Legislature(2017 - 2018)BUTROVICH 205
03/16/2018 01:30 PM Senate HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| SB81 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 81 | TELECONFERENCED | |
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.