Legislature(2013 - 2014)BARNES 124
03/17/2014 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Adjourn | |
| Start | |
| HB316 | |
| HB282 | |
| SB159 | |
| HB288 | |
| HB281 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 159 | TELECONFERENCED | |
| += | HB 288 | TELECONFERENCED | |
| + | HB 281 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 316 | TELECONFERENCED | |
| += | HB 282 | TELECONFERENCED | |
SB 159-AIR AMBULANCE SERVICES
3:36:02 PM
CHAIR OLSON announced that the next order of business would be
SENATE BILL NO. 159, "An Act relating to air ambulance service
providers, air ambulance membership agreements, and regulation
of air ambulance service providers and air ambulance membership
agreements by the division of insurance; and providing for an
effective date."
3:36:08 PM
SENATOR BERT STEDMAN, Alaska State Legislature, as sponsor of SB
159, explained that many rural Alaskans are trying to get
medical services quickly, especially in smaller communities. He
said he has been working with Representative Munoz on this topic
and between them their districts cover most of Southeast Alaska.
3:37:24 PM
CHRISTIE JAMIESON, Staff, Senator Bert Stedman, Alaska State
Legislature, stated that SB 159 would allow all life-saving air
medical transport companies such as Airlift Northwest to provide
air care membership program coverage for air ambulance services.
The purpose of a membership program is to cover all out-of-
pocket expenses that may not be covered by a primary payor. The
cost to transport patients has been estimated to range from $70-
$100 thousand per flight. The air care membership program was
discontinued by the Division of Insurance (DOI), who deemed the
membership program no longer exempt from insurance regulations
due to Airlift Northwest's restructuring. Presently, Airlift
Northwest has been allowed to honor existing memberships, but it
cannot offer any renewals. Airlift Northwest, a Seattle-based
provider of life-saving air medical transport services, has
offered the popular air care membership program to Southeast
Alaska residents since 2009 and approximately 3,000 Southeast
Alaska households are enrolled in the membership program.
MS. JAMIESON related that air medical transportation insurance
is expensive and may not cover all the costs. She stated the
purpose of a membership program is to cover all out-of-pocket
expenses, including deductibles and co-insurance amounts not
covered by the primary payor. Thus, as an "air care" member,
the insurance company would receive the bill. Airlift Northwest
is secondary to all payors and works directly with the insurance
company for claims processing. The "air care" program directly
helps fund Airlift Northwest so it can transport critically ill
or injured patients to hospitals for care not locally available.
She said that SB 159 will exempt air ambulance services from the
state's insurance code, thereby allowing Airlift Northwest to
continue offering the "air care" program to Alaskans.
3:40:03 PM
REPRESENTATIVE SADDLER asked for the approximate cost per
household of the current 3,000 members for the secondary air
transport insurance.
SENATOR STEDMAN answered the cost is approximately $100 per year
and offered his belief that the cost is per household.
3:40:51 PM
REPRESENTATIVE SADDLER asked whether Airlift Northwest is the
only company affected by this bill.
SENATOR STEDMAN answered that was his understanding.
REPRESENTATIVE MILLETT offered her belief that Anchorage offers
similar service.
MS. JAMIESON commented that Apollo [MedFlight] offers service in
Fairbanks.
3:41:49 PM
SHELLY DEERING, Alaska Regional Manager, Airlift Northwest,
testifying in support of SB 159, stated that Airlift Northwest
has offered services in Alaska for 21 years. She commented she
is also a 21-year Alaska resident. She explained that Airlift
Northwest seeks to provide Alaskans the ability to participate
in subscription membership programs for air medical
transportation. Airlift Northwest has successfully transported
patients for 32 years and is currently staffed with 19 nurses
and pilots who live and work in Juneau. Airlift Northwest has
sold air care memberships in Alaska from 2008 until November
2013. Currently, Airlift Northwest has 4,066 members, including
the previously mentioned households, but it was informed in 2013
to discontinue its membership due to restructuring, she said.
3:43:22 PM
MS. DEERING reported that [SB 159] would resolve the
discontinuation allowing any air ambulance provider to offer
this membership program. It would also give appropriate
oversight authority to the Alaska Division of Insurance. She
stated that residents require air medical transportation when a
hospital or first responder has determined they are critically
ill or injured. This is a time filled with urgency, stress, and
anxiety, so not worrying about transport costs is one less thing
families need to worry about. She reported that the cost for
the program is $99 per year per household.
3:44:18 PM
REPRESENTATIVE SADDLER asked for clarification on the business
structure.
MS. DEERING answered that Airlift Northwest is a state tax
exempt entity under the University of Washington (UW) medical
system in Seattle.
REPRESENTATIVE SADDLER asked whether Airlift Northwest operates
elsewhere.
MS. DEERING answered that Airlift Northwest also operates in
Washington. In further response to a question, she said that it
has two fixed-wing aircraft in Alaska and two fixed-wing
aircraft and four helicopter aircraft in Washington; Airlift
Northwest uses Learjet 31-A and Aero Commanders.
3:45:16 PM
MS. DEERING stated that the company was founded in 1983 after
Airlift Northwest's medical director, Dr. Michael Copus, was
unable to transport three critically burned children from Sitka.
He had decided that if patients couldn't get to care, it was
possible to bring care to patients and transport them to
facilities.
CHAIR OLSON offered his belief that the helicopters allow them
to pick up medical crews from five hospitals.
MS. DEERING agreed. At the time, Providence Medical Center,
Seattle Children's Hospital, Harborview, University of
Washington, and Virginia Mason Hospital and Medical Center in
Seattle were part of the consortium that started Airlift
Northwest.
REPRESENTATIVE JOSEPHSON asked for clarification between a
medical service and benefit.
MS. DEERING deferred to Chris Marten.
3:46:47 PM
The committee took an at-ease from 3:46 p.m. to 3:50 p.m. due to
audio issues.
3:50:58 PM
REPRESENTATIVE JOSEPHSON understood that part of the reason for
the change was finding that Airlift Northwest was not offering
clients a "medical service" but offered a "benefit."
CHRIS MARTEN, Executive Director, Airlift Northwest, stated that
Airlift Northwest was previously designated a 501(c)(3) non-
profit organization so it operated separately from the
University of Washington system. Since Northwest Airlift is now
part of the university, the company no longer fit any of the
criteria to be a membership program. The Division of Insurance
(DOI) suggested that it become its own insurance program;
however, Airlift Northwest is an air medical service and not an
insurance company. The company provides membership benefits so
clients don't have to pay out-of-pocket expenses; however, he
clarified that Airlift Northwest is not an insurance company.
At that point, the DOI advised Airlift Northwest to cease and
desist, which is when the company sought a statute change so it
could sell memberships again.
3:53:25 PM
REPRESENTATIVE JOSEPHSON asked why the stoppage was ordered.
MARTIN HESTER, Deputy Director, Division of Insurance,
Department of Commerce, Community, and Economic Development
(DCCED), stated that the division enforces AS 21.87.010 and it
came to the its attention that Airlift Northwest had
restructured its air care program. He related that the statute
requires the entity to be a municipality, a non-profit medical
service corporation, or a non-profit association. The division
consulted with Department of Law and determined the company no
longer met the three criteria, and so it did not qualify for the
exemption under the 2008 statute.
3:54:54 PM
KARLA HART said she is an Airlift Northwest member and would
like to continue to be a member. She initially bought a
membership at the suggestion of her primary care nurse who had
observed effects and burden on families whose members were
airlifted, but the families did not have adequate coverage. She
subsequently investigated the membership and found that paying
$99 for a service that is really valuable to the region was a
small price to pay and no more than the cost of a membership to
her public radio station or other non-profit that she supported.
She said many of her family and friends have purchased the
service but have never needed to use it, although she does know
people who have been medevaced. She said some people are still
paying for the medevac a decade later. She said that Airlift
Northwest provides a real financial assurance. She checked into
the private insurance as an acceptable alternative, but found
the policy was underwritten by a for-profit company. She
expressed concern that the insurance companies had an exclusion
in the event a foreseeable need existed for the medevac. The
insurance company couldn't adequately answer whether terminal
cancer, for example, or a heart stent would be considered a
foreseeable need. The Airlift Northwest program doesn't try to
cut the bottom line and disallow members, which is why she cares
about this bill. She expressed concern that delays in passing
SB 159 could cause problems. Since members cannot renew their
memberships, anyone suffering a catastrophe would not have
coverage and it could cost a substantial amount of money. She
urged members to move this quickly. In Washington, universities
are considered municipalities, but not in Alaska, so what's at
issue is really just the spirit of the law, she said.
3:59:11 PM
ED ZASTROW offered his support for SB 159. He said that
sufficient number of medevac transports occur in Ketchikan that
have kept Guardian Air and Northwest Airlift in business. He
expressed surprise at the number of airlifts that land and take
off from Ketchikan.
4:00:26 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on SB 159.
[SB 159 held over.]