SENATOR TAYLOR brought SB 367 (HEALTH CARE REFORM COMMITTEES) before the committee as the next order of business. SENATOR STEVE RIEGER, prime sponsor of SB 367, said the legislation is a number of provisions that deal with proposals for health care reforms. In general, they can be categorized as either measures to improve public health, measures to increase the efficiency and reduce the cost of delivery of health care, or measures which speak to the pooling of risk aspects of health care. Senator Rieger then presented a section-by-section analysis of the bill. Senator Rieger directed attention to an attached amendment adopted by the Senate Health, Education & Social Services Committee, which is the .08 alcohol content language which replaces the .01 language in the bill. He also noted that committee had received a memorandum from Mike Ford, a legislative legal counsel, addressing a concern with single subject provisions. He asked that the Judiciary Committee take a look at the single subject issues, and, if it deems it advisable, to break out the recommendations as listed in Mr. Ford's memo into separate bills and have them move forward. SENATOR TAYLOR commented that the committee does have some real concerns about violations of the single subject rule, and that it would make a careful examination of Mr. Ford's memo. Number 225 SENATOR TAYLOR thanked Senator Rieger for his presentation on SB 367 and stated the committee would take further testimony on the bill upon completion of the next item on the agenda. SENATOR TAYLOR stated the committee would again take up SB 367 (HEALTH CARE REFORM COMMITTEES). RUPE ANDREWS, representing the American Association of Retired Persons, said SB 367 proposes to establish a system of mandatory arbitration and AARP policy supports institution of voluntary rather than mandatory arbitration programs of state sponsored tort reform legislation. They do support the option to proceed to court adjudication should arbitration not succeed. They support state efforts to require approval of insurance rates before the rates take effect and to encourage that provider prices be made available to the public. Further, they support state efforts to facilitate the development of health care data systems in both the public and private sectors. Rationalizing the system of insurance coordination of benefits is usual and AARP recommends that the state work with such groups as the National Association of Insurance Commissioners and the American National Standards Institute in the process. Concluding, Mr. Andrews said SB 367 is neither an insurance reform bill, nor a health care reform bill. SB 367 would establish a time-limited study commission charged with the analysis of one specific health care reform plan for Alaska with the option to examine other models as well. AARP believes that from a policy prospective, SB 367 is deficient in a number of areas. Number 390 JEFF FELDMAN, President of the Alaska Academy of Trial Lawyers, addressing specific areas of the bill, said Section 3, which requires that malpractice actions involving individuals less than two years of age be brought before that individual reaches the age of eight, has a serious constitutional problem. It will deny some citizens equal protection by giving some claimants different periods of time within which to bring their claim than other claimants. Speaking to Section 5, which is the mandatory arbitration provision, Mr. Feldman said the mandatory portion of it is objectionable because there are some very practical problems in terms of how these provisions will stack the deck against the person who has been the victim of medical malpractice. Number 490 SENATOR TAYLOR stated he would request that staff send a memo to the Division of Insurance requesting a report on any malpractice claims that have been brought after age 4, age 6, age 10, etc., as well as justification on why they are billing doctors for a risk that has never occurred, as far as he knows, in the history of the State of Alaska. Number 534 Mr. Feldman clarified that the trial lawyers organization is not adamantly opposed to arbitration. They believe that arbitration of all cases voluntarily is fine, and there are things the Legislature can do to make arbitration more available to parties. He noted they submitted a bill that in the malpractice area would have required mandatory binding arbitration of all claims less than $200,000. Mr. Feldman also spoke to concerns with Section 6 and Section 23. Number 690 CHRIS CHRISTENSEN, General Counsel, Alaska Court System, stated the Supreme Court takes no position on SB 367, but there are three sections that cause the court some concern. The first is with Section 4, which relates to a floating interest rate for prejudgment and postjudment interest, and would cause a tremendous clerical burden to the court. TAPE 94-33, SIDE A Number 005 Mr. Christensen said the second concern is with Section 5, relating to mandatory arbitration. One significant problem is that since arbitration is mandatory, since it is a cost of going into court, any indigent person, generally the plaintiff, is going to be entitled to state-payed arbitration. At this time, the court system is not certain what that cost will be, but they are preparing a fiscal note. Mr. Christensen said the third concern is with Section 6, relating to expert advisory panels, which will also have a fiscal impact on the bill. Right now, half of these panels don't submit any bills and the other half average $150 a case. Section 6 provides that the expert is entitled to a fee of $500 and that could add up to at least an extra $25,000 a year of costs that the state would have to pay, costs which he does not believe are necessary since doctors are doing it right now, many of them for free. Number 040 REED STOOPS, representing AETNA, directed attention to three amendments to SB 367 which had been provided to the committee. The first amendment would delete Section 7 of the bill, which sets up a prior approval system for insurance rate regulation, and replace it with the version of rate regulation which was adopted by the House in HB 414, which is called the file and use system. He pointed out that Alaska is one of a half dozen states that have no health insurance rate regulation. AETNA believes the file and use is the better system for Alaska to adopt. The second amendment is to Section 16 and relates to the structure of the kind of universal care that the advisory committee is instructed to look at and provide a price tag for next year. The amendment requests that the committee look at a pool of all the uninsured Alaskans who wish to acquire insurance through the pool. The third amendment would delete the sections of the bill that relate to coordination of benefits. Essentially, this amendment takes SB 201 and rolls it into SB 367. AETNA thinks that there should be an analysis by the Division of Insurance to show the difference between the current regulations dealing with these same issues, as well as an analysis to determine whether the cost of doing that is worth the changes that are being made. Number 130 SENATOR TAYLOR closed the public hearing on SB 367 and stated the committee consider amendments to the bill at its next hearing. He then adjourned the meeting at 3:55 p.m.