Legislature(1997 - 1998)
01/14/1998 09:00 AM Senate HES
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SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
January 14, 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."
HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
No previous Senate committee action.
WITNESS REGISTER
Senator Dave Donley
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of SB 197.
Dr. Robert H. Banks
Alaska Chiropractic Society
401 E. 36th Ave.
Anchorage, Alaska 99503
POSITION STATEMENT: Supports SB 197.
Katie Campbell
Division of Insurance
Dept. of Commerce and Economic Development
P.O. Box 110805
Juneau, AK 99811-0805
POSITION STATEMENT: Answered questions regarding the Division of
Insurance.
Gordon Evans
Health Insurance Association of America
318 4th Street
Juneau, AK 99801
POSITION STATEMENT: HIAA believes SB 197 is unnecessary but
Theresa Obermeyer
3000 Dartmouth Drive
Anchorage, AK
POSITION STATEMENT: No stated position on SB 197.
ACTION NARRATIVE
TAPE 98-1, 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 9:02 a.m. and announced the
presence of Senators Leman and Ellis. Senator Green arrived at
9:15 a.m. and Senator Ward arrived at 9:25 a.m.
SENATOR DAVE DONLEY, sponsor of SB 197, gave the following overview
of the measure. Alaska has not experienced the difficulties states
in the Lower 48 have with the emergence of HMOs. SB 197 is a
preemptive strike requiring HMOs to follow certain rules that
benefit the public when they do arrive in Alaska. HMOs have been
controversial and have inspired many successful initiative drives
nationwide requiring them to follow some of the provisions
contained in SB 197, especially the provision related to gag
orders.
SENATOR DONLEY described each section of the bill. Section 1
requires that HMOs and health insurers establish guidelines
explaining when treatment can be denied to ensure that patients
understand the circumstances under which they will not receive
health care. Section 2 guarantees members' access to chiropractic
health care services. HMOs currently use a "gatekeeper" to approve
or disapprove the use of chiropractic services as a treatment
option. The "gatekeeper" can be a nurse or physician who is
trained in a different discipline and may be biased against
chiropractic care. Section 2 allows the patient to select
chiropractic care and visit a chiropractor during the first 30 days
of an injury, after which a review process will occur to analyze
whether or not continued chiropractic care is appropriate.
Section 3 pertains to the limitations HMOs can impose on the
communication between physicians and patients. In the Lower 48,
some HMOs may prohibit doctors from informing patients of certain
alternative treatments when those treatments are not available
through the HMO plan, even when those treatments are the most
appropriate. SENATOR DONLEY emphasized that health care providers
should always be free to talk to patients about their medical
conditions. The gag order provision has inspired all but 14 states
to enact a similar prohibition on gag orders. Section 3 also
requires an HMO to give written notice of cause before terminating
an employee.
Number 126
SENATOR ELLIS asked why Senator Taylor's name was listed as the
sponsor on the fiscal note. SENATOR DONLEY answered that error was
made by the department.
SENATOR ELLIS noted that former Senator Jay Kerttula sponsored
legislation in 1990 to eliminate any barriers in statute to the
establishment of HMOs in Alaska, since they are considered the free
market approach to providing more people with less expensive health
care. The bill passed overwhelmingly, however no HMOs have been
established. He questioned why that is and asked whether SB 197
might deter the establishment of HMOs in Alaska. SENATOR DONLEY
replied that even in a free market, governments prohibit cartels
and illegal activities to protect consumers from unscrupulous and
unfair practices. SB 197 sets basic guidelines to ensure HMOs
provide a fair, economic alternative.
Number 194
SENATOR ELLIS commented that he strongly supports consumer
protection, but repeated his question as to whether SB 197 will
discourage HMOs from establishing businesses in Alaska. SENATOR
DONLEY replied that his past experience with insurance companies
makes it very difficult to predict how they will act because their
reasons for their actions are sometimes untrue. He explained that
the provisions contained in SB 197 should not inhibit any fair HMO
from practicing in Alaska.
Number 232
SENATOR LEMAN referred to the provision that requires two doctors
to make a determination and asked whether it will create an
unnecessary barrier in some cases. SENATOR DONLEY stated that the
Alaska Medical Association specifically endorsed that section of
the bill. He explained it would be unnecessary if one could
guarantee that the physician who acts as the "gatekeeper" in the
HMO is always straightforward and has no undue pressure to make an
inaccurate evaluation but there is no way to guarantee that will be
the situation in all cases.
SENATOR LEMAN agreed there are complex cases where two diagnoses
would be sensible, but he questioned whether SB 197 will add to the
cost of health care when the diagnosis is simple and
straightforward. SENATOR DONLEY thought two diagnoses probably are
unnecessary in every case, but believed there is no way to draw the
line to ensure that in those problem cases consumers get
protection. An organization can easily create a system where two
diagnoses automatically occur, if that is the standard required by
statute. He added two diagnoses will only occur if a consumer
complains and is dissatisfied with the first diagnosis.
Number 266
CHAIRMAN WILKEN asked if there were other disciplines, such as
midwifery, that might want the same availability afforded to
chiropractors in SB 197. SENATOR DONLEY thought there probably
were but was not familiar with any at this time.
SENATOR WILKEN asked if Section 2 requires that a report be written
after the initial 30 day period of chiropractic care, and that a
second chiropractor then evaluate and treat the patient. He also
asked where the physician enters into this process. SENATOR DONLEY
answered that chiropractors have traditionally had problems with
review of their work by physicians with a different area of
expertise because many doctors are biased toward their own
discipline. Chiropractors want to be reviewed by others in their
profession, which is what Section 2 requires. He supports that
approach because it is the consumer who has made the choice to get
chiropractic treatment.
Number 311
SENATOR WILKEN asked if the first chiropractor's report is given to
both a second chiropractor and the HMO, at which point the HMO can
demand or recommend treatment by a physician. SENATOR DONLEY said
that according to lines 27-29, the HMO can send the patient to its
chiropractor after it reviews the report. SENATOR WILKEN
questioned whether the patient must go to the HMO's chiropractor at
that point. SENATOR DONLEY explained that the patient can continue
to go to his/her own chiropractor but, under the terms of the
service agreement, must check for cost containment and be checked
by the HMO chiropractor to ensure that the treatment is
appropriate.
CHAIRMAN WILKEN announced that Senators Green and Ward had joined
the committee.
Number 332
SENATOR ELLIS asked how the provisions in SB 197 would be enforced.
SENATOR DONLEY said enforcement would occur through complaints to
the Division of Insurance and Attorney General's Office. He
offered to get more information from the Division of Insurance on
that mechanism.
SENATOR DONLEY commented that when he was first elected 12 years
ago, the Division of Insurance's mission statement said nothing
about consumer protection. Now the division's latest mission
statement, produced in the last year, emphasizes consumer
protection. He believed the division has made a lot of progress in
that area over the last decade. SENATOR DONLEY also noted that he
has collected petitions in support of SB 197 containing over 3,000
names.
Number 360
DR. ROBERT H. BANKS, representing the Alaska Chiropractic Society,
testified via teleconference from Anchorage. Dr. Banks stated that
HMOs have grown to become a dominant force in health care in the
last ten years, however along with unprecedented growth has come
unprecedented consumer abuse. The sad reality of HMOs is not that
it is managed care, but that it is rationed care. The American
Chiropractic Association has created an internet site to try to
document health care abuses; he provided three examples from 170
cases that have been formally substantiated. Many of the cases
demonstrate a complete lack of morality and professional ethics.
SB 197 mandates chiropractic care as the treatment for low back
pain, and eliminates the use of gag clauses. The gag clause,
simply stated, is an agreement, by the doctor, to not reveal
treatment options to the patient if the insurance company has
deemed them to be too expensive or otherwise logistically or
financially undesirable. Dr. Banks urged committee members to
support SB 197.
Number 413
KATIE CAMPBELL, Division of Insurance, informed the committee that
she was available to relay questions to Stan Gallington of the
division, who was unable to attend.
SENATOR ELLIS asked how the Division of Insurance will enforce the
provisions of SB 197 and handle complaints. MS. CAMPBELL responded
they would be handled through the division's consumer service area
complaint process.
SENATOR ELLIS stated SB 197 has a zero fiscal note because no HMOs
are currently located in Alaska. He asked what the division
projects the cost of processing complaints to be if one or two HMOs
existed. MS. CAMPBELL offered to provide Senator Ellis with that
information at a later date.
SENATOR LEMAN asked if the division has calculated how SB 197 might
increase or decrease the costs of health care in Alaska. MS.
CAMPBELL replied the division has not done any research specific
to SB 197 and very little on HMOs overall since there have been no
applications to date.
Number 448
GORDON EVANS, representing the Health Insurance Association of
America (HIAA), a trade association representing about 225
commercial health insurance companies, gave the following
testimony. HIAA has a mixed reaction toward SB 197. It believes
SB 197 is unnecessary since no HMOs currently exist, or are likely
to be established in Alaska because it does not have a large enough
population to support one. HIAA does support Sections 1 and 3,
because it does not support inhibiting doctor-patient communication
but objects to Section 2, as it creates a special privilege for one
type of provider over others. Section 2 is unnecessary because
Alaska already has an anti-discrimination statute for medical
providers.
CHAIRMAN WILKEN asked Mr. Evans to submit HIAA's position to the
committee in writing. MR. EVANS questioned whether SB 197 had an
additional referral to the Senate Labor and Commerce Committee.
CHAIRMAN WILKEN noted the only referral is to the Senate HESS
committee.
Number 488
THERESA OBERMEYER, representing herself, expressed several opinions
on various topics but had no stated opinion on SB 197.
CHAIRMAN WILKEN announced SB 197 would be held in committee until
Friday, January 16, and adjourned the meeting at 9:45 a.m.
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