Legislature(2013 - 2014)BARNES 124

03/17/2014 03:15 PM LABOR & COMMERCE


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

Document Name Date/Time Subjects
SB159 ver N.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Sponsor Statement.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Sectional Analysis.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Fiscal Note-DCCED-DOI-2-10-14.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Email Clay Bezenek 3-13-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Airlift Northwest 11-22-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Ernest Bliss 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Jane Bliss 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Janet Buness 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Maureen Maxand 2-29-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter SOA Div Ins to Airlift Northwest 7-16-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter SOA Div Ins to Dina Yunker 11-12-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents–Letter SOA Div Ins to Dina Yunker, 11-19-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter SOA to Airlift Northwest AirCare 11-12-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Theresa Allen 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Walter Moorhead 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-News Article-Chilkat Valley News 12-5-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-News Article-CoastAlaska News 11-26-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-News Article-Juneau Empire 1-20-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
HB288 Draft Proposed Blank CS ver N.pdf HL&C 3/17/2014 3:15:00 PM
HB 288
HB288 ver N Sectional Analysis.pdf HL&C 3/17/2014 3:15:00 PM
HB 288
HB288 Supporting Documents-Arctic Infrastructure Fund for AIDEA.pdf HL&C 3/17/2014 3:15:00 PM
HB 288
HB281 ver A.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281(HSS) ver U.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Sponsor Statement.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Fiscal Note-DCCED-CBPL-02-06-2014.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Draft Proposed Amendment U.1.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Summary of Changes ver A to ver U.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-Rand Study.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-Teladoc Press Release.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-DOLWD Census Data.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-Letter Teladoc2-10-2014.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Opposing Document-Email-ASMB 1-28-2014.pdf HL&C 3/17/2014 3:15:00 PM
HB 281