SENATE LABOR AND COMMERCE COMMITTEE February 15, 1996 1:34 P.M. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator John Torgerson, Vice Chairman Senator Judy Salo MEMBERS ABSENT Senator Mike Miller Senator Jim Duncan COMMITTEE CALENDAR SENATE BILL NO. 193 "An Act requiring insurance coverage for certain costs of birth; and providing for an effective date." SENATE BILL NO. 197 "An Act prohibiting increases in health insurance premiums if the insured is a victim of domestic violence." SENATE BILL NO. 254 "An Act relating to expert advisory panels in medical malpractice litigation and the definition of health care provider for medical liability." PREVIOUS SENATE COMMITTEE ACTION SB 193 - No previous action to consider. SB 197 - No previous action to consider. SB 254 - No previous action to consider. WITNESS REGISTER Brian Gilbert, Administrator P.O. Box 288 Wrangell, AK 99929 POSITION STATEMENT: Supported SB 193. Gordon Evans Health Insurance Association of America 318 4th St. Juneau, AK 99801 POSITION STATEMENT: Opposed SB 193 and SB 197. Carol Clausson, member Alaska Nurses Association Anchorage, AK POSITION STATEMENT: Supported SB 193. Pat Senner Anchorage, AK POSITION STATEMENT: Supported SB 193. Veleta Murphy Infant Learning Specialist Tanana Chiefs 122 1St Ave. Fairbanks, AK 99701 POSITION STATEMENT: Supported SB 193. Don Koch, Marketing Surveillance Division of Insurance Department of Commerce and Economic Development P.O. Box 110805 Juneau, Ak 99811-0805 POSITION STATEMENT: Supported SB 193. Senator Dave Donley State Capitol Bldg. Juneau, AK 99801-1182 POSITION STATEMENT: Sponsor of SB 197. John George American Counsel of Life Insurance National Association of Independent Insurers 3328 Fritz Cove Rd. Juneau, AK 99801 POSITION STATEMENT: Commented on SB 197. Marcia McKenzie, Program Coordinator Counsel on Domestic Violence and Sexual Assault (CDVSA) P.O. Box 111200 Juneau, AK 99811-1200 POSITION STATEMENT: Supported SB 197. Marianne Burke, Director Division of Insurance Department of Commerce and Economic Development P.O. Box 110805 Juneau, AK 99811-0805 POSITION STATEMENT: Supported SB 197. Susan Cox, Chief Assistant Attorney General Civil Division Department of Law P.O. Box 110300 Juneau, AK 99811-0300 POSITION STATEMENT: Supported SB 254. Sherman Ernouf, Legislative Aide % Senator Tim Kelly State Capitol Bldg. Juneau, AK 99801-1182 POSITION STATEMENT: Commented on SB 258. ACTION NARRATIVE TAPE 96-12, SIDE A Number 001 SL&C 2/15/96 SB 193 MANDATORY INSURANCE FOR COSTS OF BIRTH  CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 1:34 p.m. and announced SB 193 to be up for consideration. SENATOR SALO, sponsor of SB 193, said she introduced it because a Kenai constituent called her after the birth of her third child and said her insurance company would only allow her to stay in the hospital 24 hours following the birth. SENATOR SALO said she found that this is an increasing problem across the United States, although it's just emerging in Alaska. She followed the guidelines for the American Academy of Obstetrics and Gynecology and the AMA who recommend that 48 hours is a much more appropriate amount of time to be allowed. The trend down south has been to reduce hospital time because of HMO's. She wanted to alter the statutes relative to health insurance rather than health care by saying 48 hours for a normal vaginal birth or 96 hours in the case of a cesarian. She emphasized this is not mandating a longer hospital stay, but is rather saying that amount of coverage would be available should the health care provider and the patient deem it is necessary. SENATOR SALO said in Alaska, unlike in some other states, she did not want to mandate follow-up care and home visits, given the wide variety of health care within the State. One of the reasons health care providers have been interested in this legislation is because in Alaska we have many women who fly to a central area, like Bethel or Nome, to have child and they many be ready for discharge from a hospital, but they may not be ready to travel immediately. Another reason for more time being allowed is even with a normal vaginal birth, there is great variance in how much time is needed afterwards. For the newborn more time is even more important in some cases, PKU tests for example, which aren't effective unless the blood is drawn 24 hours after birth. BRIAN GILBERT, Administrator, Wrangell General Hospital, commented that we have reached a point in health care, where we're allowing insurance companies to make decisions for the physician and patient. He said they have a lot of people coming into Wrangell to have babies and the first day is usually the most expensive day. They usually keep the mother and the baby in the hospital another 24 hour period, usually just a room and board charge, and then just "eat the bill" if people can't pay. GORDON EVANS, Health Insurance Association of America, said they oppose mandatory coverage for maternity stays because they believe that patients and their physicians and not the government can best determine when a mother and her newborn are ready to leave the hospital safely. The Legislature should not be making medical decisions or embodying such decisions in law. State and federal regulations already exist to assure quality health care. State mandated benefits always drive up costs and ultimately limit access to quality care. MR. EVANS said that health plans right now do not discharge mothers and newborns until they are medically ready to leave. He suggested that this bill could be amended to provided that the doctor has the ability to discharge a patient earlier if that is proper and the patient concurs. Number 173 SENATOR SALO responded that was the content of the proposed amendment and is also the content of the bill. The insurance part of the bill simply says that the care has to be offered to the person, not that it has to be used. This bill does not require mandatory coverage and the proposed amendment clarifies that. Number 209 SENATOR SALO said part of the problem stems from the fact that hospitals have different discharge policies. Some hospitals discharge at noon, for instance, and the baby was born at 4:00 a.m. If it's a strict 24 hour rule, you get only eight hours before you have to leave the hospital. MR. EVANS responded that some people think the hospitals are driving this legislation because of the number of beds they have to fill. CAROL CLAUSSON, registered nurse and member of the Alaska Nurses Association, supported SB 193. There are problems associated with early discharge of mothers after the birth of their child. These include mothers not being able to get infants to breast feed properly and therefore shifting to formula, mothers not understanding the teaching that is given to them in the hospital because it occurs too soon after the birth of the child, and infants are developing problems like jaundice, weight loss, and infection which are not identified quickly because they have been discharged. Even nurses have difficulty in getting newborns to nurse properly. Having a baby is a major change and young families in Alaska frequently lack extended family to help with this change. They feel patients should have the option of a 48 hour hospital stay and/or home visits by a maternal child nurse or lactation nurse. PAT SENNER, mother of three children, added that when you have a two year old at home, it's very helpful to have the extra day to recuperate and have that time alone with the new infant before you have to go home and assume your duties there. Number 250 VELETA MURPHY, Infant Learning Specialist, supported SB 193 saying they have a lot of new mothers who are being sent away after 24 hours and they have not had time for bonding and to learn feeding skill. She said if they don't have time with the parent or child they can not identify skills they need that they can provide for them. She knew of babies who would have been much healthier if they had another 24 hours in the hospital so someone could notice their problem. Number 280 DON KOCH, Division of Insurance, said they support this legislation. He had two technical suggestions. On page 1, lines 12 - 13 where there is a reference to the federal statute (ARISA) which includes self insured plans, but his Division has no jurisdiction over those. He wanted it clear that this deals with insured plans. SENATOR SALO replied that she understood the Division's inability to control self-insured plans, but she has the same concern for mothers who are employed under one of those plans and she understands that a lot of people in Alaska are. She asked what legal problems we face with the inclusion. MR. KOCH explained that Chapter 42 deals with insurance contracts and since a self insurer doesn't technically have an insurance contract this will be a piece of language that sits out there intending to do a purpose which it doesn't do. If they create the perception that this is reaching self insured plans when it really doesn't, that tends to mislead people into thinking that some protection is there when it isn't. MR. KOCH's second concern was on page 2, lines 4 and 5 dealing with nursing home administrators. If the intent is to reach entitlement plans, this statute, since it deals with insurance contracts, doesn't accomplish that. If it's dealing with an insured plan, subsection 1 already takes care of that. SENATOR SALO said that her preference would be to leave it alone, because she didn't hear there was some catastrophic problem caused by it being there. She said the first amendment inserts a new subsection, "except as otherwise required to provide coverage specified under A of this section." This section does not affect a payment arrangement entered into between the hospital or physician and an insurer. There is no intent to interfere with the way hospitals and insurance companies deal with each other in terms of business. It is common practice with some insurance companies to have a flat rate they use as reimbursement for a pregnancy. That rate is subject to negotiation between the hospital and the insurer. SENATOR SALO moved to adopt amendment 1. There were no objections and it was so ordered. SENATOR SALO said amendment 2 simply makes it crystal clear the bill is not mandating an hospital stay. SENATOR SALO moved to adopt amendment 2. There were no objections and it was so ordered. Number 367 SENATOR SALO moved to pass SB 193 (am) from Committee with individual recommendations. There were no objections and it was so ordered. # SL&C 2/15/96 SB 197 INSURANCE FOR DOMESTIC VIOL. VICTIMS  SENATOR KELLY announced SB 197 to be up for consideration. SENATOR DONLEY, sponsor of SB 197, said it prohibits discrimination against victims of domestic violence in medical insurance matters. It is a national trend and ten other states have adopted similar legislation; it is also pending in Congress. The proposed CS expands the protections in the original bill to include cancellation, denial, increasing premiums, and refusal to issue a new premium. Number 402 GORDON EVANS, Health Insurance Association of America, opposed SB 197 that requires health insurers presumptively to ignore physical or mental conditions attributable to domestic violence. Underwriting should not depend on a condition's underlying cause, but rather on the physical and mental condition of the patient at the time of application regardless of the underlying cause. Coverage of injuries or conditions resulting from domestic abuse or violence should be subject to the same conditions, limitations, exclusions, deductibles, and co-payments applied to any other injury or condition. They have no objection that prohibits the use of specific exclusions or benefit caps for claims resulting from domestic violence or legislation that prohibits questions on applications that are designed specifically to elicit evidence of domestic violence or abuse. MR. EVANS reiterated that they believe that contractual limitations such as waiting periods for preexisting conditions or that which is proposed in this bill should relate to the person's physical or mental condition at the time of application regardless of the condition's underlying cause. Number 430 JOHN GEORGE, American Counsel of Life Insurance and National Association of Independent Insurers, said he wasn't concerned with the bill as amended. This could potentially carry on to life insurance, automobile insurance, home owners, etc. An insurer likes to underwrite based on the conditions at the time of application. MARSHA MCKENZIE, Program Coordinator for the Counsel on Domestic Violence and Sexual Assault, strongly supported SB 197. Although there doesn't seem to be a real problem with insurance related to domestic violence, here it is an issue in the lower 48. Passage of this bill will help to protect victims in Alaska. In 1994 an informal survey done by a subcommittee of the U.S. House Judiciary Committee showed that eight of the 16 largest insurers in the country were using domestic violence as a factor in deciding whether to issue insurance and how much to charge for it. Since insurers in the past haven't been required to tell why they are being denied, victims or former victims might not know why they are being denied coverage. Knowing insurance might be denied could stop victims from getting medical attention they need. MARIANNE BURKE, Director, Division of Insurance, testified in favor of the bill. She said there is one word in this bill that is absolutely critical and is the bill's major strength. That word is "only." The fact that a person is a victim of domestic violence should not be reason to deny a claim, deny coverage, cancel coverage, or increase the premium for the coverage. If the person has other medical problems, they would still be considered as they have been in the past. SENATOR KELLY said since the committee substitute is considerably different from the original bill, he would let it circulate and bring it up again at next Tuesday's meeting. SENATOR SALO said she assumed Senator Donley's concern mostly has to do with insurance companies canceling victims of domestic violence more as a preventative measure than the question hovering of pre-existing conditions. SENATOR DONLEY said the committee substitute avoids the pre-existing condition issue on page l, line 9 by inserting that it would be the "only" prohibition. SL&C 2/15/96 SB 254 MEDICAL MALPRACTICE: PANEL & DEFINITIONS  SENATOR KELLY announced SB 254 to be up for consideration. SUSAN COX, Department of Law, said there are two purposes to this bill which clarifies what they believe to be existing law. However, they have found sometimes that when a suit is filed against a health care provider, and the State is the defendant the question arises whether the malpractice action can or should be referred to an expert advisory panel. Present statute, AS 955.536 as currently worded does not distinguish between cases brought against governmental entities or others. In most cases the court has referred these cases to an expert advisory panel. So they believe sections two and three merely clarify existing law so the issue does not have to basically waste time being argued in court. There has been one time when the court has refused to send a malpractice case to an expert advisory panel simply on the basis that the State was named as a defendant - although the case did involve malpractice. Section 4 would revise the definition of health care provider. Initially they sought to include physician assistant in the definition. They get occasional malpractice cases brought against the Department of Corrections where care is often provided by physician assistants. There is a question of whether those malpractice actions can be referred to an expert advisory panel. The definition is now extremely broad, but for some reason physician assistants are not included. SENATOR SALO moved to pass SB 254 from Committee with individual recommendations. There were no objections and it was so ordered. SENATOR KELLY noted that there was a $0 fiscal note and it has additional referrals to the Judiciary and Finance Committees. SL&C 2/15/96 SB 258 TRUSTS & PROPERTY TRANSFERS IN TRUST  SENATOR KELLY announced SB 258 to be up for consideration. SHERMAN ERNOUF, Legislative Aide to Senator Kelly, explained that the proposed committee substitute conforms this bill to the House bill. It allows national banks to be recognized in the definition and allows the property to be managed by Alaskans only. SENATOR KELLY stated they have heard no opposition to this bill. The Alaska Banking Industry does support this bill. SENATOR TORGERSON moved to adopt the CS to SB 258. There were no objections and it was so ordered. SENATOR TORGERSON moved to pass CSSB 258 from Committee with individual recommendations. There were no objections and it was so ordered. SENATOR KELLY adjourned the meeting at 2:20 p.m.