Legislature(2023 - 2024)DAVIS 106
02/28/2023 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB60 | |
| HB47 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 60 | TELECONFERENCED | |
| *+ | HB 47 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 47-DIRECT HEALTH AGREEMENT: NOT INSURANCE
3:22:58 PM
CHAIR PRAX announced that the final order of business would be
HOUSE BILL NO. 47, "An Act relating to insurance; relating to
direct health care agreements; and relating to unfair trade
practices."
3:23:43 PM
REPRESENTATIVE KEVIN MCCABE, Alaska State Legislature, as prime
sponsor, presented HB 47. He stated that the proposed
legislation seeks to address the issue of Alaska's high cost of
health care. Alaska is ranked third in the nation in health
care expenditure, at $13,642 per capita. It ranks second in the
nation in private health insurance spending, at $6,523 per
enrollee. The proposed legislation would provide guidelines for
direct health care agreements not insurance - between
providers and patients, expanding access to health care at a
price point that may be more affordable for Alaskans.
REPRESENTATIVE MCCABE explained that with direct health care
agreements, consumers pay a recurring fee directly to a provider
for medical services; the monthly amount can vary depending on
the doctor, area, and type of plan. The bill seeks to restore
the direct connection between doctor and patient. Cost would
not be determined by what insurance will cover, but on what
provider and patient agree. He asked the committee to help make
direct health care an option by supporting HB 47.
3:27:03 PM
BUDDY WHITT, Staff, Representative Kevin McCabe, Alaska State
Legislature, on behalf of Representative McCabe, prime sponsor,
gave the sectional analysis for HB 47, [included in the
committee packet], which read as follows, [original punctuation
provided]:
Section 1 21.03.025 Page 1, Line 4 through Page 5,
Line 9 Adds new section "Direct Health Care
Agreements" to Chapter 3 of Title 21.
[Sub]section (a), page 1, line 5 through 11 Defines
a Direct Health Care Agreement as a written agreement
between patient or patient representative and a health
care provider to provide services in exchange for a
periodic fee. This section also stipulates that
Medicaid recipients under AS 47.07 and those receiving
assistance for catastrophic illness and chronic or
acute medical conditions under AS 47.08 are not
eligible to enter into a Direct Health Care Agreement.
[Sub]section (b), page 1, line 12 through page 2, line
19 Specifies that these agreements must contain a
description of the health care services provided in
exchange for the periodic fee and the locations where
services are available. The agreements must also
specify the amount of the periodic fee, the period of
time covered by the agreement, and any additional fees
that may be charged including cancellation fees.
The agreement must also include contact information
for representative(s) of the health care provider
designated to receive complaints, prominently state
that the agreement is not health insurance, and state
that the patient is not entitled to protections under
Patient Protections Under Health Care Insurance
Policies or Trade Practices and Frauds (AS 21.07 and
21.36 respectively).
[Sub]section (c), page 2, lines 20 through 29 -
Directs that providers must allow a patient to
terminate the agreement within 30 days and that if the
agreement is terminated, the provider shall provide a
refund of the payments made under the agreement, less
payments made for services already provided that are
not included in the periodic fee. The provider may
charge a termination fee equal to one month's cost of
the periodic fee.
[Sub]section (d), page 2, line 30 through page 3, line
8 An agreement between provider and patient may be
terminated by either party with at least thirty days
written notice. The agreement must include that the
patient pay the prorated periodic fee through the date
of termination and any fees for services outstanding.
The provider may charge a termination fee equal to one
month's cost of the periodic fee.
[Sub]section (e), page 3, lines 9 through 11 The
health care providers must provide 45 days written
notice of a change in periodic fee, and that fee may
only be changed once a year.
[Sub]section (f), page 3, lines 12 through 14 The
billing for the periodic fee occurs after the period
covered by the fee.
[Sub]section (g), page 3, lines 15 through 20 An
employer may cover the cost of the direct health care
agreement of the employee, but that is not considered
insurance or dealing in the business of insurance.
[Sub]section (h), page 3, lines 21 through 31 A
provider can immediately terminate a direct health
care agreement if the patient, (1) repeatedly fails to
follow a treatment plan, (2) exhibits behavior that is
a threat to safety of the provider or staff, (3)
engages in disrespectful, derogatory or prejudiced
behavior.
[Sub]section (i), page 4, lines 1 through 5 Either
party may terminate the agreement at any time if the
other party breaches terms of the agreement.
[Sub]section (j), page 4, lines 6 through 9 AS 21.07
"Patient Protections Under Health Care Insurance
Policies" and AS 21.36 "Trade Practices and Frauds" do
not apply to Direct Health Care Agreements but are
subject to other consumer protections.
[Sub]section (k), page 4, lines 10 through 22 A
Direct Healthcare agreement is not insurance in any
form and is therefore not subject to any regulation
under the division of insurance. Additionally, a
certificate of authority or license to market is not
required in order to sell a direct health care
agreement or services under a direct health care
agreement. Definitions for this section are also
included.
Section 2 AS 45.45.915 Page 5, line 11 through
page 6, line 4 Adds new section "Direct Health Care
Agreements" to Chapter 45 of Title 45
[Sub]section (b), page 5, line 18 through 22 A
health care provider may decline to enter an agreement
or cancel an existing agreement if the patients care
needs are beyond that which the health care provider
can provide or the provider does not have the capacity
to accept new clients.
[Sub]section (c), page 5, lines 24 through 27 A
provider may use health care status as a reason for
terminating a direct health agreement only if the
health care provider is unable to provide services
that the patient needs or in accordance with AS
21.03.025 (h) and (i).
[Sub]section (d), page 5, line 28 through page 6, line
2 Provides definitions for this section
Section 3 AS 45.50.471(b) Page 6, lines 3&4 Adds
violation of section 2 of the bill to the list of
unfair methods of competition and unfair or deceptive
acts or practices in the conduct of trade or commerce
that are declared to be unlawful
3:35:02 PM
REPRESENTATIVE FIELDS referred to [Section 1, subsection (d)]
and questioned whether this provision would allow the provider
to terminate an agreement and then charge a termination fee.
MR. WHITT read the language from Section 1, subsection (d), then
deferred to Peter Diemer.
3:37:38 PM
PETER DIEMER, Attorney, Clayton and Diemer, pointed out that
Section 1, subsection (c) addresses what happens when a patient
cancels; it allows the provider to charge a cancellation fee in
that event but is limited to an amount no greater than one month
of the periodic fee. He highlighted that this would be
initiated by the patient within 30 days of entering into the
agreement. Subsection (d), he clarified, addresses the ability
of any party to terminate the agreement with 30-day notice. He
told Representative Fields that subsection (d) would not allow a
provider to charge a cancellation fee under that circumstance if
the provider initiates the termination; it would only allow the
provider to charge the termination fee if the termination is
initiated by the patient or patient's representative, and it
would be limited to an amount not to exceed one month's costs of
periodic fee.
REPRESENTATIVE FIELDS opined that is good intent, but indicated
the language should be restructured.
3:40:47 PM
REPRESENTATIVE MCCABE said he would welcome an amendment to
clarify that.
3:41:05 PM
REPRESENTATIVE SADDLER asked to what degree a provider could or
could not decline to see a patient and whether there would need
to be justification for either a patient or provider giving 30-
day notice.
MR. WHITT deferred to Mr. Diemer.
3:42:30 PM
MR. DIEMER noted that Section 2 of HB 47 outlines the
restrictions on cancellation by providers, which relate to AS
45.45.915, the Unfair Trade Practices Act amendments. He said,
"It is far more protective of the patient."
REPRESENTATIVE SADDLER paraphrased [Section 2, subsection (b),
paragraph (1)], which read:
(b) A health care provider or health care business may
decline to enter into a direct health care agreement
with a new patient if the health care provider or
health care business (1) is unable to provide to the
patient the health care services the patient requires;
or
REPRESENTATIVE SADDLER asked if that would be based solely on
the provider's judgement.
3:44:45 PM
MR. DIEMER answered that's correct. He stated that HB 47 is
designed not to amend or alter "the substantial body of existing
regulation" imposed on providers. He expounded upon this with
examples. In response to a follow-up question, he informed
Representative Saddler that it is not permissible for a provider
to terminate an agreement based on workload; however, that would
be an acceptable reason for declining a new health care
agreement. In response to Representative Saddler and Mr. Whitt,
he confirmed the language in [Section 2, subsection (c)],
regarding termination of a direct health care agreement by
provider, can be done "if the health care provider is unable to
provide to the patient the health care services the patient
requires".
3:51:11 PM
CHAIR PRAX described a situation in which a provider takes on
more patients than he/she can handle, thus cannot provide care
for them all, and he asked if, under this scenario, the provider
would be able "to terminate one of those agreements or any of
those agreements."
MR. DIEMER answered yes, "but under a different section." He
explained that the ability "to adjust the panel" once the
agreement is in effect will be limited by [sub]section (d),
beginning on page 2, line 30, through page 3, line 8 of HB 47.
It cannot be based upon any of the categories within AS
45.45.915. In response to a follow-up question, he confirmed
that there can be an adjustment of "the panel size" with the 30-
day notice.
3:53:28 PM
REPRESENTATIVE FIELDS asked for confirmation that "if the
company fails to provide the services," it is the Office of the
Attorney General to which a consumer would apply for relief.
REPRESENTATIVE MCCABE offered his understanding that that is
correct.
REPRESENTATIVE FIELDS asked the bill sponsor if he would support
"additional regulatory backstop" to ensure relief available to
consumers, "should an outside company ... cancel contracts on a
patient."
REPRESENTATIVE MCCABE responded that he would be open "to
anything that does not change the agreement back into an
insurance policy."
3:55:24 PM
REPRESENTATIVE RUFFRIDGE said he thinks HB 47 is a good bill.
He asked if there is a mechanism under which direct health care
agreements could be altered to address a situation wherein, for
example, a patient has increased needs in terms of services.
3:56:21 PM
MR. WHITT deferred to Mr. Diemer, but added that he thinks there
is nothing in HB 47 that would preclude renegotiation of the
agreement. He indicated the process would entail termination of
the existing agreement and creating a new one.
MR. DIEMER stated that HB 47 would allow services to be provided
to patients outside the scope of the periodic fee. He described
this as a menu of services. There is nothing that would prevent
the provider from providing additional services at "the fee for
service model." Additionally, he said there is nothing that
would prevent the amendment or modification of a direct health
care agreement to change the scope of the services for the
periodic fee, should the patient's needs change. That said, he
advised that HB 47 is designed to fundamentally provide "a safe
harbor for patients and providers by outlining the boundaries of
what a direct health care agreement must ... contain and the
rights and obligation of the patients and the providers that
enter into these agreements." He directed attention to language
on page 2, line 8, which addresses additional fees, including
cancellation fees.
3:59:56 PM
LEE GROSS, MD, Epiphany Health, gave invited testimony on HB 47.
He said he has been practicing the "direct primary care practice
model" for 12 years. The price range is: $80/month for one
adult; $30/month for the first child; and $15/month for each
additional child. That covers every service done at the office.
He indicated that the concerns raised by committee members today
have never been an issue for his practice. He noted that
Epiphany Health exists in a rural setting in a county with the
second-lowest income in Florida. The practice works in
conjunction with a rural hospital and has saved the hospital 55
percent in health care costs.
4:02:00 PM
DR. GROSS, in response to Representative Fields, listed the
scope of services Epiphany Health provides its patients under
the health care agreement.
4:04:06 PM
REPRESENTATIVE RUFFRIDGE asked if, within the $80/month fee for
an adults, there are tiers to accommodate patients with "higher
needs." He also asked how many patients Epiphany Health serves.
DR. GROSS answered there is no tier based upon health status.
He noted that many of the practices do tier based on age. Those
55 and older are charged $100 per month. He pointed out that
the service for children lasts up to a child's twenty-sixth
birthday [for dependent children living at the parent address].
He shared that Epiphany Health, which is just a few years old,
serves approximately 400 patients.
4:06:20 PM
REPRESENTATIVE MINA asked Dr. Gross to clarify whether his
practice is direct primary care and whether direct health care
agreements, as compared to direct primary care, are legal in
Florida.
DR. GROSS answered that the State of Florida recently passed a
bill on direct primary care, then subsequently changed it to
direct health care "because they were happy with it and they
wanted to expand the services to all specialties" rather than
restricting it to primary care.
4:07:31 PM
JOSH UMBEHR, MD, Atlas, MD, gave invited testimony on HB 47. He
said Atlas, MD has been practicing direct primary care since
2010, and over 1,200 doctors are now practicing under the Atlas,
MD software/model. He shared that the pricing is: $10/month
for children; and $58, $75, or $100/month for adults. No pre-
existing condition is excluded, and there is a flat fee for
everything but labs, which are charged based on the cost to the
practice. He echoed Dr. Gross' statement that the majority of
the concerns raised today by committee members are not things
that Atlas, MD sees in its practice. He spoke of a desire to be
known as a practice that cares for patients, no matter how sick,
and does not drop patients for being "too sick."
4:09:53 PM
REPRESENTATIVE SADDLER asked about resolutions of disputes
regarding breech of agreement.
4:10:15 PM
MR. DIEMER answered that there are two avenues of recourse. The
first would be through the Department of Law (DOL). Another
would be to file a complaint with the court system.
4:11:12 PM
REPRESENTATIVE MCCABE, in wrap-up, noted that as of 2020, there
were 32 states that had legislation such as HB 47, with 12
states "pending." He added that there are actually 48 states
"doing this," because "some states didn't require this
particular legislation." He offered his understanding that
currently, close to 11,000 practices are operating under a
direct primary care agreement. He indicated this effort to pass
HB 47 stems from support of people in Wasilla and "further
north" in order to "get back to the doctor/patient relationship"
and allow medical professionals to do what they were trained to
do rather than doing coding and coaxing insurance companies to
pay.
4:12:29 PM
REPRESENTATIVE MINA asked about price transparency and guarantee
of outlined services.
4:13:06 PM
REPRESENTATIVE MCCABE offered his understanding that that is
covered in the agreement.
REPRESENTATIVE MINA asked if that contract would be publicly
available.
MR. WHITT said he would get back to Representative Mina with
answer following the meeting.
REPRESENTATIVE MINA asked why Medicaid patients are not included
under the provisions of HB 47.
MR. WHITT deferred to Mr. Diemer.
4:15:14 PM
MR. DIEMER responded that the Department of Health (DOH)
considered the potential for those persons to "come under the
scope of a health care agreement." Ultimately, it would require
some complicated amendments to statute to allow that to happen.
Some states do allow this under pilot programs. He noted that
the Medicaid program has both state and federal funding, as well
as certain compulsory billing and coverage requirements that are
inconsistent with a direct health care agreement. That said, he
allowed that coverage could be expanded in the future "to allow
for participation of those program beneficiaries into these
types of agreement."
4:16:54 PM
REPRESENTATIVE FIELDS said he would like the bill sponsor to get
back to him with information regarding the number of businesses
involved in this that are physician-owned versus investor-owned.
REPRESENTATIVE MCCABE said he can look into that.
4:18:22 PM
CHAIR PRAX announced that HB 47 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 02.02.23 Imp. EO 121 TL House.pdf |
HHSS 2/28/2023 3:00:00 PM HHSS 3/7/2023 3:00:00 PM |
HB 60 |
| HB 60 Sectional Analysis (Version A) 2-15-23.pdf |
HHSS 2/28/2023 3:00:00 PM HHSS 3/7/2023 3:00:00 PM |
HB 60 |
| HB0060A.PDF |
HHSS 2/28/2023 3:00:00 PM HHSS 3/7/2023 3:00:00 PM |
HB 60 |
| LL0343-3-DFCS-CO-1-31-2023.pdf |
HHSS 2/28/2023 3:00:00 PM HHSS 3/7/2023 3:00:00 PM |
HB 60 |
| LL0343-3-DOH-CO-1-31-2023.pdf |
HHSS 2/28/2023 3:00:00 PM HHSS 3/7/2023 3:00:00 PM |
HB 60 |
| House Bill 47 Version A.PDF |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| House Bill 47 Sponsor Statement version A.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| House Bill 47 Sectional Analysis version A.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB47.VerA.FiscalNote.DCCED.2.14.23.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB 47 Supporting Document - John Locke Foundation DPC Policy Report.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB 47 Supporting Document - Pioneer Health DHCA White Paper.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| Kaiser Family Foundation Total Health Expenditure per Capita.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| Kaiser Family Foundation Total Health Insurance Expenditures per Capita.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB60 - EO 121 Clean Up - Summary- (2-23-23).pdf |
HHSS 2/28/2023 3:00:00 PM HHSS 3/7/2023 3:00:00 PM |
HB 60 |
| 2022200343 amendment to HB 60 (definition citation) (002).pdf |
HHSS 2/28/2023 3:00:00 PM HHSS 3/7/2023 3:00:00 PM |
HB 60 |