Legislature(2023 - 2024)BELTZ 105 (TSBldg)
04/08/2024 01:30 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB102 | |
| SB219 | |
| HB97 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 102 | TELECONFERENCED | |
| += | SB 219 | TELECONFERENCED | |
| *+ | HB 97 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 8, 2024
1:33 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Click Bishop, Vice Chair
Senator Elvi Gray-Jackson
Senator Kelly Merrick
Senator Forrest Dunbar
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 102
"An Act relating to refuse utility rates and Regulatory
Commission of Alaska regulations regarding refuse utilities; and
providing for an effective date."
- MOVED SB 102 OUT OF COMMITTEE
SENATE BILL NO. 219
"An Act relating to utilization review entities; exempting
certain health care providers from making preauthorization
requests for certain services; and providing for an effective
date."
- HEARD & HELD
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 97(JUD) AM
"An Act relating to self-storage facilities for personal
property, including vehicles and watercraft; distinguishing
self-storage facility liens from another type of storage lien;
and excluding self-storage liens from the treatment of certain
unclaimed property."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 102
SHORT TITLE: REFUSE UTILITY REGULATIONS
SPONSOR(s): SENATOR(s) MYERS
03/15/23 (S) READ THE FIRST TIME - REFERRALS
03/15/23 (S) L&C
03/04/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/04/24 (S) Heard & Held
03/04/24 (S) MINUTE(L&C)
04/08/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 219
SHORT TITLE: PRIOR AUTH EXEMPT FOR HEALTH PROVIDERS
SPONSOR(s): SENATOR(s) WILSON
02/07/24 (S) READ THE FIRST TIME - REFERRALS
02/07/24 (S) L&C, HSS
03/13/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/13/24 (S) Heard & Held
03/13/24 (S) MINUTE(L&C)
04/08/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 97
SHORT TITLE: SELF-STORAGE UNITS: LIENS; SALES
SPONSOR(s): REPRESENTATIVE(s) PRAX
03/06/23 (H) READ THE FIRST TIME - REFERRALS
03/06/23 (H) L&C, JUD
03/24/23 (H) L&C AT 3:15 PM BARNES 124
03/24/23 (H) Heard & Held
03/24/23 (H) MINUTE(L&C)
04/14/23 (H) L&C AT 3:15 PM BARNES 124
04/14/23 (H) Heard & Held
04/14/23 (H) MINUTE(L&C)
05/01/23 (H) L&C AT 3:15 PM BARNES 124
05/01/23 (H) Heard & Held
05/01/23 (H) MINUTE(L&C)
05/03/23 (H) L&C AT 3:15 PM BARNES 124
05/03/23 (H) Moved CSHB 97(L&C) Out of Committee
05/03/23 (H) MINUTE(L&C)
05/08/23 (H) L&C RPT CS(L&C) 4DP 2AM
05/08/23 (H) DP: PRAX, WRIGHT, SADDLER, RUFFRIDGE
05/08/23 (H) AM: FIELDS, CARRICK
02/05/24 (H) JUD AT 1:30 PM GRUENBERG 120
02/05/24 (H) Heard & Held
02/05/24 (H) MINUTE(JUD)
02/07/24 (H) JUD AT 1:00 PM GRUENBERG 120
02/07/24 (H) Heard & Held
02/07/24 (H) MINUTE(JUD)
02/09/24 (H) JUD AT 1:30 PM GRUENBERG 120
02/09/24 (H) <Bill Hearing Canceled>
02/14/24 (H) JUD AT 1:00 PM GRUENBERG 120
02/14/24 (H) Moved CSHB 97(JUD) Out of Committee
02/14/24 (H) MINUTE(JUD)
02/15/24 (H) JUD RPT CS(JUD) 4DP 2NR
02/15/24 (H) DP: CARPENTER, SUMNER, ALLARD, VANCE
02/15/24 (H) NR: GRAY, GROH
03/21/24 (H) TRANSMITTED TO (S)
03/21/24 (H) VERSION: CSHB 97(JUD) AM
03/22/24 (S) READ THE FIRST TIME - REFERRALS
03/22/24 (S) L&C, JUD
04/08/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR ROBERT MYERS, District Q
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 102; gave a recap of SB 102.
DAWSON MANN, Staff
Senator Robert Myers
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided comments on SB 102.
KURT FROENING, Division Vice President
Waste Connections
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 102.
SENATOR DAVID WILSON, District N
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 219; gave a recap of SB 219.
JULIA FONOV, Staff
Senator David Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 219.
EZEQUIEL (ZEKE) SILVA, MD, Delegate
American Medical Association
Texas Medical Association
Washington D.C.
POSITION STATEMENT: Gave invited testimony on SB 219.
JEFF DAVIS, Senior Vice President
Radiation Business Solutions
Wenatchee, Washington
POSITION STATEMENT: Gave invited testimony on SB 219.
JOHN KELLY, MD; Senior VP
Radiation Business Solutions
Wasilla, Alaska
POSITION STATEMENT: Provided invited testimony on SB 219.
GARY STRANNIGAN, Vice President
Congressional and Legislative Affairs
Premera Blue Cross
Everett, Washington
POSITION STATEMENT: Testified on SB 219.
HEATHER CARPENTER, Deputy Director
Division of Insurance
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions on SB 219.
JARED KOSIN, President
Alaska Hospital and Healthcare Association
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 219.
REPRESENTATIVE MIKE PRAX, District 33
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 97.
ERICK CORDERO-GIORGANA, Staff
Mike Prax,
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for HB 97.
GARY JENKINS, Owner,
Space Unlimited, Inc.
Juneau, Alaska
POSITION STATEMENT: Testified with concerns on HB 97.
ACTION NARRATIVE
1:33:38 PM
CHAIR JESSE BJORKMAN called the Senate Labor and Commerce
Standing Committee meeting to order at 1:33 p.m. Present at the
call to order were Senators Dunbar, Gray-Jackson, Merrick, and
Chair Bjorkman. Senator Bishop joined thereafter.
SB 102-REFUSE UTILITY REGULATIONS
1:34:54 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
102 "An Act relating to refuse utility rates and Regulatory
Commission of Alaska regulations regarding refuse utilities; and
providing for an effective date."
1:35:32 PM
SENATOR ROBERT MYERS, District Q, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 102, gave a recap of the bill. He
said SB 102 would extend the simplified rate stacking method
currently utilized by the Regulatory Commission of Alaska (RCA)
and apply it to refuse utilities. Previously, this method was
exclusively applied to electric co-ops by the commission for
expediting regulatory procedures.
1:36:30 PM
CHAIR BJORKMAN stated the committee has received communication
from Anchorage residents expressing concerns about the effects
of SB 102 on their municipality. He requested a clearer
understanding of these impacts, as well as those on similarly
situated communities.
1:36:51 PM
SENATOR MYERS replied that his office had also been in contact
with the municipality of Anchorage regarding Solid Waste
Services (SWS). They understand that the Regulatory Commission
of Alaska (RCA) does not currently regulate solid waste
services, and SB 102 would not change this regulatory status.
1:37:18 PM
DAWSON MANN, Staff, Senator Robert Myers, Alaska State
Legislature, Juneau, Alaska, clarified that in past reviews of
Regulatory Commission of Alaska (RCA) filings, the RCA has
exempted the municipality of Anchorage from certain sections of
statute concerning trash collection services. He emphasized SB
102 would not in any way change the existing relationship
between the RCA and the municipality of Anchorage.
1:37:46 PM
SENATOR GRAY-JACKSON expressed her satisfaction upon hearing
this clarification, as she previously understood that SWS was
not regulated by RCA. She appreciated confirmation.
1:37:56 PM
SENATOR DUNBAR mentioned that there was discussion on that
unique situation during the first hearing. He said there is a
simple solution for regulated refuse utilities. He asserted that
he would not make a conceptual amendment, as he had not prepared
one, but inquired as to whether there is a house companion to SB
102.
1:38:18 PM
SENATOR MYERS said there was not.
1:38:22 PM
SENATOR DUNBAR suggested that if SB 102 passes the Senate, the
sponsor might consider amending the legislation to add the word
"regulated" in front of "refuse utilities" to clarify that SB
102 only applies to currently regulated refuse utilities.
1:38:45 PM
CHAIR BJORKMAN opened public testimony on SB 102.
1:39:15 PM
KURT FROENING, Division Vice President, Waste Connections,
Anchorage, Alaska, testified in support of SB 102. He said SB
102 would substantially decrease the amount of time and expense
required to adjust rates. It would enable refuse utilities to
react to market conditions and respond to small and more
frequent adjustments rather than large increases that come years
apart.
1:39:55 PM
CHAIR BJORKMAN closed public testimony on SB 102 and sought the
will of the committee.
1:40:12 PM
SENATOR GRAY-JACKSON moved to report SB 102, work order: 33-
LS0583\A, from committee with individual recommendations and
attached fiscal note(s).
1:40:25 PM
CHAIR BJORKMAN found no objection and SB 102 was reported from
the Senate Labor and Commerce Standing Committee.
1:40:42 PM
At ease
SB 219-PRIOR AUTH EXEMPT FOR HEALTH PROVIDERS
1:42:31 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 219 "An Act relating to
utilization review entities; exempting certain health care
providers from making preauthorization requests for certain
services; and providing for an effective date."
1:43:15 PM
SENATOR DAVID WILSON, District N, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 219, provided the following
statement for SB 219:
[Original punctuation included.]
Sponsor Statement
Senate Bill 219
"An Act relating to utilization review entities;
exempting certain health care providers from making
preauthorization requests for certain services; and
providing for an effective date."
SB 219 aims to reduce the wait time for certain health
care services by exempting qualified health care
providers from making preauthorization requests for
said services. Currently, Alaskans who need certain
health care services must wait days or weeks to get
preauthorized to receive health care services because
of the processing time between the health care
provider and insurance companies. This bill would help
Alaskans receive health care services immediately,
especially health care services that could save their
lives.
Health care providers shall qualify for a prior
authorization exemption if at least 80 percent of
prior authorization requests submitted in the past 12-
month period were approved for that health care
service. Utilization review entities will provide
exempted health care providers with a list of health
care services for which the exemption applies and the
duration of the exemption. This helps eliminate
unnecessary delays in care by granting providers
exemptions who have demonstrated consistent adherence
to approval guidelines from prior authorization
requirements.
Other states with prior authorization exemptions have
seen increased frequency of patients who receive the
health care services they need and help eliminate
unnecessary delays in care. This bill will help
Alaskans receive fast, efficient, and quality
healthcare when they need it without waiting for a
preauthorization process that could cause their health
to decline even more.
Please contact Julia Fonov in my office at (907) 465-
4711 or [email protected] for any questions.
1:45:47 PM
CHAIR BJORKMAN asked whether "80 percent approval for prior
authorizations" is the right number or the right thing to
measure. He asked whether insurance companies are incentivized
to deny doctors' prior authorization requests so that doctors
wouldn't qualify. He suggested the approval standards should be
higher than 80 percent. He also suggested that a better measure
might be on the back end if claims and care given was paid out
because the care was in line with the industry standard and the
medical necessity for a patient.
1:46:55 PM
SENATOR WILSON suggested the people prepared to provide invited
testimony could speak to the experience of other states with the
80 percent threshold. He said it was the intent with SB 219 to
apply the 80 percent threshold after claims have been processed,
so there would not be the issue of claims being denied in order
to disqualify a practitioner. He said SB 219 is modeled after
legislation in other states. He anticipated testimony on
experience with the "back end" of claims.
1:47:55 PM
JULIA FONOV, Staff, Senator David Wilson, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 219.
[Original punctuation included.]
Sectional Analysis
Senate Bill 219 v. A
"An Act relating to utilization review entities;
exempting certain health care providers from making
preauthorization requests for certain services; and
providing for an effective date."
Section 1: Amends AS 21 (Insurance) .07 (Patient
Protections Under Health Care Insurance Policies) .005
(Regulations relating to health care insurance
policies).
Page 1, line 5, through line 14: Adds processes for
the Director of Insurance to adopt regulations for
utilization review entities, who are individuals that
perform prior authorization, as established under
section 2 of this bill.
Section 2: Adds a new section .100 (Utilization review
entities) to AS 21 (Insurance) .07 (Patient
Protections Under Health Care Insurance Policies)
Page 2, line 1 through line 7: Adds section (a) which
explains a healthcare provider is not required to
complete prior authorization for a covered person if
at least 80 percent of prior authorization requests
submitted by the provider for that health care service
have been approved in the past 12 months.
Page 2, line 8 through line 12: Adds section (b) which
explains a health care provider may be evaluated if
they continue to qualify for an exemption not more
than once every 12 months, and an existing exemption
is not required to be evaluated and a longer exemption
period may be established.
Page 2, line 13 through 14: Adds section (c) which
explains health care providers do not have to request
an exemption to qualify for an exemption.
Page 2, line 15 through 20: Adds section (d) which
explains if a health care provider is denied an
exemption, they may request evidence once every 12
months on why they were denied an exemption and an
explanation of how to appeal the denial, and the
health care provider may appeal the denial.
Page 2, line 21 through line 30: Adds section (e)
which explains utilization review entities may revoke
an exemption after 12 months if: (1) they determine
the health care provider does not meet the 80 percent
approval criteria based on a review of the claims for
the health care service for which the exemption
applies, (2) they provide the health care provider
with the information used to determine revoking the
exemption, (3) they explain to the health care
provider how to appeal the determination.
1:50:05 PM
MS. FONOV continued the sectional analysis.
Page 2, line 31 through page 3, line 3: Adds section
(f) which explains the exemption remains in effect
until 30 days after the health care provider is
notified of the decision to revoke the exemption or,
if the health care provider appeals the determination,
five days after the revocation is kept after appeal.
Page 3, line 4 through line 8: Adds section (g) which
specifies a decision to revoke or deny an exemption by
a utilization review entity must be made by a health
care provider licensed in Alaska with the same or
similar specialty as the health care provider being
considered and must have experience providing the
health care service for which the requested exemption
applies.
Page 3, line 9 through 13: Adds section (h) which
specifies a utilization review entity must provide a
health care provider who receives an exemption of this
section with a notice that includes: (1) a statement
that the health care provider qualifies for an
exemption from a prior authorization requirement and
the duration of the exemption, (2) a list of health
care services for which the exemption applies.
Page 3, line 14 through line 23: Adds section (i)
which specifies utilization review entities may not
deny or reduce payment for a health care service
exempted from prior authorization, including a health
care service ordered by an exempted health care
provider that is performed or supervised by another
health care provider, unless the health care provider
providing the health care service: (1) knowingly
misrepresented the health care service in a request
for payment with the specific intent to deceive and
obtain an unlawful payment from a utilization review
entity or, (2) failed to substantially perform the
health care service.
1:51:53 PM
MS. FONOV continued the sectional analysis.
Page 3, line 24 through page 4, line 19: Adds section
(j) which defines in this section:
(1) "health care service" means: (A) the provision of
pharmaceutical products, services, or durable medical
equipment or, (B) a health care procedure, treatment,
or service provided: (i) in a health care facility
licensed in this state or, (ii) by a doctor of
medicine, by a doctor of osteopathy, or within the
scope of practice of a health care professional who is
licensed in this state.
(2) "health maintenance organization" has the meaning
given in AS 21.86.900 (means a person that undertakes
to provide or arrange for basic health care services
to enrollees on a prepaid basis).
(3) "prior authorization" means the process used by a
utilization review entity to determine the medical
necessity or medical appropriateness of a covered
health care service before the health care service is
provided or a requirement that a covered person or
health care provider notify a health care insurer or
utilization review entity before providing a health
care service.
(4) "utilization review entity" means an individual or
entity that performs prior authorization for: (A) an
employer in Alaska with employees covered under a
health benefit plan or health insurance policy, (B) a
health care insurer, (C) a preferred provider
organization, (D) a health maintenance organization
or, (E) an individual or entity that provides, offers
to provide, or administers hospital, outpatient,
medical, prescription drug, or other health care
benefits to a person treated by a health care provider
licensed in Alaska under a health care policy, plan,
or contract.
Section 3: Effective date. Provides an immediate
effective date.
1:52:12 PM
CHAIR BJORKMAN announced invited testimony on SB 219.
1:53:06 PM
DR. EZEQUIEL (ZEKE) SILVA, Texas Medical Association, Washington
D.C., said he practices medicine in San Antonio Texas and that
he was speaking for the Texas Medical Association (TMA) which
collaborated with the Alaska State Medical Association for the
American Medical Association. He said the State of Texas was the
first state to pass a law to address [the requirement by
insurance companies for] prior authorization [of medical
services] at the state level and for state-regulated [insurance]
plans. He said the Texas legislation passed in 2021 in response
to the experience of physicians that prior authorization
requirements were causing them undue burden, such as two full-
time equivalents doing nothing but [pursuing] prior
authorization on a weekly basis and the denial of very commonly
preformed services, including services that were very much front
and center to what the physicians were experiencing. He said the
greatest motivation [to pursue legislation] in Texas was
physicians reporting of significant patient harm due to prior
authorization requirements. He listed those harms: patients
abandoning treatment, not receiving treatment in a timely
fashion, loss of bodily function and death. He said the impetus
was great and TMA is proud of their actions at the state level.
DR SILVA said the 2021 [Texas] legislation went into effect
later in 2021 and in 2023, TMA attempted to "tune up"
regulations around the law. He reported that those had not
passed and that improvement could be made. He commended the
efforts undertaken with SB 219 for Alaska.
1:55:28 PM
CHAIR BJORKMAN asked whether Dr. Silva could identify pieces of
SB 219 that could be improved or things that are right and that
the bill sponsor could be proud of.
1:55:50 PM
DR. SILVA said SB 219 is well-constructed. He opined the 80
percent measure is reasonable and his reading of the bill
suggested it would apply to same service, for example, an
orthopedic surgeon being approved to provide knee replacements.
If the surgeon achieved 80 percent approval for that procedure,
it would result in a "gold card", which is an exemption from the
prior authorization requirement going forward.
DR. SILVA also addressed the requirement to establish medical
necessity for a given service and noted that it is very
important to discern and document medical necessity through
examination and sound diagnosis.
DR. SILVA noted that only three percent of physicians in Texas
have achieved "gold card" status. He suggested that was because
the requirements are so specific. He said the 80 percent is not
only per physician, but it is per exact procedure described by
Current Procedural Terminology (CPT) code and then per payor and
sometimes also per individual payor product. He said the
consequence of this degree of specificity is that it is hard for
physicians to achieve 80 percent across all those metrics. His
recommendation would be not to include in Bill 219 a minimum
[number of approvals]. He said this is in the interest of
maximizing the protection of patients from the harms of prior
authorization.
1:58:17 PM
CHAIR BJORKMAN asked whether it would be beneficial to have the
80 percent mark apply to a group or class of procedures rather
than one specific service or procedure.
1:59:19 PM
DR. SILVA said discussion in Texas centered on situations like
hospital admissions which often include multiple patient
evaluation and management codes that apply to and describe a
patient's situation, treatment and response. He opined that it
would be completely logical to have large groups of codes
included in the 80 percent benchmark. He said that would
maintain the spirit of the legislation which is to make sure
that physicians are practicing the best care possible and not
further subject to prior authorization, but also acknowledging
that patients are different and even though medicine is grounded
in science, it is also an art. The decisions between physician
and patient may differ based on patients varied circumstances
and on the evolution of the practice of medicine.
2:00:47 PM}
JEFF DAVIS, Senior Vice President, Radiation Business Solutions,
Wenatchee, Washington, said he spent 18 years as the president
of Premera Blue Cross Blue Shield of Alaska, part of a long
career in health care, the past five years on the provider side.
He hoped to bring a balanced perspective to the discussion and
said SB 219 is primarily about patient protection. He observed
that patients are often overlooked in this debate and patients
bear the majority of the cost of unnecessary prior authorization
in the form of physical, emotional and financial harm resulting
from delays in care. He said there are multiple studies that
demonstrate the negative impacts of prior authorization. He said
it is not trivial and it is not all about the provider or about
the payor, it is about the patient. He said the original goal of
prior authorization were good; it was designed to reduce
unnecessary care and make sure things that were paid for [by
payors/insurance] were needed, but at this time it has grown
unchecked and has become a problem rather than a solution.
MR. DAVIS said it is important to remember that SB 219 would not
eliminate prior authorization, but it seeks to restore balance
to a situation that has become very one-sided in favor of the
payor. He added that when a provider signs a network contract,
which allows them to provide care as an in-network provider,
there is a provision that says the provider agrees to comply
with the utilization of requirements of the payor and that the
payor may, at any time, amend those requirements. He said the
provider is often given a period of time in which to object to
those amendments, but the bottom line is usually if the provider
doesn't accept those amendments, their only real option is to
terminate the contract, which has many consequences for the
provider and for their patients. He described this as a very
one-sided situation with payors adding multiple layers of prior
authorization over the years to the point that the payors
themselves recognize that it has gone too far and are
eliminating scores of procedures that require prior
authorization. He also noted that payors themselves have "gold
card" requirements and that if a provider meets the
requirements, they are recognized for that. He said SB 219 puts
this recognition and exemption from prior authorization in place
for providers across the spectrum of the health care environment
rather than requiring each provider to go through a costly and
time-consuming process of trying to achieve gold card status on
their own.
MR. DAVIS said he does believe SB 219 restores the balance in
the payor-provider relationship to a large degree. He said he
believed a provider who meets the standard 80 percent of the
time is likely to meet it 100 percent of the time. He said there
are very few providers that require correction by prior
authorization, but the current system applies to everyone.
2:05:41 PM
Senator Bishop joined the meeting.
MR. DAVIS noted studies that show 96 percent of the time, there
will be approval and patients and providers are spending their
time waiting and the insurers are spending their time and money
to go through a process that yields little benefit for anyone
involved.
2:06:18 PM
SENATOR GRAY-JACKSON said one of biggest issues from her
perspective is patient claims being denied. She asked whether SB
219 could prevent claim denial. She noted the packet says 15
percent of claims are denied and she opined the percentage of
denials is higher than that.
2:06:49 PM
MR. DAVIS said according to his understanding of SB 219, if a
provider has been exempted from prior authorization, it cannot
later be denied for lack of prior authorization. He said there
are other provisions in a policy, such as the need for
demonstrated medical necessity and there could be a time when
medical necessity might be found insufficient after the fact,
but he did not think SB 219 would impact a situation like that
negatively and may in fact help on the other side.
2:07:58 PM
CHAIR BJORKMAN asked what the effect of similar legislation in
other states has had on the cost of health care.
2:08:23 PM
MR. DAVIS said he doesn't have that experience with other
states. He reiterated that 96 percent of the time, prior
authorization is approved so he opined that an exemption at 80
percent would have an impact on the cost of health care as a
direct result; however, he said there are studies that suggest
physicians spend 10-15 percent of their time on prior
authorization. He said they spend 10-15 percent of their time on
something that 96 percent of the time results in approval and,
for most providers, likely 100 percent of the time. If all the
physicians in Alaska were able to be 10-15 percent more
productive; if they were able to eliminate positions in their
practices that deal with prior authorization on a full-time
basis, he speculated the increase in physician productivity and
the decrease in staff could have a stabilizing or a decrease
effect on future cost of health care. He noted that payors
probably spend as much time, energy and money on prior
authorization as [providers] do and if that were eliminated, it
would result in some economies on the payor side as well.
2:10:52 PM
CHAIR BJORKMAN asked Dr. Silva whether the prior authorization
exemption legislation in Texas had reduced health care costs in
that state or other states of which he was aware.
2:11:13 PM
DR. SILVA said he was not aware of studies with documentation
showing a reduction in cost, but he said anecdotally there is
support for that to be the case. He said he hears many stories
about delays in care leading to increased utilization of care by
patients. He told of a young person with abdominal pain for whom
the physician could not secure prior authorization for a CT scan
for multiple days. By the time a scan was authorized, the
patient's appendix had ruptured and the patient required
significantly more medical intervention. He noted the increased
expense from an economic and monetary perspective and also the
experience for the patient and the physician in terms of
emotional distress and the inability to practice the best care
possible. He said, anecdotally, SB 219 would support physicians
to provide timely care and the best care possible would also
have economic benefits. He hoped for a study that would prove
that and said he would share it when he finds it.
2:13:01 PM
JOHN KELLY, MD; Senior Vice President, Radiation Business
Solutions, Wasilla, Alaska, said he is currently based out of
Wasilla and transitioning back to his home in Fairbanks. He said
he would tailor his comments to multiple sclerosis (MS). He said
he has followed this disease through his 34-year career. When he
started his career, he said the only treatment he could offer MS
patients was high-dose intravenous (IV) steroids for flare-ups.
He said the first disease-modifying drugs (interferons) came out
about 25-30 years ago and those drugs reduced flare-ups by 25-30
percent which was better than nothing. Interferons caused
terrible side-effects. Patients would have flu-like symptoms
several days after each injection and injections were given
about once weekly. He said there have been tremendous advances
in treating MS and today there are treatments that are highly
specific and extremely effective, orally or by IV.
2:16:03 PM
DR. KELLY said there is now a drug which can be given once every
six months which allows for near complete control of the
disease. He said these new treatments are more expensive than
the older treatments, but the dictum of step-therapy has
required that treatment begin with older, less effective, poorly
tolerated medications and prove that patients failed that by
waiting for them to have another flare-up. He noted that flare-
ups damage the central nervous system every time and MS
progresses by a series of attacks and withdrawals. He said the
step therapy approach is required by most insurance companies,
which mean starting treatment with less expensive [medication]
even though it's known to be less effective, wait for the drug
to fail the patient before moving on to more advanced therapies
that are doing such a good job at controlling it.
2:17:47 PM
DR. KELLY said MS treatment was an example for which SB 219
would help prevent harm to patients. He said providers track the
disease clinically and by MRI scan to follow the volume of white
matter disease. The clinical outcome is known for these patients
as the disease continues to progress. They lose function, the
rate of disability goes up, cognitive ability goes down and it
is an aggressive disease that requires aggressive treatment. He
said MS is no place for the step therapy approach favored by
insurance companies. He said he has a high success rate of
getting the more advanced drugs approved, but that it is time-
consuming to jump through the hoops to get the patient on the
best possible drug from the get-go. He said it is a frustrating
process.
DR. KELLY told about a young, athletic and active patient who
wants to remain so, but five weeks after diagnosis, he is still
trying to gain approval for her treatment from the insurance
company. He said, in the meantime, the patient worries about the
possibility of another flare-up and what that might mean for her
and her long-term quality of life. He said SB 219 would be
beneficial for these patients who are relentlessly and
irreversibly harmed by ongoing attacks of the disease while
going through the hoops [of prior authorization]. He said it was
not defensible to treat a patient that way.
DR. KELLY shared the story of another patient, a 17-year-old who
he saw after her third episode of optic neuritis. He said each
episode causes loss of vision. He diagnosed her with a variant
of MS and prescribed a very specific treatment for her condition
that is highly effective. He said nothing else works and he
faced the same frustration with insurance companies wanting to
go through step therapy. He emphasized the patient was 17 years
old, progressively going blind and there is no excuse for such a
delay. He said after considerable personal preparation and
effort, he was able to persuade the insurance company to approve
his prescribed treatment.
2:21:56 PM
DR. KELLY shared his own story as a Type II diabetic. He said he
changed insurance companies, and it has taken several months to
resume the medications that have controlled his condition very
well for years. In the meantime, he was compelled to try
different medications and endure the accompanying negative
effects until he could return to the medications that worked for
him.
DR. KELLY urged that whatever could be done to stop harm to
patients is worthwhile.
2:22:36 PM
CHAIR BJORKMAN noted the testimony that the current system of
prior authorization requirements leads to increased frequency of
negative outcomes. He asked whether the current system leads to
more utilization and higher costs because when people are
eventually approved for care they require more intensive
treatment.
2:23:10 PM
DR. KELLY concurred. He said it may not seem tangible to the
insurance carrier because the current system leads to things
like long-term disability or [reducing] the longevity of a
patient's work life or their ability to remain independent and
walking and able to engage in activities of daily living. He
said those things aren't costs felt by the insurance company as
much as by the patient. He noted the cost of urinary
incontinence may be for "Depends" and urologist visits from the
insurance company's perspective, but they don't experience what
the patient is experiencing.
DR. KELLY said, regarding treating MS, every patient has the
right to the most effective, best tolerated treatment from the
get-go; not jumping through hoops with therapies that are known
to be less effective and waiting for proof they don't work.
2:24:31 PM
CHAIR BJORKMAN opened public testimony on SB 219.
2:24:55 PM
GARY STRANNIGAN, Vice President of Congressional and Legislative
Affairs, Premera Blue Cross Blue Shield, Everett, Washington
said Premera Blue Cross Blue Shield had considerable concern
with SB 219. He said Premera and other insurance carriers use
prior authorization to try to put downward pressure on waste,
fraud and abuse, which the American Medical Association (AMA)
pegs at about 25 percent. He said it is worth noting that
Premera is currently fighting, in concert with the Alaska
Department of Insurance and the Federal Bureau of Investigation
(FBI), fraud for claims valued at about $120 million. He said SB
219 will limit the effectiveness of the prior authorization tool
to apply that downward pressure.
MR. STRANNIGAN opined SB 219 will be difficult to comply with
from an operational program perspective. He said a program would
have to be built to track the data, assure accuracy and make
decisions based on the data. He suggested the result may be a
situation that doesn't make sense because SB 219 only applies to
the fully insured market in the State of Alaska. He said it
would not apply to the state employee plan. He said it would if
this was good policy and the state was willing to pay for it. He
said SB 219 does not apply to self-funded insurance plans,
either.
MR. STRANNIGAN suggested the following consequence of SB 219.
The bill may lead to Premera giving up on prior authorizations.
The contracts [with providers] stipulate the insurance pays for
medically necessary care. If, retrospectively, a service was
determined [by the insurance company] not to be in the best
interest of a patient, the insurance will not pay for it. He
said it will only take one of two of these incidents for doctors
to get the word out and develop a plan to call the insurance
company beforehand, which leads right back to the same crummy
system with all kinds of friction, which he acknowledged is real
and that he is aware of it.
2:27:38 PM
MR. STRANNIGAN suggested focusing on the friction and trying to
minimize it. He said an 80 percent threshold essentially
eliminates prior authorization. He suggested instead that turn-
around times, as they exist in law, be tightened from five days
for standard turnaround and one day for urgent, to three days
for standard and remain at one day for urgent. He further
suggested requests for prior authorization be submitted using an
electronic portal rather than fax, which, necessitates a manual
process. He said faxing is what leads to the friction. He urged
streamlining the process to make it work better, not throwing it
out.
2:29:00 PM
SENATOR GRAY-JACKSON asked what percentage of claims are denied.
2:29:16 PM
MR. STRANNIGAN said the percentage is low, but he does not know
the number exactly. He offered to get back to the committee with
the answer.
2:29:36 PM
SENATOR GRAY-JACKSON asked what percentage of claims that were
denied were reversed after appeal. She acknowledged that he
likely could not answer in the meeting and asked for answers to
both questions.
2:30:01 PM
SENATOR MERRICK asked whether an increase from 80 percent to 90
percent in SB 219 would change his opinion of the bill.
2:30:10 PM
MR. STRANNIGAN said he did not think it would. He said new
programming would still be necessary. He noted that in Texas,
there is a huge insurance marketplace compared with Alaska's
very small insurance marketplace to spread the investment
across. He said the difference between 80 percent and 90 precent
would not change the need to build that program, whether they
were serving Alaskans or Texans. He said it would be difficult
to pencil out.
2:31:15 PM
CHAIR BJORKMAN asked Deputy Director Carpenter whether the
Division of Insurance has any concerns with SB 219.
2:31:44 PM
HEATHER CARPENTER, Deputy Director, Division of Insurance,
Department of Commerce, Community and Economic Development,
Juneau, Alaska said the Division is neutral on SB 219. She said
the division would ask the committee to consider changing from
an immediate effective date to a specific effective date that
would allow the division time to write regulations.
2:32:16 PM
CHAIR BJORKMAN suggested that SB 219 be amended to include state
insurance plans and asked whether that would influence the
Division's position on the bill.
2:32:28 PM
MS. CARPENTER said, if SB 219 were to extend beyond insured
plans it would be necessary to consult with the Department of
Law as well as those who represent Alaska Care. She noted
conversations on another bill in the Senate Committee on Labor &
Commerce noting those plans are not overseen by the Division of
Insurance. She said they follow Employee Retirement Income
Security Act (ERIS) laws and lots of other things. She said the
insured market is what is regulated by the Division of
Insurance, which includes the individual market, small group and
large group plans, which comprises about 15% of the health care
market in Alaska.
2:33:22 PM
CHAIR BJORKMAN asked Mr. Kosin how SB 219 would affect Alaska
hospitals and their mission to provide care.
2:33:45 PM
JARED KOSIN, President and CEO, Alaska Hospital and Healthcare
Association, Anchorage, Alaska, appreciated previous testimony
and the articulation of the issue. He noted that a hospital will
treat anyone, regardless of their ability to pay. He said SB 219
is all about putting doctors and patients together and removing
unnecessary barriers or hurdles when care is needed.
MR. KOSIN said SB 219 is crafted to take the best of the best
providers who have gone through the prior authorization process
and achieved a threshold of 80 or 90 percent and determining
that they no longer be required to engage the process. He said
that would then eliminate the delay for patients who have been
told they need a certain procedure and then must wait until the
provider and their team can work with the insurance company to
determine whether that service will be authorized.
MR. KOSIN said SB 219 would remove all the unnecessary steps for
these very specific instances. He said care would be more
available and in the hands of the providers and the patients. He
said that would be very consistent with the hospitals mission.
He said SB 219 is reasonable and it keeps the process in place
and provides a reasonable avenue for using it going forward.
2:36:29 PM
CHAIR BJORKMAN held SB 219 in committee.
2:36:35 PM
At ease
2:40:27 PM
CHAIR BJORKMAN reconvened the meeting and closed public
testimony on SB 219.
HB 97-SELF-STORAGE UNITS: LIENS; SALES
2:40:42 PM
CHAIR BJORKMAN announced the consideration of CS FOR HOUSE BILL
NO. 97(JUD) am "An Act relating to self-storage facilities for
personal property, including vehicles and watercraft;
distinguishing self-storage facility liens from another type of
storage lien; and excluding self-storage liens from the
treatment of certain unclaimed property."
2:41:11 PM
REPRESENTATIVE MIKE PRAX, District 33, Alaska State Legislature,
Juneau, Alaska, Sponsor of HB 97 said HB 97 is about storage
liens for self-storage units. He made the following statements
regarding HB 97:
• Storage lien laws are the national standard for settling
disputes between facility owners and unit renters.
• These laws provide protections for both the unit renters
and the storage facility owners in the event that rent is
not paid and that contents of a storage unit are abandoned.
• Alaska is the last remaining state without a self-storage
lien law, consequently we have no consistent process for
resolving these liens, creating confusion for facility
owners and tenants and there is relatively little consumer
protection for self-storage renters.
• In states with self-storage lien laws there are clear
statutory guidelines and procedures for handling delinquent
tenants. The absence of such laws in Alaska makes it harder
for such customers to understand their rights and
responsibilities.
• Self-storage facility owners in Alaska face legal
challenges dealing with delinquent tenants because it
follows the warehouse lien laws, a court-driven process.
• The absence of clear regulatory guidelines in how to handle
non-payment in abandoned storage units makes it difficult
to recover unpaid rent, evict delinquent tenants or
properly dispose of abandoned items.
• Self-storage facility owners rely on rental income to cover
their costs and generate income. Without a stream-lined
legal process, these facility owners face financial losses
due to unpaid rent and delays in recovering abandoned
units. This results in higher rental rates for customers
when facility owners must account for potential losses when
setting rental prices.
• HB 97 provides a process for addressing these situations in
which self-storage unit renter fails to pay their rent or
otherwise abandons their unit. The facility owner needs to
access the unit to sell the unit owners' property to
recover the debt or simply to clean debris out of the unit
to make it available for the next renter.
• National data from the self-storage association indicates
that facility owners only sell approximately one to three
percent of spaces annually. It's an infrequently used
procedure but it is necessary for the successful operation
of the facility, because they must deal with the other 90
percent which are abandoned with no commercially valuable
property in the storage unit.
• HB 97 would require facility owners to include specific
information regarding their facility owners' lien rights
and the lease that governs the relationship between the
parties.
• HB 97 would also require the facility owner to send a
default notice to the unit rental before lien enforcement
can begin. If the unit renter does not cure the default,
the facility owner would then be required to send a second
notice of default to the unit renter at least ten days
after the first note. The second notice must provide an
additional 20-day window for the unit renter to cure the
default and pay the rent owed. After all this, if the rent
is not paid, then HB 97 would allow the facility owner to
proceed with the sale of the abandoned items and recover
the rental unit.
• HB 97 details the process and how proceeds from a sale must
be applied in a fair and equitable manner.
2:45:37 PM
SENATOR BISHOP sought to clarify whether one to three percent of
the storage units were sold.
2:45:56 PM
REPRESENTATIVE PRAX corrected his statement, explaining that one
to three percent of the lien enforcements involved commercially
valuable property stored inside. He said the other 90 percent of
the liens enforcement enable the facility owner to access the
unit simply to clean it out. He said, ideally they find an empty
unit that doesn't require cleaning, otherwise they find packing
material and basically junk with no commercial value.
2:46:36 PM
SENATOR BISHOP clarified that 3 percent of stuff they deal with
on nonpayment has some value and can be sold; the other 90
percent goes to the dumpster.
2:47:02 PM
ERICK CORDERO-GIORGANA, Staff, Mike Prax, Alaska State
Legislature, Juneau, Alaska presented the sectional analysis for
HB 97.
[Original punctuation included.]
House Bill 97
Sectional Analysis Version U
Section 1 (Page 1, lines 5-7) Amends AS 28.11.025
relating to abandoned vehicles by stipulating that it
does not apply to a vehicle in a self-storage facility
under the sections of this bill.
Section 2 (Page 1, lines 8-10) Amends AS 34.35 by
adding a new section stipulating that AS 34.35.220 and
225 do not apply to a self-storage facility.
Section 3 (Page 1, line 11 - Page 6, line 14) -
Amends 34.35 to add a new section titled Article 13A.
Self-Storage Facilities.
Sec. 34.35.600. Self-storage facility liens; fees.
(Page 1, line 12 - Page 2, line 7)
This section details that a facility owner has a
storage lien on unit property if the unit renter fails
to abide by a written rental agreement, including
paying the rental charges and reasonable late fees.
Sec. 34.35.605. Priority of storage lien. (Page 2,
lines 8-12) (a) This section notes that if a vehicle
is an item of the unit property, a storage lien is
superior to a lien or encumbrance established under AS
28.10.371 401.
(b) Stipulates that a storage lien is superior to a
security interest perfected under AS 45.29. A storage
lien is also superior to another lien or security
lien, except a tax lien.
Sec. 34.35.610. Attachment of storage lien; rental
agreements. (Page 2, lines 13-20)
Stipulates that a storage lien attaches on the date
property is placed in storage. A rental agreement must
contain a statement notifying the unit renter of the
existence of the storage lien and the method by which
the facility owner may enforce the lien. This section
also requires the unit renter to disclose any
lienholders with an interest in the stored property.
2:49:06 PM
MR. CORDERO-GIORGANA continued the sectional analysis for HB 97.
Sec. 34.35.615. Enforcement. (Page 2, lines 21-22)
Gives facility owners the right to enforce a storage
lien after a unit renter has been continuously in
default for at least 10 days.
Sec. 34.35.620. Denial of access; removal of unit
property. (Page 2, line 23 - Page 3, line 3)
Stipulates that after a default, the facility owner
may deny the unit renter access to the storage unit
and move property to another place for storage. The
section also allows the facility owner to tow or
otherwise remove a vehicle or watercraft from the
storage facility.
Sec. 34.35.625. Default notice (Page 3, lines 4-27)
Requires a facility owner to notify the unit renter
and any lienholders identified in the rental agreement
that a unit renter is in default before enforcing a
storage lien. Sec. 34.35.630. Authority to dispose of
unit property. (Page 3, lines 28-31) Allows the
facility owner to dispose of the unit property if a
unit renter does not cure a default and pay the amount
due by the deadline stated in the lien notice.
Sec. 34.35.635. Sale and disposal of unit property.
(Page 4, lines 1-7)
Section (a) allows a facility owner to sell unit
property at the storage facility or nearest suitable
location, or on the internet.
Section (b) Allows the facility owner to privately
sell, give away, donate, or throw away unit property
that is not commercially viable to dispose of by a
public sale.
Sec. 34.35.640. Redemption by unit renter, vehicle
owner, or vehicle lien holder. (Page 4, lines 8-18)
Section (a) notes that, before the sale of the
property, the unit renter may redeem the unit property
by paying the amount due, in which case, the facility
owner shall immediately return the unit property to
the unit renter.
Section (b) states that if a vehicle owner of record
or a lienholder pays the amount due before the
facility owner disposes of the vehicle under AS
34.35.635, the facility owner shall transfer
possession of the vehicle to the vehicle owner or
lienholder who pays the amount due.
Section (c) states that a facility owner is no longer
liable for property after it is returned under (a) or
(b) of this section.
Sec. 34.35.645. Good faith purchasers. (Page 4, lines
19-23)
A person who purchases unit property in good faith
takes possession of the property free of any rights of
the unit renter, the facility owner, or any
lienholders.
Sec. 34.35.650. Vehicle title. (Page 4, lines 24-27)
Stipulates that if a vehicle is sold at a public sale
and is titled, the Department of Administration shall
transfer the vehicle title to the purchaser.
2:51:47 PM
MR. CORDERO-GIORGANA continued the sectional analysis for HB 97.
Sec. 34.35.655. Proceeds of sale. (Page 4, line 28 -
Page 5, line 2)
This section details how the storage facility owner is
to apply the proceeds from the disposal of private
property to satisfy a storage lien.
Sec. 34.35.660. Limit on value of property stored.
(Page 5, lines 3-6)
This section details that if a rental agreement
specifies a limit on the value of stored property,
that limit is the maximum value.
Sec. 34.35.665. Additional rights and obligations.
(Page 5, lines 7-11)
Specifies that a rental agreement may contain other
rights, duties, and obligations not required in the
provisions of this bill.
Sec. 34.35.670. Definitions. (Page 5, line 12 - Page
6, line 14) This section defines terms used in the
Act.
Section 4 (Page 6, lines 15-17) This section
clarifies that AS 34.45.010 34.45.085 do not apply
to a self-storage facility.
Section 5 (Page 6, lines 18-22) Amends the uncodified
law stating this Act only applies to rental agreements
entered on or after the effective date.
2:53:24 PM
SENATOR BISHOP referred to Sec. 34.35.655 in the sectional
analysis and asked whether this would be further defined in
regulation. He asked whether the proceeds from a sale would be
held in an escrow account in this person's name. He asked
whether it would be an interest-bearing account, checking
account, cash box etc.
2:54:16 PM
REPRESENTATIVE PRAX answered that it would be up to the facility
owner. As HB 97 is currently written, the facility owner is
entitled to past due rent and expenses dealing with cleaning up
the unit and selling the property. He said, if there is extra
money the facility owner has to keep it for three years and
return it to the renter if the renter shows up or to the
lienholder in the case of a vehicle. He said the facility owner
is not making a profit on the sale. He suggested that if a
painting or some item that was of considerable value were sold,
he said there is no lien on the painting. If the item sells at
auction, the facility owner would keep what is due him for the
past due rent and the cost of selling the painting and then he
holds on to the rest of the money and the renter can claim the
difference when and if they return. He said, if the renter never
shows up, then the money goes to the state as unclaimed
property. He suggested the next question would be regarding
protection for the unit owner. He explained HB 97 requires
notification before they can start the sale process and it takes
about a month to get through that.
2:56:05 PM
SENATOR DUNBAR referred to a letter from Global Credit Union
with concerns and asked whether there were any proposed
amendments to address those concerns, for example: the priority
of the lien, title issues, proceeds of sale, etc. In particular,
he wondered about the priority of lien and suggested a scenario
involving child custody that resulted in a lien for unpaid child
support. He asked whether HB 97 would supersede child support.
2:57:21 PM
REPRESENTATIVE PRAX said he had not considered child support. He
noted you can't get ahead of the IRS; he didn't know if you
could get ahead of child support.
2:58:05 PM
CHAIR BJORKMAN opened public testimony on HB 97.
2:58:13 PM
GARY JENKINS, Owner, Space Unlimited Inc., Juneau, Alaska, said
he had several specific concerns about HB 97. He suggested that
there were assumptions in HB 97 that are not correct and
provisions that are extremely egregious from a public fairness
perspective. He said there is a lien law in Alaska which HB 97
referred to as though it were not effective. He said Alaska has
been operating under that lien law for 50 years and he said the
law is short, but effective. He said HB 97 takes all the
provisions of the warehouseman's law, embellishes it and puts it
in HB 97. He acknowledged that time was short and said he would
like an opportunity to speak in more depth about some of the
provisions that would be extremely unfair to the committee's
constituents who would be the renters and perhaps themselves if
any of the committee rent space.
3:00:09 PM
SENATOR DUNBAR asked whether Mr. Jenkins could submit his
comments in writing.
3:00:25 PM
MR. JENKINS said he could, but he said the details of the
business can be difficult to explain in an email. He said he
would comply with the wishes of the committee.
3:00:44 PM
SENATOR DUNBAR said that he would not speak for the chair, but
that he always finds written comments to be helpful.
3:00:54 PM
SENATOR MERRICK asked whether Mr. Jenkins had found others in
the storage space industry who reached the same conclusions he
had.
3:01:01 PM
MR. JENKINS said he spoke with a gentleman who is the largest
self-storage operator in Alaska. He said they stated they would
operate as they always had and they would prefer not to get into
a hassle over the language of HB 97. He said that is what he
would do as well. He said he found HB 97 to be skewed too far in
favor of the owners of storage facilities. He said his own
policies were more fair than what he considered to be very bad
public policies set forth by HB 97.
3:01:54 PM
CHAIR BJORKMAN asked Mr. Jenkins to highlight provisions of HB
97 that he found problematic with explanations for his
objections.
3:02:09 PM
MR. JENKINS concurred.
3:02:15 PM
CHAIR BJORKMAN held public testimony for HB 97 open.
3:02:20 PM
CHAIR BJORKMAN held HB 97 in committee.
3:02:54 PM
CHAIR BJORKMAN There being no further business to come before
the committee, Chair Bjorkman adjourned the Senate Labor and
Commerce Standing Committee meeting at 3:02 p.m.