Legislature(2013 - 2014)BARNES 124

02/03/2014 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 234 EXTEND REGULATORY COMMISSION OF ALASKA TELECONFERENCED
Moved Out of Committee
*+ HB 242 EXTEND PT & OCCUPATIONAL THERAPY BOARD TELECONFERENCED
Moved Out of Committee
*+ HB 141 WORKERS' COMPENSATION MEDICAL FEES TELECONFERENCED
Moved Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                        February 3, 2014                                                                                        
                           3:20 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Lora Reinbold, Vice Chair                                                                                        
Representative Mike Chenault                                                                                                    
Representative Bob Herron                                                                                                       
Representative Charisse Millett                                                                                                 
Representative Dan Saddler                                                                                                      
Representative Andy Josephson                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative Doug Isaacson                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 234                                                                                                              
"An  Act  extending   the  termination  date  of   the  Regulatory                                                              
Commission of Alaska; and providing for an effective date."                                                                     
                                                                                                                                
     - MOVED HB 234 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 242                                                                                                              
"An  Act extending  the  termination date  of  the State  Physical                                                              
Therapy  and Occupational  Therapy  Board;  and providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
     - MOVED HB 242 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 141                                                                                                              
                                                                                                                                
"An  Act  setting  the  fee  for  medical  treatment  or  services                                                              
performed   outside   the   state  under   the   Alaska   Workers'                                                              
Compensation  Act, requiring  a provider  of medical treatment  or                                                              
services  under the  Alaska Workers'  Compensation  Act to  submit                                                              
bills  for treatment  or  services to  employers  within 180  days                                                              
after  the  date  the treatment  or  services  are  rendered,  and                                                              
limiting the time for appealing an employer's denial or                                                                         
reduction of a bill; and providing for an effective date."                                                                      
                                                                                                                                
     - MOVED HB 141 OUT OF COMMITTEE                                                                                            
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 234                                                                                                                  
SHORT TITLE: EXTEND REGULATORY COMMISSION OF ALASKA                                                                             
SPONSOR(s): REPRESENTATIVE(s) HAWKER, ISAACSON, SADDLER                                                                         
                                                                                                                                
01/21/14       (H)       PREFILE RELEASED 1/10/14                                                                               
01/21/14       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/14       (H)       L&C, FIN                                                                                               
01/31/14       (H)       L&C AT 3:15 PM BARNES 124                                                                              
01/31/14       (H)       -- MEETING CANCELED --                                                                                 
02/03/14       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 242                                                                                                                  
SHORT TITLE: EXTEND PT & OCCUPATIONAL THERAPY BOARD                                                                             
SPONSOR(s): REPRESENTATIVE(s) REINBOLD                                                                                          
                                                                                                                                
01/21/14       (H)       PREFILE RELEASED 1/10/14                                                                               
01/21/14       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/14       (H)       L&C, FIN                                                                                               
01/31/14       (H)       L&C AT 3:15 PM BARNES 124                                                                              
01/31/14       (H)       -- MEETING CANCELED --                                                                                 
02/03/14       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 141                                                                                                                  
SHORT TITLE: WORKERS' COMPENSATION MEDICAL FEES                                                                                 
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/25/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/25/13       (H)       L&C                                                                                                    
01/31/14       (H)       L&C AT 3:15 PM BARNES 124                                                                              
01/31/14       (H)       -- MEETING CANCELED --                                                                                 
02/03/14       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE MIKE HAWKER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 234 as joint prime sponsor.                                                                 
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION    STATEMENT:      Presented    auditor   findings    and                                                            
recommendations and answered questions during the discussion of                                                                 
HB 234.                                                                                                                         
                                                                                                                                
T. W. PATCH, Commissioner, Chair                                                                                                
Regulatory Commission of Alaska (RCA)                                                                                           
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 234.                                                               
                                                                                                                                
TED MONINSKI, Attorney                                                                                                          
Alaska Communications Systems (ACS)                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 234.                                                               
                                                                                                                                
MARK MODEROW, Senior Counsel                                                                                                    
Legal & Regulatory Department                                                                                                   
GCI                                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 234.                                                                          
                                                                                                                                
CRYSTAL KOENEMAN, Staff                                                                                                         
Representative Lora Reinbold                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 242 on behalf of the prime                                                                  
sponsor.                                                                                                                        
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION    STATEMENT:      Presented    auditor   findings    and                                                            
recommendations and answered questions during the discussion of                                                                 
HB 242.                                                                                                                         
                                                                                                                                
LEANNE CARROTHERS, President                                                                                                    
Alaska Physical Therapy Association                                                                                             
Las Vegas, Nevada                                                                                                               
POSITION STATEMENT:  Testified in support of HB 242.                                                                          
                                                                                                                                
KATHLEEN LIND, Chair                                                                                                            
State Physical Therapy and Occupational Therapy Board                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 242.                                                               
                                                                                                                                
ANNA LATHAM, Staff                                                                                                              
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Presented HB  141 on behalf of  the sponsor,                                                            
the House Labor  & Commerce Committee, Representative  Kurt Olson,                                                              
Chair.                                                                                                                          
                                                                                                                                
MICHAEL MONAGLE, Director                                                                                                       
Central Office                                                                                                                  
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 141.                                                               
                                                                                                                                
JULIE CISCO, Risk Manager                                                                                                       
Kenai Peninsula Borough School District (KPBSD)                                                                                 
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Testified during the discussion of HB 141.                                                               
                                                                                                                                
SALLY STUVEK, Human Resources Director                                                                                          
Fairbanks North Star Borough (FNSB)                                                                                             
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 141.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:20:03 PM                                                                                                                    
                                                                                                                                
CHAIR  KURT OLSON  called the  House Labor  and Commerce  Standing                                                            
Committee  meeting   to  order  at  3:20  p.m.     Representatives                                                              
Saddler,  Josephson, Millett,  Herron,  Reinbold,  and Olson  were                                                              
present at  the call to order.   Representatives  Chenault arrived                                                              
as  the meeting  was  in progress.   Representative  Isaacson  was                                                              
also in attendance.                                                                                                             
                                                                                                                                
         HB 234-EXTEND REGULATORY COMMISSION OF ALASKA                                                                      
                                                                                                                                
3:20:25 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  first order of business  would be                                                              
HOUSE  BILL NO. 234,  "An Act  extending the  termination  date of                                                              
the  Regulatory  Commission  of   Alaska;  and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
3:20:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MIKE HAWKER,  Alaska State  Legislature, as  joint                                                              
prime sponsor,  stated that HB  234 proposes a reauthorization  of                                                              
the  Regulatory  Commission  of  Alaska  (RCA)  for  eight  years,                                                              
consistent  with  the  recommendations  made  by  the  legislative                                                              
auditor.   The  legislative auditor  determined that  the RCA  has                                                              
met all  the requirements  for the  extension.   The scope  of the                                                              
sunset  audit is  to determine  demonstrated public  need for  the                                                              
RCA to continue  and if it has been operating in  an efficient and                                                              
effective  manner.    Obviously   it  has  since  the  legislative                                                              
auditor  has  recommended  extending   the  RCA  for  the  maximum                                                              
extension  time.   Others  have characterized  the  bill as  being                                                              
complex,  but  it  really  is  a  straightforward  reauthorization                                                              
bill.   Differences exist  between disagreeing  with the  outcomes                                                              
of  a regulatory  process,  including  a  specific ruling,  and  a                                                              
dysfunctional  agency that  is not  operating  well in  accordance                                                              
with  statutes.   He  acknowledged  that stakeholders  often  have                                                              
disagreements   with   the   RCA's  outcomes,   although   it   is                                                              
universally  recognized   that  the  RCA  is  operating   well  in                                                              
accordance with statutes.                                                                                                       
                                                                                                                                
REPRESENTATIVE  HAWKER summarized that  this bill recognizes  that                                                              
the RCA is functioning  well and extends the  commission for eight                                                              
years.   He specifically referred  to the appendixes on  pages 23-                                                              
30  of the  legislative audit  [Audit  Control Number  08-20079-13                                                              
dated  July 19, 2013]  in members'  packets to  the tariff  survey                                                              
results.   This survey provides  ratings by the users  affected by                                                              
the filings  and dockets and  user responses are  very supportive.                                                              
More specifically,  he turned to  pages [18-19] and  reported that                                                              
70 percent  answered that the RCA  is operating between  "good" or                                                              
"very good" with  only 8 percent answering "poor"  or "very poor."                                                              
Again,  he said  that the RCA  has come  a long  way in  maturity,                                                              
personnel,  and staffing,  and  its ability  to  meet the  state's                                                              
needs.   He referred  to page  31 of  the audit  to the  financial                                                              
analysis  emphasizing  that it  is  critical that  the  commission                                                              
operates  in  a   solvent  manner.    This  analysis   shows  that                                                              
regulatory  cost charges are  sufficient at  this time  to support                                                              
the RCA's operations, he said.                                                                                                  
                                                                                                                                
3:23:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HAWKER   pointed   out  the   legislative   audit                                                              
identified  two issues.   He  brought up  audit recommendation  1,                                                              
which  read:   RCA's  chair  should  improve and  enforce  written                                                            
procedures  to ensure  case management  system  data is  accurate,                                                            
consistent,  and complete.   He  responded that  this has  been an                                                            
ongoing recommendation.   In fact, this recommendation  identifies                                                              
a  continuing  process  for  every  agency  in  the  state.    The                                                              
aforementioned  audit point  is about the  paperwork process,  not                                                              
about the  functioning of  the organization,  how its  rulings are                                                              
achieved, or a  dysfunction in the organization.   He acknowledged                                                              
that we  can all improve, but  this recommendation does  not speak                                                              
to a critical point on the commission's ability to function.                                                                    
                                                                                                                                
3:24:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    HAWKER    brought    up   the    second    audit                                                              
recommendation,  which  read:  The   legislature  should  consider                                                            
clarifying  AS 42.05.175(e)  to  ensure RCA  fulfills  legislative                                                            
intent  when  processing  regulatory  dockets.    He  offered  his                                                            
belief that  this recommendation  represents an honest  difference                                                              
of   opinion   between  the   RCA   and   its  auditors   on   the                                                              
interpretation  of   the  RCA's  process.    He   highlighted  the                                                              
legislature's  prior  issues with  the  RCA  were related  to  the                                                              
length of  time it took  to resolve issues  and dockets  that come                                                              
before  the RCA.    He recalled  in  past years  hearing  constant                                                              
concerns on  the length of time  to process a docket;  however, he                                                              
has not  heard any  concerns expressed  from stakeholders  in many                                                              
years.  He suggested  the commission and auditors  should sort out                                                              
these details;  however he argued  that the aforementioned  issues                                                              
should  be considered  separate  from the  reauthorization of  the                                                              
commission.    This  audit  recommendation  raises  the  issue  of                                                              
whether  the  legislature   would  like  to  add   more  statutory                                                              
guidance on how  the commission operates.  He  concluded by urging                                                              
members  to pass  out a  "clean  reauthorization" of  the RCA  and                                                              
advised  that  any  policy  issues  be  addressed  in  a  separate                                                              
vehicle.                                                                                                                        
                                                                                                                                
3:26:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT  referred to the second  recommendation and                                                              
said  the legislature  has often  debated  the length  of time  it                                                              
takes the  RCA to  complete a  docket.   While she understood  the                                                              
importance of timely  decisions, it's also important  to allow the                                                              
RCA sufficient  time on dockets.   She characterized the  issue as                                                              
one of the toughest  decisions for the commission  to make, noting                                                              
the  difficulty the  RCA must  face to  determine the  appropriate                                                              
time  to  spend.    She  said  she  somewhat  disagrees  with  the                                                              
auditors on this  recommendation since opinions vary  with respect                                                              
to  the time  the RCA  should take  but, in  fact, it's  important                                                              
that the  RCA have  sufficient time  to thoroughly review  dockets                                                              
and arrive  at the right decisions.   She concluded  by supporting                                                              
Representative   Hawker's   assessment   of   the   second   audit                                                              
recommendation.                                                                                                                 
                                                                                                                                
3:28:34 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS,  Legislative Auditor,  Legislative  Audit  Division,                                                              
Legislative  Agencies  and  Offices, reported  that  the  division                                                              
conducted a  sunset audit  of the RCA,  [Audit Control  Number 08-                                                              
20079-13] dated  July 19, 2013.   The purpose of the audit  was to                                                              
determine  whether the commission  was operating  in the  public's                                                              
interest and  if the  RCA's termination  date should be  extended.                                                              
Overall,  the audit  concluded that  the RCA  is operating  in the                                                              
public's  interest  and  the division  determined  the  commission                                                              
fulfills a public  need and is serving Alaskans.   The legislative                                                              
audit  recommended  extending  the   RCA's  termination  date  the                                                              
maximum eight years  until June 30, 2022.  The  audit does include                                                              
two recommendations,  but neither impacted the  recommendation for                                                              
extension.                                                                                                                      
                                                                                                                                
MS. CURTIS  reviewed the  two recommendations.   First,  the audit                                                              
found  the  commission  only  partially  resolved  a  prior  audit                                                              
recommendation the  RCA improve  its case management  system data.                                                              
Essentially,  auditors  reviewed the  data  and found  high  error                                                              
rates, that the audit recommended improvements.                                                                                 
                                                                                                                                
MS.  CURTIS informed  members that  the  sunset audit  made a  new                                                              
recommendation  to  clarify  statutory   timelines  on  rulemaking                                                              
proceedings.  Currently,  the statutes require the RCA  to issue a                                                              
final order  on a rulemaking docket  no later than 730  days after                                                              
complete petition  for a regulatory  change is filed or  after the                                                              
commission issues  an initiating order for such  proceedings.  The                                                              
statutes contain  a provision  for one  90-day extension  for good                                                              
cause; however, the  statutes prohibit the RCA  from terminating a                                                              
proceeding and a  docket and subsequently opening  a proceeding in                                                              
another  docket on  essentially the  same matter.   Auditors  used                                                              
statutory  criteria  to  provide   guidance  when  conducting  the                                                              
audit.   The  legislative auditors  found  that at  times the  RCA                                                              
will split  rulemaking proceedings into  two dockets.   First, the                                                              
RCA  will  open   a  docket  and  consider  whether   a  need  for                                                              
regulation  exists  in an  area  of interest  and  then close  the                                                              
docket after  receiving testimony and  comments.  In  instances in                                                              
which  the RCA  determines regulations  are needed,  the RCA  will                                                              
open  a second  docket  to  consider  adopting regulations.    The                                                              
auditors  found this practice  allows the  RCA to  take up  to 4.5                                                              
years  to   complete  its   proceedings.     However,  the   RCA's                                                              
management  has  argued  that  including   intent  language  in  a                                                              
regulatory   docket's   initiating   order   makes   the   process                                                              
transparent   and   complies   with  statutes.      Granted,   the                                                              
legislative  audit   confirmed  that   the  RCA  included   intent                                                              
language  as part  of its  dockets,  which provides  transparency;                                                              
however,  the  sunset  audit raises  this  issue  for  legislative                                                              
consideration  because   it  appears  this  practice   evades  the                                                              
statutory  timelines; however,  it does  not appear  to serve  the                                                              
regulated  community or the  public's interest.   She  paraphrased                                                              
the audit's  second recommendation,  which read:   The legislature                                                            
should  consider   clarifying  AS   42.05.175(e)  to   ensure  RCA                                                            
fulfills legislative intent when processing regulatory dockets.                                                               
                                                                                                                                
3:31:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  asked whether the legislature  has tried to                                                              
clarify this provision.                                                                                                         
                                                                                                                                
MS. CURTIS answered that she did not know.                                                                                      
                                                                                                                                
3:32:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  acknowledged that exceeding  the 720 days                                                              
by  taking  up  to  4.5 years  on  dockets  could  potentially  be                                                              
excessive.   She asked whether this  needs to be addressed  by the                                                              
legislature immediately or if the review could wait.                                                                            
                                                                                                                                
MS. CURTIS responded  that the timing is up to  the legislature to                                                              
decide.   She clarified  that the  legislative auditor  raised the                                                              
issue since during  the audit the auditors test  the RCA's dockets                                                              
for compliance  with statutes.   In this regard, the  statutes are                                                              
open  to  interpretation,  which  highlights an  area  to  further                                                              
consider, she said.                                                                                                             
                                                                                                                                
3:33:02 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON  remarked  that  the   RCA's  timeline  was  adjusted                                                              
several  years  ago.    He  recognized   that  representatives  of                                                              
several  regulated utilities  are present  today, as  well as  the                                                              
RCA's  chair.   He deferred  to  the RCA's  users and  the RCA  to                                                              
testify  on  whether   the  process  is  working.     He  recalled                                                              
complaints  that  were  registered  a  number  of  years  ago,  in                                                              
particular,  one   docket  continued  for  a   considerable  time,                                                              
somewhere  between six  and eight  years.  He  further recalled  a                                                              
new  timeline   was  started  when   each  action  taken   on  the                                                              
aforementioned dockets;  however, he  has not received  any recent                                                              
complaints.    He  asked  whether  the  audit  would  capture  any                                                              
complaints.                                                                                                                     
                                                                                                                                
MS. CURTIS answered  that a survey is conducted  with stakeholders                                                              
as part  of the sunset audit  and the results  were overwhelmingly                                                              
positive,  which was  reflected in  the eight-year  recommendation                                                              
for the RCA's extension.                                                                                                        
                                                                                                                                
3:34:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  the legislative  auditor                                                              
has any  sense on whether rulings  are typically issued  within 18                                                              
months,  which  then lead  to  a  second phase  that  subsequently                                                              
results from facts.                                                                                                             
                                                                                                                                
MS.  CURTIS  reiterated  that  the  RCA  will  open  a  docket  to                                                              
consider  whether  there  is  a   need  for  regulation  and  once                                                              
testimony  is taken  and  reviewed,  that docket  is  closed.   At                                                              
times, if  regulations are needed  the RCA will open  a subsequent                                                              
docket, she said.                                                                                                               
                                                                                                                                
3:34:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  remarked  that  it appears  as  if  the                                                              
parties  had a  resolution  on the  dispute  and  the question  is                                                              
whether  some  regulation  should  be  adopted  to  apply  to  all                                                              
parties, which is the reason for the second docket.                                                                             
                                                                                                                                
MS. CURTIS  elaborated  that the  RCA has four  types of  dockets,                                                              
including complaints  and regulatory dockets.  She  clarified that                                                              
the second  audit recommendation  is solely related  to regulatory                                                              
dockets.                                                                                                                        
                                                                                                                                
3:35:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT  questioned the  need for the  second audit                                                              
recommendation since  there haven't been any recent  complaints on                                                              
lengthy decisions.                                                                                                              
                                                                                                                                
MS.  CURTIS explained  that the  audit  recommended extending  the                                                              
RCA  for  eight  years, which  definitely  reflects  the  positive                                                              
responses.   She  explained the  process, such  that auditors  are                                                              
required  to  determine  whether  the commission  is  serving  the                                                              
public's interest.   The sunset  audits typically  accomplish this                                                              
in  different ways,  and  testing  compliance with  the  statutory                                                              
timeline  is  one.    She  pointed   out  that  timelines  are  an                                                              
important  part of  the RCA's  statutes.   More specifically,  the                                                              
aforementioned  audit  recommendation  is  not  addressed  to  the                                                              
commission but  to the legislature.   It highlighted the  issue so                                                              
the body can decide  if it wants to clarify the  timeline based on                                                              
legislative intent.   If the legislative  intent was for  a docket                                                              
to be  completed within  730 days with  one 90-day extension  from                                                              
beginning  to end,  well,  that  is not  happening.   However,  if                                                              
policymakers are  satisfied with  the RCA's interpretation  of the                                                              
statutes then no action will need to be taken.                                                                                  
                                                                                                                                
REPRESENTATIVE MILLETT  reiterated her point that  there isn't any                                                              
complaint  and the  process  seems  to be  working  so the  matter                                                              
doesn't seem to need to be addressed.                                                                                           
                                                                                                                                
MS.  CURTIS emphasized  that the  legislative  audits will  always                                                              
highlight instances  in which legislative  intent does  not appear                                                              
to be met.                                                                                                                      
                                                                                                                                
3:37:57 PM                                                                                                                    
                                                                                                                                
T.  W.  PATCH,  Commissioner,  Chair,   Regulatory  Commission  of                                                              
Alaska  (RCA),  Department  of   Commerce,  Community  &  Economic                                                              
Development  (DCCED), commended  Ms.  Curtis on  the audit  team's                                                              
rigor and  fairness.  The  first finding  is simple and  the RCA's                                                              
response is  included in members' packets.   He said, "We  can all                                                              
do better."   In  fact, the  RCA has been  editing, revising,  and                                                              
cross   training   its   staff   on   policies   and   procedures.                                                              
Additionally, the RCA  has been working on a new  manual that will                                                              
allow  the RCA  to  accept  tariff filings  electronically,  which                                                              
should  be completed  later  this year  or  early next  year.   He                                                              
acknowledged  that the change  will save  the regulated  utilities                                                              
time and money,  as well as aid  the RCA in the processing  of its                                                              
documents.  He  stated the electronic filing change  has been more                                                              
troublesome  than  he thought  it  would  be;  however, it  is  in                                                              
process.                                                                                                                        
                                                                                                                                
3:40:30 PM                                                                                                                    
                                                                                                                                
MR. PATCH  agreed that  the second recommendation  is made  to the                                                              
legislature;  still,  the RCA  takes  note of  it.   The  enabling                                                              
statutory provision  dealing with timelines for the  processing of                                                              
dockets and AS  42.05.175(l) reads, "The commission  may not evade                                                              
the requirement of  this section by terminating a  proceeding in a                                                              
docket   and  opening   a   proceeding   in  another   docket   on                                                              
substantially   the  same   matter."    He   contended  that   the                                                              
consideration  of a  docket  as  to whether  the  need exists  for                                                              
additional  regulation is  one matter;  whereas the  consideration                                                              
of the  specific regulations  to achieve  an objective  is another                                                              
matter.    He  offered  his  belief that  the  RCA  has  not  done                                                              
anything  to evade  the legislative  intent.   He highlighted  the                                                              
specific  case that  led to  this  recommendation.   He related  a                                                              
scenario  in which  Representative  Gruenberg  once remarked  that                                                              
the discovery  process  made it  easier for everyone.   He  agreed                                                              
with Representative  Gruenberg  so the RCA  subsequently  opened a                                                              
docket to  consider whether  the commission  should adopt  written                                                              
regulations  to  set  forth  the  RCA's  discovery  process.    He                                                              
recalled that  the regulatory  institution prior  to the  RCA, the                                                              
Alaska  Public Utilities  Commission  (APUC),  also had  discovery                                                              
rules, but  its rules  were not  written in  regulation.   The RCA                                                              
responded  to a  subsequent legislative  audit recommendation  and                                                              
opened  a  docket  to  consider   whether  the  RCA  should  adopt                                                              
regulations  and  if the  commission  should codify  its  existing                                                              
practices in  regulation or if  it should identify  the regulatory                                                              
language.   The  RCA  obtained public  comment  and the  regulated                                                              
utilities,  and  for purposes  of  clarity, terminated  the  first                                                              
docket  timely,  and  opened  a   new  docket  to  adopt  specific                                                              
regulations.                                                                                                                    
                                                                                                                                
3:44:11 PM                                                                                                                    
                                                                                                                                
MR.  PATCH  concluded that  the  RCA  and  the Department  of  Law                                                              
agreed that  the RCA did not  evade the legislature's intent.   He                                                              
further reported  that the RCA ultimately adopted  its regulations                                                              
well within  the timeline  for the second  docket.   Certainly the                                                              
process the  RCA uses  for its timeline  could exceed  the limits,                                                              
but   the   RCA   strives  for   appropriate   timeliness.      He                                                              
characterized  this issue  as  something the  legislature  doesn't                                                              
need to worry  about.  Additionally,  the RCA has adopted  its own                                                              
regulation  that  allows  the  RCA  to  gather  information.    He                                                              
assured members  that the RCA's  record speaks for itself  and the                                                              
public is served.                                                                                                               
                                                                                                                                
3:46:49 PM                                                                                                                    
                                                                                                                                
MR.  PATCH detailed  that  reports  to the  legislature  highlight                                                              
that the timeline  was cut to less than 300 days  without the need                                                              
for  additional funding,  staff,  or authority.    He offered  his                                                              
belief that  there has not  been any adverse  impact to  present a                                                              
rate  case, nor  has there  been  any deterioration  of the  RCA's                                                              
protection  obligation for  consumer impact.   Therefore,  for the                                                              
most  part,  the  RCA  has  reduced  any  regulatory  risk.    The                                                              
consequences have  resulted in improved credit ratings  for larger                                                              
public  utilities,  which  in turn  have  improved  the  borrowing                                                              
power  for every business  in Alaska.   He  encouraged members  to                                                              
review  the report.   He  concluded  that he  hoped members  would                                                              
recognize  the RCA's  progress  and  vote to  extend  the RCA  for                                                              
eight years.                                                                                                                    
                                                                                                                                
3:49:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON asked  whether  Mr. Patch  would object  to                                                              
clarification of "Recommendation No. 2."                                                                                        
                                                                                                                                
MR. PATCH answered that he does object.                                                                                         
                                                                                                                                
3:50:49 PM                                                                                                                    
                                                                                                                                
TED  MONINSKI,  Attorney,  Alaska  Communications  Systems  (ACS),                                                              
provided his background,  noting he spent 10 years  serving on the                                                              
Alaska Public  Utilities Commission  - five as executive  director                                                              
-    with   an    additional   22    years   spent    representing                                                              
telecommunication  companies  including   Alascom,  the  Anchorage                                                              
Telephone Utility,  and ACS before  state and federal  regulators.                                                              
He offered  Alaska Communications  qualified  support for  HB 234.                                                              
He  offered  two  specific  recommendations.    First,  given  the                                                              
importance  of  the  RCA's  work   and  the  dynamics  of  utility                                                              
regulation,  it  is imperative  that  the legislature  review  the                                                              
performance of the commission at least every four years.                                                                        
                                                                                                                                
MR. MONINSKI  stated the  second recommendation  is driven  by the                                                              
highly  competitive   nature  of  telecommunications   markets  in                                                              
Alaska.   He urged the legislature  to take a meaningful  step and                                                              
relieve a  significant paperwork burden  on the RCA  and regulated                                                              
utilities  by  removing  mandatory  written  tariffs  and  special                                                              
contracts.    He  said  that  utilities   require  some  level  of                                                              
government  oversight,   in  particular,  since   monopolies  have                                                              
dissolved,  the need for  regulation has  lessened and  eventually                                                              
will  be  eliminated.    He  provided  background  information  on                                                              
telephone  markets,  such  that even  the  Federal  Communications                                                              
Commission  (FCC)   recognizes  that   Alaska  has   robust  local                                                              
competition.  In  response to the changing circumstances,  the RCA                                                              
has  made  limited procedural  modifications  to  its  regulations                                                              
governing  tariff  filings, which  became  effective  in 2005,  he                                                              
said.                                                                                                                           
                                                                                                                                
3:53:46 PM                                                                                                                    
                                                                                                                                
MR. MONINSKI explained  that by allowing tariffs  and contracts to                                                              
go  into  effect  more  quickly,  the  regulations  continued  the                                                              
requirement,  that  virtually  every   aspect  of  local  exchange                                                              
operations  and  pricing be  supported  by a  currently  effective                                                              
tariff.    In  addition to  preparing  and  filing  these  special                                                              
contracts,  the   RCA  and   regulated  companies  must   maintain                                                              
virtually  "thousands of  pages  of tariff  documents" and  update                                                              
them  each time  a change  is made.    However, in  the ten  years                                                              
since regulations  were modified  there hasn't  been any  consumer                                                              
complaint  on  tariff   filings  and  only  limited   request  for                                                              
clarification  from  the  RCA's  staff.   He  asked,  "What's  the                                                              
problem?"   He  answered the  aforementioned  question by  stating                                                              
that  in  highly competitive  markets  with  satisfied  consumers,                                                              
companies  must  document every  aspect  of their  businesses  and                                                              
spend countless  hours of unnecessary preparation  time.  Further,                                                              
the  RCA must  use  its scarce  resources  and  also maintain  its                                                              
tariff  documents.   He urged  the legislature  to alleviate  this                                                              
issue  and modify  the  RCA's enabling  statute  to remove  tariff                                                              
requirements  in instances  in  which market  forces  are at  work                                                              
through competition.   He  concluded that  with these  qualifiers,                                                              
the  Alaska Communications  supports  the  reauthorization of  the                                                              
RCA.                                                                                                                            
                                                                                                                                
3:56:14 PM                                                                                                                    
                                                                                                                                
MARK  MODEROW,  Senior  Counsel, Legal  &  Regulatory  Department,                                                              
GCI,  indicated  that  the  RCA   has  built  a  solid  record  of                                                              
performance and  responsiveness under  the timelines adopted.   He                                                              
testified  in support  of HB  234  as written.   He  said the  new                                                              
issue raised by  ACS of an apparent de-tariffing  seems premature.                                                              
He  highlighted  that  ACS  hasn't   brought  this  issue  to  any                                                              
industry  discussion  nor has  it  availed  itself of  any  agency                                                              
process.  Based  on his 23 years of working within  this industry,                                                              
the  level  of  competition  varies   greatly  by  geographic  and                                                              
project market,  even within  Alaska.  He  asserted that  in terms                                                              
of  telecommunications, Alaska  does  not have  a uniform  playing                                                              
field.   He further said that  determinations and  assessments are                                                              
based  on  facts,  appropriately  made  by the  RCA,  which  is  a                                                              
process that is functioning quite well.                                                                                         
                                                                                                                                
MR. MODEROW  noted  that de-tariffing  at the  state level  is not                                                              
entirely covered  by the state  jurisdiction and depending  on the                                                              
issue may  still be  directed by  the federal jurisdiction,  which                                                              
would take  the RCA  out of  this equation.   In those  instances,                                                              
the  companies would  lose  local  control and  be  guided by  the                                                              
federal  jurisdiction.   He concluded  that  the RCA  has built  a                                                              
solid  record  and  performance;   thus,  GCI  supports  "a  clean                                                              
extension" bill.                                                                                                                
                                                                                                                                
CHAIR  OLSON  reiterated  that the  committee  has  established  a                                                              
record  by keeping  sunset  bills  clean.   He  said  he plans  to                                                              
continue do  so.  Other  issues are best  placed on  "stand alone"                                                              
bills.                                                                                                                          
                                                                                                                                
4:00:12 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after  first  determining  no one  else  wished  to                                                              
testify, closed public testimony on HB 235.                                                                                     
                                                                                                                                
REPRESENTATIVE   REINBOLD   indicated   the  ACS   testified   and                                                              
requested  reducing  unnecessary  paperwork.   She  asked  whether                                                              
there is any way to streamline this process.                                                                                    
                                                                                                                                
MR. PATCH  answered that he did  not come prepared to  discuss the                                                              
ACS  tariff today.    He offered  that  Mr. Moninski  could  bring                                                              
petition to  the RCA  to deregulate any  specific market  that was                                                              
adequately competitive,  on the basis  of fact determination.   He                                                              
recalled an  instance of the  RCA deregulating competitive  refuse                                                              
collection  utility   services,  which   has  worked  well.     He                                                              
anticipated  the same for  deregulated telecommunication  markets.                                                              
He   further    anticipated   that    handling   tariff    filings                                                              
electronically  will  also  help,  but  that effort  is  still  in                                                              
testing.  He  hoped to move towards electronic  filings, which may                                                              
not eliminate the concern, but will be a positive step.                                                                         
                                                                                                                                
4:04:09 PM                                                                                                                    
                                                                                                                                
MR. PATCH  offered to further  consider how to reduce  unnecessary                                                              
paperwork.                                                                                                                      
                                                                                                                                
REPRESENTATIVE REINBOLD  remarked that  anything that can  be done                                                              
to  modernize  the process  and  not  burden businesses  would  be                                                              
appreciated.                                                                                                                    
                                                                                                                                
MR. PATCH  responded that one benefit  of written tariff  books is                                                              
that  it is  informs  the  RCA and  the  public.   It  provides  a                                                              
promise to  ratepayers and  customers how  business will  operate.                                                              
He  assured  members   that  having  rules  in   writing  provides                                                              
business clarity  and customer  protection; however,  that doesn't                                                              
mean additional improvements can't be made.                                                                                     
                                                                                                                                
4:05:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD remarked  that she  enjoyed visiting  the                                                              
RCA and thanked Mr. Patch.                                                                                                      
                                                                                                                                
MR. PATCH  responded  that he could  not do  anything without  his                                                              
tremendously dedicated staff.                                                                                                   
                                                                                                                                
4:06:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  moved to report  HB 234 out  of committee                                                              
with  individual  recommendations   and  the  accompanying  fiscal                                                              
notes.   There being no  objection, HB  234 was reported  from the                                                              
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
The committee took an at-ease from 4:06 p.m. to 4:10 p.m.                                                                       
                                                                                                                                
         HB 242-EXTEND PT & OCCUPATIONAL THERAPY BOARD                                                                      
                                                                                                                                
4:10:20 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that  the next order  of business  would be                                                              
HOUSE BILL  NO. 243, "An Act  disapproving all recommendations  of                                                              
the  State  Officers  Compensation   Commission  relating  to  the                                                              
salaries  of  state  officers;  and  providing  for  an  effective                                                              
date."                                                                                                                          
                                                                                                                                
4:10:37 PM                                                                                                                    
                                                                                                                                
CRYSTAL  KOENEMAN,  Staff, Representative  Lora  Reinbold,  Alaska                                                              
State  Legislature, stated  that  HB 242  would  extend the  state                                                              
Physical   Therapy  and   Occupational  Therapy   Board  and   the                                                              
Legislative Audit  Division recommended full  eight-year extension                                                              
until  June 30,  2022.   The audit  determined  that the  Physical                                                              
Therapy  and  Occupational  Therapy  Board  is  operating  in  the                                                              
public's   interest   by   licensing   and   regulating   physical                                                              
therapists,    physical    therapy     assistants,    occupational                                                              
therapists,  and  occupational  therapy  assistants.    The  audit                                                              
recommended  that   the  Division  of  Corporations,   Business  &                                                              
Professional   Licensing  within   the  Department  of   Commerce,                                                              
Community  &  Economic  Development (DCCED)  continue  efforts  to                                                              
improve  the  integrity  and  confidentiality  of  the  division's                                                              
investigative case management system.                                                                                           
                                                                                                                                
4:11:41 PM                                                                                                                    
                                                                                                                                
KRIS  CURTIS,  Legislative Auditor,  Legislative  Audit  Division,                                                              
Legislative  Agencies  and  Offices, reported  that  the  division                                                              
conducted  a  sunset  audit  of the  State  Physical  Therapy  and                                                              
Occupational  Therapy  Board [Audit  Control  Number  08-20083-13]                                                              
dated  June 17,  2013.   Ms.  Koeneman accurately  summarized  the                                                              
results  of   the  audit.     The   legislative  audit   made  one                                                              
recommendation,  that the  Division  of Corporations,  Business  &                                                              
Professional   Licensing   (DCBPL)   within  the   Department   of                                                              
Commerce,  Community  &  Economic   Development  (DCCED)  continue                                                              
efforts  to  improve  the integrity  and  confidentiality  of  the                                                              
division's   investigative   case   management  system   and   the                                                              
division's investigative  support to the board.   She acknowledged                                                              
that the  system has  some problems; however,  the DCBPL  has been                                                              
working at  addressing them.   She related  that the  division has                                                              
made  the same  recommendation  to  all five  occupational  sunset                                                              
audits conducted in 2013.                                                                                                       
                                                                                                                                
4:13:11 PM                                                                                                                    
                                                                                                                                
LEANNE    CARROTHERS,   President,    Alaska   Physical    Therapy                                                              
Association,  said she  would like  to testify  in support  of the                                                              
bill  and  the  extension  of  the   State  Physical  Therapy  and                                                              
Occupational   Therapy  Board,   which   serves  efficiently   and                                                              
effectively in its role of providing public protection.                                                                         
                                                                                                                                
4:14:17 PM                                                                                                                    
                                                                                                                                
KATHLEEN  LIND, Chair,  State  Physical Therapy  and  Occupational                                                              
Therapy  Board, thanked  the audit  team for  the fairness  of its                                                              
audit.   She  concluded by  saying she  appreciated the  auditor's                                                              
recommendation.                                                                                                                 
                                                                                                                                
4:15:05 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after  first  determining  no one  else  wished  to                                                              
testify, closed public testimony on HB 242.                                                                                     
                                                                                                                                
REPRESENTATIVE REINBOLD  moved to report  HB 242 out  of committee                                                              
with  individual  recommendations   and  the  accompanying  fiscal                                                              
notes.   There being no  objection, HB  242 was reported  from the                                                              
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
4:15:39 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:15 p.m. to 4:18 p.m.                                                                       
                                                                                                                                
           HB 141-WORKERS' COMPENSATION MEDICAL FEES                                                                        
                                                                                                                                
4:18:29 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  final order of business  would be                                                              
HOUSE  BILL  NO.  141,  "An  Act   setting  the  fee  for  medical                                                              
treatment  or  services  performed  outside the  state  under  the                                                              
Alaska  Workers'   Compensation  Act,  requiring   a  provider  of                                                              
medical   treatment  or   services  under   the  Alaska   Workers'                                                              
Compensation  Act to  submit bills  for treatment  or services  to                                                              
employers  within  180  days  after  the  date  the  treatment  or                                                              
services  are rendered,  and limiting  the time  for appealing  an                                                              
employer's denial  or reduction  of a bill;  and providing  for an                                                              
effective date."                                                                                                                
                                                                                                                                
4:18:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON declared  a  conflict of  interest.   He                                                              
stated that  he has  an ongoing  workers' compensation  claim that                                                              
is unresolved.                                                                                                                  
                                                                                                                                
CHAIR OLSON asked whether the case is an out-of-state claim.                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered yes.                                                                                          
                                                                                                                                
CHAIR  OLSON responded  that  he  did not  think  any conflict  of                                                              
interest exists.                                                                                                                
                                                                                                                                
4:19:20 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON  stated that  the  committee  will be  reviewing  the                                                              
original bill rather  than a proposed amendment  [not offered, but                                                              
in members'  packets].  The bill  contains "180 days versus  45 or                                                              
90 days," which  will make sense to some public  members listening                                                              
today.   He explained  that the difference  in that  breakdown was                                                              
not significant to  the overall goal of the bill  and the proposed                                                              
changes could  have further complicated  matters which  might have                                                              
adversely  impacted  Alaska's  hospitals  more  than  out-of-state                                                              
hospitals.                                                                                                                      
                                                                                                                                
4:19:53 PM                                                                                                                    
                                                                                                                                
ANNA  LATHAM,  Staff,  Representative  Kurt  Olson,  Alaska  State                                                              
Legislature, read the bill title, as follows:                                                                                   
                                                                                                                                
     An  Act  setting  the  fee   for  medical  treatment  or                                                                   
     services  performed outside the  state under the  Alaska                                                                   
     Workers'  Compensation  Act,  requiring  a  provider  of                                                                   
     medical   treatment  or   services   under  the   Alaska                                                                   
     Workers'   Compensation   Act   to  submit   bills   for                                                                   
     treatment  or  services  to employers  within  180  days                                                                   
     after the date  the treatment or services  are rendered,                                                                   
     and  limiting  the  time  for  appealing  an  employer's                                                                   
     denial  or reduction  of a  bill; and  providing for  an                                                                   
     effective date.                                                                                                            
                                                                                                                                
MS. LATHAM  explained that  HB 141  does two  things.   First, the                                                              
bill will  set the fee schedule  for workers' compensation  claims                                                              
treated outside  Alaska.   Second, the  bill establishes  workers'                                                              
compensation   billing  timelines.      She  provided   background                                                              
information,  including  that  in  2011,  the  legislature  passed                                                              
House  Bill   13,  which  established  a   comprehensive  workers'                                                              
compensation fee  schedule.  The  schedule couldn't  exceed usual,                                                              
customary,  and  reasonable (UCR)  rates,  based  on the  UCR  fee                                                              
schedule  and was  reflective of  the geographical  areas for  the                                                              
services  rendered   at  the  90th   percentile.     However,  the                                                              
aforementioned  bill   failed  to  identify  any   parameters  for                                                              
locations  for  which  the  fee  schedule  could  be  used.    She                                                              
reported that Alaska  has the highest workers'  compensation rates                                                              
in the  nation.   Since 1986,  the Oregon  Department of  Business                                                              
and  Consumer Services  has  conducted a  biennial  study that  is                                                              
considered  the industry  standard.  Unfortunately,  for  the past                                                              
ten years,  Alaska has been  ranked in  the first or  second place                                                              
for the highest  workers' compensation insurance  premium rates in                                                              
the nation.                                                                                                                     
                                                                                                                                
4:21:44 PM                                                                                                                    
                                                                                                                                
MS.  LATHAM provided  some  discrepancies  between Alaska's  rates                                                              
and those  in the  Lower 48.   She  drew attention  to the  top 25                                                              
procedure  codes in  members' packets  entitled,  "Top 25  Surgery                                                              
Procedure  Codes Ranked  by Paid  Amounts (47%  of total  surgical                                                              
payments)"  and   asked  members  to  compare   Alaska's  workers'                                                              
compensation fee  schedule to Washington, Oregon,  and Idaho's fee                                                              
schedules.    While  rates  vary   somewhat,  Alaska's  rates  are                                                              
extremely high.   She referred to page 40 of  the report entitled,                                                              
"Medical  Data Report  for  the state  of  Alaska dated  September                                                              
2013."    She  explained  that   this  chart  ranks  the  top  ten                                                              
diagnostic  codes by total  claim payments  and the  International                                                              
Classification   of  Diseases   (ICD-9)  codes   by  total   claim                                                              
payments.   She  specifically referred  to the  ICD-9 code  722.10                                                              
for   displacement   of   lumbar   intervertebral   disc   without                                                              
myelopathy [at  the bottom of page  40], and pointed out  that the                                                              
National Council  on Compensation Insurance (NCCI)  indicated that                                                              
the  average payment  in  Alaska at  $31,177  compared to  $17,049                                                              
nationwide.   She  reported that  this represents  a $14,128  cost                                                              
difference for only  one procedure, noting Alaska's  rates are 182                                                              
percent higher  than the  national average.   Further,  nothing in                                                              
Alaska's  statutes prevents  a claim treated  outside Alaska  from                                                              
being  billed at  Alaska's  rates; however,  HB  141 would  change                                                              
that  practice.   Medical  services  treated  in Alaska  would  be                                                              
charged  using the  UCR fee  schedule  established in  2001.   Any                                                              
medical  services  treated  outside  Alaska  couldn't  exceed  the                                                              
charges set  by the  workers' compensation  statutes of  the state                                                              
where services were rendered.                                                                                                   
                                                                                                                                
MS. LATHAM  said the  bill would  also set  billing timelines  and                                                              
require  a  provider  submit  bills  for  treatment  to  employers                                                              
within 180  days after  the date  the treatment  is rendered.   It                                                              
would  also  limit  time  to appeal  an  employer's  denial  of  a                                                              
reduction  of a  bill  to 60  days.   The  bill  has an  immediate                                                              
effective date  and contains  a retroactivity  clause, as  well as                                                              
transition  language.    The transition  language  allows  medical                                                              
providers  to submit  bills for  service  within 180  days of  the                                                              
effective date,  irrespective of the  date of service,  and allows                                                              
providers to  submit an appeal for  denied payment within  60 days                                                              
of  the effective  date.   She  summarized  that HB  141 will  set                                                              
reasonable   timelines  for  billings,   provides  certainty   for                                                              
employers and  insurers, fixes  some loopholes  in House  Bill 13,                                                              
and  makes  incremental  changes  to  existing  statutes.    These                                                              
changes  should provide  stability and  prevent further  increases                                                              
to workers' compensation insurance rates.                                                                                       
                                                                                                                                
4:24:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  pointed  out  that  the  high  cost  of                                                              
medicine  and  the  182 percent  disparity  goes  far  to  address                                                              
Alaska's high premium rates.                                                                                                    
                                                                                                                                
MS. LATHAM agreed premium rates are an issue.                                                                                   
                                                                                                                                
CHAIR OLSON  said medical  costs are  approximately 80  percent of                                                              
the amount  paid on  workers' compensation cases.   The  costs are                                                              
significant.    He  informed  members   that  the  committee  will                                                              
consider three  additional workers' compensation bills  that could                                                              
impact  workers'  compensation  laws.    This  bill  provides  the                                                              
"first leg"  of the stool.   He offered  his belief that  when the                                                              
bills  are  considered  in  their  entirety,  they  could  provide                                                              
consumers some  reasonable savings.   He  advised members  that he                                                              
has  held discussions  with the  national  organization that  sets                                                              
rates, NCCI,  and if  the bills  pass the state  will move  in the                                                              
right direction.   He said he would be happy with  a 15-20 percent                                                              
reduction in insurance  rates, which has happened  in other states                                                              
that have  implemented serious  reform. Again,  he cautioned  that                                                              
this  bill  is only  one  segment.    He reported  that  about  20                                                              
percent  of   the  workers'  compensation  injuries   are  treated                                                              
outside  Alaska.   He  explained  that this  issue  arose when  an                                                              
original  billing  used  a  lower  rate [based  on  the  Lower  48                                                              
state's  rate],  but  once  an  audit  was  done,  the  claim  was                                                              
subsequently  rebilled [using  Alaska's  higher  rate].   However,                                                              
the  Alaskans were  treated  in  the Lower  48  state  and not  in                                                              
Alaska.                                                                                                                         
                                                                                                                                
4:27:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON appreciated the  explanation.   He asked                                                              
whether the  medical providers  find 60 days  to be  sufficient to                                                              
appeal  or  reject a  bill.    He  added that  he  represents  the                                                              
business  interests  of  most  of the  medical  community  in  his                                                              
district.                                                                                                                       
                                                                                                                                
MS. LATHAM  said the  sponsor has  not received  any letters  from                                                              
the medical community.                                                                                                          
                                                                                                                                
CHAIR  OLSON   remarked   that  the  bill   was  introduced   last                                                              
legislative session.                                                                                                            
                                                                                                                                
4:28:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON  asked how  many  states have  a  provision                                                              
that allows  them to  bill at  the Alaska  rate rather  than using                                                              
their own workers' compensation rates.                                                                                          
                                                                                                                                
MS. LATHAM  answered none.  She  explained that states  use one of                                                              
two  fee  schedules, either  the  UCR  or  else a  Resource  Based                                                              
Relative Value  Scale (RBRVS), noting  43 states have  adopted one                                                              
of the two  schedules.  Additionally, some states  have reciprocal                                                              
agreements  with  other states,  but  to  her knowledge  no  other                                                              
state has adopted this approach.                                                                                                
                                                                                                                                
4:29:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  asked how much money the state  has lost in                                                              
the past  few years because  of the workers' compensation  billing                                                              
practices used by other states.                                                                                                 
                                                                                                                                
MS. LATHAM answered  that she did not have any  quantifiable data;                                                              
however,  she offered  to provide  data  on cases  that have  been                                                              
"back billed."   She  reported that about  24 percent  of workers'                                                              
compensation cases seek treatment outside Alaska.                                                                               
                                                                                                                                
CHAIR OLSON  estimated the  companies impacted probably  represent                                                              
approximately  80 percent  of the  workers' compensation  premiums                                                              
in  the state.   He  characterized  this as  a  "right and  wrong"                                                              
issue  since the claims  are initially  billed  out for an  Alaska                                                              
patient being treated  outside Alaska.  This bill  attempts to try                                                              
to fix an "abuse" of the system issue.                                                                                          
                                                                                                                                
REPRESENTATIVE HERRON  agreed.  He thought it  was appropriate and                                                              
also  characterized the  current practice  as "a  matter of  right                                                              
and wrong."                                                                                                                     
                                                                                                                                
4:30:40 PM                                                                                                                    
                                                                                                                                
MICHAEL MONAGLE,  Director, Central  Office, Division  of Workers'                                                              
Compensation,  Department  of Labor  & Workforce  Development,  in                                                              
response  to  Chair  Olson's question,  on  whether  the  division                                                              
tracks  the percentage  of claims  being  treated outside  Alaska,                                                              
answered  no.     He  explained  that  the  National   Council  on                                                              
Compensation Insurance  (NCCI) began  a medical data  call several                                                              
years ago.   The NCCI  released its first  data cut for  Alaska in                                                              
January  2013, with  a follow-up  report  in September  2013.   He                                                              
reported that  the NCCI's figures  show that 24 percent  bills are                                                              
out-of-state  billings.  He  stated that  the division  performs a                                                              
cost of  living adjustment every  three years.   Additionally, the                                                              
division  extracts the  numbers  of people  living outside  Alaska                                                              
and he  reported that  approximately 300  claimants are  currently                                                              
receiving  ongoing benefits  out-of-state, but  in most  instances                                                              
people  are treated  out-of-state and  return to  Alaska.   He did                                                              
not  believe   that  the   aforementioned  Alaska  residents   are                                                              
permanently residing outside Alaska.                                                                                            
                                                                                                                                
4:32:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOSEPHSON  asked   whether   the  department   is                                                              
concerned about bills  that may be lost due to  clerical errors or                                                              
third-party payer  systems, relative to the 60-day  deadline.  For                                                              
example, part  of the HB  141 is designed  to respond to  a recent                                                              
Seattle  decision in  which  the courts  ordered  that a  $199,000                                                              
workers' compensation  bill be  paid.  He  remarked that is  a big                                                              
bill to  have "lost  in the mail."   He  wondered if the  provider                                                              
should receive certified mail.                                                                                                  
                                                                                                                                
MR.  MONAGLE said  the  division  rarely reviews  medical  records                                                              
since the  billing is  between the  provider and  the payer.   The                                                              
division  receives  medical  records   when  there  is  a  dispute                                                              
between the  provider and  the payer,  either through  a reduction                                                              
or a  denial of the  bill.  In those  instances the  provider will                                                              
come before the Workers' Compensation board to file a claim.                                                                    
                                                                                                                                
4:34:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON characterized  the  division as  serving                                                              
as a referee in disputes.                                                                                                       
                                                                                                                                
MR. MONAGLE answered  yes; that the division serves  as a records'                                                              
custodian and keep  case files for the 19,000  reports of workers'                                                              
compensation  injuries  and  the  subsequent reports  as  well  as                                                              
administering the adjudication process when disputes occur.                                                                     
                                                                                                                                
4:35:06 PM                                                                                                                    
                                                                                                                                
JULIE  CISCO,   Risk  Manager,  Kenai  Peninsula   Borough  School                                                              
District (KPBSD),  referred to a  letter in members'  packets from                                                              
Dave Jones, Assistant  Superintendent of the KPBSD.   She reported                                                              
that  the KPBSD's  per claim  costs  have increased  approximately                                                              
400 percent  in the  past four  years, of  which approximately  80                                                              
percent is for medical  cost.  The school district  needs some way                                                              
to contain  costs.   In the past,  one option  was to  send people                                                              
out-of-state  for treatment and  pay the lower  state fees.   That                                                              
option  vanished  several  years  ago when  a  Lower  48  hospital                                                              
discovered a loophole  and re-billed the KPBSD  for several years'                                                              
worth of procedures.  She urged members to support HB 141.                                                                      
                                                                                                                                
CHAIR OLSON asked  whether the KPBSD  is a member of a  pool or if                                                              
the borough is a qualified self-insurer.                                                                                        
                                                                                                                                
4:36:48 PM                                                                                                                    
                                                                                                                                
MS. CISCO  answered that the KPBSD  is self-insured for  the first                                                              
$250,000  per  claim, but  above  that  the district  buys  excess                                                              
insurance through the Alaska Municipal League's (AML) pool.                                                                     
                                                                                                                                
CHAIR OLSON  said that  explains why the  KPBSD has  been tracking                                                              
the claims so closely.                                                                                                          
                                                                                                                                
MS. CISCO agreed;  noting that this represents  "first dollar" for                                                              
the  first  $250,000, without  any  aggregate  limit.   Thus,  the                                                              
KPBSD could have 100 claims breach that limit.                                                                                  
                                                                                                                                
4:37:14 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON highlighted  that in  the past couple  of weeks  that                                                              
his office  has been  contacted  by a number  of self-insurers  or                                                              
pool  members  with a  large  retention  who  have been  "hit"  by                                                              
outside  hospitals so  it is not  just primary  insurers who  have                                                              
been adversely affected.                                                                                                        
                                                                                                                                
4:37:39 PM                                                                                                                    
                                                                                                                                
SALLY  STUVEK,  Human Resources  Director,  Fairbanks  North  Star                                                              
Borough (FNSB),  said she oversees risk management,  which handles                                                              
workers' compensation  for the FNSB  and the FNSB  School District                                                              
(FNSBSD).    The  combined  plans  for the  FNSB  and  the  school                                                              
district's workers'  compensation plan  is a self-funded  program.                                                              
She  reported that  the FNSB  spends approximately  $1 million  on                                                              
workers'  compensation  benefits.    The  FNSB  continues  to  see                                                              
medical costs  increase.  The regulation  of fees and  charges for                                                              
medical  treatment,  medical  equipment,  and  prescription  drugs                                                              
would  reduce overall  workers'  compensation costs.   She  stated                                                              
that assuring a  schedule for out-of-state provided  service would                                                              
have  a  positive  impact  on  the   overall  costs  for  workers'                                                              
compensation.   She  said  the administration  of  the FNSB  fully                                                              
supports  the components  listed  in HB  141.   She concluded  her                                                              
testimony  by reporting  that the  FNSB assembly  will consider  a                                                              
resolution  on February  13, 2014.   She offered  her belief  that                                                              
this  bill creates  a reasonable  timelines  for billing  services                                                              
and for the appeal period.                                                                                                      
                                                                                                                                
CHAIR  OLSON,  after  first  determining  no one  else  wished  to                                                              
testify, closed public testimony on HB 141.                                                                                     
                                                                                                                                
4:39:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  offered his  sense  that  HB 141  makes                                                              
positive  adjustments  to  existing   practice.    He  noted  that                                                              
subsection  (f)  of the  aforementioned  statute,  makes it  clear                                                              
that  if  something   is  a  covered  event  under   the  workers'                                                              
compensation law,  such that any delay by the  provider submitting                                                              
the bill can't fall on the worker.                                                                                              
                                                                                                                                
CHAIR OLSON indicated Mr. Monagle has nodded yes.                                                                               
                                                                                                                                
4:40:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  referred to decision he  previously read                                                              
the  Barrington  decision [Alaska  Workers'  Compensation  Appeals                                                              
Commission  -   Dr.  Edward   Barrington,  Appellant,   vs.  Final                                                              
Decision  February 12,  2007] that  makes it  a little murky,  but                                                              
ultimately  reaches that  conclusion.   He said  that sometimes  a                                                              
provider  doesn't know  a settlement  has occurred.   He  remarked                                                              
that  HB  141 is  simple  enough;  however,  the law  of  workers'                                                              
compensation,  including regulations  and  procedures is  "utterly                                                              
complicated."   Thus, even  though HB  141 looks  straightforward,                                                              
it isn't  clear how the bill  will ultimately affect  the outcome;                                                              
although  it  seemed   reasonable  that  six  months   will  allow                                                              
sufficient  time for  providers  to  submit a  bill.   He  further                                                              
noted that  a worker is still allowed  to go to the  nearest point                                                              
for adequate  help even if  it is in  California.  He  offered his                                                              
belief  that  Alaska  is  improving [in  providing  all  types  of                                                              
medical procedures], especially in Anchorage.                                                                                   
                                                                                                                                
4:42:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  moved to report  HB 141 out  of committee                                                              
with  individual  recommendations   and  the  accompanying  fiscal                                                              
notes.   There being no  objection, HB  141 was reported  from the                                                              
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
4:42:27 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Labor and  Commerce Standing  Committee meeting  was adjourned  at                                                              
4:42 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB234 ver A.pdf HL&C 2/3/2014 3:15:00 PM
HB 234
HB234 Sponsor Statement.pdf HL&C 2/3/2014 3:15:00 PM
HB 234
HB234 Fiscal Note-DCCED-RCA-01-23-14.pdf HL&C 2/3/2014 3:15:00 PM
HB 234
HB234 Supporting Documents-RCA Sunset Audit 2013.pdf HL&C 2/3/2014 3:15:00 PM
HB 234
HB242 ver A.pdf HL&C 2/3/2014 3:15:00 PM
HB 242
HB242 Sponsor Statement.pdf HL&C 2/3/2014 3:15:00 PM
HB 242
HB242 Fiscal Note-DCCED-CBPL-01-27-14.pdf HL&C 2/3/2014 3:15:00 PM
HB 242
HB242 Supporting Documents-Legislative Audit Recommendations.pdf HL&C 2/3/2014 3:15:00 PM
HB 242
HB141 ver N.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Sponsor Statement.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Sectional Analysis.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Fiscal Note-DOLWD-WC-1-21-14.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Supporting Document-Letter-AK Timber Insurance Exchange 01-28-2014.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Supporting Document-Letter-AMLJIA 01-29-2014.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Supporting Document-Top 25 Surgery Procedure Code Cost Comparison Chart.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB234 Supporting Document-RCA-Summary of Efforts 01-2014.pdf HL&C 2/3/2014 3:15:00 PM
HB 234
HB141 Draft Proposed Amendment ver N.1.PDF HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Supporting Document-NCCI Medical Data Report 09-2013.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Supporting Document-NAMIC's written testimony.pdf HL&C 2/3/2014 3:15:00 PM
HB 141
HB141 Supporting Document-Letter KPBSD 02-3-2014.pdf HL&C 2/3/2014 3:15:00 PM
HB 141