Legislature(2023 - 2024)BARNES 124
03/22/2023 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB93 | |
| HB47 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 117 | TELECONFERENCED | |
| + | HB 47 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 93 | TELECONFERENCED | |
HB 47-DIRECT HEALTH AGREEMENT: NOT INSURANCE
3:34:38 PM
CHAIR SUMNER announced that the final order of business would be
HB 47, "DIRECT HEALTH AGREEMENT: NOT INSURANCE."
3:35:08 PM
The committee took a brief at-ease.
3:35:49 PM
REPRESENTATIVE KEVIN MCCABE, Alaska State Legislature, as prime
sponsor, introduced HB 47. He stated that Alaska has some of
the most expensive healthcare costs in the U.S. Out of all 50
states and Washington D.C., Alaska spends the third most on
healthcare. He said that HB 47 would allow patients to make
direct healthcare agreements with medical providers. He
explained that direct healthcare agreements are not a form of
insurance; instead, a patient pays a monthly fee to a doctor for
basic medical services. He expressed the opinion that direct
healthcare agreements would restore the relationship between the
patient and the doctor.
3:39:50 PM
BUDDY WHITT, Staff, Representative Kevin McCabe, Alaska State
Legislature, on behalf of Representative McCabe, prime sponsor,
gave the sectional analysis for HB 47 [original punctuation
provided], which read as follows [copy included in the committee
packet]:
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.
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.
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).
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.
3:42:58 PM
MR. WHITT continued with subsections (d)-(k), [original
punctuation provided], which read as follows:
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.
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.
Section (f), page 3, lines 12 through 14 The billing
for the periodic fee occurs after the period covered
by the fee.
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.
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.
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.
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.
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.
3:47:16 PM
MR. WHITT continued with Section 2 [original punctuation
provided], which read as follows:
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
Section (a), page 5, lines 11 through 17 A health
care provider may not refuse to enter into a Direct
Health Care Agreement based upon any characteristic of
a class of persons protected by state laws that
prohibit discrimination.
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.
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).
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.
3:48:49 PM
REPRESENTATIVE FIELDS asked whether such agreements should be
regulated by the Division of Insurance.
REPRESENTATIVE MCCABE expressed the opinion that it would be
best not to associate direct healthcare agreements with
insurance. He stated that he had met with the director of the
Division of Insurance, and he expressed the understanding that
one of the strongest provisions of the bill is that the
agreements would be owned by the providers.
3:51:30 PM
REPRESENTATIVE FIELDS expressed concern over entities from
outside the state buying providers in Alaska. He asked if there
was another state department or division which could provide the
appropriate regulatory oversight for direct healthcare
agreements.
3:53:45 PM
PETER DIEMER, Attorney, Clayton and Diemer, LLC, answered that,
because of the nature of the contract and regulations already in
place for medical professionals, the Department of Law,
licensing boards, and the court system all offer built in
protections in the proposed legislation.
3:56:25 PM
REPRESENTATIVE FIELDS expressed uncertainty whether the provided
protections would be enough. He questioned whether the attorney
general has enough expertise in this particular area of law.
REPRESENTATIVE MCCABE responded that the ability to terminate
the agreements would be the additional protection individuals
have.
3:58:41 PM
REPRESENTATIVE CARRICK asked whether the aim of allowing direct
healthcare agreements is to replace insurance or provide
something in addition to insurance.
REPRESENTATIVE MCCABE answered that direct healthcare agreements
are meant to be in addition to insurance. He added that such
agreements would help insurance companies stay in the insurance
business for catastrophic events, such as major accidents,
rather than being involved in day-to-day health issues. In
response to a follow-up question, he stated that no Alaska-based
insurance company has openly supported the proposed legislation.
He added that in other areas where direct healthcare agreements
are allowed, there has been no pushback from major insurance
companies.
4:04:40 PM
ADAM HABIG, Co-founder and President, Freedom Health Works,
provided invited testimony on HB 47. He stated that Freedom
Health Works was founded to help healthcare providers move to a
direct healthcare model, and legislation such as HB 47 is
"critical" in helping these providers move toward this model.
He expressed the opinion that the proposed legislation would
give providers the assurance they are in accordance with the
law. He said that direct healthcare agreements provide doctors
and patients with an alternative to having to choose healthcare
treatments based on what insurance will cover.
4:08:42 PM
REPRESENTATIVE FIELDS asked whether Freedom Health Works
provides only direct primary care, or a broader range of
healthcare.
MR. HABIG answered that he is not a doctor. He stated that
Freedom Health Works supports medical practices which are both
primary care and specialized care; however, most practices using
the direct healthcare model are primary care providers. In
response to a follow-up question, he said that a primary care
provider is a doctor an individual would see on an annual basis,
and these providers would refer a patient to a more specialized
provider, if necessary.
REPRESENTATIVE FIELDS asked what the income distribution is for
patients using direct healthcare agreements.
MR. HABIG expressed uncertainty. He added that seeing the same
doctor for over a period of time is good for the patient because
the doctor would become familiar with the patient.
4:12:17 PM
REPRESENTATIVE SADDLER asked whether Mr. Habig was citing direct
healthcare agreements, or only providers represented by his
company.
MR HABIG answered that he was citing a study. In response to a
follow-up question, he stated that legal transitional risk had
been an obstacle at the beginning; however, legislation such as
HB 47 would make direct healthcare agreements legally viable.
He added that doctors creating their own practices are creating
small businesses, which has associated economic risks.
REPRESENTATIVE SADDLER asked if the proposed legislation goes
far enough to make such a healthcare model possible.
MR. HABIG expressed appreciation for the bill because it gives
flexibility to the providers and the patients.
4:19:29 PM
REPRESENTATIVE RUFFRIDGE asked if the intent of the language
"entirely owned by healthcare providers" is meant to help
smaller, locally owned healthcare providers.
REPRESENTATIVE MCCABE answered yes. In response to a follow-up
question, he said that the intent of the bill is to move
healthcare services to the doctor-patient level, and he
expressed agreement that changing the definition of "person"
within the bill would reflect this.
4:23:37 PM
MR. DIEMER added that the bill relies on the definition of
"person" being a natural person. Using this definition within
the proposed legislation would be true to the intent of the
bill.
4:25:10 PM
REPRESENTATIVE FIELDS asked whether direct healthcare agreements
should explicitly protect those with pre-existing conditions.
REPRESENTATIVE MCCABE expressed the opinion that pre-existing
conditions would be inherently protected.
REPRESENTATIVE FIELDS expressed the sentiment that patients with
chronic health conditions should not be denied access to a
direct healthcare agreement, based on these conditions.
MR. WHITT responded that Section 1 would protect people with
chronic conditions. He added that doctors should be able to
refuse entering into a direct healthcare agreement for a
condition in which they cannot give adequate care.
4:29:57 PM
REPRESENTATIVE SADDLER asked whether it is standard practice for
a doctor to examine a patient prior to treatment to determine
whether the patient has a pre-existing condition.
MR. HABIG answered that such decisions are left to the doctor,
based on how the practice is conducted. He commented that most
of the doctors Freedom Health Works does business with would do
at least one annual physical examination. In response to a
follow-up question, he said that it would be possible for a
doctor to require a patient to disclose pre-existing conditions;
however, he expressed uncertainty whether doctors would build
knowledge of the patient's medical history for themselves. He
added that direct healthcare agreements are helpful for those
with pre-existing conditions, as the patients would receive
consistent care.
4:34:40 PM
REPRESENTATIVE FIELDS asked for some examples of chronic
conditions that these doctors would care for.
MR. HABIG answered that these practices are well equipped to
care for some of the top 10 chronic health conditions, such as
diabetes, asthma, and depression.
4:36:19 PM
MR. WHITT asked if Mr. Diemer could expand on the section
detailing the termination of a direct healthcare agreement.
MR. DIEMER answered that the termination of a direct healthcare
agreement based on the doctor not being able to care for a pre-
existing condition is different than denial of insurance for a
pre-existing condition. He stated that it is an issue of
whether the doctor has the ability to actually care for the
condition versus whether insurance will cover a patient's
treatment.
4:39:41 PM
REPRESENTATIVE MCCABE, in response to a question from
Representative Carrick, answered that because of the nature of
such agreements, the patient will be aware of what they are
agreeing to before they actually agree to it. He reiterated
that direct healthcare agreements are different than insurance
and are meant to allow doctors to give more direct care to their
patients.
4:43:26 PM
MR. DIEMER added that HB 47 fits under current Alaska statutes.
He stated that doctors have regulations and ethics they must
follow, and these codes allow them to determine which types of
patients they will see. He said that doctor-patient
relationships can already be terminated based on certain
factors.
4:46:10 PM
REPRESENTATIVE SADDLER asked what would occur if the doctor and
patient had a disagreement about whether the doctor has the
ability to care for a patient's condition.
MR. DIEMER answered that patients currently have the ability to
make a complaint to the medical board if they believe their
doctor-patient relationship was inappropriately terminated,
which would not change if HB 47 were passed.
4:48:55 PM
REPRESENTATIVE FIELDS asked whether the proposed legislation
would apply to a broader range of care than primary care.
REPRESENTATIVE MCCABE answered yes. A doctor would have the
ability to refer a patient to a specialist who would be more
able to care for the patient's condition. In response to a
follow-up question, he stated that the primary purpose of the
bill is to ensure that patients receive primary care.
REPRESENTATIVE FIELDS expressed concern that direct healthcare
agreements could turn into concierge healthcare.
REPRESENTATIVE MCCABE responded that the intent of the proposed
legislation is to provide Alaskans with more options to access
primary care. He said that the bill would allow patients to
visit the doctor if an issue arises without having to worry
about their deductible.
4:53:02 PM
CHAIR SUMNER announced that HB 47 was held over.
4:53:13 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:53 p.m.