Legislature(2013 - 2014)BARNES 124

03/10/2014 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 316 WORKERS' COMPENSATION MEDICAL FEES TELECONFERENCED
Heard & Held
+= HB 152 PERS TERMINATION COSTS TELECONFERENCED
Heard & Held
*+ HB 328 BOARD/LICENSING OF MASSAGE THERAPISTS TELECONFERENCED
Heard & Held
+= HCR 15 TASK FORCE ON UNMANNED AIRCRAFT SYSTEMS TELECONFERENCED
Scheduled But Not Heard
           HB 316-WORKERS' COMPENSATION MEDICAL FEES                                                                        
                                                                                                                                
3:29:11 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first 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."                                                                 
                                                                                                                                
3:29:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT moved  to adopt  the proposed  committee                                                               
substitute  (CS)  for  HB   316,  labeled  28-LS1362\O,  Wallace,                                                               
3/10/14, as the working document.                                                                                               
                                                                                                                                
CHAIR OLSON objected for the purpose of discussion.                                                                             
                                                                                                                                
3:30:17 PM                                                                                                                    
                                                                                                                                
ANNA  LATHAM,  Staff,  Representative Kurt  Olson,  Alaska  State                                                               
Legislature,   explained  the   changes  in   proposed  committee                                                               
substitute (CS) for  HB 316, Version O.  She  related that the CS                                                               
contains  two new  subsections pertaining  to the  duties of  the                                                               
Medical Services Review  Committee (MSRC).  She  referred to page                                                               
2,  lines  24-26,  Section  2,   which  explicitly  requires  the                                                               
Workers'  Compensation  Board  (WCB)   to  request  and  consider                                                               
recommendations from  the MSRC on setting  conversion factors and                                                               
rates.  Additionally,  language on page 2,  lines 27-29, requires                                                               
the WCB  to consult with  the MSRC before evaluating  or revising                                                               
conversation factors for the fee schedules.                                                                                     
                                                                                                                                
3:30:40 PM                                                                                                                    
                                                                                                                                
MS.  LATHAM  explained that  there  was  some opposition  to  the                                                               
[Workers'   Compensation  Board]   setting  conversion   factors,                                                               
including raising questions about  the WCB's expertise in setting                                                               
the  medical schedules.   The  MSRC is  already defined  under AS                                                               
23.30.095 in  the original bill.   However, the MSRC has  not met                                                               
since 2009.   The intent of  this change is to  make it extremely                                                               
clear  in  statute  that  the   MSRC  will  advise  the  Workers'                                                               
Compensation Board (WCB) on setting the rates.                                                                                  
                                                                                                                                
MS. LATHAM  referred to  page 3, line  17, subsection  (n), which                                                               
provides an exemption  for critical access hospitals.   There are                                                               
13  federally  designated  critical access  hospitals  in  Alaska                                                               
certified   under    Medicare   conditions    of   participation.                                                               
Typically, these small  hospitals are under 25  beds, are located                                                               
in  rural areas,  and patients  have  a 96-hour  average stay  or                                                               
less.   For examples, critical  access hospitals are  in Cordova,                                                               
Valdez,  and Kodiak,  and these  facilities represent  a separate                                                               
provider type  with their own  Medicare conditions of  payment as                                                               
well as a separate payment  method.  The critical access hospital                                                               
certification  allows  these   hospitals  to  receive  cost-based                                                               
reimbursements for  Medicare instead of the  standard fixed-based                                                               
rates.    Page 3,  line  21,  subsection  (o) adds  language  for                                                               
geographical area  differential, which was  inadvertently omitted                                                               
in the  original bill.   The  sponsor felt  it was  imperative in                                                               
Alaska  for   the  board  to   have  the  option  of   using  the                                                               
geographical adjustment factor.   She noted that  the language is                                                               
"may" rather than "shall," so  the board will have flexibility to                                                               
determine whether  to use this option.   She referred to  page 3,                                                               
line  24,  Section 3,  relating  references  AS 44.62.245,  under                                                               
which future  amended document or  reference material,  as listed                                                               
can be incorporated by reference in future regulations.                                                                         
                                                                                                                                
3:33:24 PM                                                                                                                    
                                                                                                                                
MS. LATHAM pointed out that  the sunset provision in the original                                                               
bill  [Section  5] was  removed.    The language  was  originally                                                               
envisioned as  a safety net to  give the board four  years to set                                                               
rates,  conduct  an  audit, and  require  legislative  action  to                                                               
extend  the  new  fee   schedules;  however,  substantial  public                                                               
opposition occurred,  such that providers and  insurers testified                                                               
against it, noting it would be difficult for future planning.                                                                   
                                                                                                                                
CHAIR OLSON  interjected that  the sunset  provision is  the only                                                               
provision that  brought all  the stakeholders  together.   No one                                                               
liked the sunset provision except for the sponsor, so it's gone.                                                                
                                                                                                                                
3:34:19 PM                                                                                                                    
                                                                                                                                
MS.  LATHAM concluded  her testimony  by outlining  the effective                                                               
dates.   She referred to  page 4,  lines 15-17, to  the effective                                                               
date  language.   With  the  sunset  provision removed,  new  fee                                                               
schedules and  conversation factors will be  effective on January                                                               
2015; and proposed Section 5,  would make subsections (h) and (i)                                                               
effective on July 1, 2014. Thus,  the board has an opportunity to                                                               
begin its  review to set fee  schedules on July 1,  2014, and the                                                               
fee  schedules  and  conversion factors  would  be  effective  on                                                               
January 1, 2015.                                                                                                                
                                                                                                                                
3:36:33 PM                                                                                                                    
                                                                                                                                
MICHAEL MONAGLE,  Director, Central Office, Division  of Workers'                                                               
Compensation,  Department   of  Labor  &   Workforce  Development                                                               
(DLWD), introduced himself.                                                                                                     
                                                                                                                                
3:37:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  the  [WCB] with  advice                                                               
from the MSRC would set this conversion rate.                                                                                   
                                                                                                                                
MR. MONAGLE answered yes.                                                                                                       
                                                                                                                                
3:37:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for more information on the WCB.                                                                 
                                                                                                                                
MR.  MONAGLE answered  that the  board is  actually the  Workers'                                                               
Compensation Board.   He  acknowledged it  has an  advisory role,                                                               
but  most importantly  under the  statutes it  provides that  the                                                               
department may not adopt a  regulation unless the regulations are                                                               
approved  by the  WCB.   Thus, the  WCB has  authority under  the                                                               
statutes  to be  the final  voice  for any  regulations that  the                                                               
department  proposes.   The WCB  is  comprised of  18 members;  9                                                               
representing labor,  9 representing industry, and  all 18 members                                                               
are appointed by the governor.                                                                                                  
                                                                                                                                
3:38:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether the  nine labor  members                                                               
are required to  have any specific background before  they can be                                                               
nominated for  confirmation by  the governor.   He  further asked                                                               
what identifies these appointees as being associated with labor.                                                                
                                                                                                                                
MR. MONAGLE answered that the  Office of the Governor, Boards and                                                               
Commissions makes the  selection process.  He  commented that the                                                               
division rarely is consulted, unless  it relates to the knowledge                                                               
or activity  of potential board  members.  He offered  his belief                                                               
that the people who serve on  the WCB are typically involved in a                                                               
labor union  with representation  from most  of the  larger labor                                                               
organizations in the state.                                                                                                     
                                                                                                                                
CHAIR OLSON remarked that the  committee has been responsible for                                                               
the language  in HB 316, and  it was a unanimous  decision by all                                                               
members to put  forth the resolution which led to  a good portion                                                               
of the bill, including labor, medical insurance, and lay people.                                                                
                                                                                                                                
3:40:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  recalled   earlier  testimony  from  a                                                               
previous committee hearing that indicated  that there needs to be                                                               
an effort to control treatment.   He asked how the committee will                                                               
know that this reform doesn't go  too far and that rates will not                                                               
be  set in  a  way that  undermines the  capacity  of an  injured                                                               
worker to obtain the treatment he/she needs.                                                                                    
                                                                                                                                
MR. MONAGLE  agreed it is a  balancing act that the  MSRC and the                                                               
WCB are  challenged to  achieve, which is  to set  the conversion                                                               
factors at a  level that appropriately awards doctors  but not so                                                               
low as to cause providers to  elect not to treat injured workers.                                                               
He offered  his belief  that a  broad range  of data  exists that                                                               
suggests some  specialties - as  provided in members'  packets as                                                               
price comparisons  - that some allowable  reimbursement rates are                                                               
400-500  percent   higher  than   in  regional  states   such  as                                                               
Washington,  Oregon, and  Idaho.    He said  he  can't speak  for                                                               
either  the MSRC  or  the WCB,  but those  would  be areas  these                                                               
entities  would be  focused on  when determining  the appropriate                                                               
conversion  factors.   Additionally,  rates  for other  treatment                                                               
such  as evaluation  and management,  office physician,  physical                                                               
medicine,   physical  therapist,   and   chiropractor  are   more                                                               
reasonable,  although they  are higher  than regional  costs, but                                                               
don't represent 400  percent higher costs.  He  further said that                                                               
one of the  values of the conversion factors is  the MCRC and WCB                                                               
can customize them  for each specialty and "it's not  going to be                                                               
one size fits all."                                                                                                             
                                                                                                                                
3:42:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked whether  the bill should spell out                                                               
and define the  goal of a conversion factor so  those involved in                                                               
setting the factor know the policy they are trying to implement.                                                                
                                                                                                                                
MR. MONAGLE  answered that he  certainly would leave  that policy                                                               
decision to  the committee.   He said  he thought there  was some                                                               
public testimony -  both written and in person last  week to that                                                               
effect.                                                                                                                         
                                                                                                                                
3:43:18 PM                                                                                                                    
                                                                                                                                
LUKE  HOPKINS,  Mayor,  Fairbanks   North  Star  Borough  (FNSB),                                                               
testified in support  of HB 316.   He said the FNSB  and the FNSB                                                               
school  district  workers'  compensation  plans  are  self-funded                                                               
programs.   The FNSB spends  approximately $1.1 million  per year                                                               
on workers'  compensation benefits.   The  FNSB continues  to see                                                               
medical costs  increasing.   The regulation  of fees  and charges                                                               
for  medical treatment,  equipment,  and drugs  could reduce  the                                                               
overall workers' compensation  costs.  The FNSB  doesn't have any                                                               
ability to  steer the workers'  compensation related  injuries to                                                               
the PPOs network,  where certain services are provided.   In most                                                               
circumstances the FNSB  is paying the additional  costs for these                                                               
claims more than  if they were non-work  related injuries covered                                                               
under the self-funded  plan.  He said that allowing  the board to                                                               
adopt  a  fee  schedule  based on  quantified  data,  based  upon                                                               
federal Centers  for Medicare and  Medicaid service scales,  is a                                                               
positive change  and would provide  the needed reform  to address                                                               
the highest workers' compensation costs  in Alaska.  The FNSB and                                                               
the  FNSB assembly  fully  support  HB 316.    The FNSB  assembly                                                               
adopted a  resolution on February  13, 2014.  He  thanked members                                                               
for the opportunity to express the FNSB's concerns.                                                                             
                                                                                                                                
3:45:05 PM                                                                                                                    
                                                                                                                                
MARIANNE E. BURKE  said she is representing herself.   She stated                                                               
there  are some  problems with  the workers'  compensation system                                                               
with respect to the value for the single person.                                                                                
                                                                                                                                
CHAIR OLSON informed Ms. Burke that  the bill she is referring to                                                               
is not currently  the bill before the committee [so  he would not                                                               
take her testimony at this time.]                                                                                               
                                                                                                                                
[HB 316 was held over.]                                                                                                         
                                                                                                                                

Document Name Date/Time Subjects
HB316 Supporting Documents-Letter AK Surgery Center 3-05-2014.PDF HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Opposing Documents-Written Testimony-Assorted 3-7-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Letter AK Public Entity Insurance 3-07-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 316
HB328 Supporting Documents-Written Testimony- Susan Endsley 3-07-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 328
HB316 Supporting Documents-Letter Anchorage Fracture & Orthopedic Clinic 3-07-2014.PDF HL&C 3/10/2014 3:15:00 PM
HB 316
HB152 Ver C.pdf HL&C 4/5/2013 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Sponsor Statement ver. C.pdf HL&C 4/5/2013 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Sectional Analysis.pdf HL&C 4/5/2013 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Fiscal Note-DOA-DRB-4-03-13.pdf HL&C 4/5/2013 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-PERS Employer Salaries FY08 vs. FY12.pdf HL&C 4/5/2013 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Letter to DOA from Buck Consultants 3-28-2013.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Draft Proposed Blank CS ver Y.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Sectional Analysis ver Y.pdf HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Sponsor Statement ver Y.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-Letter City of Fairbanks 3-03-2014.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-Letter FNSB 02-28-2014 with Resolution 2014-06.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
SB 2
HB152 Supporting Documents-Letter-City of Craig 2-14-14.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-Letter-City of Homer 3-03-2014.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-Letter-Ketchikan Gateway Borough 2-14-14.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-Letter-Muni of Anchorage 2-26-14.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-Resolution Denali Borough 12-21.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
HB152 Supporting Documents-Resolution FNSB 2013-38.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
SB2013
HB152 Supporting Documents-Resolution Ketchikan Gateway Borough 2316.pdf HL&C 3/5/2014 3:15:00 PM
HL&C 3/10/2014 3:15:00 PM
HB 152
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
HB316 Opposing Documents-Email Ron Richards 3-10-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Draft Proposed CS ver O.pdf HL&C 3/10/2014 3:15:00 PM
HB 316
HB152 DRAFT Fiscal Note to draft blank cs ver Y 2-28-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 152
HB328 Opposing Documents-Email-Rebecca Albert 03-09-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 328
HB152 Supporting Documents-Letter City of Ketchikan 3-7-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 152
HB203 Supporting Documents-Letter AAHU 3-13-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 203
HB203 Supporting Documents-Written Testimony Lenard Sorrin 3-14-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 203
HB316 Opposing Documents-Letter AK Medical Assoc 3-12-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 316
HB316 Supporting Documents-Letter Anchorage Fracture & Orthopedic Clinic 3-12-2014.pdf HL&C 3/10/2014 3:15:00 PM
HB 316