Legislature(2025 - 2026)BELTZ 105 (TSBldg)
05/14/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB159 | |
| HB121 | |
| SB154 | |
| SB121 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 159 | TELECONFERENCED | |
| + | HB 121 | TELECONFERENCED | |
| *+ | SB 154 | TELECONFERENCED | |
| + | SB 121 | TELECONFERENCED | |
| + | SB 122 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
May 14, 2025
2:27 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Kelly Merrick, Vice Chair
Senator Elvi Gray-Jackson
Senator Forrest Dunbar
Senator Robert Yundt
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 159
"An Act increasing contributions to the Department of Labor and
Workforce Development for the State Training and Employment
Program."
- MOVED SB 159 OUT OF COMMITTEE
HOUSE BILL NO. 121
"An Act relating to the practice of accounting; and providing
for an effective date."
- HEARD & HELD
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 154
"An Act establishing the Home Care Employment Standards Advisory
Board; relating to payment for personal care services; and
providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 121
"An Act relating to settlement of health insurance claims;
relating to allowable charges for health care services or
supplies; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 122
"An Act relating to insurance; establishing standards for health
insurance provider networks; and providing for an effective
date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: SB 159
SHORT TITLE: TRAINING & EMPLOYMENT PROG: CONTRIBUTIONS
SPONSOR(s): LABOR & COMMERCE
04/07/25 (S) READ THE FIRST TIME - REFERRALS
04/07/25 (S) L&C, FIN
05/05/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/05/25 (S) Heard & Held
05/05/25 (S) MINUTE(L&C)
05/09/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/09/25 (S) Heard & Held
05/09/25 (S) MINUTE(L&C)
05/14/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 121
SHORT TITLE: ACCOUNTING; PRACTICE PRIVILEGE
SPONSOR(s): SCHRAGE
02/28/25 (H) READ THE FIRST TIME - REFERRALS
02/28/25 (H) L&C
03/10/25 (H) L&C AT 3:15 PM BARNES 124
03/10/25 (H) -- MEETING CANCELED --
03/12/25 (H) L&C AT 3:15 PM BARNES 124
03/12/25 (H) Heard & Held
03/12/25 (H) MINUTE(L&C)
03/14/25 (H) L&C AT 3:15 PM BARNES 124
03/14/25 (H) Moved HB 121 Out of Committee
03/14/25 (H) MINUTE(L&C)
03/17/25 (H) L&C RPT 5DP 1NR
03/17/25 (H) DP: COULOMBE, BURKE, NELSON, HALL,
FIELDS
03/17/25 (H) NR: CARRICK
03/17/25 (H) L&C AT 3:15 PM BARNES 124
03/17/25 (H) <Bill Hearing Canceled>
03/24/25 (H) TRANSMITTED TO (S)
03/24/25 (H) VERSION: HB 121
03/26/25 (S) READ THE FIRST TIME - REFERRALS
03/26/25 (S) EDC, L&C
04/09/25 (S) EDC REFERRAL REMOVED
04/09/25 (S) STA REFERRAL ADDED
04/22/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg)
04/22/25 (S) Heard & Held
04/22/25 (S) MINUTE(STA)
05/06/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg)
05/06/25 (S) Heard & Held
05/06/25 (S) MINUTE(STA)
05/08/25 (S) STA AT 3:30 PM BELTZ 105 (TSBldg)
05/08/25 (S) Moved SCS HB 121(STA) Out of Committee
05/08/25 (S) MINUTE(STA)
05/09/25 (S) STA RPT SCS 2DP 3NR NEW TITLE
05/09/25 (S) DP: KAWASAKI, GRAY-JACKSON
05/09/25 (S) NR: YUNDT, WIELECHOWSKI, BJORKMAN
05/14/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 154
SHORT TITLE: HOME CARE EMPLOYMENT STANDARDS ADV BOARD
SPONSOR(s): YUNDT
04/02/25 (S) READ THE FIRST TIME - REFERRALS
04/02/25 (S) L&C, FIN
04/22/25 (S) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
04/22/25 (S) L&C, FIN
05/14/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 121
SHORT TITLE: HEALTH INSURANCE ALLOWABLE CHARGES
SPONSOR(s): GIESSEL BY REQUEST
03/05/25 (S) READ THE FIRST TIME - REFERRALS
03/05/25 (S) HSS, L&C
03/11/25 (S) HSS AT 3:30 PM BUTROVICH 205
03/11/25 (S) Heard & Held
03/11/25 (S) MINUTE(HSS)
03/20/25 (S) HSS AT 3:30 PM BUTROVICH 205
03/20/25 (S) Heard & Held
03/20/25 (S) MINUTE(HSS)
03/27/25 (S) HSS AT 3:30 PM BUTROVICH 205
03/27/25 (S) Moved CSSB 121(HSS) Out of Committee
03/27/25 (S) MINUTE(HSS)
03/31/25 (S) HSS RPT CS 4NR 1DP SAME TITLE
03/31/25 (S) NR: DUNBAR, HUGHES, CLAMAN, TOBIN
03/31/25 (S) DP: GIESSEL
05/14/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
KONRAD JACKSON, Staff
Senator Jesse Bjorkman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a brief recap of SB 159.
AMANDA NDEMO, Staff
Representative Calvin Schrage
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Read the sponsor statement for HB 121.
BETH STUART, Chair
Alaska State Board of Public Accountancy
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on HB 121.
KAREN BREWER-TARVER, Chair
Alaska Society of Certified Public Accountant (CPA's)
Legislative Committee
Juneau, Alaska
POSITION STATEMENT: Testified by invitation on HB 121.
JUDY JESSEN, Senior Political and Advocacy Organizer
Service Employees International Union 775 (SEIU)
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 154.
ISATOU MBOGE, Caregiver
Service Employees International Union (SEIU)
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 154.
BJ REDD MENDEZ, Caregiver
Service Employees International Union (SEIU)
Wasilla, Alaska
POSITION STATEMENT: Testified by invitation on SB 154.
SENATOR CATHY GIESSEL, District E
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 121.
JEFF DAVIS, Principal
Weston Group Consulting
Wenatchee, Washington
POSITION STATEMENT: Provided a presentation on SB 121.
NOAH LAUFER, Physician
Medical Park Family Care
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
WADE ERICKSON, Physician
Capstone Clinic
Wasilla, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
GENE QUINN, Cardiologist
Alaska Heart and Vascular Institute
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
ACTION NARRATIVE
2:27:40 PM
CHAIR BJORKMAN called the Senate Labor and Commerce Standing
Committee meeting to order at 2:27 p.m. Present at the call to
order were Senators Merrick, Dunbar, Yundt and Chair Bjorkman.
Senator Gray-Jackson arrived soon thereafter.
SB 159-TRAINING & EMPLOYMENT PROG: CONTRIBUTIONS
2:28:48 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
159 "An Act increasing contributions to the Department of Labor
and Workforce Development for the State Training and Employment
Program."
2:29:20 PM
KONRAD JACKSON, Staff, Senator Jesse Bjorkman, Alaska State
Legislature, Juneau, Alaska, provided a brief recap of SB 159.
He said the bill proposes increasing the STEP program
contribution from 0.1 percent to 0.2 percent of unemployment
insurance payments, reflecting demonstrated funding needs and
was requested by the Department of Labor and Workforce
Development.
2:30:07 PM
CHAIR BJORKMAN solicited the will of the committee.
2:30:09 PM
SENATOR MERRICK moved to report SB 159, work order 34-LS0615\A,
from committee with individual recommendations and attached
fiscal note(s).
2:30:24 PM
CHAIR BJORKMAN found no objection and SB 159 was reported from
the Senate Labor and Commerce Standing Committee.
2:30:37 PM
At ease.
HB 121-ACCOUNTING; PRACTICE PRIVILEGE
[SCS HB 121(STA) was before the committee.]
2:31:42 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of HOUSE BILL NO. 121 "An Act relating to the
practice of accounting; and providing for an effective date."
2:32:17 PM
AMANDA NDEMO, Staff, Representative Calvin Schrage, Alaska State
Legislature, Juneau, Alaska, read the sponsor statement for HB
121:
[Original punctuation provided.]
"An Act relating to the practice of accounting; and
providing for an effective date."
The accounting profession is essential to Alaska's
economy, ensuring financial transparency for
businesses, organizations, and government entities.
However, outdated regulatory barriers are limiting the
number of qualified professionals entering the field.
The demand for accountants is growing nationwide, with
employment in the field expected to increase by 6
percent over the next decade. However, the number of
CPA's practicing in Alaska is shrinking. Between
fiscal years 2019 and 2024, CPA licensure in the state
grew by only 3 percent. If this trend continues,
Alaska will face a worsening shortage of accounting
professionals, limiting access to essential financial
services.
2:33:22 PM
MS. NDEMO continued with the sponsor statement:
HB 121 addresses these issues by:
• Making technical and housekeeping changes to
practice privilege for out-of-state firms to allow
them greater flexibility.
• Removing the outdated and onerous requirement that
students complete an extra year of college, beyond the
120-credit hour bachelor's degree with a concentration
in accounting.
• Permitting CPAs to more easily become licensed
conservators and remove the burden of maintaining a
guardianship certification in addition to their CPA
license.
These changes align Alaska with national trends toward
greater flexibility in CPA licensure while maintaining
professional integrity. Candidates will still be
required to pass the Uniform CPA Exam, meet education
and professional experience requirements, ensuring
competency without imposing unnecessary costs. I
encourage my colleagues to support this important
legislation.
2:35:08 PM
CHAIR BJORKMAN announced invited testimony on HB 121.
2:35:18 PM
BETH STUART, Chair, Alaska State Board of Public Accountancy,
Anchorage, Alaska, testified by invitation on HB 121. She stated
that when she earned her CPA license, 150 credit hours weren't
required, just a bachelor's degree, passing the CPA exam, and
work experience. HB 121 would remove the extra 30-credit
requirement, which can include any courses, to encourage more
students to pursue accounting and address workforce shortages.
HB 121 also aligns Alaska's firm mobility laws with individual
mobility laws for consistency.
2:38:22 PM
KAREN BREWER-TARVER, Chair, Alaska Society of CPA's Legislative
Committee, Juneau, Alaska, testified by invitation on HB 121.
She said the Alaska State Society of CPAs supports HB 121, which
removes the extra 30-credit requirement for CPA licensure,
making it easier and more affordable for candidates to become
CPAs and addressing the shortage of qualified accountants. HB
121 also modernizes firm mobility laws, allowing out-of-state
CPA firms to serve Alaska clients without burdensome
registration while maintaining state oversight and protections.
2:42:45 PM
CHAIR BJORKMAN held HB 121 in committee.
SB 154-HOME CARE EMPLOYMENT STANDARDS ADV BOARD
2:42:54 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SPONSOR SUBSTITUTE FOR SENATE BILL NO. 154 "An
Act establishing the Home Care Employment Standards Advisory
Board; relating to payment for personal care services; and
providing for an effective date."
2:43:22 PM
SENATOR YUNDT speaking as sponsor of SB 154 he introduced the
bill:
[Original punctuation provided.]
An Act establishing the Home Care Employment Standards
Advisory Board; relating to payment for personal care
services; and providing for an effective date."
Seniors are the fastest growing demographic in the
state of Alaska1 and are living longer lives.2 The
state's 85+ population is expected to increase by 500
percent between 2022 and 2050, of which, 1/3 will
experience Alzheimer's and Related Dementia. The
Alaska Department of Labor and Workforce Development
predicts home care, a part of Alaska's continuum of
care services for seniors and people with
disabilities, to be one of the fastest growing and
most in demand occupations in the state.
Alaska faces an acute shortage of direct care workers,
particularly outside of population centers. The
potential provider workforce demographic, those age 18
to 64, is in decline. Furthermore, low pay and lack
of benefits force many caregivers out of the
profession and make recruitment and retention
increasingly more difficult for agencies providing in-
home care services.
2:44:58 PM
SENATOR YUNDT continued:
We need to create strong and long-lasting home care
infrastructure in Alaska which will expand access to
quality, affordable home and community-based care for
seniors and people with disabilities, keep people in
their homes and out of costly facilities, and bolster
the creation of jobs. We also need to ensure that
Medicaid funding for personal care services is wisely
spent, with an adequate portion of the rate going to
pay and benefits for direct care workers, in order to
help address the workforce shortage. SB 154
accomplishes both of these objects by:
• Establishing a Home Care Employment Standards
Advisory Board that will investigate, advise, and
develop recommendations on Medicaid rates and other
policies to improve the wages, working conditions, and
recruitment and retention of direct care workers.
• Requiring that agencies providing personal care
services spend at least 70 percent of the total annual
funding they receive from the department for personal
care services on the pay and benefits of Personal Care
Assistants providing such services.
2:46:26 PM
CHAIR BJORKMAN announced invited testimony on SB 154.
2:46:37 PM
JUDY JESSEN, Senior Political and Advocacy Organizer, Service
Employees International Union 775 (SEIU), Anchorage, Alaska,
testified by invitation on SB 154. She stated that the bill
strengthens Alaska's long-term care system by addressing the
growing demand for senior and disability care amid a shrinking
caregiver workforce. SB 154 ensures a higher portion of Medicaid
personal care funds of 70 percent that goes directly to
caregiver pay and benefits rather than agency overhead,
improving transparency and compensation. She said with home care
significantly cheaper than institutional care, SB 154 supports a
sustainable, cost-effective, and well-trained care workforce for
Alaska's aging population.
2:50:41 PM
MS. JESSEN stated that some unionized caregivers received $2$4
hourly raises, but many did not, and there's little transparency
on how agencies used Medicaid rate increases. SB 154 addresses
this by requiring reporting on how funds are spent and creating
a Workforce Standards Advisory Board to bring together
caregivers, providers, clients, and the Department of Health to
plan for long-term workforce needs. SB 154 promotes
accountability, informed rate setting, and collaborative
planning to strengthen Alaska's home care system and address the
growing caregiver shortage.
2:53:38 PM
ISATOU MBOGE, Caregiver, Service Employees International Union
(SEIU), Anchorage, Alaska, testified by invitation on SB 154.
She said she helps clients with daily activities they can't do
on their own, such as bathing, grooming, and mobility support.
Caregiving is more than a job because she cares and values the
relationships she builds. She said there's a serious shortage of
caregivers, especially in rural areas, and many must work
multiple part-time jobs without health insurance. SB 154's
advisory board would allow caregivers, clients, and agencies to
collaborate on issues like training, workforce needs and giving
clients a stronger voice in their care.
2:57:42 PM
BJ REDD MENDEZ, Caregiver, Service Employees International Union
(SEIU), Wasilla, Alaska, testified by invitation on SB 154. She
stated that she cares for her father, brother, and son, all with
serious health conditions. She said being a caregiver in Alaska
is difficult and undervalued; low pay, high living costs, and
lack of health insurance force her to work two full-time jobs.
She said after 25 years of caregiving, she is asking for better
pay, benefits, and respect for the profession. SB 154 would help
address these needs, support caregivers, and ensure quality care
for Alaskans who depend on us.
3:02:10 PM
CHAIR BJORKMAN held SB 154 in committee.
3:02:17 PM
At ease.
SB 121-HEALTH INSURANCE ALLOWABLE CHARGES
[CSSB 121(HSS) was before the committee.]
3:04:19 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 121 "An Act relating to
settlement of health insurance claims; relating to allowable
charges for health care services or supplies; and providing for
an effective date."
3:04:42 PM
SENATOR CATHY GIESSEL, District E, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 121. She stated that the bill
establishes minimum reimbursement standards for healthcare
services to ensure fair and sustainable payments to providers.
After the repeal of the 80th percentile rule it left no
reimbursement floor, clinics faced severe payment declines. She
said SB 121 guides the Director of Insurance to set and audit
standards requiring insurers to reimburse at least the 75th
percentile of statewide charges or 450 percent of Medicare
rates, using current, market-based data to maintain equitable
and affordable healthcare in Alaska.
3:07:53 PM
SENATOR BJORKMAN announced that Senator Gray-Jackson joined the
meeting.
3:08:01 PM
CHAIR BJORKMAN asked if the bill, to repeal the 80th percentile
rule, included a reimbursement floor set at 300 percent of
Medicaid rates.
3:08:12 PM
SENATOR GIESSEL replied that it was 300 or 350 percent of
Medicare not Medicaid.
3:08:34 PM
CHAIR BJORKMAN announced invited testimony on SB 121.
3:08:58 PM
JEFF DAVIS, Principal, Weston Group Consulting, Wenatchee,
Washington, provided a presentation on SB 121. He stated that
the 2004 regulation was intended to prevent balance billing,
where insurers paid far less than a provider's charge, by
establishing a market-based standard. However, the regulation
also had an unintended consequence, it became a key reference
point in payment negotiations between providers and insurers.
3:10:40 PM
MR. DAVIS moved to slide 2 and spoke to the following:
[Original punctuation provided.]
SB 121: Restores State-defined, Alaska-based standard
for health insurance allowable charges.
Protects Alaskans from large balance bills
Restores balance at bargaining table
Addresses criticisms of the 80th percentile
Require insurers to:
• Set allowable charges, usual, customary & reasonable
(UCR) at 75th percentile of Alaska charges (Reduced
from 80th percentile)
• Entire state is one region, not 4 separate
geographic regions
• Updated not more often than every three years
• Instead of every six months, not less than every
five years
3:11:57 PM
MR. DAVIS moved to slide 3, Why does Alaska need a UCR
replacement. He stated that there are two reasons a replacement
is needed. Insurers don't base payments on provider charges but
on an allowable amount, often referred to as the usual,
customary, and reasonable rate. Someone must determine that
allowable amount. Under the previous rule, it was set at the
80th percentile, roughly 450 percent of Medicare rates. After
the rule's repeal, insurers set their own standards, reducing
allowable payments to about 185 percent of Medicare, a drop of
around 60 percent.
3:12:55 PM
MR. DAVIS moved to slide 4 and provided examples why usual,
customary, and reasonable (UCR) rate matters to patients. He
said if UCR is set too low, patients pay more out of pocket.
When set at market rates, patients receive the full insurance
benefit they're paying for:
[Original punctuation provided.]
Benefit calculation examples:
Benefit with insurer-defined $100 charge for service
low UCR: Patient owes $60. UCR set at $50
80 percent benefit = $40
covered by plan
Patient owes $60
UCR at hypothetical 80th $100 charge for service
percentile: Patient owes $28. 80th percentile = $90
80 percent benefit = $72
covered by plan
Patient owes $28
3:13:26 PM
MR. DAVIS moved to slide 5 and stated that the 80th percentile
rule originally protected consumers when few providers had
contracts, setting a benchmark for reimbursement when no
agreement existed. He said as more providers became contracted,
about 90 percent by 2017, the rule no longer set payment terms
but still served as a key reference point in negotiations.
Providers often accepted slightly lower rates to remain in-
network, benefiting both patients and their practices, yet the
80th percentile continued to guide fair contract pricing.
3:15:39 PM
MR. DAVIS moved to slide 6 and spoke to the following:
[Original punctuation provided.]
Impact: Repeal with no "floor" replacement
No state-defined UCR method after repeal in January
2024
Insurers again used their own definition:
-Largest plans chose 185 percent of Medicare Physician
fee schedule
-185 percent is roughly 40 percent of the 80th
percentile
With UCR defined as 185 percent of Medicare Insurers
demanded steep reductions in contract rates!
-Insurers began demanding steep reductions in existing
contracts
Providers' alternatives:
• Accept reduced terms-not financially sustainable,
eventually close
• Go out-of-network and balance-bill patients
If terminate contract, large balance bills return
new insurers trying to establish network using low
UCR-may cause large balance bills
3:16:19 PM
MR. DAVIS moved to slide 7 and stated that before the repeal, a
provider might accept $80 on a $100 charge when the 80th
percentile was $90. After repeal, that benchmark dropped to
about $35 at 185 percent of Medicare, giving insurers much
greater leverage. He said without a replacement, the repeal
greatly weakened providers' bargaining power in reimbursement
negotiations.
3:17:09 PM
MR. DAVIS moved to slide 8 and explained that the graph shows
data from 13 medical practices comparing insurer payments and
insurance premiums over time. Provider payments remained flat or
declined, while insurance premiums rose about 30 percent. This
demonstrates that rising premiums are not caused by increased
provider reimbursements.
3:18:27 PM
MR. DAVIS moved to slide 9 and stated that repealing the 80th
percentile rule without a replacement created serious financial
strain on providers. Reimbursements have remained flat for years
while practice costs, especially staff wages, have risen by 47
percent since 2016. He said as a result, physicians' take-home
pay in Alaska is now the lowest in the nation. With insurers
seeking further reductions, providers face difficult choices
like closing practices, stopping care for Medicare or Medicaid
patients, or going out of network and balance bill patients,
returning to problems seen before 2004.
3:21:17 PM
MR. DAVIS moved to slides 10-13 and shared a few excerpts from
the many letters received in support of SB 12:
[Original punctuation provided.]
"My office is in danger of closing owing to shrinking
reimbursement. While inflation has occurred every year
and the cost of supplies like sutures, liquid
nitrogen, gauze?and expenditures such as health
insurance has grown exponentially (27 percent increase
in health insurance rates, 2025-2026)?our
reimbursement is CUT each year."
Matthew Cannava, MD, Soldotna
"?I have tried to negotiate with insurance companies
unsuccessfully. I am concerned that in the near future
I may have to close my practice given the
deteriorating financial situation for me in Alaska.
Given the lower reimbursement, it will be more
difficult for me to serve Medicare and Medicaid
patients since my economic situation is declining?I am
the only neurosurgeon in Fairbanks, Alaska and I want
to stay in Fairbanks, Alaska but I do need to operate
with positive margins. Please help me to continue to
do this with passage of Senate Bill 121."
John A. Lopez, MD, Fairbanks
"?Inflation has increased 30+ percent in the last 11
years. Reimbursements on average have DECREASED by 30-
40 percent. It is not sustainable for medical
practices in the state to continue to be able to pay
the cost of doing business with the rates that
Premera, who is setting in-network rates lower than 11
years ago, and out of network rates at 185 percent of
Medicare. The ONLY leverage we had in negotiating any
kind of fair reimbursements was to have a percentile
rule in place that at the very least allowed providers
to negotiate."
Debbie Ryan, Business Manager, Community Chiropractic,
Anchorage
"?As a family physician practicing in Juneau for over
25 years, I have seen a tremendous change in the
status of medical practices in Juneau. Patients have
less selection and options, as a number of independent
practices have closed (or merged into the local tribal
health system). Declining reimbursement and decreasing
income for physician practices are the factors causing
physician practices to become nonviable." Janice
Sheufelt, MD, Juneau
MR. DAVIS said physician practices becoming nonviable is a
serious and urgent situation. Alaska's provider community is at
risk, and losing physicians would have long-term consequences,
as they are unlikely to return.
3:24:15 PM
MR. DAVIS moved to slide 14 and stated that in summary, SB 121
restores Alaska's state-defined standard, protects consumers
from balance billing, and rebalances provider-insurer
negotiations while addressing criticisms of the 80th percentile
rule.
3:24:43 PM
MR. DAVIS moved to slides 15-18 and stated that the appendices
highlight reasons why healthcare costs are high, including cost
shifting from Medicare and Medicaid to private payers, which
raises prices for those patients. The appendices also explain
why premiums rise and why Alaska's healthcare system does not
operate as a true free market, providing context and reference
for common questions.
3:25:52 PM
SENATOR YUNDT asked how other states' laws compare to Alaska.
3:26:00 PM
MR. DAVIS replied that ten states: California, Texas, Florida,
New York, Nevada, Oregon, Utah, Colorado, Kansas, and South
Carolina have laws similar to Alaska's percentile rule, with
eight using the 80th percentile and two using the 90th
percentile.
3:26:29 PM
SENATOR YUNDT noted that it is unusual for payouts to decrease
while insurance premiums rise and suggested that the legislature
must address this issue soon.
3:26:47 PM
MR. DAVIS stated that provider costs make up about 2025 percent
of total healthcare costs, and with 90 percent of providers
under contract, rising expenses are not driven by provider
charges. Instead, costs are increasing due to Alaska's aging
population, the growing share of Medicare/Medicaid patients,
limited provider numbers, expanding medical technology that adds
rather than replaces, and the high cost of new pharmaceuticals.
Overall medical inflation is about 5 percent, though individual
market headlines show higher rates due to unique Affordable Care
Act (ACA) market factors.
3:29:14 PM
NOAH LAUFER, Physician, Medical Park Family Care, Anchorage,
Alaska, testified by invitation on SB 121. He stated that he
agreed with the testimony of Mr. Davis and said the crisis in
healthcare is urgent and more severe than many realize. At
Medical Park Family Care, he has 14 providers, 85 employees, and
3540,000 patient visits annually, reimbursement has been flat
for 10 years. He said the clinic sees about 25 Medicaid patients
a day and provides extensive care that is often uncompensated. It
has no negotiating leverage making its financial stability
tenuous - retirement or incapacity of an owner could force
closure. He said nobody wants to buy a business that doesn't
make a profit. He said the comprehensive coordinated care that
his clinic has offered to generations of patients is at risk.
3:31:53 PM
CHAIR BJORKMAN stated that the 80th percentile rule has been
absent for just over a year, but reimbursements were flat for
the previous 10 years and asked whether the rule had been
ineffective.
3:32:08 PM
MR. LAUFER replied that the 80th percentile rule wasn't critical
for his office because it sees all payers and is not the most
expensive. However, without it, there is no negotiation or
leverage with insurers; the only potential leverage would be
refusing patients and that would likely achieve nothing.
3:32:43 PM
CHAIR BJORKMAN stated that for nine of the last ten years the
80th percentile rule gave providers an automatic price floor
that increased twice a year and allowed providers to set their
minimum price. He asked if the 80th percentile rule worked so
well that providers are now requesting its reinstatement, then
why, given that environment, did reimbursement pay stay the
same.
3:33:18 PM
MR. LAUFER replied that the rule benefited the community by
fostering negotiation, but providers cannot set their own prices
and are paid only what insurers dictate.
3:33:51 PM
WADE ERICKSON, Physician, Capstone Clinic, Wasilla, Alaska,
testified by invitation on SB 121. He stated that up until
around 2017, the 80th percentile rule allowed providers to
negotiate fairly with insurers despite downward market
pressures. After 2018, negotiations ceased, and rates were held
steady. Following the repeal of the rule, insurers quickly set
floors at 185 percent of Medicare, triggering concern as the
safety net the rule provided disappeared. The rule had
maintained a floor that prevented further rate reductions, but
without it, independent practices face downward pressure from
insurers and hospitals, which control both premiums and provider
reimbursements.
3:37:13 PM
MR. ERICKSON stated that it's become difficult to receive
healthcare in the Lower 48, which in turn brings patients back
to Alaska to see their primary care physicians. Since the repeal
of the 80th percentile rule, specialists are leaving, making
recruitment difficult and threatening independent practices.
This could reduce access and quality of care, leaving hospitals
to fill the gap. He asked for immediate legislative action to
restore balance before 2027, or the damage to primary and
specialty care will be significant.
3:40:26 PM
GENE QUINN, Cardiologist, Alaska Heart and Vascular Institute,
Anchorage, Alaska, testified by invitation on SB 121. He said
Envoy Integrated Health is a physician collaborative focused on
improving the quality and reducing the cost of Alaskan
healthcare through coordination and population health. He said
starting with five groups five years ago, it now includes 38
practices, over 300 physicians, and other providers. The
collaborative uses value-based care and created Alaska's first
locally based accountable care organization, saving 67 percent
of Medicare costs, compared to the 1 percent reduction promised
by repealing the 80th percentile rule. He said threats to the
income of physicians, such as, the repeal, reduce investment in
infrastructure, discourage care for vulnerable populations, and
distract from meaningful healthcare improvements. Collaboration
with insurers on cost and quality, not payment disputes, is
essential to advance Alaska's healthcare system.
3:46:04 PM
CHAIR BJORKMAN commended hospitals, care providers, and insurers
for engaging in cost-of-care projects, including SB 133 on prior
authorization. He highlighted the contrast between low-wage
caregivers and highly trained providers, noting the need to
address healthcare costs beyond simply increasing government
funding. He said he supports exploring regulations or standards
to ensure more insurance premiums go toward provider
reimbursement, emphasizing a systemic approach rather than just
distributing more money, which drives premiums up.
3:48:29 PM
CHAIR BJORKMAN held SB 121 in committee.
3:48:49 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:48 p.m.