Legislature(2017 - 2018)BUTROVICH 205

03/16/2018 01:30 PM HEALTH & SOCIAL SERVICES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 123 DISCLOSURE OF HEALTH CARE COSTS TELECONFERENCED
Heard & Held
-- Testimony <Invited and Public> --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 81 DHSS CENT. REGISTRY;LICENSE;BCKGROUND CHK TELECONFERENCED
Moved CSSB 81(HSS) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
      SENATE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                    
                         March 16, 2018                                                                                         
                           1:32 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator David Wilson, Chair                                                                                                     
Senator Natasha von Imhof, Vice Chair                                                                                           
Senator Peter Micciche                                                                                                          
Senator Tom Begich                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Cathy Giessel                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 81                                                                                                              
"An Act relating  to criminal and civil  history requirements and                                                               
a registry  regarding certain licenses,  certifications, appeals,                                                               
and  authorizations  by  the  Department  of  Health  and  Social                                                               
Services; and providing for an effective date."                                                                                 
                                                                                                                                
     - MOVED CSSB 81(HSS) OUT OF COMMITTEE                                                                                      
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 123(HSS)                                                                                
"An Act relating to disclosure of health care services and price                                                                
information; and providing for an effective date."                                                                              
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  81                                                                                                                  
SHORT TITLE: DHSS CENT. REGISTRY; LICENSE; BACKGROUND CHECK                                                                     
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/08/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/08/17       (S)       HSS, JUD                                                                                               
02/02/18       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
02/02/18       (S)       Heard & Held                                                                                           
02/02/18       (S)       MINUTE(HSS)                                                                                            
02/05/18       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
02/05/18       (S)       -- MEETING CANCELED --                                                                                 
03/14/18       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/14/18       (S)       Heard & Held                                                                                           
03/14/18       (S)       MINUTE(HSS)                                                                                            
03/16/18       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HB 123                                                                                                                  
SHORT TITLE: DISCLOSURE OF HEALTH CARE COSTS                                                                                    
SPONSOR(s): SPOHNHOLZ                                                                                                           
                                                                                                                                
02/13/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/13/17       (H)       HSS, JUD                                                                                               
03/02/17       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/02/17       (H)       Heard & Held                                                                                           
03/02/17       (H)       MINUTE(HSS)                                                                                            
03/09/17       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/09/17       (H)       Moved CSHB 123(HSS) Out of Committee                                                                   
03/09/17       (H)       MINUTE(HSS)                                                                                            
03/10/17       (H)       HSS RPT CS(HSS) 5DP 2NR                                                                                
03/10/17       (H)       DP: JOHNSTON, TARR, EDGMON, SULLIVAN-                                                                  
                         LEONARD, SPOHNHOLZ                                                                                     
03/10/17       (H)       NR: KITO, EASTMAN                                                                                      
03/24/17       (H)       JUD AT 1:00 PM GRUENBERG 120                                                                           
03/24/17       (H)       Heard & Held                                                                                           
03/24/17       (H)       MINUTE(JUD)                                                                                            
03/27/17       (H)       JUD AT 1:00 PM GRUENBERG 120                                                                           
03/27/17       (H)       Heard & Held                                                                                           
03/27/17       (H)       MINUTE(JUD)                                                                                            
03/29/17       (H)       JUD AT 1:00 PM GRUENBERG 120                                                                           
03/29/17       (H)       Moved CSHB 123(HSS) Out of Committee                                                                   
03/29/17       (H)       MINUTE(JUD)                                                                                            
03/31/17       (H)       JUD RPT CS(HSS) 1DP 1NR 4AM                                                                            
03/31/17       (H)       DP: CLAMAN                                                                                             
03/31/17       (H)       NR: EASTMAN                                                                                            
03/31/17       (H)       AM:   KOPP,   KREISS-TOMKINS,   FANSLER,                                                               
                         REINBOLD                                                                                               
04/07/17       (H)       TRANSMITTED TO (S)                                                                                     
04/07/17       (H)       VERSION: CSHB 123(HSS)                                                                                 
04/10/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/10/17       (S)       HSS, JUD                                                                                               
03/16/18       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MARGARET BRODIE, Director                                                                                                       
Division of Healthcare Services                                                                                                 
Department of Health and Social Services (DHSS)                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified on SB 81.                                                                                       
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of HB 123.                                                                                        
                                                                                                                                
BERNICE NISBETT, Staff                                                                                                          
Representative Ivy Spohnholz                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented the sectional on behalf of the                                                                  
sponsor.                                                                                                                        
                                                                                                                                
ROSA AVILA, Deputy Section Chief                                                                                                
Health Analytics and Vital Statistics                                                                                           
Division of Public Health                                                                                                       
Department of Health and Social Services (DHSS)                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions related to HB 123.                                                                     
                                                                                                                                
JEANNIE MONK, Senior Vice President                                                                                             
Alaska State Hospital and Nursing Home Association (ASHNHA)                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified on HB 123.                                                                                      
                                                                                                                                
CHELSEA GOUCHER, President                                                                                                      
Board of Directors                                                                                                              
Ketchikan Chamber of Commerce                                                                                                   
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT: Supported HB 123.                                                                                         
                                                                                                                                
DOMINIC LOZANO, Secretary/Treasurer                                                                                             
Alaska Professional Firefighters Association                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Supported HB 123.                                                                                         
                                                                                                                                
TERRY ALLARD, Member                                                                                                            
Alaska Association of Health Underwriters                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supported HB 123.                                                                                         
                                                                                                                                
JENNIFER MEYHOFF, Chair of Legislative Committee                                                                                
Alaska Association of Health Underwriters                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supported HB 123.                                                                                         
                                                                                                                                
GINA BOSNAKIS, Representing Self                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supported HB 123.                                                                                         
                                                                                                                                
GRAHAM GLASS, M.D., Representing Self                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified on HB 123.                                                                                      
                                                                                                                                
DENISE DANIELLO, Executive Director                                                                                             
Alaska Commission on Aging                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported HB 123.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:32:08 PM                                                                                                                    
CHAIR DAVID WILSON  called the Senate Health  and Social Services                                                             
Standing Committee meeting  to order at 1:32 p.m.  Present at the                                                               
call  to order  were Senators  von Imhoff,  Micciche, Begich  and                                                               
Chair Wilson.                                                                                                                   
                                                                                                                                
      SB 81-DHSS CENT. REGISTRY; LICENSE; BACKGROUND CHECK                                                                  
                                                                                                                                
1:33:59 PM                                                                                                                    
CHAIR WILSON announced the consideration of SB 81.                                                                              
                                                                                                                                
1:34:42 PM                                                                                                                    
STACIE KRALY,  Chief Assistant Attorney General,  Civil Division,                                                               
Human Services Section, Department of Law, introduced herself.                                                                  
                                                                                                                                
CHAIR WILSON  said he had  a question  about the fiscal  note. He                                                               
asked who would pay for the fees and changes to the regulations.                                                                
                                                                                                                                
1:35:15 PM                                                                                                                    
MARGARET  BRODIE,  Director,  Division  of  Healthcare  Services,                                                               
Department  of  Health  and Social  Services  (DHSS),  said  they                                                               
submitted a zero fiscal note  because the databases that are used                                                               
for the background checks are  already identified in regulations.                                                               
There is no change in processes, procedures, or regulations.                                                                    
                                                                                                                                
CHAIR WILSON asked if that  would include the additional sections                                                               
on sharing data and information with concurrent investigations.                                                                 
                                                                                                                                
MS.  BRODIE   said  they  already   notify  providers   with  the                                                               
information they need to have.                                                                                                  
                                                                                                                                
SENATOR  VON IMHOF  moved  to  report CSSB  81,  Version D,  from                                                               
committee with individual  recommendations and forthcoming fiscal                                                               
notes.                                                                                                                          
                                                                                                                                
1:36:42 PM                                                                                                                    
CHAIR WILSON found  no objection and CSSB 81(HSS)  moved from the                                                               
Senate Health and Social Services Standing Committee.                                                                           
                                                                                                                                
1:36:57 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
              HB 123-DISCLOSURE OF HEALTH CARE COSTS                                                                        
                                                                                                                                
1:38:50 PM                                                                                                                    
CHAIR  WILSON   announced  the  consideration   of  HB   123.  He                                                               
entertained  a   motion  to  adopt   the  work   draft  committee                                                               
substitute (CS).                                                                                                                
                                                                                                                                
1:39:13 PM                                                                                                                    
SENATOR VON  IMHOF moved  to adopt  the work  draft SCS  for CSHB
123, labeled 30-LS0380\G, as the working document.                                                                              
                                                                                                                                
1:39:24 PM                                                                                                                    
CHAIR WILSON objected for purposes of discussion.                                                                               
                                                                                                                                
1:39:36 PM                                                                                                                    
REPRESENTATIVE IVY  SPOHNHOLZ, Alaska State  Legislature, sponsor                                                               
of HB 123,  said HB 123 is about health  care price transparency.                                                               
Sir  Francis  Bacon,  father  of   the  scientific  method,  said                                                               
knowledge  is power.  As  health care  consumers,  people in  the                                                               
United States do not have that  power. They don't know the prices                                                               
of  health care  goods and  services before  they receive  or buy                                                               
them. This  lack of information  prevents one of  the fundamental                                                               
tenets  about  capitalism: the  power  of  the consumer  to  make                                                               
choices about what they do or  do not purchase. The United States                                                               
spends more  per capita  than the  rest of  the world.  Alaska is                                                               
almost  the highest  in the  nation in  health care  spending per                                                               
capita. A  map from the  Kaiser Family Foundation's  State Health                                                               
Facts shows that  Alaska is in the top quartile.  The health care                                                               
cost  in Alaska  is  $11,064  per person  vs.  $8,045 per  person                                                               
nationally. That is a significant  difference with no improvement                                                               
in the outcomes.                                                                                                                
                                                                                                                                
She presented  a few metrics  to illustrate the costs  in Alaska.                                                               
She noted that some were taken  from an article Senator von Imhof                                                               
wrote for Alaska Business Monthly in 2014 and some are from the                                                                 
Kaiser Foundation study.                                                                                                        
                                                                                                                                
     Medical specialist  costs are  35 to 40  percent higher                                                                    
     in Alaska than  in the lower 48; hospital  stays are 50                                                                    
     percent more expensive in Alaska.                                                                                          
                                                                                                                                
     90  percent of  the Anchorage  School District's  (ASD)                                                                    
     budget is  labor; employee compensation is  the largest                                                                    
     cost  driver and  this is  all due  to health  care and                                                                    
     group coverage costs.                                                                                                      
                                                                                                                                
     2013 study indicated that ASD  cost increases have been                                                                    
     because of  health care; benefits are  more than double                                                                    
     the national median.                                                                                                       
                                                                                                                                
     Alaska's health  care costs are  second highest  in the                                                                    
     nation. Only Washington DC is higher.                                                                                      
                                                                                                                                
     Health  premiums  for  families   have  risen  from  10                                                                    
     percent  of the  average Alaskan  salary to  33 percent                                                                    
     since 2001.                                                                                                                
                                                                                                                                
1:41:58 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
1:43:12 PM                                                                                                                    
CHAIR WILSON reconvened the meeting and announced that the                                                                      
committee would first go through the bill changes in order to                                                                   
adopt version G as the working document.                                                                                        
                                                                                                                                
1:43:28 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ reviewed the following changes from the                                                                
House Committee Substitute for HB 123, Version I, to the Senate                                                                 
Committee Substitute, Version G:                                                                                                
                                                                                                                                
     Version I                                                                                                                  
        1. Providers  list the 25 most common procedures                                                                        
         with the CPT [Current Procedural Terminology]                                                                          
          code and undiscounted price.                                                                                          
       2. Facilities  list the 50 most common procedures                                                                        
          with the CPT code and undiscounted price.                                                                             
      3. Price information will be located in a reception                                                                       
          area and/or website.                                                                                                  
        4. Statement will be provided that explains the                                                                         
          price will be higher or lower than amount                                                                             
          actually paid.                                                                                                        
        5. Department of Health & Social Services will                                                                          
          compile the information and post on their                                                                             
          website.                                                                                                              
                                                                                                                                
      Version G retains those items in Version I and adds                                                                       
     the following:                                                                                                             
                                                                                                                                
        1. Providers and facilities will also provide                                                                           
          facility fees and the Medicaid payment rate.                                                                          
                                                                                                                                
        2. Price information will be in a font size no                                                                          
          smaller than 20 points.                                                                                               
                                                                                                                                
        3. Providers will offer a Good Faith Estimate (GFE)                                                                     
          upon request including health care services, CPT                                                                      
          codes, facility fees, and identity of others that                                                                     
          may charge.                                                                                                           
                                                                                                                                
        4. In-network and out-of-network information will be                                                                    
          displayed (post & GFE).                                                                                               
                                                                                                                                
        5. Increases civil penalties up to $100/day, not to                                                                     
          exceed $5,000.                                                                                                        
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ said number 3  is designed to mirror the                                                               
Municipality of  Anchorage's Good  Faith Estimate  provision that                                                               
the Assembly passed last year.                                                                                                  
                                                                                                                                
1:46:15 PM                                                                                                                    
CHAIR   WILSON  removed   his  objection.   Finding  no   further                                                               
objection, he announced that version G was adopted.                                                                             
                                                                                                                                
1:46:25 PM                                                                                                                    
REPRESENTATIVE  SPOHNHOLZ said  that without  price transparency,                                                               
consumers can't predict  or plan whether their  medical bill will                                                               
be on  the high  or low  end of  the price  spectrum. It  means a                                                               
little capitalism  needs to  be introduced  into the  health care                                                               
field. She clarified  that HB 123 is not designed  to solve every                                                               
problem related  to health  care cost.  The health  care system's                                                               
conundrums  are so  much bigger  than any  one strategy  can fix.                                                               
Probably  many adaptive  changes  will need  to  be applied.  She                                                               
described the bill  as the first mile in a  marathon. It will set                                                               
a foundation for  the kinds of changes that need  to be made over                                                               
time.  She  said   her  office  worked  hard   with  health  care                                                               
providers,  payers, and  the Alaska  State  Hospital and  Nursing                                                               
Home  Association  to  make  HB 123  simple  to  implement  while                                                               
providing  meaningful information  to  health  care consumers  as                                                               
they navigate the health care marketplace.                                                                                      
                                                                                                                                
1:48:41 PM                                                                                                                    
BERNICE  NISBETT,  Staff,  Representative Ivy  Spohnholz,  Alaska                                                               
State Legislature, presented the  sectional analysis for SCS CSHB
123, version G:                                                                                                                 
                                                                                                                                
Section  1. The  Department of  Health &  Social Services  (DHSS)                                                             
currently collects  information and maintains a  database related                                                               
to public  health. AS  18.15.360(a) has  been amended  to include                                                               
health care services and price information.                                                                                     
                                                                                                                                
Section 2. AS  18.23.400 Disclosure and reporting  of health care                                                             
services and price, and fee information.                                                                                        
                                                                                                                                
Subsection (a)  Providers will list  25 health care services most                                                               
commonly performed.                                                                                                             
                                                                                                                                
Subsection  (b)  Facilities  will  list 50  health care  services                                                               
most commonly performed.                                                                                                        
                                                                                                                                
Subsection (c)  if  fewer than 25 or 50 health  care services are                                                               
performed, the provider  or facility will list all  of the health                                                               
care services performed.                                                                                                        
The lists will include:                                                                                                         
        • Procedure code                                                                                                        
        • Undiscounted price                                                                                                    
        • Medicaid price                                                                                                        
        • Facility Fees                                                                                                         
                                                                                                                                
Subsection (d)   a provider  working in a  group practice  is not                                                               
required to post price information.                                                                                             
                                                                                                                                
Subsection (e)  a  health care provider or  facility will compile                                                               
the information under (a) and (b) once a year by January 31st.                                                                  
        • The list will be given to DHSS.                                                                                       
        • The posting of the price information will be in font                                                                  
          size no smaller than 20.                                                                                              
        • "You will be provided with an estimate upon request."                                                                 
        • In-Network preferred providers will also be displayed.                                                                
                                                                                                                                
Subsection (f) DHSS will post this information once a year on                                                                   
their website.                                                                                                                  
                                                                                                                                
Subsection (g) Good faith estimate (GFE):                                                                                       
        • A patient can request a GFE for nonemergency                                                                          
          health care services.                                                                                                 
        • No later than 10 days after receiving the request                                                                     
          or by date of service is provided (if less than                                                                       
          10 days).                                                                                                             
        • Can be received verbally, in writing, or by                                                                           
          electronic means.                                                                                                     
                                                                                                                                
Subsection (h) the estimate must include:                                                                                       
        • Description of procedures, services, products,                                                                        
          supplies with procedure codes                                                                                         
        • Facility fees                                                                                                         
        • Individualize charges                                                                                                 
        • Identity of others that my charge                                                                                     
        • Prices                                                                                                                
        • Individual's in-network preferred provider and                                                                        
          out-of-network providers.                                                                                             
                                                                                                                                
Subsection (i) Providers and facilities will not be liable for                                                                  
damages if the estimate is different from the amount charged.                                                                   
                                                                                                                                
Subsection (j) Emergency departments are not required to                                                                        
provide a GFE.                                                                                                                  
                                                                                                                                
Subsection (k) Civil penalty after March 31st is $100 a day,                                                                    
not to exceed $5,000. GFE civil penalty after 10 days is $100 a                                                                 
day, not to exceed $5,000.                                                                                                      
                                                                                                                                
Subsection (l) Providers and facilities can challenge their                                                                     
penalties with the office of administrative hearings.                                                                           
                                                                                                                                
Subsection (m) a municipality may not enforce an ordinance that                                                                 
imposes health care price disclosure requirements. Supremacy                                                                    
clause.                                                                                                                         
                                                                                                                                
Subsection (n)   department, facility fee, health  care facility,                                                               
health care  insurer, health care provider,  health care service,                                                               
nonemergency  health  care  service, patient,  third  party,  and                                                               
undiscounted price are defined.                                                                                                 
                                                                                                                                
Section 3. Effective date will be January 1, 2019.                                                                            
                                                                                                                                
1:53:31 PM                                                                                                                    
SENATOR BEGICH asked  about the supremacy clause  in subsection m                                                               
on page  6, line  3. He  asked why a  municipality should  not be                                                               
able to go beyond this law and require even more disclosure.                                                                    
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  said the good faith  estimate provision                                                               
passed  by the  Municipality  of  Anchorage is  a  good law.  Her                                                               
office worked  with the  municipality to  come up  with something                                                               
substantively  equivalent that  could  be implemented  throughout                                                               
the state. They do not want  health care providers who operate in                                                               
multiple   jurisdictions  to   comply   with   code  in   various                                                               
communities. There  are many practices  based in  Anchorage which                                                               
operate throughout the state.                                                                                                   
                                                                                                                                
SENATOR MICCICHE asked whether the  graph on slide 3 about health                                                               
care   expenditures   per   capita  is   the   state's   Medicaid                                                               
expenditures.                                                                                                                   
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ said yes.                                                                                              
                                                                                                                                
SENATOR MICCICHE  pointed out  that that is  not health  care per                                                               
capita.                                                                                                                         
                                                                                                                                
1:55:40 PM                                                                                                                    
REPRESENTATIVE  SPOHNHOLZ   said  there   is  no   great  measure                                                               
nationwide and state  to state to track total  health care spend.                                                               
She has  been working  with Milbank  Memorial Fund,  the nation's                                                               
oldest public health  foundation, to identify a  best practice to                                                               
measure the total health care spend in the state.                                                                               
                                                                                                                                
SENATOR  MICCICHE  asked if  that  may  be  because many  of  the                                                               
insurance companies  are out of  state, and it's hard  to collect                                                               
it within the boundaries of the state itself.                                                                                   
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ said  there  is just  not  a very  good                                                               
standard nationwide for how to  measure health care spend. GDP is                                                               
a  much  bigger  and  specific methodology,  but  there's  not  a                                                               
concrete way  of measuring and  comparing state to state.  It's a                                                               
big  problem.  The  Milbank  Memorial Fund  has  put  together  a                                                               
working  group to  identify a  methodology. Mark  Foster at  ISER                                                               
[Institute of  Social and Economic  Research] did a  paper around                                                               
2010 to look  at the total health care spend  in Alaska, but that                                                               
data has not been updated.                                                                                                      
                                                                                                                                
SENATOR VON  IMHOF asked if  the Department of Health  and Social                                                               
Services (DHSS) is going to  collect the information from private                                                               
hospitals and clinics.                                                                                                          
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  said   the  bill  requires  individual                                                               
health care providers  to send in their  price disclosure sheets.                                                               
The process  is a once  a year, point-in-time analysis  that each                                                               
health care practice  would do to identify  their most frequently                                                               
offered  services. They  would create  a formatted  document with                                                               
all  the  information,  post  in   their  reception  area  and/or                                                               
website,  and send  it to  the department.  DHSS will  upload the                                                               
document to  a public website. DHSS  is not required to  create a                                                               
database.  It's good  to  get that  information  into the  public                                                               
domain. She would  like to see researchers  start doing something                                                               
useful with that data.                                                                                                          
                                                                                                                                
SENATOR  VON IMHOF  said Representative  Spohnholz had  mentioned                                                               
that   they   are  both   sitting   on   a  blueprint   committee                                                               
[Comprehensive  Health Plan  Working  Group]. She  asked what  if                                                               
another  entity is  created that  should be  the one  to collect,                                                               
analyze, and maintain  a database vs. DHSS. She  asked whether it                                                               
should  be  left   open  by  adding  something   like  "or  other                                                               
appropriate state-appointed health care agency."                                                                                
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  responded that  there  needs  to be  a                                                               
public place for that information  to go now that researchers and                                                               
individuals who  want to do  a comparison could use.  There could                                                               
be another  organization at a  later date. They are  not mutually                                                               
exclusive.  Another entity  in the  future could  take over  with                                                               
more resources and do more analysis.                                                                                            
                                                                                                                                
2:00:24 PM                                                                                                                    
SENATOR  VON IMHOF  said there  is a  zero fiscal  note from  the                                                               
[Health Analytics and  Vital Statistics], so they  will take this                                                               
on and absorb the cost of the work.                                                                                             
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ said they have  been clear that they are                                                               
not  asking  DHSS to  create  a  database  or do  any  additional                                                               
analysis.                                                                                                                       
                                                                                                                                
SENATOR VON  IMHOF asked about  health care procedure  codes. For                                                               
example,   if  a   child  has   a   tonsillectomy,  there's   the                                                               
anesthesiologist, the  recovery, the  whole procedure.  There's a                                                               
series of health care acts for a procedure.                                                                                     
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ said the  bill has two sections. There's                                                               
the  price menu  that goes  in the  reception area  and the  good                                                               
faith  estimate. The  tonsillectomy  would probably  fall in  the                                                               
good faith  estimate. Someone  would ask for  an estimate  of the                                                               
total  charge.  The  office  would  provide a  list  of  all  the                                                               
individual things  they expect to  do, along with others  who may                                                               
charge, and the  facility fees, and whether they are  in- or out-                                                               
of-network with  the patient's  insurer and  the total  price. It                                                               
would  be a  one-page  document.  The bill  allows  for a  verbal                                                               
estimate. The suggestion is that  it be documented. Most of those                                                               
things will be in writing.                                                                                                      
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ said  they  asked  the Municipality  of                                                               
Anchorage  how   many  people  are  requesting   the  good  faith                                                               
estimate. Providence may have provided 24.                                                                                      
                                                                                                                                
SENATOR VON IMHOF  said the good faith estimate  is required only                                                               
if the patient  asks. She asked whether a  provider should notate                                                               
that a patient did not ask for a good faith estimate.                                                                           
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ said they would  not need to notate that                                                               
someone did  not ask.  They are expecting  that a  provider would                                                               
document when a request was made  and that the estimate was given                                                               
verbally. The  best practice would  be to document  due diligence                                                               
since they are implementing accountability measures.                                                                            
                                                                                                                                
CHAIR  WILSON  said the  penalty  fee,  which  is not  to  exceed                                                               
$5,000,  could be  a  drop in  the bucket  for  some health  care                                                               
organizations.                                                                                                                  
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  said there are two  separate penalties.                                                               
One  for not  providing a  good faith  estimate and  one for  not                                                               
providing  prices. Not  providing good  faith estimates  over and                                                               
over could be  expensive. For price listing, the  court of public                                                               
opinion will be useful. Consumers  will want that information and                                                               
will notice when it's not there.                                                                                                
                                                                                                                                
2:05:39 PM                                                                                                                    
CHAIR WILSON said many people have  called his office to say that                                                               
the  price  board  is like  the  MSRP  [manufacturer's  suggested                                                               
retail  price]  for  cars  that people  don't  pay.  They'll  get                                                               
sticker  shock. He  asked whether  it would  be a  better use  of                                                               
effort  to  call an  insurance  provider  to  get the  usual  and                                                               
customary listings  instead of  the rack  prices that  few people                                                               
pay.                                                                                                                            
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ said version  G has two separate prices,                                                               
the  undiscounted price  and the  Medicaid  price. She  suggested                                                               
that those  will be  amongst the highest  and lowest  prices that                                                               
any provider would  charge. Medicare charges are  lower, but they                                                               
have a different  fee schedule that is difficult  to crosswalk in                                                               
a  simple  way. It  is  important  to  have  that in  the  public                                                               
discussion, so people  understand what things do  cost. They have                                                               
allowed  for a  disclaimer that  states  the actual  rate may  be                                                               
higher or  lower. Please talk  to the billing office  or insurer.                                                               
But they need  to start from somewhere. They  heard that feedback                                                               
from many folks, but  practitioners have nondisclosure agreements                                                               
with insurance  companies. That  is a whole  other nut  to crack.                                                               
Sometimes more  data is not  more information. If someone  has 18                                                               
different prices  for the  same service on  a spreadsheet  on the                                                               
wall, is that  more useful information for  health care consumers                                                               
or  more data  that tunes  people out  further from  the problem.                                                               
They felt that  showing high and low pricing with  a statement to                                                               
talk to the  billing office to get a specific  estimate was a way                                                               
of landing in the middle.                                                                                                       
                                                                                                                                
CHAIR WILSON said the bill  exempts facilities operated by Alaska                                                               
tribal health organizations.  They make up more than  half of the                                                               
health care  clinics in the  state. He  asked why they  should be                                                               
exempted.                                                                                                                       
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  said those organizations are  tribal so                                                               
there are legal preclusions to make them do something like that.                                                                
.                                                                                                                               
SENATOR  BEGICH asked  why Alaska's  health care  costs began  to                                                               
deviate from the national average around the year 2000.                                                                         
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  said she  will  not  put a  theory  on                                                               
record.                                                                                                                         
                                                                                                                                
SENATOR MICCICHE  noted that language  on page 5, line  26 states                                                               
the  department may  impose  a penalty.  He  asked about  listing                                                               
violations on  a website  for the court  of public  opinion. That                                                               
might be a stronger statement.                                                                                                  
                                                                                                                                
2:10:13 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ said she would be open to that.                                                                        
                                                                                                                                
SENATOR MICCICHE said he has seen  research on the effects of gas                                                               
wars. Sometimes  the average price  increases or  decreases. Most                                                               
states  require  that the  cost  of  gasoline  be posted  on  the                                                               
corner. Prices can  go both ways. He asked if  the expectation is                                                               
that transparency alone will bring  costs down or if transparency                                                               
will cause competition.                                                                                                         
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  said she  expects  that  the court  of                                                               
public  opinion  will  stimulate some  interesting  conversations                                                               
about the costs  of health care, which  is a big part  of why she                                                               
introduced this legislation.  Now charges are done  entirely in a                                                               
private manner without  much discussion about rates  and fees and                                                               
whether something  is reasonable  and fair. It  is time  for that                                                               
conversation in  the state  of Alaska. She'd  like to  think that                                                               
this information being out in  the public in an accessible manner                                                               
will lead  to a reduction  in health care  cost. If it  does not,                                                               
over  the long-term  health care  consumers may  be more  mindful                                                               
about how they consume and use services.                                                                                        
                                                                                                                                
She said  health care providers tend  to err on more  testing and                                                               
more  information, not  always considering  the cost  benefit and                                                               
whether the information gleaned from  one more test justifies the                                                               
expense.  For  example,  kids  playing   soccer  have  a  head-on                                                               
collision, nine  times out of  ten a superficial  examination can                                                               
be done to  know whether a child  has a concussion. But  a lot of                                                               
times a doctor will say they  don't know for sure, but they could                                                               
do an MRI  or this or that  test. People need to  start asking if                                                               
that $1,000  test gives them  that more information. If  there is                                                               
no price  information, the  doctors will  feel they  are offering                                                               
more information  and the parents  will think they are  not being                                                               
good parents  if they do not  opt for the test.  All inclinations                                                               
are  toward  increasing  health care  costs  without  considering                                                               
whether there is  real value in that  additional information. She                                                               
would like them to have that conversation.                                                                                      
                                                                                                                                
2:14:08 PM                                                                                                                    
SENATOR  MICCICHE said  he agrees.  He doesn't  think the  actual                                                               
listing results  in a lower  price. He  uses the analogy  that if                                                               
his wife  shopped without  knowing the price  and no  one stopped                                                               
her at the  door to pay, she would probably  purchase more items.                                                               
He believes  that many people  eligible for Medicaid  would self-                                                               
regulate if  they had some  idea of cost.  There is a  benefit to                                                               
just knowing what their services cost.                                                                                          
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  said that she agrees  and believes that                                                               
also applies to the private  market. Through the insurance market                                                               
people  have de-sensitized  themselves as  to what  things really                                                               
cost. Those with health insurance  don't often see the full cost.                                                               
People see  the EOB  [Explanation of Benefits]  and they  look to                                                               
see what their  responsibility is. They might  actually get ahead                                                               
of this with more information about what health care costs.                                                                     
                                                                                                                                
CHAIR  WILSON said  in  the  mid-90s, some  health  care CEOs  in                                                               
hospitals  were making  a $100,000,  some were  making a  million                                                               
plus. People  said they need to  shame them by showing  what they                                                               
make. That  openness didn't decrease  prices, it  increased them.                                                               
This could  be a way  of getting  around antitrust laws.  He said                                                               
it's a concern.                                                                                                                 
                                                                                                                                
SENATOR VON  IMHOF asked  whether the  January 1,  2019 effective                                                               
date  will also  be the  effective  date for  the penalties.  She                                                               
asked if  Representative Spohnholz  had thought about  phasing in                                                               
the penalties.                                                                                                                  
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ said  they worked hard to  make sure the                                                               
bill is  as simple and easy  to implement as possible.  It should                                                               
not  be difficult  for any  practice  or facility  to figure  out                                                               
their  most  frequently  offered   services  and  run  the  Excel                                                               
spreadsheet. It's  downloading a report, dropping  it into Excel,                                                               
doing  some formatting,  blowing  it  up to  20  point font,  and                                                               
printing it  off. Any  delay is  not necessary  given that  it is                                                               
straightforward to implement.                                                                                                   
                                                                                                                                
2:17:50 PM                                                                                                                    
SENATOR VON  IMHOF asked if  there are other states  with similar                                                               
legislation and how is it faring.                                                                                               
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ said  the idea  originally came  from a                                                               
constituent who saw a price list  in a clinic in Florida. Florida                                                               
enacted the law  in 2016 and it's  a little too soon  to note its                                                               
effect. Colorado  just enrolled a law  in January to do  the same                                                               
thing.                                                                                                                          
                                                                                                                                
CHAIR WILSON  asked if there is  any data from Anchorage  and how                                                               
they are faring with a similar law.                                                                                             
                                                                                                                                
MS. NISBETT  said according to  Melinda Freeman who  oversees the                                                               
program  in  Anchorage,  fewer  than 10  people  have  called  to                                                               
complain about the good faith estimate.                                                                                         
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  said the  most complicated  health care                                                               
organization in the  state is Providence Alaska  in Anchorage and                                                               
they have already figured out  how to implement the ordinance. It                                                               
will be  easier for  health care  facilities in  the rest  of the                                                               
state.                                                                                                                          
                                                                                                                                
2:20:30 PM                                                                                                                    
SENATOR  VON IMHOF  read  Section  1 and  said  she assumes  that                                                               
health care  services and price information  collected under this                                                               
new  statute  will be  wrapped  in  to DHSS's  authorization  and                                                               
duties.                                                                                                                         
                                                                                                                                
2:21:09 PM                                                                                                                    
ROSA  AVILA, Deputy  Section Chief,  Health  Analytics and  Vital                                                               
Statistics, Division  of Public Health, Department  of Health and                                                               
Social  Services  (DHSS)  said   they  collect  some  information                                                               
through the  Health Facilities Discharge Reporting  Program. They                                                               
have  limited  information on  charges  but  not total  costs  of                                                               
medical  events. She  said her  understanding is  that they  will                                                               
post these lists  on their website without doing  any analysis or                                                               
maintenance of  the data. At this  time that amount of  time will                                                               
be negligible and absorbed within their current resources.                                                                      
                                                                                                                                
2:22:32 PM                                                                                                                    
CHAIR WILSON opened public testimony on HB 123, version G.                                                                      
                                                                                                                                
2:22:47 PM                                                                                                                    
JEANNIE MONK,  Senior Vice President,  Alaska State  Hospital and                                                               
Nursing   Home  Association   (ASHNHA),  thanked   Representative                                                               
Spohnholz   for   taking   their   comments  on   HB   123   into                                                               
consideration. She  said ASHNHA  supports price  transparency and                                                               
consumer  engagement in  health  care  decision making;  however,                                                               
price transparency is difficult to  implement even when all agree                                                               
that  it is  desirable. Realistic  expectations about  what price                                                               
transparency will achieve are important.  The economic theory and                                                               
real-life  experience support  the idea  that consumers  are only                                                               
engaged  in price  shopping up  to point  of their  out-of-pocket                                                               
expenses.  Low deductibles  mean  that  price transparency  won't                                                               
matter to  consumers because  there is no  incentive for  them to                                                               
shop based  on price alone.  Most of Alaska's public  plans still                                                               
have  relatively low  deductibles, but  private sector  plans are                                                               
increasingly adopting  high deductibles  and that is  where price                                                               
transparency  becomes more  important.  It  seems that  providers                                                               
would  have   access  to  the   most  important   information  in                                                               
understanding  price,  but  the  insurer has  the  best  data.  A                                                               
complement  to this  effort  may be  requiring  insurers to  make                                                               
transparency tools available to  consumers. Their members say the                                                               
bill is  workable and  they can  comply. Providence  in Anchorage                                                               
has been complying with this.                                                                                                   
                                                                                                                                
MS. MONK said the bill  requires providers and facilities to post                                                               
payment  rates  for   Medicaid  rates,  which  are   set  by  the                                                               
Department  of   Health  and  Social  Services   and  are  public                                                               
information. Alaska  Medicaid rates for professional  billing are                                                               
already on a  website. The Medicaid rates are not  as relevant to                                                               
the issue of transparency since  the state mandates rates. Rather                                                               
than  asking  every  facility  and   every  provider  to  publish                                                               
Medicaid  payment  rates, the  state  should  provide a  link  to                                                               
Medicaid  rates.  ASHNHA  supports  the effort  for  health  care                                                               
providers  and   hospitals  to  provide  good   faith  estimates.                                                               
Hospitals  have  systems  in  place  to  accommodate  that.  Cost                                                               
estimates are  most appropriate for planned  procedures. She said                                                               
ASHNHA  has concerns  about how  facilities  and providers  would                                                               
handle a situation  where a provider might be asked  to provide a                                                               
written estimate  before examining a patient.  Patients sometimes                                                               
go  to the  emergency department  and  then are  admitted to  the                                                               
hospital as an  inpatient. The language is unclear  about when it                                                               
quits becoming an emergency and  when that patient is entitled to                                                               
a  good faith  estimate.  Finally, for  patients with  insurance,                                                               
working  with their  insurer  is  the best  way  to get  accurate                                                               
information about  costs. This is  a first step and  ASHNHA looks                                                               
forward to working cooperatively  on future initiatives to better                                                               
engage consumers in health care decision making.                                                                                
                                                                                                                                
2:28:06 PM                                                                                                                    
SENATOR   MICCICHE   said   he   thinks   there   is   value   in                                                               
Medicaid/Medicare costs  being transparent. Many  recipients have                                                               
no idea  what their services cost.  Those here who have  to cover                                                               
those costs  in the $1.2  billion range  want to bring  that cost                                                               
down.  Alaska's separation  from the  national average  [slide 3,                                                               
Health  Care Expenditures  per  Capita,  1991-2014] continues  to                                                               
increase on an  annual basis. Everyone needs to do  their part to                                                               
keeps costs down because it affects  all the people in the state.                                                               
This is  another tool in the  tool box to keep  those costs down.                                                               
He thinks there is value in listing the costs.                                                                                  
                                                                                                                                
MS.  MONK agreed  that Medicaid  beneficiaries should  understand                                                               
the cost  of their care. She  said she's not convinced  that they                                                               
will read  a sign  on the  wall and  change their  behavior. They                                                               
should look at  all the tools to engage them.  They are trying to                                                               
balance the work involved for  providers in generating this list.                                                               
If  this  data   is  available  already,  putting   it  in  every                                                               
provider's and  hospital's office is  a big burden that  could be                                                               
done through a centralized manner through the state.                                                                            
                                                                                                                                
SENATOR MICCICHE  said every restaurant  has a menu.  He realizes                                                               
it's  more   complicated  than  that,   but  it's   a  reasonable                                                               
expectation.                                                                                                                    
                                                                                                                                
SENATOR  BEGICH  said  he  was   intrigued  by  her  thoughts  on                                                               
insurance. Maybe  that is something  to look at next  session. He                                                               
was  concerned   about  her  comment   implying  that   a  higher                                                               
deductible makes  people more aware.  The higher  the deductible,                                                               
the  more out-of-pocket  expense for  an individual,  the greater                                                               
the burden  becomes for  an individual.  He asked  if there  is a                                                               
better way  than simply  raising the  deductible to  get people's                                                               
attention  about the  high cost  of care.  He asked  if there  is                                                               
something  to  add  to  the  bill or  put  in  another  piece  of                                                               
legislation to make people aware of the cost.                                                                                   
                                                                                                                                
MS. MONK  said she is  not an expert in  this area, but  there is                                                               
lots of  information on how  to design  health care plans  to get                                                               
desired  results, such  as  low deductibles  for  things such  as                                                               
preventative  and routine  care,  and high  deductibles for  care                                                               
insurers want people  to avoid. That is an  innovation that could                                                               
be explored.  A high deductible is  a burden on the  consumer and                                                               
sometimes it  is inequitable. Some  insurance companies,  such as                                                               
Aetna, have  good patient portals  that allow the patient  to not                                                               
just look at the price but also  to look at quality. They need to                                                               
remember that  they also want  patients to receive  high quality,                                                               
safe  care.  High quality  care  and  high  cost are  not  always                                                               
correlated, but  sometimes in  the patient's mind  it is.  How to                                                               
provide that information is complicated.  Some states are looking                                                               
at requiring every insurer to provide a patient portal.                                                                         
                                                                                                                                
SENATOR  BEGICH asked  if  the sponsor  can  answer the  question                                                               
about how to  draw the line to determine when  an emergency is no                                                               
longer an emergency.                                                                                                            
                                                                                                                                
2:33:51 PM                                                                                                                    
CHAIR  WILSON  said  the  committee  could  look  into  that  and                                                               
possibly offer an amendment to clarify that.                                                                                    
                                                                                                                                
SENATOR BEGICH  said he wonders  if there  is a simple  answer to                                                               
the question.                                                                                                                   
                                                                                                                                
MS. MONK said there is a  definition of nonemergency care, but it                                                               
might not have the necessary clarity.                                                                                           
                                                                                                                                
2:34:45 PM                                                                                                                    
CHELSEA  GOUCHER,   President,  Board  of   Directors,  Ketchikan                                                               
Chamber  of Commerce,  supported HB  123. She  said supporting  a                                                               
statewide  law   that  would  alleviate  many   of  the  problems                                                               
associated  with  opaque pricing  practices  in  the health  care                                                               
industry  fits  the  chamber's  mission  perfectly.  Health  care                                                               
consumers are  increasingly seeking  information about  the costs                                                               
of  health care  procedures.  Timely,  transparent disclosure  of                                                               
health care  costs is  essential to  protecting the  interests of                                                               
consumers and  allowing markets  to function  efficiently. Health                                                               
care is  the only business  where consumers get  services without                                                               
understanding the  price in advance  or in a  predictable manner.                                                               
Many  Alaskans have  had difficulty  obtaining information  about                                                               
the  cost of  health care  services  in a  timely and  consistent                                                               
fashion. This  foments a culture  of mistrust,  billing disputes,                                                               
and an  increased tendency  to seek  medical services  outside of                                                               
Alaska,  none  of   which  is  in  the   interests  of  homegrown                                                               
practitioners  or the  health of  the state  as a  whole. HB  123                                                               
requirements are reasonable. Even  though Ketchikan is working on                                                               
its  own local  ordinance  and  HB 123  would  preempt any  local                                                               
ordinance, they  support the bill.  IT strikes a  balance between                                                               
protecting consumers  while not  putting an  undue administrative                                                               
burden on  providers. The passage  might bolster  the competitive                                                               
position of providers  relative to providers out  of state, which                                                               
is an issue  in Ketchikan because it is close  to Seattle. Alaska                                                               
deserves a  standard set  of requirements that  are the  same for                                                               
all providers.                                                                                                                  
                                                                                                                                
2:37:27 PM                                                                                                                    
DOMINIC   LOZANO,    Secretary/Treasurer,   Alaska   Professional                                                               
Firefighters Association, supported  HB 123. He said HB  123 is a                                                               
small step  toward pricing transparency. As  a firefighting union                                                               
they  negotiate  contracts.  Health  care costs  are  always  the                                                               
driving  factor  in   negotiations.  Firefighters  in  Anchorage,                                                               
Fairbanks, and Ketchikan belong to  their health trust run out of                                                               
the  state of  Washington. Health  care  costs in  Alaska are  37                                                               
percent  higher than  in the  state  of Washington.  The lack  of                                                               
ability to  see prices  and to  make choices  about where  to get                                                               
procedures  hurts. They  try to  get  their members  to be  smart                                                               
health  care  consumers.  This  bill  is a  small  step  in  that                                                               
direction to  enable them to  do that. Firefighters  believe this                                                               
will  help the  state,  unions, municipalities,  everyone in  the                                                               
state.                                                                                                                          
                                                                                                                                
2:39:14 PM                                                                                                                    
TERRY ALLARD, Member, Alaska  Association of Health Underwriters,                                                               
supported HB  123. She  said she worked  in the  health insurance                                                               
industry in  Alaska for over  30 years. Her association  has been                                                               
very  involved  in  the  passage  of  bills  like  this  to  help                                                               
consumers. The rising cost of health  care in Alaska is making it                                                               
difficult for  individuals and  families to  receive and  pay for                                                               
care. The cost escalation is  unsustainable. Employers are making                                                               
difficult decisions about  whether they even have  the ability to                                                               
offer  coverage.  They  are increasing  deductibles  and  out-of-                                                               
pocket costs  on a regular  basis. Employees are paying  more for                                                               
their share  of premiums.  Over the last  two years  they've seen                                                               
the average deductible  for a PTO plan go from  $1,000 to $2,000.                                                               
In many cases  families are paying $1,500 up to  $2,500 or $3,000                                                               
a  month  for  their  share  of  the  coverage.  They  have  been                                                               
educating them on how to be  a good consumer, but what is lacking                                                               
is the ability  for the consumer to have the  information to make                                                               
informed  decisions.   They  can   research  many   things  about                                                               
treatment,  but so  often they  hit  a roadblock  about what  the                                                               
services will cost.  As a consumer in Alaska, she  can shop based                                                               
on cost  and quality for  all other  goods, but not  health care.                                                               
The Municipality of Anchorage passed  the ordinance that helps in                                                               
Anchorage, but many  consumers live in other parts  of the state.                                                               
Those clients that she works with  do not have the ability to get                                                               
that same information.                                                                                                          
                                                                                                                                
She said just as Uber and  Lyft and Airbnb have transformed their                                                               
industries, it  is time  for the health  care industry  to evolve                                                               
and  provide consumers  information they  need. She  doesn't want                                                               
providers to go away. Thirty years  ago, when she started in this                                                               
business, it  was common to  need to go  outside of the  state to                                                               
get care.  They need a  way for  providers and consumers  to work                                                               
together to determine reasonable cost.                                                                                          
                                                                                                                                
2:43:13 PM                                                                                                                    
SENATOR VON  IMHOF said they  are asking doctors,  hospitals, and                                                               
other health  care facilities to  publish their rates.  She asked                                                               
Ms.  Allard her  thoughts  about  adding a  section  to the  bill                                                               
requiring insurance  companies to publish  what they pay  for the                                                               
top 25 to 50 codes.                                                                                                             
                                                                                                                                
MS. ALLARD  responded that she is  not the best person  to answer                                                               
that. She  said an  insured person  with CPT  [Current Procedural                                                               
Terminology] codes can get information  from their plan about how                                                               
the services will be covered. They  want the consumer to do that,                                                               
to be an informed consumer.                                                                                                     
                                                                                                                                
2:44:27 PM                                                                                                                    
JENNIFER   MEYHOFF,    Legislative   Committee    Chair,   Alaska                                                               
Association of  Health Underwriters,  supported HB 123.  She said                                                               
their organization helps employers  design their employee benefit                                                               
plans. They  work with public,  private, and  nonprofit employers                                                               
all around the state and  beyond. They see first-hand the effects                                                               
of  high  costs  for  employers   and  employees.  She  suggested                                                               
thinking  about the  marketplace of  goods and  services. Someone                                                               
stops at a coffee stand with  a big price list. Coffee comes from                                                               
other places, is processed in many  ways, but they can tell right                                                               
to  the  ounce what  it  costs.  The  same for  gasoline  prices.                                                               
Aviation is also complicated. In  every aspect of people's lives,                                                               
they  are a  participant in  a market  where the  price is  known                                                               
except  for going  to a  doctor  or hospital.  The transition  to                                                               
high-deductible  plans  is  designed  to   make  people  be  good                                                               
consumers, but the missing piece  is knowing the price. They have                                                               
heard  that  medical  providers  have  trouble  providing  prices                                                               
because  it's  complicated, but  other  businesses  manage to  do                                                               
that.  Much  needs  to  be  done to  rebalance  the  health  care                                                               
marketplace.  HB  123 is  part  of  that.  Consumers need  to  be                                                               
empowered with information to make economic decisions.                                                                          
                                                                                                                                
2:49:40 PM                                                                                                                    
GINA BOSNAKIS, Representing Self, supported  HB 123. She said she                                                               
is a  small business owner. She  has been in the  Alaska employee                                                               
benefits  industry  for  more  than  30  years.  She  works  with                                                               
clients' employees and family members.  Working with people about                                                               
claim problems  is usually easy.  The most difficult part  of her                                                               
job, outside of  a death claim, is when a  person thinks they did                                                               
everything they were  supposed to do to get a  procedure from the                                                               
right  doctor  or  facility.  Often the  patient  asks  if  their                                                               
insurance is accepted and the  answer is yes. The proper question                                                               
is, "Are  you a  preferred provider  or are  in network,"  and if                                                               
answer is  no, it changes the  whole dynamic for the  patient. HB
123 gives patients  the ammunition to know exactly  what the out-                                                               
of-pocket  cost will  be. If  a provider  is not  in network  the                                                               
patient  will  know their  out-of-pocket  expenses  will be  much                                                               
higher than  expected and then  they can consider  other options,                                                               
such as  going out  of state  for their care.  As an  Alaskan and                                                               
business  owner,  she  finds  it  difficult  to  suggest  getting                                                               
services outside  that can  be provided in  Alaska, but  that can                                                               
save a  family from lifelong  debt and stress. Health  care costs                                                               
have gotten  so out of whack  in Alaska for a  number of reasons,                                                               
but  HB  123   will  absolutely  save  Alaskans   from  debt  and                                                               
potentially lower health care costs.                                                                                            
                                                                                                                                
2:53:18 PM                                                                                                                    
GRAHAM GLASS,  M.D., Representing  Self, testified  that he  is a                                                               
neurologist who has  been the past president of  the Alaska State                                                               
Medical Association.  He said incremental change  is important in                                                               
something  as big  as health  care. Everyone  in the  health care                                                               
world feels transparency is important  to provide people with the                                                               
right information  to make  good choices,  both for  their health                                                               
and  financial  well-being. His  issue  is  with the  information                                                               
people  will be  given. He's  heard  analogies to  menus, to  gas                                                               
stations, to  Uber. Posting  rack rates is  not an  undue burden,                                                               
but it  doesn't provide necessary  information. Rack rates  are a                                                               
grossly  inadequate  reflection  of price  information.  Accurate                                                               
information  is  insurance  rates,  contracted  rates  with  Blue                                                               
Cross,  Aetna, Cigna,  and others.  Providers and  facilities are                                                               
precluded from posting those  because of nondisclosure agreements                                                               
in insurance contracts. Someone may set  a lower rack rate to get                                                               
more business, but their contracted  rate is actually higher. Gas                                                               
is gas, a ride  from the airport is a ride  from the airport. The                                                               
quality of  health care  is not being  compared. It  is important                                                               
for  patients   to  understand  what   Medicaid  pays   and  what                                                               
commercial  insurance companies  pay.  It's not  relevant to  use                                                               
rack rates to make that comparison.                                                                                             
                                                                                                                                
DR.  GLASS  said  that  in  the  future  something  legislatively                                                               
perhaps should be done so  that nondisclosure agreements will not                                                               
be in  contracts, so that contracted  rates can be posted.  A lot                                                               
of  these   tools  already  exist  online.   Washington  requires                                                               
insurance companies  to provide  look up  tools so  that patients                                                               
with  CPT  codes  can  look  up in  network  costs  with  certain                                                               
providers.  In his  office they  do  their best  to provide  that                                                               
information,  but they  are not  privy to  up-to-date information                                                               
about  deductibles and  coinsurances  which may  affect the  good                                                               
faith estimate.  He and the  providers he has spoken  to strongly                                                               
support the  good faith  estimate. Some  say everyone  does this,                                                               
but they don't. They need  to have the right information. Posting                                                               
rack  rates is  misleading in  many ways.  The right  information                                                               
comes from insurance  companies. It is important  to force people                                                               
to provide good faith estimates.                                                                                                
                                                                                                                                
2:58:24 PM                                                                                                                    
DENISE DANIELLO, Executive Director,  Alaska Commission on Aging,                                                               
supported HB 123.  She said seniors are the  biggest consumers of                                                               
health care.  Seniors want to  know how much a  medical procedure                                                               
is going  to cost because  a lot of  them live on  fixed incomes.                                                               
She said  ACA is very  happy about  many things in  the committee                                                               
substitute, especially the good  faith estimate. The requirements                                                               
had nothing about  Medicare rates. More than  82,600 Alaskans are                                                               
on  Medicare. That  includes some  younger adults.  She suggested                                                               
adding Medicare price information  in the good faith information,                                                               
but  not the  price disclosure.  Perhaps other  benefits like  VA                                                               
benefits should also be included.                                                                                               
                                                                                                                                
SENATOR BEGICH  asked Representative Spohnholz  for clarification                                                               
about the ambiguity about emergencies and good faith estimates.                                                                 
                                                                                                                                
REPRESENTATIVE    SPOHNHOLZ   said    the   bill    states   that                                                               
"'nonemergency health  care service' means a  health care service                                                               
other than  a health care  service that is  immediately necessary                                                               
to prevent the  death or serious impairment of the  health of the                                                               
patient." She said she struggled  about how to appropriately find                                                               
a way  to carve out care  once someone shows up  at the hospital.                                                               
They  were  clear that  the  bill  does  not require  good  faith                                                               
estimates  for  people  who  show   up  at  the  emergency  room.                                                               
Conceptually, they agreed  that most of the care  in the hospital                                                               
is typically for  inpatient care. That is  mostly lifesaving care                                                               
and for the most part would  be excluded from the requirement for                                                               
a good  faith estimate. She  said she would  be open to  a better                                                               
way to address that.                                                                                                            
                                                                                                                                
3:02:47 PM                                                                                                                    
SENATOR  MICCICHE  opined  that  the  definition  on  page  7  is                                                               
satisfactory.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ said  simplicity in  design was  one of                                                               
the key principles for the bill.                                                                                                
                                                                                                                                
SENATOR  VON   IMHOF  asked  Representative  Spohnholz   for  her                                                               
response to  Dr. Glass's  thoughts about  rack rate  vs insurance                                                               
rates.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  said  they  had a  lot  of  discussion                                                               
during  the interim  about how  to land  on the  range of  prices                                                               
because they received  lots of pushback from  providers about the                                                               
undiscounted  rate,  which was  the  only  rate required  in  the                                                               
original  bill. There  is  some validity  to that.  It  is not  a                                                               
concrete  price someone  is going  to pay.  They found  that with                                                               
insurers there is not one price.  Aetna, for example, may have 25                                                               
prices for any  one service. The list gets very  large quickly if                                                               
all those  prices are compiled.  More data is sometimes  not more                                                               
information. She is interested in  adding more transparency about                                                               
health  care  insurance  prices.  That may  be  another  bill  at                                                               
another  time.  It's  another  area  of  law,  it's  complex  and                                                               
requires  due diligence.  Her observation  has been  that various                                                               
actors  in the  health  care  market all  have  ways of  pointing                                                               
fingers at other  actors in the market for  being responsible for                                                               
lack of health  care price transparency. Everyone has  to be part                                                               
of the  solution. This  bill looks  at providers  and facilities.                                                               
Another bill to look at health  care insurance is probably a good                                                               
idea.                                                                                                                           
                                                                                                                                
3:06:38 PM                                                                                                                    
CHAIR WILSON closed public testimony on HB 123.                                                                                 
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  said they  tried to approach  a complex                                                               
problem   using  simplicity   as  a   core  value.   In  pursuing                                                               
transparency,  she encountered  lots of  obfuscation about  price                                                               
transparency. Multiple  websites dedicated  to health  care price                                                               
transparency  do  not  make  the solution  clearer.  That  is  an                                                               
illustration  of the  level of  complexity. Health  insurance has                                                               
served as  an intermediary  between providers  and those  who get                                                               
care for  a long time.  The level  of complexity has  grown since                                                               
Blue Cross  was the first  insurer 100  years ago.   Everyone has                                                               
seen huge billing offices and  long billing codes. She would urge                                                               
everyone to  not get too  distracted about the noise  about price                                                               
transparency. They can tackle bite-size  pieces to make progress.                                                               
If they  make the perfect the  enemy of the good  they will never                                                               
solve this sticky, intractable problem that is outrageous health                                                                
care costs in Alaska.                                                                                                           
                                                                                                                                
CHAIR WILSON held HB 123 in committee.                                                                                          
                                                                                                                                
3:08:45 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Wilson adjourned the Senate Health and Social Services                                                                    
Standing Committee at 3:08 p.m.                                                                                                 

Document Name Date/Time Subjects
SCS SB 123 version G.PDF SHSS 3/16/2018 1:30:00 PM
SB 123
HB123 Comparsion of ver. I and ver. G 02-22-18.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB123 Comparsion of ver. I and ver. G 02-22-18 chart.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 ver I 4.10.17.PDF SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Sponsor Statement 4.10.17.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Sectional Analysis 4.10.17.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Supporting Document-AAMC Price Transparency in the News 4.10.17.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Supporting Document - AK Options for Health Policy Reform 2.26.18.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Supporting Document-Article ADN-A Doctor's Quest to Remain Human Inside an Insane Medical System 4.10.17.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Supporting Document-NYT Those Indecipherable Medical Bills 4.10.17.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB 123 FN DHSS Public Health Bureau of Vital Stats 2.23.17.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB 123 FN DHSS Public Health Bureau of Vital Stats 3.6.18.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB 123 Center for American Progress 2014.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB 123 Thomson Reuters 2012.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Supporting Document-Support Letters 4.10.17.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Supporting Document - AK Options for Health Policy Reform 2.26.18.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB0123 Additional Letters of Support 03.15.18.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB162 SB81 - FAQs 050317.pdf HHSS 2/20/2018 3:00:00 PM
SHSS 2/2/2018 1:30:00 PM
SHSS 3/16/2018 1:30:00 PM
HB 162
SB 81
CSHB 123 Disclosure of Health Costs Ak Comm on Aging.pdf SHSS 3/16/2018 1:30:00 PM
HB 123
HB123 Disclosure of Health Care Costs - Senate HSS Hearing 3-16_ (002).pdf SHSS 3/16/2018 1:30:00 PM
HB 123