HOUSE RULES STANDING COMMITTEE May 9, 1994 9:50 p.m. MEMBERS PRESENT Representative Carl E. Moses, Chair Representative Jerry Sanders, Vice Chair Representative Mark Hanley Representative Gail Phillips MEMBERS ABSENT Representative Pat Carney Representative Ramona Barnes Representative Fran Ulmer COMMITTEE CALENDAR SB 362: 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. HCS CSSB 362(RLS) PASSED OUT OF COMMITTEE WITH INDIVIDUAL RECOMMENDATIONS WITNESS REGISTER PAUL FUHS, Commissioner Department of Commerce & Economic Development P.O. Box 110800 Juneau, AK 99811-0800 Phone: 465-2500 POSITION STATEMENT: Explained the two changes in the proposed work draft and then advised members that the Governor would prefer not to have the changes, and would suggest passage of the CSSB 362 (L&C) CHARLIE MILLER, Lobbyist Alaska Regional Hospital P.O. Box 102286 Anchorage, Alaska 99510 Phone: 561-4773 POSITION STATEMENT: Spoke in support of the two changes made in the proposed work draft for CSSB 362 (L&C) PREVIOUS ACTION SHORT TITLE: OMNIBUS INSURANCE REFORM BILL VERSION: CSSB 362(L&C) SPONSOR(S): LABOR & COMMERCE BY REQUEST JRN-DATE JRN-PG ACTION 03/18/94 3268 (S) READ THE FIRST TIME/REFERRAL(S) 03/18/94 3269 (S) L&C, JUD 03/29/94 (S) L&C AT 01:30 PM FAHRENKAMP ROOM 203 03/29/94 (S) MINUTE(L&C) 04/05/94 3447 (S) L&C RPT CS 2DP 1NR SAME TITLE 04/05/94 3447 (S) ZERO FN TO SB & CS PUBLISHED (DCED) 04/11/94 (S) JUD AT 01:30 PM BELTZ ROOM 211 05/02/94 4211 (S) JUD RPT 1DP 2NR (L&C)CS 05/02/94 4211 (S) PREVIOUS ZERO FN (CORR) 05/05/94 4355 (S) RULES RPT 3CAL 2NR 5/5/94 05/05/94 4372 (S) READ THE SECOND TIME 05/05/94 4372 (S) L&C CS ADOPTED UNAN CONSENT 05/05/94 4372 (S) MOTION TO ADVANCE WITHDRAWN 05/05/94 4372 (S) THIRD READING 5/6 CALENDAR 05/06/94 4426 (S) READ THE THIRD TIME CSSB 362 (L&C) 05/06/94 4427 (S) PASSED Y20 N- 05/06/94 4427 (S) COURT RULE CHANGE VOTE SAME AS PASSAGE 05/06/94 4427 (S) EFFECTIVE DATE SAME AS PASSAGE 05/06/94 4450 (S) TRANSMITTED TO (H) 05/08/94 4169 (H) READ THE FIRST TIME/REFERRAL(S) 05/08/94 4170 (H) LABOR & COMMERCE 05/08/94 4209 (H) L&C WAIVED PUBLIC HRNG NOTICE, RULE 23(A) 05/09/94 (H) L&C AT 07:30 PM CAPITOL 17 05/09/94 (H) RLS AT 09:35 PM CAP 102 05/09/94 4239 (H) L&C RPT HCS(L&C) 2DP 2NR 1AM 05/09/94 4240 (H) DP: PORTER, HUDSON 05/09/94 4240 (H) NR: GREEN, WILLIAMS 05/09/94 4240 (H) AM: MULDER 05/09/94 4240 (H) -PREVIOUS SENATE ZERO FN (DCED) 4/5/94 05/09/94 4240 (H) REFERRED TO RULES 05/09/94 4246 (H) RLS WAIVED PUBLIC HEARING NOTICE, 05/09/94 4246 (H) ...RULE 23(A) 05/09/94 4249 (H) RLS RPT HCS(RLS) 1DP 3NR 05/09/94 4250 (H) DP: MOSES 05/09/94 4250 (H) NR: SANDERS, HANLEY, PHILLIPS 05/09/94 4250 (H) -PREVIOUS SENATE ZERO FN (DCED) 4/5/94 ACTION NARRATIVE TAPE 94-2 SIDE A Number 001 CHAIRMAN CARL MOSES called the meeting to order at 9:50 p.m., noted the members in attendance and informed the committee that SB 362, "Relating to insurance, and the licensing and accreditation of those involved in the insurance business," was on the calendar. REPRESENTATIVE SANDERS MOVED to adopt the work draft of HCS CSSB 362(), dated 5/7/94 by Ford, numbered 8-LS1757\J. REPRESENTATIVE HANLEY objected. He said he had voted against the amendment in the Finance Committee, and would rather have the version without the amendment. CHAIRMAN MOSES asked if there were people who wanted to testify. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, noted that "the main thrust of the bill changes the way we look at solvency of insurance companies to make sure that we don't end up with a Savings and Loan or an executive life type situation. The two provisions that are different from what came to you from Labor and Commerce is 1) any willing provider, that means any provider who is willing to provide the service at the same price an insurance company, will be required to allow their patients to go to that provider without any penalty on payment of those services. The other one is appointment of independent council. It's a codification of a court case (indiscernible) in which the policyholder is entitled a representation independent of the council, proposed by the insurer defending the case on behalf of the insured. On both of these, while we're neutral on the substance of the provisions, you have a letter here from Governor Hickel and we ask that these amendments not be included, and that you use the Labor and Commerce committee substitute." Number 082 CHAIRMAN MOSES asked if there were questions. There were none. CHARLIE MILLER, LOBBYIST, ALASKA REGIONAL HOSPITAL, advised members that he would first address the "any willing provider" portion of the legislation that "deals with a problem that we've run into being excluded without any form of bid process for these PPOs (Preferred Provider Organizations) and so we've not had an opportunity to share in some of them. Currently the Aetna PPOs that we deal with pay full price without any problem." He further stated that "the Medical Service Corporations in the area we deal with doesn't allow us to bid either, and we'd just like to make sure that we have access to the patients and the physician referrals for our facility in Anchorage. The doctors and dentists in the community also support it, I can speak to that a little bit. For them, it's more of an access issue as far as they don't want to lose patients that they have or patients that want to utilize their services because the patient is put into one of these PPO's, most people that have insurance don't chose their insurer. It's provided at the work place and they are put into one of these. They don't have a choice if they're in a PPO, they're just given that option, I mean they're in there. If they don't get the doctor they like, that's, they either have to pay a penalty, or its just not available to go there. So the doctors would rather see this provision in." Number 086 MR. MILLER then noted that "our understanding is that medical insurers, other than medical service corporations now already have language similar to this in law, in AS 21. So they're covered already. This would just bring the rest of the medical insurance community under the same provisions. We feel that if that if there were competitive bidding allowed, that that would foster much more competition and bring the market forces to bear a lot more than the current situation where discounts under these programs but without the competitive bid you don't really know how big a discount is available in the community. So we don't think this will hurt the cost and we think it will help access. We'd hope that you would include this measure, include this provision in the measure. If there are any questions, I'd be happy to answer them." Number 136 CHAIRMAN MOSES asked if there were questions. There were none. REPRESENTATIVE PHILLIPS reminded members that there was a motion on the floor to adopt the HCS CSSB 362(RLS), and that Representative Hanley had objected. CHAIRMAN MOSES asked that a roll call vote be taken. REPRESENTATIVES PHILLIPS, SANDERS AND MOSES voted `YEA'. REPRESENTATIVE HANLEY voted `NAY.' So the HCS CSSB 362(RLS) was adopted. REPRESENTATIVE HANLEY MOVED to pass HCS CSSB 362(RLS) FROM COMMITTEE with individual recommendations. IT WAS SO ORDERED. ADJOURNMENT CHAIRMAN MOSES adjourned the meeting at 10:00 p.m.