Legislature(2007 - 2008)CAPITOL 106
03/13/2007 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| Overview: Division of Childrens Services, Citizen Review Panel | |
| HB100 | |
| HCR1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HCR 1 | TELECONFERENCED | |
| += | HB 100 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 100-AIR AMBULANCE SERVICES 3:57:58 PM CHAIR WILSON announced that the next order of business would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 100, "An Act relating to exempting certain air ambulance services from insurance regulation and requiring certain air ambulance services to provide services." 3:58:50 PM KAREN LIDSTER, Staff to Representative John Coghill, Alaska State Legislature, sponsor, offered to answer questions regarding the amendments to SSHB 100. 4:00:12 PM REPRESENTATIVE ROSES moved to adopt Amendment 1, 25-LS0373\E.1, Bailey, 3/13/07, which read: Page 1, line 7, following "person.": Insert "In this section, "air ambulance service" means an organization certified by the department under AS 18.08.082 to provide medically assisted transportation, by air, to persons who are ill or injured." Page 1, line 9, following "service": Insert ", as defined in AS 18.08.095," CHAIR WILSON objected. 4:01:41 PM MS. LIDSTER informed the committee that the definition of air ambulance service was suggested by Shelly Owens of the Emergency Medical Service (EMS) unit. 4:02:13 PM CHAIR WILSON removed her objection. There being no further objection, Amendment 1 was adopted. 4:02:23 PM REPRESENTATIVE GARDNER moved Amendment 2, 25-LS0373\E.2, Bailey, 3/13/07, which read: Page 1, line 1, following "regulation": Insert ", limiting the duration of air ambulance service subscriptions," Page 1, line 5, following "services.": Insert "(a)" Page 1, following line 7: Insert a new subsection to read: "(b) An air ambulance service may not issue a subscription for a period greater than two years." REPRESENTATIVE ROSES objected. 4:02:30 PM REPRESENTATIVE GARDNER stated that the purpose of Amendment 2 is to minimize the risk exposure, for individuals who are not sophisticated insurance consumers, by limiting the length of the subscription to two years. She added that subscriptions for air ambulance services are not regulated. 4:03:58 PM REPRESENTATIVE ROSES asked how limiting the subscription to two years will help the consumer. The risk to the consumer is that the service that they have paid for may not be available. CHAIR WILSON noted that the current subscription limit is for one year. REPRESENTATIVE GARDNER explained that the limit prohibits a flat rate subscription for a life-time membership. 4:05:01 PM CHAIR WILSON corrected her statement and said that the amendment specifies [not] "for a period greater than two years." REPRESENTATIVE ROSES clarified that the subscriptions would be limited to a maximum of two years, and the original bill did not have a time limit. 4:05:55 PM REPRESENTATIVE CISSNA noted that a consumer living in rural Alaska may be at fish camp or elsewhere during part of the year. Often they may not have the logistical means to receive mail or to maintain telephone connections. She suggested that a longer term would benefit consumers and the business selling the service. 4:08:34 PM CHAIR WILSON pointed out that an air ambulance service can not sell a membership to a subscriber unless it has been in business in Alaska for two years. CHAIR WILSON stated that Representative Cissna's comments pertain to a different issue that can be set aside for later consideration. REPRESENTATIVE CISSNA reiterated that, from the consumer's point of view, it would be difficult to subscribe for only two years. Consumers need to get the best kind of service available and may have a difficult time renewing every two years. Representative Cissna offered an amendment to Amendment 2 which replaces "two" with "five" years. REPRESENTATIVE GARDNER objected for discussion purposes. She opined that most of the consumers, who will be served by SSHB 100, have seasonal work and travel patterns and will, thereby, be available for renewal within a two year period. REPRESENTATIVE ROSES expressed his doubt about the intent of SSHB 100 and emphasized that this subscription is not an insurance policy. Consumers do not have the protection of insurance regulation and are subscribing, with good faith, that the seller will continue to be in business for the duration of the contract. It is more comfortable to consider that a business will still be available in two, rather than five, years. He opposed the amendment to Amendment 2. 4:12:35 PM REPRESENTATIVE CISSNA withdrew her amendment to Amendment 2. 4:12:45 PM REPRESENTATIVE ROSES removed his objection to Amendment 2. There being no further objection, Amendment 2 was adopted. 4:13:06 PM REPRESENTATIVE GARDNER offered Amendment 3, labeled 25- LS0373\E.3, Bailey, 3/13/07, which read: Page 1, line 1, following "regulation": Insert ", prohibiting sale of air ambulance services to persons already covered," Page 1, line 5, following "services.": Insert "(a)" Page 1, following line 7: Insert a new subsection to read: "(b) An air ambulance service may not sell a subscription to a person who has full coverage for air ambulance services from another source, including the Indian Health Service, Medicaid, or private insurance." REPRESENTATIVE ROSES objected. REPRESENTATIVE GARDNER explained that Amendment 3 will protect the consumer who already has full coverage insurance benefits for air ambulance services. She added that it will be up to the company selling the subscription to make that determination. 4:14:21 PM REPRESENTATIVE ROSES confirmed that the burden of responsibility is on the person selling the subscription. REPRESENTATIVE GARDNER noted her agreement. 4:14:50 PM CHAIR WILSON asked whether consumers always know the extent of their insurance coverage. REPRESENTATIVE GARDNER responded that consumers and the subscription sellers are responsible for that determination. 4:16:03 PM REPRESENTATIVE FAIRCLOUGH observed that SSHB 100 will regulate an insurance product that should be governed under the insurance laws in the state. She referred to previous testimony by [director, Division of Insurance, Department of Commerce, Community & Economic Development] Hall and expressed her belief that this committee should not be attempting to address this issue. REPRESENTATIVE GARDNER responded that the state has determined that the subscriptions are not an insurance product. She quoted Ms. Hall, who said "the sales of memberships are not insurance". 4:17:56 PM CHAIR WILSON stated that SSHB 100 will be held for further clarification of this question. 4:18:16 PM MS. LIDSTER stated her agreement with Ms. Hall's testimony. She said that SSHB 100 takes air ambulance services out from under the insurance code, and allows them to sell memberships. The memberships are not subject to the conditions and code regulations in that statute. She said that small businesses cannot bear the burden of the bonding and audit requirements of the insurance code. Ms. Lidster added that other states have taken this action to encourage service in underserved regions. CHAIR WILSON said the state has not acknowledged that. 4:19:40 PM REPRESENTATIVE ROSES encouraged the committee to hear additional discussion on this bill and to continue with the public testimony. 4:20:10 PM REPRESENTATIVE GARDNER continued to say that if the bill passes and the insurance regulations are removed, Amendment 3 will protect consumers who do not need air ambulance service memberships. CHAIR WILSON opined that there are many people who do not have insurance and they could subscribe to this service. Many people in rural areas could utilize this service in the case of a Medivac. Chair Wilson shared that she owns a subscription to a service. REPRESENTATIVE GARDNER clarified that Amendment 3 applies only to consumers with 100 percent coverage. 4:23:00 PM REPRESENTATIVE ROSES expressed his understanding of the intent of the bill and the amendment. He then asked for the consequence of selling a policy to a consumer with full coverage. 4:23:33 PM MS. LIDSTER explained that a complaint from a consumer would be referred to the consumer protection agency. 4:24:53 PM REPRESENTATIVE ROSES further observed that the consumer protection agency would intervene if someone bought a subscription and the service was not provided, but not if a subscription was sold to someone in error. He recommended tabling the bill. 4:25:40 PM REPRESENTATIVE GARDNER deferred the question to her aide. 4:26:08 PM IRIS MATTHEWS, staff to Representative Berta Gardner, Alaska State Legislature, informed the committee that the answer to this question has not been determined by the Division of Insurance, Department of Commerce, Community & Economic Development (DCCED). 4:27:05 PM REPRESENTATIVE GARDNER requested moving forward on the amendment and referring further questions to the next committee. 4:27:37 PM REPRESENTATIVE FAIRCLOUGH expressed her support for the amendment; however, she reiterated her concern about whether the sale of this service should be regulated under the insurance statutes. She also requested further testimony from the director of the Division of Insurance regarding the impact of this legislation. 4:29:14 PM REPRESENTATIVE ROSES asked whether the intent is to make the service not part of an insurance policy. He opined that the amendment directly connects the service to insurance. REPRESENTATIVE FAIRCLOUGH added that there will be a confidentiality issue regarding the release of information on the consumer's existing coverage. 4:30:22 PM REPRESENTATIVE GARDNER stated her indecision about the final passage of the bill. However, she opined that a consumer could sign a release to allow the subscription provider access to confidential information. REPRESENTATIVE FAIRCLOUGH expressed her doubt that a release will satisfy regulations under the Health Insurance Portability and Accountability Act (HIPPA). CHAIR WILSON opined that a signed waiver is sufficient. REPRESENTATIVE GARDNER expressed her belief that an insurance policy is not subject to HIPPA. 4:32:08 PM CHAIR WILSON announced that the committee will finish with this amendment and take public testimony. 4:32:33 PM REPRESENTATIVE ROSES moved to table Amendment 3. There being no further discussion, Amendment 3 was tabled. 4:33:37 PM ART WARBELOW, President, Warbelow's Air Ventures, Inc., informed the committee that his business is the oldest certified air support service in Fairbanks, and that he is opposed to SSHB 100. His concern is the increase in costs of gearing up to compete in a membership program. The small operators will not be able to compete at the state level. This bill will reduce competition and determine success by who has the best marketing and salesmanship versus the best medical service. Mr. Warbelow said that the memberships will increase costs to consumers and decrease the quality of patient care. He referred to previous testimony by the representative from Guardian Flight, Inc., and noted that Guardian has forecasted sales of memberships greatly exceeding the amount of the deductibles paid normally by consumers. The result is that air ambulance providers are well compensated and take large write-offs for uncollectible service. His primary concern is that the memberships are a insurance and have been illegally sold in the state for the past six years. He read from a related article in the "The Fairbanks Daily News- Miner" dated 2/1/01, and concluded by saying that it is problematic that a law is posed for passage to support a company that has been operating outside of regulation. 4:40:12 PM REPRESENTATIVE GARDNER requested that Mr. Warbelow provide the committee with a copy of the news article. 4:40:35 PM CHAIR WILSON asked whether Mr. Warbelow reports non-payments to a collection agency. MR. WARBELOW answered that the law requires that the services attempt to collect; however, one-third of the bills are never paid. 4:42:44 PM REPRESENTATIVE ROSES referred to previous testimony and to the 100,000 subscriptions that Guardian expects to sell. This, he said, appears to cover the amount of uncollectible fares for one year. Representative Roses asked Mr. Harris whether the sales would enable Guardian to lower the rates for service. PAUL HARRIS, General Manager, Guardian Flight, Inc., stated that the funds would be used for community service; for example, additional first responder and emergency medical training. REPRESENTATIVE ROSES further asked for Mr. Harris' opinion of Amendment 3. MR. HARRIS responded that Amendment 3 will require his company to rely on the consumer to ascertain whether he/she has full coverage or not. It could be unenforceable, and will eliminate some people who need this service. Mr. Harris gave the example of a pregnant patient who is covered by Medicaid until the delivery of her child. He added that the Indian Health Service also has gaps in coverage. 4:46:35 PM REPRESENTATIVE ROSES further asked whether Amendment 3 reduces Guardian's ability to sell 100,000 subscriptions. MR. HARRIS said yes, and he will provide estimates for the committee. 4:47:35 PM ERIC STERLING, owner, Guardian Flight, Inc., informed the committee that everyone has the possibility of being denied coverage for a Medivac, especially when covered by Medicare, Medicaid, and Blue Cross. Dr. Sterling continued to say that regulations require a flight service to attempt to collect from insurance and the patient. That was the basis for supporting legislation to enable the sale of subscriptions. Guardian has not sold memberships; however, it honors certificates sold by Critical Care Inc. He noted that this legislation is the third attempt to legalize the sale of memberships and stressed that is a benefit to the consumer. 4:51:54 PM CHAIR WILSON asked whether Guardian would refund a subscription fee if it was unable to provide transportation due to unavailability, location, or mechanical problems. DR. STERLING answered yes. He stressed that the cost of a Medivac is always reviewed by the insurance company and many times coverage is denied, adjusted or negotiated. 4:53:22 PM REPRESENTATIVE ROSES asked whether Dr. Sterling is a board member of the non-profit that sells the memberships. DR. STERLING answered yes. However, Guardian has not received money for uncompensated care. 4:54:15 PM REPRESENTATIVE GARDNER asked for clarification of the reasons for supporting this legislation. 4:54:41 PM DR. STERLING explained that, in 2001, Linda Hall, representing the Division of Insurance, DCCED, advised him that to sell memberships, Guardian would need to test the law, or change the law through the legislature. 4:55:27 PM CHAIR WILSON acknowledged that she had misunderstood Linda Hall's testimony. 4:55:38 PM REPRESENTATIVE GARDNER confirmed that Guardian is a for-profit business and is prohibited from selling memberships; however, a non profit may sell memberships. DR. STERLING replied that the non profit is an educational and research organization. Guardian donates to the non profit in the form of Medivac services. REPRESENTATIVE GARDNER stated that Guardian wants to be able to sell the memberships directly. DR. STERLING said yes. He said that Guardian's donation to the non profit this year is estimated to be $4.5 million in uncompensated care. 4:57:40 PM CHAIR WILSON announced that SSHB 100 would be held over.
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