Legislature(2007 - 2008)CAPITOL 106

03/01/2007 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES


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Audio Topic
03:05:34 PM Start
03:05:34 PM HJR10
03:07:10 PM HB100
04:35:50 PM Presentation: Strengthening Families
05:12:10 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Strengthening Families TELECONFERENCED
Initiative
+= HB 100 AIR AMBULANCE SERVICES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HJR 10 MEDICAL ASSISTANCE FOR CHILDREN TELECONFERENCED
Adopted Fiscal Note
HB 100-AIR AMBULANCE SERVICES                                                                                                 
                                                                                                                                
3:07:10 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."                                                                                                              
                                                                                                                                
3:07:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHN COGHILL,  Alaska State Legislature, presented                                                               
SSHB 100,  as prime sponsor.   He explained that this  bill arose                                                               
because   an  air   ambulance  service   wishes   to  provide   a                                                               
subscription Medivac service  that under current law  may only be                                                               
offered  by a  non-profit  entity.   He  went on  to  say that  a                                                               
subscription  service differs  from insurance.   Furthermore,  he                                                               
said  that SSHB  100 stipulates  that subscription  air ambulance                                                               
services  may not  deny  emergency  service to  any  person.   He                                                               
explained that the bill allows  market dynamic forces to work, as                                                               
the  service provider  is  able  to offer  a  desired service  to                                                               
customers.    He  referred  to  previous  testimony  before  this                                                               
committee from one provider who  objects to certain provisions in                                                               
the  bill, and  noted  that today's  testimony  will cover  other                                                               
aspects  of the  business.    He suggested  that  the state  move                                                               
slowly in this  new area, however, he opined  that persons should                                                               
have  the benefit  of entering  a service  agreement at  whatever                                                               
level they may choose.  He  said a level playing field will allow                                                               
providers to enter at the service level they desire.                                                                            
                                                                                                                                
3:12:37 PM                                                                                                                    
                                                                                                                                
CHAIR WILSON stipulated  that testimony will be  taken today, but                                                               
the intent is to hold the bill in committee.                                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL  expressed  his  openness  for  amendment                                                               
suggestions.                                                                                                                    
                                                                                                                                
3:13:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER referred  to  the  sponsor's allusion  to                                                               
there  being six  air ambulance  providers, in  Alaska, and  said                                                               
that she has  documentation indicating that there may  be as many                                                               
as 18.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  COGHILL   replied  that  the  numbers   may  vary                                                               
depending  on the  type of  aircraft and  certification that  the                                                               
provider  holds, and  he  speculated  that forthcoming  testimony                                                               
would clarify the numbers.                                                                                                      
                                                                                                                                
The committee took a brief at ease from 3:14 to 3:16.                                                                           
                                                                                                                                
3:16:14 PM                                                                                                                    
                                                                                                                                
KATHLEEN  MCLERON, Health  Program  Manager,  Division of  Public                                                               
Health (DPH),  Department of Health  and Social  Services (DHSS),                                                               
explained that  her division  "credentials" air  medical services                                                               
for  the health  department.   She  said that  there  are 19  air                                                               
certificates issued in  the state to 14 different  agencies.  She                                                               
explained  that five  are Native  health  organizations, two  are                                                               
hospital-based services, two are  borough or government agencies,                                                               
four  are  privately  owned  services,  and  one  is  a  military                                                               
organization.                                                                                                                   
                                                                                                                                
3:17:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COGHILL   established  that  the   bill  concerns                                                               
carriers who operate  for profit, therefore a  description of the                                                               
differentiation between  profit and non-profit services  would be                                                               
in order.                                                                                                                       
                                                                                                                                
3:17:42 PM                                                                                                                    
                                                                                                                                
MS.  MCLERON explained  that DPH  does  not review  certification                                                               
based  on an  organization's profit  or non-profit  status.   She                                                               
explained that  there are three levels  of service certification:                                                               
Medivac, critical  care or ambulance, and  specialty aero-medical                                                               
transport teams.  The certification  requirements differ for each                                                               
level,  and require  different  staff,  equipment, and  aircraft.                                                               
Other organizations, such as  the Federal Aviation Administration                                                               
(FAA),  also   require  that   carriers  meet   certain  aircraft                                                               
requirements.   The DPH limits  itself to ensuring  that agencies                                                               
comply with state statutes and regulations.                                                                                     
                                                                                                                                
3:19:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON asked  how  many carriers  are within  the                                                               
three service classifications.                                                                                                  
                                                                                                                                
MS. MCLERON responded that  currently certified services include:                                                               
ten critical care or ambulance,  eight Medivac, and one specialty                                                               
transport  team.    Several  organizations  hold  more  that  one                                                               
certificate,  therefore   there  are   19  certificates   for  14                                                               
agencies, she  said.   She explained in  response to  a question,                                                               
that AS  18.08.082 authorizes the  DPH to write  regulations, and                                                               
that  the  three  levels  of   service  are  contained  in  these                                                               
regulations.   In  further response,  she noted  that there  is a                                                               
small  variation  in   the  number  of  providers   and  type  of                                                               
certifications issues.   One service  is currently  considering a                                                               
consolidation from two  levels of certification to  one, and that                                                               
one out-of-state provider chose not  to renew certification.  She                                                               
went on to say that overall the numbers are reasonably stable.                                                                  
                                                                                                                                
3:22:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER asked whether  Alaskans are well served by                                                               
air ambulance providers, and whether  this bill would improve the                                                               
services offered.                                                                                                               
                                                                                                                                
MS. MCLERON  stated her understanding  that DHSS is not  taking a                                                               
position on  this bill.   She said  that currently  air ambulance                                                               
services are  available in rural  areas to transport  patients to                                                               
urban, and  out of  state, medical centers.   Recalling  her past                                                               
personal  experience, as  a certified  flight paramedic  in Point                                                               
Barrow, she  offered that  clinic workers are  well aware  of the                                                               
services available for patients.                                                                                                
                                                                                                                                
REPRESENTATIVE  GARDNER  questioned if  the  effect  of SSHB  100                                                               
would  be to  improve access  to necessary  medical services,  or                                                               
serve to address a business model.                                                                                              
                                                                                                                                
MS. MCLERON reiterated that DHSS is  not taking a position on the                                                               
bill because  it is viewed as  addressing a business model.   The                                                               
governing  statute, and  regulations, stipulates  that a  service                                                               
employ   the  appropriate   medical  personnel,   administration,                                                               
equipment,   and   aircraft.     An   applicant   meeting   these                                                               
requirements will be credentialed, she said.                                                                                    
                                                                                                                                
3:24:59 PM                                                                                                                    
                                                                                                                                
SHELLY  DEERING, Alaska  Director,  Clinical Operations,  Airlift                                                               
Northwest, paraphrased  from a statement,  which read  as follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     I'm  a  critical  care  flight  nurse  and  manage  our                                                                    
     medically related operations in Alaska.                                                                                    
                                                                                                                                
     Airlift  Northwest was  created in  1982 after  a house                                                                    
     fire in  Sitka claimed the  lives of five  children for                                                                    
     whom  no   air  medical  transport  service   could  be                                                                    
     obtained to fly them to a  burn center.  After 25 years                                                                    
     and  55,000  patients,  we  remain  southeast  Alaska's                                                                    
     premiere  nonprofit air  medical  service.   We're  the                                                                    
     only service  with dedicated medical Learjet's  in both                                                                    
     Ketchikan and  Juneau.   We have  14 nurses  and pilots                                                                    
     who live and  work in each community.  It  has been our                                                                    
     honor and privilege to serve  Alaska patients and their                                                                    
     families.                                                                                                                  
                                                                                                                                
     I'm  here today  to  express concerns  about SSHB  100.                                                                    
     This  legislation seeks  to provide  Alaskans with  the                                                                    
     ability  to participate  in subscription  or membership                                                                    
     programs for air medical transportation.   This type of                                                                    
     program offers a discounted medical  service for a fee.                                                                    
     Rarely  will  insurance  cover all  the  costs  of  air                                                                    
     medical transportation.   Under a subscription program,                                                                    
     the  patient's co-pay,  or the  amount  not covered  by                                                                    
     insurance  or Medicare,  will  be  covered through  the                                                                    
     membership fee.                                                                                                            
                                                                                                                                
     We  are concerned,  however, that  SSHB 100  could have                                                                    
     some  serious, unintended  consequences.   In fact,  it                                                                    
     could  jeopardize  some  of  the  state's  air  medical                                                                    
     programs.  Currently Alaska has  16 state certified air                                                                    
     medical service providers - some  cover rural areas and                                                                    
     others  cover  the  state  as   a  whole.    Membership                                                                    
     programs  can result  in a  competitive environment  in                                                                    
     which  smaller   providers  would  be  at   a  distinct                                                                    
     disadvantage.     They  may  not  have   the  resources                                                                    
     necessary  to set  up a  viable program.   Conceivably,                                                                    
     some could be  driven out of business  leaving areas of                                                                    
     the state without adequate service.                                                                                        
                                                                                                                                
     It's  important  to  remember, too,  that  subscription                                                                    
     programs  are like  every  other  health care  program.                                                                    
     When  one person  pays  less than  the  actual cost  of                                                                    
     service,   which   occurs    when   they   purchase   a                                                                    
     subscription,     another     person     pays     more.                                                                    
     Unfortunately,   this  differential   pricing  is   the                                                                    
     reality of our health care system.                                                                                         
                                                                                                                                
     I'd also like to call  your attention to Section One of                                                                    
     this  bill which  requires that  organizations offering                                                                    
     subscription programs  "may not deny  emergency medical                                                                    
     services to  any person."   On the surface,  this would                                                                    
     seem  like  an   admirable  policy.    But   if  it  is                                                                    
     interpreted  broadly,   patients  will  suffer.     The                                                                    
     problem lies in the definition of emergency.                                                                               
                                                                                                                                
     For example, if  a person falls in Juneau  and breaks a                                                                    
     hip, that  is an  emergency - one  that can  be treated                                                                    
     effectively  at Bartlett  Regional Hospital.   However,                                                                    
     under  Section One,  the person  could  call their  air                                                                    
     ambulance membership  provider and request to  be taken                                                                    
     to Anchorage.  Not only will  this drive up the cost of                                                                    
     treatment,  it could  take an  aircraft out  of service                                                                    
     when it is needed for a much more serious emergency.                                                                       
                                                                                                                                
     We  also  are  concerned that  this  legislation  would                                                                    
     exempt   subscription  programs   from   any  type   of                                                                    
     insurance  regulation.   We  believe that  subscription                                                                    
     programs   are   a  form   of   insurance.     To   get                                                                    
     clarification  on this,  we presented  the question  to                                                                    
     Alaska Insurance  Commissioner Linda Hall in  a meeting                                                                    
     on February  9.  We  are still waiting to  get guidance                                                                    
     from  the Commissioner  or her  staff.   We've  checked                                                                    
     several times  with her office  since that  meeting and                                                                    
     haven't been able to get a response.                                                                                       
                                                                                                                                
     If  subscription  programs  are  made  available,  they                                                                    
     should  be regulated  to assure  that Alaskans  receive                                                                    
     adequate protection when they purchase a membership.                                                                       
                                                                                                                                
     Let me  give two  examples of  what can  happen without                                                                    
     regulation.                                                                                                                
                                                                                                                                
     First, some  companies require  that patients  fly only                                                                    
     with  them   in  order  to  receive   their  membership                                                                    
     benefits.   This  could result  in harm  to a  patient.                                                                    
     For example, a  person who has suffered  a heart attack                                                                    
     may  receive  treatment at  a  local  hospital to  help                                                                    
     dissolve  a clot.    Sometimes  this procedure  doesn't                                                                    
     work  and  the  only alternative  is  advanced  cardiac                                                                    
     intervention  at another  hospital  accessible only  by                                                                    
     air.  If an aircraft  is not immediately available from                                                                    
     the company  that sold the  patient a  membership, that                                                                    
     person   may  have   to  wait   for  hours   for  their                                                                    
     "subscription program"  to transport them.   The longer                                                                    
     the delay, the more heart  muscle that can be destroyed                                                                    
     -- having long-term effects on a patient's health.                                                                         
                                                                                                                                
     Second,  some companies  try to  sell subscriptions  to                                                                    
     Medicaid  recipients  or  people who  receive  benefits                                                                    
     from the  Indian Health Service.   These patients don't                                                                    
     need  a subscription  program  because co-payments  are                                                                    
     not required from  them.  If they are  persuaded to buy                                                                    
     a membership,  they are purchasing coverage  they don't                                                                    
     need.   Companies who sell  to Medicaid or  IHS [Indian                                                                    
     Health   Services]  beneficiaries   are,  in   essence,                                                                    
     praying  on  people  who can  least  afford  the  cost.                                                                    
     Regulation is needed to prevent this.                                                                                      
                                                                                                                                
     Washington State recently  passed legislation to exempt                                                                    
     membership  programs  from insurance  regulation,  with                                                                    
     minimal  consumer protection.    Already revisions  are                                                                    
     being   considered.      Airlift   Northwest   provides                                                                    
     memberships in  Washington and we voluntarily  formed a                                                                    
     reciprocity agreement with  another flight program that                                                                    
     provides  the same  level of  quality service.   It  is                                                                    
     also the only  other flight program in  Washington.  We                                                                    
     did this to assure that  our membership holders are not                                                                    
     delayed in getting the care they need.                                                                                     
                                                                                                                                
     So  if   you  do  decide   to  move  ahead   with  this                                                                    
     legislation,  we urge  you  to  consider safeguards  to                                                                    
     protect  Alaskans.    In  addition  to  regulations  to                                                                    
     prevent  the  situations  I just  described,  companies                                                                    
     selling  memberships should  be  required  to obtain  a                                                                    
     surety bond from  a company licensed to  do business in                                                                    
     Alaska  in  an   amount  equal  to  the   funds  to  be                                                                    
     subscribed  and  also  to  maintain  adequate  reserves                                                                    
     based  on   the  subscription   fees.     Without  this                                                                    
     regulation,  a  company can  come  into  a state,  sell                                                                    
     memberships,  and  then  leave without  ever  providing                                                                    
     service  to  patients.     This  protection  is  needed                                                                    
     especially when a  company offers lifetime memberships.                                                                    
     Companies should  also be required  to comply  with all                                                                    
     state  and federal  regulations  regarding billing  and                                                                    
     reimbursement for participants.                                                                                            
                                                                                                                                
     People  require air  medical  transportation when  they                                                                    
     are  critically ill  or injured.   This  is a  time for                                                                    
     them and their families that  is filled with stress and                                                                    
     anxiety.  Those  of us who practice in  this field want                                                                    
     the best possible  care for our patients.   We hope you                                                                    
     will carefully  consider this legislation and  not pass                                                                    
     something that could ultimately  be to the detriment of                                                                    
     patients - not to their benefit.                                                                                           
                                                                                                                                
                                                                                                                                
3:31:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  asked if  a patient,  who has  purchased a                                                               
subscription for service, would have  to use the class of carrier                                                               
covered by  the subscription service,  regardless of  the medical                                                               
condition necessitating the air ambulance service.                                                                              
                                                                                                                                
MS. DEERING responded that the patient would have to decide                                                                     
whether to pay the extra cost, if the patient chose to fly with                                                                 
a carrier with whom they do not have a subscription.                                                                            
                                                                                                                                
3:33:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ROSES asked about the turnover rates for air                                                                     
ambulance service providers.                                                                                                    
                                                                                                                                
MS. DEERING  said that during  her time in Washington  State, she                                                               
experienced the  loss of one  service provider.  She  stated that                                                               
she  is not  aware of  a service  provider leaving  the Southeast                                                               
Alaska area.                                                                                                                    
                                                                                                                                
REPRESENTATIVE    ROSES   expressed    concern   regarding    the                                                               
consequences  of a  subscription  service provider  going out  of                                                               
business or leaving the state.   He opined that there may need to                                                               
be some type  of guarantee that a service will  be available when                                                               
needed.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  WILSON  noted   that  doctors  certainly  provide                                                               
guidance to  patients in  emergency medical  situations requiring                                                               
air-lift services.                                                                                                              
                                                                                                                                
3:35:33 PM                                                                                                                    
                                                                                                                                
PAUL HARRIS,  General Manager,  Guardian Flight,  Inc., testified                                                               
in support of SSHB 100.   He explained that Guardian Flight's air                                                               
medical  ambulance service  is based  out  of Fairbanks.   It  is                                                               
Alaska's   largest  air   medical   carrier;  providing   service                                                               
throughout the state.  It  is his understanding that subscription                                                               
services are  a common  business practice in  other states.   The                                                               
provider's  reputations,  and  the  need for  services,  are  the                                                               
deciding  factors  of  whether   to  enter  into  a  subscription                                                               
contract.  The  number of air medical service  providers has been                                                               
fairly stable  for the last ten  years.  He opined  that SSHB 100                                                               
allows any air ambulance provider  the option to sell memberships                                                               
or  subscriptions for  air ambulance  services.   In response  to                                                               
concerns  regarding  continuity  of services  should  a  provider                                                               
cease operations, he noted that  a lifetime membership subscriber                                                               
would be  aware that any business  could be terminated.   He said                                                               
that the  customer/business relationship is important.   Guardian                                                               
Flight provides a  service to the people of Alaska  at the lowest                                                               
possible  cost,  and he  relayed  that  the  idea of  offering  a                                                               
subscription  service was  developed as  a means  to improve  the                                                               
system.   A subscription  service allows people  to plan  for the                                                               
future  possibility  that they,  or  a  family member,  may  need                                                               
emergency air medical  services.  He drew a  comparison between a                                                               
subscription service and a pre-burial  service:  both are a means                                                               
for planning ahead  to minimize stress at a difficult  time.  Mr.                                                               
Harris  said he  thought it  was fair  to allow  all air  medical                                                               
service  providers   the  chance  to  sell   subscriptions.    He                                                               
suggested  that  the  courts  would not  look  favorably  upon  a                                                               
provider selling subscriptions in areas they did not serve.                                                                     
                                                                                                                                
3:41:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ROSES observed  that air  ambulance services  are                                                               
vital  in Alaska.   He  said that  he is  not concerned  with the                                                               
integrity of  the providers, but he  noted that it may  only take                                                               
one aircraft crash to force a  company out of business.  He asked                                                               
what  Guardian  Flight  would  plan  to charge  for  a  flat  fee                                                               
subscription, and how many subscribers are anticipated.                                                                         
                                                                                                                                
MR. HARRIS replied  that an annual fee of  $50.00 per individual,                                                               
and $75.00  for a family,  would be charged, and  estimated sales                                                               
of 100,000 subscriptions.                                                                                                       
                                                                                                                                
REPRESENTATIVE  ROSES  calculated  $2.5 million  in  subscription                                                               
fees,  and   asked  what   a  person   with  insurance,   but  no                                                               
subscription,  would pay  out  of pocket  for  a medical  service                                                               
flight.                                                                                                                         
                                                                                                                                
MR.  HARRIS  noted  that   insurance  policies  provide  variable                                                               
payment  amounts.   However, in  2006,  Guardian Flight  provided                                                               
about 1,100 Medivac flights at a  cost range of $6,000 to $55,000                                                               
each.   He said that  most insurers pay  80 percent of  that cost                                                               
and  explained that  a flight  to Portland,  Oregon, or  Seattle,                                                               
Washington, could cost $48,000 to $50,000.                                                                                      
                                                                                                                                
REPRESENTATIVE ROSES  estimated that a  patient with a  co-pay of                                                               
20  percent, charged  $6,000 for  a Medivac,  is responsible  for                                                               
$1,200.    A  provider  receiving $2.5  million  in  subscription                                                               
payments  could, he  theorized,  transport 2,500  people for  the                                                               
amount of money  collected through subscriptions.   He related to                                                               
this to the co-pay aspect of insurance coverage.                                                                                
                                                                                                                                
MR. HARRIS  revealed that Guardian  Flight had  uncollectible, or                                                               
underfunded, service fees, in 2006, totally $2.3 million.                                                                       
                                                                                                                                
3:45:37 PM                                                                                                                    
                                                                                                                                
MR.  HARRIS  responding  to  a  member's  question,  stated  that                                                               
Guardian  Flight responds  to  every  service request,  including                                                               
calls  from  clinics,  hospitals,   or  rural  emergency  medical                                                               
service systems.                                                                                                                
                                                                                                                                
REPRESENTATIVE GARDNER  inquired about contracts  from particular                                                               
hospitals, or  agencies, to provide  flight service on  a routine                                                               
bases.                                                                                                                          
                                                                                                                                
MR. HARRIS replied that there are preferred provider contracts.                                                                 
                                                                                                                                
3:46:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON asked  how  a  subscription service  would                                                               
work if a  patient needed transport from a different  area of the                                                               
state,  and whether  the subscription  agreement specifies  which                                                               
areas are serviced.                                                                                                             
                                                                                                                                
MR.  HARRIS explained  that Guardian  Flight has  the ability  to                                                               
service  the entire  state, and  will respond  regardless of  the                                                               
subscriber's  location.   He noted  that regulatory  limitations,                                                               
such as  certain FAA requirements,  may affect the  arrival time.                                                               
Guardian Flight  informs the patient/doctor of  the arrival time,                                                               
to allow them the option of alternative arrangements.                                                                           
                                                                                                                                
REPRESENTATIVE SEATON  asked whether  the patient  is responsible                                                               
for the  full cost of  the service,  in the absence  of insurance                                                               
coverage.                                                                                                                       
                                                                                                                                
MR. HARRIS replied yes.                                                                                                         
                                                                                                                                
3:49:17 PM                                                                                                                    
                                                                                                                                
CHAIR WILSON  said that she  has had occasion to  request Medivac                                                               
services,  and  has never  been  asked  whether the  patient  has                                                               
insurance.                                                                                                                      
                                                                                                                                
MR. HARRIS said  that the non-profit agency,  Critical Care, Inc.                                                               
(CCI),  [Ketchikan,  Alaska],   offers  memberships  for  Medivac                                                               
services.                                                                                                                       
                                                                                                                                
3:50:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA opined  that the high cost of  a Medivac in                                                               
some rural  areas is very  expensive and constitutes  a financial                                                               
burden to  the communities.   Some  organizations are  working to                                                               
provide medical services to areas that are lacking.                                                                             
                                                                                                                                
MR. HARRIS  said that in the  Tanana Chiefs area, the  Council of                                                               
Athabascan  Tribal   Governments  (CATG),  has   contracted  with                                                               
Guardian   Flight   to   provide  medical   services   to   seven                                                               
communities,  and  with  another  air carrier  to  service  other                                                               
areas.  He  explained that two Guardian Flight  doctors travel to                                                               
the seven  communities to hold clinics  three times a week.   The                                                               
doctors are on  contract with CATG, and  Guardian Flight provides                                                               
the air  support.   However, if  the patient  is a  Tanana Chiefs                                                               
client,  they  would  use  a  Tanana  Chief's  service  provider.                                                               
Guardian  Flight has  facilitated  membership  payments for  CCI,                                                               
forwarding the necessary paperwork.                                                                                             
                                                                                                                                
3:55:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH asked if  a definition of air ambulance                                                               
service is in state statute.                                                                                                    
                                                                                                                                
MR.  HARRIS said  statute requirements  exist for  each level  of                                                               
certification of air medical services.                                                                                          
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  asked whether statute  allows Guardian                                                               
Flight to solicit memberships.                                                                                                  
                                                                                                                                
MR. HARRIS replied that membership  solicitation is restricted to                                                               
non-profit agencies;  however, he understands that  SSHB 100 will                                                               
allow for-profit businesses to seek memberships/subscriptions.                                                                  
                                                                                                                                
3:56:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH   asked  if  there  are   defined  EMS                                                               
(emergency medicals service) boundaries in Alaska.                                                                              
                                                                                                                                
CHAIR  WILSON offered  that the  services know  their boundaries,                                                               
and  the   circumstances  may  dictate   whether  a   patient  is                                                               
transferred,  at  a  given  point, or  carried  non-stop  to  the                                                               
regional hospital.                                                                                                              
                                                                                                                                
REPRESENTATIVE  CISSNA interjected  that  the  state manages  the                                                               
EMS.                                                                                                                            
                                                                                                                                
3:58:00 PM                                                                                                                    
                                                                                                                                
MS. MCLERON said  there are no limits as to  where an air medical                                                               
service is  allowed to operate.   She explained that  some choose                                                               
to  service only  a defined  area, or  patient population,  while                                                               
others  provide state  wide services.   She  reiterated that  the                                                               
governing  statutes,  and  regulations, set  forth  certification                                                               
requirements.  In response  to Representative Fairclough's query,                                                               
she noted  that "air ambulance" is  not defined in statute.   The                                                               
governing regulations, AS 7 AAC  26.999, define Medivac services,                                                               
critical  care   air  ambulance,   and  specialty   aero  medical                                                               
transport teams.                                                                                                                
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  stated  that  the  specific  criteria                                                               
exists  for  the  licensing  requirement  of  the  air  ambulance                                                               
services, and asked about the  defined areas that are established                                                               
in municipalities as EMS response areas.                                                                                        
                                                                                                                                
MS. MCLERON confirmed, that specific,  municipality EMS areas are                                                               
adhered   to,  and   described  the   boundaries  in   Anchorage.                                                               
Regarding the  air medical  arena, she  clarified, it  is "market                                                               
driven;" there  is not  a certificate  of need  (CON) restricting                                                               
service areas.   To a follow-up question, she  said that Medicaid                                                               
regulations are not her purview.   Receiving credentials from the                                                               
department means  that the provider  is meeting  state standards,                                                               
and she explained the standards for a Medivac service.                                                                          
                                                                                                                                
4:01:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH referred to page  1, line 8, Sec. 2. AS                                                               
21.03.021,  and  asked if  this  statement  allows air  ambulance                                                               
services to be exempt from insurance regulation.                                                                                
                                                                                                                                
MS. MCLERON  declared that DHSS  is not  taking a stance  on SSHB
100, and said that Sec. 2 appears to cover insurance.                                                                           
                                                                                                                                
4:01:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON stated  his  understanding  that SSHB  100                                                               
would  allow  private air  ambulance  services  to use  the  same                                                               
subscription model,  which is now  limited for use  by non-profit                                                               
agencies.   He  asked whether  allowing wide  spread use  of this                                                               
model  would   diminish  the   existing  community   air  medical                                                               
services.                                                                                                                       
                                                                                                                                
MR. HARRIS responded  that it comes down to what  the market will                                                               
bear.  Speaking  specifically to the bill, he  said that Guardian                                                               
Flight has found the non-profit  model to be beneficial, creating                                                               
a  symbiotic  relationship for  marketing  purposes,  as well  as                                                               
meeting   the  needs   of  the   communities.     The  non-profit                                                               
organization supports free hospital and  EMS training, which is a                                                               
critical component to the air medical services system.                                                                          
                                                                                                                                
4:05:23 PM                                                                                                                    
                                                                                                                                
TOM  BAILEY, Manager,  Providence, Air  Medical Services,  stated                                                               
opposition to  SSHB 100, paraphrasing from  a prepared statement,                                                               
which read as follows [original punctuation provided]:                                                                          
                                                                                                                                
     I'm the  manager of  Providence Alaska  Medical Centers                                                                    
     Air  Ambulance Service,  LifeGuard  Alaska.   LifeGuard                                                                    
     Alaska is a rotor and  fixed wing air ambulance service                                                                    
     providing emergence  medical transports,  and specialty                                                                    
     transports  throughout Alaska  and  have done  so as  a                                                                    
     dedicated  service since  1986, touching  the lives  of                                                                    
     over 25,  000 Alaskans and non-Alaskans  from premature                                                                    
     infants to  adults.  I would  like to go on  the record                                                                    
     first to  thank representative Coghill for  his efforts                                                                    
     in  trying  to  decrease   the  cost  risks  for  those                                                                    
     Alaskans  with grave  illnesses or  injuries but  would                                                                    
     also like to  share with you my concerns  with the bill                                                                    
     as written.   Most people  who have been  seriously ill                                                                    
     understand that  the costs can  be astronomical  and in                                                                    
     some  cases  people  have put  their  own  outcomes  in                                                                    
     jeopardy as a result of  trying to cut corners, or base                                                                    
     decisions  on  economics  verses   the  path  with  the                                                                    
     greatest  likelihood   for  a  positive  outcome.     A                                                                    
     potential example of  this is the patient who  is in an                                                                    
     isolated  village  or  community  and  having  a  heart                                                                    
     attack  and  belongs  to  a  subscription  for  an  air                                                                    
     ambulance  that is  not available  for maybe  hours and                                                                    
     chooses  to wait  verses allowing  the  use of  another                                                                    
     provider  and either  succumbs to  the heart  attack or                                                                    
     loses so  much heart muscle  that he becomes  a cardiac                                                                    
     cripple , and  then is dependent on  the government for                                                                    
     care throughout the  rest of his life.  In  the case of                                                                    
     a  trauma patient  who  chooses to  wait  for the  next                                                                    
     available subscription  flight he  or she  would reduce                                                                    
     the likelihood  of a  positive outcome.   In  this case                                                                    
     the  golden hour  of trauma  kicks  in which  indicates                                                                    
     that if his  or her chance of survival  due to injuries                                                                    
     is 50% after one hour it  decreases to 25% or two hours                                                                    
     12.5% etc.   Again  the desire  to save  expenses could                                                                    
     potentially result  in death  or long  term disability.                                                                    
     There  is also  a potential  for abuse  of the  service                                                                    
     which could  leave those  most in  need of  the service                                                                    
     waiting for the next available aircraft.                                                                                   
                                                                                                                                
     In addition to potential harm  to the patient I believe                                                                    
     the  question  exists  regarding   the  legality  of  a                                                                    
     membership  program for  the coverage  of patients  who                                                                    
     are   Medicare,  IHS   [Indian  Health   Services],  or                                                                    
     Medicaid  eligible.     Coverage  for   these  patients                                                                    
     already exists.   In the  case of the  Medicaid patient                                                                    
     there is no  co-pay and by subscribing  to a membership                                                                    
     they in  essence are being  charged a co-pay  that they                                                                    
     one,  are not  legally  required to  pay  and two,  the                                                                    
     provider is not legally allowed  to charge for.  As you                                                                    
     are probably  aware a large  majority of  rural Alaskan                                                                    
     natives  are  Medicaid  eligible  and  there  would  be                                                                    
     little if any  benefit to them, and if  subscribed to a                                                                    
     membership program  would be  paying much  needed money                                                                    
     for a  service they  are already covered  for.   In the                                                                    
     case of  the Medicare and  IHS patient I  believe there                                                                    
     is question  enough to  research issues  with anti-kick                                                                    
     back legislation.                                                                                                          
                                                                                                                                
     Another  issue in  regard to  the consumer  is lack  of                                                                    
     protection to  the consumer in  the event  the provider                                                                    
     of service  goes out of  business or leaves  the state.                                                                    
     The  consumer has  then paid  for a  service that  they                                                                    
     will not receive without the protection of a refund.                                                                       
                                                                                                                                
     I  would  also  like  to   point  out  that  I  am  not                                                                    
     personally aware of any service  in the state of Alaska                                                                    
     in  an  emergency  situation that  asks  for  proof  of                                                                    
     insurance  or benefit  coverage  before transporting  a                                                                    
     seriously ill  patient.  In  fact it is the  last thing                                                                    
     on  our minds.    As  a provider  for  the citizens  of                                                                    
     Alaska  Providence writes  off millions  of dollars  in                                                                    
     charitable care every year  [sic], and LifeGuard Alaska                                                                    
     in particular operates  at a loss to  provide this much                                                                    
     needed  service.   I  do  not  believe this  bill  will                                                                    
     benefit  the   providers  or  the  majority   of  those                                                                    
     provided for.                                                                                                              
                                                                                                                                
4:10:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA inquired what regular services are                                                                        
provided by Guardian Flight, to the Yukon Flats area.                                                                           
                                                                                                                                
MR. HARRIS responded that Guardian Flight primarily transports                                                                  
doctors to the area, but also provides Medivac services.                                                                        
                                                                                                                                
4:14:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON asked whether the practice of selling                                                                     
subscriptions to persons eligible for Medicaid or Indian Health                                                                 
Services (IHS), should be considered illegal.                                                                                   
                                                                                                                                
MR. BAILEY opined that charging a Medicaid patient a service                                                                    
subscription fee, is essentially the same as a co-pay, and the                                                                  
legality of this is questionable.                                                                                               
                                                                                                                                
4:15:33 PM                                                                                                                    
                                                                                                                                
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce,  Community,  &  Economic  Development  (DCCED),  stated                                                               
support for  SSHB 100.   She  explained that  the intent  of this                                                               
bill does  not address  the provision  of ambulance  services, or                                                               
health insurance, but deals with  subscriptions for air ambulance                                                               
services.  She opined that  perhaps a misunderstanding of Chapter                                                               
87, Title  21, has  occurred.   Only two  entities in  Alaska are                                                               
governed  by  Chapter 87,  titled  Hospital  and Medical  Service                                                               
Corporations:  Premera Blue Cross  and Vision Service Plans.  The                                                               
division does  not regulate an  agency based  on its status  as a                                                               
profit,  or  not-for-profit,  organization.   The  exclusions  in                                                               
Chapter 87  are specific to that  chapter, and do not  exclude an                                                               
agency  from being  governed  by Title  21.   The  bill does  not                                                               
interfere  with the  provision of  air ambulance  services.   She                                                               
observed that  SSHB 100  is modeled  after legislation  passed in                                                               
Washington State.   Following  a 27 state  survey, the  Office of                                                               
the Insurance Commissioner found  that air ambulance memberships,                                                               
not  service, were  considered insurance  under Washington  State                                                               
statute.  She  further described the result of  that finding, and                                                               
the limiting effect  it has had on air ambulance  services in the                                                               
San  Juan Islands.   The  air ambulance  providers were  informed                                                               
that their  service was considered  a product, and  required them                                                               
to become  insurers in  order to continue  operating.   She said,                                                               
"To become  an insurer is a  very onerous process."   Many of the                                                               
services  were   discontinued,  based  on  that   ruling.    "Our                                                               
definition  of  insurance  is  broad," she  said,  and  read  the                                                               
definition [source not cited]:                                                                                                  
                                                                                                                                
     Insurance means a contract where  by ... one undertakes                                                                    
     to indemnify another  or pay or provide  a specified or                                                                    
     determinable  amount   or  benefit   upon  determinable                                                                    
     contingencies."  ...  That  could  cover  a  myriad  of                                                                    
     activities,  all  of  which   [the  division  has]  the                                                                    
     ability to  say are  insurance. ... For  [the division]                                                                    
     to  regulate  somebody  selling an  insurance  product,                                                                    
     they have  to become an  insurer. ... To be  an insurer                                                                    
     in  Alaska, you  have to  have a  specified by  statute                                                                    
     amount of  statutory capital and surplus.   Minimum ...                                                                    
     to start  an insurance  company is $2  million dollars:                                                                    
     $1 million in  capital, $1 million in  surplus. ... You                                                                    
     get a  certificate of authority, which  says now you're                                                                    
     an insurer,  ... you also  get to have an  annual audit                                                                    
     by your  CPA ... $10,000  roughly. ... You also  get to                                                                    
     have [the  division] come  in and  do a  financial exam                                                                    
     every  three years,  ... conservative[ly]  $30,000. ...                                                                    
     If  we   say  this  air  ambulance   membership  is  an                                                                    
     insurance  product, which  we  probably  can under  our                                                                    
     statute,  then  we  have to  make  that  air  ambulance                                                                    
     company  selling the  membership an  insurance company.                                                                    
     ...  The  bills intent  is  merely  to say  that  these                                                                    
     subscriptions  are not  insurance; it's  not to  impact                                                                    
     whether you have ambulance service.                                                                                        
                                                                                                                                
MS.  HALL  noted  that  none  of  the  states  surveyed,  in  the                                                               
Washington study, have reported  any consumer complaints, and she                                                               
stated that  should a  complaint arise, it  would be  directed to                                                               
the Division of Fraud, Department of Law.                                                                                       
                                                                                                                                
4:23:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  clarified   that  SSHB  100  establishes                                                               
statute   to   stipulate  that   the   sale   of  air   ambulance                                                               
subscriptions does  not constitute  the sale  of insurance.   She                                                               
asked  whether  that  will  preclude   the  state  from  imposing                                                               
regulation, or providing statutory  insurance laws to protect the                                                               
consumer,  and  what  happens if  someone  purchases  a  lifetime                                                               
contract from  a service provider  whose business does  not prove                                                               
viable.                                                                                                                         
                                                                                                                                
MS. HALL offered that a  restriction could be imposed on lifetime                                                               
memberships,  and she  pointed out  that the  consumer protection                                                               
office is available to enforce consumer protection laws.                                                                        
                                                                                                                                
4:25:24 PM                                                                                                                    
                                                                                                                                
SHARLI HAYTER,  Critical Care Incorporated (CCI),  stated support                                                               
for  SSHB 100,  and described  CCI as  a non-profit  organization                                                               
dedicated  to  providing  support for  education,  training,  and                                                               
research for Alaska's  medical personnel.  The  organization is a                                                               
member supported  service, and all members  receive "the critical                                                               
care  advantage":    a  no  balance  bill  for  Medivac  services                                                               
received, if the  services are provided by Guardian  Flight.  She                                                               
reported  that  100 percent  of  donations  received by  CCI  are                                                               
allocated for funding medical education and research.                                                                           
                                                                                                                                
REPRESENTATIVE   SEATON    requested   clarity    regarding   the                                                               
subscriptions sold  by CCI, and  how the subscriptions  relate to                                                               
the  air ambulance  services fees,  which are  collected directly                                                               
from patients.                                                                                                                  
                                                                                                                                
MS.  HAYTER stated  that CCI  does not  sell subscriptions.   She                                                               
said,  "People   donate  to  us   and  we  call   them  members."                                                               
Additionally, CCI also solicits direct donations.                                                                               
                                                                                                                                
4:29:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER asked  whether subscribers  would receive                                                               
priority service  should two medical  emergencies occur  and only                                                               
one Guardian Flight airplane is available.                                                                                      
                                                                                                                                
MS. HAYTER  answered that Guardian  Flight will  respond wherever                                                               
they  are  needed,  without  question.     If  a  flight  is  not                                                               
available, the patient is immediately informed of the situation.                                                                
                                                                                                                                
4:30:09 PM                                                                                                                    
                                                                                                                                
LEIF  WILSON, President,  Director  of  Operations, 40-Mile  Air,                                                               
Medivac  Service, stated  opposition to  SSHB 100,  and cautioned                                                               
that a membership service "effectively  strips the local provider                                                               
from their  ability to  choose the Medivac  service that  is most                                                               
suited to  the needs of  the patient, for the  particular problem                                                               
that exists, at that time."   He described a recent situation, in                                                               
which a  patient held  a membership for  a Medivac  service based                                                               
out of Fairbanks.  The patient  insisted on waiting the 3-4 hours                                                               
that it  would take for  the service  provider to arrive  in Tok,                                                               
rather than  use the  local Medivac service.   The  response time                                                               
for  40-Mile Air  is 30  minutes, and  the ability  to deliver  a                                                               
patient to  a regional hospital in  less time than it  would take                                                               
for one  of the regional services  to be dispatched to  the Upper                                                               
Tanana area.  Additionally, the  subscription carrier service may                                                               
be  weathered  out,  due  to  the lack  of  a  precision  landing                                                               
facility in Tok.  Weather that  does not allow for an aircraft to                                                               
land  does  not  prohibit  take-off, thus  40-Mile  Air  has  the                                                               
advantage.  He  stressed the need for the  local medical services                                                               
to have the option of utilizing a special service flight.                                                                       
                                                                                                                                
4:35:15 PM                                                                                                                    
                                                                                                                                
CHAIR WILSON  closed public testimony,  and stated that  the bill                                                               
would be held for further discussion.                                                                                           
                                                                                                                                

Document Name Date/Time Subjects