Approved: March 24, 2006
The meeting was called to order by Chairman Jim Morrison at 1:30 P.M. on March 21, 2006, in Room 526-S of the Capitol.
All members were present.
Committee staff present:
Melissa Calderwood, Kansas
Legislative Research Department
Mary Galligan, Kansas Legislative Research Department
Renae Jefferies, Office of the Revisor of Statutes
Gary Deeter, Committee Secretary
Conferees appearing before the committee:
Representative Kenny Wilk
Scott Day, Day Insurance Solutions, Ozawkie, Kansas
Beverly Gossage, HSA Specialist, Co-Director, Health Division of Olympic
Financial Marketing
Chip Wheelen, Executive Director, Kansas Association of Osteopathic Medicine
Chad Austin, Vice President, Government Relations, Kansas Hospital Association
Others attending:
See attached list (not available on electronic copy).
The minutes for 3-15 and 3-20, 2006, were approved.
The Chair invited members to consider
SB 528.
Following a member’s comments about the bill creating a duplication of
services and employing discriminatory language, a motion was made to table
the bill. The motion passed 9-7.
The Chair opened the hearing on
HB 3011.
Scott Day, Day Insurance Solutions, Ozawkie, Kansas, testified as a
proponent for the bill.
(Attachment 1) He said spiraling health costs need to be addressed,
commenting that the bill goes beyond HSAs (Health Savings Accounts) to introduce
transparency to medical pricing and to bring competition to the medical field.
He gave examples of various prices for the same medical procedure, the
difficulty of obtaining consistent charges for a given procedure, and the fact
that different insurance companies negotiate different rates for a procedure.
He noted a new trend introduced by HSAs, the cash-paying patient, who often can
negotiate a lower cost for a service. He commented on the closed system of some
medical practices, which control ancillary services and therefore pricing for
laboratory work and other evaluation procedures. He noted that some insurance
companies are using Medicare rates as the basis for their payments, forcing the
consumer to remain within a preferred provider network.
Beverly Gossage, HSA Specialist and Co-Director, Health Division of Olympic
Financial Marketing, spoke in support of the bill. (Attachment
2) She said the bill will unleash consumer/market-driven pricing and
create competition; she commented that presently costs are not clearly
designated, citing a prescription drug which varied in price from $18 to over
$100 in the Kansas City area. She mentioned a California law similar to the
bill, noting that it erred in giving retail prices, not net prices, further
commenting that a common medical coding system would help consumers make valid
comparisons in pricing. She stated that HSAs had helped lower premiums up to
40% for health insurance and had enabled consumers to more accurately evaluate
health-care costs.
The following provided written testimony in support of the bill: Ira Stamm,
Clinical Psychologist, American Board of Professional Psychology,
(Attachment 3) and Wayne Nelson, National President, Communicating for
Agriculture and the Self-Employed.
(Attachment 4)
Chip Wheelen, Executive Director, Kansas Association of Osteopathic Medicine,
spoke in opposition to the bill.
(Attachment 5) He stated that the bill will not serve the consumer well
because most family physicians offer a diverse and complex range of services,
the prices of which vary widely depending upon the needs of the patient. He
said collecting pricing information and providing a website for the information
can be done without statutory imposition.
Representative Kenny Wilk testified as a proponent. He said the increased use
of HSA accounts has accelerated the need for information about medical pricing
practices, and he called the bill an important step in helping consumers make
knowledgeable decisions in relation to medical services. Acknowledging the
complexity of medical coding, he encouraged interested parties to collaborate in
creating a pricing index. Responding to a question, Representative Wilk said
that providing information about patient outcomes was not a part of the bill,
but perhaps should be. To another question, he noted that the newly created
Kansas Health Policy Authority had expressed interest in the concepts of the
bill and the topic might be considered by an interim committee.
Chad Austin, Vice President, Government Relations, Kansas Hospital Association,
testified as an opponent.
(Attachment 6) He said that, although the KHA is opposed to the bill, it
recognizes the need for consumers to have pricing transparency. He noted that
medical coding is too diverse and complex to be listed on a website, but that
the Center for Medicare and Medicaid Services (CMS) provides helpful
information. Further, he said KHA is working with a task force which is
considering hospital pricing policies, noting that data transparency is also of
interest to the Kansas Health Policy Authority.
Cynthia Smith, Advocacy Counsel, Sisters of Charity of Leavenworth Health
System, provided written testimony as an opponent to the bill.
(Attachment 7)
Conferees responded to members’ questions. Mr. Day replied that he wanted to
see less dependence upon health insurance networks and more dissemination of
information about medical services pricing. He acknowledged that health
insurance companies would oppose this type of legislation, since it would limit
a company’s ability to negotiate its own rates. He agreed that the bill does
not address quality assessment of medical services, only pricing. Ms. Gossage
said legislation in Wisconsin mandated creation of a website to provide pricing
information regarding medical procedures.
A fiscal note was provided for members. (Attachment
8)
The Chair closed the hearing on HB 3011.
Representative Hill referenced the sub-committee report on
HB 2820 (now SB 217).
(Attachment 9) He said the initiative for tracking prescription drugs
started with HB 2397, which was adapted to create HB 2820,
which had a hearing on March 1. After meeting with all the stakeholders,
Representative Hill said the agreements were rolled into
SB 217. He stated that provisions of the bill had been divided so that
the complexities of the distribution documentation mechanism (“pedigree”) could
be studied further. Thus the bill requires the Kansas Board of Pharmacy to
develop licensure requirements for drug wholesalers, to study and recommend to
the legislature an effective pedigree system, and to address the use of
technology for effective tracking of drugs through the delivery system.
A motion was made, seconded and passed to adopt the sub-committee report.
A motion was made and seconded to recommend SB 217 as amended as
favorable for passage.
Members discussed the changes in the bill, noting that in spite of the
complexities of the subject, the bill itself was straightforward. The motion
passed.
Representative Mast reported on the work of the sub-committee on HB 2852
and HB 2853. She said the sub-committee deleted the words
expungement and juvenile records from the bill and recommended using
rules and regulations to work out other details of the bill. However, she said
the sub-committee agreed that introducing the bill at the next legislative
session was the best plan.
A motion was made and seconded to remove SB 528 from the table and
reconsider it. The motion passed 10-8.
A motion was made and seconded to recommend SB 528 as favorable for
passage.
A motion was made and seconded to amend the bill to stipulate that all
information being collected remain absolutely confidential and not subject to
subpoena or discovery. Discussion centered on the amendment’s accord with
HIPAA (Health Insurance Portability and Accountability Act) and the importance
of gathering data while protecting the identify of individuals. The motion
failed 10-11.
A motion to amend was made and seconded to strike the
lines referring to disability status (page one, lines 36-39). The amendment
passed, 11-7.
A motion was made and seconded to pass the bill favorably as amended.
During further discussion, other references to disability were identified. A
motion to amend was made and seconded to strike the language on page 3,
sub-section 3 beginning on line 19 through the remainder of the sub-section.
Discussion centered on why or how a baby’s abnormalities could be identified at
birth. The motion failed, 9-11.
A motion was made and seconded to strike references to the disability of the
mother (page 3, line 19), deleting the words “and any disability of the mother”
and deleting the disability definition in lines 22-24. The motion to amend
passed, 11-7.
The motion to recommend the bill for passage as amended passed 12-7.
Representatives Flaharty, Garcia and Storm were recorded as voting no.
The meeting was adjourned at 3:28 p.m. No further meeting
was scheduled.