Legislature(2017 - 2018)SENATE FINANCE 532

04/09/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 38 PHARMACY BENEFITS MANAGERS TELECONFERENCED
Heard & Held
+ SB 185 REEMPLOYMENT OF RETIRED TEACHERS & ADMIN TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Moved HB 273 Out of Committee
+= HB 278 EXTEND:CERT. REAL ESTATE APPRAISERS BOARD TELECONFERENCED
Moved HB 278 Out of Committee
+= HB 279 EXTEND: REAL ESTATE COMMISSION TELECONFERENCED
Moved HB 279 Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 9, 2018                                                                                            
                         9:13 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:13:32 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:13 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Sam  Kito,  Sponsor; Sara  Chambers,  Deputy                                                                    
Director,   Division    of   Corporations,    Business   and                                                                    
Professional  Licensing, Department  of Commerce,  Community                                                                    
and  Economic  Development; Representative  Andy  Josephson,                                                                    
Sponsor;  Senator  Cathy   Giessel,  Sponsor;  Jane  Conway,                                                                    
Staff,  Senator Cathy  Giessel;  Lori Wing-Heier,  Director,                                                                    
Division  of Insurance,  Department  of Commerce,  Community                                                                    
and   Economic  Development;   Emily  Ricci,   Chief  Policy                                                                    
Administrator,   Division   of  Retirement   and   Benefits,                                                                    
Department of  Administration; Rachel Hanke,  Staff, Senator                                                                    
Peter  Micciche;  Lisa  Parady, Executive  Director,  Alaska                                                                    
Council  of   School  Administrators;  Dr.   Karen  Gaborik,                                                                    
President, Alaska Superintendents  Association; Norm Wooten,                                                                    
Executive  Director, Association  of  Alaska School  Boards;                                                                    
Mark  Miller, Superintendent,  Juneau School  District; Mary                                                                    
Wegner, Superintendent,  Sitka School District;  Sean Dusek,                                                                    
Superintendent,  Kenai  Peninsula Borough  School  District;                                                                    
Bobby Bolen, Superintendent,  Bering Strait School District;                                                                    
Monica   Goyette,  Superintendent,   Matsu  Borough   School                                                                    
District; Kathy Lea, Chief Pension Officer Division of                                                                          
Retirement and Benefits, Department of Administration.                                                                          
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Deena Bishop, Superintendent, Anchorage School District.                                                                        
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 38     PHARMACY BENEFITS MANAGERS                                                                                            
                                                                                                                                
          SB 38 was HEARD and  HELD in committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SB 185    REEMPLOYMENT OF RETIRED TEACHERS and ADMIN                                                                            
                                                                                                                                
          SB  185  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 273    EXTEND: MARIJUANA CONTROL BOARD                                                                                       
                                                                                                                                
          HB 273  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  the  previously                                                                    
         published fiscal impact note: FN 2(DEC).                                                                               
                                                                                                                                
HB 278    EXTEND:CERT. REAL ESTATE APPRAISERS BOARD                                                                             
                                                                                                                                
          HB 278  was REPORTED out  of committee with  a "do                                                                    
          pass" recommendation and with  one new fiscal note                                                                    
          from  the Department  of  Commerce, Community  and                                                                    
          Economic Development.                                                                                                 
                                                                                                                                
HB 279    EXTEND: REAL ESTATE COMMISSION                                                                                        
                                                                                                                                
          HB 279  was REPORTED out  of committee with  a "do                                                                    
          pass" recommendation and with  one new fiscal note                                                                    
          from  the Department  of  Commerce, Community  and                                                                    
          Economic Development.                                                                                                 
                                                                                                                                
HOUSE BILL NO. 273                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the                                                                              
     Marijuana Control Board; and providing for an                                                                              
     effective date."                                                                                                           
                                                                                                                                
9:15:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SAM KITO, SPONSOR, introduced himself.                                                                           
                                                                                                                                
Vice-Chair Bishop  MOVED to REPORT  HB 273 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  273 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  the previously  published  fiscal                                                                    
impact note: FN 2(DEC).                                                                                                         
                                                                                                                                
9:15:51 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:16:42 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 278                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Board of                                                                     
     Certified Real Estate Appraisers; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
9:16:49 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon discussed the history of the bill.                                                                           
                                                                                                                                
9:17:08 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:18:40 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:18:58 AM                                                                                                                    
                                                                                                                                
Senator  Micciche stated  that  he had  a  question for  the                                                                    
department. He  stated that he  was looking at the  chain of                                                                    
custody issues in the fee  analysis. He wondered why the fee                                                                    
analysis was higher than the board's fee analysis.                                                                              
                                                                                                                                
9:19:53 AM                                                                                                                    
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY AND  ECONOMIC DEVELOPMENT,  stated that                                                                    
she would  be addressing the Real  Estate Appraisers, rather                                                                    
than Real Estate Commission, therefore  she missed a portion                                                                    
of the question.                                                                                                                
Senator  Micciche stated  that  he was  confused, and  would                                                                    
save his question for a later bill.                                                                                             
                                                                                                                                
Vice-Chair Bishop  MOVED to REPORT  HB 278 out  of Committee                                                                    
with  individual  recommendations  and  accompanying  fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  278 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one  new  fiscal  note  from  the                                                                    
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
9:20:42 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:24:13 AM                                                                                                                    
                                                                                                                                
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 279                                                                                                            
                                                                                                                                
     "An Act extending the termination date of the Real                                                                         
     Estate Commission; and providing for an effective                                                                          
     date."                                                                                                                     
                                                                                                                                
9:24:55 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:25:08 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:25:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ANDY  JOSEPHSON,  SPONSOR, stated  that  the                                                                    
Senate Labor  and Commerce Committee did  its due diligence,                                                                    
and made the recommendation to extend the commission.                                                                           
                                                                                                                                
Senator Micciche  wondered why  the division's  proposal was                                                                    
higher  than  the  board's  proposal.   He  noted  that  the                                                                    
explanation  did not  give a  reason for  the agreement.  He                                                                    
asked for further information about the board numbers.                                                                          
                                                                                                                                
9:26:03 AM                                                                                                                    
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY  AND  ECONOMIC  DEVELOPMENT,  explained                                                                    
that AS  08.01.065 required  the division  and the  board to                                                                    
work together.  She stated that  it was required  that those                                                                    
decisions  were not  made independently.  She stressed  that                                                                    
those  efforts  occurred with  each  new  fee analysis.  She                                                                    
stated  that the  board offered  observations  that had  not                                                                    
been  taken  into  consideration   with  the  fee  analysis,                                                                    
including the desire to reduce  the surplus. She stated that                                                                    
the  director  opted  to take  the  board's  recommendation,                                                                    
rather  than  the  analysis.  She stated  that  it  was  not                                                                    
unusual, and a sign of a healthy process.                                                                                       
                                                                                                                                
Senator  Micciche wondered  whether  the  case was  properly                                                                    
served during  the investigation. Ms. Chambers  replied that                                                                    
the  investigator   reviewed  the  facts  provided   in  the                                                                    
complaint,  and   it  was  determined   that  it   was  non-                                                                    
jurisdictional.  The senior  investigator  reviewed it,  and                                                                    
agreed with the determination. She  stated that the case was                                                                    
reopened,  with the  stipulation that  all parties  provided                                                                    
timely information.  She stated  that the Department  of Law                                                                    
would  work  with  the division  to  determine  whether  the                                                                    
process was  working or  whether there  would be  a required                                                                    
change to the system.                                                                                                           
                                                                                                                                
Vice-Chair Bishop  MOVED to REPORT  HB 279 out  of Committee                                                                    
with  individual  recommendations  and  accompanying  fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  279 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one  new  fiscal  note  from  the                                                                    
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
9:29:27 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:30:58 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 38                                                                                                            
                                                                                                                                
     "An  Act relating  to the  registration  and duties  of                                                                    
     pharmacy  benefits  managers; relating  to  procedures,                                                                    
     guidelines,  and  enforcement mechanisms  for  pharmacy                                                                    
     audits; relating  to the  cost of  multi-source generic                                                                    
     drugs and insurance reimbursement procedures; relating                                                                     
     to the duties of the director of the division of                                                                           
     insurance; and providing for an effective date."                                                                           
                                                                                                                                
9:32:05 AM                                                                                                                    
                                                                                                                                
SENATOR CATHY GIESSEL,  SPONSOR, introduced the legislation.                                                                    
She stated that Alaska had  the highest health care costs in                                                                    
the country,  and furthered that  the United States  had the                                                                    
highest health care  costs in the world.  She announced that                                                                    
it  was  not utilization  that  drove  the cost  of  health,                                                                    
rather  the cost  of that  health care.  She announced  that                                                                    
pharmaceutical costs made up of  approximately 20 percent of                                                                    
health  care costs.  She  stated  that administrative  costs                                                                    
were another large  cost driver. She remarked  that the bill                                                                    
addressed  both  of  those  items.  She  felt  that  it  was                                                                    
imperative that  Alaska addressed those costs.  The bill was                                                                    
a  consumer protection  bill.  She  explained that  pharmacy                                                                    
benefit  managers  (PBMs)  served as  middlemen  for  health                                                                    
insurance  plans  between  pharmaceutical  manufactures  and                                                                    
retailers. She announced that PBMs  were designed to perform                                                                    
administrative   duties  for   insurers;  validate   patient                                                                    
eligibility; administer  plan benefits; and  negotiate costs                                                                    
between  pharmacies and  health care  plans. She  added that                                                                    
PBMs  also  audited  for  fraud.   She  felt  that  creating                                                                    
networks  of multiple  pharmacies,  the  PBMs had  leveraged                                                                    
their  size and  power to  negotiate contracts  between drug                                                                    
manufacturers  and retail  outlets.  The  PBMs could  secure                                                                    
rebates or kickbacks on certain  drugs, and were responsible                                                                    
for  determining  which  drugs  were  covered  by  different                                                                    
health  care  plans. She  stated  that  the PBM  market  had                                                                    
become  highly consolidated.  The  focus seemed  to be  less                                                                    
about serving  consumers and  more about  increasing company                                                                    
profits. She felt that there  was egregious and anticipative                                                                    
behavior  by PBMs  that had  harmed consumers  and community                                                                    
pharmacist  with increased  cost  and unreasonable  business                                                                    
practices.                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon  wondered  whether   there  would  be  a                                                                    
sectional analysis or an overview of the bill.                                                                                  
                                                                                                                                
9:34:53 AM                                                                                                                    
                                                                                                                                
JANE CONWAY,  STAFF, SENATOR CATHY GIESSEL,  stated that she                                                                    
would provide an overview.                                                                                                      
                                                                                                                                
Ms. Conway discussed, "Pharmacy Benefit Managers" (copy on                                                                      
file).                                                                                                                          
                                                                                                                                
Ms. Conway looked at slide 2, "SB 38 is a":                                                                                     
                                                                                                                                
     ?  consumer  protection  bill shines  a  light  on  PBM                                                                    
     opaque  auditing  and  MAC pricing  practices  to  help                                                                    
     drive prescription costs down                                                                                              
                                                                                                                                
                                                                                                                                
     ?  small-business protection  bill  components of  this                                                                    
     bill  helps  ensure  viability of  critical  small-town                                                                    
     Alaska pharmacies and access to health care                                                                                
                                                                                                                                
Ms. Conway highlighted slide 3, "What's a PBM?":                                                                                
                                                                                                                                
     PBMs are multi-billion dollar middlemen                                                                                    
                                                                                                                                
     Started  in1970 as  claims processers,  now intertwined                                                                    
     in almost  every aspect of  the pharmaceutical/pharmacy                                                                    
     supply chain                                                                                                               
                                                                                                                                
     Virtually unregulated, state or federal level                                                                              
                                                                                                                                
     Today,  the  top  PBMs  represent   some  of  the  most                                                                    
     profitable companies in the nation                                                                                         
                                                                                                                                
Ms. Conway addressed slide 4, "Examples of PBM's Market                                                                         
Power/Influence":                                                                                                               
                                                                                                                                
     CVS/Caremark (AK State Plan Pharmacy Benefit Manager)                                                                      
                                                                                                                                
          2017 - 7th most profitable U.S. company in                                                                            
          Fortune 500                                                                                                           
                                                                                                                                
          2017 Revenue: $177.5 Billion                                                                                          
          Express Scripts Holding                                                                                               
                                                                                                                                
          ESH generated $100.3 billion in revenue in 2017                                                                       
          Number 22 ranking                                                                                                     
                                                                                                                                
Ms. Conway discussed  slide 5, "State of  Alaska Health Care                                                                    
Plan." She  stated that  the picture was  a State  of Alaska                                                                    
health care plan  card. She noted that AETNA  was the health                                                                    
care plan,  and contracted with  CVS Caremark to  handle the                                                                    
prescriptions.                                                                                                                  
                                                                                                                                
                                                                                                                                
Ms. Conway highlighted slide 6, "PBMs were designed to:"                                                                        
                                                                                                                                
     reduce administrative costs for insurers                                                                                   
                                                                                                                                
     validate patient eligibility                                                                                               
                                                                                                                                
     administer plan benefits                                                                                                   
                                                                                                                                
    negotiate costs between pharmacies and health plans                                                                         
                                                                                                                                
     audit pharmacies for fraud                                                                                                 
                                                                                                                                
Ms. Conway discussed slide 7, "PBM's Impact on Pharmacy and                                                                     
Patients":                                                                                                                      
                                                                                                                                
     PBMs develop pharmacy provider networks with contracts                                                                     
                                                                                                                                
     Pharmacies must accept a PBM contract                                                                                      
                                                                                                                                
     Many contracts truly are "take it or leave it."                                                                            
     If  they don't  sign it,  they lose  all the  customers                                                                    
     covered by that plan                                                                                                       
                                                                                                                                
     PBMs influence  what drugs are dispensed  regardless of                                                                    
     what a  physician prescribes  by using  a list  of PBM-                                                                    
     approved drugs known as "formularies"                                                                                      
                                                                                                                                
                                                                                                                                
     PBMs  receive  rebates   from  drug  manufacturers  for                                                                    
     putting their drugs on a given formulary                                                                                   
                                                                                                                                
Ms. Conway looked at slide 8, "PBM's Impact on Pharmacy and                                                                     
Patients":                                                                                                                      
                                                                                                                                
     PBMs dictate how  much pharmacies will be  paid for the                                                                    
     drugs  they  dispense  regardless  of  the  pharmacies'                                                                    
     acquisition costs                                                                                                          
                                                                                                                                
     PBMs  have free  reign to  dictate what  pharmacies are                                                                    
     permitted  to do  in a  given  network thereby  driving                                                                    
     patients to particular pharmacy options                                                                                    
                                                                                                                                
     PBMs operate  their own  mail-order pharmacies  and can                                                                    
     incentivize  or  mandate  that customers  obtain  their                                                                    
     medications only through the mail-order option                                                                             
                                                                                                                                
9:38:59 AM                                                                                                                    
                                                                                                                                
Ms.  Conway addressed  slide 9.  She noted  that there  were                                                                    
three aspects to the scenario  in terms of the transactions.                                                                    
She explained how the drug was priced out.                                                                                      
                                                                                                                                
Ms. Conway highlighted slide 10,  "National Academy of State                                                                    
Health Policy:"                                                                                                                 
                                                                                                                                
     ?  80 pieces  of  legislation  currently introduced  in                                                                    
     state legislatures  across the country to  regulate PBM                                                                    
     practices. Even the White House is paying attention.                                                                       
                                                                                                                                
     ? The  fair audit  provisions of  SB 38  are consistent                                                                    
     with legislation in other states                                                                                           
                                                                                                                                
     ?  The  PBM  requirements  for  setting  pharmacy  drug                                                                    
     reimbursement rates, including  appeals, are similar to                                                                    
     other states                                                                                                               
                                                                                                                                
Ms.  Conway  looked  at  slide   11,  "Fair  Pharmacy  Audit                                                                    
Legislation in  the States." She  noted that Alaska  was one                                                                    
of  the  few  states  that had  not  adopted  fair  pharmacy                                                                    
legislation.                                                                                                                    
                                                                                                                                
Ms. Conway  highlighted slide 12, "States  With Generic Drug                                                                    
Pricing Transparency  Legislation Enacted." She  stated that                                                                    
the   blue   dots   had   enacted   generic   drug   pricing                                                                    
transparency, and noted  that Alaska was in  the minority on                                                                    
that map.                                                                                                                       
                                                                                                                                
Ms.  Conway  discussed  slide 13,  "Maximum  Allowable  Cost                                                                    
(MAC)":                                                                                                                         
                                                                                                                                
     A "maximum  allowable cost" or  "MAC" list refers  to a                                                                    
     payer or PBM -generated  list of products that includes                                                                    
     the upper limit or maximum  amount that a plan will pay                                                                    
     for  generic  drugs  and  brand-name  drugs  that  have                                                                    
    generic versions available ("multi-source brands").                                                                         
                                                                                                                                
     A PBM  may have several different  MAC lists, depending                                                                    
     on the plan                                                                                                                
                                                                                                                                
     Essentially, no  two MAC lists  are alike and  each PBM                                                                    
     has free  reign to pick  and choose products  for their                                                                    
     MAC lists.                                                                                                                 
                                                                                                                                
     Sometimes   the  MAC   list   is   confused  with   the                                                                    
     "formulary."                                                                                                               
                                                                                                                                
     A  Formulary  is a  list  of  all  the drugs  that  are                                                                    
     covered by  a particular  insurance plan.  Generally it                                                                    
     has no pricing  attached to it. A  formulary will usual                                                                    
     contain both Brand and Generic Drugs.                                                                                      
                                                                                                                                
9:44:19 AM                                                                                                                    
                                                                                                                                
Ms. Conway highlighted slide 14, "PBM Use of MAC as Revenue                                                                     
Stream":                                                                                                                        
                                                                                                                                
     Because of  this lack  of clarity,  PBMs can  use their                                                                    
     MAC lists to generate significant revenue                                                                                  
                                                                                                                                
     Typically, they  utilize an aggressively low  MAC price                                                                    
     list  to reimburse  their contracted  pharmacies and  a                                                                    
     different, higher  list of  prices when  they negotiate                                                                    
     prices with their clients or plan sponsors                                                                                 
                                                                                                                                
     Essentially,  the PBMs  reimburse low  and charge  high                                                                    
     with their  MAC price lists, pocketing  the significant                                                                    
     spread between the two prices                                                                                              
                                                                                                                                
     Most plan sponsors are unaware  that multiple MAC lists                                                                    
     are being  used and  have no real  concept of  how much                                                                    
     revenue the PBM retains                                                                                                    
                                                                                                                                
Ms. Conway looked at slide 15, "MAC Pricing":                                                                                   
                                                                                                                                
     When  the PBMs  fail to  update MAC  lists in  a timely                                                                    
     manner, pharmacies  are often  forced to dispense  at a                                                                    
     loss, sometimes  as high  as $100 or  more on  a single                                                                    
     prescription, or not dispense at all                                                                                       
                                                                                                                                
     (The MAC  lists can  be updated at  any time    usually                                                                    
     decreased- so  real time prices are  often obsolete and                                                                    
     less than what the pharmacist expected)                                                                                    
                                                                                                                                
     When  prices increase,  PBMs often  wait weeks  or even                                                                    
     months before  updating MAC lists and  rarely, if ever,                                                                    
     reimburse  pharmacies retroactively,  yet the  PBMs act                                                                    
    swiftly to update MAC list when drug costs decrease                                                                         
                                                                                                                                
     This significantly  jeopardizes financial  viability of                                                                    
     community pharmacies                                                                                                       
                                                                                                                                
     In   fact,  84   percent   of   pharmacists  said   the                                                                    
     acquisition price spike/lagging  reimbursement trend is                                                                    
     a "very significant" impact on  their ability to remain                                                                    
     in business and to continue serving patients                                                                               
                                                                                                                                
Ms. Conway looked at slide 16, "MAC Pricing":                                                                                   
                                                                                                                                
     MAC legislation is designed to reasonably address                                                                          
     concerns by:                                                                                                               
                                                                                                                                
          Providing clarity to plan sponsors and pharmacies                                                                     
          with/regard to how MAC pricing is determined and                                                                      
          updated                                                                                                               
                                                                                                                                
          Establishing an appeals process by which a                                                                            
          dispensing pharmacist can contest a listed MAC                                                                        
          price                                                                                                                 
                                                                                                                                
          Providing standardization for how products are                                                                        
          selected for inclusion on a MAC list                                                                                  
                                                                                                                                
     The MAC process provides no transparency for plan                                                                          
     sponsors or contracted retail network pharmacies.                                                                          
                                                                                                                                
     They are required to blindly agree to contracts.                                                                           
                                                                                                                                
Ms. Conway skipped slide 17, "MAC Pricing."                                                                                     
                                                                                                                                
Ms. Conway discussed slide 18, "SB 38: What Does A MAC                                                                          
Transparency Bill Do?"                                                                                                          
                                                                                                                                
     Sets reasonable standards                                                                                                  
                                                                                                                                
     Requires regular reporting of MACs to a pharmacy in                                                                        
     useable format                                                                                                             
                                                                                                                                
     Provides for a defined MAC appeals process                                                                                 
                                                                                                                                
     A MAC Transparency Bill Does NOT:                                                                                          
                                                                                                                                
          Mandate that a PBM reimburse a pharmacy at a                                                                          
          higher amount                                                                                                         
                                                                                                                                
          Represent an administrative burden on the PBM                                                                         
                                                                                                                                
          Mandate that a PBM approve a pharmacy's MAC                                                                           
          appeal                                                                                                                
                                                                                                                                
          Result in increased costs to the healthcare                                                                           
          system                                                                                                                
                                                                                                                                
     There is no documented  evidence or analysis nationally                                                                    
     that MAC  pricing legislation has  increased healthcare                                                                    
     costs.                                                                                                                     
                                                                                                                                
Ms. Conway looked at slide 19, "SB 38  What Does a Fair                                                                         
Audit Bill Do?                                                                                                                  
                                                                                                                                
     Brings  fairness  to   the  unregulated  and  expanding                                                                    
     practice of pharmacy audits                                                                                                
                                                                                                                                
     Does not  allow audits during the  first seven calendar                                                                    
     days of each month because  of the high patient volume,                                                                    
     unless the pharmacy and auditor agree otherwise                                                                            
                                                                                                                                
     Prevents   the   targeting   of   minor   clerical   or                                                                    
     administrative errors  here no fraud, patient  harm, or                                                                    
     financial loss has occurred                                                                                                
                                                                                                                                
     Establishes    submission   of    data/medical   record                                                                    
     standards    to   allow    for   clarification    where                                                                    
     discrepancies are identified                                                                                               
                                                                                                                                
     Establishes   a   reasonable   time   frame   for   the                                                                    
     announcement of  an audit to allow  proper retrieval of                                                                    
     records under review                                                                                                       
                                                                                                                                
Ms. Conway highlighted slide 20, "What Does a Fair Audit                                                                        
Bill Do?"                                                                                                                       
                                                                                                                                
    Establishes an audit appeals process for pharmacies                                                                         
                                                                                                                                
     Establishes  guidelines for  PBMs  to follow  regarding                                                                    
     patient confidentiality                                                                                                    
                                                                                                                                
    Prohibits extrapolation in assessing fees/penalties                                                                         
                                                                                                                                
     Allows   Alaska  pharmacists   to  provide   mail-order                                                                    
     service to their customers without penalization                                                                            
                                                                                                                                
     Local  mail-order  service   keeps  Alaska  dollars  in                                                                    
     Alaska                                                                                                                     
                                                                                                                                
     Legislation does  not prevent  the recoupment  of funds                                                                    
     where fraud, waste, and abuse exist                                                                                        
                                                                                                                                
9:50:06 AM                                                                                                                    
                                                                                                                                
Ms. Conway discussed slide 21, "SB 38: Summary":                                                                                
                                                                                                                                
     40 states have enacted fair audit legislation                                                                              
                                                                                                                                
     34  states have  enacted Maximum  Allowable Cost  (MAC)                                                                    
     transparency legislation                                                                                                   
                                                                                                                                
     Bill will also include:                                                                                                    
                                                                                                                                
     Registration of PBMs with the  State of Alaska Division                                                                    
     of  Insurance   Set-up  guidelines  for   generic  drug                                                                    
     maximum allowable cost (MAC) pricing by PBMs                                                                               
                                                                                                                                
     Establish  a mechanism  for a  pharmacy  to appeal  MAC                                                                    
     pricing appeal denials                                                                                                     
                                                                                                                                
     Don't audit local pharmacies out of business.                                                                              
     Their services are crucial in our rural areas.                                                                             
                                                                                                                                
Ms. Conway highlighted slide 22, "This legislation has been                                                                     
the Alaska Pharmacists":                                                                                                        
                                                                                                                                
     Association's  Number  1  Priority  bill  for  past  10                                                                    
     years.                                                                                                                     
                                                                                                                                
     Sponsored by  Senator Kim  Elton, Senator  Dennis Egan,                                                                    
     and now, Senator Giessel                                                                                                   
                                                                                                                                
     In your  packets you will see  numerous articles. Those                                                                    
     are just the tip of the iceberg.                                                                                           
                                                                                                                                
     Nationally, the  opaque "black  box" practices  of PBMs                                                                    
     are now under intense scrutiny.                                                                                            
                                                                                                                                
     All  one  needs  to  do  is  Google  "Pharmacy  Benefit                                                                    
     Manager" and  you will see  countless articles  on this                                                                    
     emerging concern. NCSL is now tracking these trends.                                                                       
                                                                                                                                
     In a few  states now, PBMs have sued  states because of                                                                    
     their PBM legislation and have lost.                                                                                       
                                                                                                                                
     It is even more crucial to support this legislation in                                                                     
     Alaska   because   of   the   critical   service   that                                                                    
     independent pharmacies provide to its rural clientele.                                                                     
                                                                                                                                
          ? Rich Holt  Chair, AK State Board of Pharmacy                                                                        
          ? Barry Christensen - AK Pharmacist Association                                                                       
          Legislative Chair                                                                                                     
          ? Emily Ricci        Dept. of Administration,                                                                         
          Retirement and Benefits                                                                                               
          ? Lori Wing-Heier        Director, Division of                                                                        
          Insurance                                                                                                             
                                                                                                                                
Senator  von Imhof  looked at  slide 20,  and looked  to the                                                                    
third  bullet point,  "prohibits extrapolation  in assessing                                                                    
fees and  penalties." She  explained that  the extrapolation                                                                    
was a  federal issue with  Medicaid. She felt that  the PBMs                                                                    
were not directing  that issue. Ms. Conway  replied that the                                                                    
Medicaid plans and audits did  not apply under the bill. She                                                                    
shared  that the  Department of  Health and  Social Services                                                                    
(DHSS) hired private contractors to conduct those audits.                                                                       
                                                                                                                                
Senator von  Imhof surmised that there  could technically be                                                                    
two different audits for pharmacy:  one for private insurers                                                                    
that  would  not  use   extrapolating  techniques;  and  one                                                                    
auditor   under  Medicaid   that  would   use  extrapolation                                                                    
techniques. Ms.  Conway agreed, but deferred  to the experts                                                                    
available online.                                                                                                               
                                                                                                                                
Senator Stevens  assumed that  the native  corporations were                                                                    
also  exempt  in  the  bill.   Ms.  Conway  replied  in  the                                                                    
affirmative. She  stated that they  were more  internal with                                                                    
the clinics and  hospitals that were regulated  on a federal                                                                    
level.                                                                                                                          
                                                                                                                                
9:55:26 AM                                                                                                                    
                                                                                                                                
LORI   WING-HEIER,   DIRECTOR,    DIVISION   OF   INSURANCE,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
noted  that the  subject  had been  in  legislation in  many                                                                    
different states. She stated  that the organizations allowed                                                                    
for  little  insights.  She  noted  the  concerns  from  the                                                                    
pharmacists  about the  costs of  what  was reimbursed;  the                                                                    
extrapolations; and the costs of  the audit. She stated that                                                                    
PBMs initially  saved money,  but were  initially mail-order                                                                    
pharmacies.   Eventually    PBMs   changed    to   community                                                                    
pharmacists  that adjusted  the  prices.  She remarked  that                                                                    
there was no  insight into the PBMs, and there  was a desire                                                                    
to  control without  inadvertently  increasing  the cost  of                                                                    
health care.                                                                                                                    
                                                                                                                                
9:57:21 AM                                                                                                                    
                                                                                                                                
EMILY  RICCI,   CHIEF  POLICY  ADMINISTRATOR,   DIVISION  OF                                                                    
RETIREMENT  AND  BENEFITS,   DEPARTMENT  OF  ADMINISTRATION,                                                                    
Noted  that  the bill  had  been  around for  a  significant                                                                    
number of  years. She  shared that there  was work  with the                                                                    
independent  pharmacists,  the  contractor  AETNA,  and  CVS                                                                    
Caremark.  She noted  that the  division had  a relationship                                                                    
with  the PBM;  and that  PBM had  contractual relationships                                                                    
with  different pharmacies.  The  pharmacies had  additional                                                                    
contractual  relationships with  wholesale distributors  and                                                                    
purchasing   services   administrative  organizations.   She                                                                    
furthered   that  the   PBMs   had  additional   contractual                                                                    
relationships  with  the  drug manufacturers.  She  stressed                                                                    
that none of those entities  were privy to the relationships                                                                    
of  the  other  entities.   Therefore  there  was  a  narrow                                                                    
perspective of  the drug  claims paid  on the  state's side.                                                                    
She stressed  that there was  a fiduciary  responsibility to                                                                    
the plan.                                                                                                                       
                                                                                                                                
Senator  von  Imhof  noted that  PBMs  and  pharmacists  had                                                                    
recently  attempted to  come to  an agreement,  and wondered                                                                    
whether there was success in  that effort. Ms. Ricci replied                                                                    
that she  was aware of an  effort two or three  years prior,                                                                    
and  did not  know  the content  of  those discussions.  She                                                                    
assumed that the effort was not successful.                                                                                     
                                                                                                                                
SB  38  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 185                                                                                                           
                                                                                                                                
     "An Act relating to reemployment of persons who retire                                                                     
     under the teachers' retirement system."                                                                                    
                                                                                                                                
10:01:38 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:02:11 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:02:21 AM                                                                                                                   
                                                                                                                                
SENATOR  PETER  MICCICHE,  SPONSOR discussed  the  bill.  He                                                                    
stated that  the bill  allowed teacher's  to be  paid normal                                                                    
retirement, while  not accruing  additional benefits  in the                                                                    
system.  There  would  be  no   additional  cost  to  school                                                                    
district.                                                                                                                       
                                                                                                                                
Senator Stevens thought  the bill was good in  many ways. He                                                                    
asked about  the bill  provision related to  the age  of the                                                                    
teacher.                                                                                                                        
                                                                                                                                
Senator Micciche stated that the  provision had to do with a                                                                    
ruling of  the IRS. He  deferred to those who  could address                                                                    
the specifics of that issue.                                                                                                    
                                                                                                                                
10:06:16 AM                                                                                                                   
                                                                                                                                
RACHEL HANKE,  STAFF, SENATOR PETER MICCICHE,  discussed the                                                                    
Sectional Analysis (copy on file):                                                                                              
                                                                                                                                
     Section 1                                                                                                                  
     Adds new section to AS 14.20:                                                                                              
     AS  14.20.136(a)  allows  school  districts  to  rehire                                                                    
     educators that  have retired under the  defined benefit                                                                    
     plan or the defined contribution plan when;                                                                                
                                                                                                                                
     AS  14.20.136(b)(1) the  retired member  certifies that                                                                    
     there was no prearrangement  of reemployment made prior                                                                    
     to retirement;                                                                                                             
                                                                                                                                
     AS  14.20.136(b)(2)  the  member has  been  retired  at                                                                    
     least 60 days  if they are 62 years of  age or older or                                                                    
     six months  if the member  is younger than 62  years of                                                                    
     age;                                                                                                                       
                                                                                                                                
     AS  14.20.136(c)  the  school district  has  adopted  a                                                                    
     rehire   policy   by   resolution  and   has   publicly                                                                    
     advertised  the position  for 10  business days  and is                                                                    
     actively recruiting to fill the  position with a person                                                                    
     other than a retired member.                                                                                               
                                                                                                                                
     AS 14.20.136(d)  reemployment contracts may  not exceed                                                                    
     12 consecutive months.                                                                                                     
                                                                                                                                
     AS  14.20.136(e)  the  school  district  that  hires  a                                                                    
     retiree must  provide the administrator with  a copy of                                                                    
     the resolution and policy required  by (e) as well as a                                                                    
     report  stating  the  retiree's  name,  description  of                                                                    
     circumstances,  and actions  taken to  comply with  the                                                                    
     policy. The  school district is  also required  to make                                                                    
     contributions to AS 14.25.070.                                                                                             
                                                                                                                                
     AS  14.20.136(f) certain  requirements  of the  section                                                                    
     don't  apply to  a  rehire member  that's eligible  for                                                                    
     restoration of tenure rights.                                                                                              
                                                                                                                                
     Section 2                                                                                                                  
     Allows  retirees  who  are  rehired,  as  permitted  by                                                                    
     section 1,  to continue to receive  retirement benefits                                                                    
     during the  period of  reemployment unless  they become                                                                    
     an active member.                                                                                                          
                                                                                                                                
     Sections 3                                                                                                                 
     Makes  retirees who  are  reemployed,  as permitted  by                                                                    
     section 1, ineligible  to receive additional retirement                                                                    
     benefits based  on their service and  salary during the                                                                    
     period of reemployment.                                                                                                    
                                                                                                                                
     Section 4                                                                                                                  
     Clarifies  that a  member who  is  reemployed does  not                                                                    
     become an  active member, the  member will  continue to                                                                    
     receive retirement benefits,  deductions under TRS will                                                                    
     not be  made to  their salary and  reemployed educators                                                                    
     will  not  receive  credited time  for  service  during                                                                    
     reemployment. This section also  ensures that a retired                                                                    
     and  rehired teacher  will be  eligible to  receive the                                                                    
     group health  plan coverage that is  provided to active                                                                    
     members  employed by  the school  district  if they  so                                                                    
     choose.                                                                                                                    
                                                                                                                                
     Section 5                                                                                                                  
     Inserts reference  to section 1 which  will require the                                                                    
     employer  to  make   TRS  contribution  for  reemployed                                                                    
     retirees at a rate of 12.56 percent.                                                                                       
                                                                                                                                
     Section 6                                                                                                                  
     Applies the  bill's provisions to contracts  made on or                                                                    
     after the effective date.                                                                                                  
                                                                                                                                
10:09:32 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  looked at page  2, lines 12 and  13, and                                                                    
noted  that  the  intent was  twelve  months.  She  wondered                                                                    
whether  a retired  teacher  could  move between  districts,                                                                    
begin a new contract, and continue to accrue benefits.                                                                          
                                                                                                                                
Senator Micciche  replied that all teachers'  contracts were                                                                    
for twelve months  or less. Those teachers  could have other                                                                    
contracts,  but  the districts  would  go  through the  same                                                                    
process. The  intent was not  to replace  existing teachers.                                                                    
He remarked that the bill was about filling a position.                                                                         
                                                                                                                                
Co-Chair  MacKinnon  wondered  what   would  happen  when  a                                                                    
retired  teacher  exited at  $50,000  per  year, and  a  new                                                                    
teacher was hired  at $35,000 a year. She  asked whether the                                                                    
new  teacher that  would be  rehired and  receiving benefits                                                                    
received $35,000 or $50,000.                                                                                                    
                                                                                                                                
Senator Micciche  replied that each instructor  was hired on                                                                    
an  individual basis,  so the  negotiation would  occur with                                                                    
the  districts.   He  stated  that  he   had  managed  large                                                                    
organizations,  so he  asserted that  the position  with the                                                                    
smaller salary would be the first choice.                                                                                       
                                                                                                                                
Co-Chair   MacKinnon   noted   that  there   were   specific                                                                    
provisions  in statute  that would  not allow  to come  back                                                                    
with the retirement wage.                                                                                                       
                                                                                                                                
Senator Stevens  felt that the  negotiation was  between the                                                                    
district and  the individual  teacher; therefore  the salary                                                                    
could not be at a specific commitment.                                                                                          
                                                                                                                                
Senator Micciche agreed,  and stated that there  would be no                                                                    
additional  benefit  beyond  the  pay of  the  position.  He                                                                    
announced  that  there was  a  hope  that all  positions  be                                                                    
filled with  new teachers, but districts  were struggling to                                                                    
fill those positions.                                                                                                           
                                                                                                                                
Co-Chair  MacKinnon  shared that  the  state  paid what  the                                                                    
districts   negotiate.  She   remarked  that   it  was   the                                                                    
committee's job to appropriately understand the impact.                                                                         
                                                                                                                                
Senator Stevens  understood that  the state paid  that bill.                                                                    
He wondered  why the University  of Alaska was  not included                                                                    
in the legislation.                                                                                                             
                                                                                                                                
Co-Chair MacKinnon shared that she  had not planned to bring                                                                    
the university  into the discussion, and  encouraged Senator                                                                    
Stevens to communicate with the bill sponsor.                                                                                   
                                                                                                                                
10:16:16 AM                                                                                                                   
                                                                                                                                
LISA PARADY,  EXECUTIVE DIRECTOR,  ALASKA COUNCIL  OF SCHOOL                                                                    
ADMINISTRATORS,  (ACSA) spoke  in support  of the  bill. She                                                                    
felt that it  was a tool to help school  districts in a time                                                                    
to fill vacancies with high  quality staff. She felt that it                                                                    
was not a "silver bullet",  but could provide some relief as                                                                    
a stop  gap. She remarked  that SB  185 would allow  for the                                                                    
reemployment  retired  educators   to  help  districts  fill                                                                    
vacancies; and  was a necessary  tool to help  meet district                                                                    
personnel  needs  in both  urban  and  rural districts.  She                                                                    
thanked  Kathy  Lee  for  work   to  ensure  that  the  bill                                                                    
envelopes the  necessary IRS Treasury regulations  and other                                                                    
important issues in the bill.  She felt that the legislation                                                                    
was vital  because of  the shortage of  staff in  the state.                                                                    
She  recalled  that  preparing,  attracting,  and  retaining                                                                    
teachers.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon wondered  when the  previous legislation                                                                    
had concluded. Ms.  Parady replied that the  bill sunset was                                                                    
2009.                                                                                                                           
                                                                                                                                
10:24:28 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman queried the  hiring provisions between 2001                                                                    
and  2010,  and whether  those  differed  from the  proposed                                                                    
legislation.  Ms.   Parady  responded  that  the   bill  was                                                                    
structured based on the  previous legislation. She furthered                                                                    
that  the  current  regulations were  included  by  the  IRS                                                                    
letter  ruling  that  included   the  waiting  periods.  She                                                                    
stressed that there were  sufficient requirements to greatly                                                                    
reduce the likelihood  that the bill would  impact a current                                                                    
TRS member's  decision to retire,  because of the  bona fide                                                                    
separation of employment.                                                                                                       
                                                                                                                                
10:26:12 AM                                                                                                                   
                                                                                                                                
DR.   KAREN  GABORIK,   PRESIDENT,  ALASKA   SUPERINTENDENTS                                                                    
ASSOCIATION, spoke  in support  of the  bill. She  felt that                                                                    
the  bill  would  positively   impact  every  public  school                                                                    
student  in  the  state. She  remarked  that  Fairbanks  had                                                                    
experienced   teacher  shortages   in  positions   that  had                                                                    
previously  been  filled.  She   remarked  that  there  were                                                                    
frequently   unfilled   vacancies   in   special   education                                                                    
positions, and were constantly  recruiting and traveling for                                                                    
those  positions. She  stressed that,  recently, there  were                                                                    
regular education  teacher vacancies  in areas such  as high                                                                    
school  math, science,  physics, calculus,  music, etc.  She                                                                    
remarked  that  it was  not  good  for  students to  face  a                                                                    
revolving door of substitute teachers to fill that gap.                                                                         
                                                                                                                                
Senator   Stevens   surmised   that  the   rules   currently                                                                    
restricted the  hiring of a  retired Alaska  school teacher.                                                                    
He remarked, however, that a  retired teacher could be hired                                                                    
from another  state. He  felt that  was unfair.  Ms. Gaborik                                                                    
replied  that  there  were  people who  had  taught  in  the                                                                    
community to fill those positions.                                                                                              
                                                                                                                                
Senator  Stevens stressed  that  the issue  was unfair.  Ms.                                                                    
Gaborik agreed.                                                                                                                 
                                                                                                                                
10:30:06 AM                                                                                                                   
                                                                                                                                
DEENA  BISHOP,  SUPERINTENDENT,  ANCHORAGE  SCHOOL  DISTRICT                                                                    
(via  teleconference), spoke  in  support of  the bill.  She                                                                    
stressed that  her district had  accessed the  experience of                                                                    
retired  educators by  allowing for  temporary or  part time                                                                    
employee. Nevertheless, the efforts  to access the workforce                                                                    
was limited  without a  full-time provision  of reemployment                                                                    
of   retirees.   She   assured  the   committee   that   the                                                                    
reemployment of  retired teachers was not  intended to avoid                                                                    
the hire of new teachers.  She stressed that retirees filled                                                                    
gaps when  properly certified  staff could  not be  hired in                                                                    
those hard to fill areas.                                                                                                       
                                                                                                                                
Co-Chair MacKinnon  requested a telephone  conversation with                                                                    
her office. Ms. Bishop agreed.                                                                                                  
                                                                                                                                
10:32:29 AM                                                                                                                   
                                                                                                                                
NORM  WOOTEN,  EXECUTIVE  DIRECTOR,  ASSOCIATION  OF  ALASKA                                                                    
SCHOOL BOARDS, testified  in support of the  bill. He stated                                                                    
that his organization  had a resolution in  place to support                                                                    
retire  rehire of  teachers and  administrators since  2008,                                                                    
which  the previous  provision was  scheduled to  sunset. He                                                                    
stressed that  there was a  nationwide shortage  of teachers                                                                    
and administrators.  He remarked that it  was especially the                                                                    
case with hard to fill positions.                                                                                               
                                                                                                                                
Senator Stevens  stressed that administrators  were included                                                                    
in the bill. Mr. Wooten agreed.                                                                                                 
                                                                                                                                
10:35:23 AM                                                                                                                   
                                                                                                                                
MARK MILLER,  SUPERINTENDENT, JUNEAU SCHOOL  DISTRICT, spoke                                                                    
in support  of the legislation.  He shared that he  only had                                                                    
two options  when he had  an open position: attempt  to fill                                                                    
that position with a substitute  or fill with a new teacher.                                                                    
He  stated that  on any  given day  there would  be students                                                                    
supervised  by  someone, because  there  was  no teacher  to                                                                    
substitute during that period. He  stated that he could also                                                                    
contact  a company  in  the  lower 48  to  contract to  send                                                                    
someone  to   fill  services  that   could  not   be  filled                                                                    
internally. He  stressed that the Alaskan  tax dollars would                                                                    
be spent outside  of Alaska. He felt that it  was a resource                                                                    
issue.                                                                                                                          
                                                                                                                                
10:38:08 AM                                                                                                                   
                                                                                                                                
MARY  WEGNER, SUPERINTENDENT,  SITKA SCHOOL  DISTRICT, spoke                                                                    
in support of the bill.                                                                                                         
                                                                                                                                
10:41:01 AM                                                                                                                   
                                                                                                                                
SEAN DUSEK,  SUPERINTENDENT, KENAI PENINSULA  BOROUGH SCHOOL                                                                    
DISTRICT, testified in support of the legislation.                                                                              
                                                                                                                                
10:43:26 AM                                                                                                                   
                                                                                                                                
BOBBY BOLEN, SUPERINTENDENT,  BERING STRAIT SCHOOL DISTRICT,                                                                    
spoke in support of the bill.                                                                                                   
                                                                                                                                
Senator Olson  wondered what would occur  when the qualified                                                                    
positions were lost.  Mr. Bolen replied there  was much time                                                                    
spent in the  lower 48 looking for teachers.  He stated that                                                                    
there were teachers that needed to fill those empty spaces.                                                                     
                                                                                                                                
Senator  Olson  noted  that   Golovan  had  some  substitute                                                                    
teachers  who  were  recently   graduated,  because  of  the                                                                    
teacher shortage.                                                                                                               
                                                                                                                                
Senator  von  Imhof  wondered how  much  teacher  housing  a                                                                    
contributing   factor  was   to  hire   and  maintaining   a                                                                    
workforce. Mr.  Bolen replied that  there was not  a current                                                                    
problem of housing,  because there were no  teachers to fill                                                                    
that housing.                                                                                                                   
                                                                                                                                
10:47:45 AM                                                                                                                   
                                                                                                                                
MONICA   GOYETTE,  SUPERINTENDENT,   MATSU  BOROUGH   SCHOOL                                                                    
DISTRICT, spoke in support of the bill.                                                                                         
                                                                                                                                
Co-Chair  MacKinnon noted  that the  statement of  the three                                                                    
year  educational certification  was an  individual district                                                                    
policy. Ms. Goyette agreed.                                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
10:49:39 AM                                                                                                                   
                                                                                                                                
KATHY LEA, CHIEF PENSION OFFICER  DIVISION OF RETIREMENT AND                                                                    
BENEFITS, DEPARTMENT OF ADMINISTRATION,  stated that she was                                                                    
available   for  questions.   She  also   stated  that   the                                                                    
Department  of Administration's  position  on  the bill  was                                                                    
neutral.                                                                                                                        
                                                                                                                                
Co-Chair MacKinnon queried the fiscal note.                                                                                     
                                                                                                                                
10:50:17 AM                                                                                                                   
                                                                                                                                
Ms. Lea explained the fiscal note.                                                                                              
                                                                                                                                
Senator Stevens  requested the point  of the  IRS regulation                                                                    
of the  difference between  six months  and sixty  days. Ms.                                                                    
Lea replied that  in any plan, because of  the tax qualified                                                                    
plan, there must  be a mark at which it  would be considered                                                                    
a "normal retirement" for any  time of government or private                                                                    
sector  plan.   She  explained  that  it   was  because  the                                                                    
contributions  made  to the  plan  were  made on  a  pre-tax                                                                    
basis. The IRS would then  examine when it could receive the                                                                    
tax for the pre-tax contributions.                                                                                              
                                                                                                                                
Vice-Chair Bishop requested a meeting with his office.                                                                          
                                                                                                                                
10:55:06 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon   asked  for   an  explanation   of  the                                                                    
indeterminate fiscal  note. Ms. Lea replied  that the fiscal                                                                    
note was  indeterminate, because it  was not known  how many                                                                    
people would  participate in the  program, nor was  it known                                                                    
which group they might participate.                                                                                             
                                                                                                                                
11:00:48 AM                                                                                                                   
                                                                                                                                
Senator  Stevens  noted  that  some  districts  were  hiring                                                                    
retired  teachers  at  24.9  percent   or  less,  which  was                                                                    
acceptable  under the  rules of  the retirement  system. Ms.                                                                    
Lea  replied that  under the  existing rules,  a teacher  or                                                                    
administrator  was mandated  to be  in  TRS if  they had  at                                                                    
least a 50 percent contract.                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon wondered  whether  there was  additional                                                                    
cost to the state, if there  was not an effect on insurance.                                                                    
Ms. Lea  replied that  she had not  analyzed it,  because it                                                                    
occurred on an ad hoc basis.                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon announced  that amendments  were due  on                                                                    
Wednesday.  She  discussed  the  agenda  for  the  afternoon                                                                    
meeting.                                                                                                                        
                                                                                                                                
SB  185  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
11:02:39 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 11:02 a.m.                                                                                         

Document Name Date/Time Subjects
SB38 Background Document NPR How Generics are Killing Local Pharmacies 10-22-2015.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Letters of Support Compilation 4-4-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Sectional Analysis vsn D 4-4-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Sponsor Statement 4-4-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Summary of Changes vsn A to vsn D 3-31-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Support Letter AK Chamber 3-23-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Supporting Document NASHP 3-30-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Supporting Document NCPA 1-26-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Supporting Document PBMs in Alaska 3-2016.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Supporting Document Hidden Monopolies 3-2017.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Supporting Document Reuters-Business Insider Dec. 2017.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Supporting Document Bismark Tribune 11-17.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB38 Supporting Document Capitol Forum 1-2018.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB185 Explanation of Changes Ver. A to Ver. D.pdf SFIN 4/9/2018 9:00:00 AM
SB 185
SB185 Sponsor Statement.pdf SFIN 4/9/2018 9:00:00 AM
SB 185
SB185 Sectional Analysis ver. D.pdf SFIN 4/9/2018 9:00:00 AM
SB 185
SB185 Support Doc - 10 Year Utilization Summary.pdf SFIN 4/9/2018 9:00:00 AM
SB 185
SB185 Support Letters SB185 and HB224.pdf SFIN 4/9/2018 9:00:00 AM
HB 224
SB 185
SB185 Support Doc - Actuarial Risk Graphic.pdf SFIN 4/9/2018 9:00:00 AM
SB 185
SB 185 Alaska_HB224_FINAL Conduent analysis.pdf SFIN 4/9/2018 9:00:00 AM
HB 224
SB 185
SB38 Supporting Document AK Independent Pharmacy List 2018 4-8-18.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB 38 2018_0320_SFC Presentation for 3.22.2018 Hearing_Final.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB 38 support Medical Center Pharmacy.pdf SFIN 4/9/2018 9:00:00 AM
SB 38
SB 185 - Retire_Rehire of Teachers & Administrators.pdf SFIN 4/9/2018 9:00:00 AM
SB 185