02/09/2009 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB104 | |
| HB64 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 104 | TELECONFERENCED | |
| = | HB 64 | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 9, 2009
3:17 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Mark Neuman, Vice Chair
Representative Mike Chenault
Representative John Coghill
Representative Bob Lynn
Representative Robert L. "Bob" Buch
MEMBERS ABSENT
Representative Lindsey Holmes
COMMITTEE CALENDAR
HOUSE BILL NO. 104
"An Act adjusting certain fees for treatment or services under
the Alaska Workers' Compensation Act to reflect changes in the
Consumer Price Index; and providing for an effective date."
- MOVED HB 104 OUT OF COMMITTEE
HOUSE BILL NO. 64
"An Act relating to gift certificates and gift cards, and to
unclaimed property; and making a violation of certain gift card
prohibitions an unlawful trade practice."
- MOVED HB 64 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 104
SHORT TITLE: WORKERS COMP. MEDICAL TREATMENT FEES
SPONSOR(s): LABOR & COMMERCE
01/30/09 (H) READ THE FIRST TIME - REFERRALS
01/30/09 (H) L&C
02/09/09 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 64
SHORT TITLE: GIFT CARDS
SPONSOR(s): REPRESENTATIVE(s) GATTO, GARDNER, GRUENBERG
01/20/09 (H) PREFILE RELEASED 1/16/09
01/20/09 (H) READ THE FIRST TIME - REFERRALS
01/20/09 (H) L&C, FIN
02/02/09 (H) L&C AT 3:15 PM BARNES 124
02/02/09 (H) Heard & Held
02/02/09 (H) MINUTE(L&C)
02/09/09 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
LINDA HALL, Director
Division of Insurance
Anchorage Office
Department of Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 104.
ROD BETIT, President
Alaska State Hospital & Nursing Home Association (ASHNHA)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 104.
REPRESENTATIVE CARL GATTO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as joint prime sponsor of HB 64.
OTHER LEGISLATORS PRESENT
REPRESENTATIVE BERTA GARDNER
ACTION NARRATIVE
3:17:50 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:17 p.m. Representatives Neuman,
Coghill, Chenault, Buch, Lynn, and Olson were present at the
call to order. Representative Gardner was also in attendance.
HB 104-WORKERS COMP. MEDICAL TREATMENT FEES
3:18:10 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 104, "An Act adjusting certain fees for treatment
or services under the Alaska Workers' Compensation Act to
reflect changes in the Consumer Price Index; and providing for
an effective date."
3:19:04 PM
LINDA HALL, Director, Division of Insurance, Anchorage Office,
Department of Community & Economic Development (DCCED), stated
that HB 104 is "the medical fees bill." She explained that
Alaska Statutes (AS) 23, Workers' Compensation provides that
charges for medical treatment and services are regulated by the
Workers' Compensation Board. She related that standards set by
the board are listed in the physician fee schedule. She
provided a history of the physician fee schedule. She offered
that legislation passed in 2005 that repealed the methodology
for setting maximum medical fees, and froze the 2004 physician
fee schedule. Additionally, in 2007, legislation passed that
extended the 2004 physician fee schedule until March 31, 2009,
and applied a consumer price index (CPI) increase. She
highlighted that in March 2009, the physician fee schedule will
expire. The effect will be to remove the cap on medical fees.
She further explained that the overall impact is detailed in an
attachment in committee member's packets prepared by the
National Council on Compensation Insurance, Inc. (NCCI), titled
"Analysis of the sunset of the Alaska Physician Fee Schedule
Effective March 31, 2009. She related the handout provides a
fairly technical analysis of what the "fee cap" means.
MS. HALL explained that the NCCI makes "lost cost filings" with
the Department of Commerce, Community, & Economic Development
(DCCED) Division of Insurance (DOI). These filings ultimately
generate workers' compensation premiums, she stated. She
referred to the last page of the analysis provided in member's
packets, page 16, which she said covers the period from April 1
through December 3l, 2009. She explained that the lack of a cap
on physician fees would have a 5.2 percent impact on the overall
Workers' Compensation system costs in Alaska. She interpreted
that to mean that Workers' Compensation premiums would be that
much higher. She offered that this analysis provides one piece
of the filing that the DOI approved for the January 1, 2009
rates. In the event this cap is reenacted, the potential exists
that rates could be decreased, she opined. Ms. Hall stressed
that she would like to see the physician fee cap extended. She
further explained that the projected increase is 5.2 percent.
3:22:40 PM
MS. HALL provided some 2006 statistics regarding the Workers'
Compensation premiums. She pointed out that an Oregon study
indicates that Alaska's premiums were rated highest. She
highlighted that Alaska still is ranked number one in the 2008
ranking, which means that Alaska's employers on average are
paying higher workers' compensation premiums than any place else
in nation. She pointed out costs of the Workers' Compensation
benefit system. She offered that in 2007, medical fees in
Alaska comprised 71 percent of the entire Workers' Compensation
benefit cost. "I'm not talking about premiums, but the cost of
the system, 71 percent goes to medical fees," she said.
However, during that same time period in 2007, of the
approximately 35 NCCI states, the percentage averages at 59
percent. Thus, Alaska's medical fees are 12 percent higher than
other NCCI states. She expressed concern over high employer
rates. She highlighted that if the physician fee schedule
expires, those rates could potentially rise.
MS. HALL offered her belief that HB 104 applies a straight
forward solution. She recalled that the change in the bill is
identical to the 2007 legislation that passed, which kept the
current physician fee schedule and applied a consumer price
index (CPI) percentage increase applicable from 2004 to 2008.
She directed members to an index in their packets, titled
"Consumer Price Index, Medical Care Component - All Urban
Consumers; U.S. City Average". She explained that each year
contains a medical care component increase. She explained that
the physician medical fee schedule would increase by that
amount. She pointed out that the DOI is not requiring providers
to forego an increase in fees. Ms. Hall highlighted that the
issue this bill addresses is time sensitive since the current
schedule expires on March 31, 2009. She stressed the importance
of passing HB 104 prior to that date to ensure that the schedule
does not expire.
MS. HALL opined that the solution is not perfect. She pointed
out that it does not include common procedure terminology codes,
which would entail listing several thousand codes for various
medical procedures, such as the codes that most medical offices
currently use. She explained those codes are typically
considered billing codes, which is how the old fee schedule was
organized, she stated. However, she explained that new billing
codes are also generated each year. Thus, the physician fee
schedule itself and the billing codes are not updated by HB 104,
since the bill does not create a standard billing and coding
system. Therefore, this bill does not provide a permanent
solution. However, she offered her belief that HB 104 does
provide some control over medical costs and buys some time for
stakeholders to work towards a permanent solution. She related
that currently the DOI's biggest concern is the cost of workers'
compensation coverage, which is driven by the cost of claims.
She urged members to support HB 104.
3:26:57 PM
CHAIR OLSON informed members that a companion bill should be
introduced in the Senate sometime this week.
3:27:11 PM
REPRESENTATIVE NEUMAN asked for the effect this bill would have
on specific fees that doctors charge patients.
MS. HALL answered that under the CPI increase, doctors will be
allowed to charge higher fees, but this bill places a cap on
fees that doctors can charge. She explained the formula is
similar to compound interest.
MS. HALL, in response to Representative Coghill, referred to
page 2, line 6 of the bill, and explained that the December 31,
2010 date would act as a sunset date for the bill. She
explained that at that time, the physician fee schedule and the
CPI increases proposed by HB 104 would expire. She further
offered that the DOI generally holds a public rate hearing in
September of each year for rates to be effective on January 1 of
the following year. Thus, the March expiration date listed in
the 2007 legislation is awkward since it does not mesh with the
rate-making cycle, she stated.
3:31:13 PM
ROD BETIT, President, Alaska State Hospital & Nursing Home
Association, stated that the Alaska State Hospital and Nursing
Home Association offers its support for HB 104. He stated that
without passage of HB 104, prices would automatically increase
since the State of Alaska (SOA) does not have the discretion to
set a different reimbursement mechanism. Thus, the effect would
be to cost insurers more, as well as increase employer's
Workers' Compensation premiums. He opined that the bill offers
a temporary solution by extending the date an additional year
and a half. He recalled that former Senator Seekins created a
task force charged with finding a permanent solution. However,
that task force dissolved when his term expired. He related
that currently the responsibility for medical fees rests with
the Department of Labor & Workforce Development (DLWD), along
with a medical review committee. He said he hopes that the
medical review committee will make recommendations for a
permanent reimbursement for the legislature to consider.
3:32:35 PM
CHAIR OLSON offered that his office has not received any
opposition to the bill. After first determining that no one
else wished to testify, Chair Olson closed public testimony on
HB 104.
REPRESENTATIVE COGHILL stated his interest in finding a more
permanent solution. He suggested that the committee may wish to
work with the DLWD to tackle the issue during the legislative
interim.
3:33:54 PM
REPRESENTATIVE COGHILL moved to report HB 104, Version 26-
LS0427\R out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, HB 104
was reported from the House Labor and Commerce Standing
Committee.
3:34:08 PM
The committee took an at-ease from 3:34 p.m. to 3:36 p.m.
HB 64-GIFT CARDS
3:36:29 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 64, "An Act relating to gift certificates and
gift cards, and to unclaimed property; and making a violation of
certain gift card prohibitions an unlawful trade practice."
3:36:37 PM
REPRESENTATIVE GATTO, Alaska State Legislature, speaking as one
of the joint prime sponsors of HB 64, stated that this bill has
previously been before the House Labor and Commerce Standing
Committee for a hearing. He recalled subsequent discussions
with the members who had questions about the bill. He offered
to answer any additional questions members may have.
3:37:05 PM
CHAIR OLSON, after first determining that no one wished to
testify, closed public testimony on HB 64.
3:37:26 PM
REPRESENTATIVE COGHILL recalled his earlier questions about the
perpetuity provision in HB 64. He referred members to page 3,
line 18, then stated that the bill sponsors have answered his
questions. He related his understanding that when a person
purchases a gift card, a certain amount of money is exchanged.
Thus, the value of the gift card should remain the same over
time. Therefore, he said he removes any objections he
previously had with HB 64.
3:38:13 PM
REPRESENTATIVE NEUMAN moved to report HB 64, Version 26-
LS0201\E, out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, HB 64
was reported from the House Labor and Commerce Standing
Committee.
3:38:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:38 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB104 CPI Chart - Medical Care Component.pdf |
HL&C 2/9/2009 3:15:00 PM |
HB 104 |
| HB104 FNSB Letter of Support.pdf |
HL&C 2/9/2009 3:15:00 PM |
HB 104 |
| HB104 ver R.pdf |
HL&C 2/9/2009 3:15:00 PM |
HB 104 |
| HB104 Sponsor Statement ver R.pdf |
HL&C 2/9/2009 3:15:00 PM |
HB 104 |
| HB104 NCCI Analysis of Sunset.pdf |
HL&C 2/9/2009 3:15:00 PM |
HB 104 |
| HB104-DOLWD-WC-02-02-09.pdf |
HL&C 2/9/2009 3:15:00 PM |
HB 104 |
| HB64-DOR-01-30-09.pdf |
HL&C 2/9/2009 3:15:00 PM |
HB 64 |