HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 29, 1994 3:00 p.m. MEMBERS PRESENT Rep. Bill Hudson, Chairman Rep. Joe Green, Vice Chair Rep. Brian Porter Rep. Bill Williams Rep. Eldon Mulder MEMBERS ABSENT Rep. Joe Sitton Rep. Jerry Mackie COMMITTEE CALENDAR *HB 538: "An Act relating to uniform claims forms, uniform standards, and uniform procedures for processing data relating to billing and payment of health care services; and providing for an effective date." MOVED FROM COMMITTEE *HB 539: "An Act extending the Alaska Public Utilities Commission; and relating to regulation of public utilities and to regulatory cost charges." HEARD AND HELD IN COMMITTEE *HB 534: "An Act relating to insurance, to the licensing, accreditation, examination, regulation, and solvency of persons engaged in the insurance business, including insurers, nonadmitted insurers, purchasing groups, risk retention groups, and United States branches of alien insurers; relating to the management of and the filing of reports by persons licensed or otherwise doing business under the insurance code; amending Alaska Rule of Civil Procedure 45; and providing for an effective date." HEARD AND HELD IN COMMITTEE (* First public hearing.) WITNESS REGISTER REP. CYNTHIA TOOHEY Alaska State Legislature State Capitol Juneau, Alaska 99801-1182 465-4919 Position Statement: Presented HB 538 DAVE WALSH, Director Division of Insurance Department of Commerce and Economic Development P.O. Box 110805 Juneau, Alaska 99811-0805 465-2515 Position Statement: Supported HB 538 and HB 534 DON SCHROER Executive Director Alaska Public Utilities Commission 1016 West 6th Ave., Suite 400 Anchorage, Alaska 99501-1963 276-6222 Position Statement: Supported HB 539 (Spoke via teleconference) DAVE HUTCHENS Executive Director Alaska Rural Electric Cooperative Association 703 W. Tudor Rd., #200 Anchorage, Alaska 99503 561-6123 Position Statement: Supported HB 539 REED STOOPS Lobbyist - GCI 240 Main Street, Suite 600 Juneau, Alaska 99801 463-3223 Position Statement: Supported HB 539 GARY HAYNES Vice President of Operations Prime Cable 5151 Fairbanks St. Anchorage, Alaska 99503 786-9326 Position Statement: Supported HB 539 (Spoke via teleconference) JAMES ROWE Alaska Telephone Association 4341 B St., No. 304 Anchorage, Alaska 99501 276-6272 Position Statement: Supported Mr. Hutchens' amendment (Spoke via teleconference) BOB LOHR Executive Director Alaska Public Utilities Commission Department of Commerce and Economic Development 1016 W. 6th Ave., Ste. 400 Anchorage, Alaska 99501-1963 276-6222 Position Statement: Answered questions on HB 539 (Spoke via teleconference) RANDY WELKER Legislative Auditor Legislative Audit Division P.O. Box 113300 Juneau, Alaska 99811-3300 465-3830 Position Statement: Answered questions on HB 539 PREVIOUS ACTION BILL: HB 538 SHORT TITLE: UNIFORM HEALTH CARE CLAIMS PROCEDURES SPONSOR(S): HEALTH, EDUCATION AND SOCIAL SERVICES JRN-DATE JRN-PG ACTION 03/23/94 2935 (H) READ THE FIRST TIME/REFERRAL(S) 03/23/94 2935 (H) L&C, FINANCE 03/29/94 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 539 SHORT TITLE: APUC EXTENSION AND REGULATORY COST CHARGE SPONSOR(S): LABOR & COMMERCE JRN-DATE JRN-PG ACTION 03/23/94 2935 (H) READ THE FIRST TIME/REFERRAL(S) 03/23/94 2935 (H) L&C, FINANCE 03/29/94 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 534 SHORT TITLE: OMNIBUS INSURANCE REFORM SPONSOR(S): LABOR & COMMERCE JRN-DATE JRN-PG ACTION 03/18/94 2868 (H) READ THE FIRST TIME/REFERRAL(S) 03/18/94 2868 (H) L&C, JUDICIARY, FINANCE 03/29/94 (H) L&C AT 03:00 PM CAPITOL 17 ACTION NARRATIVE TAPE 94-30, SIDE A Number 001 CHAIRMAN HUDSON convened the meeting at 3:10 p.m. HB 538 - UNIFORM HEALTH CARE CLAIMS PROCEDURES Number 010 REP. CYNTHIA TOOHEY presented HB 538. She read the following sponsor statement: This bill would give the Division of Insurance the ability to adopt, by regulation, uniform insurance claims forms. This piece of legislation was derived from HB 414, the governor's comprehensive health care bill. While there is definitely the need for overall health care reform, there is the possibility that these comprehensive changes will not pass this year. I feel that it is important to have some mechanism in place for the development of the uniform claims form, which will at least get us started in the right direction. The Division of Insurance has submitted a zero fiscal note for HB 538. I urge your favorable consideration of this important piece of legislation. REP. TOOHEY offered a short amendment to the HB 538 on page 2, Section 2, lines 6 and 7: delete all material and insert *Sec. 2. By July 1, 1995, the director of the Division of Insurance shall adopt regulations necessary to implement the uniform claim form described by Sec. 1 of this act. Number 056 REP. MULDER asked if the HESS Committee had any questions in relation to disclosure of costs or fees by medical providers. Number 061 REP. TOOHEY stated that it was a concern of the committee. Number 067 REP. MULDER asked if Rep. Toohey thought it had support among the HESS Committee members. Number 069 REP. TOOHEY replied yes. Number 074 REP. MULDER asked if she thought it worthwhile to add it to the bill or would it detract. Number 079 REP. TOOHEY stated it would detract at this time. Number 087 DAVE WALSH, Director, Division of Insurance, Department of Commerce and Economic Development, agreed with Rep. Toohey that adding a provision requiring disclosure of costs by medical providers would be risky for the bill at this point. Number 104 REP. PORTER asked for the executive summary of what this form is and who uses it. Number 108 MR. WALSH replied that the forms people send in to their insurance companies after going to a doctor differ from company to company. MR. WALSH explained that this increases administrative work for the companies, the consumer and in terms of any data collection. One claim form would ease this burden. Number 131 CHAIRMAN HUDSON asked if there were any other states attempting similar activities. Number 135 MR. WALSH replied that there were a number of states as well as the National Association of Insurance Commissioners who are working towards the single claim form. Number 140 CHAIRMAN HUDSON asked how this bill would be regulated and what would be the savings to the public. Number 146 MR. WALSH asserted that they wouldn't even have to mandate that everyone use the same form since doing so would be beneficial to everyone. MR. WALSH answered that it would be very speculative and he would not want to venture a guess except to say it would be significant. Number 161 REP. TOOHEY added that there would be a significant savings in data collection. Number 165 REP. PORTER moved Amendment 1. No objections were heard; it was so ordered. Number 185 REP. MULDER moved CSHB 538(L&C) with individual recommendations and zero fiscal note. No objections were heard; it was so ordered. Number 205 (Note: The committee stood at ease from Number 205 to Number 242 while the chairman reviewed some notes.) HB 539 - APUC EXTENSION AND REGULATORY COST CHARGE Number 242 CHAIRMAN HUDSON brought up HB 539 and stated that the CS corrects some errors in the original draft. Number 279 DON SCHROER, Chairman, Alaska Public Utilities Commission, Department of Commerce and Economic Development, testified via teleconference in support of HB 539 with the two small amendments noted. Number 300 REP. GREEN moved adoption of CSHB 539(L&C) to bring it before the committee. No objections were heard; it was so ordered. REP. MULDER asked why an increased assessment was necessary as provided for in Section 1. Number 308 MR. SCHROER responded that this section gives the commission some flexibility when setting their budget. He added that the assessment rate is still subject to legislative approval. Number 321 REP. MULDER questioned how the rate of assessment would be still subject to legislative approval. He understood APUC's budget to be cost plus; they determine what their costs to be and then charge a rate appropriately. Number 330 MR. SCHROER explained that his budget still goes through the administration and then the legislature. Number 336 REP. PORTER asked for an explanation for paragraph 3. Number 340 MR. SCHROER responded that it was requested by the Alaska Rural Electric Power Cooperative. He added that the effect of the paragraph will be to lower the amount a user pays on their electrical bill in order to meet the budget and will raise the amount to all the other utilities and oil companies. Number 349 CHAIRMAN HUDSON asked Mr. Schroer to run the committee through the bill. Number 352 MR. SCHROER explained each section of the bill. Number 426 DAVE HUTCHENS, Executive Director, Alaska Rural Electric Cooperative Association (ARECA), testified in support of HB 539. He stated three points: 1) Supports extension of APUC. 2) Believes that if the APUC is funded through a regulatory cost charge than it ought to be fair. ARECA thinks the formula needs to be overhauled. 3) Amendment to remove the liberally construed language from the APUC statute and replace it with directive that the powers of the commission would be those specially conferred by statute or necessarily implied by those specific grants of authority. Number 552 CHAIRMAN HUDSON asked Mr. Hutchens where this would fit into the bill. MR. HUTCHENS replied that it would need to be a new section. CHAIRMAN HUDSON read the amendment to Mr. Schroer. Number 575 MR. SCHROER stated the APUC (Alaska Public Utilities Commission) was totally opposed to the deletion liberally construed language from the statute. Mr. Schroer read a prepared statement for the record. (available in the committee files.) Number 617 REED STOOPS, Lobbyist, GCI, testified in support of the amendment and in opposition to the amendment deleting the language regarding liberally construed. MR. STOOPS stated that the APUC cannot foresee everything given the changing nature of telecommunications. Number 630 GARY HAYNES, Vice President of Operations, Prime Cable, testified via teleconference in support of amendment by Mr. Hutchens. TAPE 94-30, SIDE B (Number 001 - Number 031 dead space) Number 031 REP. MULDER moved Amendment 2, page 2, line 5, following "commission" insert ";(4) a cable television utility shall include in gross revenue only revenue attributable to services that the commission has authority to regulate under this chapter". No objections were heard; it was so ordered. Number 045 JAMES ROWE, Executive Director, Alaska Telephone Association (ATA), testified via teleconference in support of Mr. Hutchens' amendment regarding "liberally construed". He complimented the members of the current commission but commented that it was uncertain what kind of talent the future commissions would have. Number 069 REP. PORTER asked Mr. Lohr where in the bill is the provision to change the qualifications of one of the commission members. Number 080 BOB LOHR, Executive Director, Alaska Public Utilities Commission (APUC), Department of Commerce and Economic Development, responded via teleconference that it was in Section 14 of the original bill. MR. LOHR explained that the change would allow for substitution of five years of experience for a degree. Number 092 REP. PORTER stated that he had received information recently regarding a recent appointee that did not meet the qualifications of the statute. He asked if this change was tailored for an individual. Number 102 MR. LOHR explained that the language was recommended by the legislative auditor and will not take effect until the expiration in 1999. Number 110 CHAIRMAN HUDSON announced that the bill will be held over for further information from the APUC in writing concerning Amendment 3 regarding "liberally construed". REP. PORTER added that he would like to hear from Legislative Audit regarding the numbers ARECA has submitted and to whom the costs are shifted to. Number 133 RANDY WELKER, Legislative Auditor, Legislative Audit Division, Legislative Affairs Agency, stated he had not looked at the numbers referenced above, but at a glance they looked to be in order. Number 151 REP. PORTER asked Mr. Welker if the formula being proposed in this bill would correct the problems the audit addresses. MR. WELKER felt that the bill would correct the problem, but added that it may not be to the exactness the Division of Legislative Audit was hoping to see. Number 170 CHAIRMAN HUDSON asked Mr. Welker if most of the points in the audit had been covered during the current hearing. Number 176 MR. WELKER responded that yes, most points had been covered. The bill does address the inequity in the current formula although it's a different solution than the division had recommended. HB 534 - OMNIBUS INSURANCE REFORM Number 210 DAVE WALSH, Director, Division of Insurance, Department of Commerce and Economic Development, presented HB 534. He stated that the bill carried a zero fiscal note. Mr. Walsh noted that there didn't seem to be any opposition to the bill. MR. WALSH noted that the bill contains a number of items that are newly developed national models and smaller items that have come to the Division of Insurance's attention. MR. WALSH stated that there was nothing in the bill that to his knowledge was controversial. MR. WALSH told the committee that the Division of Insurance had six pages of amendments to bring before the committee. About 5-1/2 of the pages are to correct drafting errors, with the balance being substantive amendments. Mr. Walsh took the committee through the amendments. Number 340 CHAIRMAN HUDSON stated that the six pages of amendments would be considered Amendment 1. REP. PORTER moved Amendment 1 (all six pages). REP. GREEN raised the concern that this piece of legislation was very long and complex and he was concerned that there wasn't enough time to decipher it all. CHAIRMAN HUDSON noted that there was no one else to testify and asked for the wishes of the committee. Number 365 CHAIRMAN HUDSON stated that in deference to Vice Chairman Green he would hold the bill, but asked that the amendment be adopted so that a committee substitute could be printed, and then if there were any questions, the committee could more easily address them. MR. WALSH agreed and noted that the division was working on it side by side for the committee's information. Number 386 CHAIRMAN HUDSON brought up Amendment 1 and asked the committee for their wishes. The amendment passed with no objections. CHAIRMAN HUDSON adjourned the meeting at 4:22 p.m.