Legislature(2013 - 2014)BARNES 124
03/10/2014 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB316 | |
| HB152 | |
| HB316 | |
| HB152 | |
| HB328 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 316 | TELECONFERENCED | |
| += | HB 152 | TELECONFERENCED | |
| *+ | HB 328 | TELECONFERENCED | |
| += | HCR 15 | TELECONFERENCED | |
HB 316-WORKERS' COMPENSATION MEDICAL FEES
3:29:11 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 316, "An Act relating to workers' compensation
fees for medical treatment and services; relating to workers'
compensation regulations; and providing for an effective date."
3:29:51 PM
REPRESENTATIVE CHENAULT moved to adopt the proposed committee
substitute (CS) for HB 316, labeled 28-LS1362\O, Wallace,
3/10/14, as the working document.
CHAIR OLSON objected for the purpose of discussion.
3:30:17 PM
ANNA LATHAM, Staff, Representative Kurt Olson, Alaska State
Legislature, explained the changes in proposed committee
substitute (CS) for HB 316, Version O. She related that the CS
contains two new subsections pertaining to the duties of the
Medical Services Review Committee (MSRC). She referred to page
2, lines 24-26, Section 2, which explicitly requires the
Workers' Compensation Board (WCB) to request and consider
recommendations from the MSRC on setting conversion factors and
rates. Additionally, language on page 2, lines 27-29, requires
the WCB to consult with the MSRC before evaluating or revising
conversation factors for the fee schedules.
3:30:40 PM
MS. LATHAM explained that there was some opposition to the
[Workers' Compensation Board] setting conversion factors,
including raising questions about the WCB's expertise in setting
the medical schedules. The MSRC is already defined under AS
23.30.095 in the original bill. However, the MSRC has not met
since 2009. The intent of this change is to make it extremely
clear in statute that the MSRC will advise the Workers'
Compensation Board (WCB) on setting the rates.
MS. LATHAM referred to page 3, line 17, subsection (n), which
provides an exemption for critical access hospitals. There are
13 federally designated critical access hospitals in Alaska
certified under Medicare conditions of participation.
Typically, these small hospitals are under 25 beds, are located
in rural areas, and patients have a 96-hour average stay or
less. For examples, critical access hospitals are in Cordova,
Valdez, and Kodiak, and these facilities represent a separate
provider type with their own Medicare conditions of payment as
well as a separate payment method. The critical access hospital
certification allows these hospitals to receive cost-based
reimbursements for Medicare instead of the standard fixed-based
rates. Page 3, line 21, subsection (o) adds language for
geographical area differential, which was inadvertently omitted
in the original bill. The sponsor felt it was imperative in
Alaska for the board to have the option of using the
geographical adjustment factor. She noted that the language is
"may" rather than "shall," so the board will have flexibility to
determine whether to use this option. She referred to page 3,
line 24, Section 3, relating references AS 44.62.245, under
which future amended document or reference material, as listed
can be incorporated by reference in future regulations.
3:33:24 PM
MS. LATHAM pointed out that the sunset provision in the original
bill [Section 5] was removed. The language was originally
envisioned as a safety net to give the board four years to set
rates, conduct an audit, and require legislative action to
extend the new fee schedules; however, substantial public
opposition occurred, such that providers and insurers testified
against it, noting it would be difficult for future planning.
CHAIR OLSON interjected that the sunset provision is the only
provision that brought all the stakeholders together. No one
liked the sunset provision except for the sponsor, so it's gone.
3:34:19 PM
MS. LATHAM concluded her testimony by outlining the effective
dates. She referred to page 4, lines 15-17, to the effective
date language. With the sunset provision removed, new fee
schedules and conversation factors will be effective on January
2015; and proposed Section 5, would make subsections (h) and (i)
effective on July 1, 2014. Thus, the board has an opportunity to
begin its review to set fee schedules on July 1, 2014, and the
fee schedules and conversion factors would be effective on
January 1, 2015.
3:36:33 PM
MICHAEL MONAGLE, Director, Central Office, Division of Workers'
Compensation, Department of Labor & Workforce Development
(DLWD), introduced himself.
3:37:07 PM
REPRESENTATIVE JOSEPHSON asked whether the [WCB] with advice
from the MSRC would set this conversion rate.
MR. MONAGLE answered yes.
3:37:29 PM
REPRESENTATIVE JOSEPHSON asked for more information on the WCB.
MR. MONAGLE answered that the board is actually the Workers'
Compensation Board. He acknowledged it has an advisory role,
but most importantly under the statutes it provides that the
department may not adopt a regulation unless the regulations are
approved by the WCB. Thus, the WCB has authority under the
statutes to be the final voice for any regulations that the
department proposes. The WCB is comprised of 18 members; 9
representing labor, 9 representing industry, and all 18 members
are appointed by the governor.
3:38:23 PM
REPRESENTATIVE JOSEPHSON asked whether the nine labor members
are required to have any specific background before they can be
nominated for confirmation by the governor. He further asked
what identifies these appointees as being associated with labor.
MR. MONAGLE answered that the Office of the Governor, Boards and
Commissions makes the selection process. He commented that the
division rarely is consulted, unless it relates to the knowledge
or activity of potential board members. He offered his belief
that the people who serve on the WCB are typically involved in a
labor union with representation from most of the larger labor
organizations in the state.
CHAIR OLSON remarked that the committee has been responsible for
the language in HB 316, and it was a unanimous decision by all
members to put forth the resolution which led to a good portion
of the bill, including labor, medical insurance, and lay people.
3:40:00 PM
REPRESENTATIVE JOSEPHSON recalled earlier testimony from a
previous committee hearing that indicated that there needs to be
an effort to control treatment. He asked how the committee will
know that this reform doesn't go too far and that rates will not
be set in a way that undermines the capacity of an injured
worker to obtain the treatment he/she needs.
MR. MONAGLE agreed it is a balancing act that the MSRC and the
WCB are challenged to achieve, which is to set the conversion
factors at a level that appropriately awards doctors but not so
low as to cause providers to elect not to treat injured workers.
He offered his belief that a broad range of data exists that
suggests some specialties - as provided in members' packets as
price comparisons - that some allowable reimbursement rates are
400-500 percent higher than in regional states such as
Washington, Oregon, and Idaho. He said he can't speak for
either the MSRC or the WCB, but those would be areas these
entities would be focused on when determining the appropriate
conversion factors. Additionally, rates for other treatment
such as evaluation and management, office physician, physical
medicine, physical therapist, and chiropractor are more
reasonable, although they are higher than regional costs, but
don't represent 400 percent higher costs. He further said that
one of the values of the conversion factors is the MCRC and WCB
can customize them for each specialty and "it's not going to be
one size fits all."
3:42:30 PM
REPRESENTATIVE JOSEPHSON asked whether the bill should spell out
and define the goal of a conversion factor so those involved in
setting the factor know the policy they are trying to implement.
MR. MONAGLE answered that he certainly would leave that policy
decision to the committee. He said he thought there was some
public testimony - both written and in person last week to that
effect.
3:43:18 PM
LUKE HOPKINS, Mayor, Fairbanks North Star Borough (FNSB),
testified in support of HB 316. He said the FNSB and the FNSB
school district workers' compensation plans are self-funded
programs. The FNSB spends approximately $1.1 million per year
on workers' compensation benefits. The FNSB continues to see
medical costs increasing. The regulation of fees and charges
for medical treatment, equipment, and drugs could reduce the
overall workers' compensation costs. The FNSB doesn't have any
ability to steer the workers' compensation related injuries to
the PPOs network, where certain services are provided. In most
circumstances the FNSB is paying the additional costs for these
claims more than if they were non-work related injuries covered
under the self-funded plan. He said that allowing the board to
adopt a fee schedule based on quantified data, based upon
federal Centers for Medicare and Medicaid service scales, is a
positive change and would provide the needed reform to address
the highest workers' compensation costs in Alaska. The FNSB and
the FNSB assembly fully support HB 316. The FNSB assembly
adopted a resolution on February 13, 2014. He thanked members
for the opportunity to express the FNSB's concerns.
3:45:05 PM
MARIANNE E. BURKE said she is representing herself. She stated
there are some problems with the workers' compensation system
with respect to the value for the single person.
CHAIR OLSON informed Ms. Burke that the bill she is referring to
is not currently the bill before the committee [so he would not
take her testimony at this time.]
[HB 316 was held over.]