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July 11-12, 2005
Wyoming Girls' School
Sheridan, Wyoming
Senator John Hanes, Chairman
Representative Jack Landon, Chairman
Senator Bruce Burns
Senator Ken Decaria
Senator Tony Ross
Senator Kathryn Sessions
Representative George Bagby
Representative Ed Buchanan
Representative Tom Lubnau
Representative Monte Olsen
Representative Ann Robinson
Representative Stephen Watt
Representative Deb Alden
Representative Kevin White
Gerald W. Laska, Staff Attorney
Please refer to Appendix 1 to review the Committee Sign-in Sheet for a list of other individuals who attended the meeting.
All meeting materials and handouts provided to the Committee by the Legislative Service Office (LSO), public officials, lobbyists, and the public are referenced in the Meeting Materials Index, attached to the minutes. These materials are on file at the LSO and are part of the official record of the meeting.
Chairman Hanes called the meeting to order at 8:30 a.m. The following sections summarize the Committee proceedings by topic. Please refer to Appendix 2 to review the Committee Meeting Agenda.
Chairman Hanes presented proposed committee rules. Among the provisions is one that would require a majority of the Senate members and a majority of the House members each to approve a final motion that the committee sponsor a bill. Representative Olsen moved, seconded by Representative Bagby, that the joint interim committee rules be approved. The motion carried on a voice vote.
Anne Ladd, Executive Director of the Wyoming Health Care Commission, distributed to the committee a copy of the "toolbox" of proposed solutions (Appendix 3) previously given to the governor.
John Glode, M.D., a member of the Commission, addressed the committee. Regarding affordability of medical malpractice insurance, Dr. Glode told the committee that the Commission had contracted with Milliman Associates actuaries to study the feasibility of a risk retention group ("RRG") in Wyoming. Milliman's report, received November 15, 2004, concluded that premiums being charged in Wyoming are not excessive and that therefore an RRG would not be able to offer significantly reduced premiums.
Regarding availability of malpractice insurance, Dr. Glode noted that UMIA, The Doctors' Company and MedPro are currently writing insurance and have picked up nearly all of the former OHIC insureds. The window of opportunity to begin an RRG is therefore probably closed, as an RRG would need an insured base of 175-350 physicians to be competitive.
Senator Hanes stated that the Milliman report assumed OHIC-levels of market share and asked if a larger share would make an RRG more competitive. Dr. Glode stated that it probably would, but might then drive out private carriers or abandon higher risk insureds to the private market.
Senator Sessions asked if the Commission considered the effect on an RRG of an excess liability fund paid by the State. Dr. Glode said that is the subject of a separate Commission study, but that state funds have not done well in other states.
The committee discussed generally with Dr. Glode whether the medical malpractice situation is just a market-driven phenomenon, whether the malpractice crisis had been exaggerated, whether the patient base in Wyoming is too small to support easy access to physicians throughout the state, and whether Medicaid/Medicare reimbursements are too low
Senator Hanes noted that he had distributed to the Committee copies of a Wall Street Journal article regarding the response of anesthesiologists to the malpractice insurance crisis, and their successful efforts to reduce injuries and malpractice claims. (Appendix 4).
Robert Kidd of the Wyoming Hospital Association addressed the committee. Mr. Kidd noted that he was involved in starting RRG's in Indiana and Virginia, that neither fared well in the long term, and that many RRG's grow too fast and collapse.
Mr. Kidd described the Yellowstone Group, which is a mutual insurance company among small hospitals in Wyoming, Montana and Idaho. The group currently insures 22 small hospitals and 125 of their physician employees. Many doctors are "knocking on the door" to become physician employees of insured hospitals in order to come under the hospital's insurance. Mr. Kidd sees that as only a short-term solution for the malpractice crisis because the hospitals' premiums will increase accordingly. The best aspects of the Yellowstone Group program are the strict underwriting and risk management requirements. The Yellowstone Group at its next meeting will consider 'spinning off' the physician insurance component.
In response to questioning from Chairman Hanes, Mr. Kidd stated that some adverse selection or "cherry picking" occurs, that that is a benefit of self-ownership and control and that the program is able to operate under current law without additional legislation. The Wyoming Hospital Association is therefore not seeking statutory changes.
Robert Schimenti addressed the committee. He stated that he has been involved in starting RRG's in many states, both as stock companies and mutual companies. They are usually registered in Vermont because of its heavy oversight and education requirements. Major issues in starting an RRG include: format of the company; underwriting selectivity; reinsurance and its breakpoint; no claim settlement without insured's approval; aggressive risk management; physician management assistance. Mr. Schimenti stated that a successful RRG usually drives down premiums for all physicians. He said he disagreed with the Milliman study for the Health Care Commission because their conclusions about premium levels were beyond the confidence level of their data, and because he has seen many successful RRG's. Commercial insurers do very little actual risk management. Damage caps and robust pre-litigation review would increase the likelihood of success.
In response to Senator Decaria's suggestion that adverse selection might force out bad doctors, Mr. Schimenti said the key is to identify bad actors as opposed to inherently risky areas of practice.
Wendy Curran addressed the committee. Private insurance companies do fairly aggressive risk management, but that does not address the problem of lawsuits over bad outcomes where there was no negligence. Generally, there are physician shortages in surgery and ob-gyn. Insurance for "tail" coverage is still a problem; UMAI has stopped writing prior acts coverage in high-risk specialties. The Society would like to see the tail insurance assistance program extended
Ms. Curran stated that the WMS has been studying RRG's for a long time, that they would have high start-up costs. There is no statutory bar to forming an RRG now but the state could help with initial capitalization and assist doctors affected by adverse selection. WMS does not believe an RRG would help with affordability, and they are concerned about the possibility of additional assessments in the event of a reserve shortfall. What would help would be a strong package of tort reform; premiums in Texas and West Virginia have decreased after passage of tort reform there.
Richard Jamieson, President-elect, Wyoming Trial Lawyers Association, addressed the committee. Mr. Jamieson reported that a group of Casper attorneys and physicians have been conducting a very encouraging roundtable about medical malpractice liability. The Association has endorsed a three-phase plan to address problems: a medical review panel; a physicians' risk retention group; and a mandatory fund to cover damages in excess of mandatory minimum insurance levels. Such a fund, following a Wisconsin model, would: protect doctors, hospitals, other health care providers; have local management through a board; have no attorney general involvement; protect patients and their families from uncompensated injury; protect the assets of doctors and hospitals; promote patient safety; and promote doctor recruitment.
Richard Bray, CEO of the Nevada Mutual Insurance Company, described the cyclical nature of the medical malpractice insurance industry. He also is a principal with a holding company that owns and advises physician mutual insurance companies. He believes Wyoming's premium volume is sufficient to support a self-funded malpractice company/risk retention group. Mr. Bray found the Milliman actuarial analysis flawed, and he would propose a plan to form a Wyoming RRG to be owned by physicians and administered with outside expert assistance. Mr. Bray believes a state loan of $8.5 Million for initial capitalization would be sufficient to provide full coverage, including tail coverage and reinsurance, at competitive or cheaper premiums than private carriers. Surplus note funding would also be feasible. Mr. Bray stated that the cooperation of the trial bar to date is a very promising and unique feature for Wyoming. The loan could be paid back on a date certain or a time the insurance commissioner deems reserves to be sufficient.
James F. Ripley, D.D.S., made a Powerpoint presentation to the board (Appendix 5). Dr. Ripley, a dentist in private practice, proposed establishing a trust fund with $1.2 Billion per year from the mineral royalty fund for 10-15 years. Earnings from the fund would be used to pay limited damages and litigation expenses for those plaintiffs and defendants willing to enter into a "participation agreement," under the terms of which the parties would have access to a pre-defined amount of money for litigation expenses and damages. Participating defendants would be required to have reinsurance above the amount available from the pool. Dr. Ripley stated the fund would not be a subsidy to physicians and would be guaranteed to reduce premiums. The fund would have built-in deterrence provisions such as loss of license for physicians sued successfully three times or attorneys who pursue and lose three claims after medical review panel determination of no merit.
Chairman Landon asked generally for comment about the "New Zealand Plan" of medical malpractice courts.
· Anne Ladd said that the Health Care Commission is studying several such plans and will report by October 15;
· Marcia Shanor, Wyoming Trial Lawyers Association, stated that several states have considered medical malpractice courts but none has adopted them and those foreign countries that have them also have socialized medicine. She noted that Senator Enzi has sponsored a bill in Congress to fund pilot medical malpractice projects;
· Wendy Curran, Wyoming Medical Society, stated that the American Medical Association will soon propose model medical court legislation, and noted that the current system does not work well for any involved.
Senator Hanes proposed that the committee request LSO to draft a bill to renew and extend the program, which expired in January, and which provided loans to assist physicians with premiums for malpractice tail coverage. The committee agreed unanimously by show of hands.
Senator Sessions proposed that the committee request LSO to draft a bill to extend the additional obstetrical payment to certain physicians. The committee agreed by show of hands.
The committee discussed the possibility of a bill to appropriate funds for a risk retention group but decided to wait for a more specific proposal from Mr. Bray and the Wyoming Trial Lawyers Association.
Representative Lubnau stated that he has been working on a concept bill to provide governmental immunity to physicians working under contract with hospitals. Chairman Landon and Chairman Hanes agreed that the bill should be distributed to the committee for consideration at its next meeting.
Rodger McDaniel and Korin Schmidt, Department of Family Services, reported to the committee on a study of the state's juvenile justice system by the Wyoming Survey and Analysis Center. Copies of the study, "Youth Case Processing in the State of Wyoming: An Analysis of Four Counties," were distributed (Appendix 6). Ms. Schmidt reviewed the report for the committee and highlighted its key findings, including:
· Most juveniles contact the justice system through circuit and municipal courts, not district or juvenile courts;
· There is no consistency between counties or courts in the treatment of juvenile offenders;
· There is a lack of statewide judicial leadership and a concise vision of how the state's courts should respond to juvenile crime;
· The gatekeeper decision as to which jurisdiction will handle a case is made by law enforcement, usually at the time of issuing a summons or citation.
The department adopted the recommendations of the study, including:
· The development of a clearly articulated juvenile justice vision for Wyoming;
· Centralized screening for all juvenile cases;
· An enhanced continuum of local services and programs for juvenile offenders, with detention as a last resort;
· A pilot project to use state funds as incentive for counties to develop more community based juvenile services;
· Development of framework for exclusive juvenile courts throughout the state;
· Development of a statewide plan for minor-in-possession offenses, which would remain in circuit or municipal courts;
· Better data collection, reporting and information sharing regarding juvenile offenders.
Chairman Landon asked that the Department repeat the study presentation the following day when court and county representatives were expected to be present.
Director McDaniel proceeded to describe the new cost-based formula and fee schedules for reimbursement of service providers. The method is similar to the method used by Medicaid and was in fact developed under contract with the same vendor used by Medicaid. New contracts incorporating the fee schedules have been tendered to the providers but have not yet been signed and returned. The department intends to add performance measures and incentives to the contracts in the near future.
Chairman Landon stated that he was bothered by a methodology whereby providers costs determine their reimbursement, rather than a more market-based or RFP-type of system. Director McDaniel replied that the fee schedule is statutorily required, that the services are mostly provided per court order rather than free market, and that the department is studying a system to make a grant to the eligible family and allow them to procure the services they need. He noted that the Department has a new auditor position and will soon be issuing contracts for assessment services, in order to assure that clients receive the best placement with appropriate services for the appropriate length of time. The committee discussed generally the need for timely and uniform screening assessments, consideration of client/family desires in treatment plans, and regular follow-up assessments.
Cal Furnish, Normative Services, addressed the committee. Normative Services is a private residential treatment facility for up to 140 students near Sheridan. Mr. Furnish reviewed for the committee his long personal experience in counseling, including Awareness House in Cheyenne, abuse counseling, Office of Youth Alternatives in Cheyenne and Normative Services. The center applies the fundamental beliefs Mr. Furnish has developed regarding counseling and treatment for negative behaviors, including:
Jeff Holsinger, Volunteers of America, addressed the Committee with a Powerpoint presentation (Appendix 7). Volunteers of America operates the Campbell County Community Corrections Center, one of three private community corrections centers in the state and the only one that is a non-profit organization. The facility is 13,000 square feet, has 17 paid staff, and houses up to 96 residents. Referrals are received from the circuit and drug courts and Sheridan County jail. The purposes of the program are offender re-entry, decreased recidivism, offender accountability and public safety. All residents are employed in the community; $16,000 in victim restitution was paid by residents last month and $90,000 in the last half of 2004. The program has an 85% success rate. Its major problems relate to retention and hiring of qualified staff in a community with an unemployment rate under 2% and high salaries in the mining industry.
The committee recessed at 5:20 p.m.
Chairman Landon called the meeting to order at 8:06 a.m. The following sections summarize the Committee proceedings by topic. Please refer to Appendix 2 to review the Committee Meeting Agenda.
Director McDaniel reported to the Committee on the progress of the Children and Families Initiative mandated by the legislature. He distributed an outline of his comments (Appendix 8), a copy of the enabling legislation (Appendix 9), a "Wyoming Family Photo" highlighting selected statistical findings to date (Appendix 10), and the summer county visit schedule for Marilyn Patton, Director of the Initiative (Appendix 11). The final report is due October 1, 2005.
Director McDaniel also distributed a draft chapter from the final report regarding the role of the courts in juvenile justice (Appendix 12), as required by the enabling legislation, recommending the creation of "problem-solving courts" or a similar alternative, a family court pilot project, development of a statewide vision for juvenile justice system goals, and performance standards for judicial accountability.
Director McDaniel distributed copies of a May 2005, National Drug Court Institute report on drug courts and other problem-solving courts (Appendix 13), and a draft chapter of the final CFI report on community involvement and empowerment in juvenile justice (Appendix 14).
The committee discussed generally: the difficulty of creating a new court system in the state; the expansiveness of a project to define a single statewide vision for juvenile justice; and the contradiction between statewide uniformity and local control.
Ms. Schmidt summarized again the WySAC report on the juvenile justice system (Appendix 6) and its primary recommendations, including:
· A non-law enforcement screener/gatekeeper to make a jurisdictional decision in juvenile cases;
· A uniform juvenile detention policy;
· A continuum of local services;
· Alternatives to detention and incarceration;
· Alternatives to court referral;
· A pilot program to incentivize local programs and services for juveniles;
· Retention of lesser offenses in the circuit and municipal courts;
· A plan for improved data collection and reporting.
District Court Judges John Perry, Jeffrey Donnell, Scott Skavdahl and Dan Price addressed the committee. The judges noted that they were present in their individual capacities and not as official representatives of the district court bench, the Wyoming Supreme Court or the judicial branch.
Judge Perry stated that the proposed specialty courts and other changes from the WyCAS report and DFS would require a significant restructuring of the judicial system in general, with changes to Titles 1, 14, 20, 35 and Article 5 of the Wyoming Constitution. The result would be a "sea change" in the judiciary at least as large and complex as government reorganization in 1988-1992. Such a change would have to be deliberate and would be time-consuming and costly. A select committee would probably be needed, operating over several years.
Judge Donnell stated that the draft report chapter on the judiciary (Appendix 12) has been circulated to all the judges for comment. The scope of the proposal is huge, and would cost many millions of dollars to implement. He noted that the Juvenile Justice Act currently allows for discretion and experimentation, and that most studies on the subject identify the lack of treatment resources as the primary problem, not the judicial system's organization.
The committee generally discussed the judicial system's responsiveness to change, and whether the current problems are structural or resource-related.
Representative Robinson asked if the judges generally have sufficient information in juvenile cases under the current system. Judges Perry and Donnell stated that the DFS reports they receive are very good and complete, that the multi-disciplinary team approach is working very well, but agreed that there might be a problem with information flowing back to circuit and municipal courts because of confidentiality limitations.
Judge Price stated that he has several years experience now with drug courts. They are working well, but he noted that they are high intensity, time consuming and expensive. Much more could be done under the current system if there were more local treatment facilities with good quality counselors.
Judge Park stated he agreed with most of the other judges' comments. He noted that he has disagreed with DFS/MDT recommendations less than 5% of the time. He strongly agreed with the need for more service resources, especially early intervention.
Judge Skavdahl noted the draft CFI reports listing of the indicia of successful drug courts, and noted that all of those are available in the current system. Most juvenile and substance abuse cases are family cases, and perhaps a new "Families in Need of Supervision" Act would be helpful.
The judges each noted the huge and growing impact of methamphetamine usage and addiction on families and juveniles.
Representative Iekel addressed the committee, as legislator and licensed clinical social worker. He stated that he is a long-time advocate of better funding for support services, and that methamphetamine addiction therapy can be successful but takes 3-4 times longer than other addiction therapies.
Melinda Dennington, a University of Wyoming junior, described her childhood in the foster care and juvenile justice system. She described the Wyoming Advocates for Youth program for peer counseling that she has co-founded, and that the mentoring component of the Wyoming Girls School program helped her turn her life around.
Senator John Schiffer testified that HB 33 contemplated a needs analysis driven by citizen input, but that the judicial system recommendations identified to the committee and contained in the draft report do not come out of the data collected in the Children and Families Initiation survey. The problems are lack of good and timely assessment, and inadequate treatment resources, not the structure of the judiciary.
Matt Riedel, Sheridan County Attorney, stated the jurisdictional gatekeeper role belongs in the prosecutor's office, not DFS. His office is being reorganized to centralize that function in a single person rather than with every law enforcement officer. Laramie County is unique and would not be a good pilot project for a family court. Overhauling the court system would not solve the problem of inadequate treatment resources.
Aaron Holz described the Sheridan County Justice Office, a joint powers board, as an example of the innovation that can occur under current law.
Director McDaniel agreed that the persons surveyed did not explicitly recommend court reform, but they reported economic, healthcare, substance abuse, mental health and domestic violence problems that are all court-related. The board then digested the data and came up with the recommendations. He noted that HB 33 expressly directed consideration of the courts and their responsiveness to family concerns. He agreed that the review needed to be an intentional, deliberative process, and that the draft report is very preliminary.
Chairman Landon noted that almost all speakers agreed on the need for a common vision and the need for additional resources for local programs that are working now.
Chairman Hanes suggested that the co-chairs receive from Judge Donnell, in his capacity as representative of the Judicial Conference, a list of those statutes that should be amended to increase the efficiency of the courts in juvenile justice matters. The co-chairs would then review the list and decide which ones were within the charge of the Management Council, for purposes of preparing draft legislation for the next meeting. The purpose would generally be to increase support and access to treatment within the current system, and not an overhaul of the judicial system or creation of new courts. Committee members agreed that they did not see a mandate to rush into creation of a new court system.
Chairman Landon also requested that individual members circulate by e-mail and additional specific requests for draft legislation for the next meeting.
Chairman Hanes suggested a draft bill request to amend confidentiality requirements to allow information sharing between district courts and circuit or municipal courts in juvenile cases, with appropriate safeguards. The committee agreed by show of hands.
Clark Fairbanks, Superintendent of the Wyoming Girls School, briefly described the history and mission of the Girls School. The school's treatment emphasizes best practices therapy and seven standards of care, including: safe environment; professionalism; teamwork; gender-specific individual treatment plans; child centered and family focuses care; personal accountability; and hope. The school has served 64 girls in the last six months, currently has 35 enrolled and expects full capacity this fall. A large majority of the girls have upon presentation substance abuse problems, substance abuse arrests, prior residential placements, diagnosed psychiatric disorders and open CHINS cases. The operational plan for the school is to improve safety, increase intake assessments, provide continuing care plans, teach more independent living skills, and form family and community partnerships.
Gary Gilmore, Superintendent of the Boys School, described its operation. The school admitted 138 students last year and discharged 129. There are four dorms, categorized according to risk level and duration of stay. The school has overseen 986 of community service and $18,000 of victim restitution in the last year. Significant trends are the difficulty in retaining and hiring qualified staff, and the increasing acuity of substance and mental health problems in referred students.
There being no further business, Chairman Landon adjourned the meeting at 4:30 p.m.
Respectfully submitted,
Senator John Hanes, Chairman Representative Jack Landon, Chairman