inside alec may/june 2013

7/28/2019 Inside ALEC May/June 2013

1/28

INSIDE

MAY / JUNE 2013

A P U B L I C A T I O N O F T H E A M E R I C A N L E G I S L A T I V E E X C H A N G E C O U N C I L

legal issuesEDITIONHealth Exchanges: ComingSoon to a State Near You,ProbablyBy Sean Riley and Edward Walton

South Dakota ImplementsCriminal Justice Reform Basedon Data-Driven ApproachBy the Honorable Brian Gosch, SD (HD-32)

Playing with Fire:Manufacturers Fate ShowsReforms are Needed toSave Industry and JobsBy Amanda Emerson


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.ae.g/aa-eetg


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CONTENTS

Inside ALEC | May / June 2013 3

A PUBLICATION OF THE

AMERICAN LEGISLATIVE

EXCHANGE COUNCIL

LEADERSHIP

2013 Naonal ChairmanThe Honorable John Piscopo,

CT (HD-76)

Private Enterprise Advisor

Council Chair

C. Steven Seale, SAP America

Eecuve Director

Ron Scheberle

Senior Director

Polic and Strategic Iniaves

Michael Bowman

Senior DirectorFinance and Administraon

Lisa Bowen

Senior Director

Public Aairs

Bill Meierling

INSIDE ALEC

Editor in Chief

Bill Meierling

Eecuve Editor

Ashle Varner

Ehibing or adversing at an

Echange Council event is a great

wa to promote our compan to

members of both the private and

public sectors. If ou are interested

n ehibing or adversing at a

Council meeng, please contact Sarah

McManamon at:

[email protected] or

(202) 742-8516.

American Legislave Echange

Council

2900 Crstal Drive

Arlington, VA 22202

Phone: (202) 466-3800

Fa: (202) 466-3801

www.alec.org

DESIGN / LAYOUT

Steven Andrews

The Council provides legislators

with viewpoints and discussions on

ssues important to them and their

constituents. Authors submitting

articles for Inside ALECdo not

necessaril reflect the views or

polic positions of the Council.

Leadership Proiles

Lets All Get Along...With Lawsuit Reormby Amy Kjose Anderson And john eicK

Playing With Fire: Manuacturers Fate Shows Reorms are Needed to SaveIndustry and Jobsby AmAndA emerson

Losing Good Legislation to the Quagmire o Politicsby miKe seney

South Dakota Implements Criminal Justice Reorm Based on Data-DrivenApproachby the honorAble briAn Gosch, sd (hd-32)

Five Solutions or Addressing Environmental Overcriminalizationby ViKrAnt P. reddy And mArc A. leVin

Provisional Occupational Licenses Provide a Path to Employment orEx-Oendersby cArA sulliVAn

Legislators Address the Growing Use o Contingent Fee Attorneys by StateOicialsby christoPher e. APPel

Barriers to Entry: State Licensing Laws Restricting Charityby edwArd wAlton

Health Exchanges: Coming Soon to a State Near You, Probablyby seAn r iley And edwArd wAlton

The Medicaid Expansion Landscapeby seAn r iley And edwArd wAlton

A Premium on Premiumsby seAn riley

Telemedicineby Alex rued

4

5

6

7

8

10

18

20

12

13

16

17

22

JUSTICE PERFORMANCE PROJECTCIVIL JUSTICE AND JUSTICE PERFORMANCE PROJECT

INSIDE ALEC | MAY / JUNE 2013

HEALTH & HUMAN SERVICES


4/28

Chaian Pofie:

The Honorable Lance Kinzer - Kansas (HD-30)

Chaian of the Conci Task Foce on Civi Jstice

The American Legislave Echange Council is pleased to announce Kansas Representave Lance Kinzer (HD-30) as the incoming chair of the

Council Task Force on Civil Jusce. Rep. Kinzer, the current Chair of the Kansas House Judiciar Commiee, will bring to the Task Force over nine

ears of eperience in the Kansas Legislature. Rep. Kinzer served four ears on acve dut in the U.S. Arm JAG Corps and is currentl a partnein the law rm Schlagel, Gordon & Kinzer, LLC in Olathe, KS. The Task Force on Civil Jusce will benet greatl from Rep. Kinzers man ears o

eperience, eperse and commitment to free market principles.

4 Inside ALEC | May / June 2013

leadership profiles

Chaian Pofie:

The Honorable Chris Shank - Maryland (SD-2)Chaian of the Jstice Pefoance Poject

The American Legislave Echange Council is pleased to announce Senator Chris Shank of Marland as the incoming chair of the Echange

Councils Jusce Performance Project. Aer serving in the Marland House of Delegates for 12 ears, Senator Shank was elected to the Marland

Senate in the 2010 elecons. Among his man leadership roles, he will bring si ears of eperience on the Judiciar Commiee as well as two

ears of eperience on the Judicial Proceedings Commiee to the Jusce Performance Project. Senator Shanks leadership on criminal jusce issues in Marland will provide valuable insights and knowledge to members of the Jusce Performance Project. Last session, he helped spearhead

reforms that concentrate resources on higher-risk oenders through earned compliance credits. In 2011, Senator Shank sponsored legislaon

that would provide swi, certain and proporonate sancons to individuals who violate the terms of their supervision. These reforms strengthen

probaon and parole and allow law enforcement to focus on individuals most likel to reoend. The Echange Council has alread beneted

from Senator Shanks role as a member of the Task Force on Civil Jusce and his hands-on eperience with criminal jusce reform will be a grea

resource for Project members as the discuss limited government, free-market soluons for our states criminal jusce sstems.

Chaian Pofie:

The Honorable Judson Hill - Georgia (SD-32)

Chaian of the Conci Task Foce on Heath and Han Sevices

The American Legislave Echange Council is pleased to announce the appointment of Georgia Senator Judson Hill (SD-32) as chairman of the

Council Task Force on Health and Human Services. A ve-term State Senator, Hill has served as the chair of the Georgia Finance Commiee and

as a member of the Government Oversight and Judiciar Commiees. As a member of the Georgia Health and Human Services Commiee, he

authored and successfull passed the naons rst paent-centered, prevenon-focused, free market reform legislaon, making health care and

insurance more aordable for Georgias working families. Having previousl served as an Eecuve Commiee member on the Task Force, Sena

tor Hills eperience within the Council will complement his etensive polic and legal eperse to the connued benet of the membership

Senator Hill served in the Reagan Administraon as an Assistant United States Aorne for the Northern District of Georgia and also in Washing

ton, D.C. as a White House appointee at the United States Department of State/Agenc for Internaonal Development. He is a graduate of Emor

Universit and the Walter F. George School of Law at Mercer Universit.


5/28Inside ALEC | May / June 2013 5

JUSTICE

BY AmY KJOSE ANDErSON AND JOHN EICK

The current polical climate has le man people red of

parsanship and gridlock. For those looking for sound pol-

ic with broad appeal, the Echange Council Task Force on

Civil Jusce oers model polic for lawsuit abuse reforms.

A new naonal surve conducted b Luce Research and sponsored

b the American Tort Reform Associaon and the Sick of Lawsuits

campaign reveals there is wide-ranging appeal to curb lawsuit abuse.

The Luce poll suggests that 89 percent of Americans think lawsuit

abuse is a problem and 83 percent believe the liabilit lawsuit sstem

should be improved. The poll found this agreement spread across the

polical spectrum.

An overwhelming majorit of American voters (90 percent) believein the values and goals embodied b the Task Force on Civil Jusce;

namel, that lawsuits and legal selements should seek to compen-

sate people for their actual losses rather than provide unmerited -

nancial gain.

The task forces lawsuit reform resoluons are purposed to dimin-

ish the negave impact of frivolous ligaon, minimize the nancial

burden shouldered b the business econom to defend against such

lawsuits, treat plains and defendants fairl, and encourage proper

use of the legal sstem.

Is ever lawsuit ridiculous? No. Are a majorit of lawsuits unfound-

ed? No. However, those unmerited or quesonable lawsuits create

problems in the sstem and impose crippling insurance and legal de-

fense fees on small businesses. The Echange Council takes parcular

care to cra model polic designed to target problemac areas of li-

gaon while safeguarding the legal sstem as a deliverer of jusce and

a funconing check on the free market sstem.

Imagine our compan could be sued not because of a defect

in the product ou sell but because the customer used our prod -

uct for an unintended purpose, causing injur. Such lawsuits and

damages awarded result in product warning labels such as: do

not use while sleeping on a hair drer, remove child before fold-

ing on a bab stroller, or do not eat toner on a printer cartridge.

most Aeicans agee that

asit abse poses a seios

theat to bsiness podctivity

and copetiveness.

Continued on page 24

Lets All GetAlongWithLawsuit Reform


6/286 Inside ALEC | May / June 2013

INSIDE ALEC

BY AmANDA EmErSON, POrTABlE FuEl CONTAINEr

mANuFACTurErS ASSOCIATION

The American Dream does not mean everone is guaran-

teed success. It means America provides vast opportunies

for success to those who work hard.

Blitz U.S.A., a compan in eistence since WWII, was an

eample of the American dream. From its home base in the small

town of Miami, Oklahoma, this compan once commanded 75 per-

cent of the U.S. market for a niche, commodized product in constantdemand.

Toda, the once proud compan is histor the latest American

manufacturer to shut its doors.

Blitz was one of ve companies in the U.S. and Canada that pro -

duced the familiar red plasc gas cans found in nearl ever Ameri -

can household. First introduced in the earl 1980s, the product was a

signicant safet breakthrough. For the rst me, consumers had ac-

cess to non-metallic containers designed eclusivel for the transport

and storage of gasoline that were both safe and aordable.

Over the ears, safet standards and regulaons developed b

the American Societ for Tesng and Materials and the Environmen-

tal Protecon Agenc have furthered safet and environmental im-

provements, including child-resistant and spill-proof spouts. Gas can

manufacturers have voluntaril embraced all proven means of safet

and performance improvements. Unfortunatel, the primar causes

of accidents involving gas cans are individuals who choose to misuse

gasoline to start or accelerate a re.

Around the turn of the centur, Blitz U.S.A. became the target of

trial aornes who theorized that when gasoline is eposed to ame,its not the gasoline which causes injur, but the gas can. Plains

allege consumer gas cans are defecve because the do not contain

a device called a metallic ame arrestor, a device designed to pre-

vent ame progression. Blitz took the brunt of the ligaon, having

the industrs largest market share.

What began as a trickle, averaging between three to seven lawsuits

each ear over 10 ears, erupted into an avalanche of 26 lawsuits

led in the wake of one large selement in 2011 made b Blitzs in -

surer. Shortl aer the me of bankruptc ling, Blitz had 42 open

playing With fire:

Manuacturers Fate Shows

Reorms are Needed to Save

Industry and Jobs



cases. Other manufacturers eperienced similar increases in ligaon

and connue to be at risk of a similar fate.

With 15-20 million cans sold in the U.S. annuall, an esmated 600

million instances of gas can usage occur each ear with ver few re -

sulng in accident or injur.

Data from the Naonal Electronic Injur Surveillance Sstem shows

the number of accidents involving gas cans has steadil declined. It

stands in stark contrast to the skrockeng number of lawsuits and

selements b liabilit carriers that brought a once-viable industr to

the brink of collapse.

While man businesses balk at regulaon, the members of the

Portable Fuel Container Manufacturers Associaon (PFCMA) acvel

seek regulator mandates that will stabilize the industr and allow

them to beer defend themselves in cases involving product misuse.

It is impossible to completel remove all risk for those who choose

to put themselves and others in danger. If the soluon was as simple

as plains allege, the manufacturers of consumer gas cans would

have done so long ago. It would be irresponsible to adopt design

changes to potenall reduce risks surrounding product misuse with-

out rst concluding that the proposed changes do not have unintend-ed consequences for the majorit of consumers who use the product

responsibl. At the end of the da, there is no device that will make it

safe to mi gasoline and re.

The Consumer Product Safet Commission (CPSC) has twice re-

jected requests to mandate standards for consumer gas cans. In its

original determinaon, CPSC stated that accident informaon did

not indicate that the design or performance of gas cans presents an

unreasonable risk of injur, and it was the Commissions belief that

the majorit of accidents occur because of the wa gasoline and con-

tainers are used around ignion sources. Onl the trial bar deems

the product itself as unsafe. As a result, the manufacturers remain

trapped in a vicious ccle of ligaon.

At the Federal level, PFCMA is working with legislators to mandaterelevant voluntar standards. A bill introduced b the Honorable Tom

Cole of Oklahoma (CD-4) amending the 2008 Childrens Gasoline Burn

Prevenon Act would mandate eisng voluntar standards, in eect

gaining CPSC oversight on product design. There is also opportunit

for state statutes providing limited immunit related to product mis-

use.

In Oklahoma, PFCMA members have supported the Raonal Prod-

uct Use Act, an American Legislave Echange Council model polic

that would restrict the abilit of consumers to recover in the event of

misuse. Addionall, the act claries the law to assure that the rea -

sonableness of the consumers act is taken into account. The mere

fact that a misuse might, in some wa, be foreseeable is insucient

for imposing liabilit when the misuse was unreasonable and, in the

case of gas cans, quite literall like pouring gasoline on a re.

It is too late to save Blitz. Without polic intervenon to stabilize

the business environment, the remaining manufacturers are at risk to

meet a similar fate.

AmAndA EmErson is a Government Affairs Specialist at the Portable

Fuel Container Manufactuers Association.

Losing Good Legislation to theQuagmire o Politics

Mike Sene is the Senior Vice President of

Polic Analsis & Strategic Planning at the State

Chamber of Oklahoma.

BY mIKE SENEY, STATE CHAmBEr OF OKlAHOmA

Senate Bill (SB) 754, based on the Echange Councils model R

onal Use of a Product Act, passed the Oklahoma Senate bvote of 33-9 and was sent to the House of Representaves a

a live round. In other words, if the House passed it with n

amendments it would go straight to the Governor for her signa

ture.

No problem, right? Wrong!

At the same me, the State Chamber of Oklahoma was push

ing for a bill to regulate lawsuit lending, a bill to provide for pe

sonal injur bankruptc trust transparenc (which also include

asbestos cases), and a complete restructuring of Oklahoma

workers compensaon court-based sstem (replacing it with a

administrave sstem).

Due to me constraints and other polical gamesmanship (i.e

strong pushback from the trial bar), the House decided not thear SB 754. SB 754 will hopefull be the rst piece of legisl

on heard net Februar in the House Judiciar Commieean

I believe it will pass.

Wh? Because SB 754 makes good sense. The State Chambe

of Oklahoma, in supporng SB 754, conducted a poll of likel vo

ers in late Februar.

Here is the queson and respondent results:

Within the last year, an Oklahoma manufacturer of gas cans closed

its business because it could not aord the lawsuits that had been

led by people who were injured when they poured gasoline on

res, even though the cans had a label on them warning against

doing so. Do you think consumers who misuse products should or

should not be able to sue the companies that make that product?

SHOULD BE ABLE TO SUE 7%

Should not be able to Sue 88%

UNDECIDED VOL. 5%

Its obvious that the common cizen has common sense. I

this case, common sense was trumped b polics. Unfortu

natel, it somemes also stands in the wa of returning a sens

of personal responsibilit to our societ.

We will be back net earand we will pass SB 754.


8/288 Inside ALEC | Ma / June 2013

South Dakota

Implements Criminal

Justice Reform Based

on Data-Driven

Approach

By THE HONORABLE BRIAN GOSCH, SD HD32

INSIDE ALEC

8 Inside ALEC | Ma / June 2013



iJUSTICE

Businesses are increasingl using data to beer meet cus-

tomer needs. State policmakers should do the same and

leverage available data to help cra public policies that

most ecientl allocate tapaer dollars.

South Dakota provides an eample of data-driven polic reforms

that reduce recidivismthe rate at which oenders return to pris -

on. The states reforms are likel to be successful because decisions

on what would work best for the criminal jusce sstem were not

based on emoon, insnct or whim. Rather, lawmakers based polic

changes on data that revealed what was actuall driving the prison

populaon in the state.

Over the past 20 ears, South Dakotas correcons spending tripled

as its prison populaon has swelled from a few hundred inmates in

the 1970s to over 3,600 toda.1 The increase in spending has not pro-

duced a commensurate return in public safet; nearl 45 percent of

oenders in the state return to prison within three ears of their re -

lease.2 Most importantl, South Dakotas crime rate has not kept pace

with the naonal crime rate decline.3

In earl spring 2012, state leaders gathered input from a variet of

stakeholders involved in all parts of the criminal jusce sstem. Three

dozen meengs with over 400 interested parcipants led to the for -

maon of the South Dakota Criminal Jusce Iniave Working Group.

Throughout the remainder of 2012, the Working Group conducted

an ehausve review of probaon, parole and incarceraon data and

produced a set of polic recommendaons for the state.

One of the Working Groups major ndings was that the number of

prison beds used for parole violators returning to prison had nearl

tripled between 2000 and 2012.4 Addionall, 40 percent of proba-

on violators were incarcerated due to a technical or minor violaon

of the terms of their supervision.

These ndings allowed the Working Group to focus polic soluons

on the specic groups of oenders who were driving up the prison

populaon. The resulng reform package included several evidence-

based soluons that have been proven to reduce recidivism in other

states. South Dakota implemented earned compliance credits that

allow low-risk oenders to earn their wa o supervision b adher-

ing to specic goals and guidelines. This provides powerful incenves

for oenders to change their behavior and concentrates resources on

higher-risk oenders b allowing law enforcement to focus on the in-

dividuals most likel to reoend or to be a danger to the communit.

In addion, South Dakota enabled probaon and parole ocers

to emplo swi, certain and proporonate responses to violaons ofthe condions of their supervision. The immediate and inevitable re-

sponse helps prevent or erase the mentalit that oenders can break

the rules without consequences. Swi and certain sancons can

provide appropriate punishment and save tapaer dollars b help-

ing prevent long and costl prison stas for minor violaons. Posive

reinforcements such as good me credits or decreased reporng re-

quirements can incenvize oenders to sta on track.

Combined with other aspects of reform, these responses can have

an enormous eect on decreasing the rate of return to jail or prison.

In South Dakota, reforms are esmated to save approimatel $200

million through averted prison construcon and operang epenses.5

A data-driven approach allowed South Dakota to go beond rheto-

ric and eamine what was reall happening with South Dakotas cor-

reconal populaon. This will help the state beer protect its com-

munies, contain its correcons spending and hold both criminal

oenders and reentr programs more accountable for results.

1 South Dakota Criminal Justice Initiative, Final Report. November 2012.

2 Ibid.

3 Ibid.

4 Ibid.

5 Ibid.

spEAkEr BriAn Gosch served on the South Dakota Criminal

Justice Initiative Work Group and is a member of the Echange

Councils Task Force on Civil Justice. Rep. Gosch represents

South Dakotas 32nd House district.

t a f a k

f a

a k f

a

a , .

cage ovea ce rate cage iet rate

nate -19% 1.6%

s. data -9% 18%

p pat BA Te:

July 2000

2558 total offenders

Parole Violators 18%

New Commitments 79%

Other 3%

July 2010

3611 offenders

Parole Violators 25%

New Commitments 70%

Other 5%

Increasing Number Of Prison Beds Are Being Used For

Offenders Entering Through Parole Revocations

Crime Rate Decline In SD Has Not Kept Pace Wit h The AverageRate Of Decline

Source: http://www.pewstates.org/uploadedFiles/PCS_Assets/2013/CJI_re-

port_Nov_2012.pdf

Source: Department of Justice, Bureau of Justice Statistics, Prisoner Series.

Federal Bureau of Investigation, Uniform Crime Reports.



INSIDE ALEC

Fv s f Ag evaovaza

BY VIKrANT P. rEDDY AND mArC A. lEVIN

In recent ears, advocates from across the polical spectrum

have increasingl cricized overcriminalizaon, the tendenc of

government to use criminal law to regulate behavior that is not

tradionall criminal.

In Januar, we authored a report for the Teas Public Polic Founda-

on that described the U.S. Gulf Coast as Ground Zero for state-level

overcriminalizaon. Indeed, between Teas, Louisiana, Mississippi,

Alabama and Florida nearl 1,000 laws have passed to criminalize ac-

vies involving the environment. Criminal sancons are of course

appropriatel applied to an individual who intenonall contaminates

another persons propert. Too oen, however, the acvit that is

governed b these mriad laws is non-blameworth, ordinar busi-

ness acvit.

In Louisiana alone, more than one hundred oenses that relate to

hunng, shing and wildlife could result in imprisonmentand virtu-

all none of these oenses carr the mens rea (or culpable state of

mind) requirement that has been a foundaon of American criminal

law for centuries. In Florida, it is a rst-degree misdemeanor to trans-

port b vessel over water both wild and aquaculture products of the

same species at the same me, but it is not clear wh it is necessar

to ban this pracce in all circumstances. In Mississippi, individuals can

face up to si months in prison for hunng deer from a boat. Teas has

11 felonies related to oster harvesng.

Overcriminalizaon along the Gulf Coast is inevitabl a signicant

burden to businesses. Ordinar business acvit that is vital for the

health of a stateshing, drilling, hunng, building, etc.is curtailed.

Businesses do not have clear rules under which to operate, and when

the do, the rules can be undul harsh. Ulmatel, it is the business

consumers who suer. In our report, we oered ve possible polic

es.

First and foremost, policmakers should review whether certain of-

fenses are properl characterized as crimes in the rst place. If not,

criminal penales for these oenses should be removed. The remain-

ing oenses, if the are aached to criminal penales, ought to ap -

pear in the states penal code.Secondl, states should strengthen their mens rea protecons. Civil

and criminal law have alwas been disnguished b the requirement

that a criminal must have a guilt state of mind, but an increasing

number of regulator oenses disregard the mens rea requirement

because it is inconvenient for a speed prosecuon. Similarl, some

statutes require mere criminal negligence rather than intenonal,

knowing, or reckless conduct for culpabilit. Negligence is a low stan-

dard, which is more appropriate in civil cases. In the criminal jusce

contet, mere negligence or the lack of a culpable mental state re-

quirement leads to the punishment of accidental conduct with poten

all the same consequences as if it had been knowing or intenonal

The American Legislave Echange Council has developed model poli

cies that would appl a strong mens rea element to all criminal laws

that are silent on this issue.

Third, states should codif the rule of lenit to environmental of

fenses, and not simpl trust the court will appl it. The rule of lenit

is a canon of statutor interpretaon instrucng a court to resolve

ambiguies about whether conduct is criminall prohibited in favor o

the defendant. The U.S. Supreme Court has eplained the rule using a

sports analog: the e must go to the defendant. This approach to

statutor interpretaon is almost universall unquesoned in criminaprosecuonsecept when it comes to regulator oenses. As Timo

th Lnch of the Cato Instute has wrien, [n]ot onl has the rule o

lenit been ignored in the contet of regulator oenses, it has also

been turned on its head. When an ordinar criminal statute is am

biguous, the courts give the benet of the doubt to the accused, but

when a regulator provision is ambiguous, the benet of the doubt is

given to the prosecutor. Just as the Echange Council has approved

model polic codifing a strong mens rea protecon, it has also ap

proved the rule of lenit as model polic.

Fourth, states should eliminate provisions that delegate to agenciethe power to create criminal oenses through rulemaking. Man pro

visions in state and federal statutes authorize regulator agencies to

designate an violaon of their rules as a criminal oense. Such provi

sions transfer the power to take awa an individuals libert from dul

elected ocials to unelected administrators. Moreover, as each da

brings new agenc rules and revisions of eisng rules, these broad

delegaon provisions make it virtuall impossible for businesses and

individuals to keep track of what constutes criminal conduct, under

mining the fair warning principle.

In Mississippi, individuals can

ace up to six months in prison

or hunting deer rom a boat.

Texas has 11 elonies related to

oyster harvesting.




JUSTICE

The Gulf Coast ma be a known hotbed for the proliferaon of environmental laws, but the phenomenon of overcriminalizaon is not limited

to one area of the countr. In Oregon, Gar Harrington was sentenced to 30 das in jail and ned $1,500 for collecng rain and snow runo

on his propert.

Mr. Harrington was convicted of breaking a 1925 law b having three illegal reservoirs on his propert. Authories based their charges on the

claim that Harrington violated Oregons water use law because he diverted state water.

All water is publicall owned in Oregon. Before a person can store an tpe of water, the must rst appl for a permit. Harrington applied for and

received his permits, but the were withdrawn b the state when an Oregon court ruled the cit of Medford holds eclusive rights to core sources o

water in the Big Bue Creek watershed and its tributaries. Harrington argued that he was well within the connes of the law, as there was no menon

of rainwater or snow run-o. Aer a prolonged legal bale, Mr. Harrington reported to jail for his 30-da sentence.

Regardless of whether Harrington violated the 1925 law, regulaons such as collecng rainwater on ones propert should be enforced through

nes and market forces rather than criminal sancons. Mr. Harrington will now carr the sgma of a prior incarceraon and increased dicult nd

ing emploment.

Civil remedies can serve as consequences for behavior deemed undesirable b the government and achieve the governments regulator goals

et protect individuals and businesses from epensive prosecuons and length prison stas. Civil sancons for non-criminal violaons also preserve

prison space for dangerous, violent or habitual oenders who pose a threat to our communies.


12/28

BY EDwArD wAlTON

Improving medical access for the poor has remained a long -

standing issue of concern for state governments. The 1986

Emergenc Medical Treatment and Acve Labor Act instuted

a requirement on hospitals that accept Medicare and Medicaid

to provide emergenc services to anone in need, regardless of abilit

to pa. A stud b the Kaiser Famil Foundaon found that uncompen-

sated care costs reached $57 billion naonwide in 2008, $42 billion

of which was paid for b tapaers through federal and state govern-

ments.1,2 These costs are largel driven b people who, unable to af-

ford health coverage, rel on hospitals and emergenc rooms for care.

While man states are considering Medicaid epansion under the

Aordable Care Act as a potenal soluon to these challenges, creat-

ing an environment where private charies and free clinics can thrive

represents an immediate, cost-free alternave. Largel run b volun-

teers, free clinics can oer a wide range of services, including medi-

cal, dental, pharmaceucal and behavioral care. In 2005, free clinics

provided charit care to an esmated 1.8 million people, valued at

roughl $1 billion.3

Despite the success of and demand for free clinics, man charit

care organizaons face operaonal limitaons due to eisng state

laws prohibing professionals licensed in other states from providing

free care.

One such charit care group is Remote Area Medical (RAM), a vol-

unteer organizaon specializing in temporar free clinics. RAM travels

around the countr providing a variet of health services to those in

need, regardless of abilit to pa. RAM services include denstr, ee

care, general health checkups, mammograms, and more. In the Unit-

ed States, over 75,000 volunteers have aided RAMs eorts, delivering

$61 million in care to over 300,000 paents.

As a mobile organizaon, however, RAMs volunteer health care

professionals face state licensure restricons, prohibing them from

providing free care to those in need in the vast majorit of states.

RAM founder, Stan Brock, described the problem in a 2009 inter-

view:

The greatest impediment to what we do is the fact that for some

etraordinar reason in this countr, a doctor or denst or nurse

or veterinarian licensed in one state, taking essenall the same

eams and having the same qualicaons, is not allowed to cross

state lines to provide free care There is a huge reservoir of thou-

sands and thousands of willing medical people willing to cross the

countr at their epense to provide free care for the underserved.4

The majorit of statessave Tennessee, Illinois and Conneccut

block out-of-state healthcare professionals from providing free carewithin their borders, which prevent organizaons like RAM from

reaching their full potenal. While the merits of licensure for profes

sional pracce can be debated, restricng capable, licensed health

care professionals from providing free services to the poor neithe

epands access nor reduces costs.

Several states are considering measures that would remove road

blocks for volunteer health professionals and charitable organiza

ons, potenall epanding access to qualit care for those in need

while reducing the burden on state budgets and tapaers. With so

man states considering the impacts of uncompensated care and ac

cess in the Medicaid epansion contet, there is real opportunit to

reevaluate eisng policies that restrict care for those in need.

INSIDE ALEC


1 Kaiser Commission on Ke Facts, Covering the Uninsured in 2008: Ke Facts about Current Costs, Sources of Pament,

and Incremental Costs, Kaiser Famil Foundation, August 2008, http://www.kff.org/uninsured/upload/7810.pdf.

2 Jack Hadle, John Holahan, Teresa Coughlin and Dawn Miller, Covering The Uninsured In 2008: Current Costs, Sources

Of Pament, And Incremental Costs, Health Affairs, August 2008, http://content.healthaffairs.org/content/27/5/

w399.full.pdf.

3 Julie Darnell, Free Clinics in the United States, Arch Intern Med Vol. 170 No. 11, June 14, 2010, http://www.

wafreeclinics.org/admin/mod-cms/viewattachment.php?id=498.

4 Uninsured Travel from Across US for Free Healthcare from Relief Group Remote Area Medical, Democrac Now, Jul

22, 2009, http://www.democracnow.org/2009/7/22/uninsured_travel_from_across_us_for.

ba e:sa lg la

rg ca

EdwArd wAlTon is the

Legislative Analst for the Task

Forces on Health and Human

Services and Education.


13/28

The Aordable Care Act (ACA) requires full operaonal health insurance echanges in ever state b Januar 1, 2014,

with open enrollment beginning in October of this ear. The ACA also provides that the federal government will step in

for states that decide against voluntar implementaon. Currentl, onl 16 states plan to operate an individual market

health insurance echange for plan ear 2014. Utah will split the dues and default to a federal echange in the indi-

vidual market but use its eisng echange to oer plans to small businesses through what are known as small business health

opon program (SHOP) echanges. Recent guidance from the Department of Health and Human Services (HHS), however, has

delaed that SHOP program unl 2015.

Two-thirds of the states will default to a federal echange in various capacies, including several serving as partners or silent

partners. For purposes of the ACA, partnership and silent partnership echanges are sll federall-facilitated, rather than state,

echanges. The consequence, logiscall, is that the federal government will shoulder a much larger burden than originall anci-

patedthe White Houses most recent budget request asks Congress for an addional $1.5 billion to run these federal echanges.

Health insurance echanges, oen billed as websites for consumers to shop for health insurance plans, are integral to several

provisions of the health law. These echanges are essenall the vehicle through which much of the health law is carried out, from

the imposion of federal insurance regulaons, to the distribuon of ta subsidies eceeding $1 trillion, which then triggers the

individual and emploer mandates to bu insurance. Man states, therefore, queson wh the would support such echanges.

Resistance to state echanges comes in various forms, chief among them are unanswered quesons as to how echanges will

operate, whether the will be nanciall viable, whether the federal government will be able to handle the task of establishing

them in states that refuse to do so, and whether the will actuall foster compeon and reduce healthcare related costs.

Like Medicaid epansion, the establishment of a state echange is voluntar, and states can default to a federal echange in

the absence of taking armave steps. Also similar to Medicaid epansion, states can choose to implement echange provisions

at a later me. Specicall, provisions in the law allow states defaulng to a federal echange in the short term to take control offederal echanges moving forward.

While the actual tet of the law provides onl that states either implement or default to the federal government, HHS has since

released guidance creang partnership echanges in an aempt to move states toward state echanges. In Februar, HHS began

contacng state insurance departments urging states that did not seek partnership arrangements to connue to conduct certain

administrave funcons in federal echanges as silent partners through marketplace plan management.

For the 33 states defaulng (not including Utah), seven will be partners and an addional seven will be silent partners.

While these arrangements do not eempt states from federal regulaons or oer states control beond administrave funcons,

the will lighten the task before HHS and, to that etent, support implementaon of the law.

Connuing uncertaint as to how echanges will funcon will turn an intense focus to state implementaon as open enrollment

approaches in October of this ear. HHS stressed that echanges will be up and running on me, though the recent dela of SHOP

echanges and remarks from federal ocials tasked with implemenng the law have raised concerns. [T]he me for debang

about the size of tet on the screen, or the color, or is it a world-class user eperiencethats what we used to talk about two

ears ago, said Henr Chao, who oversees echange technolog, [now the philosoph is]: lets just make sure its not a ThirdWorld eperience.

AuThor bio

HEALTH

HealtH excHanges: coming soon toa state near You, ProbablYBY SEAN r IlEY AND EDwArD wAlTON

EdwArd wAlTon is the Legislative Analst for the Task

Forces on Health and Human Services and Education.

sEAn rilEy is Director of the Task

Force on Health and Human Services.



14/28

INSIDE ALEC

HealtH insurance excHanges b

NV

CA

OR

WA

MN

ND

SD

IA

WI

IL

NE

KS

TX

OK

MO

AR

LA

MS

NMAZ

UT

CO

ID

MT

WY

AK

All inormation accurate as o 4/22/2013.


15/28

sTATE sTATus

ALABAMA NO

ALASKA LEANS NO

ARIZONA GOV/LEG SPLIT

ARKANSAS NEGOTIATING W/ HHS

CALIFORNIA YES

COLORADO YES

CONNECTICUT YES

DELAWARE YES

FLORIDA GOV/LEG SPLIT

GEORGIA NO

HAWAII YES

IDAHO NO

ILLINOIS YES

INDIANA LEANS NO

IOWA LEANS NOKANSAS LEANS NO

KENTUCKy UNDECIDED

LOUISIANA NO

MAINE LEANS NO

MARYLAND YES

MASSACHUSETTS YES

MICHIGA N GOV/LEG SPLIT

MINNESOTA YES

MISSISSIPPI NO

MISSOURI GOV/LEG SPLIT

MONTANA GOV/LEG SPLIT

NEBRASKA GOV/LEG SPLITNEVADA YES

NEW HAMPSHIRE LEANS YES

NEW JERSEy YES

NEW MExICO YES

NEW yORK YES

NORTH CAROLINA NO

NORTH D AKOTA YES

OHIO GOV/LEG SPLIT

OKLAHOMA NO

OREGON LEANS YES

PENNSYLVANIA LEANS NO

RHODE ISLAND YES

SOUTH CAROLINA NO

SOUTH DAKOTA NO

TENNESSEE NEGOTIATING W/ HHS

TEXAS NO

UTAH UNDECIDED

VERMONT YES

VIRGINIA UNDECIDED

WASHINGTON YES

WEST VIRGINIA LEANS YES

WISCONSIN NO

WyOMING NO

MEDICAID EXPANSION

state

FL

GA

SC

NC

VA

WV

OH

PA

NY

MD

DE

NJ

ME

CT

RI

MA

VTNH

to-date inormation, please contact Edward Walton at [email protected].

PARTNERSHIP MODEL

FeDeral excHange

PLAN MANAGEMENT MODEL

state excHange

DEFAULT MODEL



INSIDE ALEC

The Aordable Care Acts Medicaid epansion provisions would etend Medicaid benets to nearl all Americans below

138 percent of the federal povert level$15,856 for an individual in 2013. 1 Reacons from states have been decid-

edl mied, spanning the range between support and opposion, including splits between state legislatures and their

governors. Several states embracing Medicaid epansion take the posion that it will reduce uncompensated care

while serving as another round of smulus. Other states are concerned, however, that because Medicaid is alread the largest

component of total state spending, epanding the program will onl further encourage dependence on the federal government

while straining state budgets.

In roughl half of the states, it is clear which path policmakers will take: 14 are currentl poised to epand the Medicaid pro-

grams while 11 states seem read to oppose. The remainder of states are either split, delaing the decision or connuing to studthe laws impact. Quesons surrounding proposals from states like Arkansas to move the epansion populaon into private plans

via health echanges fuel uncertaint as to where remaining states will ulmatel land. Nonetheless, with no statutor deadline

to pursue epansion, much of the debate is focused on the federal governments temporar 100 percent funding for epansion

through 2016. That rate falls graduall to 90 percent in 2020 and subsequent ears, assuming the law remains unchanged.

The broader uncertaint facing states, however, stems from the Supreme Court s June 2012 ruling making epansion oponal.

Twent-si states joined the mulstate lawsuit against the federal government challenging the Medicaid epansion provisions as

unconstuonall coercivethat is, because the law as wrien allowed the federal government to withhold eisng Medicaid

funding in states that did not epand, and since states were alread largel dependent on federal funds, the were le without

a choice.

The Supreme Court agreed, but, rather than upholding or rejecng the provisions in total, it essenall rewrote the law b leav-

ing all Medicaid epansion provisions intact, ecept for the abilit of the federal government to withhold eisng funds.2 States

then found themselves in a posion of determining whether epansion made sense absent coercion. While states like Arkansas

have since pursued premium assistance for the epansion populaon using new federal funds, 3 states such as Wisconsin have

sought to etend Medicaid without reling on the health law.4 The majorit of states, however, have taken a binar view of either

outright support or opposion.

The Arkansas model has received the most aenon of the Medicaid epansion alternaves. Some previous supporters of

the concept have taken pause, however, as details regarding the premium assistance strateg have et to be full arculated. 5

Meanwhile, further guidance from the Department of Health and Human Services (HHS) has made clear that an proposals from

states regarding Medicaid epansion must provide the same services at the same cost as the otherwise would, dampening the

prospect of state eibilit.6

While details regarding some state plans and the lat-

itude HHS will provide is unclear, the Medicaid debate

will connue with an increased focus on eibilit and

closer aenon paid to federal budget talks.

1 Federal Financial Participation in State Assistance Ependitures, Health and Human Services Department, November 30, 2011, https://www.

federalregister.gov/articles/2011/11/30/2011-30860/federal-financial-participation-in-state-assistance-ependitures-federal-matching-shares-for.

2 NFIB v. Sebelius, 132 S. Ct. 2566 (2012), http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf.

3 Michael Stratford, Arkansas House OKs Medicaid 'Private Option' 62-37, The Associated Press, April 11, 2013, http://www.arkansasbusiness.

com/article/91940/arkansas-house-oks-medicaid-private-option-62-37.

4 Governor Scott Walker Announces Additional Entitlement Reform, Wisconsin Office of the Governor, Februar 13, 2013, http://walker.wi.gov/

Default.asp?Page=891c1886-b72b-49a5-8505-c1d622886931.

5 Avik Ro, The Arkansas-Obamacare Medicaid Deal: Far Less Than It First Appeared, Forbes Online, April 1, 2013, http://www.forbes.com/sites/

aro/2013/04/01/the-arkansas-obamacare-medicaid-deal-far-less-than-it-first-appeared/.

6 Medicaid.gov, Medicaid and the Affordable Care Act: Premium Assistance, Centers for Medicare & Medicaid, March 2013, http://medicaid.gov/

Federal-Polic-Guidance/Downloads/FAQ-03-29-13-Premium-Assistance.pdf.

tHe meDicaiD exPansion lanDscaPeBY SEAN rIlEY AND EDwArD wAlTON

sEAn rilEy is Director of the Task Force on

Health and Human Services.

EdwArd wAlTon is the Legislative Analst

for the Task Forces on Health and Human

Services and Education.


17/28


18/2818 Inside ALEC | Ma / June 2013

INSIDE AlEC

Provisional Occupational Licenses Provide aPath to Employment for Ex-Offenders

BY CArA SullIVAN



iJUSTICE

In the classic movie scene of an individuals discharge from pris-

on, the released oender emerges from a single door to cross

a dust courtard and pass through a vast, chain-link fence. On

the other side of that fence, a friend or loved one is waing to

pick up the prisoner and drive o into the future.

In realit, the reentr process is much dierent. Ninet-ve percentof all state prisoners will eventuall be released into our communies,

so it is in the interest of public safet to provide e-oenders with the

tools and resources the need to successfull reintegrate into societ.1

Provisional occupaonal licenses can help reduce recidivism, protect

our communies and contain correcons budgets b providing a path

to emploment for certain e-oenders.

Obtaining and maintaining a job is an integral part of an eecve

reentr process because released oenders oen lack nancial re-

sources and must rel on friends or famil for support. Beond pro-

viding an e-oender with an income, a job provides a sense of stabil-

it, responsibilit and structure. However, a criminal background, no

maer how minor, can make it tremendousl dicult to nd emplo-

ment.

A provisional, or probaonar, occupaonal license is given to an

otherwise qualied e-oender with the understanding that the li-

censing authorit will revoke the license if the provisional license

holder commits a new crime, has their communit supervision or

parole revoked or violates the rules governing the pracce of the oc-

cupaon for which the provisional license was issued. The possibilit

of having the license revoked provides incenves for e-oenders to

follow the law and maintain emploment.

Provisional licenses will help protect our communies and reduce

recidivism because gainful emploment can reduce the likelihood of

criminal behavior. In Januar 2012, the Center for Emploment Op-

portunies conducted an analsis of their transional jobs program.

The surve found that among the subgroup who were enrolled in

the program, within three months of release, individuals were lesslikel to be arrested, convicted of a new crime and reincarcerated.2 In

Indiana, among oenders with a high school diploma or equivalent,

the recidivism rate was 23.3 percent for those with a job aer release

and 38.4 percent for those without a job aer release.3 Lowering the

rate at which oenders return to prison will reduce the number of

necessar prison beds and, more importantl, protect our communi-

es b decreasing the incidents of crime.

Provisional occupaonal licenses do not remove an oenders crim-

inal histor or prevent an emploer from accessing that informaon.

Understandabl, emploers want to know of a potenal emploees

criminal past, and the would oen rather hire an individual without

a criminal record due to the fear that the e-oender ma reoend.

However, aer approimatel seven ears without another oense,

an e-oender is no more likel to commit a crime than an individual

without a criminal record.4

Protecons can be put in place when giving an e-oender a pro-

visionar occupaonal license. The occupaon should not be directl

related to the crime for which the individual was convicted. Clearl

a se oender should not be licensed to operate a dacare and an

individual convicted of residenal burglar should not be installing

residenal HVAC sstems. However, nonviolent oenders should have

the opportunit to obtain a provisional license for an occupaon un-

related to their crime. For eample, individuals convicted of insurance

fraud should be able to obtain a provisional license to be a barber if

the are otherwise qualied.

Emploment allows e-oenders to make their vicm restuon

paments, pa court fees and support themselves. Oering provision-

al licenses to e-oenders will not solve the various problems prison-

ers have tring to nd emploment aer the are released, but it is

a step in the right direcon to providing resources to help released

oenders get back on their feet.

1 Hughes, Timoth and Doris James Wilson. Reentr Trends in the United States. Bureau of Justice Statistics. U.S. Department of Justice. Available at: http://bjs.

gov/content/pub/pdf/reentr.pdf.

2 Office of Planning, Research and Evaluation (OPRE) Administration for Children and Families and the Office of the Assistant Secretar for Planning and Evaluation.

More than a Job: Final Results from the Evaluation of the Center for Emploment Opportunities (CEO) Transitional Jobs Program. Department of Health and Hu -

man Services. Januar 2012. Available at: http://www.mdrc.org/sites/default/files/full_451.pdf.

3 Nall, John, Susan Lockwood, and Taiping Ho. The Impact of Education and Emploment on Recidivism. Available at: http://www.in.gov/idoc/files/Impact_of_Ed -

ucation_and_Emploment_on_Recidivism.pdf.

4 Kurlchek, Megan C., Robert Brame, and Shawn D. Bushwa. Enduring Risk? Old Criminal Records and Short-Term Predictions of Criminal Involvement. March

2006.

cArA sulliVAn is the Director of the American Legislative

Echange Council Task Force on Commerce, Insurance and

Economic Development.

Beyond poviding an e-

offende ith an incoe,

a job povides a sense

of y, py

d .



INSIDE ALEC

Legislators Address the Growing Use oContingent Fee Attorneys by State Ofcials

BY CHrISTOPHEr E. APPEl

As the pracce of states hiring private lawers has epand-

ed to virtuall ever area of government enforcement,

concerns have mounted as to whether such arrange-

ments serve the public interest or are driven b private

prot. Legislators have responded b adopng safeguards on the hir-

ing, oversight, and pament of private aornes b state ocials. Fol-

lowing Floridas lead,1 si addional states have adopted reform over

the past three ears.

These reforms have their genesis in the American Legislave E-

change Councils Private Aorne Retenon Sunshine Act (PARSA) ad-

opted in 1998. Soon thereaer, Colorado, Conneccut (via eecuve

order), Kansas, Minnesota, North Dakota, Teas and Virginia adopted

legislaon based on the model polic. The most recent wave of states

taking acon includes Arizona, Indiana and Missouri in 2011,2 and

Iowa, Mississippi and Georgia (via administrave order) in 2012.3

Momentum connues to grow. Recentl, West Virginia voters re-

placed long-serving West Virginia Aorne General Warren McGraw,

Jr., who faced signicant controvers due to his roune no-bid hir-

ing of private lawers, with

Patrick Morrise, who was

elected on an ethics plat-

form. Among the newAorne Generals rst

acts was to propose new

procedures and guidelines

outlining when and how

the Oce of the Aorne

General should hire out-

side counsel to represent

the State and its agencies

in legal proceedings.4

THE EXPANDING USE OF THE PRACTICEUse of private conngenc fee agreements rst rose to prominence

during the landmark state aorne general tobacco ligaon of the1990s. The Manhaan Instute has esmated that approimatel 300

lawers from 86 rms are projected to earn up to $30 billion from the

selement of this ligaon.5 In most cases, the selecon of outside

counsel to pursue this ligaon was not the product of an open or

compeve bidding process, but rather occurred behind the scenes

and went to polical allies and large campaign contributors of the

state aorne general.6 The eecve rates for the work performed on

behalf of the state b some plains aornes has been calculated at

tens of thousands of dollar per hour.

Although observers once viewed such arrangements as unique to

tobacco ligaon, plains lawers and some state aornes genera

are now appling this model to virtuall ever area of ligaon agains

numerous industries. Pharmaceucal manufacturers, nancial ins

tuons and insurers are among the most frequent targets.7 Govern

ment ocials in at least 21 states have hired plains lawers on a

conngent fee basis to enforce state laws in recent ears.

A NEED FOR SAFEGUARDSThe histor of conngent fee contracts between state aornes gen

eral and private aornes is replete with eamples of unfavorable

deals from the publics perspecve and pa-to-pla ancs. Although

state laws tpicall require use of an open and compeve process

when contracng for goods and services, such good government pro

cedures are not tpicall used when the state hires outside counsel

Eperience has shown that plains law rms oen develop the the

or for the ligaon, then shop it around to state aornes genera

to nd an interested client, not the other wa around. State ocials

have frequentl hired law rms that contribute or are epected to

contribute to their campaigns or have other polical or personal con

necons to the hiring ocial. There is no assurance that the state is

hiring the most qualied counsel and geng the best deal. In some

instances, government lawers ma be perfectl capable of handling

the ligaon without outside assistance, which would avoid siphoning o a signicant poron of the recover, potenall millions of dol

lars that could reduce the ta burden or fund projects or programs, b

a conngent fee.

Enforcement of state law through a conngent fee also raises seri

ous ethical and constuonal concerns.8 There is an inherent conic

of interest between the prot maimizing objecve of a private at

torne, whose compensaon is based on the amount of damages o

nes imposed on a compan, and the states most fundamental role

of ensuring that the law is enforced in a fair and reasonable manner

The effective ates fo the ok pefoed on behaf

of the state by soe paintiffs attoneys has been

cacated at f hd f d p h.



JUSTICE

In some cases, the public interest ma be best served through a rem-

ed that is not nancial in nature or the evidence ma suggest thatthe government should disconnue ligaon. Unlike cases brought

for private plains, public enforcement acons involve a balancing

of interests and a delicate weighing of values that demands the

representave of the government to be absolutel neutral.9 This is

simpl not the case where a private lawers compensaon depends

upon the dollar amount of a judgment or selement.

In eamining this pracce, the state supreme courts of Rhode Is -

land and California have found that conngent fee agreements be-

tween government ocials and private aornes ma be permissible

in some circumstances but onl where the governments aornes

maintain full and complete control over the ligaon.10 A state ma

not abrogate its law enforcement powers to private lawers.

In addion, b shiing ligaon risks to outside counsel, states mabe enced to bring novel or speculave lawsuits (oen at the invita-

on of the retained private counsel) that seek to epand the liabilit

as opposed to enforce eisng law.11 The pracce invites regulaon

through ligaon.

ADOPTION OF REFORMAlthough the legislaon adopted varies signicantl from state-to-

state, the recent wave of state laws generall includes the following

elements:

The aorne general must analze certain factors and make a

wrien determinaon that conngent fee representaon will beboth cost-eecve and in the public interest, prior to entering

into a contract;

The aorne general is required to request proposals from pri-

vate aornes, or make a wrien determinaon that such a re-

quest is not feasible under the circumstances;

Conngent fees are subject to ered limits and an aggregate cap

of $50 million, eclusive of reasonable costs and epenses;

Conngent fees ma not be based on imposion of nes;

Certain requirements must be met throughout the contract to

ensure government aornes retain complete control over the

ligaon;

Conngent fee contracts must include certain standard provi-

sions reecng what is epected of the government aornesand conngent fee counsel;

The conngent fee contract, paments made under the contract,

and the aorne generals wrien determinaon about the need

for conngent fee representaon are to be posted on the aor-

ne generals website. Other records relang to the contract are

to be subject to the states open records laws. The private aor-

nes and paralegals are to maintain detailed contemporaneous

me records for presentaon to the aorne general on request;

and




INSIDE ALEC

TelemedicineBY AlEx ruED

Health Informaon Technolog (IT) has dramacall im-

proved since S. Eric Wachtel of MedPhone Compan rst

diagnosed paents needing debrillaon over telephone

lines, which the 1989 House Chronicle arcle described

as a [h]eart aack vicm revived via telephone.1 Toda, paents

are able to seamlessl communicate with phsicians using remote

health monitoring tools, including laptops, smartphones and tablets.

These technologies eploit Americas tech-focused societ and result

in qualit, paent-centered care for more Americans at a lower cost.

In order to cope with future regulator and demographic challenges,

policmakers must embrace technological advancements as a catalst

for reworking the healthcare sstem.

Health IT is a broad term that refers to a variet of technolog-

related healthcare funcons, including Electronic Healthcare Records

(EHRs), Mobile Health or mHealth and telemedicine. These health-

related technologies allow phsicians to access digized healthcare

records, diagnose paents, or prescribe medicineall via the Inter-

net. Paents also benet from mobile applicaons as the monitor

their own health and provide phsicians with real-me feedback on

their progress.

The changing healthcare landscape requires both policmakers

and industr representaves to think cricall about innovaon and

idenf creave soluons to challenges. Under the Aordable Care

Act (ACA), the federal-state health insurance program for low-income

individuals known as Medicaid will epand eligibilit to an esmated

16 million Americans. This regulator change, coupled with Americas

shi towards an older and less health populaon, will likel cause

a phsician shortage. The Associaon of American Medical Colleges

esmates the U.S. will face a shortage of over 90,000 phsicians b

2020.2

Telemedicine enables healthcare providers to reach paents acros

distances and has eecvel connected paents in underserved, ru

ral areas with phsicians. Telemedicine could be similarl eecve

in helping the U.S. cope with the predicted lack of phsicians. Othe

naons eperimenng with telemedicine have eperienced progress

in this arena. One such eample is Dr. Sunita Maheshwaris compan

Teleradiology Soluons, which addressed Indias phsician shortage

b receiving paents scans and connecng them with medical e

perts from around the world.3

A great benet to implemenng mHealth and telemedicine is tha

the technolog is alread in the hands of most paents and phsicians. The Pew Research Center recentl announced that 87 percen

of Americans own cell phones4 and more than half of people with

mobile phones are smartphone users.5 Fortunatel, adopon of these

devices is on the rise, for smartphone adopon has increased 38 per

cent in the past three ears6 and Gartner, a leading IT research and

advisor compan, esmates 2013 will bring the sale of nearl 1.2 bil

lion smartphones and tablets.7 Not onl do people own the devices

that make mHealth possible, but the are also acvel engaging them

for health purposes; 80 percent of phsicians have an iPhone and 30

percent of phsicians use an iPad for clinical acvies.8 As for paents

the U.S. House Energ Subcommiee on Communicaons and Tech

nolog recentl reported that 500 million people will use the 97,000

available mobile health applicaons b 2015.9,10

As states look to decrease the overall burden on the U.S. health

care sstem, mHealth is a means to streamline healthcare processes

around common diseases, such as diabetes, and decrease readmis

sion rates. For eample, the American Diabetes Associaon calculated

the cost of treang diabetes in 2012 reached $245 billion. 11 The in

troducon of DiabetesManager and similar mobile apps empowers

paents to manage their health and allows phsicians to ensure ad

herence and idenf problems before paents are re-hospitalized



iHEALTH

Since $100 billion is spent annuall to hospitalize paents who did not

adhere to medicaon requirements, Diabetes Manager or a simple

app like MediSafe, which alerts emergenc contacts if paents forget

to take their medicine, has huge potenal to cut unnecessar costs.

Although Health IT soluons lower costs and improve paent care,

these technolog-related devices are oen subject to regulator over-

sight well before there are signs regulaon is needed. Currentl, in

both Medicaid and Medicare, phsicians, hospitals and various health-

care providers are eecvel using mHealth technologies cered b

accredited private enes. Meanwhileears aer the invenon of

these mobile health devicesthe Federal Drug Administraon is slldetermining how best to regulate them.12 As the federal government

generates regulator uncertaint, there is opportunit for the states

to take the lead in fostering an environment that encourages innova-

on in and the ulizaon of medical-related technologies.

One major impediment to telemedicine are state pracce-licensing

issues that arise when healthcare providers aempt interstate care.

Prior to the advent of the Internet and accompaning technologies

like smartphones, Faceme and Skpe, seeing a phsician across state

lines was an impossibilit. Paents seeking healthcare outside their

state confuses medical licensing laws wrien for a bgone era. In

order to pracce telemedicine, a quarter of doctors have obtained

licenses in more than one state, which adds up to $300 million in li -

censing costs from doctors alone. While the state barrier is important

to the state medical associaon, it is meaningless to paents. In the

future, establishing standards that make sense to paents, healthcare

providers and regulators will be important to reducing uncertaint

with regards to telemedicine.

As Bret Swanson points out in The App-licaon of Medicine, given

that healthcare is one-sith of the Gross Domesc Product, reducing

barriers to technologies that improve our healthcare sstem will raise

the producvit of the sector and have posive implicaons for the

overall U.S. econom.13 Although states do not alwas have primar

jurisdicon over policies related to Health IT, their role as regulators

in terms of pharmacies, hospitals and clinics, insurance, and phsi -

cians and nurses grant them the authorit to encourage a paent-

centered, market-driven approach to healthcare. Given the looming

doctor shortage and general economic malaise, the U.S. healthcare

sstemand paents naonwidecannot risk missing out on the

benets of Health IT.

As the fedea govenent

geneates egatoy ncetainty,

thee is oppotnity fo the states

to take the ead in f

v h

v d h z f

d-d h.

1 Russell, Nina. "Using telemedicine to address doctor shortages." yale Journal of Medicine & Law Ix, no. 1 (Februar 16, 2013).

2 "Fiing the Doctor Shortage." Association of American Medical Colleges. Last modified 2013. Accessed April 12, 2013 https://www.aamc.org/initiatives/fidoc -

shortage/.

3 "Telemedicine is answer to doctor shortage." The Times of India. Last modified March 29, 2013. Accessed April 12, 2013. http://articles.timesofindia.indiatimes.

com/2013-03-29/goa/38125242_1_telemedicine-doctor-bangalore.

4 Brenner, Joanna. "Pew Internet: Mobile." Pew Internet & American Life Project. Last modified Januar 31, 2013. Accessed April 12, 2013. http://pewinternet.org/

Commentar/2012/Februar/Pew-Internet-Mobile.asp.

5 Schmerler, Jessica. "mHealth: Healthcare Goes Mobile." yale Journal of Medicine & Law Ix, no. 1 (Februar 22, 2013).

6 Boucher, Rick. "The net generation of American talk." Reuters (blog). Entr posted April 1, 2013. Accessed April 12, 2013. http://blogs.reuters.com/great-de-

bate/2013/04/01/the-net-generation-of-american-talk/.

7 Swanson, Bret. The App-lification of Medicine. Washington, DC: Business Horizon Quarterl, 2013.

8 Schmerler, Jessica. "mHealth: Healthcare Goes Mobile." yale Journal of Medicine & Law Ix, no. 1 (Februar 22, 2013).9 "On Da Two of Three-Da Hearing Series, Eperts Warn FDA Regulation of Health Information Technolog Could Stifle Innovation, Barring Patients Access to

Apps." News release. March 20, 2013.

10 Jahns, Ralf-Gordon. "The market for mHealth app services will reach $26 billion b 2017." Research2guidance. Last modified March 7, 2013. Accessed April 12,

2013. http://www.research2guidance.com/the-market-for-mhealth-app-services-will-reach-26-billion-b-2017/.

11 "American Diabetes Association Releases New Research Estimating Annual Cost of Diabetes at $245 billion." American Diabetes Association. Last modified March

6, 2013. Accessed April 12, 2013. http://www.diabetes.org/for-media/2013/annual-costs-of-diabetes-2013.html.

12 White, Joel. "New regulations needed for growth of mobile medical technologies." United Press International. Last modified April 1, 2013. http://www.upi.com/

Science_News/Technolog/2013/04/01/Outside-View-New-regulations-needed-for-growth-of-mobile-medical-technologies/UPI-43091364789520/.

13 Swanson, Bret. The App-lification of Medicine. Washington, DC: Business Horizon Quarterl, 2013.

AlEx ruEd is the Legislative Analst for the Task Force on

Communications and Technolog.



INSIDE ALEC

Finall, states should implement safe harbor provisions. A safe har-

bor provision is an element in a statute or regulaon that aords pro-

tecon from liabilit or penalt if certain condions are met. Oen

these condions require that no harm has occurred as a result of theviolaon and that the oender take prompt steps to come into com-

pliance with the statute or regulaon that has been violated. In the

bzanne world of environmental regulaon in which it is nearl im-

possible to be in total compliance at all mes, safe harbor provisions

are parcularl sensible.

For a business owner along the Gulf Coast of Teas, Louisiana,

Mississippi, Alabama and Florida, dozensand in some cases, hun-

dredsof acvies that one could not possibl know to be criminal

put business owners at signicant risk. The risk is not just of monetar

loss, but of actual prison me. The ve Gulf Coast states menoned

in this report can seize a signicant opportunit for leadership b re -

forming their laws to conform beer to tradional legal norms. The

ma also set an eample that can be followed b the federal govern

ment, which has made notorious overcriminalizaon headlines such

as imprisoning a lobster sherman for si ears for improperl har

vesng lobster tails.Fundamentall, governments are instuted to secure libert, and

although our report focused primaril on the economic ramicaons

of overcriminalizaon, the most important reason for reform is simpl

that overcriminalizaon is a derelicon of the governments respon

sibilit to secure individual libert. A few modest reforms would do a

great deal to address this problem.

While man people ma nd such labels humorous, these seemingl

unnecessar warning labels are an unfortunate side eect of eces-

sive ligaon.

A compan out of Massachuses was sued for millions of dollars for

eercise equipment that was used incorrectl and resulted in injur.

Gas can manufacturers have been sued aer customers poured gaso-line onto a live re and were surprised when the gas can eploded.

The Council develops model polic to inject common sense and ac-

countabilit into the legal sstem and monetar awards. Sit percent

of those polled believe lawsuits led against businesses hurt the U.S.

econom. The Councils common sense lawsuit reform policies reduce

the harm unmerited lawsuits can have on the U.S. econom.

According to the surve, most Americans agree that lawsuit abuse

poses a serious threat to business producvit and compeveness.

Sevent-two percent agree that the eisng liabilit lawsuit sstem

makes it harder for emploees to do business and 88 percent sup-

port creang safeguards to protect small businesses from groundless

lawsuits that could put them out of business. The Councils Private

Enforcement of Consumer Protecon Statutes Act would protectsmall businesses against lawsuit abuse brought under the guise of

consumer protecon while sll allowing injured consumers to recover

their due.

Sevent-eight percent of the polls respondents believe there are

too man lawsuits, while a mere eight percent believe there are too

few. The Council developed a Resoluon on the Lawsuit Abuse Re

ducon Act to temper the incenve to le frivolous lawsuits. The

model polic is designed to dissuade complaints groundless in fact

or legal standing. Specicall, the model resoluon would encourage

courts to lev sancons and award aornes fees to an aorne opart who brings a lawsuit deemed frivolous b a judge. Such a safe

guard would provide reasonable protecon for defendants who ma

not have done anthing wrong, et are sll forced to pa the oen

signicant costs of ligaon under the current tort sstem.

The polling data nds that 78 percent of people agree to the posed

statement that enacng lawsuit reform is an important part of im

proving the U.S. business environment and aracng and keeping

jobs. Lawsuit reform is widel-appreciated polic that can improve

the business environment for companies large and small. The Coun

cils Task Force on Civil Jusce works to develop fair reforms that help

the free enterprise sstem funcon more fairl and eecvel.

Small businesses will not be the onl ones eected, however. A

2012 report from actuarial consulng rm Milliman, Inc. esmated

that state governments would pa over $13 billion over ten ears in

new taes as a result of the health insurance ta.4 Ironicall, this will

aect states with larger Medicaid programs that ulize managed care:

that is, Medicaid programs that contract with private plans in the full

insured market.

The general consensus that premiums will rise is consistent with

what man predicted based on eamples in several states; es

senall, guaranteed issue and communit rang come at a cost

VikrAnT p. rEddy is a polic analst and

mArc A. lEVin is director of the Center for

Effective Justice at the Teas Public Polic

Foundation.

Amy kJosE AndErson is the Director of

the Task Force on Civil Justice.

John Eick is the Polic Analst for the Task

Force on Civil Justice.

Lawsuit Reform, continued from page 5

Five Solutions, continued from page 10

Premiums, continued from page 17


25/28

The aorne general must submit an annual report to the leg-

islature that describes the states use of outside counsel in the

preceding calendar ear.

Each of these laws, and earlier legislaon adopted based on PAR-

SA, shares the common goals of promong transparenc, curbing

unseeml liaisons between public enforcement ocials and private,

prot-movated lawers, and protecng the public funds. Such re-

forms provide legislators with an eecve means of safeguarding the

public interest when the state enforces the law through use of private

aornes.

1 Louise Radnofsk, Sebelius: Some Could See Insurance Premiums Rise, Wall Street Journal Online, March 26, 2013, http://blogs.wsj.com/washwire/2013/03/26/

sebelius-some-could-see-insurance-premiums-rise/.

2 Congressional Budget Office, An Analsis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act, November 30, 2009 http://www.

cbo.gov/sites/default/files/cbofiles/ftpdocs/107/doc10781/11-30-premiums.pdf.

3 Michael J. Chow, Effects of the PPACA Health Insurance Premium Ta on Small Businesses and Their Emploees: An Update, NFIB, March 19, 2013, http://www.

nfib.com/Portals/0/PDF/AllUsers/research/studies/ppaca/health-insurance-ta-stud-nfib-2013-03.pdf.

4 John D. Meerschaert and Matieu Doucet, PPACA Health Insurer Fee Estimated Impact on State Medicaid Programs and Medicaid Health Plans, Milliman, Januar

31, 2012, http://capsules.kaiserhealthnews.org/wp-content/uploads/2012/02/PPACA-Health-Insurer-Fee-Estimated-Impact-on-Medicaid.pdf.

5 Elise Viebeck, Premiums could rise under healthcare law, Sebelius concedes, The Hill, March 27, 2013, http://thehill.com/blogs/healthwatch/health-reform-

implementation/290523-sebelius-sas-some-could-see-insurance-premiums-go-up.

sEAn rilEy is Director of the Task Force on Health and

Human Services.

The mechanism of the law that claims these higher premiums will be

aordable comes in the form of ta subsidies paid for b raising taes

elsewhere. These taes, however, will be passed down to consumers

and, ironicall, the federal government will indirectl ta itself and the

states for the honor. On the other hand, Secretar Sebelius stated that

the mechanism the law relies on to make insurance aordable comesfrom the market when insurers compete for customers.5

chrisTophEr E. AppEl is an Associate in the Public Polic

Group in the Washington, D.C. office of Shook Hard & Bacon

L.L.P., and serves as an advisor to the Task Force on Civil

Justice.

Legislators, continued from page 20

1 Fla. Stat. Ann. 16.0155.

2 Ariz. Rev. Stat. 41-4801; Ind. Code Ann. 4-6-3-2; Mo. Rev. Stat. 34.376, 34.378, and 34.380.

3 Iowa Code 13.7, 23B.1 et seq.; Miss. Code Ann. 7-5-1 to -8, 7-5-21, 7-5-39; Admin. Order, Attorne General Samuel L. Olens, Ma 29, 2012.

4 See Office of West Virginia Attorne General Patrick Morrise, Outside Counsel, at http://www.wvago.gov/outsidecounsel.cfm.

5 See Manhattan Inst., Center for Legal Pol, Trial Lawers, Inc.: A Report on the Lawsuit Industr in America 2003 6 (2003), available at http://www.manhattan-

institute.org/pdf/triallawersinc.pdf; see also Leah Godesk, State Attornes General and Contingenc Fee Arrangements: An Affront to the Neutralit Doctrine?,

42 Colum. J.L. & Soc. Probs. 587, 588-89 (2009) (estimating that approimatel $14 billion of the settlement has gone to private attornes).

6 See, e.g., Stuart Talor, How a Few Rich Lawers Ta the Rest of Us, Natl J., June 26, 1999; Robert A. Lev, The Great Tobacco Robber: Hired Guns Corral Contin -

gent Fee Bonanza, Legal Times, Feb. 1, 1999, at 27.

7 See, e.g., Manhattan Inst., Trial Lawers Inc.: Attornes General: A Report on the Alliance Between State AGs and the Plaintiffs Bar 2011 (2011), available at

http://www.triallawersinc.com/TLI-ag.pdf; Pa-to-Pla Eamples, U.S. Chamber Institute for Legal Reform, at http://www.instituteforlegalreform.com/featured -

tool/pa-to-pla-eamples-0.

8 See Martin H. Redish, Private Contingent Fee Lawers and Public Power: Constitutional and Political Implications, 18 Sup. Ct. Econ. Rev. 77 (2010).

9 People e rel. Clanc v. Superior Ct., 705 P.2d 347, 352 (Cal. 1985).

10 See Rhode Island v. Lead Indus. Assn, 951 A.2d 428 (R.I. 2008); Count of Santa Clara v. Atlantic Richfield Co., 235 P.3d 21 (Cal. 2010).

11 See, e.g., Adam Liptak, A Deal for the Public: If you Win, you Lose, N.y. Times, Jul 9, 2007, at A10; Editorial, The Pa-to-Sue Business, Wall St. J., Apr. 16, 2009, at

A15.

HEALTH



26/28

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