Legislature(2013 - 2014)BARNES 124

03/07/2014 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 247 PEACE OFFICER/FIREFIGHTER RETIREMENT TELECONFERENCED
Heard & Held
*+ HB 316 WORKERS' COMPENSATION MEDICAL FEES TELECONFERENCED
Heard & Held
           HB 316-WORKERS' COMPENSATION MEDICAL FEES                                                                        
                                                                                                                                
4:47:00 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE BILL  NO. 316,  "An Act  relating to  workers' compensation                                                               
fees  for medical  treatment and  services; relating  to workers'                                                               
compensation regulations; and providing for an effective date."                                                                 
                                                                                                                                
4:47:04 PM                                                                                                                    
                                                                                                                                
ANNA  LATHAM,  Staff,  Representative Kurt  Olson,  Alaska  State                                                               
Legislature, stated  that for the  past decade, Alaska  has faced                                                               
the  highest  workers compensation  rates  in  the nation.    The                                                               
Alaska  Workers' Compensation  Board,  the  legislature, and  the                                                               
administration agree that  effective reform is needed.   She said                                                               
this  bill  proposes to  change  the  fee schedule  for  workers'                                                               
compensation claims  to a schedule  based on the  federal Centers                                                               
for Medicare and Medicaid Services  fees with a conversion factor                                                               
set by  the Alaska Workers' Compensation  Advisory Board (AWCAB).                                                               
She reviewed the section-by-section analysis of the bill.                                                                       
                                                                                                                                
4:47:48 PM                                                                                                                    
                                                                                                                                
MS.  LATHAM stated  that  Section 1  would  amend the  physician,                                                               
outpatient   and  ambulatory   surgical  center,   and  inpatient                                                               
hospital fee  schedules to  be based on  the federal  Centers for                                                               
Medicare and  Medicaid Services  fees.  Section  2 refers  to the                                                               
fee schedule  that is currently  in statute.  This  section would                                                               
go back into  effect on January 1, 2019.   She related that there                                                               
is a sunset provision for this new schedule.                                                                                    
                                                                                                                                
4:48:04 PM                                                                                                                    
                                                                                                                                
MS.  LATHAM stated  that  Section 3  would  require the  Workers'                                                               
Compensation Advisory Board (WCAB)  to annually review and adjust                                                               
fees set  under Section 1.   It also requires  the WCAB to  set a                                                               
conversion  factor  for  the  fee  schedules  in  Section  1.  It                                                               
provides for  maximum reimbursement for fees  rendered in another                                                               
state.  It  requires the board to set the  rate for air ambulance                                                               
service  and  to set  the  markup  and reimbursement  limits  for                                                               
durable  medical equipment.   It  requires the  board to  set the                                                               
markup,   dispensing   fee,    and   reimbursement   limits   for                                                               
prescription  drugs.    It  also  requires  a  prescription  drug                                                               
dispensed by a  physician to include in an invoice  the code from                                                               
the National Drug  Code Directory published by the  U.S. Food and                                                               
Drug Administration  (FDA).  Section 4  lists reference materials                                                               
the   department  may   incorporate,  including   future  amended                                                               
versions, into regulations.  Sections  5-8 are part of the sunset                                                               
clause, which she'll explain in a few minutes.                                                                                  
                                                                                                                                
4:49:10 PM                                                                                                                    
                                                                                                                                
MS. LATHAM stated  that the fee schedule currently in  use is not                                                               
working.  In 2004, the  state established a usual, customary, and                                                               
reasonable fee schedule  that was set at the  90th percentile and                                                               
reflective  of  the  geographic   area  in  which  services  were                                                               
rendered.   The UCR schedule  has been  in effect since  2004 and                                                               
since then  the state has  had the highest  workers' compensation                                                               
rates  in the  nation.   Medical costs  constitute $.76  of every                                                               
dollar spent on workers' compensation  in Alaska, which has had a                                                               
serious impact  on premium rates  paid by all  Alaskan employers.                                                               
Medicare costs have  risen 25 percent over the  past year despite                                                               
a 14  percent decline in  the frequency of  workers' compensation                                                               
claims over  the same  period.  Alaska's  premiums are  priced at                                                               
160  percent above  the national  median.   High  premiums are  a                                                               
drain  on  resources in  both  the  public and  private  sectors.                                                               
Clearly  the fee  schedule Alaska  is using  is not  effective in                                                               
reducing costs.   Upward  pressure is  constantly applied  to the                                                               
UCR schedule and  once a fee schedule is  published; charges tend                                                               
to rise  to and above the  level of payment, which  guarantees an                                                               
annual increase in the UCR charges.                                                                                             
                                                                                                                                
MS. LATHAM asked why the  state should switch to a resource-based                                                               
relative value scale.   This methodology was created  in the late                                                               
80s  by  a  team  of researchers  from  Harvard,  which  included                                                               
statisticians, physicians, and economists.   They determined that                                                               
each  procedure  was  equated  to  a  relative  value  unit  that                                                               
included a  combination of  physician's work,  practice expenses,                                                               
and malpractice insurance.   This system is owned  and updated by                                                               
the  American  Medical Association  (AMA).    The AMA  assigns  a                                                               
relative value  unit to each current  procedural technology (CPT)                                                               
code.    Other   states  using  this  system   commonly  apply  a                                                               
geographical adjustment  factor.   The value  is multiplied  by a                                                               
fixed conversion factor,  which is a dollar  amount that converts                                                               
a relative  value unit into a  payment amount for service.   This                                                               
is the basis for Medicare  and Medicaid's payment schedule and 32                                                               
states have adopted this methodology.                                                                                           
                                                                                                                                
4:51:12 PM                                                                                                                    
                                                                                                                                
MS. LATHAM stated that HB 316  specifies that there are three fee                                                               
schedules that  will be used  for workers'  compensation billing.                                                               
The  physician   fee  schedule,  an  outpatient   and  ambulatory                                                               
surgical fee  schedule, and an in-patient  hospital fee schedule.                                                               
The  WCAB  would  then  be  responsible  for  setting  conversion                                                               
factors for all of the  three fee schedules and annually renewing                                                               
and  adjusting fees.    They  would also  set  the  fees for  air                                                               
ambulance  or Medevac.   They  would set  the markup  for durable                                                               
medical  equipment,  the  dispensing  fee and  markup  rates  for                                                               
reimbursement of prescription drugs.   She highlighted the safety                                                               
net in HB  316, in the form  of the sunset provision.   This bill                                                               
will give  the WCAB four years  to set the new  rates and measure                                                               
the success  of those reforms.   The new  resource-based relative                                                               
value  scale and  the  conversion factors  would  go into  effect                                                               
January 1,  2015 and sunset  January 1,  2019.  Section  2, which                                                               
includes all of  the old language using the UCR  schedule go back                                                               
into  effect January  1,  if  the legislature  did  not take  any                                                               
action.  She  stated that HB 316 is the  first step in developing                                                               
a  solution to  the escalating  medical costs  that Alaska  faces                                                               
with its  workers' compensation system.   The concepts introduced                                                               
in  HB  316 were  unanimously  approved  by  the WCAB  this  last                                                               
September.                                                                                                                      
                                                                                                                                
4:52:43 PM                                                                                                                    
                                                                                                                                
MS.  LATHAM outlined  some  concern about  the  WCAB setting  the                                                               
conversion  factors, in  particular,  due to  their expertise  in                                                               
setting  fee  schedules.   Another  board,  the Medical  Services                                                               
Review  Committee (MSRC),  is defined  under AS  23.30.095.   Its                                                               
mission  is  to assist  and  advise  the  Department of  Labor  &                                                               
Workforce Development  (DLWD) and  the WCAB in  matters involving                                                               
appropriateness,  necessity,  and  cost of  medical  and  related                                                               
services.   However, the current a  nine member MCRC has  not met                                                               
since  2009.    She  related   that  four  members  have  medical                                                               
expertise  and the  committee will  develop a  proposed committee                                                               
substitute requesting  the MSRC to  advise the WCAB  when setting                                                               
conversion factors.  She anticipated  that the proposed committee                                                               
substitute would be before the committee soon.                                                                                  
                                                                                                                                
4:53:35 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON  remarked  that several  months  ago  the  committee                                                               
started contacting all  the stakeholders to solicit  advice.  The                                                               
committee has  begun to  receive information  back that  is being                                                               
incorporated into the CS.                                                                                                       
                                                                                                                                
4:54:24 PM                                                                                                                    
                                                                                                                                
JOHN  BITNEY,  Lobbyist, stated  that  he  represents the  Alaska                                                               
Surgery  Center.    He  indicated that  the  concern  the  Alaska                                                               
Surgery Center expressed  was having the board  be a rate-setting                                                               
entity.    He  believed  that some  provisions  in  the  proposed                                                               
committee  substitute will  address this.   He  indicated he  has                                                               
provided  written comments,  but  reiterated that  he thinks  the                                                               
proposed  committee substitute  will  address  this; however,  he                                                               
will review the committee substitute once it is finalized.                                                                      
                                                                                                                                
4:55:17 PM                                                                                                                    
                                                                                                                                
DAVIS  PETERSON,  Orthopedic  Surgeon;  President,  Alaska  State                                                               
Orthopaedics  Society,  stated  he  has  previously  submitted  a                                                               
written  statement  that includes  details.    He said  that  his                                                               
society would prefer  an RVRVS type for billing  purposes for the                                                               
administrative  simplicity   and  since   the  RVRVS   system  is                                                               
maintained  for  updated  codes and  modifications  of  codes  as                                                               
technology develops,  which is readily  maintained.  In  the past                                                               
problems have existed with private  coding services that were not                                                               
maintained  appropriately   and  were   quickly  outdated.     He                                                               
emphasized  that  his  organization  would  prefer  a  conversion                                                               
factor  system,   and  like  some  of   the  other  stakeholders,                                                               
including  the Alaska  State  Medical  Association, would  prefer                                                               
that rate  setting and conversion factor  adjustment be completed                                                               
by  a separate  entity, preferably  made up  of commission  level                                                               
individuals.  Additionally, his  group would prefer uniformity be                                                               
developed among  employers and stakeholders,  in terms  of forms,                                                               
paperwork, and submissions,  so physicians will not  need to deal                                                               
with  multiple entities  that  make  administrative changes  more                                                               
complicated.   He  said  that, currently,  his  society is  being                                                               
faced with the ICD 10  changes that require software adaption and                                                               
billing for  Medicare purposes that  will entail  additional cost                                                               
to officers,  including hiring  additional employees  for coding.                                                               
As much  as possible, he hoped  for consistency in order  to save                                                               
time, training, and  money in the long run, which  will help with                                                               
efficiencies.                                                                                                                   
                                                                                                                                
4:58:22 PM                                                                                                                    
                                                                                                                                
SALLIE  STUVEK, Human  Resources Director,  Fairbanks North  Star                                                               
Borough (FNSB),  stated that  she oversees  the Division  of Risk                                                               
Management,  which  handles  the  workers'  compensation  benefit                                                               
program  for the  FNSB and  the FNSB  School District,  which are                                                               
self-insured  plans.   The  FNSB continues  to  see increases  in                                                               
medical cost  and believes  that the changes  proposed in  HB 316                                                               
are  a step  in the  right  direction, and  the FNSB  is in  full                                                               
support   of  those   changes.     She  stated   that  the   FNSB                                                               
administration  and the  assembly support  the proponents  of the                                                               
WCAB's adopted resolution  in September 2013.  She  referred to a                                                               
letter  of  support  and  FNSB  Resolution  [Number  2014-09]  in                                                               
support  of the  changes  outlined [in  Resolution  13-01 of  the                                                               
Alaska Workers' Compensation Board].                                                                                            
                                                                                                                                
4:59:29 PM                                                                                                                    
                                                                                                                                
DAVE  JONES, Assistant  Superintendent,  Kenai Peninsula  Borough                                                               
School  District (KPBSD),  stated  that  he previously  testified                                                               
before  this committee  with respect  to the  large medical  cost                                                               
increases   the   KPBSD's    workers'   compensation   plan   has                                                               
experienced.   He  said he  will not  repeat the  testimony.   He                                                               
stated  that the  fee schedules  within HB  316 represent  a good                                                               
start toward  addressing the state's  medical cost concerns.   He                                                               
would  like to  see  treatment guidelines  developed to  regulate                                                               
usage, too.   He urged  members to move  HB 316, which  will help                                                               
control the workers' compensation costs.                                                                                        
                                                                                                                                
5:00:38 PM                                                                                                                    
                                                                                                                                
JULIE  CISCO,  Risk  Manager,   Kenai  Peninsula  Borough  School                                                               
District (KPBSD),  said she seconded  everything Mr.  Jones said.                                                               
Any steps  that the state  can make to get  workers' compensation                                                               
costs under  control will be  greatly appreciated.  She  said the                                                               
KPBSD will continue to support HB 316.                                                                                          
                                                                                                                                
5:01:10 PM                                                                                                                    
                                                                                                                                
DAVE KESTER stated  he is representing himself.  He  said he is a                                                               
commercial  insurance  broker  and  prior to  that  worked  as  a                                                               
workers' compensation  underwriter for an insurance  company.  He                                                               
also  said  he has  served  for  ten years  as  a  member of  the                                                               
Workers' Compensation Board, having  just been reappointed to his                                                               
fourth  term.   He  clarified  that he  is  not representing  the                                                               
Workers'  Compensation Board.    He participated  in the  working                                                               
group this summer  that heard from a large  array of stakeholders                                                               
in Fairbanks,  Juneau, Kenai, and Anchorage,  including large and                                                               
small employers, members of  labor, medical providers, adjusters,                                                               
attorneys  and  others.   Many  public  members  expressed  their                                                               
concern about the rising medical  costs in workers' compensation.                                                               
As  a  result, the  board  adopted  Resolution 13-01  to  support                                                               
addressing system  costs under  the Alaska  Workers' Compensation                                                               
Act.  He offered his belief that  HB 316 is taking a lot of those                                                               
into account and offered his support  for the bill.  He indicated                                                               
that the current system cannot  sustain these types of escalating                                                               
medical  costs  and  a  different   medical  fee  methodology  as                                                               
presented in  HB 316 will have  a big impact.   He cautioned that                                                               
without it  he feared  employers would  be subject  to additional                                                               
increases,  which  will make  them  uncompetitive  and the  state                                                               
uncompetitive.   The legislative  intent for the  Alaska Workers'                                                               
Compensation Act  was to ensure  the quick, efficient,  fair, and                                                               
predictable  delivery  of  indemnity   and  medical  benefits  to                                                               
injured workers at a reasonable cost  to employers.  He said that                                                               
reasonable cost is far exceeded  for employers.  He asked members                                                               
to  carefully consider  the  sunset clause.    He suggested  that                                                               
fixing the problem  and then returning to a  methodology that got                                                               
us into this problem in  the first place seems counterproductive.                                                               
He   also   advocated   implementing   evidence-based   treatment                                                               
guidelines and encouraged the  committee to consider implementing                                                               
the guidelines into  the bill.  Additionally,  the suggested that                                                               
having  the MSRC  give input  to help  the board  is a  very good                                                               
idea.   He  admitted that  the board  doesn't consist  of medical                                                               
experts.  The  WCB had considered seeking that  kind of expertise                                                               
when it adopted  the resolution.  He  appreciated the committee's                                                               
time and efforts to try to fix the system.                                                                                      
                                                                                                                                
5:05:12 PM                                                                                                                    
                                                                                                                                
CHUCK  BRADY,  President,   Workers'  Compensation  Committee  of                                                               
Alaska  (WCCA);,  Manager,  Workers' Compensation,  Arctic  Slope                                                               
Regional  Corporation, stated  that he  is primarily  responsible                                                               
for workers'  compensation in the  Lower 48; however, he  is very                                                               
much  involved  with  Alaska,  too.   He  referred  to  a  letter                                                               
submitted today on  behalf of the WCCA voicing support  of HB 316                                                               
with suggestions.   The suggestions  are consistent with  what he                                                               
previously heard, including that input  by the MSRC is probably a                                                               
good idea since they have  medical expertise.  Another suggestion                                                               
is that  the fee schedule alone  will not get the  state where it                                                               
needs to be.  In his  experience in the claims field, every state                                                               
that  has introduced  fee  schedules as  a  means of  controlling                                                               
costs has  experienced a  limited effect over  a short  period of                                                               
time until  medical providers find a  way to bill around  it.  He                                                               
said that medical fee schedules  alone are not effective but they                                                               
can  be if  they are  introduced with  utilization and  frequency                                                               
standards to control treatment.   Additionally, there needs to be                                                               
changes to AS 23.30.090 (a) to  deal with the effects of the 1999                                                               
U.S.  Supreme  Court  decision for  Hebden  v.  WCAB  [Bethenergy                                                               
Mines,  Inc..),  632  A.2d  1302  (Pa.Commonwealth  1993)]  which                                                               
essentially gave  treating doctors  a blank  check for  two years                                                               
with  no real  recourse  by employers  or  insurance carriers  to                                                               
question what  was being  done or  to limit  the cost  within the                                                               
first two years.  Finally, the  sunset clause is of concern since                                                               
the state  could be right  back where  it started in  four years.                                                               
He offered support HB 316 with the additional comments.                                                                         
                                                                                                                                
5:07:40 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON answered that some  components will come out shortly.                                                               
He indicated  that next  year, the committee  could take  up best                                                               
practices  for pain  management  and other  components that  will                                                               
interface with this bill.                                                                                                       
                                                                                                                                
5:08:03 PM                                                                                                                    
                                                                                                                                
RACHEL PETRO,  President; Chief  Executive Officer,  Alaska State                                                               
Chamber  of Commerce  (Alaska Chamber),  stated  that the  Alaska                                                               
Chamber represents  hundreds of businesses across  Alaska as well                                                               
as local chambers.  She  stated that the Alaska Chamber submitted                                                               
a letter that articulated all  of their concerns.  She emphasized                                                               
workers' compensation  reform is  a top  priority for  the Alaska                                                               
Chamber and  all of the  members.  It's a  competitiveness issue.                                                               
She appreciated the  committee introducing the bill.   She stated                                                               
that the Alaska Chamber's letter  made recommendations to improve                                                               
the bill.   More specifically, it  would like to see  more policy                                                               
direction  given to  the  board  in respect  to  giving them  the                                                               
responsibility of  setting the fee schedules.   Additionally, the                                                               
Alaska  Chamber would  like  to  see a  more  robust and  defined                                                               
public process  for the promulgation  of regulations  through the                                                               
board.   She agreed with  earlier comments regarding  adoption of                                                               
evidence  based  treatment   guidelines  and  utilization  review                                                               
standards.  Finally,  the Alaska Chamber considers the  MSRC as a                                                               
great option to help provide  advice to the Workers' Compensation                                                               
Board.   She  said the  Alaska Chamber  looks forward  to working                                                               
with   the  committee   to  achieve   real  reform   on  workers'                                                               
compensation in Alaska.                                                                                                         
                                                                                                                                
5:09:55 PM                                                                                                                    
                                                                                                                                
SARAH LEFEBVRE,  Staff, Exclusive Paving and  University Redimix;                                                               
Member;  Alaska  Workers'  Compensation Board,  agreed  with  Mr.                                                               
Kester,  especially  with respect  to  the  sunset clause.    She                                                               
doesn't  believe  that type  of  mechanism  works well  and  said                                                               
further changes are  needed.  She said this is  an excellent bill                                                               
and an excellent  start.  She discouraged any  changes that could                                                               
possibly  impede  its progress,  and  her  only concern  was  the                                                               
sunset clause.                                                                                                                  
                                                                                                                                
CHAIR OLSON said the committee will consider the sunset clause.                                                                 
                                                                                                                                
5:11:30 PM                                                                                                                    
                                                                                                                                
KAREN PURDUE,  Chief Executive  Officer; President;  Alaska State                                                               
Hospital  and  Nursing  Home Association  (ASHNHA),  stated  that                                                               
hospitals and  nursing homes are  large private  sector employers                                                               
so  they bear  the burden  of  workers' compensation  costs.   As                                                               
employers and health care providers,  ASHNHA supports the concept                                                               
of workers'  compensation fee reform.   She indicated  that where                                                               
it makes  sense AHNHA is  willing to be  paid less than  they are                                                               
today.   However,  she outlined  a  few concerns  about fees  and                                                               
rates set out  in the bill.   It might seem easy  to use Medicare                                                               
and multiply  those rates geographically; however,  hospitals and                                                               
nursing  homes are  paid in  five different  ways under  Medicare                                                               
law.   She said that ASHNHA  submitted a letter that  covers more                                                               
details.   She  highlighted that  Medicare  is a  poor payer  for                                                               
Providence  Alaska  Regional;   Fairbanks  Memorial,  Kenai,  and                                                               
Bartlett  Memorial   Hospital.    She  cautioned   against  using                                                               
Medicare since it  pays about $.30 on the dollar  in Alaska.  She                                                               
said  ASHNHA  needs  some  reassurance   in  the  process.    The                                                               
commercial rates  that Premera  and Aetna pay  might be  a target                                                               
that  the  committee  could  consider to  provide  a  minimum  or                                                               
backstop in this discussion.   Secondly, in terms of the critical                                                               
access hospitals, which are 13  of the small hospitals in Alaska,                                                               
Congress has  already exempted them from  Medicare fee schedules.                                                               
She  explained  that these  small  hospitals  have an  exemption,                                                               
since they cannot  kept their doors open based on  volume so they                                                               
have  a  cost-based reimbursement  system.    For example,  Idaho                                                               
exempts "cause"  from their workers' compensation  Medicare based                                                               
fee  schedule  and she  recommended  that  this  be the  case  in                                                               
Alaska.   She pointed out  that the letter also  outlines skilled                                                               
nursing facilities.   She  said that the  ASHNHA stands  ready to                                                               
work with the committee.                                                                                                        
                                                                                                                                
5:14:57 PM                                                                                                                    
                                                                                                                                
GREG MILLES,  Physical Therapist; WCC, Owner,  Home Town Physical                                                               
Therapy, stated  that he has  a small private  outpatient clinic.                                                               
He  supported  ASHNHA's  comments  but asked  to  tread  lightly.                                                               
Currently  this bill  is based  off  Medicare fee  schedule.   He                                                               
related his understanding that this  practice has occurred in the                                                               
Lower  48.    Small  practices and  some  larger  facilities  are                                                               
beginning to minimize  the health care exposure to  Medicare.  He                                                               
thought this could  impact how much health care  coverage will be                                                               
provided  for the  workers'  compensation  patients, which  could                                                               
have  the effect  of  minimizing patients'  health  care and  how                                                               
quickly these patients return to work.                                                                                          
                                                                                                                                
CHAIR  OLSON pointed  out  this is  a work  in  progress and  the                                                               
committee is receiving a lot of feedback.                                                                                       
                                                                                                                                
5:17:00 PM                                                                                                                    
                                                                                                                                
RUTH  CARSON,  Physical   Therapist,  Equinox  Physical  Therapy,                                                               
stated she  has a small  physical therapy practice  in Fairbanks.                                                               
She  agreed with  Ms.  Purdue  and Dr.  Milles  that the  current                                                               
Medicare and  Medicaid fee schedule  will make it  more difficult                                                               
to run  her business.   She understands  the need to  reform, but                                                               
she must work harder to keep her doors open.                                                                                    
                                                                                                                                
5:18:01 PM                                                                                                                    
                                                                                                                                
WALTER  PARRISH, testifying  on  behalf of  himself, stated  that                                                               
cutting  these costs  will interfere  with his  health care.   He                                                               
said  he thought  it is  a savings  to the  workers' compensation                                                               
board to have  that in effect. He  said, "My old saying  is if it                                                               
ain't broke don't fix it."                                                                                                      
                                                                                                                                
5:18:44 PM                                                                                                                    
                                                                                                                                
JULIANA AMENT,  Physical Therapist, DPT, MOMT  Owner, stated that                                                               
she  is a  small  business owner,  a health  care  provider as  a                                                               
physical therapist,  and a  member of the  Alaska Chapter  of the                                                               
American  Physical Therapy  Association.   While the  association                                                               
supports  the  efforts  to  reform   and  improve  this  workers'                                                               
compensation  system, she  still has  a number  of questions  and                                                               
concerns about the bill.  The  proposal is broad and far reaching                                                               
and may  have serious  ramifications if  all of  its implications                                                               
are  not  fully vetted  or  understood.    She urged  members  to                                                               
proceed with  caution.  The  proposed RBRVS-based system  may not                                                               
be  ideal for  Alaska.   The proposed  workers' compensation  fee                                                               
schedule would have its foundation  in the Medicare physician fee                                                               
schedule,  which is  a fundamentally  flawed  and broken  system.                                                               
She did  not think  it will  be a good  fit for  Alaska.   It has                                                               
taken  only focused  management strategies  and cost  shifting in                                                               
her clinic  to be able to  continue to see patients  whose payers                                                               
are currently  using an  RBRVS system like  Medicare.   This bill                                                               
appears to  have a five  year sunset; which would  greatly affect                                                               
her business's  ability to continue to  see workers' compensation                                                               
patients  in North  Pole.   Given  the  potential for  unintended                                                               
consequences  and  some  of the  ramifications  this  bill  could                                                               
potentially have on small business  health care providers and the                                                               
patients she  sees, she strongly  recommended the bill  be turned                                                               
over  to a  subcommittee to  review the  variables and  potential                                                               
outcomes.  She offered to submit her statement in writing.                                                                      
                                                                                                                                
5:21:05 PM                                                                                                                    
                                                                                                                                
RICHARD   COBDEN,  Orthopedic   Surgeon,  Fairbanks   Orthopaedic                                                               
Center, stated  that he  is a  sole practitioner,  immediate past                                                               
Chief of  Staff at Fairbanks  Memorial Hospital, and a  member of                                                               
the Alaska  State Orthopaedics Association.   He said he  has two                                                               
problems with the bill.  First,  the CMS RBRVS Medicare based fee                                                               
schedule creates  big problems  for him and  his colleagues.   He                                                               
also said  that most of  them are  barely getting by  even though                                                               
the reimbursement  rates are reported as  very high.  In  fact, a                                                               
lot of  the CMS reimbursement rates  will change.  On  April 1 it                                                               
will  revert back  to 26  percent  lower rates  than the  current                                                               
rates based on issues that  the Congress has experienced.  Basing                                                               
it on  that kind of  reimbursement system could be  a catastrophe                                                               
for  Alaska.   Secondly, the  average wholesale  price (AWP)  for                                                               
medications   has  always   been  used   for  reimbursement   for                                                               
prescription medications, which should  continue since the actual                                                               
invoice price  included in the  bill is significantly lower.   He                                                               
said  that physicians  will no  longer be  able to  give patients                                                               
prescription  medications at  a great  convenience to  them.   He                                                               
asked  members  to consider  the  basic  reimbursement rate,  the                                                               
Medicare rate,  and the other  rates before deciding  that Alaska                                                               
is just like the rest of the  50 states.  He asserted that Alaska                                                               
is  not, that  it has  big problems,  very difficult  medical and                                                               
orthopedic  problems  with injured  patients  and  the state  and                                                               
physicians have  an obligation to  take care  of them.   He would                                                               
like to  continue to do  this, but  his colleagues have  told him                                                               
that  if the  CMS rates  drop  and if  the workers'  compensation                                                               
rates  drop,  that  they  simply  won't  be  able  to  see  these                                                               
patients.  He concluded that this  is a huge problem for patients                                                               
who should be the number one priority.                                                                                          
                                                                                                                                
5:23:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  asked whether  he could  provide written                                                               
testimony outlining his  concerns.  She expressed  an interest in                                                               
the April 1, 2014 rates dropping by 26 percent.                                                                                 
                                                                                                                                
DR. COBDEN  offered to do so.   He indicated that  he has already                                                               
prepared a written statement and will add to it.                                                                                
                                                                                                                                
5:23:47 PM                                                                                                                    
                                                                                                                                
DEBORAH  MURSCH,  Financial  Director, Willow  Physical  Therapy,                                                               
stated that she has a  small physical therapy business and agreed                                                               
with  the  previous  testimony.    She  said  that  her  practice                                                               
disagrees with this bill.   She hoped the committee will consider                                                               
the  small physical  therapist's practices  in Fairbanks  so they                                                               
can stay open and be able to provide medical care for patients.                                                                 
                                                                                                                                
[HB 316 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB247 ver A.PDF HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Sponsor Statement.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Sectional Analysis.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Fiscal Note-DOA-DRB-02-28-2014.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Fiscal Note-DOA-DRB-02-28-2014-actuarial.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Draft Proposed Blank CS ver U.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Supporting Documents- FAQs.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Supporting Documents-APDEA 02-24-2014.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Supporting Documents-Tools and Safeguards.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Supporting Documents-Assorted Letters.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB247 Supporting Documents-VBRS-PP Presentation.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB316 ver N.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Sponsor Statement.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Sectional Analysis.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Fiscal Note-DOLWD-WC-03-03-14.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Fiscal Note-DOA-RM-02-28-14.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Letter NFIB 3-5-2014.PDF HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Resolution ASHBA.PDF HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-WC Board Resolution 13-01.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-WC Fee Comparison.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-AHLA 3-5-2014.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Legislative Research Brief.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Letter AK Chamber 03-05-2014.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Letter ASHNA 3-4-2014.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Letter FNSB 2-28-14.pdf HL&C 3/7/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 316
SB 2
HB247 Supporting Documents-VRP Presentation-Fornia 3-07-2014.pdf HL&C 3/7/2014 3:15:00 PM
HB 247
HB316 Supporting Documents-Letter-ASRC-ANC 0306-2014.pdf HL&C 3/7/2014 3:15:00 PM
HB 316