00 HOUSE BILL NO. 273 01 "An Act relating to health care benefits and to the Alaska Health Insurance 02 Corporation; relating to hospitals; relating to certain insurers; relating to duties 03 of the Department of Health and Social Services that are related to health care; 04 and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. SHORT TITLE. This Act may be cited as the Comprehensive Health 07 Insurance and Payment Reform Act of 1993. 08 * Sec. 2. FINDINGS AND PURPOSE. (a) The legislature finds that 09 (1) health care services and health insurance in the state are becoming 10 prohibitively costly, and a growing number of our citizens are unable to obtain health 11 insurance or pay for needed care; 12 (2) the universe of reasons for increasing health care costs is complex and 13 includes the following: spiraling technology, aging of the population, increasing dereliction 14 of personal responsibility for health status, lack of incentives to obtain preventive care, costs 01 of defensive medicine, the use of experience rating for writing health insurance policies with 02 a concomitant rise in the exclusion of preexisting conditions from coverage, and cost shifting 03 as a result of this practice; provision of unnecessary services and procedures for whatever 04 reasons, a multiplicity of utilization review standards, a multiplicity of claims forms and 05 claims processing requirements of different insurance companies, delays in obtaining payment 06 for insurance companies, and the absence of market incentives for cost containment; 07 (3) primary responsibility for controlling health care costs in the state should 08 be borne by Alaska health care providers, particularly physicians, on whose orders and 09 recommendations the overwhelming majority of health care expenditures are incurred; at 10 present, federal and state antitrust laws effectively preclude health care providers from 11 engaging in voluntary self-regulation regarding fees and volume of services; this Act mandates 12 the participation by health care providers in the process of cost control and volume control 13 to assure that health care expenditures do not increase faster than the general inflation rate, 14 unless there is specific, verifiable justification based on clearly defined standards; 15 (4) in order to increase access to health care, by containing the rate of increase 16 of health care expenditures and by making basic health insurance available to the people in 17 the state, it is essential that the factors contributing to the increasing costs of health care and 18 the unavailability of health insurance be addressed comprehensively and consistently; this Act 19 constitutes a comprehensive approach to the accomplishment of the purpose of this Act, and 20 all matters addressed in this Act are related to and essential to the achievement of the purpose 21 of this Act. 22 (b) The purpose of this Act is to increase access to health care by containing the rate 23 of increase of health care expenditures and by making basic health insurance available to the 24 people in the state. The creation of the Alaska Health Insurance Corporation is essential to 25 the achievement of this purpose through the establishment of a state health insurance program, 26 the regulation of increases in health insurance rates, the regulation of increases in charges of 27 health care providers, the establishment of utilization review guidelines, and the establishment 28 of procedures assuring efficient and prompt processing and payment of insurance claims. The 29 requirement that participants in the state health insurance program and those who are not 30 insured contribute their permanent fund dividends to the state health insurance program fund 31 is essential to the achievement of the purpose of this Act. This requirement assists in funding 01 the procurement of insurance by the corporation, and it provides an incentive for otherwise 02 uninsured people to participate in the state health insurance program. The requirement that 03 employers offer basic health care benefits to their employees or contribute to the state health 04 insurance program fund is essential to the achievement of the purpose of this Act as a means 05 of significantly reducing the number of people who lack health insurance. 06 * Sec. 3. AS 08.64 is amended by adding a new section to article 3 read: 07  Sec. 08.64.363. COMPLIANCE WITH REQUIREMENTS OF STATE 08 HEALTH INSURANCE CORPORATION. A physician shall comply with the 09 provisions of AS 21.56 that are applicable to physicians including regulations adopted 10 by the Alaska Health Insurance Corporation. 11 * Sec. 4. AS 18.20 is amended by adding a new section to read: 12  Sec. 18.20.078. UTILIZATION REVIEW. A hospital shall implement the 13 utilization review guidelines established by the Alaska Health Insurance Corporation 14 under AS 21.56.110. 15 * Sec. 5. AS 21.39.020 is amended to read: 16  Sec. 21.39.020. APPLICABILITY. (a) This chapter applies to disability 17 insurance and to all forms of casualty insurance, including fidelity, surety, and 18 guaranty bonds, to all forms of fire, marine, and inland marine insurance, and to a 19 combination of any of them, or risks or operations in this state. Inland marine 20 insurance includes insurance defined by statute, or by interpretation of statute, or if not 21 defined or interpreted, by ruling of the director, or as established by general custom 22 of the business, as inland marine insurance. 23  (b) This chapter does not apply to 24  (1) reinsurance, other than joint reinsurance to the extent stated in 25 AS 21.39.110; 26  (2) [DISABILITY INSURANCE; 27  (3)] insurance of vessels or craft, their cargoes, marine builders' risks, 28 marine protection and indemnity, or other risks commonly insured under marine, as 29 distinguished from inland marine insurance policies; 30  (3) [(4)] insurance against loss of or damage to aircraft or against 31 liability, other than workers' compensation and employer's liability, arising out of the 01 ownership, maintenance, or use of aircraft; or, to insurance of hulls of aircraft, 02 including their accessories and equipment. 03 * Sec. 6. AS 21.39.030(a) is amended to read: 04  (a) Rates shall be made in accordance with the following provisions: 05  (1) rates may [SHALL] not be excessive, inadequate, or unfairly 06 discriminatory; 07  (2) consideration shall be given to past and prospective loss experience 08 inside and outside this state, to the conflagration and catastrophe hazards, to a 09 reasonable margin for underwriting profit and contingencies, to dividends, savings, or 10 unabsorbed premium deposits allowed or returned by insurers to their policyholders, 11 members, or subscribers, to past and prospective expenses both countrywide and those 12 specially applicable to this state, and to all other relevant factors inside and outside this 13 state; 14  (3) the systems of expense provisions included in the rates for use by 15 an insurer or group of insurers may differ from those of other insurers or group of 16 insurers to reflect the requirements of the operating methods of the insurer or group 17 of insurers with respect to any kind of insurance, or with respect to a subdivision or 18 combination of them [THEREOF] for which subdivision or combination separate 19 expense provisions are applicable; 20  (4) risks may be grouped by classifications for the establishment of 21 rates and minimum premiums; classification rates may be modified to produce rates 22 for individual risks in accordance with rating plans that establish standards for 23 measuring variations in hazards or expense provisions, or both; the standards may 24 measure any differences among risks that can be demonstrated to have a probable 25 effect upon losses or expenses; 26  (5) in the case of fire insurance rates, consideration may be given to 27 the experience of the fire insurance business during a period of not more than the most 28 recent five-year period for which experience is available; 29  (6) when there is an established program to inspect new and existing 30 dwellings and the program has been certified by the director as likely to reduce the 31 incidence of fires in inspected dwellings, then in any rate plan used in this state, 01 dwellings that have been found by the inspection to meet the standards established by 02 the program shall have credits applied to the rate in amounts approved by the director; 03  (7) in the case of disability insurance rates, 04  (A) rates shall be made on a statewide basis; rates may vary 05 depending on age, sex, family status, and other generic risk factors as may 06 be established under regulations of the Alaska Health Insurance 07 Corporation under AS 21.56.110; 08  (B) in addition to other relevant factors in determining 09 whether a proposed rate should be approved, the director shall consider 10 changes in the amount of utilization of covered services, changes in the 11 intensity of covered services provided, changes in medical technology or 12 health care delivery that may affect the cost of providing health care, and 13 changes in provider charges that have been approved under AS 21.56.350. 14 * Sec. 7. AS 21.39 is amended by adding a new section to read: 15  Sec. 21.39.035. PROHIBITED DISABILITY INSURANCE RATE 16 INCREASE. (a) Notwithstanding any other provisions of this chapter, a disability 17 insurance rate filing that would increase the rate by a percentage greater than the 18 percentage increase in the Consumer Price Index for the previous year may not be 19 approved by the director unless the director makes a written finding that the rate 20 increase is justified under the requirements of AS 21.39.030. Before authorizing a rate 21 increase in excess of percentage increase in the Consumer Price Index, the director 22 shall solicit and consider comments from the Alaska Health Insurance Corporation. 23  (b) In this section, "Consumer Price Index" means the Consumer Price Index 24 for all urban consumers for the Anchorage Metropolitan Area, compiled by the Bureau 25 of Labor Statistics, United States Department of Labor. 26 * Sec. 8. AS 21.51 is amended by adding a new section to read: 27  Sec. 21.51.015. CLAIMS PROCESSING REQUIREMENT. A policy subject 28 to this chapter is also subject to the requirements in AS 21.54.015 and 21.54.025. 29 * Sec. 9. AS 21.54 is amended by adding a new section to read: 30  Sec. 21.54.015. REQUIRED UNIFORM BENEFITS POLICY. An insurer that 31 is authorized to transact disability insurance in the state, in addition to any other form 01 of insurance that it may offer, shall offer coverage under a uniform benefits policy as 02 required under AS 21.56. 03 * Sec. 10. AS 21.54 is amended by adding a new section to read: 04  Sec. 21.54.025. CLAIMS PROCESSING AND UTILIZATION REVIEW 05 REQUIREMENTS. (a) An insurer authorized to transact disability insurance in the 06 state shall 07  (1) use the claims clearinghouse designated by the Alaska Health 08 Insurance Corporation under AS 21.56.260 for the processing of claims submitted for 09 health care services rendered in the state; 10  (2) require that all claims be submitted using the methods of 11 submission and the formats specified by the Alaska Health Insurance Corporation 12 under AS 21.56.260; 13  (3) pay each claim within 15 business days after a claim is received by 14 the claims clearinghouse designated by the Alaska Health Insurance Corporation under 15 AS 21.56.260 or, within that same time period, shall give the provider notice that the 16 claim is denied; 17  (4) adopt a claims grievance procedure and submit the procedure for 18 approval to the Alaska Health Insurance Corporation under AS 21.56.110; after the 19 procedure has been approved, the insurer shall follow the procedure; and 20  (5) use the utilization review guidelines that are adopted by the Alaska 21 Health Insurance Corporation under AS 21.56.110, and accept the utilization review 22 determinations of a hospital, in accordance with the corporation's guidelines. 23  (b) If a claim form is fully completed and an insurer fails to pay a claim or 24 give notice that the claim is denied within the time specified in (a) of this section, the 25 insurer shall pay interest at the rate specified under AS 45.45.010, from the 16th 26 business day after the claim was received until paid, on the amount finally determined 27 to be due. 28  (c) If an insurer denies a claim, the notice that the claim is denied must 29 include a statement of the reason for the denial. The statement must be sufficiently 30 clear to allow the provider to understand the reason for the denial and to take 31 corrective action, including resubmission of the claim, if appropriate. 01  (d) An insurer may deny a claim against a group or blanket disability 02 insurance policy only for a reason that has been specified as an acceptable reason for 03 denial in regulations of the Alaska Health Insurance Corporation under AS 21.56.110. 04  (e) An insurer providing disability insurance is not required to pay for health 05 care services or supplies covered under a disability policy that 06  (1) were provided in violation of the utilization review guidelines 07 adopted by the Alaska Health Insurance Corporation under AS 21.56.110; or 08  (2) exceed a mandatory expenditure limit adopted by the Alaska Health 09 Insurance Corporation under AS 21.56.350; an insurer shall receive a refund of an 10 amount paid in violation of this paragraph, but may not seek a refund from the insured. 11 * Sec. 11. AS 21 is amended by adding a new chapter to read: 12 CHAPTER 56. STATE HEALTH INSURANCE. 13 ARTICLE 1. ALASKA HEALTH INSURANCE CORPORATION. 14  Sec. 21.56.010. CREATION AND PURPOSE. (a) The Alaska Health 15 Insurance Corporation is established. The corporation is a public corporation and an 16 instrumentality of the state in the Department of Commerce and Economic 17 Development but has a legal existence independent of and separate from the state. The 18 exercise by the corporation of the powers conferred by this chapter is considered an 19 essential function of the state. 20  (b) The purpose of the corporation is to establish and maintain a program for 21 providing uniform health insurance coverage for eligible residents of the state and 22 employees in the state on a basis calculated to contain or reduce both the costs of the 23 program and the costs of obtaining health care in general in the state. 24  Sec. 21.56.020. BOARD OF DIRECTORS. (a) The corporation is governed 25 by a board of seven directors. The directors are 26  (1) the commissioner of commerce and economic development or the 27 designee of the commissioner; 28  (2) a person who, at the time of appointment, is an employee of a city, 29 borough, unified municipality, or school district and who is recommended by the 30 Alaska Municipal League; 31  (3) a person representing an insurance company that is licensed to 01 transact disability insurance in the state and who is recommended by the 02 Comprehensive Health Insurance Association created under AS 21.55.010; 03  (4) the chief executive officer of a hospital or nursing home that is 04 licensed by the state but not owned or operated by the state or federal government and 05 who is recommended by the Alaska State Hospital and Nursing Home Association; 06  (5) a physician licensed to practice medicine in the state who is not 07 employed by the state or a political subdivision of the state and who is recommended 08 by the Alaska State Medical Association; 09  (6) a person who is actively engaged in private business in the state 10 who is recommended by the Alaska State Chamber of Commerce; and 11  (7) a person representing consumers of health services who does not 12 have a direct or indirect interest in an entity that provides health care services and who 13 has recognized competence and experience in health insurance, health care, or 14 employee benefits. 15  (b) An organization described in (a) of this section may submit a list of three 16 recommended directors to the governor. 17  Sec. 21.56.030. APPOINTMENT AND REMOVAL OF DIRECTORS. The 18 directors of the corporation, including the designee, if any, of a director under 19 AS 21.56.020(1), are appointed by the governor and serve at the pleasure of the 20 governor. A director may be removed only for good cause. 21  Sec. 21.56.040. TERM OF SERVICE. The term of a director is three years. 22 A director may not be appointed to more than two successive terms. A director 23 appointed to fill a vacancy serves for the unexpired term of the director. A term shall 24 be measured from January 1 of the year in which the term of the vacant position 25 begins, regardless of when the vacancy is filled. 26  Sec. 21.56.050. COMPENSATION AND EXPENSES. (a) A director 27 appointed under AS 21.56.020(2) - (7) shall receive compensation at a rate of $400 for 28 each day the member is engaged in the actual performance of duties as a member of 29 the board. The corporation may provide by regulation for compensation for partial 30 days during which a member is engaged in actual performance of duties as a member 31 of the board. 01  (b) In addition to compensation under (a) of this section, a director is entitled 02 to travel and per diem expenses authorized by law for boards and commissions under 03 AS 39.20.180. 04  Sec. 21.56.060. OFFICERS. At the first meeting of each year, the board of 05 the corporation shall elect a chair and a vice-chair from among its members. The 06 corporation shall prescribe their duties by regulation. 07  Sec. 21.56.070. MEETINGS AND QUORUM. The board of the corporation 08 shall meet at least once every three months. Four members of the board constitute a 09 quorum for the transaction of business and the exercise of the powers and duties of the 10 corporation. 11  Sec. 21.56.080. ADMINISTRATIVE PROCEDURE. (a) Actions of the 12 corporation under this chapter are subject to AS 44.62 (Administrative Procedure Act) 13 except as provided in (b) of this section and in AS 21.56.310(c). 14  (b) The corporation shall issue a decision within 30 days after the submission 15 to the corporation of the proposed decision of a hearing officer under AS 44.62.500. 16 The decision of the corporation, except a decision to refer the case to a hearing officer 17 under AS 44.62.500(c), is a final administrative order under AS 44.62.560. 18  Sec. 21.56.090. EMPLOYMENT OF PERSONNEL. The corporation shall 19 employ and determine the salary of an executive director who is responsible for the 20 day-to-day operations of the corporation and who serves at the pleasure of the board. 21 With the approval of the board, the executive director may select and employ 22 additional staff. The executive director and other employees are in the exempt service 23 under AS 39.25. 24  Sec. 21.56.100. GENERAL POWERS. The corporation may 25  (1) make contracts and execute all instruments necessary or convenient 26 for carrying out its business; 27  (2) acquire, own, hold, dispose of, and encumber personal property and 28 lease real property in the exercise of its powers; 29  (3) enter into agreements or transactions with a federal, state, or 30 municipal agent, or other public institution, or with a private individual, partnership, 31 firm, corporation, association, or other entity; 01  (4) perform all other acts necessary and proper to carry out the duties 02 of the corporation. 03  Sec. 21.56.110. DUTIES. The corporation shall 04  (1) adopt regulations to implement this chapter; 05  (2) implement a program to monitor and control expenditures in the 06 state for health care in compliance with this chapter; 07  (3) implement a state health insurance program in compliance with this 08 chapter; 09  (4) develop a schedule of uniform health care services that enrollees 10 in the state health insurance program are entitled to receive; 11  (5) at least annually, review the schedule of uniform health care 12 services developed under (4) of this section and revise it as determined by the 13 corporation, taking into consideration the health care needs of the state, available 14 funding, and other relevant factors as determined by the corporation; 15  (6) adopt a uniform claims form; 16  (7) designate a claims clearinghouse to perform the functions specified 17 in AS 21.56.260; 18  (8) with funds from the state health insurance program fund, procure 19 insurance coverage under the uniform benefits policy from one or more companies 20 licensed to transact health insurance in the state for all persons who are eligible to be 21 enrollees of the state health insurance program; 22  (9) contract with health care providers to perform cost control by peer 23 review and reduction of health care payments when target budget segments under 24 AS 21.56.350 are exceeded; 25  (10) establish for each fiscal year a standard fee and a sliding scale fee 26 schedule specifying the fee that must be paid by or on behalf of each enrollee, taking 27 into consideration the corporation's cost of procuring insurance, the funds available 28 from the state health insurance program fund, the income, assets, and financial 29 obligations of the enrollee, and other relevant factors as determined by the corporation; 30  (11) establish and publish, at least annually, comprehensive comparative 31 lists of charges for commonly provided health care services as described in 01 AS 21.56.290; 02  (12) establish uniform utilization review guidelines for hospitals; 03  (13) define acceptable reasons for the denial of claims under the 04 uniform benefits policy; 05  (14) establish generic risk factors that may be the basis for health 06 insurance premium rates in the state; 07  (15) monitor the utilization review activities of hospitals under 08 AS 18.20.077 to ensure compliance with the corporation's uniform utilization review 09 guidelines; 10  (16) review proposed grievance procedures that are submitted by health 11 insurance companies under AS 21.54.025 and approve the procedures if they comply 12 with criteria established by the corporation; 13  (17) monitor and enforce compliance by employers with 14 AS 23.10.600 - 23.10.620, under regulations adopted by the corporation; 15  (18) conduct studies concerning the status of health care in the state, 16 with an emphasis on monitoring and assuring appropriate patient outcomes, and 17 concerning the effect on consumers and businesses of programs established under this 18 chapter; publish the results of studies at least biennially. 19  Sec. 21.56.120. HEALTH INSURANCE FUND. The state health insurance 20 program fund is established as a separate account in the general fund. the fund shall 21 be administered by the corporation and used to purchase insurance under AS 21.56.110 22 and 21.56.130. The fund consists of fees paid by or on behalf of enrollees, penalties 23 paid by employers under AS 23.10.610, contributions of permanent fund dividends 24 under AS 43.23.021, appropriations by the legislature, and private or government 25 grants. 26  Sec. 21.56.130. PROCUREMENT OF INSURANCE. (a) In the procurement 27 of insurance required under AS 21.56.110, the corporation shall 28  (1) at least annually, solicit proposals from insurance companies that 29 are licensed to transact health insurance in the state and, periodically, contract with a 30 selected company, under the procurement procedures adopted by the corporation under 31 AS 36.30.015(e); 01  (2) select the company with which it will contract to procure insurance, 02 on the basis of the cost of the insurance, the availability from the company of program 03 features directed at reducing the cost of providing health care services, and other 04 relevant factors as determined by the corporation. 05  (b) The corporation may contract for insurance coverage for enrollees for a 06 term that it considers to be the most advantageous to the corporation and its enrollees, 07 for a period not exceeding three years. 08  Sec. 21.56.140. GOVERNMENT EMPLOYEE ENROLLEES. (a) A 09 government employee is eligible to be an enrollee in the state health insurance program 10 if the government employee is eligible for health insurance as an employment benefit 11 under the standards adopted by the employee's employer. 12  (b) An employer of a government employee who is eligible to be an enrollee 13 in the state health insurance program shall, under regulations of the corporation, 14  (1) enroll the employee in the program; and 15  (2) pay to the state health insurance program fund the applicable fee 16 established by the corporation under AS 21.56.110. 17  (c) An employer of a government employee may agree with the employee or 18 the employee's bargaining agent to provide additional health insurance benefits and to 19 provide health insurance on terms more favorable to the employee than the terms of 20 the uniform benefits policy. If an employer enters into an agreement described in this 21 subsection, the policy may be revised to reflect the agreement. The employer must 22 negotiate the amount of an additional premium with the insurance company, and the 23 employer shall pay the additional premium to the insurance company. 24  (d) The procedures established under AS 21.56.150(e) apply to government 25 employee enrollees. 26  Sec. 21.56.150. OTHER ENROLLEES. (a) A person who is not enrolled 27 under AS 21.56.140 is eligible to be an enrollee in the state health insurance program 28 under this chapter in a given year if the person 29  (1) has applied for and is eligible for a permanent fund dividend under 30 As 43.23.005 to be paid during that year; 31  (2) is not eligible to receive health care benefits under an employer 01 sponsored health insurance plan, an individually purchased health insurance policy, the 02 medical assistance program under AS 47.07 or AS 47.25, the medical assistance 03 program under 42 U.S.C. 1301 -1396, a health care benefits program of the Veterans 04 Benefits Administration, a health care benefits program for active or retired military, 05 a health care benefits program of the Indian Health Service of the United States Public 06 Health Service, a health care benefits program of an Alaska Native health corporation 07 receiving funds from the Indian Health Service, or a generally equivalent program as 08 determined by the corporation; 09  (3) has elected to contribute the person's permanent fund dividend to 10 be paid during that year to the state health insurance program fund by making the 11 election on the permanent fund dividend application as authorized in AS 43.23.021; 12  (4) has paid to the corporation the applicable fee for the first calendar 13 quarter of coverage, as established by the corporation under AS 21.56.110; and 14  (5) has complied with the procedures established by the corporation 15 under (e) of this section. 16  (b) Notwithstanding (a) of this section, a person who is eligible to receive 17 health care benefits as described in (a)(2) of this section is eligible to be an enrollee 18 in the state health insurance program under this chapter in a given year if 19  (1) the person has paid the full standard fee established by the 20 corporation under AS 21.56.110, without application of the sliding scale fee schedule; 21 and 22  (2) the person satisfies all other requirements of (a) of this section. 23  (c) A person who is eligible to be an enrollee shall be enrolled by the 24 corporation in the state health insurance program. 25  (d) The corporation shall cancel an enrollee's coverage if, during the fiscal 26 year, the enrollee becomes ineligible to be an enrollee. 27  (e) The corporation shall establish by regulation appropriate procedures for 28 processing applications for enrollment, for determining the eligibility of enrollees, for 29 enrolling enrollees, for determining and collecting the applicable fees, for canceling 30 an enrollee's coverage, and for processing appeals by enrollees of adverse decisions 31 by the corporation regarding eligibility, enrollment, determination or collection of 01 applicable fees, or cancellation of coverage. 02  Sec. 21.56.160. DISCRIMINATION AGAINST ENROLLEES PROHIBITED. 03 A provider of health care services may not discriminate against an enrollee with 04 respect to the availability, cost, or quality of health care services wholly or in part on 05 the basis of the person's status as an enrollee. 06  Sec. 21.56.170. CONFIDENTIALITY OF ENROLLEE INFORMATION. 07 Medical and financial information regarding applicants or current or former enrollees 08 is confidential and is not subject to public disclosure. The corporation by regulation 09 may establish reasonable standards for the release of limited information in specified 10 circumstances, including the release of reasonably necessary information to insurance 11 companies and the release of information with the written authorization of the 12 applicant or enrollee. 13  Sec. 21.56.180. UNIFORM BENEFITS POLICY. (a) The uniform benefits 14 policy form adopted by the corporation under AS 21.56.110 must include the required 15 terms of coverage in this chapter and other terms adopted under regulations of the 16 corporation. 17  (b) The corporation shall adopt regulations specifying the services required to 18 be covered by a uniform benefits policy, consistent with the general scope of services 19 in (c) of this section and with the required exclusions in (d) of this section, and taking 20 into consideration the cost of providing the services, the cost of procuring the 21 insurance coverage, the funds available in the state health insurance program fund, and 22 other relevant factors as determined by the corporation. 23  (c) A uniform benefits policy shall cover the following services as specified 24 by the corporation: 25  (1) health care services; 26  (2) preventive health care services for adults and children, including 27 prenatal, well-baby, and well-child care; deductibles and copayment amounts may not 28 apply to services described in this paragraph, subject to reasonable annual limits on 29 covered preventive services to be established by the corporation; 30  (3) limited periods of inpatient health care services for alcoholism, 31 chemical dependency, or drug addiction; services described in this paragraph shall be 01 subject to a copayment rate of not more than 50 percent; 02  (d) A uniform benefits policy may not cover the following: 03  (1) services that are not medically necessary; 04  (2) services that have been determined by the corporation to be 05 ineffective or of doubtful value for prevention or remediation of disease or injury; 06  (3) experimental treatments or procedures that are not covered by an 07 approved clinical research protocol; 08  (4) treatment of occupational disease or occupational injury. 09  Sec. 21.56.190. DEDUCTIBLES AND COPAYMENTS. Subject to 10 AS 21.56.180, the corporation shall establish the deductible and copayment amounts 11 applicable under a uniform benefits policy. Covered expenses incurred after the 12 applicable maximum limit has been reached shall be paid at the rate of 100 percent of 13 the lesser of the maximum rate of payment under AS 21.56.250, as periodically 14 adjusted, or the usual, customary, reasonable, or prevailing charges, except that 15 expenses incurred for specified limited periods of inpatient health care services for 16 alcoholism, chemical dependency, or drug addiction shall be paid at a rate of not less 17 than 50 percent of the lesser of the maximum rate of payment under AS 21.56.250, as 18 periodically adjusted, or the usual, customary, reasonable, or prevailing charges. 19  Sec. 21.56.200. PREEXISTING CONDITIONS. Preexisting conditions shall 20 be covered by a uniform benefits policy upon the terms and conditions established by 21 the corporation by regulation. 22  Sec. 21.56.210. EFFECTIVE DATE OF POLICIES. (a) Except as provided 23 in (b) of this section and subject to different policy terms that may be adopted under 24 AS 21.56.140(c), insurance provided under the state health insurance program is 25 effective immediately upon receipt by the corporation of the first quarterly fee and is 26 retroactive to the date of the application if the applicant otherwise complies with the 27 requirements of this chapter. 28  (b) Insurance provided under the state health insurance plan is effective 29 retroactively to the date that the person's previous contract or policy terminated if the 30 person 31  (1) applies for coverage under the state health insurance program within 01 60 days after the previous contract or policy terminated; 02  (2) is accepted by the corporation; and 03  (3) pays the required fee for the period of retroactive coverage. 04  Sec. 21.56.220. LIFETIME LIMIT FOR ENROLLEES OF STATE HEALTH 05 INSURANCE PROGRAM. The minimum standard benefits of a uniform benefits 06 policy for enrollees in the state health insurance program shall be limited by a lifetime 07 maximum of $1,000,000 per individual for usual, customary, reasonable, or prevailing 08 charges or, when applicable, the allowance agreed upon between a provider and the 09 writing carrier for charges for covered medical services performed for an individual 10 covered by the plan. 11  Sec. 21.56.230. SOLICITATION OF ELIGIBLE PERSONS. (a) The 12 corporation, under a plan approved by the director, shall disseminate appropriate 13 information to the residents of the state regarding the existence of the state health 14 insurance program and the means of enrollment. 15  (b) The corporation shall devise and implement a means of maintaining public 16 awareness of the provisions of this chapter regarding the state health insurance 17 program and shall administer this chapter in a manner that facilitates public 18 participation in the state health insurance program. 19  Sec. 21.56.240. PROHIBITION OF INTENTIONAL SHIFTING OF 20 COVERAGE TO STATE HEALTH INSURANCE PROGRAM. (a) A person may 21 not terminate a health care plan or terminate participation in a health care plan by a 22 participating person or refuse to enroll additional participants in a health care plan for 23 the purpose of shifting coverage to the state health insurance program. 24  (b) The director shall seek a waiver of federal legal requirements that may be 25 necessary to enforce the prohibition in (a) of this section. 26  (c) The prohibition in (a) of this section does not apply until the director has 27 obtained any necessary federal waivers and has given public notice of that fact or has 28 given public notice that a federal waiver is not necessary. 29  Sec. 21.56.250. MANDATORY DISCOUNT ON COVERED SERVICES. (a) 30 A health care provider that provides covered health care services in the state to an 31 enrollee is entitled to receive payment for those services the following percentages of 01 the provider's charges for comparable services to the state Medicaid program under 02 AS 47.07 in fiscal year 1992, as adjusted under (c) and (d) of this section, subject to 03 applicable deductibles and copayments: 04  (1) 95 percent for hospitals and nursing facilities; and 05  (2) for physicians and other individual health care providers, varying 06 percentages depending on location and type of service, determined by the corporation, 07 amounting in the aggregate to 95 percent. 08  (b) The maximum rate of payment applicable to a health care provider that did 09 not participate in the state Medicaid program in 1992 is 95 percent of the median 10 charge in 1992 for each service by similar health care providers in the same 11 geographic area, as adjusted under (c) and (d) of this section, subject to applicable 12 deductibles and copayments. 13  (c) The maximum rate of payment established in (a) and (b) of this section 14 shall be adjusted annually to reflect the change in the Consumer Price Index after 15 1992, under regulations established by the corporation. The corporation may make 16 other adjustments in the maximum rate of payment based on the factors specified in 17 AS 21.56.310(b) and other criteria that may be established by the corporation by 18 regulation. 19  (d) A provider of health care services is not entitled to payment from any 20 source for any portion of the provider's charge for a covered health care service 21 rendered to an enrollee that exceeds the amount the provider is entitled to be paid 22 under this section, subject to different policy terms that may be adopted under 23 AS 21.56.140(c). 24  (e) The corporation shall by regulation specify limited exceptional 25 circumstances in which payment may be made under the insurance procured by the 26 corporation for covered services rendered to enrollees outside the state. 27  (f) In this section, "charges to the state medicaid program" means the amount 28 charged by the health care provider and does not mean the amount paid by the 29 Medicaid program. 30  Sec. 21.56.260. CLAIMS CLEARINGHOUSE. (a) A provider of health care 31 services shall submit all claims for payment under a health insurance policy to the 01 claims clearinghouse. The corporation may, by regulation, require providers to submit 02 specified additional information pertaining to the cost of providing health care services 03 in the state to the claims clearinghouse. 04  (b) Claims and other required information may be submitted to the claims 05 clearinghouse either electronically or on paper forms at the option of the provider. 06 Claims and other required information shall be submitted to the claims clearinghouse 07 in uniform formats to be established by the corporation by regulation. 08  (c) The claims clearinghouse shall process all claims expeditiously so that they 09 may be paid or denied within 15 business days after receipt as required by 10 AS 21.54.025. 11  (d) From the information submitted to the claims clearinghouse, the claims 12 clearinghouse shall abstract data pertaining to health care services in the state and 13 submit the data periodically to the corporation under regulations adopted by the 14 corporation. 15  (e) The claims clearinghouse's costs of operation in fulfilling the functions 16 required by this section shall be paid by the companies authorized to transact health 17 insurance in the state. 18  Sec. 21.56.270. SINGLE FEE SCHEDULE. (a) Except as provided in (b) of 19 this section, hospitals and physicians shall maintain a single fee schedule for their 20 services and supplies, and all services and supplies shall be charged as required by the 21 schedule. 22  (b) Hospitals and physicians may depart from the fee schedule specified under 23 (a) of this section, if 24  (1) they have entered into a preferred provider arrangement that 25 provides for a different schedule; 26  (2) they have negotiated a discount with an entity, that is not an 27 individual or a family, that is purchasing or contracting for health care services for a 28 group; or 29  (3) different fees are required by law. 30  (c) Subject to the requirements of AS 21.56.300 and 21.56.310, hospitals and 31 physicians may revise their fee schedules from time to time at their discretion. 01  Sec. 21.56.280. REQUIRED AVAILABILITY OF SAMPLE FEE 02 SCHEDULE. Hospitals and physicians shall make a sample fee schedule consisting 03 of at least 80 percent of the most frequent charges available for review during normal 04 business hours at the hospital or the physician's office. The sample fee schedule shall 05 be made available either by posting the fee schedule in a conspicuous public area in 06 the hospital or the physician's office or by similarly posting a notice that the fee 07 schedule is available for review upon request. 08  Sec. 21.56.290. INFORMATION ON CHARGES FOR HEALTH CARE 09 SERVICES. At least annually, a hospital and a physician shall submit to the 10 corporation copies of their current fee schedules and all fee schedules that have been 11 in effect during the past year. The corporation shall specify by regulation the methods 12 and formats for submitting the fee schedules. The corporation shall make the fee 13 schedules available to the public upon request. 14  Sec. 21.56.300. LIMITATION ON INCREASES IN CHARGES FOR 15 HEALTH CARE SERVICES. (a) Except as provided under (b) of this section, a 16 hospital or a physician may not increase a charge for a health care service if the 17 percentage increase is greater than the percentage increase in the Consumer Price Index 18 for the previous calendar year. 19  (b) The charge limitation imposed under (a) of this section does not apply to 20 an increase in a charge that is approved by the corporation under AS 21.56.310. 21  Sec. 21.56.310. APPROVAL OF CHARGE INCREASES. (a) If a hospital 22 or a physician wishes to increase a charge in excess of the increase authorized under 23 AS 21.56.300, the hospital or physician shall submit the proposed increase to the 24 corporation, and the corporation shall review the proposed increase. If the corporation 25 determines that the increase is not excessive, the corporation shall approve the 26 increase. 27  (b) In determining whether a proposed increase is excessive, the corporation 28 shall consider the following factors: 29  (1) changes in medical technology or health care delivery that may 30 affect the cost of health care; 31  (2) changes in the availability of adequate health care services; 01  (3) changes in the cost of professional liability insurance for health care 02 providers; 03  (4) changes in the amounts of awards, by judgment or settlement, 04 against a health care provider as the result of a professional liability claim; 05  (5) other factors affecting the cost of health care, as determined by the 06 corporation, including epidemics and disasters. 07  (c) The corporation shall establish by regulation procedures and may establish 08 additional criteria for the prompt and efficient review of proposed charge increases. 09 The procedures required under this subsection must require that a determination on a 10 proposed charge increase be made on the basis of written verified information 11 submitted by the provider, that the provider have an opportunity to review additional 12 information that may be considered by the corporation and to respond in writing to that 13 information, and that a determination be made within 90 days after the submission of 14 a proposed charge increase. The determination of the corporation is a final 15 administrative order under AS 44.62.560. 16  Sec. 21.56.320. APPLICATION TO OTHER HEALTH CARE PROVIDERS. 17 The corporation may specify by regulation other providers of health care services that 18 shall be subject to the requirements of AS 21.56.270 - 21.56.310. 19  Sec. 21.56.330. COMPARATIVE LISTS OF CHARGES. (a) At least 20 annually, the corporation shall compile comparative lists of charges for commonly 21 provided health care services based on abstracted data provided to the corporation by 22 the claims clearinghouse under AS 21.56.260, on the fee schedules submitted to the 23 corporation under AS 21.56.290, and on other relevant information as determined by 24 the corporation. 25  (b) The lists required under this section shall be prepared to allow 26 identification and comparison of charges made by individual providers for the listed 27 services. Hospital services may be compared on the basis of diagnosis related groups. 28  Sec. 21.56.340. HEALTH CARE EXPENDITURE DATA SYSTEM. (a) The 29 corporation shall develop and periodically update a data system that indicates the total 30 amount expended in the state for health care. To the extent practicable, the data 31 system base year for health care expenditures shall be calendar year 1992 and must 01 contain a separate expenditure breakdown for 02  (1) hospital services; 03  (2) physician services; 04  (3) laboratory services; 05  (4) pharmaceutical products; 06  (5) nursing and pioneers' home services; 07  (6) radiology services; 08  (7) home nursing services; 09  (8) durable medical equipment; and 10  (9) appropriate subcategories of the above listed services and products 11 and other health services or products that the corporation determines appropriate. 12  (b) In addition to the data collected under (a) of this section, the corporation 13 shall collect data on the following: 14  (1) aging of the population and other factors that may affect demand 15 for health care services in the future; 16  (2) general inflation factors and the costs related to inflation in labor 17 and other factors used to produce health care services; 18  (3) technological advances that may increase or decrease health care 19 costs; 20  (4) improvements in health care productivity; 21  (5) reductions in unnecessary health care services; 22  (6) need to assure that all sectors of the population have adequate 23 access to health care services; 24  (7) the effect of statewide expenditure goals on the quality of health 25 care; and 26  (8) other factors that may affect the cost of providing health care that 27 the corporation determines appropriate. 28  Sec. 21.56.350. STATEWIDE HEALTH CARE EXPENDITURE LIMITS. (a) 29 The corporation shall prescribe by regulation statewide health care expenditure limits, 30 based on the data obtained under AS 21.56.340. To the extent practicable, the base 31 year for the statewide health care expenditure limits shall be calendar year 1992. 01  (b) The corporation annually shall adjust the health care expenditure limits 02 established under this section to reflect changes in the Consumer Price Index, changes 03 in provider charges authorized by the corporation under AS 21.56.310 and other 04 appropriate factors. 05  Sec. 21.56.360. VOLUNTARY HEALTH CARE PROVIDER COMPLIANCE. 06 The health care expenditure limits adopted by the corporation under AS 21.56.350 07 shall constitute a recommended target for expenditures within each specified category 08 or subcategory of health care services or products. Health care providers may 09 voluntarily comply with the expenditure limits and may take all appropriate steps not 10 prohibited by law to attempt to ensure that annual expenditures for health care in the 11 state do not exceed the expenditure limit adopted by the corporation. 12  Sec. 21.56.370. MANDATORY HEALTH CARE PROVIDER COMPLIANCE. 13 (a) Based on the data compiled under AS 21.56.340, the corporation shall monitor the 14 success of voluntary compliance under AS 21.56.360. At any time beginning three 15 years after the voluntary expenditure limits have been in effect, if the corporation 16 concludes that voluntary compliance has failed substantially to achieve the adopted 17 expenditure limits, the corporation by regulation shall impose mandatory expenditure 18 limits. Mandatory expenditure limits may be imposed on one or more of the 19 categories or subcategories specified under AS 21.56.340(a). 20  (b) A health care provider shall comply with the mandatory expenditure limits 21 established by the corporation under (a) of this section. A person who receives a 22 charge that does not comply with the mandatory expenditure limits imposed under this 23 section is not required to pay that portion of the charge that exceeds the mandatory 24 expenditure limit. A health care provider shall refund an amount received that exceeds 25 the mandatory expenditure limit. 26  (c) The corporation by regulation shall establish procedures for monitoring 27 compliance with mandatory expenditure limits and for providing notice to a person 28 who is determined to have been overcharged. 29  Sec. 21.56.400. DEFINITIONS. In this chapter, 30  (1) "clearing house" means the claims clearing house designated by the 31 corporation under AS 21.56.110; 01  (2) "Consumer Price Index" means the Consumer Price Index for All 02 Urban Consumers, United States City Average, All Items Index, compiled by the 03 Bureau of Labor Statistics, United States Department of Labor; 04  (3) "corporation" means the Alaska Health Insurance Corporation 05 established in AS 21.56.010; 06  (4) "eligible resident" means a person who is eligible for a permanent 07 fund dividend under AS 43.23.005; 08  (5) "enrollee" means a person whose application for coverage under the 09 state health insurance program has been accepted by the corporation, who has 10 completed applicable enrollment procedures, and who is covered by insurance under 11 the program; 12  (6) "government employee" means an employee of the state, the 13 University of Alaska, a political subdivision of the state, or a school district, including 14 retired government employees or dependents of government employees; 15  (7) "health care services" means preventive, medical, surgical, 16 diagnostic, reproductive, psychiatric, psychologic, rehabilitative, dental, podiatric, 17 optometric, optical, audiologic, and chiropractic care; prescription drugs, laboratory and 18 radiologic services, medical supplies, durable medical equipment and devices; inpatient 19 and outpatient care; home health care; hospice care; and long-term or institutional care; 20  (8) "health insurance" means an individual or group contract or other 21 plan providing coverage of health care services that is issued by a health insurance 22 company, a hospital service corporation, a medical service corporation, or a health 23 maintenance organization; "health insurance" includes disability insurance under 24 AS 21.12.050; 25  (9) "health insurance company" means an insurer that is authorized to 26 transact health insurance; 27  (10) "hospital service corporation" has the meaning given in 28 AS 21.87.330; 29  (11) "medical service corporation" has the meaning given in 30 AS 21.87.330; 31  (12) "state health insurance program fund" is the fund established in 01 AS 21.56.120. 02 * Sec. 12. AS 23.10 is amended by adding a new article to read: 03 ARTICLE 9. EMPLOYEE HEALTH INSURANCE. 04  Sec. 23.10.600. REQUIRED UNIFORM HEALTH BENEFITS POLICY. (a) 05 Subject to AS 23.10.610 and 23.10.615, an employer shall offer to its employees 06 enrollment in the state health insurance coverage for the employees and the employees' 07 dependents under either a uniform benefits policy as provided for in AS 21.56 or under 08 a policy with benefits equal to those of a uniform benefits policy or a policy with 09 benefits more favorable to the employee. As a condition of employment, an employer 10 may require that the employee pay the portion of the premium not required to be paid 11 by the employer. 12  (b) An employer who has provided other health insurance benefits to 13 employees may terminate that coverage and offer coverage under a uniform benefits 14 policy under (a) of this section. 15  (c) In this section, "offer" means to procure the required insurance and to pay 16 at least that portion of the premium that equals 50 percent of the standard fee for a 17 uniform benefits policy. 18  Sec. 23.10.610. PENALTY FOR FAILURE TO OFFER REQUIRED HEALTH 19 CARE COVERAGE. An employer that fails to offer at least the coverage under a 20 uniform benefits policy that is required by AS 23.10.600 shall pay a penalty to the 21 state in the amount equal to 50 percent of the standard fee for a uniform benefits 22 policy for coverage for the employee and the employee's dependents. 23  Sec. 23.10.615. DUPLICATE COVERAGE NOT REQUIRED. An employer 24 is not required to offer health care insurance coverage to an employee or to a 25 dependent of an employee who is covered by other insurance that provides at least the 26 benefits included in a uniform benefits policy. 27  Sec. 23.10.620. DEFINITIONS. In AS 23.10.600 - 23.10.620, 28  (1) "employee" means an employee engaged in commerce or other 29 business in the state, or the production of goods or materials in the state, or the 30 provision of services in the state; 31  (2) "employer" means an employer, wherever located, who employs 01 employees in the state; 02  (3) "standard fee for a uniform benefits policy" means the standard fee 03 established by the Alaska Health Insurance Corporation under AS 21.56.110; 04  (4) "uniform benefits policy" means a policy described in AS 21.56. 05 * Sec. 13. AS 36.30.015(e) is amended to read: 06  (e) The board of directors of the Alaska Railroad Corporation, [AND] the 07 board of directors of the Alaska Aerospace Development Corporation, and the board 08 of directors of the Alaska Health Insurance Corporation shall adopt procedures to 09 govern the procurement of supplies, services, professional services, and construction. 10 The procedures must be substantially equivalent to the procedures prescribed in this 11 chapter and in regulations adopted under this chapter. 12 * Sec. 14. AS 39.25.110(11) is amended to read: 13  (11) the officers and employees of the following boards, commissions, 14 and authorities: 15  (A) Alaska Gas Pipeline Financing Authority; 16  (B) Alaska Permanent Fund Corporation; 17  (C) Alaska Industrial Development and Export Authority; 18  (D) Alaska Commercial Fisheries Entry Commission; 19  (E) Alaska Commission on Postsecondary Education; 20  (F) Alaska Aerospace Development Corporation; 21  (G) Alaska Health Insurance Corporation; 22 * Sec. 15. AS 43.23.005(a) is amended to read: 23  (a) An individual is eligible to receive one permanent fund dividend each year 24 in an amount to be determined under AS 43.23.025 if 25  (1) the individual applies to the department; 26  (2) on the date of application the individual is a state resident; 27  (3) the individual was a state resident for at least the calendar year 28 immediately preceding January 1 of the current dividend year; 29  (4) the individual has been physically present in the state at some time 30 during the prior two calendar years before the current dividend year; [AND] 31  (5) the individual is 01  (A) a citizen of the United States; 02  (B) an alien lawfully admitted for permanent residence in the 03 United States; 04  (C) an alien with refugee status under federal law; or 05  (D) an alien that has been granted asylum under federal law; 06 and 07  (6) the individual either 08  (A) is eligible to receive health care benefits under an 09 employer sponsored or other group health insurance plan, an individually 10 purchased health insurance policy, the medical assistance program under 11 AS 47.07 or AS 47.25, the medical assistance program under 42 U.S.C. 12 1301 - 1396, a health care benefits program of the Veterans Benefits 13 Administration, a health care benefit plan for active or retired military, a 14 health care benefits program of the Indian Health Service of the United 15 States Public Health Service, a health care benefits program of an Alaska 16 Native health corporation receiving funds from the Indian Health Service, 17 or a generally equivalent program as determined by the Alaska Health 18 Insurance Corporation under AS 21.56.140(a)(2); or 19  (B) on the application, makes the election authorized by 20 AS 43.23.021 to contribute the dividend to the state health insurance 21 program fund. 22 * Sec. 16. AS 43.23 is amended by adding a new section to read: 23  Sec. 43.23.021. CONTRIBUTIONS TO STATE HEALTH INSURANCE 24 PROGRAM FUND. An individual may contribute the individual's permanent fund 25 dividend to the state health insurance program fund established under AS 21.56.120. 26 The permanent fund dividend application form must provide a place for the individual 27 to indicate that the individual wishes to make this contribution. Annually, after 28 calculating the amount of the permanent fund dividend under AS 43.23.025, the 29 commissioner shall transfer funds from the dividend fund under AS 43.23.045 to the 30 state health insurance program fund under AS 21.56.120 in an amount equal to the 31 dividends that individuals elected to contribute to the state health insurance program 01 fund. 02 * Sec. 17. AS 43.23.055 is amended to read: 03  Sec. 43.23.055. DUTIES OF THE DEPARTMENT. The department shall 04  (1) annually pay permanent fund dividends from the dividend fund; 05  (2) subject to AS 43.23.011 and [PARAGRAPH] (8) of this section, 06 adopt regulations under AS 44.62 (Administrative Procedure Act) that establish 07 procedures and time limits for claiming a permanent fund dividend; the department 08 shall determine the number of eligible applicants by October 1 of the year for which 09 the dividend is declared and pay the dividends by December 31 of that year; 10  (3) adopt regulations under AS 44.62 (Administrative Procedure Act) 11 that establish procedures and time limits for an individual upon emancipation or upon 12 reaching majority to apply for permanent fund dividends not received during minority 13 because the parent, guardian, or other authorized representative did not apply on behalf 14 of the individual; 15  (4) assist residents of the state, particularly in rural areas, who because 16 of language, disability, or inaccessibility to public transportation need assistance to 17 establish eligibility and to apply for permanent fund dividends; 18  (5) annually determine, in cooperation with the Department of 19 Corrections, the number and identity of individuals ineligible for a permanent fund 20 dividend under AS 43.23.005(d); 21  (6) adopt regulations that are necessary to implement AS 43.23.005(d); 22  (7) adopt regulations that establish procedures for the parent, guardian, 23 or other authorized representative of a disabled individual to apply for prior year 24 permanent fund dividends not received by the disabled individual because no 25 application was submitted on behalf of the individual; 26  (8) adopt regulations that establish procedures for an individual to apply 27 to have a dividend warrant reissued if it is returned to the department as undeliverable 28 or it is not paid within two years of the date of its issuance; however, the department 29 may not establish a time limit within which an application to have a warrant reissued 30 must be filed; 31  (9) annually provide to the Alaska Health Insurance Corporation 01 established under AS 21.56.010 the identity of individuals who are eligible for a 02 permanent fund dividend under AS 43.23.005. 03 * Sec. 18. AS 44.62.330(a) is amended by adding a new paragraph to read: 04  (59) Alaska Health Insurance Corporation. 05 * Sec. 19. AS 47.05.010 is amended by adding a new paragraph to read: 06  (15) upon request by a hospital, deputize a qualified employee of each 07 hospital that has a capacity of 45 or more beds to determine eligibility for Medicaid 08 assistance under AS 47.07 and eligibility for general relief assistance under 09 AS 47.25.120, subject to subsequent review and disapproval by a state employee for 10 failure to comply with the applicable legal requirements; in this paragraph, "hospital" 11 has the meaning given in AS 18.20.130. 12 * Sec. 20. TRANSITION. (a) The Alaska Health Insurance Corporation established in 13 sec. 11 of this Act shall develop an implementation plan and begin the implementation of 14 AS 21.56 by July 1, 1994, and shall fully implement AS 21.56 before July 1, 1996. 15 (b) The director of the division of insurance, in consultation with representatives of 16 the insurance industry, shall develop a plan to implement the 17 (1) statewide rating of disability insurance required under AS 21.39.030(a), as 18 amended in sec. 6 of this Act; and 19 (2) preexisting conditions coverage required under AS 21.56.200, enacted in 20 sec. 11 of this Act. 21 (c) The plan required under (b) of this section shall be phased in over a three-year 22 period and shall be completed by July 1, 1997. 23 (d) The initially appointed members of the board of the Alaska Health Insurance 24 Corporation that are serving staggered terms shall serve terms set by the governor under 25 AS 39.05.055(2). 26 * Sec. 21. REPORT. By July 1, 1995, the Alaska Health Insurance Corporation shall 27 prepare and submit a report to the governor on the effectiveness, with respect to containing 28 the cost of health care, of the resource based relative value scale payment system adopted in 29 42 U.S.C. 1395(w) and implemented by 42 CFR part 415 (1992), published at 56 Fed. 30 Reg. 59, 501 (Nov. 25, 1991); in the report, the corporation shall recommend whether a 31 similar system should be adopted for the state health insurance program administered by the 01 corporation under AS 21.56. 02 * Sec. 22. This Act takes effect immediately under AS 01.10.070(c).