Legislature(2009 - 2010)BELTZ 105 (TSBldg)

04/08/2010 01:30 PM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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Moved CSHB 314(FIN) Out of Committee
Moved HB 245 Out of Committee
Moved CSHB 110(HSS) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HB 314-WORKERS' COMPENSATION                                                                              
2:19:22 PM                                                                                                                    
CHAIR PASKVAN called  the meeting back to order  and announced HB
314  to be  up for  consideration [CSHB  314(FIN) was  before the                                                               
SENATOR BUNDE joined the committee.                                                                                             
2:19:59 PM                                                                                                                    
REPRESENTATIVE  KURT OLSON,  sponsor of  HB 314,  said this  bill                                                               
represents  the  recommendations  of  the  Workers'  Compensation                                                               
Legislative Task Force and the  Medical Service Review Committee.                                                               
Getting to this  point has been a four-year  process and involved                                                               
a significant amount of support  from the Department of Labor and                                                               
Workforce Development (DOLWD).                                                                                                  
2:21:49 PM                                                                                                                    
CONRAD JACKSON, staff  to Representative Olson, said  he hoped to                                                               
relay  to  them the  details  and  importance  of this  bill.  He                                                               
explained that  last year  the cap on  medical services  fees was                                                               
extended, but  it expires at the  end of this year.  He said this                                                               
bill  updates the  fee schedule  in a  way that  stakeholders are                                                               
happy with.{                                                                                                                    
2:23:25 PM                                                                                                                    
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce,  Community and  Economic Development  (DCCED), reviewed                                                               
that  the  fee  schedule  was   inadvertently  left  out  of  the                                                               
revisions that  were made  in 2005  to the  Workers' Compensation                                                               
Act. But the expectation was that  by the end of 2007 there would                                                               
be a new  fee schedule. That did  not occur and as  a result, the                                                               
fees were frozen  until August 2007. Subsequently  they have done                                                               
two "CPI-type" increases,  but the fee schedule  has remained the                                                               
same  and it  expires on  December  31, 2010,  which means  there                                                               
would be no caps on fees at all for providers.                                                                                  
She included  charts that were  self explanatory, but  she wanted                                                               
to  show  that  Alaska  already has  the  highest  percentage  of                                                               
medical  costs.  They  showed  that  the  cost  of  the  Workers'                                                               
Compensation system  in most states  is 58 percent and  in Alaska                                                               
it is  72 percent. In other  words 72 cents of  every dollar that                                                               
goes for system costs is in medical care.                                                                                       
2:25:10 PM                                                                                                                    
SENATOR THOMAS joined the committee.                                                                                            
She said  her concern with  that is as  the cost of  medical care                                                               
goes up the  subsequent cost of claims go up  and that drives the                                                               
compensation  premiums. Chart  3  showed the  average  cost of  a                                                               
claim country wide versus Alaska.  Average country wide cost of a                                                               
claim is $26,000  and in Alaska the average cost  is $40,000. The                                                               
last chart  showed that  Alaska ranks number  one on  the premium                                                               
rate ranking chart - not a place she wants to be.                                                                               
The reason  she brought  these charts to  their attention  was to                                                               
stress  the  importance   of  having  a  fee   schedule  that  is                                                               
sustainable.  This bill  will replace  the  current fee  schedule                                                               
with  an up-to-date  methodology. To  date 2,000  procedure codes                                                               
are  missing because  the schedule  has not  been updated.  Those                                                               
missing codes are paid at 100  percent. So, those will be subject                                                               
to billable charges in the 90th  percentile. She said this is not                                                               
a  fix or  going to  lower  premiums, but  it gives  the state  a                                                               
complete medical  fee schedule with  all the terminology  and the                                                               
procedure codes. The schedule will  be developed by a vendor, and                                                               
Engenics as that is the only one she is aware of.                                                                               
MS. HALL  said the other  section of  the bill updates  the fraud                                                               
prosecution  language. Workers'  Compensation fraud  adds to  the                                                               
cost of  the system. The investigative  and prosecution authority                                                               
was  added  to  the  workers'  comp  code  in  2005,  but  recent                                                               
experience  has  shown  that  the  language  is  insufficient  to                                                               
actually prosecute. So this bill  also contains language to allow                                                               
prosecution of workers' comp fraud where it exists.                                                                             
Section  1 of  HB 314  is the  actual fee  schedule language.  It                                                               
provides  a base  fee  schedule  that is  still  based on  usual,                                                               
customary  and  reasonable charges.  It  requires  that that  fee                                                               
schedule  be   based  on  statistically  credible   profile  bill                                                               
charges. These charges are actually  based on Alaska charges. The                                                               
only  vendor  they are  aware  of  is  called Engenics  and  they                                                               
currently provide fee schedules for  many of the health insurers.                                                               
They use  Alaska data  and base it  on geographical  areas; today                                                               
there are  three different geographical  areas that  reflect cost                                                               
differences. The fee schedule is  based at the 90th percentile of                                                               
those charges.                                                                                                                  
2:28:35 PM                                                                                                                    
She said the bill also requires  for the first time inclusions of                                                               
procedure   codes  for   medical  supplies   including  emergency                                                               
transportation, an area where a  real cost increase is being seen                                                               
in both health care and workers' compensation.                                                                                  
MS.  HALL  stated  that  Section  2 clarifies  that  a  crime  of                                                               
knowingly making  false benefit  statements, assisting  in making                                                               
false submissions,  misclassifying employees is  prosecuted under                                                               
AS 11 (criminal code). The prior  language had a mixture of civil                                                               
and  criminal liability  in  the same  paragraph  which was  what                                                               
caused one of the problems  with prosecution. The civil liability                                                               
remains and  was clarified in  the Judiciary CS. It  provides the                                                               
civil  action;  there  can  be   an  award  of  three  times  the                                                               
compensatory damages  and reasonable  attorney fees.  One section                                                               
is criminal and one section is civil she summarized.                                                                            
SENATOR BUNDE asked  if the workers' comp premiums  in Alaska are                                                               
approximately double what they are in the Lower 48.                                                                             
2:31:19 PM                                                                                                                    
MS. HALL replied that she thought  he was referring to a Division                                                               
of  Insurance  study  comparing  costs  for  specific  procedures                                                               
between  Washington  and  Alaska,  and  they  found  some  vastly                                                               
varying  charges.  Those  same  types  of  things  are  found  in                                                               
workers'  compensation, but  the  premium  chart indicates  other                                                               
pieces to  the system cost.  So Alaska's premiums are  not double                                                               
exactly, but  the index rate indicates  it is four times  as much                                                               
as North Dakota, for instance.                                                                                                  
2:32:13 PM                                                                                                                    
SENATOR BUNDE asked  if travel cost is a major  factor in a state                                                               
as large as Alaska.                                                                                                             
MS.  HALL   answered  that  the  transportation   costs  she  was                                                               
referring to can be just within  Alaska or out of state depending                                                               
on the  nature of an  injury. They  are seeing increases  even in                                                               
land transportation. But in  general, emergency transportation is                                                               
SENATOR  BUNDE   suggested  that  perhaps  because   of  Alaska's                                                               
geography, travel is a factor.                                                                                                  
MS. HALL responded that she really didn't know that.                                                                            
SENATOR MEYER asked if this statute was last changed in 2005.                                                                   
MS. HALL answered yes.                                                                                                          
SENATOR MEYER asked if they  did that because workers' comp costs                                                               
were  high and  businesses  were complaining.  He  also asked  if                                                               
anything had been done to reduce workers' comp costs.                                                                           
MS. HALL  replied back in 2005  some changes were made  that were                                                               
intended to have  some effect on system cost over  time. That was                                                               
when  the Appeals  Commission was  created  in lieu  of going  to                                                               
Superior  Court as  the beginning  step of  appealing a  Workers'                                                               
Compensation Board decision. The impetus  for much of that is the                                                               
cost of  the system. She  approved significant  premium increases                                                               
based on what she  saw in loss ratios. At the  time that work was                                                               
started she saw a loss ratio  in excess of 150 percent, at times.                                                               
She approved fairly significant  premium increases to accommodate                                                               
that. She explained that they  have seen a tremendous decrease in                                                               
claims and a  much greater emphasis on safety in  the work place,                                                               
which is  what they wanted to  see. This has helped  lower claims                                                               
cost, and  rates have  decreased over the  last three  years. She                                                               
couldn't anticipate that  would continue, but it  has resulted in                                                               
a safer  environment which has  allowed the system to  absorb the                                                               
increases in the cost per claim  by the fact that there are fewer                                                               
claims. At some point that will balance out.                                                                                    
2:36:46 PM                                                                                                                    
SENATOR MEYER asked if she supported this bill.                                                                                 
MS. HALL answered yes.                                                                                                          
SENATOR THOMAS  commented that  a lot  of work  has been  done on                                                               
safety programs and that Alyeska  had zero accidents for the last                                                               
million  man  hours.  He  asked  if rates  had  been  reduced  or                                                               
flattened out.                                                                                                                  
MS. HALL  answered that rates  have decreased. They went  from an                                                               
overall 22  percent increase and  double-digit increases  for two                                                               
years after  that, but for  the last  three years the  rates have                                                               
decreased.  Today   the  comp  rates  on   average  are  probably                                                               
equivalent to where they were in  the early 1990s. They are still                                                               
high as  can be seen  from her  information. Alaska also  has the                                                               
highest health  insurance premiums  in the  country. The  cost of                                                               
health care drives both.                                                                                                        
SENATOR  THOMAS said  part of  his question  was the  correlation                                                               
between various things,  and he asked if she had  a chart showing                                                               
the  cost of  health  care  versus the  number  of accidents  per                                                               
classification of worker.                                                                                                       
MS.  HALL  answered  that her  statistical  agent,  the  National                                                               
Council  on Compensation,  keeps  an incredible  amount of  data.                                                               
They make  the original  rate filing  and it  takes a  variety of                                                               
things  into consideration  and is  based on  actuarial analysis.                                                               
She offered to  provide that kind of detail  that correlates with                                                               
age of work  force, average salaries, and how  that inter relates                                                               
with  workers  comp claims.  It's  all  reviewed very  carefully,                                                               
because it  impacts every employer in  the state. It is  the only                                                               
insurance rate for which they have public rate hearings.                                                                        
2:43:16 PM                                                                                                                    
FRED  BROWN,  Executive  Director, Health  Care  Cost  Management                                                               
Corporation  of  Alaska, Fairbanks,  said  he  was not  concerned                                                               
about the  medical fee  schedule language,  but he  was concerned                                                               
with  the   proposed  fraud  language  because   it  expands  the                                                               
language.  He  thought  the consequence  would  be  further  cost                                                               
shifting.  He thought  that costs  could be  better contained  by                                                               
reducing  the  complexity of  the  system;  his organization  had                                                               
specific ideas  on this  topic and he  looked forward  to working                                                               
with Ms. Hall and the legislature on specific remedies.                                                                         
2:44:39 PM                                                                                                                    
MR.  BROWN  said  before  becoming   the  executive  director  in                                                               
February 2009  he was a  hearing officer for the  Alaska Workers'                                                               
Compensation Board  since 1984.  He said that  Mano Fry,  a long-                                                               
time president  of the Alaska  AFL-CIO, is the co-founder  of his                                                               
organization  and  helped  them  develop  their  current  mission                                                               
statement, which  is to  ensure that  workers and  their families                                                               
have access to  value and quality based health  care benefits and                                                               
service. His  organization covers about  26 member funds  most of                                                               
which  are in  Alaska, some  are in  the Pacific  Northwest. They                                                               
represent about 10  percent of the population in  Alaska. Most of                                                               
their members  are union related  health care buyers and  pay the                                                               
highest rates in the nation.  Typically their trust funds are the                                                               
first to  pay medical bills in  the case of an  on-the-job injury                                                               
and, accordingly, they  hold a subrogation interest  hoping to be                                                               
reimbursed later by the  injured employee's workers' compensation                                                               
insurance carrier.                                                                                                              
He said  each time a  change is implemented in  Alaska's workers'                                                               
compensation  law,  the  system becomes  more  complex,  expenses                                                               
increase  and  the  process  of  adjudication  is  slowed.  These                                                               
changes add to the delay  before their trust funds are reimbursed                                                               
their  subrogation claims.  Also, workers'  compensation insurers                                                               
gain  additional  leverage  in   negotiating  a  settlement  with                                                               
injured workers and then the  percentage of reimbursement paid to                                                               
their  trust fund  is reduced.  This  is why  he is  particularly                                                               
concerned  about   the  provision  in  HB   314  which  threatens                                                               
additional  criminal  penalties  on   injured  workers  who  file                                                               
claims. He  said he personally  believes the proposed  changes in                                                               
HB 314  make the system  more complex. Instead they  should focus                                                               
on making  the system less  complex and remove all  medical codes                                                               
to the fee schedule.                                                                                                            
2:47:08 PM                                                                                                                    
CHAIR  PASKVAN  said AS  11.46.120-150  are  being replaced  with                                                               
simply AS  11 and  asked what his  concern was  specifically with                                                               
that change.                                                                                                                    
MR.  BROWN  replied  that  previously the  focus  was  solely  on                                                               
matters  having  to  do  with  theft by  deception.  Now  the  CS                                                               
incorporates all  of Title 11, which  is all of criminal  law. If                                                               
you focus on Chapter 46 of Title  11 there are 50 ways you can be                                                               
prosecuted. Of that  list of 50, only one is  theft by deception.                                                               
His concern  is that by  opening it up to  all of Title  11 there                                                               
are any number of ways by  which one can "hammer" upon on injured                                                               
worker  for not  filing a  claim  form correctly  and reducing  a                                                               
settlement which would otherwise be  owed not only to the injured                                                               
worker but to their trust funds through the subrogation process.                                                                
2:48:39 PM                                                                                                                    
SENATOR BUNDE asked  if it is necessary to  separate the criminal                                                               
from the civil. Is there a lot of fraud?                                                                                        
MS. HALL answered that she  didn't have the fraud statistics, and                                                               
thought  the  Department  of   Labor  and  Workforce  Development                                                               
(DOLWD), would  have those, but  all suspected fraud  that occurs                                                               
with  a  benefit claim  to  an  insurance company  is  originally                                                               
reported to  the Division of  Insurance by statute. They  in turn                                                               
refer   those   to   the  Division   of   Workers'   Compensation                                                               
Investigative  team. She  thought  there was  an  average of  5-8                                                               
referrals per year.                                                                                                             
SENATOR BUNDE said  he was pleased to hear we  didn't have a high                                                               
2:51:13 PM                                                                                                                    
SUSAN  MCCLAIN, Director,  Criminal Division,  Department of  Law                                                               
(DOL),   said  she   also  supervises   the  Office   of  Special                                                               
Prosecutions   which  is   the  office   that  handles   criminal                                                               
prosecutions   under  Workers'   Compensation   fraud.  She   was                                                               
mystified by  Mr. Brown's concern.  She explained for  someone to                                                               
be prosecuted  - an  employer a medical  provider or  an employee                                                               
who is making dishonest statements -  they have to prove beyond a                                                               
reasonable  doubt  that  what  they  did  was  fraudulent  either                                                               
knowingly  or intentionally.  They weren't  talking about  simply                                                               
not  filling  out forms  correctly,  but  about their  burden  of                                                               
proving  beyond a  reasonable doubt  that someone  tried to  take                                                               
money one way or another that they were not entitled to.                                                                        
The former statute limited prosecutions  to the crime of theft by                                                               
deception, but not  everything people do that  is dishonest falls                                                               
within the definition of theft  by deception. It might be another                                                               
Title  46 crime,  like  falsification of  business  records by  a                                                               
doctor or  theft by failure to  make disposition of funds,  if it                                                               
was  an employer  who  took  money but  didn't  contribute as  an                                                               
employer  should to  the fund.  It limits  them into  a situation                                                               
where  if you  can't prove  the elements  of theft  by deception,                                                               
then you can't file a charge.                                                                                                   
MS. MCCLAIN  explained further  that under  Title 11.46  when the                                                               
state charges  theft, it  isn't necessary for  them to  specify a                                                               
theory of  theft - even though  they usually do. But  often there                                                               
is more than  one theory and it's not necessary  to be limited to                                                               
2:54:07 PM                                                                                                                    
The  other  problem  with  that statute  is  that  the  dishonest                                                               
conduct may  fall within  a different  criminal statute  in theft                                                               
for which  the mental state  was "knowingly." The purpose  of the                                                               
criminal statute  is to  address those people  who are  not being                                                               
honest on purpose.                                                                                                              
2:55:30 PM                                                                                                                    
CHAIR PASKVAN asked if she supported this bill as written.                                                                      
MS. MCCLAIN answered absolutely.                                                                                                
SENATOR  BUNDE asked  if probable  cause  before bringing  action                                                               
still applied  in this section of  law in regards to  the concern                                                               
about using the  law to harass people who made  a claim - whether                                                               
they are workers or business owners.                                                                                            
MS.  MCCLAIN answered  yes, and  the standard  is proof  beyond a                                                               
reasonable doubt.  "It's not  a goal  of criminal  prosecution to                                                               
harass people."                                                                                                                 
SENATOR BUNDE asked if the  threshold for criminal prosecution is                                                               
higher than for civil.                                                                                                          
MS. MCCLAIN answered yes.                                                                                                       
2:56:50 PM                                                                                                                    
MICHAEL JENSEN,  Law Offices of  Michael Jensen,  Anchorage, said                                                               
he  had practiced  in Alaska  for 25  years representing  injured                                                               
Alaska workers exclusively. Prior to  that he was a prosecutor in                                                               
the Army  for three  years. In his  role as  representing Alaskan                                                               
workers he  had first  a concern regarding  Section 1  because it                                                               
will affect a worker's ability to  get medical care. One way they                                                               
have  seen  to save  money  is  simply  to  slash the  amount  of                                                               
treatment  that  a worker  can  obtain.  Medicare uses  the  same                                                               
approach that this act envisioned, and  it has saved money by not                                                               
allowing  doctors  to  recoup  even   the  basic  cost  of  their                                                               
overhead. And  when a person  over 65 wants  to find a  doctor in                                                               
Alaska they simply  can't. Section 1, in its zeal  to save money,                                                               
may have  the unintended effect  of making it more  difficult for                                                               
workers to obtain medical care.                                                                                                 
He said it was stated  that the Medical Services Review Committee                                                               
supported this  bill, but  he had  a copy of  a February  2, 2010                                                               
letter sent by  three doctors to the legislature  stating that it                                                               
is unfortunate that none of  the committee's recommendations were                                                               
included in it. The Alaska  State Medical Association on February                                                               
1, 2010 also  wrote to the legislature stating  that they opposed                                                               
the adoption of HB 314. Not  everyone was happy with it. In fact,                                                               
in  HB 346  the  Department of  Labor  and Workforce  Development                                                               
(DOLWD) seeks to abolish the Medical Services Review Committee.                                                                 
MR. JENSEN  focused on  Sections 2  and 3  saying that  he didn't                                                               
think they should be part of  a fee schedule bill. Those sections                                                               
should be referred  to Judiciary so that the  consequences of the                                                               
changes could  be more fully  studied. There  is no cost  for the                                                               
new anticipated  prosecutions through the DOL;  and in particular                                                               
Section (a)(4)  is vague. He  couldn't comprehend who  it applies                                                               
to  and  it was  adding  49  potential  offenses to  the  current                                                               
offense of  theft by  deception. Do  doctors and  therapists risk                                                               
prosecution  or  civil  action  if   they  make  the  mistake  of                                                               
believing  their   patients  and  encourage  them   to  file  for                                                               
benefits? Do employers  risk prosecution or civil  action if they                                                               
encourage   one  of   their  employees   to  file   for  workers'                                                               
compensation benefits  if the employer feels  the worker suffered                                                               
an  injury at  work? Do  lawyers  who believe  their clients  and                                                               
pursue  the  claim on  their  behalf  risk prosecution  or  civil                                                               
3:03:09 PM                                                                                                                    
STEVEN  CONSTANTINO,  private practitioner  representing  injured                                                               
workers  in  workers'  compensation  cases,  said  he  is  former                                                               
hearing officer on Alaska worker's  Compensation Board. He didn't                                                               
agree with Mr. Jensen on the  first section. He noted this change                                                               
just takes  them back to the  old system where they  actually had                                                               
an  Alaskan schedule  of fees  based  on Alaska  charges, and  he                                                               
wanted the public  to have access to the fee  schedule once it is                                                               
created. In the past this  information was treated as proprietary                                                               
and  special  coding  companies bought  it.  Insurance  companies                                                               
submitted their bills to the  coding company, but injured workers                                                               
didn't have access to the fee schedule.                                                                                         
His primary concern related to section  2(a)(4) - the same as Mr.                                                               
Jensen  - that  changes theft  by  deception to  the entirety  of                                                               
Title 11.  He thought the  existing language vague and  he didn't                                                               
understand what it meant.                                                                                                       
He agreed with  Ms. Hall's statement that Alaska's  fraud rate is                                                               
very low. Everyone agrees that  fraud is reprehensible and should                                                               
be  prohibited,  but  the  legislature needs  to  know  that  the                                                               
current  fraud statutes  are being  used as  a way  to intimidate                                                               
workers  from   pursuing  legitimate   claims.  He   was  acutely                                                               
concerned for  the unrepresented  workers that  account one-third                                                               
of the  litigants in  the workers'  compensation system.  He knew                                                               
from personal  and anecdotal experience from  his colleagues that                                                               
fraud is  being alleged to  basically intimidate  injured workers                                                               
from bringing legitimate claims. He  encouraged them to move very                                                               
cautiously in  amending the fraud  provisions. And he  echoed Mr.                                                               
Jensen's comments  that Section (4)  could be applied  to doctors                                                               
and other medical  providers acting in good faith  who are taking                                                               
their patients at face value.                                                                                                   
MR. CONSTANTINO was also concerned  that they have a standard now                                                               
called theft  by deception and  theft has  been a concept  in the                                                               
common law  for a thousand years.  They know what it  means. When                                                               
it gets opened up to  Title 11 crimes like unsworn falsification,                                                               
he didn't  know how upholding  what his  client tells him  is the                                                               
truth will  be viewed. He  urged that the criminal  provisions go                                                               
through  the Judiciary  Committee where  the expertise  exists to                                                               
analyze them.                                                                                                                   
SENATOR DAVIS wanted a response from the department.                                                                            
3:10:46 PM                                                                                                                    
TRINA  HIEKUS,  Director,   Division  of  Workers'  Compensation,                                                               
Department of  Labor and Workforce  Development (DOLWD),  said by                                                               
way of  background she had  spent 25 years  on the other  side of                                                               
the  table from  Mr. Jensen  representing insurance  carriers and                                                               
employers in workers' compensation cases  and, in fact, had tried                                                               
cases in front of Fred brown.                                                                                                   
SENATOR DAVIS said she was  interested in her thoughts on whether                                                               
doctors might inadvertently face criminal charges.                                                                              
MS. HIEKUS  said she also  spent two  years as a  public defender                                                               
and didn't think  a prosecutor would take something  on with that                                                               
weak of  an evidentiary  stream if the  physician stated  that he                                                               
had no knowledge  that the claim itself or the  injury report was                                                               
fabricated.  It  would be  pretty  difficult  to prove  beyond  a                                                               
reasonable doubt.                                                                                                               
SENATOR DAVIS  asked if  she had heard  anything in  the previous                                                               
testimonies that she didn't agree with.                                                                                         
3:12:19 PM                                                                                                                    
MS. HIEKUS pointed out that before  she took this job in December                                                               
2008  the   division  had  never   prosecuted  anyone   under  AS                                                               
23.32.250(a), which has existed since  2005. Last spring they met                                                               
with a special  prosecutor in the Attorney  General's (AG) Office                                                               
to get someone designated to take their cases.                                                                                  
She  explained that  in 2005  a special  investigations unit  was                                                               
created  that was  charged with  reviewing  cases and  forwarding                                                               
them on  to the AG's  office for prosecution. They  have received                                                               
cases  from the  Division  of Insurance  and  from employers  and                                                               
their carriers.  The prosecuting  attorney's concern was  that it                                                               
was difficult, if not impossible,  to prosecute under the current                                                               
statute because it has two  different intents. She explained that                                                               
every crime  has to have  an intent as an  element.  Now,  when a                                                               
person knowingly  does something  - that  is the  intent element.                                                               
But at  the end  of the  statute as it  currently reads  they are                                                               
guilty of  theft by  deception, which  is a  completely different                                                               
intent. It  means someone actually  intended the  consequences of                                                               
an action.  This is a much  more difficult standard to  meet than                                                               
to show knowingly,  and that is the problem they  wanted to clean                                                               
up with this revision.                                                                                                          
When it  was presented to the  Department of Law, she  said, they                                                               
recognized a  civil liability in  the same criminal  statute, and                                                               
the  department   wanted  that   pulled  out.  They   created  AS                                                               
23.30.250(c).  They  also questioned  limiting  a  crime to  just                                                               
theft by deception  when there are a number of  other crimes that                                                               
could fit this conduct  - be it by an employer  an employee or an                                                               
insurance company.                                                                                                              
CHAIR PASKVAN  asked how many  cases would  arise in a  year that                                                               
might be subject to Section 2 criminal prosecution.                                                                             
MS.  HIEKUS replied  the  head of  the unit  is  a former  police                                                               
officer who  does a  thorough investigation and  if it  meets her                                                               
standard, they  would forward  on probably  about 5-10  cases per                                                               
CHAIR PASKVAN said the legislature  would want information in the                                                               
future on this.                                                                                                                 
SENATOR BUNDE  asked if  she generally  agreed with  the previous                                                               
Deputy Attorney General who supported this bill.                                                                                
MS. HIEKUS answered yes.                                                                                                        
3:17:15 PM                                                                                                                    
CHAIR PASKVAN closed public testimony.                                                                                          
3:17:24 PM                                                                                                                    
SENATOR BUNDE moved  to report CSHB 314(FIN)  from committee with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
were no objections and it was so ordered.                                                                                       

Document Name Date/Time Subjects