Housing Finance Corporation Bonding Projects in Chapter 129, SLA 1998 Co-Chair Torgerson noted an approximate $200 million bond package that was created under SB 360 from the twentieth legislative session, with approximately $62 million of that obligated. He stated the purpose of this overview was to hear the status of the projects and the schedule for the issuance of the remaining bonds. ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor told the Committee she had reviewed the status of the bonds and also asked if the process was moving along as scheduled. She stated that the responsibility for processing and managing the projects remained with the individual departments, which are then reimbursed from the Alaska Housing Finance Corporation (AHFC), as necessary. Therefore, she said the information gleaned from the AHFC only reflects the amount of money expended on projects to date. She said her office then looked at each department's assessment of the projects and learned that most were progressing on schedule. Ms. McConnell referred to a summary list that showed monies disbursed to date plus encumbered funds and a status of the projects. [Copy on file.] She noted that most of the projects would take two to three years to complete. Schools take a minimum of three years from planning to opening, she said. However, she stated most of the other projects would be complete by the end of upcoming construction season. Ms. McConnell noted the University of Alaska would speak to its own projects, which are handled separately. There were no questions of the Committee on university projects. Ms. McConnell highlighted the Americans with Disabilities (ADA) projects as one area of concern, saying there are still a lot of needs beyond what could be met with the $4 million that was appropriated. She said the Office of Management and Budget has been working with Department of Transportation and Public Facilities on how projects could be sped up, but noted that the department is progressing slowly to incorporate the changes with other deferred maintenance projects. She stated that most ADA compliance projects would be completed by the end of the upcoming construction season. Co-Chair Torgerson asked if any projects would not be completed. Ms. McConnell was not aware of any projects that would "fall off" schedule. She noted some of the harbor projects did have some delays due to the Stellar Sea Lion studies but were back on track. Co-Chair Torgerson was concerned about the projects that had very little expenditures to date. He suggested that administrative fees had been taken but nothing was spent on the actual projects. As an example, he referred to the Iditarod School/Lime Village oil spill and expressed that this project was one that should get prompt attention. He also mentioned the $4.6 million allocated to the Kuskokwim School District water treatment facility, of which no funds had been spent. EDDY JEANS, Manager, School Finance and Facilities Section, Education Support Services, did not have specifics on each project, but noted that when projects are funded the department issues grants to the school districts and requires the districts to meet certain milestones before additional funds are allocated. He added that the projects the co-chair referred to, have only expended funds for the planning portion and that the actual construction had not yet begun. Co-Chair Torgerson challenged that it was not only the school projects that had not progressed significantly, but also the bulk fuel tank projects, which he thought should be addressed promptly because of the environmental concerns. He wanted to know if the extent of the situations were not as serious as earlier portrayed to the legislature. He requested a more detailed status of the projects. Senator Phillips wanted information on the Northway Soil Remediation project. Mr. Jeans responded that he would research and report back to the Committee. Senator Wilken referred to the Kasayulie case, noting that SB 360 set aside $25 million for twelve or fourteen projects and asked if that appropriation was part of the evidence presented to the judge by the district attorney. Ms. McConnell did not know and said she would find out. Senator Wilken commented that over $24 million of the bonding package was set aside for rural schools in the Rural Education Attendance Area (REAA). Ms. McConnell qualified that the state does not do the school projects, but only oversees the school districts' work. Co-Chair Torgerson stated that most projects seemed to be on schedule but he still had concerns with the environmental projects. He had been hoping for more detail in the presentation but would wait for the report on the school projects. SENATE BILL NO. 204 "An Act extending the termination date of the Alaska Commission on Aging; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Torgerson noted that a representative of the Department of Administration was present to answer questions. There were none. Speaking to concerns she voiced during the previous hearing, Senator Green offered some solutions. One option, she told of, was to relocate the Alaska Commission on Aging to the legislative branch where it would be under the direct supervision of the legislature and would be located in the Legislative Information Office in Anchorage. She stated that under this method, the commission would function as an independent ombudsman for issues related to aging. She thought this would eliminate the potential conflict of interest with the Department of Administration and the Alaska Pioneer's Homes that was currently present. Senator Green continued with her second suggestion, which would move the long-term care ombudsman from its current status and place it under the direction of a yet to be determined state agency. She understood this change would be reflected on the legislative budget but did not know how to otherwise deal with her concerns. Senator Phillips asked why the ombudsman should be moved. Senator Green responded that she felt there was a need to have a separation between the overseer of the pioneer's homes, Department of Administration, and the long-term care ombudsman. She noted that the ombudsman was charged with investigating complaints and also being the advocate for senior citizens, which was in conflict with it's other charge to oversee the pioneers' home facilities. Senator Green then offered a third suggestion to have the ombudsman report directly to the commissioner of the Department of Administration, saying this solution would not require a budgetary change. ALYSON ELGEE, Deputy Commissioner, Department of Administration stated that the Committee had been briefed on the work the Commission had done to find an alternative placement for the long-term care ombudsman, although it was unable to identify an acceptable location. As a result, she said the Commission took steps to clarify the reporting relationship of the long-term ombudsman with the commissioner and the department to eliminate any potential conflicts she and others in the department who also serve on the Commission might have. Ms. Elgee added that if an acceptable outplacement position were identified, the Commission would not object to the change. Ms. Elgee spoke of the efforts of the Commission to change the bylaws to remove the commissioner from the reporting process. She surmised that Senator Green's second option of having the long-term care ombudsman report directly to the commissioner would undermine these efforts to avoid the conflict of interest. Senator Wilken shared Senator Green's desire to eliminate the conflicts of having the long-term care ombudsman under the supervision of the commissioner, who oversees the same facilities that are sometimes investigated. He understood the Commission had established a subcommittee that excluded any members who may be in conflict. JANE DEMMERT, Executive Director, Alaska Commission on Aging explained the Commission's bylaw amendment to establish a standing, long-term care ombudsman committee with a provision that excludes any commission member that has any relationship whatsoever to the pioneer homes. She stated that the subcommittee and the ombudsman have an on- going relationship and that the subcommittee acts as a buffer. She felt the Commission already has a workable strategy in place with this subcommittee, but was open to improvement. Senator Wilken talked about the broad representation of the state with the volunteer members of the Commission. He shared that the two members from Fairbanks were viewed as being "in touch" with the senior population in that community. He suggested giving the subcommittee process a chance to prove itself before making any changes. Senator Phillips referred to five recommendations made by the Division of Legislative Audit it its report on the Department of Administration Alaska Commission on Aging [Audit Control Number 02-1462-99, Copy on file,] and asked which had been completed. Ms. Demmert described the basic premise behind the recommendations that there were specific assurances that needed to be required of the Commission's grantees. She stated that those were established and in place at the start of the current fiscal year in which the grants were awarded. Senator Phillips asked the witness to list each recommendation and state whether or not it was implemented. Ms. Demmert began saying the first recommendation pertained to the organizational considerations and was addressed by the aforementioned subcommittee bylaw. Ms. Demmert said the second, third and fifth recommendations referred to the development of a cost allocation plan and were in the final stages and would be forwarded to the Department of Health and Social Services within the month. Monitoring of sub-recipients to ensure that federal funding was appropriately spent was the fourth recommendation and Ms. Demmert said that was in place. Ms. Demmert assured Senator Phillips that the Commission was tracking the progress of the recommendations. Senator Green asked if the Commission appointed members to the standing committee and was told it did. When asked by Senator Green if the Commission could replace members of the standing subcommittee or if it could change the bylaws, Ms. Demmert answered the Commission had the authority to do both. Senator Green then asked about the oversight provisions between the standing committee and the long-term care ombudsman. Ms. Demmert replied that the directive of the standing committee was to provide oversight and guidance, advice regarding the annual workplan and an annual report focusing on the proposed cooperative agreements with state and local agencies and to provide support around the development of a volunteer cadre. She added that the committee would also review and advise the full Commission with regard to a budget for the long-term care ombudsman and make that request on behalf of the ombudsman to the full Commission. Senator Green's real concern was not that the Alaska Commission on Aging would involve itself directly but she wanted the assurance that when the ombudsman begins an investigation, the process is unfettered and without pressure from the Commission. If so, then she deemed this system acceptable. Ms. Demmert stressed the current plan has that assurance and would be respected. Amendment #1: This amendment changes the bill to add the following language: Page 1, line 1, following ";": Insert "transferring the office of the long-term care ombudsman from the Alaska Commission on Aging to the legislative branch;" Insert a new bill section to read: "Sec.__ AS 24 is amended by adding a new chapter to read: Chapter 57. Office of the Long-Term Care Ombudsman. Sec. 24.57.010. Office of the long-term care ombudsman. There is created in the legislative branch of the state the office of the long-term care ombudsman. Sec. 24.57.020. Appointment of the long-term care ombudsman. (a) A candidate for appointment as the long- term care ombudsman shall be nominated by the long-term care ombudsman selection committee composed of three members of the senate appointed by the president of the senate and three members of the house of representatives appointed by the speaker of the house. One member of a minority party caucus in each house shall be appointed to the selection committee. (b) The long-term care ombudsman selection committee shall examine persons to serve as long-term care ombudsman regarding their qualifications and ability and shall place the name of the person selected in nomination. The appointment is effective if the nomination is approved by a roll call vote of two- thirds of the members of the legislature in joint session and approved by the governor. However, the governor may veto the appointment and return it, with a statement of objections, to the legislature. Upon receipt of a veto message, the legislature shall meet immediately in joint session and reconsider approval of the vetoed appointment. The vetoed appointment becomes effective by an affirmative vote of two-thirds of the membership of the legislature in joint session. The vote on the appointment and on reconsideration of a vetoed appointment shall be entered in the journals of both houses. (c) The appointment of the long-term care ombudsman becomes effective if, while the legislature is in session, the governor neither approves nor vetoes it within 15 days, Sundays excepted, after its delivery to the governor. If the legislature is not in session and the governor neither approves nor vetoes the appointment within 20 days, Sundays excepted, after its delivery to the governor, the appointment becomes effective. Sec. 24.57.030. Term; removal. (a) The term of office of the long-term care ombudsman is five years. An incumbent may be reappointed but may not serve for more than three terms. If the term of a long-term care ombudsman expires without the appointment of a successor under this chapter, the incumbent continues in office until a successor is appointed. If the long- term care ombudsman dies, resigns, becomes ineligible to serve, or is removed or suspended from office, the person appointed as acting long-term care ombudsman under AS 24.57.040 serves until a new long-term care ombudsman is appointed for a full term. (b) The legislature, by a concurrent resolution adopted by a roll call vote of two-thirds of the members in each house entered in the journal, may remove or suspend the long-term care ombudsman from office, but only for neglect of duty, misconduct, or disability. Sec. 24.57.040. Staff; employment policies. (a) The long-term care ombudsman shall appoint a person to serve as acting long-term care ombudsman in the absence of the long-term care ombudsman. The long-term care ombudsman shall also appoint assistants and clerical personnel necessary to carry out this chapter. (b) The long-term care ombudsman is a full-time position in the exempt service under AS 39.25.110, and neither the long-term care ombudsman nor the staff of the office of the long-term care ombudsman is subject to the employment policies under AS 24.10 or AS 24.20. Sec. 24.57.050. Financial interests. Neither the long-term care ombudsman nor the staff of the office of the long-term care ombudsman may have a financial interest in a long-term care facility in the state Sec. 24.57.060. Duties and powers of the long-term care ombudsman. (a) The long-term care ombudsman shall investigate and resolve a complaint made by or on behalf of an older Alaskan who resides in a long-term care facility in the state if the complaint relates to a decision, action, or failure to act by a provider or a representative of a provider of long-term care services, or by a public agency or social services agency, that may adversely affect the health, safety, welfare, or rights of the older Alaskan. (b) The long-term care ombudsman may investigate and resolve a complaint made by or on behalf of an older Alaskan relating to the long-term care or residential circumstances of the older Alaskan. Complaints under this subsection may relate to any issue not covered under (a) of this section, including the older Alaskan's landlord, senior citizen housing, a public assistance program, a public grant program for services to older Alaskans, public utilities, health care facilities, and health care providers. (c) The long-term care ombudsman may (1) subpoena witnesses, compel their attendance, require the production of evidence, administer oaths, and examine any person under oath in connection with a complaint described under (a) of this section; the powers described in this paragraph shall be enforced by the superior court; (2) pursue administrative, legal, or other appropriate remedies on behalf of an older Alaskan who resides in a long-term care facility in the state. (d) The long-term care ombudsman shall adopt regulations under AS 44.62 (Administrative Procedure Act) to implement this chapter. Sec. 24.57.070. Training and certification of staff. (a) The long-term care ombudsman shall hire and provide for the training and certification of office staff, including volunteers and other representatives of the office of the long-term care ombudsman. Training must include instruction in federal, state, and local laws and policies relating to long-term care facilities in the state and in investigative techniques. The long- term care ombudsman may require other appropriate training. The long-term care ombudsman may decertify a person under this section for goad cause in accordance with regulations adopted by the ombudsman. (b) An employee, volunteer, or other representative of the office of the long-term care ombudsman may not investigate a complaint under AS 24.57.060 unless the person has been certified as having completed training under (a) of this section and approved by the long-term care ombudsman as qualified to investigate the complaint (c) The employees of the office of the long-term care ombudsman are in the exempt service under AS 39.25.110. Sec. 24.57.080. Access to long-term care facilities, older Alaskans, and records. (a) A person may not deny access to a long-term care facility or to an older Alaskan by the long-term care ombudsman or an employee, volunteer, or other representative of the office of the long-term care ombudsman. (b) Notwithstanding the provisions of AS 24.57.060(c)(l), the long-term care ombudsman may obtain medical or other records of an older Alaskan who resides in a long-term care facility in the state only with the consent of the older Alaskan or the older Alaskan's legal guardian or, if the older Alaskan is unable or incompetent to consent and does not have a legal guardian, only with a court order. Sec. 24.57.090. Confidentiality. (a) Records obtained or maintained by the long-term care ombudsman are confidential, are not subject to inspection or copying under AS 09.25.110 - 09.25.120, and, except as provided in (b) of this section, may be disclosed only at the discretion of the long-term care ombudsman. (b) The identity of a complainant or an older Alaskan on whose behalf a complaint is made may not be disclosed without the consent of the identified person or the person's legal guardian, unless required by court order. Sec. 24.57.100. Immunity from liability. (a) A person who, in good faith, makes a complaint described in AS 24.57.060 is immune from civil or criminal liability that might otherwise exist for making the complaint (b) The long-term care ombudsman, or an employee, volunteer, or other representative of the office of the long-term care ombudsman, is immune from civil or criminal liability for the good faith performance of official duties. Sec. 24.57.110. Interference with the long-term care ombudsman and retaliation prohibited. (a) A person may not intentionally interfere with the long-term care ombudsman, or an employee, volunteer, or representative of the office of the long-term care ombudsman, in the performance of official duties under AS 24.57.060. (b) If a. person makes a good faith complaint described in AS 24.57.060, an employer or supervisor of the person, or a public or private agency or entity that provides benefits, services, or housing to the person, may not discharge, demote, or transfer, reduce the pay or benefits or work privileges of, prepare a negative work performance evaluation of, deny or withhold benefits or services, evict, or take other detrimental action against the person because of the complaint. The person making the complaint may bring a civil action for compensatory and punitive damages against an employer, supervisor, agency, Or entity that violates this subsection. In the civil action, there is a rebuttable presumption that the detrimental action was retaliatory if it was taken within 90 days after the complaint was made. (c) A person who intentionally violates this section is guilty of a class B misdemeanor. Sec. 24.57.120. Legal counsel for the long-term care ombudsman. (a) Except as provided in (b) of this section, the Legislative Affairs Agency shall provide legal services, including advice and representation, in connection with any matter relating to the powers, duties, and operation of the office of the long-term care ombudsman, and in any legal action brought against the long-term care ombudsman or an employee, volunteer, or other representative of the office of the long-term care ombudsman. If the Legislative Affairs Agency cannot provide legal advice or representation because of a conflict of interest or because of the limitation in (b) of this section, the long-term care ombudsman may employ private legal counsel. (b) The Legislative Affairs Agency may not provide legal services to the office of the long-term care ombudsman in connection with the office's power under AS 24.57.060(c)(2). Sec. 24.57.200. Definitions. In this chapter, (1) "long-term care facility" means an assisted living home that is required to be licensed under AS 47.33 and a nursing home as defined in AS 08.70.180; (2) "older Alaskan" means a resident who is 60 years of age or older; (3) "senior citizen housing" has the meaning given "senior housing" in AS 18.56.799." Renumber the following bill sections accordingly. Insert new bill sections to read: "Sec.__. AS 24.60.176(b) is amended to read: (b) In this section, "appointing authority" means (1) the legislative council for employees of the Legislative Affairs Agency and of the legislative council and for legislative employees not otherwise covered under this subsection; (2) the Legislative Budget and Audit Committee for the legislative fiscal analyst and employees of the division of legislative finance, the legislative auditor and employees of the division of legislative audit, and employees of the Legislative Budget and Audit Committee; (3) the appropriate finance committee for employees of the senate or house finance committees; (4) the appropriate rules committee for employees of (A) standing committees of the legislature, other than the finance committees; (B) the senate secretary's office and the office of the chief clerk of the house of representatives; and (C) house records and senate records; (5) the legislator who made the hiring decision for employees of individual legislators; however, the legislator may request the appropriate rules committee to act in the legislator's stead; (6) the ombudsman for employees of the office of the ombudsman, other than the ombudsman, and the long-term care ombudsman for employees of the office of the long-term care ombudsman, other than the long-term care ombudsman; (7) the legislature for the ombudsman and the long-term care ombudsman. Sec.___. AS 24.60.250(c) is amended to read: (c) In addition to the sanctions described in AS 24.60.260, if the Alaska Public Offices Commission finds that a legislative director has failed or refused to file a report under AS 24.60.200 by a deadline established in AS 24.60.210, it shall notify the Alaska Legislative Council or the Legislative Budget and Audit Committee, as appropriate. For the ombudsman and the long-term ombudsman, the Alaska Legislative Council shall be notified. Sec.__. AS 24.60.990(a)(9) is amended to read: (9) "legislative director" means the director of the legislative finance division, the legislative auditor, the director of the legislative research agency, the ombudsman, the long-term care ombudsman, the executive director of the Legislative Affairs Agency, and the directors of the divisions within the Legislative Affairs Agency;" Renumber the following bill sections accordingly. Insert a new bill section to read: "Sec.__. AS 39.27.O22 (d) is amended to read: (d) This section applies to employees of the legislature only if the committee responsible for adopting employment policies concerning the employee adopts a written policy that the section applies. This section applies to the employees of the office of the ombudsman only if the ombudsman adopts a policy that the section applies. This section applies to the employees of the office of the long-term care ombudsman only if the long-term care ombudsman adopts a policy that the section applies." Renumber the following bill sections accordingly. Insert a new bill section to read: "Sec.__. AS 39.90.140(3) is amended to read: (3) "matter of public concern" means (A) a violation of a state, federal, or municipal law, regulation, or ordinance; (B) a danger to public health or safety; (C) gross mismanagement, a substantial waste of funds, or a clear abuse of authority; [OR] (D) a matter accepted for investigation by the office of the long-term care ombudsman under AS 24.55.100 or 24.55.320; or (E) a matter accepted for investigation by the office of the long-term care ombudsman under AS 2437.060 (a);" Renumber the following bill sections accordingly. Insert a new bill section to read: "Sec.__. AS 44.2l.230(c) is amended to read: (c) The commission may not investigate, review, or undertake any responsibility for the longevity bonus program under AS 47.55 or [,EXCEPT FOR ACTIVITIES OF THE OFFICE OF THE LONG TERM CARE OMBUDSMAN,] the Alaska Pioneers' Homes under AS 47.55." Renumber the following bill sections accordingly. Insert a new bill section to read: "Sec.__. AS 44.62.040(c) is amended to read: (c) Before submitting the regulations and orders of repeal to the lieutenant governor under (a) of this section, every state agency that by statute possesses regulation making authority, except boards and commissions, [AND] the office of the ombudsman, and the office of the long-term care ombudsman, shall submit to the governor for review a copy of every regulation or order of repeal adopted by the agency, except regulations and orders of repeal identified in (a)(l) - (2) of this section. The governor may review the regulations and orders of repeal received under this subsection. The governor may return the regulations and orders of repeal to the adopting agency before they are submitted to the lieutenant governor for filing under (a) of this section [,] (1) if they are inconsistent with the faithful execution of the laws, or (2) to enable the adopting agency to respond to specific issues raised by the Administrative Regulation Review Committee. The governor may not delegate the governor's review authority under this subsection to a person other than the lieutenant governor." Renumber the following bill sections accordingly. Insert new bill sections to read: "Sec.__. AS 44.66.050(a) is amended to read: (a) Before the termination, dissolution, continuation, or reestablishment of a board or commission under AS 08.03.010 or AS 44.66.010, or of an agency program under AS 44.66.020 and 44.66.030, a committee of reference of each house, which shall be the standing committee of legislative jurisdiction as provided in the Uniform Rules of the Alaska State Legislature, shall hold one or more hearings to receive testimony from the public, the commissioner of the department having administrative responsibility for each named board, commission, or agency program, and the members of the board or commission involved. The hearings may be joint hearings. The committee shall also consider the proposed budget of the board, commission, or agency program, prepared in accordance with AS 37.07.050(f), and the performance audit of the activities of the board, commission, or agency program, prepared by the legislative audit division as prescribed in AS 24.20.271(1). The committee may consider any other report of the activities of the board, commission or program, including but not limited to annual reports, summaries prepared by the Legislative Affairs Agency, and any evaluation or general report of the manner of conduct of activities of the board, commission, or agency program prepared by the office of the ombudsman or by the office of the long-term care ombudsman. Sec.__. AS 44.66.050(c) is amended to read: (c) A determination as to whether a board, [OR] commission, or agency program has demonstrated a public need for its continued existence must take into consideration the following factors: (1) the extent to which the board, commission, or program has operated in the public interest; (2) the extent to which the operation of the board, commission, or agency program has been impeded or enhanced by existing statutes, procedures, and practices that it has adopted, and any other manor, including budgetary, resource, and personnel matters; (3) the extent to which the board, commission, or agency has recommended statutory changes that are generally of benefit to the public interest; (4) the extent to which the board, commission, or agency has encouraged interested persons to report to it concerning the effect of its regulations and decisions on the effectiveness of service, economy of service, and availability of service that it has provided; (5) the extent to which the board, commission, or agency has encouraged public participation in the making of its regulations and decisions; (6) the efficiency with which public inquiries or complaints regarding the activities of the board, commission, or agency filed with it, with the department to which a board or commission is administratively assigned, [OR] with the office of the ombudsman, or with the long-term care ombudsman have been processed and resolved; (7) the extent to which a board or commission that regulates entry into an occupation or profession has presented qualified applicants to serve the public; (8) the extent to which state personnel practices, including affirmative action requirements, have been complied with by the board, commission, or agency to its own activities and the area of activity or interest; and (9) the extent to which statutory, regulatory, budgeting, or other changes are necessary to enable the agency, board, or commission to better serve the interests of the public and to comply with the factors enumerated in this subsection." Renumber the following bill sections accordingly. Insert a new bill section to read: "Sec.__. AS 44.99.240(2) is amended to read: (2) "state agency" means (A) a department, institution, board, commission, division, authority, public corporation, or other administrative unit of the executive branch, including the University of Alaska and the Alaska Railroad Corporation; (B) a committee, division, or administrative unit of the legislative branch, including the Alaska Legislative Council, the leadership of each house, [AND] the office of the ombudsman, and the office of the long-term care ombudsman; (C) an administrative unit of the judicial branch, including the Alaska Judicial Council and the Commission on Judicial Conduct." Renumber the following bill sections accordingly. Insert new bill sections to read: "Sec.__. AS 47.24.010(f) is amended to read: (f) A person listed in (a) of this section who reports to the long-term [LONG TERM] care ombudsman under AS24.57.060 [AS 44.21.232], or to the Department of Health and Social Services, that a vulnerable adult has been exploited, abused, or neglected in an out-of- home care facility is considered to have met the duty to report under (a) of this section. "Sec.__. AS 47.24.013(a) is amended to read: (a) If a report received under AS 47.24.010 regards the abandonment, exploitation, abuse, neglect, or self-neglect of a vulnerable adult who is 60 years of age or older that is alleged to have been committed by or to have resulted from the negligence of the staff or a volunteer of an out-of-home care facility, including a facility licensed under AS 18.20, in which the vulnerable adult resides, and, if the Department of Health and Social Services licenses that type of facility, the Department of Administration shall transfer the report for investigation to the long-term [LONG TERM] care ombudsman under AS 24.57.060 [AS 44.21.232] and the Department of Health and Social Services. "Sec.__. AS 47.24.013(c) is amended to read (c) Upon receipt of a report from the department under (a) or (b) of this section, the long-term [LONG TERM] care ombudsman and the Department of Health and Social Services shall (1) conduct an investigation as appropriate under AS 24.57.060 [AS 44.21.232] or this title, respectively; (2) coordinate and cooperate in their responses to and investigations of the report if their jurisdictions overlap; (3) provide the results of their actions or investigations to the central information and referral service of the department within 60 days after the receipt of the report." Renumber the following bill sections accordingly. Insert a new bill section to read: "Sec.__. AS 47.33.310(b) is amended to read: (b) An assisted living home shall post in a prominent place in the home (1) a copy of the rights set out in AS 47.33.300; (2) the name, address, and phone number of the long-term [LONG TERM] care ombudsman appointed [HIRED] under AS 24.57.020 [AS 44.21.231] and, if relevant to residents, of the advocacy agency for persons with a developmental disability or mental illness; (3) the telephone number of an information or referral service for vulnerable adults; and (4) a copy of the grievance procedure established under AS 47.33.340." Renumber the following bill sections accordingly. Insert new bill sections to read: "Sec.__. REPEALER. AS 44.21.231, 44.21.232, 44.21.233, 44.21.234, 44.21.235, 44.21.236, 44.21.237, 44.21.238, 44.21.239, 44.21.240(2), 44.21.240(3), 44.21.240(4), and 44.21.240(5) are repealed. Sec.__. TRANSITIONAL PROVISION FOR PAY LEVELS. (a) Notwithstanding other provisions of this Act, if the person serving in the position of long-term care ombudsman under AS 44.21.231 on the day before tile effective date of this Act is appointed as the first long-term care ombudsman under AS 24.37, added by this Act, that person shall be compensated under AS 24.57 at the same salary level at which the person was compensated on the day before the effective date of this Act. (b) Notwithstanding other provisions of this Act, if a person serving as an employee in the office of the long-term care ombudsman under AS 44.21.231 - 44.21.240 on the day before the effective date of this Act is retained to serve as an employee with the same duties under the first long-term care ombudsman appointed under AS 24.57, added by this Act, that person shall be compensated under AS 24.57 at the same salary level at which the person was compensated on the day before the effective date of this Act." Renumber the following bill sections accordingly. Senator Green moved for adoption and Senator Leman objected. Senator Green explained that this amendment places the long-term care ombudsman in the legislative branch and gives a deeper separation from the funding responsibilities and authority of the Department of Administration. She felt the long-term care ombudsman would have autonomy within the legislative branch. Senator Phillips noted the provisions appeared to be similar to those for the state ombudsman. Senator Green assumed the provisions were identical. However, she stressed the long-term care ombudsman advocates for senior citizens, in addition to the investigative duties as charged to the state ombudsman. Senator Wilken stated he would support the amendment only if it were a last resort measure. He expressed that he hoped this amendment would be set aside. Senator Green WITHDREW her motion but stressed that she would follow the long-term care ombudsman closely to ensure no conflicts arose. Senator Wilken stressed that the entire Committee would follow this matter closely. Senator Wilken offered a motion to move from Committee SB 204, 1-LS8002\A with individual recommendations, four zero fiscal notes from the Division of Senior Services, Department of Administration, and a forthcoming $976 million fiscal note from the Protection, Community Services and Administration component of the Division of Senior Services, Department of Administration. Without objection, the bill MOVED FROM COMMITTEE. COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 256(HES) "An Act relating to regulation of managed health care and allowing physicians to collectively negotiate with a health benefit plan that has substantial market power." Senator P. Kelly told the Committee he introduced this bill to address any inequities starting to grow out of the rapidly changing health care industry. He stated that many of the mergers of the past few years were changing the rules for health care providers. He gave an example of the severity of the problem, saying that since 1994 the leading 18 insurance companies has been reduced to only six and that more mergers were projected. He asserted that the bargaining power of the insurance companies has increased while the bargaining power of the health care providers has not. Senator P. Kelly attested that this bill contains a mechanism called a "state action doctrine" to address the problem. He shared that this doctrine came out of a US Supreme Court case and that it allows the states to allow health care providers to form groups for the purpose of negotiating with health care companies without being subject to some anti-trust laws. He noted the groups are still overseen by the state and must still adhere to other anti-trust laws. Senator Phillips declared a conflict of interest due to his employment with Providence Medical Center. Co-Chair Torgerson noted the bill has two substantive sections, one being the patient and health care provider protection and the other the authority to negotiate with health care providers. He asked what the first section accomplishes. Senator P. Kelly explained it is part of the necessary structure to enable the negotiation provision. After receiving verification that there were no Health Maintenance Organizations (HMO) operating in Alaska, Senator Green asked if the definition of a "managed care entity" in the bill applies to a self insured group or a preferred provider. She wanted to know if the definition included anything else. Senator P. Kelly responded that there could be a number of additional companies that would fall under the definition of "managed care entity." He deferred to the Anchorage Independent Physicians organization provide further detail. SIGNE ANDERSON, Assistant Attorney General, Fair Business Practices Section, Civil Division, Department of Law testified via teleconference from Anchorage to answer questions on the anti-trust issue. Co-Chair Torgerson asked why there is an antitrust question. JULIA COSTER, Assistant Attorney General, Commercial Section, Civil Division, Department of Law, testified via teleconference from Anchorage to explain that the legislation would involve the Federal Trade Commission's (FTC) enforcement of federal laws. Ms. Anderson added that there is another legal concern regarding the Employment, Retirement, Income and Security Act of 1974 (ERISA) Premption and that she was available to answer questions on that matter as well. She stated that this concern was implicated in Sections 2 and 3 of the bill. RICHARD FEINSTEIN, Assistant Director, Bureau of Competition, Federal Trade Commission, testified via teleconference from Washington DC and clarified that he was authorized by the Commission to offer views on the legislation but that the Commission was not taking an official position nor was he speaking for the Commission. Co-Chair Torgerson referred to congressional legislation, HR 1304, the Quality Health Care Coalition Act of 1999 sponsored by Congressman Thomas Campbell, and asked if the bill was still pending or if it had been enacted. Mr. Feinstein answered the legislation was still pending. Co-Chair Torgerson noted that his information claimed that this US House of Representatives bill would be the "fix of all fixes" if it were adopted into law. He asked if the witness shared that view. Mr. Feinstein replied that while the bill was a "fix in one sense," the Commission has formally opposed it as detailed in the written testimony presented before congress by Chairman Robert Pitofsky. [Copy on file] Mr. Feinstein clarified that if HR 1304 were passed at the federal level, it would preempt any effort by a state to address collective negotiations by physicians and health plans in any other way. Mr. Feinstein qualified that he only recently received the latest version of SB 256 but that this bill was a variation of a theme seen at the federal level to facilitate collective bargaining by physicians in their dealings with health plans. He stressed that several other states are also considering similar measures. Mr. Feinstein emphasized that the focus of the FTC is whether these proposals are in the best interest of consumers. He understood that there are many concerns about managed care and how it delivers health care and health insurance services. However, he said the Commission had serious questions about whether anti-trust immunity for providers was the best way to address those concerns. Mr. Feinstein referred to a list of issues proposed in SB 256 that directly targeted the concerns articulated about the managed care. He quoted Section 2 (8), "protects the ability of a health care provider to communicate openly with a covered person about all appropriate diagnostic testing and treatment options." He surmised this subsection was intended to address what was sometimes referred to as a "gag clause" and that a number of states had already passed legislation to address this issue. He suggested that if there were specific concerns about the operations of managed care organizations, those concerns should be addressed directly rather than indirectly by creating circumstances in which groups of providers may be able to exercise market power in ways that don't benefit consumers. Mr. Feinstein assured that he completely respected the states' authority to address the issues in the manner they felt most appropriate and in the best interest of its citizens. He stressed that it was not his job to take a bottom line position on whether or not this is good legislation, but was more to give advice on the anti-trust analysis. Mr. Feinstein pointed out that one provision of the bill is the notion where health plans, health insurers and managed care organizations, have at least 15 percent of the market, there is a presumption that that constitutes considerable market power. In these instances, he continued, the bill gives authorization for collective negotiation with those parties that made up the 15 percent. He warned that this is only a useful measure if there is clear understanding of what the percentage of the market is; and in looking at the geographic or product market in Alaska, he did not think it was clear. He inferred that a determination of the percentage of the market could not be done without a definition of what that would be. He predicted that this legislation could result in some health plans that have a relatively small share of the market would find themselves negotiating with a group that represented 100 percent of the providers. Mr. Feinstein spoke about the general boycotts, strikes and concerted action provisions in the bill as another area that should be reviewed. He quoted the findings in the bill; "the collective bargaining will benefit competition so long as the physicians don't engage in expressed or implied threat of retaliatory collective action including boycotts or strikes." Elsewhere in the language, he read, "competing physicians may not engage in a boycott related to these terms and conditions." He stated that those terms are somewhat ambiguous. He gave a scenario of an attempt at collective negotiations between providers in a given area and the health plan, which did not lead to a satisfactory contract. He said a situation could then arise where the bargaining group would not have contracts, they would withhold their services to the plan and the patients would have to pay for the services out of pocket. He noted the bill did not require health plans to participate in negotiations. Tape: SFC - 00 #43, Side B 9:50 AM Mr. Feinstein next addressed the state action doctrine on anti-trust, which he felt was relevant to the Committee's analysis of the bill. He said there were two "prongs" to the doctrine, first was the need a clearly articulated policy of the state to displace competition in the sector that is being regulated and to replace it with regulation. He did not think there was any question that this bill would satisfy that requirement. The second "prong" was the requirement under federal anti-trust law that there be active supervision by the state of the private parties who were hoping to benefit from the state action exemption, and according to Mr. Feinstein, could be more problematic. He stated that it was unclear whether the regulatory apparatus in the bill would meet test of active supervision. Senator Wilken wanted to know how other states have provided the active supervision. Mr. Feinstein replied that it was probably too early to tell since no other state had such a process implemented as of yet. He told of similar legislation passed the previous year in Texas and that the attorney general's office in that state was in the process of adopting regulations to oversee the private conduct of the bargaining groups. Co-Chair Torgerson requested the witness submit his comments as written testimony. Mr. Feinstein referred to written testimony presented on behalf of the Commission to address the federal bill plus two letters written by the Bureau of Competition. One letter he said related to the Texas legislation and the other was sent to the District of Columbia. [Copies on file.] BOB LOHR, Director, Division of Insurance, Department of Community and Economic Development, testified via teleconference from Anchorage focusing on the public cost of the legislation. He stated that identifying what the cost would be was difficult, partly because no other state had established a system that could be used as a model. He stressed that any factor that might provide more equity or address an imbalance in bargaining power could also have the affect of raising consumer prices. Speaking to the impact on the division, Mr. Lohr referred to the fiscal note that reflects the addition of one fiscal analyst position to analyze the estimated number of contracts that would result from the legislation. He directed the Committee's attention to Section 3 of the bill saying that it stipulates, "It is the responsibility of the division to approve, in advance, the contracts submitted as having the required elements, in the form that is required and not having the prohibited elements." He clarified the amount requested in the fiscal note is very conservative and is based on the likelihood that the participating negotiating parties will customize the contracts. These customized contracts, he stated, would require more analysis since each one would contain detailed provision and there would also be time pressure for the division to make a determination. Co-Chair Torgerson requested written testimony from all testifiers, noting the helpful points raised. Senator P. Kelly asked how many contracts the division currently reviews. KATY CAMPBELL, Actuary on Life and Health Issues, Division of Insurance, Department of Community and Economic Development replied only two and that they were required filings from Blue Cross. She explained these were standard provision contracts and were not specific to the health plans each employer purchased. Senator P. Kelly asked if the witness thought the number of contracts the division would review would change dramatically if this bill passed into law. Ms. Campbell referred to the provisions in the legislation stating that the health care services would be required to be detailed in the contract, which were complex and individualized for the groups that were covered. She spoke of the many variations in health plans such as different vision and dental services. Senator P. Kelly thought the fiscal note seemed high and asked if the division anticipated any standardization of the new contracts. Ms. Campbell responded that there would be a significant increase in the workload because the contracts currently reviewed by the division do not contain the details for each individual services package. JEROME SELBY, Providence Health Systems testified via teleconference from Anchorage saying he was present to answer questions. Ms Coster reiterated her earlier comments that the Department of Law thought that the definition of "benefit plan" in Section 3 of the bill would be in conflict with ERISA. GARY SWARTZ testified via teleconference from Fairbanks that because the Alaska Healthcare Network has been under investigation by the FTC for over a year, they are unable to enter contracts, etc. and had become dysfunctional. He noted the network had spent over $100,000 on the investigation saying there was no merit to the accusations and no finding of fact. He shared that he had many discussions with the FTC and that he disagreed with Mr. Feinstein. Co-Chair Torgerson noted the Committee did not have the written testimony Mr. Schwartz had referred to. DR. MICHAEL CARROLL, Board Member, Alaska Healthcare Network, testified via teleconference from Fairbanks on behalf of both physicians and consumers. He spoke to the uniqueness of Fairbanks in that it has more than one hospital in the community. He believed if physicians were prevented from addressing the health care plans in an organized manner, the consumer is going to suffer. He gave and example of the question of how to define an emergency room visit and emergency room care. He was not interested in interfering with how much money doctors are paid he stressed that he only wanted physicians to be part of the process. PAUL SMITH, Attorney, testified via teleconference from San Francisco, California as legal council for the Alaska Healthcare Network. He noted the area of physicians in collective bargaining groups was "fought with practical difficulty" because the anti-trust guidelines were not always clear. He gave an example the discretion between price related terms and non-price-related terms, which was difficult to make. He advised that this legislation would be helpful because it does make that classification. Mr. Smith then drew attention to the correspondence submitted by the FTC claiming that under existing anti- trust laws physicians can comment and express opinions on proposed contracts, which he thought was a fair statement. However, he said that in practice, the boundary between expressing an opinion and engaging in a negotiation was difficult to recognize. He stated that by setting forth a regulated procedure that defines the scope of acceptable conduct, it would provide practical help to physicians and physician organizations who need to engage in these kind of activities. HELEN JAMISON testified via teleconference from Chicago that she wished to listen and would be available if something came up needing clarification. DWIGHT PERKINS, Deputy Commissioner, Department of Labor and Workforce Development testified that the department has no expertise to handle such anti-trust matters. He had heard that because the federal legislation was stalled, interested parties were attempting to pass new laws in each state and that to date, they were only successful in Texas. He asked that the Committee take time to consider this legislation and that the department had not submitted a fiscal note because of the uncertainty of the actual affect on the department. Stated that he met with group that would be testifying. Co-Chair Torgerson stated that the department's request to be excused from this legislation was odd, since this legislation addresses a labor issue. Senator Leman stated that he readily agreed with the witness's testimony saying he did not think it was appropriate for the department to review the legislation. MIKE HAUGEN, Executive Director, Alaska Physician and Surgeons testified that the organization was on the front lines of dealing with the contracts. He stressed that the provisions in this legislation were completely voluntary for all parties. He suggested that if the state, the payers or the physicians felt uncomfortable about the process, negotiations would be over. He added that the legislation requires active state oversight. On the merits of bill, he stressed physicians would be able to communicate amongst themselves without a threat of the FTC. GEORGE RHYNEER, Cardiologist, President, Alaska Physicians and Surgeons testified that he was available to answer questions. Co-Chair Parnell asked Mr. Haugen what would be the benefit to consumers regarding the availability and affordability of health care if this legislation passed. He noted that those opposed to the bill argued that this would drive up the cost of health care. Mr. Haugen responded that this bill would allow physicians to get together and discuss issues such as medical necessity and who determines what is medically necessary. He lamented that these decisions were often left up to a clerk in the insurance company looking at a "cookbook" when a doctor calls for pre-authorization. His organization felt these decisions should be made by a physician and that there should be peer review. Another example he gave was how to define emergency services and the frustrations of trying to deal with an insurance company at the time of an emergency. He concluded that the bill would solve a number of patient protection and physician issues. Co-Chair Parnell wanted to know how the witness could address the concerns of increased costs saying that when physicians organized, they would talk about their own best interests. Mr. Haugen assured that because of the state's oversight, if the costs got to high, the Division of Insurance could step in on behalf of the public's best interest. He also told of "point of service options," which allow a patient to go outside an established network for services but must pay the difference. This would not cost the employer but would give another choice to the consumer. Mr. Haugen next addressed the concern that the bill will drive up litigation. He used the Texas legislation of an example of how this would probably not happen. Although the new law in Texas includes the right to sue health plans, he pointed out that in three years there have only been five lawsuits filed. Because of this and because of the larger Texas population, he thought the litigation expenses in Alaska would be minimal. Co-Chair Parnell thought one benefit to the bill would be to bring in competition. Senator P. Kelly asked for an explanation of how the bill would bring other health care companies into the state. He also asked the witness to respond to the concern raised by the FTC representative regarding active state supervision. Mr. Haugen shared that the State of Pennsylvania drafted good language to address what is required of the state. He responded to Senator P. Kelly's first question saying that it is cost prohibitive for new healthcare carriers to enter the Alaska market due to the population base and the established relationships of existing carriers with local physicians. He stated that if potential carriers could deal with an organization of physicians, without fear of action by the FTC, "new players" could come into the market. Senator P. Kelly wanted to know if Mr. Haugen was confident that the adoption of the state action doctrine would allow groups of physicians to enter these discussions without the threat of being sued by the FTC. Mr. Haugen was. JIM JORDAN, Executive Director, Alaska State Medical Association deferred to written testimony he submitted to the Committee. [Copy on File.] NANCY WELLER, Division of Medical Assistance, Department of Health and Social Services testified that her concern was the affects this bill could have on the Medicaid program. However, the division believed the program was exempted from the bill because it was already heavily regulated by the federal government. Co-Chair Torgerson clarified that the division did not oppose the bill since the division was not involved. GORDON EVANS, Health Insurance Association of America noted he had submitted written testimony. [Copy on file.] He stated that although the previous witnesses did respond to some of his earlier comments, he felt the responses were self-serving. He surmised that the physicians in support of the bill dispute the association's claim that the issue is economics rather than quality of care. He stated that stated that this argument gave the physicians leverage to "prevent the intrusion of a giant third party into the sacred physician-patient relationship." While Mr. Evans agreed that this relationship is sacred, he hadn't heard any physicians turning down insurance payments from this "giant third party." Mr. Evans addressed the statements that this legislation would establish a voluntary arrangement, which any party could withdraw from if not satisfied. He asked why the bill was needed saying that if the physicians currently thought they provide quality care, the insurance companies would not refuse to work with them. He surmised the answer was to give physicians leverage, noting that three years ago, the average income of an Alaskan doctor was $250,000 and that this bill would only seek to increase their income at the expense of the consumers. JEFF DAVIS, Executive Director, Blue Cross-Blue Shield of Alaska testified about previous testimony given before the Senate Health, Education and Social Services Committee. He summarized that the company's perspective was that there is not an imbalance of market power based on the limited success in trying to contract with physicians. He stated that the company has contracts with 700 of the total of 1800 physicians practicing in the state. Aetna, he said, had approximately 100 contracts and that other carriers had no contracts. Mr. Davis qualified that the bill contained some patient's rights provisions that the company does support, such as the "gag clause". He stressed that they never have had this clause. However, he noted that other provisions in the bill were confusing and unnecessarily costly. He stated that no carrier in Alaska prohibited patients from obtaining services from physicians outside of the network of contracted physicians although the cost to the patient was higher when he or she did so. Mr. Davis disagreed with the claim that this bill would bring more carriers into the market because the true limitations were economies of scale and distance. He stressed that the issue with this legislation would increase costs both regulatory and administrative and that there was a potential that physician costs would increase. He noted that FTC regulations already allow physicians to come to carriers in fairly large blocks to discuss patient care. LEN SORRIN, Assistant General Council, Blue Cross-Blue Shield of Alaska, focused his comments on the collective bargaining/anti-trust provisions of the bill. He stressed that the provisions were certain to increase costs to Alaskan consumers. He pointed out that those provisions are unrelated to the patient protection issues in the bill and that there was no consumer benefit to collective bargaining. He stated that physicians do have the right under federal guidelines to collectively talk about issues related to patient care, but also to negotiate prices with carriers. He admitted that there are some limitations on the physicians' ability to do so but said consumers deserve a substantial quid pro quo from those parties to ensure increased efficiency to the marketplace and improved delivery of health care. Mr. Sorrin asserted that the provisions related to market share were unprecedented in the realm of anti-trust law. He did not know of any case in the health care services industry where 15 percent was determined to be a significant market share. In fact, he added, the US Department of Justice guidelines established a "two-tier safe harbor" of 30 percent for physicians grouping together. He stressed that it makes no economic or legal sense to impose the negotiating provisions for those carriers that only have 15 percent of the marketplace. Tape: SFC - 00 #44, Side A 10:37 AM Mr. Sorrin continued saying that under the Justice Department's guidelines, no carrier in the state would fall under the bill's terms. Mr. Sorrin concluded that there was no problem and that this legislation did not offer a solution. He stated that the regulations being drafted in Texas had generated a "firestorm of controversy" and suggested that "we underestimate the regulatory complications that this bill will bring to everyone's life." He added that problems would reemerge each time the contracts were up for negotiation. Senator P. Kelly rebutted the claim that doctors currently are allowed to get together and negotiate for both terms and conditions and price. He said the FTC had ordered the North Lake Tahoe Medical Group and the Mesa County Physicians Independent Practice Association, Inc. to cease an desist from these activities. He read definition language from one of the two consent decrees, "exchanging or facilitating the exchange of information among physicians concerning the terms and conditions including reimbursement on which any physicians are willing to deal with payers." [Copies on file.] He said while he had not been able to find any information to substantiate the claim that physicians were allowed to gather; he was able to find information that showed where the FTC did not allow the activities. Co-Chair Torgerson ordered the bill HELD in Committee. COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 73(HES) "An Act relating to assisted living homes; and providing for an effective date." This was the third hearing for this bill in the Senate Finance Committee and the first hearing in the year 2000. Co-Chair Torgerson announced that due to time constraints, public testimony would be taken but that there would be no debate at this meeting. MONTA FAYE LANE, President, Alaska Caregivers Association, testified via teleconference from Fairbanks in support of the bill. She talked about the needs in the assisted living industry. DR MICHAEL CARROL testified via teleconference from Fairbanks that this bill directly applies to the community. He spoke of the quality and capacity of facilities saying assisted living was a cost efficient way to care for people compared to nursing homes. GARY WARD, Licensing Coordinator, Assisted Living Homes, Division of Senior Services, Department of Administration testified via teleconference from Anchorage about an amendment that the Committee did not have. He explained this amendment relating to AS 47.33 and concerning terminating residential services contracts and temporary management and receivership. DWIGHT BECKER, Protective Services Coordinator, Division of Senior Services, Department of Administration testified via teleconference from Anchorage to answer questions about the fiscal note that he helped draft. KAY BURROWS, Director, Division of Senior Services, Department of Administration testified via teleconference from Anchorage that she would also be available to answer questions. JEFF JESSEE, Executive Director, Mental Health Trust Authority, Department of Revenue, testified via teleconference from Anchorage as also available. Senator Phillips restated conflicted of interest with healthcare related matters citing his employment with Providence Medical Center. ALISON ELGEE, Deputy Commissioner, Department of Administration testified in support the bill and referred to documentation to support the rate increase paid by the state to assisted living facilities. [Copy on file.] KARL BRIMNER, Director, Division of Mental Health and Developmental Disabilities, Department of Health and Social Services testified that the division supports the bill also. Co-Chair Torgerson stated his intent to move bill from Committee soon. The bill was HELD in Committee. ADJOURNED Senator Torgerson adjourned the meeting at 10:48 AM. SFC-00 (14) 03/02/00 SFC-00 (19) 03/02/00
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