Legislature(2013 - 2014)SENATE FINANCE 532

04/19/2014 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 385 PERS/TRS STATE CONTRIBUTIONS TELECONFERENCED
Moved SCS CSHB 385(FIN) Out of Committee
+= HB 278 EDUCATION TELECONFERENCED
Scheduled But Not Heard
+= HB 19 PERM. MOT. VEH. REGISTRATION/TRAILERS TELECONFERENCED
Moved CSHB 19(RLS) (efd am) Out of Committee
+= HB 160 LICENSING OF ATHLETIC TRAINERS TELECONFERENCED
Moved SCS CSHB 160(FIN) Out of Committee
+= HB 282 LANDLORD AND TENANT ACT TELECONFERENCED
Moved CSHB 282(JUD) Out of Committee
+= HB 287 OIL ROYALTIES; TAX CREDIT TELECONFERENCED
Scheduled But Not Heard
+= HB 306 EVAL. INDIRECT EXPENDITURES; TAX CREDITS TELECONFERENCED
Scheduled But Not Heard
+= HB 140 REGULATIONS: NOTICE, REVIEW, COMMENT TELECONFERENCED
Heard & Held
+ HB 316 WORKERS' COMPENSATION MEDICAL FEES TELECONFERENCED
Moved CSHB 316(FIN) Out of Committee
+ HB 384 ALASKA MINIMUM WAGE TELECONFERENCED
Scheduled But Not Heard
+= HJR 10 CONST. AM: TRANSPORTATION FUND TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR HOUSE BILL NO. 316(FIN)                                                                                                
                                                                                                                                
     "An  Act relating  to  workers'  compensation fees  for                                                                    
     medical  treatment and  services; relating  to workers'                                                                    
     compensation   regulations;   and  providing   for   an                                                                    
     effective date."                                                                                                           
                                                                                                                                
11:03:16 AM                                                                                                                   
                                                                                                                                
ANNA LATHAM, STAFF, REPRESENTATIVE KURT OLSON, introduced                                                                       
the legislation and read from the sponsor statement:                                                                            
                                                                                                                                
     For  the  past decade,  Alaska  has  faced the  highest                                                                    
     workers compensation rates in the nation.                                                                                  
                                                                                                                                
     The   Alaska    Workers'   Compensation    Board,   the                                                                    
     Legislature, the Alaska Health  Care Commission and the                                                                    
     Administration agree  that effective reform  is needed,                                                                    
     and is crucial to Alaska's economic future.                                                                                
                                                                                                                                
     In  2005, the  Alaska Legislature  passed HB  13, which                                                                    
     established a workers'  compensation fee schedule based                                                                    
     on usual,  customary and reasonable  rates, set  at the                                                                    
     90th percentile,  with a geographic  differential. This                                                                    
     made incremental changes for  the better, but it wasn't                                                                    
     the sweeping reform that Alaska truly needs.                                                                               
                                                                                                                                
     HB  316  proposes  a  solution  to  this  challenge  by                                                                    
     introducing  a new  fee schedule.  HB  316 changes  the                                                                    
     basis for the fee  schedule from what physicians charge                                                                    
     in a  geographic area, to  what it costs  physicians to                                                                    
     perform    medical   procedures.    Thirty-two   states                                                                    
     currently  use this  relative values  unit methodology,                                                                    
     which incorporates the relative  value of a physician's                                                                    
     work,  practice  expense,  and  professional  liability                                                                    
     insurance.   A   conversion   factor   and   geographic                                                                    
     differential is  applied to the formula.  This relative                                                                    
     value unit  methodology is  a system  that is  owned by                                                                    
     the American Medical Association,  and is the basis for                                                                    
     Medicare and Medicaid's payment schedules.                                                                                 
                                                                                                                                
     The  Medical Services  Review  Committee  will set  the                                                                    
     conversion  factors   for  the  fee   schedules,  which                                                                    
     require the  approval of the Commissioner  of Labor and                                                                    
     Workforce  Development  before  they are  adopted  into                                                                    
     regulation  by  the  Workers' Compensation  Board.  The                                                                    
     Board  will  also  set   reimbursement  rates  for  air                                                                    
     ambulance   services,   and   the  markup   rates   for                                                                    
     prescription drugs and durable medical equipment.                                                                          
                                                                                                                                
     HB  316  introduces  comprehensive reform  of  Alaska's                                                                    
     workers'  compensation fee  schedule, in  an effort  to                                                                    
     reduce exorbitant costs in both  the public and private                                                                    
     sectors.                                                                                                                   
                                                                                                                                
     I urge your support of this legislation.                                                                                   
                                                                                                                                
Co-Chair  Meyer  understood  that   the  bill  had  received                                                                    
support from  the majority of  affected parties.  Ms. Latham                                                                    
agreed that  there were  38 letters of  support in  the bill                                                                    
packet  from  various  medical,   union  and  other  related                                                                    
groups. She furthered  that the sponsor had  worked with all                                                                    
stakeholders  involved  during  the legislative  process;  5                                                                    
hearings were  heard in  House Labor and  Commerce and  2 in                                                                    
the House  Finance Committee,  prior to  the bill  moving to                                                                    
the senate.                                                                                                                     
                                                                                                                                
Vice-Chair  Fairclough read  from an  April 17,  2014 letter                                                                    
from the Alaska Chamber of Commerce:                                                                                            
                                                                                                                                
     While Committee  Substitute House Bill 316  (HB 316) is                                                                    
     singularly focused  on the medical fee  schedule, it is                                                                    
     an   important   piece    of   the   overall   workers'                                                                    
     compensation system. Until now,  the Alaska Chamber has                                                                    
     withheld support  from HB 316. Not  because the changes                                                                    
     made  by  HB  316  move  workers'  comp  in  the  wrong                                                                    
     direction,  but because  additional reforms  introduced                                                                    
     during  the   legislative  process   have  yet   to  be                                                                    
     included. Our primary concern is  that HB 316 will only                                                                    
     have  a  short-term  effect  on  workers'  compensation                                                                    
     medical costs over the next several years.                                                                                 
                                                                                                                                
Vice-Chair Fairclough  noted that Alaska ranked  last in the                                                                    
nation  when it  came to  worker's compensation  reform. She                                                                    
wondered  if  the  legislation  would  improve  the  state's                                                                    
standing, and  what the  effects would  be on  employers and                                                                    
employees. Ms.  Latham replied that there  were many reforms                                                                    
that  needed  to  be   addressed  when  discussing  worker's                                                                    
compensation.  She  believed  that  the  chamber  wanted  to                                                                    
implement evidence  based best practices and  utilization as                                                                    
part  of the  reform.  The sponsor  holds  that the  process                                                                    
should consist  of 2 parts,  lowering fees  and implementing                                                                    
utilization and evidence based best practices.                                                                                  
                                                                                                                                
11:08:45 AM                                                                                                                   
                                                                                                                                
Vice-Chair Fairclough understood  that the legislation would                                                                    
also benefit employers. Ms.  Latham responded yes; employers                                                                    
would pay lower premium rates.                                                                                                  
                                                                                                                                
Senator  Bishop   expressed  support   for  the   intent  of                                                                    
legislation.  He  noted in  member  packets  the letters  of                                                                    
support  from labor  and contract  associations, as  well as                                                                    
certain municipalities and boroughs (copy on file).                                                                             
                                                                                                                                
Senator  Olson remarked  that the  letters  of support  were                                                                    
from  industry. He  queried  whether  employees had  offered                                                                    
support  for   the  legislation.  Ms.  Latham   replied  one                                                                    
individual testified in House  Labor and Commerce concerning                                                                    
their experience  in the  worker's compensation  system. She                                                                    
relayed that  the previous hearings  of the  legislation had                                                                    
been publicly  noticed and  that the  process had  been very                                                                    
open to the public. She  added that the Alaska State Medical                                                                    
Association   offered  full   support  of   the  legislation                                                                    
following the  amendment of  the bill  in the  House Finance                                                                    
Committee;  the amendment  would allow  the Commissioner  of                                                                    
Labor to  approve the conversion  factor set by  the Medical                                                                    
Services Review  Committee (MSRC).  She maintained  that the                                                                    
process had been open and transparent.                                                                                          
                                                                                                                                
Senator Olson expressed  concern that the bill  could be too                                                                    
ambitious.  He worried  about a  hasty  transition from  the                                                                    
usual,  customary, and  reasonable (UCR)  fee schedule  to a                                                                    
resource  based scenario.  He wondered  if  the sponsor  had                                                                    
been  in  discussions  with   pain  management  clinics,  or                                                                    
patients  that  dealt  with pain  management.    Ms.  Latham                                                                    
stated that  a HB370 was  up in Senate Judiciary,  and spoke                                                                    
to the fee schedule as  it pertained to pain management. She                                                                    
asserted  that  the   Resource-Based  Relative  Value  Scale                                                                    
(RBRVS)  methodology in  the  bill was  sound  and had  been                                                                    
developed by  Harvard researchers. She relayed  that the UCR                                                                    
was inherently  inflationary. She shared that  32 states had                                                                    
adopted the RBRVS methodology with  a conversion factor, not                                                                    
in phases but in a swift switch from one to the next.                                                                           
                                                                                                                                
11:13:13 AM                                                                                                                   
                                                                                                                                
Senator  Dunleavy asked  whether  practitioners from  remote                                                                    
areas of  the state  had testified  on the  legislation. Ms.                                                                    
Latham said  that the only practitioners  that had testified                                                                    
on  the  bill were  physical  therapists  in Fairbanks.  She                                                                    
added that  the sponsor had  worked closely with  the Alaska                                                                    
State  Hospital   and  Nursing  Home   Association  (ASHNA),                                                                    
adopting a critical access  hospital exemption because ASHNA                                                                    
used  a different  federal  Medicaid  billing schedule.  She                                                                    
furthered that  a geographic  differential had  been applied                                                                    
for smaller, rural hospitals and clinics.                                                                                       
                                                                                                                                
Senator Olson understood that there  was a letter of support                                                                    
from the  Alaska State Medical Association  (ASMA) in member                                                                    
packets. Ms. Latham replied in the affirmative.                                                                                 
                                                                                                                                
Co-Chair Meyer  wondered if  chiropractors had  expressed an                                                                    
opinion  on   the  bill.  Ms.  Latham   responded  that  the                                                                    
chiropractic community  had not expressed an  opinion on the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Senator Dunleavy  asked whether cost issues  due to Alaska's                                                                    
unique terrain  had been considered during  the process. Ms.                                                                    
Latham replied  yes. She reiterated that  the bill contained                                                                    
a critical access hospital exemption  and the ability of the                                                                    
board to  apply a  geographic differential,  as well  as the                                                                    
initial conversion factor.                                                                                                      
                                                                                                                                
RACHAEL PETRO, PRESIDENT AND  CEO, ALASKA CHAMBER, ANCHORAGE                                                                    
(via   teleconference),   testified   in  support   of   the                                                                    
legislation.  She  referred  to  the letter  of  support  in                                                                    
member  packets  (copy  on  file).  She  believed  that  the                                                                    
legislation was a step in  the right direction for systemic,                                                                    
comprehensive change.                                                                                                           
                                                                                                                                
11:17:17 AM                                                                                                                   
                                                                                                                                
WARD HURBURT,  CHIEF MEDICAL  OFFICER, DEPARTMENT  OF HEALTH                                                                    
AND SOCIAL  SERVICES, ANCHORAGE (via  teleconference), spoke                                                                    
in  support   of  the  legislation.   He  shared   that  the                                                                    
legislation was  consistent with the recommendations  of the                                                                    
Alaska Healthcare  Commission and  that the  new methodology                                                                    
would  encourage a  free market.  He opined  that healthcare                                                                    
and  medical costs  in the  state  were the  highest in  the                                                                    
nation and  the bill would  open up better  negotiations. He                                                                    
said  that  there  would  be a  conversion  factor  for  the                                                                    
resource  based scale  to reflect  the costs  in Alaska.  He                                                                    
noted that  organized labor groups had  testified in support                                                                    
of the legislation.                                                                                                             
                                                                                                                                
BARBARA HUFF TUCKNESS,  DIRECTOR, GOVERNMENT AND LEGISLATIVE                                                                    
AFFAIRS, TEAMSTERS  LOCAL 959,  testified in support  of the                                                                    
legislation.  She believed  that the  medical review  board,                                                                    
with the  make-up of doctors and  lay representatives, would                                                                    
be effective.                                                                                                                   
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
Senator Olson  expressed concern that the  legislation could                                                                    
prove to alienate those already on the margins of society.                                                                      
                                                                                                                                
Vice-Chair  Fairclough  spoke  to   the  fiscal  notes.  She                                                                    
remarked that the FY15 column  reflected $62 thousand, while                                                                    
FY16 through  FY18 reflected $54 thousand  with an estimated                                                                    
supplemental  appropriation of  $13,700. She  felt that  the                                                                    
numbers were  appropriate. She pointed out  that fiscal note                                                                    
3  reflected  several   indeterminate  costs;  however,  the                                                                    
analysis on  page two  of the  note provided  an appropriate                                                                    
explanation for the indeterminate amount.                                                                                       
                                                                                                                                
Vice-Chair Fairclough  MOVED to REPORT CSHB  316(FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB 316(FIN) was REPORTED out  of committee with individual                                                                    
and with previously published  fiscal impact note: FN2(LWF);                                                                    
and   previously   published  indeterminate   fiscal   note:                                                                    
FN3(ADM).                                                                                                                       
                                                                                                                                
11:23:18 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:44:29 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Meyer handed the gavel to Co-Chair Kelly.                                                                              
                                                                                                                                

Document Name Date/Time Subjects
FW HB385 and SB220 - Leighton.msg SFIN 4/19/2014 9:00:00 AM
HB 385
SB 220
HB385 and SB220 Public Testimony - Walkin.msg SFIN 4/19/2014 9:00:00 AM
HB 385
SB 220
HB278 Are you joking No $ for the BSA - Faralan-Mingo.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 New education plan - Habicht.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 school grading - Roberts.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 2014-04-18 Sealaska Support for BSA - Sealaska.doc SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Pre-k thru 12 funding - Hayden.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Functional schools in Alaska - Hall Jones.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB 278 Section 55 Removal - Brown.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Thank you for sending our money for our schools - Kuckertz.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 I am very disappointed by the newly released senate education plan - Pausbeck.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB 278 Opposition - Delaney.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 BSA school funding needs to increase - Fagnani.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Please support base student allocation by $650 over next 3 years - Goto.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Good luck Education funding 7th grade Anchorage son - Stoddard.msg SFIN 4/19/2014 9:00:00 AM
HB 278
Hb278 For Our Children (HB 278) - Predeger.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Increase the BSA - Goudreau.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Increase BSA - Fischer.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 BSA increase ($400 then $125 and $125) - Olsen.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 School funding - Slyker.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 URGENT - Fox.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 increase BSA funding for our schools - Nolan.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 BaseStudentAllocation_041814 - Reitmeier.pdf SFIN 4/19/2014 9:00:00 AM
HB 278
HB278 Please fund our schools Increase the BSA $400 $125 $135.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB 19 Public Testimony - Crowell.msg SFIN 4/19/2014 9:00:00 AM
HB 19
HB282 Support - Welsh.docx SFIN 4/19/2014 9:00:00 AM
HB 282
HB 282 - Public Testimony - Somers.msg SFIN 4/19/2014 9:00:00 AM
HB 282
HB282 Landlord tenant bill - McConnochie.msg SFIN 4/19/2014 9:00:00 AM
HB 282
HB282 Landlord tenant - Hewitt.msg SFIN 4/19/2014 9:00:00 AM
HB 282
HB287 Tesoro Letter of Support Senate FIN.pdf SFIN 4/19/2014 9:00:00 AM
HB 287
HB306 Photos from my Alaska Film Acting (SAG-AFTRA) - Holmstrom.msg SFIN 4/19/2014 9:00:00 AM
HB 306
Hb 306 Film Industry - McElroy.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 SENATE FINANCE COMMITTEE - take FILM out of HB306. - Teela.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB 306 Public Testimony - Halsey.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB 306 Public Testimony - Kern.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Oppose Committee Substitute for HB306 - Weaver.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306-Film Tax Credit - Crockett.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Public Testimony - Skabar.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 - PLEASE TAKE FILM OUT - Robinson.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB278 Protect the classroom for our children - Story.msg SFIN 4/19/2014 9:00:00 AM
HB 278
HB306 AK Resident Concern of HB306 Film Tax Incentive - Duffin.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB 306 Public Testimony - Gamez.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Please vote No or remove the film incentive program from HB 306 - Owens.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Take film out of HB306 - Robinson.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Letter 4 18 14.pdf SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Public Testimony - Boles.docx SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Public Testimony - Wegener.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 NO on 306 - Katzke.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Please consider the big picture and take the film out of HB306 - Scheler.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Public Testimony - Wheel Good Food.msg SFIN 4/19/2014 9:00:00 AM
HB 306
Hb306 AK Senate Letter 306 - Cypherius.pdf SFIN 4/19/2014 9:00:00 AM
HB 306
HB 306 Public Testimony - Robinson.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 - The Alaska Film Tax Credit Program - AK Film Group.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Please do not vote for HB306 - Frame.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Film Incentive Program HB306 - Sears.msg SFIN 4/19/2014 9:00:00 AM
HB 306
HB306 Public Testimony - Saarloos.msg SFIN 4/19/2014 9:00:00 AM
HB 306
AlaskaChamber-Kelly_HB316_WorkersCompMedicalFees.pdf SFIN 4/19/2014 9:00:00 AM
HB 316
HB 384 - Summary of Changes - Ver A to A A.pdf SFIN 4/19/2014 9:00:00 AM
HB 384
HB 384 Letter of Intent.pdf SFIN 4/19/2014 9:00:00 AM
HB 384
HB385 NO to HB 384! - Girard.msg SFIN 4/19/2014 9:00:00 AM
HB 384
HB 385
HB284 Public Testimony - Woodman.pdf SFIN 4/19/2014 9:00:00 AM
HB 284
HB384 Minimum Wage Bill - Mayhew.msg SFIN 4/19/2014 9:00:00 AM
HB 384
HB384 Public Testimony - Goldsmith.msg SFIN 4/19/2014 9:00:00 AM
HB 384
HB384 Oppose HB 384 - Pomeroy.msg SFIN 4/19/2014 9:00:00 AM
HB 384
HB385 LFD 041814 Buck Comparing Payment Options.pdf SFIN 4/19/2014 9:00:00 AM
HB 385
HB385 SCR Titile Change.pdf SFIN 4/19/2014 9:00:00 AM
HB 385
HB385 Buck Consultants 041814.pdf SFIN 4/19/2014 9:00:00 AM
HB 385
HB385 work draft version U.pdf SFIN 4/19/2014 9:00:00 AM
HB 385
HB385-SFC-TRS-04-19-14.pdf SFIN 4/19/2014 9:00:00 AM
HB 385
HB385-SFC PERS-04-19-14.pdf SFIN 4/19/2014 9:00:00 AM
HB 385
HB278 DEED Mil Rate Chart.pdf SFIN 4/19/2014 9:00:00 AM
HB 278