HOUSE BILL NO. 211 "An Act relating to liability for providing managed care services, to regulation of managed care insurance plans, and to patient rights and prohibited practices under health insurance; and providing for an effective date." REPRESENTATIVE NORM ROKEBERG, SPONSOR provided members with a letter from Ed Burgan, Senior Vice President, Brady and Company (copy on file). Mr. Burgan represents a number of private sector employers, unions and trusts around the state. He observed that he was able to resolve the concerns of Mr. Burgan and that Mr. Burgan now supports the legislation with the addition of an amendment. The amendment would exempt self-insured employers. He observed support for the legislation by Alaska State Medical Association, Blue Cross, Aetna and representatives from the Health Insurance Association of America. He maintained that that the legislation is supported by organized labor and other businesses in the state. Representative Williams MOVED to ADOPT Amendment 1: Sec. 21.07.090. Construction. This chapter may not be construed to supersede or change the provisions of 29 U.S.C. 1001 - 1191 (Employee Retirement Income Security Act of 1974) as those provisions apply to self-insured employers. There being NO OBJECTION, it was so ordered. Vice Chair Bunde MOVED to ADOPT conceptual Amendment 2: add "medical necessity" back into the legislation. He expressed concern regarding the removal of "medical necessity". Medical necessity was removed as part of a compromise with the understanding that it would be included in another bill. He stressed that its absence would leave the legislation incomplete. Co-Chair Therriault thought that the medical community supported the bill and did not want to risk killing the legislation. BARBARA HUFF TUCKNESS, DIRECTOR, GOVERNMENTAL AND LEGISLATIVE AFFAIRS, TEAMSTER LOCAL 959 observed that the Teamster supports the legislation with the addition of the amendment. DR. GEORGE REINEER, MD, ANCHORAGE testified via teleconference in support of Amendment 2. He noted that the definition of "the best care" for patients changes rapidly. Vice Chair Bunde questioned if the inclusion of the right for an external appeal would remove the need for a definition of "medical necessity". Dr. Reineer responded that the right for an outside appeal should not exclude the acceptance of something as a medical necessity. Representative Rokeberg argued that the statutory provisions for the external review amount to a de facto definition of "medical necessity". Representative Rokeberg added that the external review agency might also take into consideration additional evidence. Vice Chair Bunde referred to a letter by the Alaska State Medical Association (copy on file.) According to the letter the Association recognizes that the legislation contains some significant protections for Alaska's patients. However, the letter continues, "the job is not yet completed." Two major issues remain, managed care entity accountability (liability issue) and the issue pertaining to the definition of "medical necessity" with its impact on the external appeal mechanism and with liability. The Alaska State Medical Association acknowledged the shortness of the remaining session and concluded that passage of an incomplete bill was better than no bill at all. Dr. Reiner agreed that something is better than nothing. Representative Rokeberg observed that the addition of "medical necessity" would remove support of the legislation by groups that support its current version. In response to a question by Vice Chair Bunde, Representative Rokeberg observed that there is a three stage level of review in the legislation to assure that a patient has a forum for due process before going to the court. Representative Foster MOVED to report CSHB 211 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 211 (FIN) was REPORTED out of Committee with a zero fiscal note by the Department of Community and Economic Development, published date 3/8/00.