CHAIRMAN RIEGER introduced SB 270 (COMPREHENSIVE HEALTH CARE) and SB 284 (COMPREHENSIVE HEALTH INSURANCE ACT) as the next order of business before the committee. He stated that he intended to discuss the liability reform proposals of both bills. He noted that there had been a hearing on Senator Duncan's bill of last year and it would be available for discussion as well. SENATOR DUNCAN specified that the Tort Reform bill was left to move on its own. Therefore, there is no companion bill to SB 284. CHAIRMAN RIEGER asked Ms. Usera to discuss the proposals of SB 270 regarding civil procedures, arbitration. NANCY USERA pointed out the two civil provisions of SB 270. The first provision is, section 4, page 8, a non-binding court ordered arbitration for malpractice suits. She noted that this alternative dispute resolution has been successfully used in other states. This would resolve a malpractice suit before going through a costly litigation process. The second provision in section 6 addresses a similar concept for claims against insurance companies. TAPE 94-16, SIDE B Number 593 NANCY USERA summarized that they are attempting to uncover more cost effective ways to resolve these disputes short of the courts. CHAIRMAN RIEGER asked if the possibility of strengthening the burden of proof, or the penalties on either party that rejects the arbitrator's claim had been considered. NANCY USERA said no. Ms. Usera explained that the premise of SB 270 is to do what can be done now. This was the first step towards finding alternative dispute resolutions. CHAIRMAN RIEGER indicated that he may want to introduce something similar. He noted a discussion with the legal counsel who explained that one cannot mandate that an arbitrator's ruling is deemed to be true nor can the burden be placed on the individual to disprove the ruling. The stakes, such as court costs and attorney fees, can be raised. He asked Senator Duncan to discuss SB 123 regarding an OB statute of limitations. SENATOR DUNCAN explained that there were no recommendations on Tort Reform in SB 284 because of the constitutional single subject rule. He pointed out that there were recommendations in SB 123: (1) reducing the statute of limitations for birth related injuries from current law to the eighth birthday of the child; (2) court ordered non binding arbitration process be used to replace existing pre-trial screening process for medical malpractice suits; and (3) change the pre-judgement interest rate from 10.5 to the prevailing interest rate. CHAIRMAN RIEGER inquired of the expert advisor provision. SENATOR DUNCAN believed that was part of the non binding arbitration process. NANCY USERA stated that changes a court rule which requires a different vote of the legislature to do that. She explained that SB 270 converts from a three person panel to a one person expert advisor for the resolution. She referred to an article which would be given to the committee which illustrates the success of arbitration versus litigation; 89 percent of the cases were settled prior to hearings. She clarified that the provisions in SB 270 do not limit anyone's liability, but only provide an alternative to dispute resolution; therefore, the single subject rule does not seem to apply. SENATOR DUNCAN requested a legal opinion. Number 539 CHAIRMAN RIEGER offered an amendment for discussion regarding raising the stakes which would clarify that court costs and attorney fees would go against the party who attempts to appeal the arbitrator's decision if nothing changes. The amendment was written for SB 270 because the drafter needed somewhere to start, but Chairman Rieger did not know where it would be used. Chairman Rieger asked if there were any questions or objections to the basic ideas of the proposals by Senator Duncan, Nancy Usera, and his amendment. SENATOR ELLIS stated opposition of the proposals being proposed separately. The recommendations Senator Duncan discussed were adopted in the context of a comprehensive health care reform package. He pointed out that many of the recommendations were adopted because other parts of the Task Force's recommendations were adopted. The Tort Reform recommendations of the Task Force proposed individually would not be supported by the majority of the Task Force. He stated that he would support the provisions in the context of comprehensive health care reform. CHAIRMAN RIEGER acknowledged the need to review the proposals case by case and not always refer to them in context of the entire package. He advised the committee that the provisions regarding regulation of insurers, the standardized claims form, and the fiscal notes of both SB 270 and SB 284 would be addressed at the next meeting. He said that the civil procedure aspect of the bills could be discussed today. SENATOR DUNCAN clarified that the work group did not endorse any of the Tort Reform proposals even those in SB 123. There was no formal recommendation from the work group. SENATOR ELLIS added that he believed that most physicians thought Tort Reform was going to pass this year and time should not be wasted discussing or negotiating other liability and compensation limits in the health care reform context. CHAIRMAN RIEGER explained that he did not realize that Tort Reform was not part of the work group's proposal. The February 9, 1994 draft of the Health System Reform Work Group, Alaska Proposal SB 284 lists Tort Reform as item ten. SENATOR DUNCAN informed Chairman Rieger that he had an old copy, there is a newer copy that would be provided. Number 469 SENATOR ELLIS asked if Mr. Walsh would be discussing the Division of Insurance's portion of the fiscal note for both bills. CHAIRMAN RIEGER reiterated that the standardized claim form, the regulation of insurers, and the fiscal notes would be before the committee on Friday. SENATOR DUNCAN requested that Kim Busch and others of the Department of Health and Social Services be present on Friday to discuss the various Medicaid claim costs and administrative costs. He expressed concern with a fiscal note being prepared by AETNA; he would review that aspect.