HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE WORK SESSION August 31, 1993 9:00 a.m. MEMBERS PRESENT Rep. Cynthia Toohey, Co-Chair Rep. Pete Kott Rep. Bettye Davis Rep. Irene Nicholia (via teleconference) Rep. Tom Brice (via teleconference) MEMBERS ABSENT Rep. Con Bunde, Co-Chairman Rep. Gary Davis, Vice-Chairman Rep. Al Vezey Rep. Harley Olberg OTHER LEGISLATORS PRESENT Sen. Johnny Ellis Sen. Dave Donley Sen. Suzanne Little (via teleconference) Rep. Joe Sitton (via teleconference) Rep. Jim Nordlund COMMITTEE CALENDAR Work Session: Proposed Regulations on State Lab Fees WITNESS REGISTER DR. PETER NAKAMURA, Director Division of Public Health Department of Health & Social Services P.O. Box 110610 Juneau, AK 99811-0610 Phone: (907) 465-3090 Position Statement: explained and defended fees DR. KATHERINE KELLEY, Chief Section of Laboratories Division of Public Health Department of Health & Social Services 3256 Hospital Drive Juneau, AK 99801 Phone: (907) 586-3586 Position Statement: presented detailed history of how regulations were adopted, what sort of comments were received, how fees work REP. JOE SITTON Alaska State Legislature Dimond Courthouse, Room 609 Juneau, AK 99801 Phone: (907) 465-2327 Position Statement: questioned fees and their public health impact CHARLES F. TEDFORD Radiological Physicist Division of Public Health Department of Health & Social Services 320 West Willoughby Street, Suite 101 Juneau, AK 99811 Phone: (907) 465-3019 Position Statement: explained tube fees, defended inspection system MARGARET ERICKSON Seward General Hospital P.O. Box 265 Seward, AK 99664 Phone: (907) 224-3845 Position Statement: expressed concern with tube fees, advocated moving radiological inspector's office to Anchorage TONI LEE, Lab Supervisor Family Medical Center HC 60, Box 3140 Delta Junction, AK 99737 Phone: (907) 895-5100 Position Statement: expressed concern with lab fees, their effect on patient participation in public health process SHELIA NORDALE Central Peninsula General Hospital P.O. Box 866 Soldotna, AK 99669 Phone: (907) 262-4404 Position Statement: concerned about effect of fees on hospital operations and collection of public health data JOAN BENNET SCHRADER Coalition of Labor Women Mount Redoubt Chapter P.O. Box 1587 Kenai, AK 99611 Position Statement: opposed to fees, insistent on full state funding SEN. SUZANNE LITTLE Alaska State Legislature State Capitol, Room 7 Juneau, AK 99801 Phone: (907) 465-2828 Position Statement: expressed concern over infrequent radiological testing, uncertainty as to need for fee increases TERRY SCHMIDT, Lab Supervisor State Health Laboratory Fairbanks, AK 99701 Phone: (907) 474-7017 Position Statement: representing self, questioned amounts of lab fees JENNIFER GARCIA P.O. Box 110518 Anchorage, AK 99511 Phone: (907) 276-5222 Position Statement: expressed concern over fees and privatization trend HEATHER FLYNN Abused Women's Aid in Crisis, Inc. 100 West 13th Avenue Anchorage, AK 99501 Phone: (907) 279-9581 Position Statement: explained shelter's dependence on Neighborhood Health Services and state labs JEANNE WOLF Municipality of Anchorage Department of Health & Human Services Anchorage, AK Phone: (907) 343-4605 Position Statement: expressed concern over effect of fees, need for publicity of fee waivers JAN WELLS Municipality of Anchorage Department of Health & Human Services Anchorage, AK Phone: (907) 343-4605 Position Statement: stated fear of cost shifting and effect of fees on high quality of state labs WILLIAM GALLANGER 664 West 34th Avenue, #425 Anchorage, AK 99503 Phone: (907) 562-5276 Position Statement: representing self, concerned with fees and priority for tests SALLY GUINEY Petersburg General Hospital P.O. Box 1244 Petersburg, AK 99833 Phone: (907) 772-4291 Position Statement: mammography fee too high, inspections ought to be combined SUSAN KERNES, President Board of Directors Kachemak Bay Family Planning Clinic P.O. Box 984 Homer, AK 99603 Phone: (907) 235-5194 Position Statement: opposed fees, recommended consolidation into one state lab KIM SMITH Kachemak Bay Family Planning Clinic P.O. Box 2742 Homer, AK 99603 Phone: (907) 235-3436 Position Statement: listed specific public health concerns, noted importance of accessibility DAN FIEBELKORN Southern Peninsula Hospital P.O. Box 4333 Homer, AK 99603 Phone: (907) 235-8101 Position Statement: expressed concern that HIV tests would no longer be confidential, and that fees would hurt rural areas more MARY JEFFERSON Bartlett Memorial Hospital 9351 Miner Drive Juneau, AK 99810 Phone: (907) 586-8417 Position Statement: specified some fees which shouldn't be charged, likely problems with billing DONALD NOVOTNEY Bartlett Memorial Hospital 1120 Timberline Court Juneau, AK 99810 Phone: (907) 586-8413 Position Statement: worried over charges for Hepatitis-B tests, said use of private labs to save money and time likely TONY BELL Municipality of Anchorage Department of Health & Human Services Sexually-Transmitted Diseases Clinic 525 `L' Street, #107 Anchorage, AK 99501 Phone: (907) 343-4611 Position Statement: concerned with fees' effect on confidentiality, collection of data, public use of labs HAROLD JOHNSON, M.D. Anchorage Neighborhood Health Center 1217 East 10th Avenue Anchorage, AK 99501 Phone: (907) 257-4600 Position Statement: concerned with fees as compared to private labs, inquired if doctors would decide finally for whom to waive fees GEORGE M. HANSEN, D.D.S. Alaska Dental Society Anchorage, AK Phone: (907) 567-7518 Position Statement: opposed increase on per-tube inspection, questioned entire inspection program KAY LAHDEMPERE Municipality of Anchorage Department of Health & Human Services 525 `L' Street Anchorage, AK Phone: (907) 343-4624 Position Statement: supported keeping tests in state labs, keeping fees low to account for client hardship PATRICIA HONG Alaska Nurses Association 237 East 3rd Avenue, #3 Anchorage, AK 99501 Phone: (907) 274-0827 Position Statement: supported prevention, including testing, over mere treatment of illness MELINDA EVANS, M.D., M.P.H. Center for Health & Counseling University of Alaska Fairbanks Health & Social Services Building Fairbanks, Alaska 99775 Phone: (907) 474-7043 Position Statement: opposed fees, listed problems expected ELMER LINDSTROM Special Assistant to the Commissioner Department of Health & Social Services P.O. Box 110601 Juneau, AK 99811-0601 Phone: (907) 465-3030 Position Statement: explained department's budgeting REP. JIM NORDLUND Alaska State Legislature Dimond Courthouse, Room 608 Juneau, AK 99801 Phone: (907) 465-4968 Position Statement: criticized fees SHARLANE DONALSON, Lab Supervisor Crossroads Medical Center P.O. Box 5 Glennallen, AK 99588 Phone: (907) 822-3203 Position Statement: exposed flaw in fee schedule, questioned revenue generating potential SUZANNE OLSON, Health Lab Supervisor Center for Health & Counseling University of Alaska Fairbanks Health & Social Services Building Fairbanks, AK 99775 Phone: (907) 474-7043 Position Statement: opposed fees, questioned how they were calculated DAN RITTER, Manager State Health Lab Fairbanks, Alaska 99775 Phone: (907) 474-7017 Position Statement: representing self, opposed fees VICKI MARIE COLACICCO, Director Public Health Nursing Norton Sound Regional Hospital P.O. Box 966 Nome, AK 99762 Phone: (907) 443-3221 Position Statement: opposed fees and cost shifting DONNA HURDLE Planned Parenthood of Alaska 406 West Fireweed Lane Anchorage, AK 99503 Phone: (907) 272-4822 Position Statement: requested specification of which sexually-transmitted diseases allow for waivers CARMEN DIEZ CANSECO-MALLIJUDI 3150 Seawind Drive Anchorage, AK 99516 Position Statement: opposed charging lab fees, called policy short-sighted FRANK L. PAULS, M.D. 3431 Cottonwood Street Anchorage, AK 99508 Phone: (907) 274-9930 Position Statement: opposed fees as likely to result in further cuts in general fund support of state labs ROSE TANAKA, Manger Public Health Lab Division of Public Health Department of Health & Social Services, Anchorage P.O. Box 110610 Juneau, AK 99811-0610 Phone: (907) 465-3090 Position Statement: representing self, opposed fees ACTION NARRATIVE TAPE 93-68, SIDE A Number 002 CHAIR CYNTHIA TOOHEY called the meeting to order at 9:00 a.m. and noted members and other legislators present. She announced the calendar, namely consideration of regulations proposed by the Department of Health & Social Services to charge fees for services at state laboratories and for radiological safety testing. CHAIR TOOHEY noted that the meeting was being teleconferenced to Juneau, Fairbanks, Bethel, Nome, Delta Junction, Glennallen, Soldotna, Valdez, Cordova, Seward, and Homer. She stated that hearings had been held on July 30 regarding the proposed regulations, but concerns expressed to her and other legislators had led to the House HESS Committee hearing on the same matter. She stated that the Division of Public Health would consider testimony from this hearing as it implemented its new regulations and outlined the history of the regulations in question. Number 067 DR. NAKAMURA, Director, Division of Public Health, Department of Health and Social Services, began his testimony by stating the importance of public health independent of the process of health care reform. He explained that the state's labs are an integral part of the public health system, which is maintained by the state and federal governments. He noted that funds were essential to providing public health services, including lab services, and when funds are not available several options exist: altering the manner of services provided, either in quality or quantity; or generating resources to maintain a level of services. Fees are an attempt to do the latter, he said. Number 113 REP. BRICE noted that the need for general fund monies for the state laboratory program hadn't arisen in Health & Social Services (HSS) Finance Subcommittee meetings, or if it had been brought up it wasn't addressed. Rep. Brice inquired what the status of lab funding had been at the time the HSS Finance Subcommittee was doing its work. DR. NAKAMURA responded that the initial cuts to the division's budget had come in 1993, which caused the division to consider where funds could be raised to replace the lost general fund monies. Various programs were looked at and lab services were considered a potential source for an estimated $264,000. Number 129 DR. KATHERINE KELLEY confirmed this amount at Dr. Nakamura's request. Number 130 DR. NAKAMURA finished by explaining that though the division did not specifically request general funds for the labs, they were at that time dealing with budgetary shortfalls that extended into FY '94. Number 135 DR. KATHERINE KELLEY, Chief of Public Health Laboratories for the Division of Public Health, Department of Health and Social Services, announced that she would be using an overhead projector, prompting Rep. Brice to ask that the materials she would display be transmitted to him via facsimile. Number 144 CHAIR TOOHEY responded that the information would be sent up after the presentation. Number 145 DR. KELLEY began by describing the state's public health lab system: operating labs in Anchorage, Fairbanks, and Juneau; the office of radiological health; and the chief's office. She noted that some sort of public health lab had been available since territorial days with a varying array of services provided. She stated that in the past ten years services at the public health labs had been reduced by transferring them to other agencies or eliminating them. Transferred services include all environmental testing (except water microbiology in Juneau), the PSP program (transferred to the Department of Environmental Conservation), and the DWI program moved in 1987 (at which time drug testing by public health labs was completely eliminated). Number 180 DR. KELLEY indicated that a quality assurance program had been dropped, too, and the motivation for these changes had been the budget. The labs were funded entirely from the general fund, and the initial cuts in FY '93 led to an effort to shift federal funds to cover the labs costs. Federal funds include Medicare and Medicaid, which cannot be billed selectively; every one must be billed for a service if Medicare and Medicaid will pay for it. This led to development of a schedule of fees that Dr. Kelley stated seemed conservative to the division. This would have yielded an estimated $260,000 for half of FY '93. Dr. Kelley said that in order for the labs to bill legally, regulations must specify for what services they would bill and in what exact amounts. The review of all Health & Social Services regulations would provide an opportunity for all the divisions to evaluate their receipts and modify fees charged, but a comprehensive fee schedule is time-consuming. Number 219 DR. KELLEY continued by stating that concerned parties knew of the proposed fee increases by the time the July 30 meeting was announced, and she had tried to give as much advance notice as possible. She reflected that the public notice format does not attract much attention, operating within a certain bureaucratic framework. She said she appreciated the fact that many persons sincerely felt they had not received adequate notice. Number 236 DR. KELLEY displayed an overhead transparency illustrating the public notice process and a summary of the verbal comments from the July 30 meeting with written comments received through August 18. These comments were divided into categories of concern: cost of fees and impact on care (27 comments); epidemiological impact (17 comments); and concerns about specific fees and how they would be collected in situations of high public health concern (no number). DR. KELLEY mentioned for Rep. Brice's benefit that the transparency she was currently discussing was in the file in his possession. Continuing with categories of concern, DR. KELLEY listed possible privatization of public health labs and efficiency of public health labs compared with the private sector; regulations and the notice process; the amount of detail in regulations and the guidance they provide; billing and payment of fees; and the decision-making process on implementation including waivers and discounts. Fifteen comments were received on radiological fees. DR. KELLEY noted that there was a lot of misunderstanding about the proposed fees and that fees were calculated in accordance with a system derived from the Centers for Disease Control and the public health lab directors using a standard lab accounting system common in the private sector. The cost of lab time is the base unit for the system. DR. KELLEY cited the proposed fee documentation, specifically the charts on pages 14-19 comparing costs of public fee schedules at private labs doing business in Alaska (based on FY '92 figures). Dr. Kelley pointed out that she was aware that public fee schedules do not represent all prices charged for services by labs, given some contractual arrangements. She explained how she had gone through the fee schedule and marked the fees that were higher, roughly equal, or lower than the proposed state fees, calculating that for the 68 state public health lab fees for which comparable private data existed 57% were lower, 24% were about the same, and 19% were higher than the private fees. She listed the procedures for which the proposed state fees were higher, describing these as time- consuming and/or rare. Number 389 DR. KELLEY addressed the epidemiological impact of the proposed fees, noting that the major concern she was aware of was the waiver language in the regulations. She recommended reading the regulations, most importantly the sliding fee scale section which mentions health services but not labs, because it was not the division's intent to use the sliding scale for lab services. She explained that waivers were intended to apply to lab fees, then read how the waivers would help provide necessary public health information when an outbreak occurred, as fees for testing for it would be waived. Number 441 CHAIR TOOHEY asked DR. KELLEY if she considered TB or HIV an ongoing epidemic. DR. KELLEY responded that these diseases were ongoing epidemics but not outbreaks, which are clusters being investigated in order to find the source and bring in necessary medical services to stop the spread of a disease. She then pointed out that a waiver could be granted if the lab service was necessary to detect a sexually-transmitted or communicable disease that would pose a health risk to the general public. She said this was an example of a long- term, ongoing effort to control, say, HIV. Number 462 REP. BRICE asked DR. KELLEY if removal of the term "sexually-transmitted" meant such diseases would be covered by the term "communicable." DR. KELLEY responded in the affirmative. Number 470 CHAIR TOOHEY noted that REP. BETTYE DAVIS joined the meeting. Number 474 DR. KELLEY spoke of the third justification for waiving a fee, which states that the inability to pay will not result in denial of services. She noted that this provision was not only regulatory but present in the enabling statute. She cited page 8, mentioning free screening and pre- and post-test counseling as services that must be offered free of charge in the interest of public health, which she interpreted as meaning HIV testing would be offered for free. She said that the Department of Law had instructed the writers of the fee schedule that unless a service has a fee associated with it, no fee could be charged under any circumstances; HIV and TB are listed in the schedule to allow for the possibility of charging for testing in a specific situation, such as a contract research project. Number 530 CHAIR TOOHEY reiterated that she wanted to know if the labs would charge for TB and sexually transmitted diseases. DR. KELLEY responded that no fees would be charged when the tests were in the interest of public health. CHAIR TOOHEY asked how they defined the interest of public health. DR. KELLEY stated that that was "the tough one." With TB, she said, the labs would take direction from the Section of Epidemiology. Number 550 REP. BRICE mentioned that many concerns were based on the definition of public health, especially if said definition depended on funding levels, and a drop in funding levels could make some tests less important to the public health than they should be. He asserted his desire for a stronger, clearer definition of public health in order to allow for better guidelines. DR. KELLEY responded that in her thirty-year career in public health she had experienced constant grappling with the definition of public health and she didn't think she could answer the question once and for all, but the Alaskan definition was the relevant one and the public health meeting in Fairbanks in September would be an excellent forum to define public health. Number 590 REP. SITTON said he agreed with Rep. Brice that the state underfunds public health, and asked Dr. Kelley why so few federal funds were available for state labs. DR. KELLEY responded that traditionally public health labs had not received direct funding from the federal government, even from the mother agency, the Centers for Disease Control. Dr. Kelley said that the majority of federal funds were grants to the program element housed in the Section of Epidemiology, which was generous in assisting public health labs with the federal funds available to them. She noted that while labs had not been well-funded federally, she had written a grant application for equipment replacement to reduce the diagnosis time for TB, and the labs had received $38,000. Dr. Kelley stated that she expected no federal funding in the coming year. Number 660 REP. SITTON commented that without dealing with the specifics of the fee schedule, nothing is more cost- effective than prevention, and any fee interfering with prevention defeated the main purpose. He stressed the imperative of adequately funding public health, and expressed his concern with the Division of Public Health's quarter-million dollar budget cuts every year. CHAIR TOOHEY mentioned that the division had not had its funding reduced at least since 1988 and these reductions had not originated in the legislature. Number 683 REP. SITTON responded that he had thought he had seen a $254,000 operations reduction in the last year. CHAIR TOOHEY said that it must have been an inter-agency reallocation, as the legislature had not cut it. She then asked DR. KELLEY to finish up her testimony. TAPE 93-68, SIDE B Number 028 DR. KELLEY spoke about the privatization concerns raised at the July 30 meeting, and tests that would be shifted to the private sector. She asserted that these concerns were common to every one involved in public health who want just to survive and not to compete. She stated that she hoped the waiver system was comprehensible, and if there were questions, she would answer them if possible. DR. KELLEY mentioned concerns about the efficiency of the public health labs, not for quality, but for fiscal efficiency, given bureaucratic constraints. She accepted that the state health labs were not fiscally efficient compared with those in the private sector, and she had so stated at the July 30 meeting. DR. KELLEY mentioned that billing would be direct to a third-party payer if one existed, and the labs would collect a minimum of information above that currently collected from providers; three or four simple questions would be asked regarding a patient's insurance status, and the policy number if insured. She said providers would decide if patients needed to use the waiver option due to an inability to pay. Number 070 CHAIR TOOHEY clarified her earlier comment on the budget's not having been reduced, stating that the lab budget had not been reduced. She continued, saying that a major concern she had heard was whether or not one would have to lie in order to get a test fee waived. Number 084 CHARLES TEDFORD, Radiological Health Specialist, Division of Public Health, Department of Health and Social Services, addressed three questions about the radiologic health program. Mr. Tedford noted that there were 1265 x-ray tubes in the state at many different medical offices, a majority being dental. He stated that there were 29 or 30 mammography units, spread out individually except for concentrations of three in Anchorage and Juneau. Mr. Tedford noted that proposed fee increases were from $20 to $50 on dental tubes; from $30 to $80 for medical units; and $1500 for mammography inspections. MR. TEDFORD noted three issues arising when considering fees: cost by number of inspections and related expenses; total departmental expenses; and comparison with other states (asserting that Alaska was more expensive than other states due to travel and other factors). He said that presently the program had $140,000 and one person, and that it ought to have $250,000 and three persons. He stated that the fees covered 25-50% of actual costs excluding mammography; the federal contribution to the mammography figure was probably $1200, which Alaskans probably would not pay. He said the mammography program would be transferred to the Food & Drug Administration on October 1, 1994, though it may still be administered by the state's radiological health officer. He mentioned the operator licensing inspector who accompanied him on inspections as an example of additional expenses to mammography. CHAIR TOOHEY asked MR. TEDFORD if he considered equipment manufacturer's contract tests valid. MR. TEDFORD noted that that question had been raised at the July 30 hearing, and a radiologist had stated that he was inspected four times a year; this duplication comes from different sources requiring inspection. Number 174 MR. TEDFORD mentioned a recent study requested by Governor Hickel on radiological threats in response to events at Fort Greely and Point Hope, citing the top recommendation: the state ought to revise and implement the existing x-ray unit inspection program to ensure that x-ray units are inspected and that the frequency inspections recommended protects public health; the greatest exposure for most Alaskans to radiation comes from diagnostic x-rays used in medical and dental facilities; inspection of x-ray machines and correction of deficiencies is the most effective way to minimize unnecessary exposure; and inspections in Alaska are far behind schedule. Number 198 MR. TEDFORD noted the question of why mammography fees were so much higher than for other machines, answering that they required much longer inspections due to Medicare funding requirements. He noted the question of why the radiological inspector was situated in Juneau when most units requiring inspection were elsewhere, and answered that most programs of this sort were located in state capitals and relocating the inspector would have only a very small effect on costs. He mentioned the issues of how often inspections were required and how frequently they occurred; if other qualified individuals could perform inspections and submit reports; if inspections could be conducted by mail; and what qualifications an inspector needed. Number 248 CHAIR TOOHEY thanked MR. TEDFORD and asked for the SEWARD TELECONFERENCE SITE to present testimony. Number 256 MARGARET ERICKSON, Head of the Radiology Department at Seward General Hospital, stated that the hospital's greatest concern was the increased cost of inspection, largely because of travel costs. She endorsed the idea of moving the radiological inspector's office to Anchorage for cost savings before adoption of the $1500 fee. Number 274 CHAIR TOOHEY thanked Ms. Erickson for her testimony and noted for the record the arrival of Rep. Jim Nordlund. She then asked for the DELTA JUNCTION TELECONFERENCE SITE to present testimony. Number 282 TONI LEE, Laboratory Supervisor, Family Medical Center, commented that the proposed lab fees would be a problem in her area due to an influx of low-income persons and increased dependence on state labs. She mentioned difficulty in getting patients to submit insurance information or documentation of inability to pay, and state labs' history of intervention in epidemics before they start. Ms. Lee expressed her belief that it is harder to get someone to pay for a procedure that does not affect him or her directly. Number 299 SHELIA NORDALE, Central Peninsula General Hospital, Soldotna, stated that charging fees for services could restrict accessibility to health care by the poor and if persons avoided testing for sexually transmitted diseases or TB, waiting until their condition became critical, greater expense would result than that incurred by screening and early treatment. She said that if state labs began charging, the hospital would likely start sending its tests to a reference lab, which would delay collection of data for epidemiological purposes. Ms. Nordale noted that if state labs charged a retail price, it might increase health care costs for consumers. Number 324 CHAIR TOOHEY thanked MS. NORDALE for her testimony and asked for the next witness. Number 327 JOAN BENNET SCHRADER, Coalition of Labor Union Women, Mount Redoubt Chapter, Kenai, spoke of the taxpayers' having paid for a modern lab that was badly needed and her group's concern over the status of public health in the state. Ms. Schrader asked for a series of conveniently timed public meetings to discuss this issue and mentioned that labs on the Kenai Peninsula had to choose between testing for HIV and testing for TB. Ms. Schrader asked the legislature to fund clinics at a level that would eliminate fees, and characterized this as a responsibility. Number 362 CHAIR TOOHEY pointed out to Ms. Schrader that the statute allowing for regulations charging fees dated from 1986, though the fees themselves were more recent. The Chair then recognized REP. BRICE. Number 370 MS. SCHRADER interrupted, claiming that her group recognized the point made by Chair Toohey, but by accepting responsibility as taxpayers and voters, they knew that the law had sometimes to be amended or changed. Number 375 REP. BRICE asked for Ms. Schrader's address. Number 380 SEN. LITTLE said she was appalled to hear Mr. Tedford say that some radiological units had not been inspected in ten years, and asked him to verify that she had heard him correctly. She inquired as to the type of units having gone uninspected. MR. TEDFORD stated that he would have to check records to provide the exact units, but they were of all types, in isolated areas. He said he would provide the information after checking the record, though he remembered a number in the seven-year category. Mr. Tedford asserted the need for more staff to conduct inspections. Number 401 DR. KELLEY stated that the radiological testing program was a one person office, and x-ray inspections were but a part of his job, which included providing expert advice to the Governor and others on radiation. She added that it had taken over two years after the last radiological physicist retired to recruit a replacement. REP. NICHOLIA stated that she thought it would be wise to move the radiological testing person to Anchorage to improve access to rural areas. Number 431 CHAIR TOOHEY asked SEN. LITTLE if she had further commentary. SEN. LITTLE responded that she was certain this was an area requiring change, better performance, and heightened efficiency in addressing public health needs. She stated she was unconvinced that higher fees were the answer, but ensuring the inspection of radiological equipment more frequently than once a decade was necessary. Number 444 CHAIR TOOHEY asked the FAIRBANKS TELECONFERENCE SITE to present testimony, suggesting that REP. SITTON and REP. BRICE speak. REP. BRICE mentioned that Rep. Sitton had intended to speak but he had to leave. Rep. Brice stated he would let persons who had come to testify present their testimonies. Number 456 TERRY SCHMIDT, Lab Supervisor, State Health Laboratory, Division of Public Health, Department of Health and Social Services, spoke as an individual. He referred to page 45 of the proposal where lab services were allocated $2.2 million for FY '92. He subtracted radon monitoring and radiological testing costs to arrive at a figure of $2.1 million for lab services. MR. SCHMIDT mentioned the figures used to determine the work-time unit from page 77, stating that horizontal addition of those numbers yielded a figure of almost $3.5 million, indicating that the total cost used to calculate fees exceeded the actual appropriation by $1.4 million. Mr. Schmidt said the cost of tests and the resultant proposed fees were inflated by 63%. He questioned the work-time unit for individual tests, citing his prior day's lab experience setting 170 hepatitis-b tests, which he processed the following morning. Mr. Schmidt noted that the proposed fee was based on a lab work-time of ten minutes for a single hepatitis-b test, and the official time he calculated of 1700 minutes (just over 23 hours) was much greater than the two and a half hours it actually had taken him. MR. SCHMIDT hypothesized that the figures were determined based on small numbers of tests being done, though large batches were common. He stated his belief in the efficiency of the labs, but it was unreasonable to expect tests to be sent to the labs if overcharging occurred. He noted that the cost estimates accounted for having to set up a billing system that would require four new positions, leasing a computer at a cost of $300,000, and paying for office space. Number 527 MR. SCHMIDT emphasized that revenues from fees would probably not exceed the costs of implementing the fee schedule. He stated that the labs' approximate budget request for FY '94 was $2.9 million, which he divided by the state's population to arrive at a cost per person of $5.30, or just over $21 for a family of four. Mr. Schmidt stated his belief that the labs provided a level of service to each Alaskan. Number 541 CHAIR TOOHEY asked for persons present at the meeting in ANCHORAGE to testify next. Number 562 JENNIFER GARCIA, Anchorage, stated that she had testified at the July 30 hearing on the proposed regulations and many of her concerns had since been addressed. She said she felt privatization was coming to the state lab system and wondered whether the public sector could bid for components of the work, such as insurance billing. Ms. Garcia stated that she thought billing would involve fourth and fifth parties after the third party, that it would be expensive, and that it was not a task to which lab technicians were accustomed. Number 600 HEATHER FLYNN, Executive Director of Abused Women's Aid in Crisis (AWAIC), Anchorage, told how the shelter received weekly services via a federal grant and the Neighborhood Health Center. She said a registered nurse visited weekly to tend to cuts and bruises, but women coming to the shelter were often unable to get basic health services. Ms. Flynn said the Neighborhood Health Center provided blood analysis, urological analysis, gynecological tests, and other services to which women at the shelter often haven't had access in a long time, intervening at a much better point than if the conditions were allowed to go untreated. She said a lot of children were helped by the shelter through such procedures as well baby checks, immunizations, and other treatment of common ailments. She praised the Neighborhood Health Center's contributions to the shelter's operations, mentioning her awareness that the Center used state labs for all the shelter's tests. Ms. Flynn expressed concern that paperwork generated by the proposed regulations would take funds from actual lab work, and pointed out that persons leaving her shelter continued to rely on the Neighborhood Health Center or the Municipal Health Department. Number 669 JEAN WOLF, Municipal Department of Health & Human Services Community Health Services Division, Anchorage, stated that she had testified at the July 30 hearing and she felt more comfortable after hearing Dr. Kelley's remarks. Ms. Wolf expressed lingering concern for some clients unable to pay for services. Her first concern was perception, based on her experience with federal parental notification rules, that publicity could deter persons from coming in for tests merely because they would think they would have to pay until the were seriously ill. Ms. Wolf stated that good information needed to go out to the public regarding fees, and she would like an agreement that if the fee system turned out not to work, the issue could be revisited in order to make the system work better. Number 721 CHAIR TOOHEY clarified that statute signs bearing the message that one would not have to pay if one could not afford it would be posted at all lab sites. She said she felt this was a very important message. TAPE 93-69, SIDE A Number 001 MS. WOLF noted that having signs up at clinics would make no difference if persons failed to come to those locations. She stated that there had been a reduction in public health service funding at the municipal level, with more tasks being done by fewer persons. CHAIR TOOHEY recognized JAN WELLS. Number 022 JAN WELLS, TB Control Community Health Nurse Supervisor for the Municipal Department of Health & Human Services, Anchorage, said she was reassured by Dr. Nakamura and Dr. Kelley's statements that necessary public health work could be done without charging for lab tests. She said she was still concerned at hearing of cost shifting at the state Department of Health & Social Services as this had happened with Medicaid and Medicare. Ms. Wells stated that in seeking payment for services that had been publicly funded, the focus of those services might shift due to staffing constraints. She praised the quality of state labs and expressed her hope that the system, of which all were proud, would be maintained in spite of fees. Number 045 CHAIR TOOHEY called WILLIAM GALLANGER to testify. WILLIAM GALLANGER, Anchorage, stated that he worked in lab services but was representing himself at the hearing, though he felt he represented many lab workers and their concerns. He said based on his handling of TB work, he would like to maintain the quality of lab services, and the fee schedule would limit the availability of health care. He said that in Alaska private labs often hadn't the resources to provide testing for low income persons. Mr. Gallanger told a story about an immigrant to the U.S.A. who was in Alaska but three days, displayed TB symptoms, and came into contact with approximately 200 persons while staying at the Brother Francis Shelter. He made the point that if all 200 persons had needed to be tested, it would have stressed the clinic, lab, and hospital involved to the point of sending specimens to an Outside reference lab. Mr. Gallanger expressed hope that given the speed and efficiency of state labs, the legislature would prioritize which tests would remain available for no fee in order to protect rural areas likely to be impacted harder than Anchorage. Number 097 CHAIR TOOHEY asked Dr. Kelley if she would like to address Mr. Gallanger's concerns. DR. KELLEY stated that the example situation would come under the outbreak or emergency category, and that skin tests would be done prior to lab tests. Number 109 CHAIR TOOHEY called for the PETERSBURG TELECONFERENCE SITE to present testimony. Number 110 SALLY GUINEY, Lab Director and Radiologist, Petersburg General Hospital, stated that $1500 was too high a fee for mammography, noting that a Seattle physicist was performing annual inspections for them for Medicare certification at a cost of $2500. She said that in addition to this, they paid for Medicare and state inspections of other radiological equipment. Ms. Guiney asked why mammography and general tube inspections couldn't be combined to reduce costs, perhaps inspecting all tubes in a community on one visit. Ms. Guiney stated that the hospital often used the Juneau state lab for confirmation of work, not for primary testing. She then asked what the fees would be for specimens sent for identification, pointing out a discrepancy between two different figures for a parasitology test. DR. KELLEY said the fee would be $19.75 for parasitology, and confirmation tests would be charged back. Number 159 CHAIR TOOHEY asked SUSAN KERNES at the HOMER TELECONFERENCE SITE to testify. SUSAN KERNES, President, Kachemak Bay Family Planning Clinic Board of Directors, identified herself as underinsured, and stated that public health was a part of government's duty to maintain public safety. She said the public health system was in place to monitor and react to general public well- being, a mission that would be undermined by fees that could force family planning clinics to shut. Ms. Kernes explained that the clinic received many reproductive health services at low cost or free from state labs and charged low fees to clients. She commented on a study by a New York consultant assessing the sometimes unsafe, crumbling lab infrastructure, which recommended centralization as the way to go. She noted that the study suggested closing the three main labs due to inadequate physical plant. She recommended creating a new state of the art facility to serve the entire state, as well as possibly in terms of accuracy, speed and efficiency. CHAIR TOOHEY recessed the meeting for five minutes. Number 205 KIM SMITH, Kachemak Bay Family Planning Clinic, testified from Homer that cervical cancer and genital warts were considered public health issues. She said 27 pap smears had been done at four clinics in July and August and the average client's income was $918.15 per month. She asserted the importance of these critical procedures to women and her desire to see them remain available. Ms. Smith proposed, in reference to HIV, that the health of an entire community often depended on the health status of its least advantaged member, indicating that health care must be obtainable. Number 227 CHAIR TOOHEY recognized DAN FIEBELKORN in Homer. DAN FIEBELKORN identified himself as Lab Director at South Peninsula Hospital, and said he had been in health care service in Alaskan labs for twenty years and he truly appreciated state labs. He stated the need to keep billing in the hospital, which would not happen in cases of inability to pay, resulting in violation of HIV test confidentiality as information was released. He indicated that borderline cases would probably go to reference labs, using staff time and funds, leading towards privatization which would have a greater negative impact rurally. Number 250 CHAIR TOOHEY asked DR. KELLEY to respond. DR. KELLEY stated that there was no plan to charge for HIV testing in the normal course of events, making fears of billing information leaking into the insurance system unfounded. She said she shared the reference lab concern, anticipating the loss of some data. She cited studies from other states where fees had been implemented showing a return to 80-90% of the pre-fee workload after a year with fees. Number 270 CHAIR TOOHEY asked if anyone in ANCHORAGE wishing to testify had a time constraint. MR. FIEBELKORN asked Dr. Kelley how cases where a patient was able to pay for an HIV test would be handled, as no specific provision exempted such persons from billing. DR. KELLEY answered that HIV testing was listed only to allow for the possibility of billing at some future point, which would be impossible were it not listed. She said future information would address the matter. Number 295 CHAIR TOOHEY called witnesses to the table, then recognized MARY JEFFERSON and DONALD NOVOTNEY at the JUNEAU TELECONFERENCE SITE. MARY JEFFERSON said she was Lab Manager at Bartlett Memorial Hospital and listed four concerns: that fees not be charged for epidemiological activity, such as stereotyping organisms for CDC; that fees not be charged for TB monitoring, which was proposed excepting that funding developments could alter this; that Bartlett would shop for the cheapest and quickest lab, reducing the state's access to information; and that billing would be hard in labs without computers. Ms. Jefferson noted that lab workers in Alaska are uncommon, and that adding billing to their appointed duties would increase stress on the profession. Number 350 DONALD NOVOTNEY said he was Infection Control Practitioner at Bartlett Memorial Hospital, and explained that his job was to protect employees. He cited Occupational Safety & Health Administration requirements for occupational exposure control with HIV and hepatitis-b, noting that although HIV tests were to remain free, there might be charges for hepatitis tests. He mentioned that state labs had a ten-day return time, and price differentials would necessitate shopping. Mr. Novotney noted that he would prefer to keep the money in Alaska if speed and cost were comparable. He said that he would like to see duplication of services eliminated. Number 389 CHAIR TOOHEY thanked Mr. Novotney for his testimony and asked TONY BELL to speak. TONY BELL said he was a Nurse Practitioner who had been at an STD Clinic for thirteen years. He listed his concerns: that the definition of public health was related to waiver of fees for certain procedures based on the availability of funds; that confidentiality be maintained; that word of fees would deter persons from testing despite public notice of the waiver system; that collection of data not be impaired; and that more paperwork would be detrimental to clinical efficacy. Number 425 CHAIR TOOHEY pointed out that by law clinics must notify the Division of Public Health of suspected TB or sexually transmitted disease infection. MR. BELL responded that identification had to be by number and not by name. DR. NAKAMURA noted that the regulations allowed for providers to exercise judgment in order to maintain good public health practices. Number 447 CHAIR TOOHEY called DR. HAROLD JOHNSON to speak. HAROLD JOHNSON said he was Family Physician and Medical Director of the Anchorage Neighborhood Health Center, and that information he had heard at the day's hearing allayed his fears, which were the viability of state labs facing competition with lower fees (his annual fees at proposed state levels would be $120,000 versus $90,000 with a private contractor), and the loss of epidemiological information as free testing ended for many persons and procedures. CHAIR TOOHEY asked DR. KELLEY to address these issues. DR. KELLEY stated they would be dealt with in the final recommendations to the Commissioner of Health & Social Services. DR. NAKAMURA added that most decisions would remain in the hands of providers and that the division did not want to have to decide. Number 525 DR. JOHNSON asked if a provider would decide finally if a person could pay. DR. KELLEY told him he was correct. Number 553 CHAIR TOOHEY called DR. GEORGE HANSEN from the Alaska Dental Society, who expressed his and the Society's opposition to any increase in fees for inspection of dental x-ray machines. He noted his lack of expertise in radiology, but also his twenty-five years using dental x-ray equipment. He said dentists agreed to testing of machines initially to comply with federal law and offer the best possible service to patients, and the fee of $20 had been thought reasonable given the nature of the machines and their use. Number 570 DR. HANSEN explained dentists' experiences with inspectors, and voiced his belief that inspections probably ought to be regularly timed and less labor-intensive. He stated that dental x-rays were being considered inaccurately with medical devices, and the proposed fee increase was unwise as it would be paid by patients. Number 639 CHAIR TOOHEY thanked DR. HANSEN for his testimony and noted that she had a letter from a DR. HIBSCHER that she would like to have included in the record. The Chair then called for KAY LAHDEMPERE. KAY LAHDEMPERE, Public Health Nurse Manager, Municipal Family Planning Clinic, said she had been with the clinic since 1966. Ms. Lahdempere said she had worked extensively with state labs, and that tests ought to continue to go to state labs. She thanked Drs. Nakamura and Kelley for their sensitivity on the issue, noting her lab was charged with serving low-income and teen-aged patients. She noted three items: use of Outside labs, consistency of epidemiological reporting, and clients' hardships. CHAIR TOOHEY asked Ms. Lahdempere to limit her testimony to the allotted time. MS. LAHDEMPERE noted problems in using Outside labs, and the chlamydia rate among persons aged fifteen years and younger was 25%, necessitating reasonable fees. TAPE 93-69, SIDE B Number 011 PATRICIA HONG, President, Alaska Nurses Association, reminded the committee that nurses nationally supported prevention and health promotion programs over treatment. She noted that health promotion and disease prevention required surveillance which could not occur if fees were prohibitive. She stated that she didn't want to see a shift to illness care only, but hoped Alaska's focus on prevention would persist. Number 022 CHAIR TOOHEY recognized REP. BRICE, and asked the FAIRBANKS TELECONFERENCE SITE to testify. REP. BRICE introduced DR. MELINDA EVANS of the Center For Health & Counseling at the University of Alaska Fairbanks. DR. EVANS described the Center's duty to provide primary care and counseling to students who did not budget, and thus could not pay for, health care. Dr. Evans said students would not be able to pay for tests, and that in spite of the testimony she had heard, she feared the fees would impair her ability to track illnesses on campus. She proposed that the fees could end up costing the state more if an outbreak resulted, and she asserted that data collection on illnesses was essential to provision of public health. She said that private physicians and clinics did not always report data to the state. DR. EVANS stated that current practice was not to bill Medicaid, that no system was in place to determine waiver eligibility, and that increased paperwork would result. She pointed out a flaw in the revenue estimates for the proposed fees - that reduced demand would result from increased prices, yielding less total revenue. She defined public health as an investment in the population, and pointed to erosion of support for this investment through reduced services. She also said she was unsure if the Center would be considered a private or public provider. Number 065 CHAIR TOOHEY asked ELMER LINDSTROM, Special Assistant to the Commissioner of Health & Social Services, to speak briefly. Number 068 MR. LINDSTROM described the department's budgeting and the effect formula funding of some programs and of mental health trust income account funding had on other agencies in the department. He said the Division of Public Health's budget relied on two strategies to make up for lost general funds: seeking federal grants, and Medicaid refinancing (also known as cost shifting). The use of the latter strategy lead to confusion over whether or not reductions had occurred. Mr. Lindstrom noted that the aforementioned consultant's report on lab consolidation was very important and needed to be considered at Dr. Nakamura's upcoming public health conference. Number 123 DR. NAKAMURA noted that the conference was legislative, not his, and that Rep. Sitton had taken the lead on getting the conference together. Number 130 REP. NORDLUND stated fees were dubious public policy, and as the fees had resulted from prior legislative action, it was the legislature's job to appropriate supplemental monies. CHAIR TOOHEY noted for the record that SEN. DONLEY arrived at the meeting. She then called for SHARLANE DONALSON at the GLENALLEN TELECONFERENCE SITE to testify. Number 145 SHARLANE DONALSON identified herself as Lab Supervisor at Crossroads Medical Center, complimented state labs, and noted that the epidemic policy needed work in order to determine when an epidemic started and whether or not surveillance testing was necessary. She questioned at what point waivers for testing would apply to all epidemic victims. She said the fee schedule was flawed in that it assumed all cultures would be positive and would require full work-ups, when in reality many were negative. Ms. Donalson said she had a computer at her facility, but she disagreed that a few simple questions would provide enough insurance information due to the complexity of third-party billing and insurers' demands for diagnostic codes. Number 207 CHAIR TOOHEY asked DON RITTER and SUZANNE OLSON to testify. SUZANNE OLSON said she was Lab Supervisor at the Health Center at UAF, and when she had heard of impending fee increases, she had not been alarmed and expected the increases to be minimal. She stated that the proposed fees were surprisingly high and that she would probably get lab service from other labs at a more reasonable cost, though this was not her desire. Ms. Olson expressed her wish that careful attention be paid to lab workers' concerns, and that the erroneous method of calculating fees be addressed. Number 234 DON RITTER said he was speaking as a private citizen, and that the state had a moral and ethical obligation to provide for public health, and fees would ultimately jeopardize the public health infrastructure. Number 252 REP. NICHOLIA mentioned significant opposition in District 36 to increased lab fees, and said there had been a hepatitis epidemic, and mentioned other dangerous diseases. Number 273 VICKI MARIE COLACICCO, Director of Public Health Nursing at Norton Sound Hospital, commented on her need to establish a billing position in order to recoup lost general fund monies from Medicaid, which would require the loss of a nursing position. She noted the difficulty of distinguishing between the inability and the unwillingness to pay. She stated that TB and hepatitis were endemic in her region and the need for surveillance made deciding whether or not to waive fees difficult. Ms. Colacicco questioned the language allowing fees to be raised or changed at the discretion of the commissioner. Number 317 DONNA HURDLE, Executive Director of Planned Parenthood, said all costs for non-profit providers were significant, meaning use of private labs would occur if necessary. She noted her need for a list stating exactly which sexually-transmitted diseases allowed for waivers. Ms. Hurdle stated that every one had a different means of determining ability to pay, and even in low-income groups there was a great variety of circumstances. Number 345 CHAIR TOOHEY stated that each provider's definition of ability to pay was the deciding one. Number 352 CHAIR TOOHEY asked if anyone on the teleconference network wanted to testify. There was no response. Number 366 CARMEN DIEZ CANSECO-MALLIJUDI said that as a health educator she viewed collection of data as essential to health promotion, disease prevention, and cost containment. She mentioned Alaska's problem with cervical cancer in Natives, and that cutting costs by raising fees was short-sighted. Number 385 DR. FRANK PAULS stated that he had expressed his views in writing to the commissioner. He then told the committee how he had come to Alaska in 1938 to establish the first territorial lab in Juneau and had retired as chief of the Section of Labs in 1979. He said that the hearing showed concern, and that the idea of charging fees could lead to the legislature's viewing state labs as a source of revenue, with fees' being raised to a point of self-sufficiency. He stated that this development would result in the loss of a public service. Number 445 CHAIR TOOHEY asked for a last time if anyone else wanted to testify. ROSE TANAKA, Manager of the Public Health Lab in Anchorage, representing herself, recognized the need to look at other funding alternatives than fees, including consolidating labs and flat fees for services. Number 468 CHAIR TOOHEY announced that public testimony was closed and indicated for the record that four minutes remained of meeting time. She thanked the department and the interested public. She welcomed written testimony and adjourned the meeting.