Senate Public Health Committee
February 5, 2025
Senator Dave Wallace Good morning folks. Thank you all for being here. The chair sees a quorum. Excuse me. If you wish to speak for or against a bill, if you would, please sign in if you have not already. And with that, Senator Love, if you will present Senator Irvin's bill. Senate Bill 134.
Senator Fredrick Love Mr. Chairman, I have a guest that's going to join me. I don't know if I need him, but he's here. Go ahead and introduce yourself.
Senator Dave Wallace And, sir, if you will introduce yourself and Grant, if you will introduce yourself.
Grant Wallace Grant Wallace, director of the Employee Benefits Division.
Senator Dave Wallace And Senator Love, sir, you are recognized and welcome to start.
Senator Fredrick Love Thank you, Mr. Chair and Committee. I'm here to present Senator Irvin's bill, Senate Bill 134. And this bill does two things. Number one, it moves the monthly meetings to quarterly to bring it more in line with the board that it needs to work with. And then number two, the bill reduces the stipend from 500 to $100. That brings it more in line also with the other boards and commissions that are related. So with that, it's pretty simple, pretty straightforward. And I appreciate a good vote.
Senator Dave Wallace Members, do you have any questions? Seeing none, do you make a motion to.
Senator Fredrick Love Yes, sir. I close and I'll make a motion do pass.
Senator Dave Wallace And do I have a second? I have a second. All in favor, say aye. Members, it has passed. And thank you, Senator Love. I appreciate the help. Congratulations. And with that, Senator Boyd, you're recognized. And you're up for the next four.
Senator Justin Boyd Thank you, Mr. Chair. Senator Justin Boyd, Fort Smith. It's an honor to be back in Public Health. It was a disappointment to me that I could not join you on this committee for the legislative session. But I'm back here today, and I appreciate that. So with your permission, we'll start on Senate Bill 50.
Senator Dave Wallace Yes, sir.
Senator Justin Boyd Okay. So Senate Bill 50. One second. I got a bunch of paperwork here because I got to be prepared for four different bills. So, colleagues, I appreciate the opportunity to present Senate Bill 50 to you today. In fiscal year 22, our state agencies received greater than $200 million in state, federal and other funding for workforce development.
This bill seeks to study the successes and potential failures of how these funds are helping Arkansans navigate the government maze of programs and provide a clear hand up, rather than just simply being a handout or unaccountable use of government funds. This bill seeks to bring the right people together with the best information to create a gap overlap analysis, highlight the good work in the executive branch, and identify opportunities to engage the federal government.
This bill sets the structure for a study to be conducted in ALC Hospital and Medicaid Subcommittee, and generate a report to be completed prior to the next General Assembly. And with that, Mr. Norris, with your permission, will introduce himself and have a few comments as well.
Senator Dave Wallace Mr. Norris.
Ryan Norris Thank you, Mr. Chair. Thank you, committee. Americans for Prosperity is a grassroots organization that looks for bottom up solutions, and Senate Bill 50 establishes a framework by which we can hear from those that are affected by these programs. Americans for Prosperity believes that prosperity is possible for everyone. But through the communities that we are engaged in, we find out that there are barriers that are created in the process. Some of them are administrative, some of them are criteria based.
And those voices need to be heard so that we can understand why does Arkansas continue to see flat or increasing poverty when we have investments of this amount? Well, some of that is just that people get locked into systems that do not benefit them over time in terms of they want to improve their economics, but the trade off sometimes between benefits and self improvement can be vast. And they just don't want to take those. So I don't pretend to speak necessarily for those that are in those systems. But I do recognize that we must come up to some solutions that will allow people to break the cycle of poverty.
We believe, again, that prosperity is available to everybody. What we really appreciate about Senate Bill 50 is also it's using the Legislative Council. It is a low cost. We're not spending millions of dollars for consultants to come in and tell us what our people already know. We just need to hear from those groups that are working with this population that do want to improve their life. And so we strongly support this bill because Arkansas, again, is stuck in this cycle of poverty that is nationally understood and known.
It's time that we spend some time focusing on what the real root causes of them can be. And some of that root cause is the systems that are designed to help are actually holding people back who want to maximize their contribution to the workforce, to their community, and also just keep their families together. So we'd appreciate a good vote in support of Senate Bill 50.
Senator Dave Wallace Thank you, Mr. Norris, and I appreciate your testimony. Members, are there any questions by the members? Senator Love.
Senator Fredrick Love Thank you, Mr. Chair. And Senator Boyd, thank you for bringing the Senate bill, but, just a few things as I read through the bill. And Mr. Norris talked about bringing groups together. However, I don't see any group specifically named in the bill that we would be bringing together to convene to make sure that we have the fullness and the robust conversation that is necessary if you want to hear from everybody. So I mean, can you address that?
Senator Justin Boyd I'd say personally, I'm open to ideas of groups that you feel like need to be at the table. I mean, that's our goal is to hear from everybody and see how this funding is being used. Because we're investing a lot of dollars, and we want to make sure that we're, again, moving people out of the cycle of poverty. And so if there are groups you have in mind, I'm open to it. At the end of the day, the co-chairs of the Hospital Medicaid subcommittee, and I don't know who those are going to be, they're going to be the ultimate decision makers in that. But I'm confident that I know I would encourage that whatever group to be heard and be a part of the process.
Ryan Norris And if I may make a comment, Mr. Chair, to that.
Senator Dave Wallace Yes, sir. Mr. Norris.
Ryan Norris I think that again, this is a Americans for Prosperity inspired bill. We're about bringing people together. And I think if we continue to allow those that showed up today to testify for this, you'll see that we've brought together a fairly robust group of individuals who are across the political spectrum even, but who understand that these populations need to have their voices heard. And they will be helping to guide their constituents' voice to this committee.
Senator Fredrick Love Okay. All right. I guess I'll save my comments for discussion. Thank you.
Senator Dave Wallace Members, are there any other questions? Senator Payton, you're recognized.
Senator John Payton Thank you. Senator Boyd and Mr. Norris. I definitely support this effort. We definitely need to figure out any disincentives that are in the system to somebody improving their situation and maybe figure out how to incentivize them to improve their situation. The Hospital, Medicaid and Developmental Disabilities subcommittee already exists, and I'm sure they could already be doing this.
And I don't mind giving them an assignment to do this, but you you touched on this, hiring consultants and consulting firms and spending a lot of money. Is there anything in the language of this bill, I don't see it, that sets a guardrail or anything to keep them from going out and issuing a contract and hiring a consultant for this work?
Senator Justin Boyd What I would say, and I told Senator King this this morning, there are no plans to hire a consultant. And you've got a commitment to me as the vice chair of ALC to figure out how we can do this without bringing in outside resources. I'm a firm believer. Jack Welch said, We should fire all the consultants and do it ourselves. In our case, this is what we were elected to do, and we have people in the executive branch who have a lot of knowledge. And I think that the plan is to lean on Medicaid and workforce development, Mike Rogers, and bring in some executive branch experts and help them guide the discussion and then bring in groups that have an interest in this topic and make sure everybody's voice is heard.
Senator John Payton Thank you. I just want to get that on the record and hopefully we can hold you to it.
Senator Justin Boyd Well, I was going to say it when I closed, but I've already said it now.
Senator John Payton Thank you.
Senator Dave Wallace Members, are there any other questions? Seeing no other questions, we have four people signed up to speak for it. Or three, rather. As of right now, I don't have anybody signed up to speak against it. So, Mr. Paul Chapman. Sir, if you're here, please come up. Mr. Chapman, if you will, please introduce yourself.
Paul Chapman Hi, I'm Paul Chapman. I'm the director for a nonprofit called Restore Hope.
Senator Dave Wallace And, sir, you are recognized.
Paul Chapman Thank you. Thank you, committee. Restore Hope helps communities organize what we call an alliance. It's the professionals that would provide services along the crisis to career continuum, which could include your child welfare, your probation, your homeless shelters all the way to colleges, community colleges, private vocational training and workforce services. We do this in 19 counties in 2024.
These alliances serve 3,314 families who started in multiple areas of crisis, and 670 of those families completed their journey to career. So they're out of crisis, and they have a full time job that can provide them and their families a living wage. That's about 1,400 professional Arkansas providers that are using our software system and model. And so my testimony today is that all the different help, whether it be public or private, that exist in our communities, it's not connected together.
And when we can provide methods like 100 families where a community can actually organize together, then we start to see more efficiencies for the individual agencies, and we see better outcomes for the clients that we're serving. For instance, if we take a child into foster care in Arkansas with the goal of reunification, 43% of the time do we successfully reunify those children with that parent.
But through the collaborative method, in the last 12 months, the parents that worked with their local alliance, the reunification rate with 63% and 80% if you include a place with relatives of the children. And so just through the coordination of services, you can see more efficiencies for agencies and better outcomes for the target client.
Senator Dave Wallace Members, do you have any questions? Mr. Chapman, sir, thank you for your testimony. Do I have anybody to speak against the bill? Seeing none, we're going to move forward. Move on to Mr. Pete Gess.
Pete Gess Good morning everyone. Pete Gess, economic policy director for Arkansas Advocates for Children and Families.
Senator Dave Wallace You're recognized, sir.
Pete Gess Thank you, Mr. Chair. Thank you, committee members, for this opportunity to speak in half of Senate Bill 50. As many of you may know, Arkansas Advocates has been working now for almost a half of a century, working to improve the lives of children and families in Arkansas. We certainly advocate for evidence based, research driven solutions to improve lives for all Arkansans. In fact, information and analysis are essential to the work we do. We also understand that for families to succeed, parents need to have viable economic opportunities.
We have to pay attention to issues that may prevent these opportunities, such as those related to housing, transportation, health care, childcare, education, workforce training, all of the things we've been talking about so far today. We also know that unfortunately, poverty continues to persist in Arkansas and around the country. Some families struggle to meet needs. Federal and state public assistance programs are essential for them in the struggle to move them from the struggle to self-sufficiency to prosperity.
And of course, we all want all families and children to thrive. I'd like to discuss one issue that we're especially interested in at Arkansas Advocates that I think would be addressed by SB 50 Study Committee, and that is the challenges brought on by the so-called benefits cliffs problem. And it's natural for parents to make decisions that are in the economic best interest of their families. The sudden loss of a public assistance program can make it difficult to accept that promotion or a better paying job opportunity.
I recently discovered that the Federal Reserve Bank of Atlanta has a great tool. It's a simulator that's at the county level for looking at the effects of these benefit cliffs. So I've been modeling that for communities across Arkansas. Just to give you one example. Let's say a family of three, a single parent and two children living right here in Pulaski County would face four major benefit cliffs that occur as the mom accepts additionally better paying positions. These losses come from the lack of eligibility for SNAP, CHIP coverage, among some of the others.
And some of these are not insignificant at all. They can amount to as much as $7,000 in one fell swoop. So a parent is obviously facing a very difficult choice when you're facing this kind of magnitude of a loss. There are many proven state level solutions to minimizing the effects of benefit cliffs, such as avoiding the clustering of multiple cliffs, phasing out benefits to minimize the slope of the cliff, and increasing asset limits to participation.
I believe the study committee, as it works to develop novel approaches to improved workforce and social service program delivery, we can minimize the effects of these detrimental effects of these cliffs. Further, as the study committee answers its charge, it will uncover innovative ways of increasing efficiency and effectiveness of social services workforce development economic opportunities. For this reason, Arkansas Advocates urges you to support Senate Bill 50. Thank you. Oh, and I just want to say directly to Senator Love's question, we are very happy to participate in the effort going forward. Thanks.
Senator Dave Wallace Thank you, Mr. Gess. Appreciate your testimony. Once again, does anybody here wish to speak against the bill? Seeing none, we will move on to Mr. Dunbar Ethan. Mr. Ethan, sir, you are recognized. If you would, please introduce yourself.
Ethan Dunbar Good morning, Mr. Chair, committee. My name is Ethan Dunbar. I'm the mayor of Lewisville, Arkansas, and I'm here to speak in support of Senate Bill 50 from a rural community perspective. And as we consider the framework for this study, I think, and it's been said before, Mr. Norris, he hit the nail on the head. We need to have a diverse group participate in this study to be able to look at it. Because truth be told, upwards of 50% of Arkansas families are Alice families. That means they're working.
They just fall short of meeting the monthly or annual requirements. You know, they're working. Some of the benefits that they receive just help them get over the mark each month. And to lose those benefits is detrimental, especially to a family of four. You know, my community has a 27% poverty rate. I see these guys every day as a mayor. You're at the closest level of government to the people. I see them in the post office. I see them in the grocery store or at the gas station, everywhere you go. So I deal with the problems because they ask the questions when they see you, because they think we can help.
And I think we can help if we consider all voices, if we take these families and include them in part of the study. And as mayor, we have a little influence. I have a little influence to bring other groups, community based groups into the conversation. I think that would help, because losing those benefits sometimes is a decision to take another job or a job that pays more, but I'm going to end up losing every month.
So I think that needs to be taken into consideration. I also think as you all develop a framework, you include a disparities report in the final report, something that looks at the outer, not in the population areas. I mean, not everybody lives in Little Rock, the center of a universe. You know, a lot of us out in those rural communities, we struggle with factories closing, with schools barely staying open, all those things that affect how we make decisions about our lives. So I think all that needs to be taken into consideration. I support this bill. I think it's a good step toward understanding a true picture of Arkansas demographics.
Senator Dave Wallace Members, do we have any questions of Mayor Ethan? Seeing none, Mayor, thank you. Good testimony.
Ethan Dunbar Yes, sir.
Senator Dave Wallace Senator Boyd, sir, you're recognized to close.
Senator Justin Boyd Thank you, Mr. Chair. Thank you, senate colleagues. Appreciate the opportunity to present this bill. The goal is, again, to bring together state resources and the executive branch, help them help us as legislators understand the things that we're doing and things that are working, things that need opportunities, places we can engage the federal government together. And so with that, I would appreciate someone giving me a do pass and a second and a good vote. Thanks.
Senator Dave Wallace And members, I forgot to ask if there's any discussion. Seeing none-- I'm sorry, Senator Love. Please go ahead, sir. My apologies.
Senator Fredrick Love Are we going to take the motion before discussion? I'll make a motion. Motion do pass.
Senator Dave Wallace Got a second.
Senator Fredrick Love All right. So now in a discussion, so I am very much in support of this bill. The only thing that I'm very skeptical about is the fact that there are not specific groups that are written into this bill to ensure that we can get a broad input into the bill. Usually, I mean, I've done a number of bills like this where it's just pretty much a task force, except for the fact that it's going to be happening in subcommittee.
But when you don't name those groups or targeted groups that can actually speak to the broader populace, then there might be some things that are left out, perspectives that are left out. And so while I'm in support of this bill, I just ask that we really think about making sure that the groups are really involved, they're engaged and then we're seeking that support, those perspectives. So with that I close.
Senator Dave Wallace Thank you, Senator Love. Are there any more discussion? Seeing none Senator Boyd you have closed already. Members, do I have a motion? I have a motion. Do I have a second? All in favor, say aye. Any opposed say nay. Seeing none, Senator Boyd, congratulations, you have passed your bill.
Senator Justin Boyd Thank you, committee.
Senator Dave Wallace And now we may move on to the next one, which is Senate Bill 137.
Senator Justin Boyd I don't have the agenda in front of me. I've got Senate Bill 136.
Senator Dave Wallace I'm sorry. 136. My apologies.
Senator Justin Boyd Okay. So 136. I have Naomi Lopez, and she'll introduce herself in just a moment to do that. So, with your permission, Mr. Chair, I'll quickly begin and then hand it over to name Naomi for a brief presentation.
Senator Dave Wallace Go ahead, sir.
Senator Justin Boyd Senate Bill 136. This is what I like to refer to as Right to Try 2.0. Since I've been in the legislature, we passed a Right to Try bill. This bill updates our state law to Right to Try. An individualized investigational treatment act means a drug, biological product, or device that is unique to and produced exclusively for use for an individual patient-- and again, that's why we need it updated-- based on his or her own genetic profile. This bill places parameters and guardrails around the use of an individualized investigational treatment for a patient with a life threatening or severely debilitating illness in Arkansas.
Senator Dave Wallace And with that, ma'am, would you identify yourself?
Naomi Lopez Chair Irvin, Vice chair Wallace, and members of the Senate Committee on Public Health, Welfare and Labor, my name is Naomi Lopez, and I'm a senior fellow in health care policy at the Goldwater Institute, which is based in Phoenix, Arizona. Thank you for allowing me to offer my public comments regarding SB 136, The Right to Try Individualized Treatment Act. As you consider this important issue to protect the Right to Try to save one's own life without having to beg the federal government for permission to do so.
Imagine that there's a new treatment for a rare disease. It's custom made for you based on your own genetic profile. It offers you hope, but you can't access it, even though your doctor says it could save your life. The reason? Federal regulations are ancient by today's standards, and they're not designed to allow these new genetic treatments. Arkansas has an important opportunity to help lead the nation in solving this problem and save lives by championing the Right to Try Individualized Investigational Treatment Act.
The federal barriers to lifesaving treatment are not hypothetical. Arkansas lawmakers have already been a leader in putting patients rights first and cutting through medical red tape under the original Right to Try Act, which Arkansas passed unanimously and enacted 10 years ago. In 2015, patients gained the right to seek medical treatments that are safe enough to be used in clinical trials, but remained under clinical evaluation before final FDA approval.
The federal Right to Try Act was later signed into law in 2018, and is now the law of the land, and we know that this law is working. The trouble is that this law needs to be upgraded and modernized to account for rapid advances in medicine, such as gene therapy, which aren't covered under the original law in most cases. That's where the Right to Try Individualized Investigational Treatment Act comes in.
The new law does not change in any way the successful original Right to Try law. It does, however, create a new safe and physician directed pathway for those patients with rare and ultra rare diseases who don't have treatment options in clinical trials, or who need an individualized treatment approach made specifically for them. This reform is now law in Arizona, Maryland, Louisiana, Mississippi, Nevada and North Carolina, and is now under legislative consideration in a dozen more states across the country today. Individualized treatments are being pioneered all over the world.
But too often, U.S. patients such as little Kira Riley in Arizona and her family had to travel overseas in the height of the pandemic to save her life. It doesn't have to be this way. Arkansas can continue to lead on the important goal of getting the right treatment to the right patient at the right time.
Removing the government red tape that stands in the way of a doctor's treatment options does not require additional taxpayer investment, and it can be achieved in a manner that ensures patient safety and informed consent. Arkansas lawmakers have the authority, as well as the legislative vehicle, to unleash the potential of today's medical innovations and to further benefit patients. Thank you for your consideration of this important reform, and I'd be happy to take any questions.
Senator Dave Wallace Senator Boyd, are you ready for questions?
Senator Justin Boyd Yes, sir.
Senator Dave Wallace Okay, members, are there any questions by the committee? Senator Payton, you're recognized, sir.
Senator John Payton Thank you, Mr. Chair. I've been reading through this and most of my questions, you've answered them correctly in the bill. But on page five, near the bottom line 34, there's a paragraph that starts, it says, 'This chapter does not require a medical professional who is licensed.' I've got a question. Are we saying that these decisions and treatments are going to be suggested, prescribed by people who are unlicensed?
Naomi Lopez Chairman Irvin.
Senator Dave Wallace Go right ahead, ma'am. Oh.
Naomi Lopez Oh. I'm sorry. Vice Chair Wallace. Senator Payton, thank you for your question. So the way that this works is that this law uses the federal wide assurance, which is part of the Department of Health and Human Services protections for humans being used in clinical research. The way that this section that you're referring to is under the immunity section, and it is-- and I'm not an attorney but the federal wide assurance that is granted by the Department of Health and Human Services has a lot of different requirements on patient consent and also requires a registered institutional review Board to approve the treatment before it moves forward in their facility.
For example, a university research organization would be covered by a federal wide assurance they have authority over allowing this to move forward or not move forward, as well as monitoring the treatment. And they can actually stop the treatment for whatever reason if necessary. Yes. So I don't know. I would need to look closer at that particular, that particular provision.
But I can tell you that a doctor, even if they hold a Nobel Prize in medicine, cannot walk into a facility that holds a federal wide assurance and start doing anything there. They have to be approved by the facility and by there Institutional Review Board. Those requirements are extremely strict. And they are in fact, the federal assurance is created by the Department of Health and Human Services.
Senator Justin Boyd Senator Payton, are you talking about line 34 on page five?
Senator John Payton Yeah. Subsection B.
Senator Justin Boyd Yeah. So it says this subchapter does not require a medical professional who is licensed under the laws of the state to counsel, advise, prescribe, dispense, administer or otherwise be involved in the care of an eligible patient. It's basically saying that if you're the physician, you don't have to be involved. Not we don't have to have one.
Because it's the immunity section, it's saying that if I'm Doctor Boyd and I choose not to participate, I'm not going to get sued. Right. Like it it provides immunity. An Arkansas licensed physician has to be involved in this in order for this to work. If that's your question, that's what it is. It's just this specific section is saying I can choose not to. If I'm the medical provider, I can choose not to participate. Right.
Whereas, if there is going to be participation, a physician has to be involved in that. Because I had the same question when I drafted it, or I should say, I had a very similar question when I drafted it.
Senator John Payton Is there anything in the bill that sets who can prescribe this or what those credentials should be?
Naomi Lopez And vice chair Wallace, Senator Payton. So as I mentioned before, it does have to be a licensed physician, of course. But under the federal wide assurance, which is the additional requirement, an additional layer of protection for the provision of these individualized treatments, It has to be done in a facility that holds a federal wide assurance, which is a certification that is granted by the U.S. Department of Health and Human Services and covers the entire entity of that organization.
And as I mentioned before, a physician, let's say, I'm not trying to pick on any medical profession, but let's say that it's a podiatrist. The institutional review board would have the authority to say, no, we're not going to allow a podiatrist to recommend an immunotherapy treatment for a patient. And so even if it's under the scope of the licenses provider, the institutional review board of that federal wide assurance facility still has the authority to say, no, you are not, for example, a provider who has the expertise to be recommending this and allowing it to move forward. So. So that--
Senator John Payton So if I could stop you right there. I think maybe at the top of page two where it defines eligible facility, is that what you're describing? So only eligible facilities as defined here can perform this, is that correct?
Naomi Lopez Vice chair Wallace, Senator Payton, that is absolutely correct. This is an additional layer of protection. The facilities that hold a federal wide assurance have to undergo an extensive certification process. They have to agree to a very large set of rules and regulations. This has been in place for many decades.
And in moving forward with creating this bill, we wanted to create something that lawmakers would feel very comfortable knowing that it was a safe approach to providing very serious treatments for patients who are facing very serious medical crises. So we use the federal wide assurance as a way to say only these facilities are allowed to operate under this law.
Senator John Payton Well thank you. Thank you for your answer. Thank you, Mr. Chair.
Senator Dave Wallace And the chair recognizes Senator Leding.
Senator Greg Leding Thank you, Mr. Chair. I am on the bottom of page three, line 35. I'm also generally supportive of the legislation, but I did have a constituent reach out with a potential concern. They're worried that the way the bill is written a patient could potentially be removed from hospice care without their consent. And I'm not sure that's the way I read it. But I wondered if you could address that.
Senator Dave Wallace Go right ahead, ma'am.
Senator Greg Leding Page three, line 35.
Naomi Lopez Vice Chair Wallace, Senator Leding, thank you for that question. It's a very important one. So if a patient is pursuing a life saving, a potentially life saving treatment, then by definition they may not qualify for hospice care. And so this is really a provision that deals with the provision of hospice care under insurance payments.
Senator Greg Leding So I suppose that makes sense. If you are pursuing a life saving treatment, you probably don't think you belong in hospice, right? Okay. But they would have to have like the patient's consent? Okay. Thank you. Thank you, Mr. Chair.
Senator Dave Wallace Thank you. And, Senator Love, you're recognized.
Senator Fredrick Love Thank you, Mr. Chair. Let me go to my first question, which I mean, I think you touched on the cost. Now, Senator Boyd, how does this impact Medicaid? So if somebody says they want to undergo this specialized treatment, does Medicaid actually, I mean-- because I'm reading through this bill quickly. How does this apply to Medicaid? Are we going to have to pick up the tab for somebody? So I was trying to figure this out.
Senator Justin Boyd Thank you, Senator Love. If you go to the very, very last section of the bill, this subchapter does not require the Department of Human Services or the Arkansas Medicaid Program to provide additional coverage for an individualized investigational treatment, so the state would not have to pick up the tab.
Senator Fredrick Love But I'm looking at the insurance coverage part of this bill. I'm not looking at that. I'm looking at, it says an insurance company and it goes into 'may', you know, do this piece in. But then it goes over to, I'm looking at one and then two, it says 'shall' not deny coverage for an item or service that is otherwise covered by an insurance contract between the eligible person and the insurance company. I'm just trying to make sure that if somebody says, hey, I need this treatment, what, you know...
Senator Justin Boyd So the way I read that, Senator Love, is if I'm in the hospital and I'm potentially dying or being severely ill, or I'm severely debilitated, and the insurance company has in the contract an agreement to cover something, just the simple fact of using the individualized investigational treatment does not disqualify the patient from services that should otherwise be covered by the health insurance.
So it's protecting the patient from a health insurer coming in and saying, well, you did this, so we're not going to cover this over here, right? It's not saying they have to cover the individualized investigational treatment. It's saying just because you're on it doesn't mean we're going to quit covering the other things associated with our contract.
Senator Fredrick Love All right. So does this individualized plan, is that additional money? I'm like, I'm just trying to figure this thing out. So to better understand.
Senator Dave Wallace You're recognized, ma'am.
Naomi Lopez Vice chair Wallace, Senator Love, thank you very much for that question. It's a very important one. In the informed consent that is required under this law, the costs associated have to be spelled out and agreed to by the patient before proceeding. And in this law, no one is compelled to participate. An insurer, whether private or public, is not required to cover these treatments, although they may. They're not forbidden from doing that either. But what this law does is it says that if you use this investigational treatment, a health insurer that's supposed to give you an annual physical cannot deny you your annual physical because you did this treatment.
Senator Fredrick Love Okay. All right. And so my second thing is because you brought up IRB. So do all these go through IRB?
Naomi Lopez Vice chair Wallace, Senator Love, all of these go through not just an institutional review board, but they go through one that's already certified by the Department of Health and Human Services because they can only go through facilities that have a federal wide assurance. So there are a lot of different kinds of IRBs. These are ones that are already approved under the facility that has the federal wide assurance.
Senator Fredrick Love Give me-- so then, Senator Boyd, who has federal wide assurance here because this, I mean, that's not written into this deal. Give me some institutions. I'm just trying to kind of put this all together.
Naomi Lopez Vice chairman Wallace, Senator Love, so typically, any organization that's taking federal money for clinical research that involves human research subjects, it has to be by law covered by a federal wide insurance. And so there are probably at least hundreds if not thousands within the state that would be covered by a federal wide insurance. But really think of all of your medical research institutions and organizations. Those all have to have the federal wide assurance if they're taking money from the U.S. Department of Health and Human Services to conduct research.
Senator Fredrick Love Okay. So then walk me through this. I'm a patient at UAMS. There is a treatment life saving treatment. How does the process start? Walk me through that.
Naomi Lopez So, vice chair Wallace, Senator Love. So if you're a patient who's facing a life threatening or severely debilitating disease for which you've considered FDA approved treatments. And your physician is recommending that you need an individualized treatment, perhaps a genetic therapy, for example.
If the physician attests to your illness, to the need for the individualized treatment, to having considered other options that are out there, then you can go to a facility that has a federal wide assurance and ask them, can we do the treatment here? And the Institutional Review Board will evaluate the treatment protocol.
They'll evaluate the research that's involved, the individuals that would be involved, and decide if that treatment can in fact move forward. They're not required to say yes. They can say no. But if they do decide that it can move forward, then it can move forward. And that treatment can be developed for you and you can receive treatment under it.
Senator Fredrick Love Okay, I don't think, I think I get it. All right. Thank you.
Senator Dave Wallace Members, are there any additional questions? Miss Lopez, thank you for very good testimony today. Folks, is there anybody in the audience that wants to speak for or against this bill? Senator Payton, you are recognized for a motion.
Senator John Payton Thank you, Mr. Chair. I move do pass.
Senator Dave Wallace I have a second. Members, I have a recommendation and a second. All in favor, say aye. Any opposed say nay. Congratulations, Senator Boyd, you are two for two so far.
Senator Justin Boyd Thank you, Committee. I very much appreciate it.
Senator Dave Wallace So if you will give up your chair just for a while, the chair recognizes Miss Jill Thayer. You're recognized, madam? Members, we're going to get a short briefing on fiscal impact.
Jill Thayer Thank you, Mr. Chair. Jill Thayer, Bureau of legislative research. I was asked by Senator Irvin to be here to give just a brief overview to this committee of the fiscal impact process for the bills that impact the EBD program, the state and public school life and health insurance program. There are a few bills that have been identified for the Public Health committees that fall under that.
You all just adopted your joint rules, I think, last week, and they have provisions in there that require, before any bill impacting that program that would impose a new or increased cost to the program, have a fiscal impact statement that's produced by the actuary that the bureau contracts with. So the bureau is under contract with the Segal Group as approved by the Legislative Council.
They've identified about 28 bills that were filed by the bill filing deadline, which was this past Friday and are beginning to work on producing fiscal impact statements under the procedures that the Senate and House Insurance and Commerce committees have adopted. No bill can be taken up by a committee that's been flagged as needing a fiscal impact statement until that statement is produced.
I've notified all the sponsors of those bills that have been identified. So they're all aware, as are the committee chairs, and Segal is thinking that they will have those ready within about a three week period. If the sponsors would like for the actuary to be here to present or answer questions on it, that can be done. But under the procedures, the committees have to establish a special order of business. Segal is out of state. I'd be happy to answer any questions that you all may have, and if not, I will head out.
Senator Dave Wallace Do we have any questions for Miss Thayer? Senator Love.
Senator Fredrick Love Thank you. So just my assumption, so we just passed out Senator Boyd's bill. So you all looked at that bill and it was decided that it did not have any fiscal impact. So therefore he let it over here. I mean, this is one example.
Jill Thayer Yes, sir. Segal has been monitoring the bill filing since November when pre filing began. Have notified me every day. And that was one that I did notice and asked a question about. But they said it is not mandated coverage. So it's going to be things that require the program to cover something probably currently.
Senator Fredrick Love All right. I just want to say that was an assumption. Okay. Thank you.
Senator Dave Wallace Members, are there any other questions? Seeing none, Miss Thayer, Jill, thank you. Appreciate that. Good information. Senator Boyd, are you ready for Senate Bill 137.
Senator Justin Boyd Yes, sir.
Senator Dave Wallace You're recognized
Senator Justin Boyd Senator Justin Boyd here to present Senate Bill 137. So this bill makes it clear that in 2025 and beyond, electronic medical records are legally sufficient substitutes for hardcopy health care records in Arkansas, except where federal law might take precedence. So, for instance, in a pharmacy, if a physician writes a schedule two drug on a piece of paper, then the pharmacy right now still has to keep that piece of paper, because that's what federal law requires. So it would not do away with that.
But what if a physician or nurse practitioner wrote a prescription for amoxicillin, and there's no federal law that says that we have to keep the piece of paper, what it would do is it would allow a clear copy to be stored, and you wouldn't have to keep that that piece of paper. So this bill was based on language and ideas in place from other states. So I asked BLR to help me look at what other states have done in this regard.
And so we took the best from all the states and put it together. I have sent it to the Hospital Association, to the Health Care Association, to the Pharmacy Association, the Medical Society, anybody who I thought might have an interest in this to make sure that they did not have a concern. No one has expressed a concern. I've only had support. Now, you might have a list of 50 people who are coming to speak against this bill. I don't know. But at this moment in time, I know of no opposition to this bill.
Senator Dave Wallace Members, are there any questions by the committee? Seeing none, is there anybody in the audience who would like to speak for or against this bill? Seeing none, I have a motion. Do I have a second? I have a second. All in favor, say are. Anybody opposed say nay. Congratulations, Senator Boyd, you are three for three. And moving on, Senator Boyd, are you prepared to brief us on Senate Bill 139?
Senator Justin Boyd Yes, sir. Mr. chair. Thank you, committee. So this is what I think is a fairly simple bill. Sometimes simple bills become a little more complex. But this is the deal. I've had physicians reach out to me with concern about non-compete clauses in contracts. And so as I've studied this, I've come across information where I've found there have been three cases in the state of Arkansas. There could be more, but I know of three.
And in those cases, the non-compete clauses for physicians were found to be unenforceable for various reasons. So, again, can I sit here and imagine every possibility and tell you every possibility about how a physician non-compete clause might be enforceable? No, but what I can tell you is when you go to medical school, you shouldn't have to go understand case law to figure out that your non-compete clause is not enforceable.
So rather than having a physician who went to medical school, learned how to treat patients, is busy treating patients, and quite frankly, is engaged in our community in a way where we need him, I don't know of any community which does not need more physicians, then what this does is it makes clear for physicians in Arkansas that a non-compete clause is unenforceable.
Now if you're a medical director or you have an ownership, that's a different animal. This is for a physician who shows up to work.,Goes to work in a clinic every day and is employed by somebody, presumptively a large employer, but it could be somebody else. So that said, I'm happy to try to answer any questions.
Senator Dave Wallace Senator Payton, sir, you're recognized for a question.
Senator John Payton Thank you, Mr. Chair. Senator Boyd, what are we talking about here? A covenant not to compete is a contract between the physician and whoever they want to give that contract to. It's not involuntarily entered into. And I've been told for 20 plus years, 30 years, I guess, by my attorney, that a covenant not to compete is void unless you receive compensation for it. It's unenforceable. So we're talking about where a physician would voluntarily accept a payment to not compete in a particular county or city or radius.
Senator Justin Boyd So, Senator Payton, that's a great question. And I share your concern, and that's why I went back and I went and tried to understand case law. So you've got Mercy Health System of Northwest Arkansas Inc. versus, I don't know how to say this, Bicak in 2011. And the court declined to uphold a non-compete provision lasting two years, covering an 18 mile radius, because the employer could not demonstrate sufficient interest to justify a restriction, and the agreement would eliminate competition and interfere with public access to physicians.
Senator John Payton So that's going to be a case where what the physician received was training and the employer provided the training. And the agreement between the employee and the employer was that they would not compete if they received this training.
Senator Justin Boyd So I don't know that training was involved or not, and you might know more about the case, but what I do know is the court said that non-compete is not enforceable.
Senator John Payton And many times, the court will say that if the person who entered into the non-compete did not get compensated. But anyway, I just don't think that the state should prevent people from voluntarily entering into a contract that they've received something in exchange for it. And obviously, if they didn't receive anything in exchange for it, it's not valid contract. But I don't know if you can address that or not.
Senator Justin Boyd So what I would say is, while in most scenarios I agree, I think this is a unique situation where what case law is available to me says that non-compete with physicians are unenforceable because they limit competition. They wind up creating a scenario where physicians leave our communities because they feel like, hey, I have this and so, but when they go hire an attorney or spend money otherwise they find out it's probably not enforceable.
And then so we've got somebody who then has to go, well, am I going to leave the community or am I going to potentially spend thousands of dollars defending myself because of this? So what I think is Arkansas law should be clear, and a physician should not have to go learn how to be an attorney or hire an attorney on this. And this law makes it clear that--
Senator John Payton I don't know what makes physicians so special. Car dealers have to hire attorneys to tell us what the law is. But anyway, appreciate it. Okay.
Senator Dave Wallace Senator Love, you're recognized.
Senator Fredrick Love Thank you, Mr. Chair. So Senator Boyd, I guess I'm in line with Senator Payton. But I'm trying to understand. So because I'm pretty sure it's clear that it's probably like a doctor signing a contract to go work for somebody. They're signing the contract with Mercy. And in that contract, this is how you will not compete with some sort of-- I guess I'm just confused. If they knowingly enter a contract or a binding agreement, why being the state would make it unenforceable by law?
Senator Justin Boyd Because right now, Senator, my interpretation is case law has already made it unenforceable. So if we don't do anything, what we're going to do is we're going to leave in a scenario where there continue to be these non-compete contracts in place, and then they're likely going to show up in court. And due to limits on competition and interfering with public access to physicians, then they're going to continue to be found unenforceable.
So the alternative is we make it clear in statutory law that they're not enforceable, and then people don't have to clog up our court systems waiting on that. So there are different levels of law, right? You got the constitution, then you have statutes, then you have case law, and then you have an agreement between individuals. If anywhere above those agreements between individuals, something says you can't do this, then that overrides the contract.
Senator Fredrick Love I guess I'm perplexed in the fact that we are now stepping into something that should be between individuals and I guess, a company. I mean, like, I understand that you said you had case law, but I'm pretty sure that there are some cases the agreement was upheld.
Senator Justin Boyd Well, maybe there are, but I don't know where they are. All I know is the research that I did seems to say that when it's a physician, the reason it's limited to physicians is purely because it's only physicians who've reached out to me. And then, number two, the case law I found was around physicians. I'm not opposed to having this discussion with any other people. It's just that it's been around that.
So what happens is, practically speaking, a physician who went to medical school, went to train, and what they really want to do is take care of patients. They sign a contract, they come into a community, they sign a contract. And now what is usually a big company holds that over their head and says, you're either going to have to leave the community or you're going to have to keep working for us.
Or the alternative is you're just not going to work, right. And so what this does is it puts into statute what I believe case law is going to show, which is that a non-compete with a physician is unenforceable. So I don't know how else to explain it. I'm trying to make the statutory law reflective of case law.
Senator Fredrick Love Okay. All right. Thank you.
Senator Dave Wallace Senator Penzo, sir, you're recognized.
Senator Clint Penzo Thank you, Mr. Vice Chair. In these three cases you're mentioning, did they have any financial consideration in the non-compete? Or do you know that off the top of your head?
Senator Justin Boyd So my interpretation, based on the information I have, is that these were employees of,-- so Mercy Health System of Northwest Arkansas, Cardiology Associates of Northeast Arkansas, and I'm not sure, Dufner versus Alberti, which had to do with an orthopedic surgeon in a 30 mile radius.
Senator Clint Penzo Payton brought up something that made me think, if there isn't financial consideration, maybe they aren't enforceable. But if there was an exchange of money for the non-compete, I would hate to go back retroactively and somebody get paid and now we're going to say, you don't have to adhere to the.
Senator Justin Boyd So my question to you is, if I go back and amend the bill and say, if you got $30,000 for signing that, would you agree to the bill? I mean, if that's the question. Because if so, I'll go amend it. I mean, that's not a problem.
Senator Clint Penzo Let me finish what I was going to say. I think what I'd like to see is if you want to set today's date and move forward and say they're unenforceable. I just don't know if I'm comfortable going retroactively. Because, if you made it through medical school, you're intelligent enough to know that a non-compete means you're not going to compete.
You agreed to a contract. So if we want to make them where they're not enforceable, if we do it from this day forward, then we're looking at the hospitals know they're not enforceable. They're not going to try to get doctors to enter into them and then nobody's going into it blind. So I mean, if we want to eliminate non competes for doctors, I think that's the way it should be done if you don't want to have non-compete. But I don't want to go retroactively.
Senator Dave Wallace Senator Payton, you're recognized, sir.
Senator Justin Boyd So, one, I'm happy to amend the bill to do that. What I'm just going to disclose up front is, again, I'm not an attorney. And as far as I know, you aren't either. I don't know that that's going to change case law, but if that's what it takes to make clear going forward, then I'm happy to make that amendment. I'd still like to have an idea of where the rest of the committee is going to be on it before I do that.
Senator Clint Penzo Well, I was going to say I'd like to know the committee's thoughts on that as well.
Senator Justin Boyd May someone join me to give some insight into who is an actual attorney?
Senator Dave Wallace Yes, sir. Sir, you are recognized. Please state your name.
Mike Mitchell Yes, Mr. Chairman. My name is Mike Mitchell. I have reviewed dozens and dozens and dozens of position employment agreements over years and years and years. Never once was there a specific payment for a non-compete. The way it works is the physician is presented a contract, there is a non-compete in there if you go to work for us, and never once was there special payment for a non-compete. And the point here is you put physicians in a situation of having to go to court and spend a ton of money to contest a non-compete if they leave that employment. And so, while there may be a case out there where somebody pays specifically for non-compete, I have never seen it in my practice.
Senator Dave Wallace Senator Penzo, sir, you're recognized.
Senator Clint Penzo So I'm saying if there's a physician-owned clinic and they sell it with the agreement they're not going to compete, that would be a financial consideration. I'm not saying just flat out payment. Are you saying that you've never seen that happen either?
Mike Mitchell I've not. Again, the contracts are presented. Some hospitals, by the way, do not. Washington Regional, I reviewed a contract for a physician for Washington Regional. There was no non-compete. And I called the general counsel and said, what is this? Because generally they're always included. And he said, we found out if we treat physicians fairly, they don't want to go compete because they don't want to do administration.
Senator Clint Penzo Well, I talked to a pharmacist a couple of days ago that had to sell his pharmacy. And he signed a non-compete for certain terms. So, I mean, I think it happens every day that people sell businesses with the agreement they're not going to compete.
Mike Mitchell So now that's a different situation. That's a totally different situation than a simple employment
Senator Justin Boyd Yeah. Section H1 of this section does not apply to a covenant not to compete agreement that is ancillary to other contractual relationships, including any type of agreement for the sale and purchase of business, franchise agreement, any other agreement not ancillary to an employment relationship or employment contract. And so I was very specific. Like I was not going to let somebody out of one. Like, as you know, I own a pharmacy or co-own a pharmacy in Alma. I think it's absolutely wrong if I sell my interest and then go. So no, this does not get into this. This is really, truly an employee.
Senator Clint Penzo A lot of times, though, that doctor will go to work for the bigger corporation that bought their business. And so they are an employee of that business. So in that scenario, if they sold their business.
Senator Justin Boyd Again, this section does not apply to a covenant not to compete agreement that is ancillary to other contractual relationships. And so that's covered up here in H1. This doesn't apply. I wrote this as narrowly as I could figure out how to write it where I'm a physician who went to work for a specific company right out of school or even 30 years. But if there are other contractual relationships, this isn't going to apply. I mean, that's what H1 clarifies.
Mike Mitchell Senator Penzo, and that is a typical provision in a sale that is enforceable. And obviously, you don't want to sell your business and then go into competition with the buyer. No, that's a different situation.
Senator Dave Wallace Senator Payton, you're recognized.
Senator John Payton Thank you, Mr. Chair. And I'm not a doctor, and I'm not a lawyer. But I am somebody who once sold my non-compete, got paid for it, and agreed not to compete because I was selling my business. I've also seen a lot of businesses, and I've hired people where we paid a sign on bonus. And I think hospitals do that with bringing in physicians and paying them a big upfront signing bonus.
I always thought doctors were considered very intelligent people and capable of navigating life as much as any of the rest of us are. I don't think it's unreasonable to expect doctors to be able to read the contract before they sign it and know what's in it. And I don't intend to give them relief through this legislation from the same responsibility that all other citizens are held to. If we should do this for doctors, why shouldn't we be doing it for everybody?
Senator Justin Boyd Because case law is different for everybody else. You show me the case law of another entity. What happens is, say, Fort Smith, but it could happen in your community as well, is I have a physician who basically has said, you signed this, and so you're either going to continue to work for us or you're going to pack up and leave the community or you're not going to work.
Senator John Payton And I really appreciate you saying that about the case law, because this is not the Judiciary Committee. And maybe this bill should have went before the Judiciary Committee. The fact that it has physicians, I guess, is the only reason it came before the Health committee. But I'm not comfortable with pulling out such a small subset of the society, physicians.
I mean, we're not including nurses. We're not including anesthesiology, all the other things that are in the medical field. And I'm sure those hospitals are signing contracts with all those people too. So I don't know how you can remedy that with an amendment. You might be better served to put it in the Judiciary Committee where you can argue case law.
Senator Justin Boyd Okay, so what I'm hearing from you is that you would support me if it's re referred to Judiciary.
Senator John Payton No, I'm not on Judiciary.
Senator Justin Boyd But you would support me in getting it re referred to Judiciary?
Senator John Payton Yeah I would I think that's where it should be considered. They would have a better understanding. Y
Senator Justin Boyd Well, I'll just ask Mr. Treat how to do that. And we'll go argue it in Judiciary.
Senator Dave Wallace Let's handle this with a motion.
Senator Clint Penzo Motion to refer to Judiciary Committee.
Senator Dave Wallace Thank you, Senator Penzo. Do I have a second? Do I have a second? I have a second. [Off-mic discussion]
Senator Justin Boyd Yeah, that's what I would prefer to do, is just let me pull it down and go ask Philip the rules. And if I need to bring it back here, then I know what questions I need to try to answer before I come back.
Senator Dave Wallace Members, are there any other questions? And, Senator Boyd, I understand you would like to pull down your bill.
Senator Justin Boyd Yes, but first, I'd like an opportunity to say thank you for passing the other three.
Senator Dave Wallace Well, three out of four. Yes, sir. Senator Leding.
Senator Greg Leding Thank you, Mr. Vice Chair. I just have one comment. I would just ask that Senator Boyd consider running fewer bills because you're making some of your family look bad.
Senator Justin Boyd I'll give it serious consideration.
Senator Dave Wallace Thank you, Senator Boyd. Members, the next bill would be the House Bill 1214. And Representative Bentley is not here. Is anybody here to carry it for her? Members, I want to recess for five minutes and allow Senator Rice to have time to come up here. So we'll recess for five minutes, and then we'll come back here with that. We are in recess. [Recess]
Senator Dave Wallace Call us back into committee. And we're not going to be able to hear any more testimony today based on folks being in other committees. So with that, unless there's any objections, I am going to adjourn. Seeing none, we are adjourned.
