03/23/2022 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SJR12 | |
| HB176 | |
| SB143 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 176 | TELECONFERENCED | |
| += | SB 143 | TELECONFERENCED | |
| += | SJR 12 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 23, 2022
3:18 p.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Ivy Spohnholz, Co-Chair
Representative Calvin Schrage
Representative Liz Snyder
Representative David Nelson
Representative James Kaufman
Representative Ken McCarty
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 12
Urging the United States Congress to repeal the Windfall
Elimination Provision and Government Pension Offset of the
Social Security Act.
- MOVED SJR 12 OUT OF COMMITTEE
HOUSE BILL NO. 176
"An Act relating to insurance; relating to direct health care
agreements; and relating to unfair trade practices."
- HEARD & HELD
SENATE BILL NO. 143
"An Act relating to horizontal property regimes and common
interest communities; and relating to mortgages, deeds of trust,
and other property liens."
- MOVED SB 143 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SJR 12
SHORT TITLE: SOCIAL SECURITY BENEFIT REDUCTION REPEAL
SPONSOR(s): SENATOR(s) WIELECHOWSKI
03/29/21 (S) READ THE FIRST TIME - REFERRALS
03/29/21 (S) STA, FIN
04/27/21 (S) STA AT 3:30 PM BUTROVICH 205
04/27/21 (S) <Bill Hearing Canceled>
05/04/21 (S) STA AT 3:30 PM BUTROVICH 205
05/04/21 (S) Heard & Held
05/04/21 (S) MINUTE(STA)
05/06/21 (S) STA AT 3:30 PM BUTROVICH 205
05/06/21 (S) Moved SJR 12 Out of Committee
05/06/21 (S) MINUTE(STA)
05/07/21 (S) STA RPT 1DP 3NR
05/07/21 (S) DP: SHOWER
05/07/21 (S) NR: HOLLAND, COSTELLO, REINBOLD
02/24/22 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/24/22 (S) Heard & Held
02/24/22 (S) MINUTE(FIN)
03/01/22 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/01/22 (S) Moved SJR 12 Out of Committee
03/01/22 (S) MINUTE(FIN)
03/04/22 (S) FIN RPT 6DP
03/04/22 (S) DP: STEDMAN, BISHOP, HOFFMAN, WILSON,
WIELECHOWSKI, OLSON
03/11/22 (S) TRANSMITTED TO (H)
03/11/22 (S) VERSION: SJR 12
03/14/22 (H) READ THE FIRST TIME - REFERRALS
03/14/22 (H) STA
03/14/22 (H) L&C REPLACES STA REFERRAL
03/21/22 (H) L&C AT 3:15 PM BARNES 124
03/21/22 (H) Heard & Held
03/21/22 (H) MINUTE(L&C)
03/23/22 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 176
SHORT TITLE: DIRECT HEALTH AGREEMENT: NOT INSURANCE
SPONSOR(s): REPRESENTATIVE(s) RASMUSSEN
04/16/21 (H) READ THE FIRST TIME - REFERRALS
04/16/21 (H) L&C, HSS
05/03/21 (H) L&C AT 3:15 PM BARNES 124
05/03/21 (H) Heard & Held
05/03/21 (H) MINUTE(L&C)
05/07/21 (H) L&C AT 8:00 AM GRUENBERG 120
05/07/21 (H) Heard & Held
05/07/21 (H) MINUTE(L&C)
05/12/21 (H) L&C AT 3:15 PM BARNES 124
05/12/21 (H) <Bill Hearing Canceled>
03/23/22 (H) L&C AT 3:15 PM BARNES 124
BILL: SB 143
SHORT TITLE: COMMON INTEREST COMMUNITIES; LIENS
SPONSOR(s): SENATOR(s) REVAK
01/18/22 (S) PREFILE RELEASED 1/7/22
01/18/22 (S) READ THE FIRST TIME - REFERRALS
01/18/22 (S) L&C
02/09/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/09/22 (S) Moved SB 143 Out of Committee
02/09/22 (S) MINUTE(L&C)
02/11/22 (S) L&C RPT 3DP
02/11/22 (S) DP: STEVENS, MICCICHE, GRAY-JACKSON
02/16/22 (S) TRANSMITTED TO (H)
02/16/22 (S) VERSION: SB 143
02/17/22 (H) READ THE FIRST TIME - REFERRALS
02/17/22 (H) L&C
02/17/22 (H) CRA REFERRAL ADDED BEFORE L&C
03/01/22 (H) CRA AT 8:00 AM BARNES 124
03/01/22 (H) Heard & Held
03/01/22 (H) MINUTE(CRA)
03/03/22 (H) CRA AT 8:00 AM BARNES 124
03/03/22 (H) Heard & Held
03/03/22 (H) MINUTE(CRA)
03/08/22 (H) CRA AT 8:00 AM BARNES 124
03/08/22 (H) Moved SB 143 Out of Committee
03/08/22 (H) MINUTE(CRA)
03/09/22 (H) CRA RPT 5DP
03/09/22 (H) DP: MCCARTY, MCCABE, DRUMMOND, HANNAN,
SCHRAGE
03/14/22 (H) L&C AT 3:15 PM BARNES 124
03/14/22 (H) -- MEETING CANCELED --
03/16/22 (H) L&C AT 3:15 PM BARNES 124
03/16/22 (H) Heard & Held
03/16/22 (H) MINUTE(L&C)
03/23/22 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
DAVID GUTTENBERG
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SJR 12.
TAMMY SMITH
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SJR 12.
LORI WING-HEIER, Director
Division of Insurance
Alaska Department of Commerce, Community, and Economic
Development
Anchorage, Alaska
POSITION STATEMENT: During the hearing on HB 176, testified
that with the proper consumer protections the bill would help in
Alaska's healthcare system.
JOHN HALEY, Assistant Attorney General
Special Litigation and Consumer Protection
Civil Division (Anchorage)
Department of Law
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
176.
CRYSTAL KOENEMAN, Staff
Representative Sara Rasmussen
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing on HB 176, answered
questions about the bill on behalf of Representative Rasmussen,
prime sponsor.
LEE S. GROSS, MD
Epiphany Health Direct Primary Care
North Port, Florida
POSITION STATEMENT: Answered questions during the hearing on HB
176.
ACTION NARRATIVE
3:18:34 PM
CO-CHAIR ZACK FIELDS called the House Labor and Commerce
Standing Committee meeting to order at 3:18 p.m.
Representatives Schrage, McCarty, Nelson, Spohnholz, and Fields
were present at the call to order. Representatives Snyder and
Kaufman arrived as the meeting was in progress.
SJR 12-SOCIAL SECURITY BENEFIT REDUCTION REPEAL
3:18:59 PM
CO-CHAIR FIELDS announced that the first order of business would
be SENATE JOINT RESOLUTION NO. 12, Urging the United States
Congress to repeal the Windfall Elimination Provision and
Government Pension Offset of the Social Security Act.
3:19:16 PM
CO-CHAIR FIELDS opened public testimony on SJR 12.
3:19:39 PM
DAVID GUTTENBERG testified in support of SJR 12. He recounted
that he worked as a laborer for over 20 years, then worked four
years as a staff person in the legislature, followed by 16 years
as a legislator. When he became eligible to retire from the
state he learned that the Windfall Elimination Provision (WEP)
would take about $400 out of his retirement. He said he has
been amazed at it ever since and how detrimental it has been to
those who have split their time between the private sector and
the public sector. He did not anticipate this big hit and an
estimated $70 million a year is not received by Alaskans because
of this provision. He paid Social Security for more than 20
years while working as a laborer, but because he split his
career between the private and public sectors he is penalized,
as are many Alaskans. People just want to get back the money
they put into Social Security; nobody is asking for more than
that. He said there is support [for repeal] in Congress and
urged the passage of SJR 12.
3:22:06 PM
TAMMY SMITH testified in support of SJR 12. She related that
she is a teacher in Fairbanks with the benefit of being Tier I,
and she will be retiring after 40 years of teaching in Alaska.
She said she began her career as a teacher in Minnesota and then
taught at a Catholic school in Fairbanks, both positions in
which she paid into Social Security. In 1986 she moved into the
public school system and eventually learned about WEP and the
Government Pension Offset (GPO) and how they would significantly
impact her retirement, which is part of the reason why she
continues to teach. Her husband worked with the plumbers and
pipefitters for over 30 years. At his death seven years ago,
she realized the significant impact that the GPO/WEP would have
on her, as there is a double impact for certain individuals.
The work that her husband did has been taken away from her.
MS. SMITH stated that as a board member of the National
Education Association-Alaska (NEA-Alaska) she has taken this
issue to Alaska US Senator Dan Sullivan and Alaska US Senator
Lisa Murkowski. While they understand the issue, she said, they
need the legislature's encouragement. She related that in a
letter Senator Sullivan wrote to the Internal Revenue Service
(IRS) and the Social Security Administration (SSA) he talks
about how 70 percent of the Alaskan teachers that are in the
Tier III system may run out of money after a certain amount of
time. Senator Sullivan's work targets what is going to happen
to the Tier III individuals who do not have a defined benefit
and the significant impact that this will have on these Alaska
teachers without Social Security.
MS. SMITH said she is only asking for consideration of what she
has donated to Social Security. She pointed out that young
Alaskans are also being impacted and don't feel they can stay in
Alaska. Three years ago, her daughter, a public employee,
decided to leave Alaska because as a Tier III or Tier IV she
could do better elsewhere. She urged the committee to help
senators Sullivan and Murkowski going forward. Even if it isn't
a total fix or isn't retroactive, she said, it would be
something to support Alaskans working in the state.
3:26:44 PM
REPRESENTATIVE NELSON thanked Ms. Smith for her 40 years of
teaching.
3:27:05 PM
CO-CHAIR FIELDS closed public testimony after ascertaining that
no one else wished to testify.
3:27:14 PM
CO-CHAIR SPOHNHOLZ moved to report SJR 12 out of committee with
individual recommendations and the accompanying [zero] fiscal
notes. There being no objection, SJR 12 was moved out of the
House Labor and Commerce Standing Committee.
3:27:40 PM
The committee took an at-ease from 3:27 p.m. to 3:29 p.m.
HB 176-DIRECT HEALTH AGREEMENT: NOT INSURANCE
3:29:35 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 176, "An Act relating to insurance; relating
to direct health care agreements; and relating to unfair trade
practices."
CO-CHAIR FIELDS invited Ms. Lori Wing-Heier to outline some of
the recommended changes or clarifications that the Division of
Insurance has in terms of consumer protections for those
consumers purchasing direct care agreements, with the goal of
getting them addressed prior to the bill's next hearing.
3:30:45 PM
LORI WING-HEIER, Director, Division of Insurance, Alaska
Department of Commerce, Community, and Economic Development
(DCCED), testified that with the proper consumer protections HB
176 would help in Alaska's healthcare system. She stated that
the division supports direct care agreements and that there is a
need for them in Alaska. Direct care agreements would help with
access to health care, particularly for Medicare recipients who
cannot find a primary doctor.
MS. WING-HEIER advised, however, that the division thinks there
needs to be some consumer protections. She said the bill should
not be able to discriminate. As well, if charging a fee [the
provider should be required to] give notice if the fee is going
to be increased. In addition, both parties should be able to
cancel with proper notice and perhaps with a nominal or minimum
termination fee. The contract should clearly spell out what the
consumer is going to get during the contract; for example, two
check-ups annually, a certain amount of bloodwork, and whatever
else the doctor wants to provide under the contract. Ms. Wing-
Heier further advised that if the treatment or whatever the
consumer is receiving from the doctor exceeds the contract, then
insurance would be available. With proper consumer protections,
she stated, this is a bill worth considering and it would help
in Alaska's healthcare system.
3:32:03 PM
REPRESENTATIVE MCCARTY requested that the committee be sent a
list of the division's suggestions.
MS. WING-HEIER agreed to do so.
CO-CHAIR FIELDS added that [the committee], along with the
sponsor, will work with Ms. Wing-Heier on a committee substitute
(CS) that will include some of these clarifications. He invited
Mr. Haley of the Department of Law to comment on Ms. Wing-
Heier's suggestions.
3:32:47 PM
JOHN HALEY, Assistant Attorney General, Special Litigation and
Consumer Protection, Civil Division (Anchorage), Department of
Law, clarified he is before the committee to answer questions
that the committee might have regarding how enforcement under
the Unfair Trade Practices Act (UTPA) would work. The
Department of Law, he said, does not have any specific
recommendations as far as what consumer protections should exist
in the law.
3:33:23 PM
CO-CHAIR SPOHNHOLZ said the committee is interested in adding
some consumer protections and transparency language to the bill.
She requested Mr. Haley to discuss how consumer protection
statutes are typically structured and what the process is for
consumers if they have a challenge related to unfair contract
practices and how that might be enforced in the state of Alaska.
MR. HALEY responded that the Unfair Trade Practices Act is a
common consumer protection statute. He said Section 3 of HB 176
would make violating the new AS 45.45.915 an unfair trade
practice. He stated that AS 45.50.471 includes a list of [57]
enumerated violations of the [Alaska Unfair Trade Practices and
Consumer Protection Act]. The UTPA has two remedies - a private
cause of action and a government cause of action.
MR. HALEY explained that in the private cause of action, once
something has been made an Unfair Trade Practices Act violation,
which this draft of HB 176 would do for section 915, any person
who has suffered an ascertainable loss of money or property
could file a lawsuit against anyone who has violated the act.
It may not necessarily be easy to prove the suffering of an
ascertainable loss of money or property for every type of unfair
trade practice. But if a person could prove that a loss has
been suffered, he or she could file a private cause of action
and would be entitled to either treble damages or $500 of
statutory damages, whichever is greater, as well as full
attorney's fees.
MR. HALEY specified that a government cause of action works in
some ways like other government enforcement activity. If a
consumer has had an issue with a business and believes it may be
an unfair trade practice, the consumer can call [the Consumer
Protection Unit at the Department of Law] and submit a consumer
complaint. The office typically gets about 400 actual consumer
complaints a year, although it receives more calls than that.
The office can investigate those complaints, but with a staff of
two attorneys and one investigator the office must pick and
choose what to investigate. After an investigation, the office
can file a lawsuit seeking an injunction and then penalties of
$1,000-$5,000 per violation, plus full attorney's fees.
MR. HALEY offered his understanding that possibly the committee
or some legislators may be considering adding additional
violations beyond 45.45.915, Section 2, making more things into
consumer protection violations, violations of the UTPA. If the
committee is going to do that, he advised, it would be best to
use similar language to that used in section 915 where it is
very clear what obligation a particular person has, what that
person shall do and what that person may not do. That clarity
in language helps a lot to understand who it is that may be
violating the law and what exactly that person would have to do
to violate it.
3:38:22 PM
CO-CHAIR SPOHNHOLZ asked whether the government cause of action
is the structure that the Division of Insurance uses to enforce
compliance.
MS. WING-HEIER answered that the Division of Insurance looks at
both civil and criminal, and when it becomes criminal the
division works with the attorney general. She said the division
has authority under Alaska statutes to remedy civil infractions,
fine penalties, and assess the damages. Then, whoever has
caused the bad deed would pay the money to the division to cover
the general fund and the division enters into stipulated
agreements as such. If it becomes criminal, the division refers
it over for resolution to either the federal government or the
state government depending on what the crime is.
CO-CHAIR SPOHNHOLZ surmised that keeping direct care agreements
under Title 21 would give the public additional possible
protection against potential unfair practices as it is related
to direct care agreements than if direct care agreements were
moved into a different section of law.
MS. WING-HEIER replied that that is the division's belief.
3:39:39 PM
REPRESENTATIVE SNYDER remarked that during the bill's previous
hearing she felt enthusiastic about some of the things it could
achieve. She inquired about the mechanism of this model whereby
it reduces health care cost.
3:40:46 PM
CRYSTAL KOENEMAN, Staff, Representative Sara Rasmussen, Alaska
State Legislature, on behalf of Representative Rasmussen, prime
sponsor of HB 176, replied that one way this has a potential to
lower health care costs is by utilizing better preventative
care. If an individual and family members have access to their
provider, it sets up a way for them to see the doctor when they
may not necessarily go for cost reasons or other reasons. Doing
this and ensuring better preventative care provides the option
of finding any issues within that individual before they
escalate to higher cost of care.
REPRESENTATIVE SNYDER expressed her concern that [a direct
primary care agreement] could be utilized as an "express pass"
whereby a person is able to jump the line. She asked whether
the sponsor has considered this and whether ways can be built to
prevent that from being the primary application of this option.
MS. KOENEMAN deferred to Dr. Gross to provide an answer.
3:43:07 PM
LEE S. GROSS, MD, Epiphany Health Direct Primary Care, answered
questions during the hearing on HB 176. He first related that
since 2002 he has been in private practice as a primary care
physician in southwest Florida. In 2010 he transitioned to one
of the first direct primary care (DPC) practices in the US, so
his is probably one of the longest practicing direct primary
care practices in the nation. Regarding how [his practice]
saves cost, Dr. Gross stated that much of primary care in a
traditional practice is on a fee-for-service (FFS) basis, which
is designed to drive up charges and generate as much billable
revenue from the patient or the patient's insurance company as
possible. It is designed to serve the intermittent sick care.
However, a direct primary care practice is more a whole-body
health care that also focuses on getting out in front of disease
and prevention.
DR. GROSS explained that in traditional practice it may take
three minutes to write a prescription for someone with diabetes.
[In direct primary care] it will take 30 minutes to educate the
patient how not to need a prescription for diabetes, which is
included at no additional cost, so downstream complications,
downstream medications, and unnecessary hospitalizations can be
prevented. A primary care practitioner is spending less time on
the administrative burden of the practice, which gives the
practitioner much more clinical time to focus on and interact
with the patient.
DR. GROSS reviewed a case study that began in 2019 in which
direct primary care was integrated as an option for an employee
health plan for DeSoto Memorial Hospital in rural southwest
Florida. The hospital itself had a self-funded insurance plan
and gave its employees an option to sign up for the direct
primary care. The employees who signed up had it paid for by
the hospital but still could keep their traditional option of
going to their fee-for-service doctor. One year later in 2020,
he reported, the direct primary care practices were compared to
the non-direct primary care practices and the following was
seen: a 48 percent reduction in all money paid for by the
health clinic; a 45 percent reduction in all out-of-pocket costs
by the patient, which included co-pays, co-insurance, and
deductibles; a 52 percent reduction in emergency room visits due
to the means of access; and a 57 percent reduction in specialty
cost spend. Despite the primary care being pre-paid in the
direct primary care model, there was a 25 percent reduction in
primary care spend because the goals of the practice were much
better. Dr. Gross further reported that over the past three
years the case study results show that a direct primary care
practice managed diabetes at 72 cents per member per month
compared to a national average of $4.04, an 82 percent reduction
in health clinic cost. He noted that DeSoto Memorial Hospital
has 49 beds and is in the second poorest county in the state of
Florida. In 2019, the Rural Accountable Care Organization
generated $64 per beneficiary savings and in 2019 the DeSoto
Memorial Hospital plan generated $2,420 per beneficiary savings.
3:47:29 PM
REPRESENTATIVE SNYDER stated that as a public health official
she is a fan of preventative health care and its value. She
observed that the sponsor statement focuses on being able to get
in quicker, perhaps the next day or so. She said this is
wonderful if it doesn't come at the expense of others who may
have fewer resources. She asked what sidebars have been used
elsewhere to prevent that [from happening].
DR. GROSS replied that the direct primary care practice model is
designed for efficiency, so by nature DPC patients will have
faster access than traditional practice. He noted that [his
clinic] has had telemedicine at no additional cost, so during
the pandemic while probably 40 percent of practices were near
insolvency because of the challenges of COVID-19, [his clinic]
converted to parking lot practices on day one and did house
calls, so [his clinic] was a more efficient model. He stated
that people who are participating will get more efficient care.
Perhaps it is true, he continued, that people will come to these
practices specifically to have improved efficiency and improved
access, but better outcomes will be seen which will drive more
direct primary care growth which will ultimately transition into
practice. All the practices will be better because of the drive
of the market forces of direct primary care making the
traditional practices more efficient.
3:49:47 PM
CO-CHAIR FIELDS offered his understanding that there is
generally a flat fee per month or per year for a certain amount
of services. He asked whether there are DPC practices that have
differentiated fees where higher fees get a person in quicker or
whether there is just a level fee for a given amount of service.
DR. GROSS responded he is unaware of practices that charge
additional fees for moving to the front of the line. He said it
is a challenge to discern between a concierge practice and a
direct primary care practice. A concierge practice, he
explained, specifically charges an access fee that gets people
front-of-the-line service, and then also bills a third party for
services provided on a fee-for-service basis. A concierge
practice is a different model than the direct primary care
bundle service model which has no additional fee. If direct
primary care practices tier their membership fees, it is usually
based upon age, not upon insurance status or health conditions.
MS. KOENEMAN added that another facet of direct health care
agreements that may be seen is additional doctors who have
either recently retired or are about to retire starting their
own practice or moving into another avenue to provide this care.
Because there is less overhead, doctors are working for
themselves versus working for, say, a hospital. Instead of
these doctors leaving the field entirely, this would provide an
additional avenue for them to still provide health care to
others. So, it may ultimately keep more providers on the
market, thereby reducing an individual's overall wait times for
traditional methods as well as this model.
3:52:23 PM
CO-CHAIR FIELDS asked whether Ms. Wing-Heier's suggestions for
consumer protections in HB 176 are reflected in what is seen in
other states.
DR. GROSS confirmed that similar consumer protections have been
included in the bills passed by other states, such as
highlighting very clearly what is included in the contract and
what is not included in the contract, specific exclusions, and
whether there are additional charges for services that are
outside the defined scope of services and what those charges are
going to be. Those are included in his contracts, he noted, as
well as in any other contracts he has seen.
3:53:14 PM
CO-CHAIR SPOHNHOLZ recalled Dr. Gross stating that direct care
agreement practices do not tier cost based on priority but based
on age. She asked how this typically works.
DR. GROSS answered that every practice is different but at his
practice the fee for adults up to age 64 is $80 per month, the
first child is $30 per month, and each additional child is $15
per month. At age 65 the price for adults increases to $100 per
month. It is not a tier based upon health status, so a 68-year-
old diabetic with hypertension and heart disease would pay the
same price as a 68-year-old who is on no medications.
CO-CHAIR SPOHNHOLZ asked Ms. Wing-Heier whether Dr. Gross's
description of pricing is consistent with the way that insurance
pricing operates.
MS. WING-HEIER replied that that's exactly how insurance is
priced. She offered to provide the committee with the rates for
the individual market in which it would be seen that the rate
for a 21-year-old might be $250 a month whereas the rate for a
64-year-old might be close to $800 a month.
CO-CHAIR SPOHNHOLZ confirmed that she pays more as a 49-year-old
than she did as a 21-year-old.
3:55:10 PM
REPRESENTATIVE KAUFMAN observed that beginning on page 3, line
24 of the bill, it states, "Before terminating a direct health
care agreement with an existing patient, a health care provider
shall ensure that the patient is transferred to a health care
provider who" provides the services that are subsequently listed
thereafter in the bill. He asked whether this is typical in
other forms of health care because this did not happen when his
own physician retired. He further asked about the background on
why this provision is included and if it is different, why it is
different relative to other forms of health care.
MS. KOENEMAN responded that [the sponsor] wanted this language
in the bill for additional protections for the patient. She
related a personal anecdote in which her general practitioner
referred her to a rheumatologist and a neurologist for medical
care. Specialized medicine, she explained, isn't typically
covered under direct health care agreements, and [the sponsor]
wanted to ensure that the level of care that was provided to the
patient was consistent with what the patient needs to happen.
By putting in this language the provider cannot say, "Sorry,
it's not in our contract, I can't help you," and leave the
patient out in the cold. The sponsor wanted to ensure that
there is a mechanism in place where, if a doctor is not with the
specialty, that doctor does work with that patient to provide
the care that the patient needs.
REPRESENTATIVE KAUFMAN stated that it sounds like a good
motivation, but asked whether this might discourage someone from
engaging in this type of contract if there is a high burden of
getting out of it as the practitioner.
MS. KOENEMAN answered that it is optional whether a practitioner
wants to participate in these health care agreements. She
deferred to Dr. Gross to provide his experience in this regard.
CO-CHAIR FIELDS invited Dr. Gross to provide comment.
DR. GROSS qualified that he is not attempting to criticize this
very good bill but allowed that the provision does stand out to
him because of the concrete nature of the language. He said the
burden of ensuring that the patient is handed off to another
provider before discontinuing the doctor-patient relationship is
probably higher than the requirement that would be placed on any
other practice within the country. For discontinuing care of a
patient there are usually standards within the state for giving
ample notice, such as a 15- or 30-day notice. That notice can
sometimes be shorter if there is an issue or if there is a
threat to staff safety by the patient. Some states have broader
language that still has the patient protections but also has
some safety nets for standard of care within the state or within
the community for discharging patients from care.
CO-CHAIR FIELDS invited Ms. Wing-Heier to provide comment.
MS. WING-HEIR responded that the only thing to which she can
relate this is the recently passed federal law called the No
Surprises Act. The Act, she explained, provides that if there
is a change in insurer by the insurance company, the new
insurance company must allow the same kind of care with the same
provider, which is called continuity of care. For example, she
said, if she goes from Aetna to Premera and her new doctor is
not in-network, the care to her must still be continued. She
said she thinks that that is what this provision is doing it
is saying there will still be the same kind of care, but it will
be a different physician.
REPRESENTATIVE KAUFMAN stated he sees the intent but wonders if
it will put a damper on the marketplace.
4:00:57 PM
REPRESENTATIVE MCCARTY surmised there is no preferential
treatment in scheduling [between those who do and don't have
this type of service]. He asked whether in an agreement a
doctor is agreeing to a certain length of time when a person
comes in. For example, traditional practices bill to a specific
[current procedural terminology (CPT) code] that is based on the
length of time spent with the patient. He further asked whether
there are any boundaries to ensure that the person will be seen
[long enough] for effective care.
DR. GROSS answered that direct primary care practices don't bill
based upon time, but rather upon fixed increments and bundled
services. Therefore, the distinction between a time code of
99211 versus 99215 is a language that is not spoken in a direct
primary care practice. The patient gets as much, or as little,
time as needed to handle the problem and can come in as
frequently as needed to address an issue at no additional cost
or charge. He related that in his practice a new patient visit
is an hour long and each follow up is 30 minutes long. Some
people want 30 minutes, he noted, and some want to be in and out
in five. A person with an arm laceration can come right over
and he will treat the laceration but the billable to the patient
doesn't change based upon the level of care. He allowed it is
possible to have a certain individual patient's needs exceed the
time that the practitioner has for that day. However, he
explained, the flexibility within the practice model allows for
addressing it on subsequent visits at no additional charge or
co-pays, so the patient is more likely to more efficiently and
more cost effectively get an issue resolved.
MS. WING-HEIER pointed out that under these agreements there is
no billing. The patient is paying a fee like a gym membership.
There is no bill unless it goes outside what the contract says,
and then it would bill insurance and that is when the CPT codes
would come in. There shouldn't be a separate charge for more or
less time because it is all covered within the agreement.
4:04:48 PM
REPRESENTATIVE MCCARTY clarified that the intent of his question
was not about the CPT code, but about the expectation of service
that is received. He posed a scenario of buying into an
agreement for $80 per month, and asked whether the doctor could
see him "quick and dirty" rather than spending the expected
amount of time with him.
MS. WING-HEIER offered her understanding that that is covered in
the contract. If the practice says the patient's appointment is
going to be an hour or will give the patient up to an hour
without billing the patient's insurance company, then the
Division of Insurance would expect that the patient would be
given an hour to talk to the doctor, or a half hour, or whatever
the contract stipulates. That is what should be received as the
service for the direct health care agreement.
REPRESENTATIVE MCCARTY surmised the news would get out when a
practitioner is seeing lots of people and getting lots of money
up front but is not a very good provider. He asked whether
there are provisions so that those people could get out of their
contracts sooner because the service was not being rendered.
MS. WING-HEIER replied that that comes back to the consumer
protections built in. If a consumer has a contract that states
two visits a month of at least 30 minutes each, and the consumer
comes to the division saying he or she cannot get appointments
or the provider is only spending 10 minutes per appointment,
then "we've got a consumer complaint."
4:06:35 PM
CO-CHAIR SPOHNHOLZ stipulated that this is why it is important
to have good consumer protection and enforcement mechanisms in
place. It must be ensured that it is known what the whole
regulatory framework for insurance is, that all stakeholders
involved are made whole, and that there is clarity about roles
and responsibilities and the enforcement mechanisms. A new
framework in the state of Alaska is being created. She inquired
about how to ensure that patients know what they need and are
buying a product that meets their needs when entering a
contract. She posed a scenario in which a person develops
diabetes and that the current fee-for-service model allows for
service growth as is needed along the way. She asked how this
would work under a direct care agreement to ensure that a
patient's needs are met in the direct care model.
DR. GROSS responded that the most unique aspect of direct care
is the direct relationship. There is not typically a third
party paying that bill, he said, so the doctor must look the
patient in the eye and directly justify the value of his or her
services. It's the purest and most ethical relationship that if
the patient does not feel like the doctor is giving adequate
time and counsel the patient can cancel. As a business owner
himself, he related, it is far more cost effective to maintain
an existing patient and keep that patient satisfied than to
recruit a new patient from scratch. He has a built-in incentive
to make sure the patient's needs are met because he wants the
patient to renew his or her membership, not cancel it.
MS. WING-HEIER agreed with Dr. Gross that the patient has the
right to cancel, and that is one of the provisions the division
wants to ensure is in the bill and that there is not a huge
termination fee. She posed a scenario in which someone's health
care insurance doesn't start until January and has a large
deductible, so the consumer offsets the cost of that deductible
by purchasing a direct health care plan. If come February the
direct health care plan is not working for the consumer, the
consumer should not have to pay the entire 12-month premium but
rather the one month that the consumer used it, and any
outstanding charges that should have been billed to insurance
should still be billed to insurance. The consumer can then go
to another provider that suits the consumer's needs.
4:10:28 PM
CO-CHAIR FIELDS asked why HB 176 is necessary from a legal or
regulatory perspective and whether providers could provide
direct care under direct care agreements now.
MS. WING-HEIER answered that right now providers cannot provide
this type of agreement. These agreements, she explained, fall
right within the definition of what a health care insurer is or
a health maintenance organization (HMO). An upfront premium is
being taken to direct health care and [the consumer] should get
something in return for that premium, the consumer should know
that the insurance company is going to pay his or her doctor
bills, and in these agreements the consumer should know that the
provider is going to provide the care. They are viewed as an
insurance policy, yet nowhere in Alaska law are they registering
or going through the hoops that are expected of an insurance
company, and [the division] is not asking them to, nor does she
think they should have to, much like the air ambulance
memberships. There is a reason for provisions to protect the
consumer, but they are not going to go through what insurance
companies do.
CO-CHAIR FIELDS, in terms of consumer protections and consumer
expectations, asked whether other states have guidelines on what
type of provider the consumer is seeing, such as an MD,
physician's assistant (PA), or nurse practitioner (NP).
MS. WING-HEIER deferred to Dr. Gross to answer the question.
DR. GROSS replied that that is mostly defined by the state law
that defines the scope of practice for an individual provider's
license. The expectation is that a physician assistant would
practice within the scope of practice that is outlined by Alaska
law for physician assistant, and so on.
4:12:57 PM
REPRESENTATIVE KAUFMAN inquired about the intersection between
this health care service and what is outside of the service
through insurance, as per page 1 of HB 176. He asked whether
there have been any challenges with getting that intersection
defined well and not having complaints around that area.
DR. GROSS responded that there is not a tremendous amount of
direct interaction between the direct primary care practice and
the insurance per se because the practice is not filing claims.
However, the practice still interacts with the insurance company
for services outside of its office, he explained. For example,
if the patient needs to see a cardiologist the practice will
work through the protocols of the insurance company to make sure
that the patient sees an in-network cardiologist. If the
patient needs to have some imaging services that require prior
authorization from the insurance company then the direct primary
care practices usually work through the process of the insurance
company's protocols, even though they are out of network, to get
those services approved. For prescription medications that fall
outside of the formulary requirements, the practices will go
through the process of getting those services approved.
DR. GROSS added that the biggest issue he has seen between the
direct care practice and an insurance is when an HMO insurance
requires that referrals from the primary come from an in-network
primary care provider, in which case the patient will have to
establish with an in-network primary to secure those referrals.
He said Maine tackled that issue by passing legislation that
says if an out-of-network primary is willing to follow the
protocols and practices of the insurance company through the
referral process and in referring [a patient] to an in-network
provider then the insurance company would honor that referral.
In his experience, most insurance companies find it quite nice
that they are not filing claims and processing claims for every
single interaction with the health care system.
REPRESENTATIVE KAUFMAN offered his understanding, then, that it
is not so much in-house but more of interfacing with the
specialties externally.
DR. GROSS answered that that has been his experience and he has
not heard any other stories to the contrary.
4:16:45 PM
REPRESENTATIVE MCCARTY posed a scenario in which a direct
primary care provider's schedule includes some patients that are
direct care agreements and some that are coming in under their
insurance and both are getting the same type of service.
DR. GROSS clarified that direct primary care practices do not
have distinguished classes of patients where direct care and
insurance patients are seen; they are typically one or the
other. For example, he said, his practice does not have any
commercial insurance contracts whatsoever. Patients wanting to
come to his practice enter into a direct care agreement with his
practice and his practice does not have a direct contract with
an insurance provider for any patients.
[HB 176 was held over.]
SB 143-COMMON INTEREST COMMUNITIES; LIENS
4:18:18 PM
CO-CHAIR FIELDS announced that the final order of business would
be SENATE BILL NO. 143, "An Act relating to horizontal property
regimes and common interest communities; and relating to
mortgages, deeds of trust, and other property liens."
4:19:06 PM
CO-CHAIR FIELDS opened public testimony on SB 143, then closed
it after ascertaining that no one wished to testify.
4:19:27 PM
CO-CHAIR SPOHNHOLZ moved to report SB 143 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, SB 143 was reported out of the House
Labor and Commerce Standing Committee.
4:19:57 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:20 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 176 v. A.PDF |
HL&C 3/23/2022 3:15:00 PM |
HB 176 |
| HB 176 Sponsor Statement.pdf |
HL&C 3/23/2022 3:15:00 PM |
HB 176 |
| HB 176 Sectional Analysis.pdf |
HL&C 3/23/2022 3:15:00 PM |
HB 176 |
| HB 176 Supporting Document - Direct Primary Care.pdf |
HL&C 3/23/2022 3:15:00 PM |
HB 176 |
| HB 176 Presentation - Direct Primary Care Coaltion 5.6.21.pdf |
HL&C 3/23/2022 3:15:00 PM |
HB 176 |
| HB 176 Letter of Support - AK Policy Forum, 5.7.21.pdf |
HL&C 3/23/2022 3:15:00 PM |
HB 176 |
| HB 176 Letters of Support Received as of 5.3.21.pdf |
HL&C 3/23/2022 3:15:00 PM |
HB 176 |