Legislature(1997 - 1998)
01/21/1998 09:00 AM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
January 21, 1998
9:00 a.m.
MEMBERS PRESENT
Senator Gary Wilken, Chairman
Senator Loren Leman, Vice-Chairman
Senator Lyda Green
Senator Jerry Ward
Senator Johnny Ellis
MEMBERS ABSENT
None
COMMITTEE CALENDAR
SENATE BILL NO. 197
"An Act relating to health care services provided by, and practices
of, a health maintenance organization; and prohibiting health
maintenance organizations from limiting free speech of health care
providers."
MOVED SB 197 OUT OF COMMITTEE
SENATE BILL NO. 146
"An Act relating to the public school funding program; relating to
the definition of a school district, to the transportation of
students, to school district layoff plans, to the special education
service agency, to the child care grant program; imposing a school
tax in the unorganized borough; and providing for an effective
date."
MOVED CSSB 146(HESS) OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 197 - See HESS minutes dated 1/14/98 and 1/16/98.
SB 146 - See Senate Health and Social Services Committee minutes
dated 3/24/97, 4/4/97 and 4/9/97. Also see Senate
HESS Committee minutes dated 2/12/97, 3/14/97, 3/17/97, 3/19/97, 3
WITNESS REGISTER
Senator Dave Donley
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of SB 197.
Quinn McKenna
Providence Health System
3200 Providence Drive
Anchorage, Alaska
POSITION STATEMENT: Discussed concerns with SB 197.
ACTION NARRATIVE
TAPE 98-3, SIDE A
Number 001
SB 197 - REGULATING HEALTH MAINTENANCE ORGS.
CHAIRMAN WILKEN called the Senate Health, Education and Social
Services (HESS) Committee to order at 9:05 a.m. Present were
Senators Green, Leman, and Ellis. Senator Ward arrived at 9:07
a.m. The Chairman announced the committee would first continue
taking public testimony on SB 197, and then take up SB 146.
QUINN MCKENNA, Operations Manager for Managed Health Physician
Integration and Business Development for Providence Health System
in Alaska, testified via teleconference. Mr. McKenna raised two
concerns with SB 197. The first was the provision mandating
coverage for chiropractic services, because any change to the way
HMOs function may inhibit their ability to control costs. Last year
health care inflation nationwide was 1.9 percent, a dramatic
decrease from the spiraling double-digit inflation of prior years.
That decrease is attributable to the tools used by managed care
plans: the ability to define benefit packages; to control and offer
networks volume in exchange for price discounts; and the ability to
control who is in and out of the network with regard to quality.
Consumers currently have the choice of getting services from a
managed care plan or a traditional indemnity insurance plan with a
free choice of providers. If HMOs are mandated to look more like
traditional indemnity plans, the price differential will change.
MR. MCKENNA'S second concern was a lack of clarifying language in
Section 3 which specifically prohibits HMOs from reimbursing
physicians for denying or delaying coverage. Federal regulations,
known as STARK 2 (ph), address this issue and agree with the
language in Section 3, but make it clear that a physician can be
reimbursed for developing clinical pathways for a group of
patients. This provision allows HMO providers to treat all
patients in the same manner, but disallows singling out one patient
for a different level of care. This is a second tool used by HMOs
to control health care costs nationwide.
There being no questions of the witness, and no further testimony,
SENATOR GREEN moved SB 197 out of committee with individual
recommendations and accompanying fiscal notes. SENATOR LEMAN
objected for the purpose of making a brief statement.
Number 134
SENATOR LEMAN stated that other providers have expressed interest
in having protections similar to those offered to chiropractors in
Section 2 and asked Senator Donley why no other providers are
included in the bill. Senator Leman said he would like to see that
issue addressed before the bill reaches the Senate floor and then
removed his objection to the motion.
SENATOR ELLIS stated although he is a co-sponsor of SB 197 and
supports it in its current form, he believes this is the
appropriate committee to address the concerns raised by Providence
Hospital staff.
SENATOR DONLEY responded that he worked on this legislation with
various interest groups over a four-month period last year, and
introduced it last session so that everyone would have notice of it
and could provide feedback during the interim. During that time he
worked with the Alaska Medical Association and developed a formula
that addresses some of Mr. McKenna's concerns and he added SB 197
contains provisions for cost containment of chiropractic services.
He empathized with other groups who want similar protections, but
said the Legislature is in the second year of this session, and
addressing those concerns at this time could prevent action on this
bill, achieving nothing. He stated he is willing to work with
those groups but felt it is not the right policy call to use this
piece of legislation as the vehicle to address those groups'
concerns at this time.
Number 207
SENATOR ELLIS asked about the new issue raised by Providence staff
regarding physician compensation and the ability of groups of
physicians in various specialties to establish clinical protocols.
He and Senator Duncan talked to many physicians who generally
wanted no reform. However, the national trend has been to develop
protocols to determine what kind of practices and care within a
certain scope would be compensated by third party payers and HMOs.
The national trend was prompted by genuine concern about patient
care and because the establishment of protocols could limit those
practitioners from liability. Senator Ellis said Mr. McKenna is
concerned that the language in SB 197 could be misconstrued to
preclude innovation by other specialities.
SENATOR DONLEY said that the language in SB 197 was taken from
other states that used the initiative process to deal with abuses
by HMOs in those states. The situation had become serious enough
that people forced the issue via the ballot. SENATOR DONLEY
thought the picture painted by the previous witness was not
entirely accurate. He did not believe the language contained in SB
197 prohibits appropriate clinical protocols; the language could be
interpreted that way but the chance of it prohibiting legitimate
cost containment procedures is very, very slim.
SENATOR ELLIS asked who will decide appropriate protocols. SENATOR
DONLEY answered the Division of Insurance regulates those matters,
and will have to resolve questions as they come up over time. To
write a bill that specifies those concerns would require 40 pages
and it would be obsolete within six months.
SENATOR ELLIS did not think the bill should include specific
clinical protocols, but should specify who would arbitrate and what
protocols are appropriate. SENATOR DONLEY thought the Division of
Insurance would be able to address the problems through its hearing
process, and noted any action on the division's part would be
initiated by consumer complaints.
Number 289
SENATOR ELLIS thought most people would agree that a peer review
panel of chiropractors can decide reasonable clinical protocols for
that scope of practice, and that other specialties could do the
same for their own practices. He noted the Division of Insurance
would be conducting passive enforcement, rather than active
enforcement, if it only takes action when consumers complain.
SENATOR DONLEY commented it would be important that peer reviews
occur independently of HMOs.
SENATOR ELLIS suggested getting model language from other states to
clarify the intent of the bill. He expressed concern that the
Division of Insurance may not be adequately staffed and have the
appropriate level of expertise to determine whether clinical
protocols and the related cost aspect are in the public's best
interest. SENATOR DONLEY said the highest complaint response
activity within the Division of Insurance is with health insurance,
therefore they do have staff specifically trained in that field.
SENATOR ELLIS asked if that is the one area they are currently
prohibited by state law from knowing what the insurance companies
are doing. SENATOR DONLEY answered the only thing they are
prohibited from knowing is rate review, but they do regulate the
administration of the insurance process to ensure that the
companies are treating people fairly. SENATOR ELLIS said in a very
important aspect they are blind. SENATOR DONLEY agreed that a gap
exists in that area.
There being no further objection, CHAIRMAN WILKEN announced the
motion to pass SB 197 to the next committee of referral with
individual recommendations passed.
SB 146 - PUBLIC SCHOOL FUNDING/CHILD CARE GRANTS
CHAIRMAN WILKEN noted the following teleconference sites were
connected on a listen-only basis: Anchorage, Barrow, Glenallen,
Seward, Valdez and Cordova. He informed committee members the
proposed committee substitute in members' packets (Draft Q) is the
same as the bill reviewed last year but has been updated to reflect
1998 dates.
SENATOR LEMAN moved to adopt CSSB 146(HESS) (0-LS0775\Q-Ford) as
the working document of the committee. There being no objection,
the motion carried.
CHAIRMAN WILKEN noted his intent to pass CSSB 146(HESS) from
committee today. SENATOR GREEN so moved.
CHAIRMAN WILKEN explained CSSB 146(HESS) is one attempt to revise
how public education is funded in the State of Alaska. This bill
was the subject of discussion in this committee on March 24, April
4, and April 9, of 1997. During the interim, the Senate HESS
committee conducted six town meetings in which public testimony was
taken on SB 146 as well as the other education funding bills. This
bill was presented to school superintendents at their convention in
October, and to the State PTA in November, and has been discussed
with Common Sense for Alaska and at least one Chamber of Commerce
around the State. He stated it is time to move the bill on to the
Senate Finance Committee where there are other related bills being
reviewed.
There being no further discussion on CSSB 146(HESS), CHAIRMAN
WILKEN announced the motion to move the bill to the next committee
of referral with individual recommendations carried.
Number 372
SENATOR ELLIS asked if HB 189 had been rescheduled. CHAIRMAN
WILKEN stated the committee is waiting on the sponsor, and those
interested should contact the committee aide for notification of
when the bill will be rescheduled.
There being no further business before the committee, CHAIRMAN
WILKEN adjourned the meeting at 9:32 a.m.
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