Legislature(2013 - 2014)SENATE FINANCE 532
04/19/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB19 | |
| HB160 | |
| HB282 | |
| HB140 | |
| HB316 | |
| HB385 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 385 | TELECONFERENCED | |
| += | HB 278 | TELECONFERENCED | |
| += | HB 19 | TELECONFERENCED | |
| += | HB 160 | TELECONFERENCED | |
| += | HB 282 | TELECONFERENCED | |
| += | HB 287 | TELECONFERENCED | |
| += | HB 306 | TELECONFERENCED | |
| += | HB 140 | TELECONFERENCED | |
| + | HB 316 | TELECONFERENCED | |
| + | HB 384 | TELECONFERENCED | |
| += | HJR 10 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 316(FIN)
"An Act relating to workers' compensation fees for
medical treatment and services; relating to workers'
compensation regulations; and providing for an
effective date."
11:03:16 AM
ANNA LATHAM, STAFF, REPRESENTATIVE KURT OLSON, introduced
the legislation and read from the sponsor statement:
For the past decade, Alaska has faced the highest
workers compensation rates in the nation.
The Alaska Workers' Compensation Board, the
Legislature, the Alaska Health Care Commission and the
Administration agree that effective reform is needed,
and is crucial to Alaska's economic future.
In 2005, the Alaska Legislature passed HB 13, which
established a workers' compensation fee schedule based
on usual, customary and reasonable rates, set at the
90th percentile, with a geographic differential. This
made incremental changes for the better, but it wasn't
the sweeping reform that Alaska truly needs.
HB 316 proposes a solution to this challenge by
introducing a new fee schedule. HB 316 changes the
basis for the fee schedule from what physicians charge
in a geographic area, to what it costs physicians to
perform medical procedures. Thirty-two states
currently use this relative values unit methodology,
which incorporates the relative value of a physician's
work, practice expense, and professional liability
insurance. A conversion factor and geographic
differential is applied to the formula. This relative
value unit methodology is a system that is owned by
the American Medical Association, and is the basis for
Medicare and Medicaid's payment schedules.
The Medical Services Review Committee will set the
conversion factors for the fee schedules, which
require the approval of the Commissioner of Labor and
Workforce Development before they are adopted into
regulation by the Workers' Compensation Board. The
Board will also set reimbursement rates for air
ambulance services, and the markup rates for
prescription drugs and durable medical equipment.
HB 316 introduces comprehensive reform of Alaska's
workers' compensation fee schedule, in an effort to
reduce exorbitant costs in both the public and private
sectors.
I urge your support of this legislation.
Co-Chair Meyer understood that the bill had received
support from the majority of affected parties. Ms. Latham
agreed that there were 38 letters of support in the bill
packet from various medical, union and other related
groups. She furthered that the sponsor had worked with all
stakeholders involved during the legislative process; 5
hearings were heard in House Labor and Commerce and 2 in
the House Finance Committee, prior to the bill moving to
the senate.
Vice-Chair Fairclough read from an April 17, 2014 letter
from the Alaska Chamber of Commerce:
While Committee Substitute House Bill 316 (HB 316) is
singularly focused on the medical fee schedule, it is
an important piece of the overall workers'
compensation system. Until now, the Alaska Chamber has
withheld support from HB 316. Not because the changes
made by HB 316 move workers' comp in the wrong
direction, but because additional reforms introduced
during the legislative process have yet to be
included. Our primary concern is that HB 316 will only
have a short-term effect on workers' compensation
medical costs over the next several years.
Vice-Chair Fairclough noted that Alaska ranked last in the
nation when it came to worker's compensation reform. She
wondered if the legislation would improve the state's
standing, and what the effects would be on employers and
employees. Ms. Latham replied that there were many reforms
that needed to be addressed when discussing worker's
compensation. She believed that the chamber wanted to
implement evidence based best practices and utilization as
part of the reform. The sponsor holds that the process
should consist of 2 parts, lowering fees and implementing
utilization and evidence based best practices.
11:08:45 AM
Vice-Chair Fairclough understood that the legislation would
also benefit employers. Ms. Latham responded yes; employers
would pay lower premium rates.
Senator Bishop expressed support for the intent of
legislation. He noted in member packets the letters of
support from labor and contract associations, as well as
certain municipalities and boroughs (copy on file).
Senator Olson remarked that the letters of support were
from industry. He queried whether employees had offered
support for the legislation. Ms. Latham replied one
individual testified in House Labor and Commerce concerning
their experience in the worker's compensation system. She
relayed that the previous hearings of the legislation had
been publicly noticed and that the process had been very
open to the public. She added that the Alaska State Medical
Association offered full support of the legislation
following the amendment of the bill in the House Finance
Committee; the amendment would allow the Commissioner of
Labor to approve the conversion factor set by the Medical
Services Review Committee (MSRC). She maintained that the
process had been open and transparent.
Senator Olson expressed concern that the bill could be too
ambitious. He worried about a hasty transition from the
usual, customary, and reasonable (UCR) fee schedule to a
resource based scenario. He wondered if the sponsor had
been in discussions with pain management clinics, or
patients that dealt with pain management. Ms. Latham
stated that a HB370 was up in Senate Judiciary, and spoke
to the fee schedule as it pertained to pain management. She
asserted that the Resource-Based Relative Value Scale
(RBRVS) methodology in the bill was sound and had been
developed by Harvard researchers. She relayed that the UCR
was inherently inflationary. She shared that 32 states had
adopted the RBRVS methodology with a conversion factor, not
in phases but in a swift switch from one to the next.
11:13:13 AM
Senator Dunleavy asked whether practitioners from remote
areas of the state had testified on the legislation. Ms.
Latham said that the only practitioners that had testified
on the bill were physical therapists in Fairbanks. She
added that the sponsor had worked closely with the Alaska
State Hospital and Nursing Home Association (ASHNA),
adopting a critical access hospital exemption because ASHNA
used a different federal Medicaid billing schedule. She
furthered that a geographic differential had been applied
for smaller, rural hospitals and clinics.
Senator Olson understood that there was a letter of support
from the Alaska State Medical Association (ASMA) in member
packets. Ms. Latham replied in the affirmative.
Co-Chair Meyer wondered if chiropractors had expressed an
opinion on the bill. Ms. Latham responded that the
chiropractic community had not expressed an opinion on the
legislation.
Senator Dunleavy asked whether cost issues due to Alaska's
unique terrain had been considered during the process. Ms.
Latham replied yes. She reiterated that the bill contained
a critical access hospital exemption and the ability of the
board to apply a geographic differential, as well as the
initial conversion factor.
RACHAEL PETRO, PRESIDENT AND CEO, ALASKA CHAMBER, ANCHORAGE
(via teleconference), testified in support of the
legislation. She referred to the letter of support in
member packets (copy on file). She believed that the
legislation was a step in the right direction for systemic,
comprehensive change.
11:17:17 AM
WARD HURBURT, CHIEF MEDICAL OFFICER, DEPARTMENT OF HEALTH
AND SOCIAL SERVICES, ANCHORAGE (via teleconference), spoke
in support of the legislation. He shared that the
legislation was consistent with the recommendations of the
Alaska Healthcare Commission and that the new methodology
would encourage a free market. He opined that healthcare
and medical costs in the state were the highest in the
nation and the bill would open up better negotiations. He
said that there would be a conversion factor for the
resource based scale to reflect the costs in Alaska. He
noted that organized labor groups had testified in support
of the legislation.
BARBARA HUFF TUCKNESS, DIRECTOR, GOVERNMENT AND LEGISLATIVE
AFFAIRS, TEAMSTERS LOCAL 959, testified in support of the
legislation. She believed that the medical review board,
with the make-up of doctors and lay representatives, would
be effective.
Co-Chair Meyer CLOSED public testimony.
Senator Olson expressed concern that the legislation could
prove to alienate those already on the margins of society.
Vice-Chair Fairclough spoke to the fiscal notes. She
remarked that the FY15 column reflected $62 thousand, while
FY16 through FY18 reflected $54 thousand with an estimated
supplemental appropriation of $13,700. She felt that the
numbers were appropriate. She pointed out that fiscal note
3 reflected several indeterminate costs; however, the
analysis on page two of the note provided an appropriate
explanation for the indeterminate amount.
Vice-Chair Fairclough MOVED to REPORT CSHB 316(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 316(FIN) was REPORTED out of committee with individual
and with previously published fiscal impact note: FN2(LWF);
and previously published indeterminate fiscal note:
FN3(ADM).
11:23:18 AM
AT EASE
11:44:29 AM
RECONVENED
Co-Chair Meyer handed the gavel to Co-Chair Kelly.