00 CS FOR SENATE BILL NO. 45(L&C) am 01 "An Act relating to insurance; relating to direct health care agreements; relating to the 02 duties of the director of the division of insurance in the Department of Commerce, 03 Community, and Economic Development; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. AS 21.03 is amended by adding a new section to read: 06 Sec. 21.03.025. Direct health care agreements. (a) A health care provider or 07 health care business and a patient or the representative of a patient may enter into a 08 direct health care agreement. Health care services provided under a direct health care 09 agreement are limited to the type of health care services that a primary care provider 10 may provide to a patient. A patient is not eligible to enter into a direct health care 11 agreement under this section if the patient is eligible to receive assistance under 12 AS 47.07 (Medical Assistance for Needy Persons) or AS 47.08 (Assistance for 13 Catastrophic Illness and Chronic or Acute Medical Conditions). 14 (b) To be eligible to enter into a direct health care agreement under this 01 section, a health care provider or health care business must 02 (1) accept new patients who receive assistance under AS 47.07 03 (Medical Assistance for Needy Persons) or AS 47.08 (Assistance for Catastrophic 04 Illness and Chronic or Acute Medical Conditions) or who are enrolled in the Medicare 05 program; or 06 (2) maintain a practice in which 20 percent or more of the patients 07 (A) are eligible to receive assistance under AS 47.07 or 08 AS 47.08; 09 (B) are enrolled in the Medicare program; or 10 (C) do not have health insurance. 11 (c) A direct health care agreement must 12 (1) describe the health care services that the health care provider or 13 health care business makes available to the patient in exchange for payment of a 14 periodic fee and each location at which the health care services are available; 15 (2) specify 16 (A) the amount of the periodic fee a patient or the 17 representative of a patient pays in exchange for the health care services that the 18 health care provider or health care business makes available to the patient; 19 (B) the period covered by the periodic fee under (A) of this 20 paragraph; and 21 (C) additional fees that the health care provider or health care 22 business may charge in addition to the periodic fee, including termination fees; 23 (3) identify and include contact information for a representative of the 24 health care provider or health care business that is responsible for receiving and 25 addressing 26 (A) a complaint made by a patient relating to the agreement; 27 and 28 (B) a request made by a patient to amend the agreement, 29 including a patient's request to change the name of the representative of the 30 patient or the patient's mailing address, physical address, telephone number, 31 electronic mail address, or other personal information; and 01 (4) prominently state that the agreement is not health insurance and 02 does not meet an individual or other health insurance mandate that may be required by 03 federal law. 04 (d) The amount of the periodic fee may not be based solely on the patient's 05 health status or sex. 06 (e) A health care provider or health care business may not decline to enter into 07 a direct health care agreement with a new patient or terminate a direct health care 08 agreement with an existing patient solely because of the patient's race, religion, color, 09 national origin, age, sex, physical or mental disability, marital status, change in marital 10 status, pregnancy, parenthood, or any other characteristic of a class of persons 11 protected by a state law that prohibits discrimination. 12 (f) A health care provider or health care business may decline to enter into a 13 direct health care agreement with a new patient if the health care provider or health 14 care business 15 (1) is unable to provide to the patient the health care services the 16 patient requires; or 17 (2) does not have the capacity to accept new patients. 18 (g) A health care provider or health care business may terminate a direct 19 health care agreement with an existing patient based on the patient's health status only 20 if the health care provider is unable to provide to the patient the health care services 21 the patient requires or in accordance with this section. 22 (h) A patient or the representative of a patient may terminate a direct health 23 care agreement in writing within 30 days after entering into the agreement. If a patient 24 or representative terminates an agreement under this subsection, the health care 25 provider or health care business shall, not later than 30 days after the patient or 26 representative terminates the agreement, refund to the patient or representative 27 payments made under the agreement, less payments made for services the health care 28 provider or health care business has already performed that are not included in the 29 periodic fee. 30 (i) A health care provider or health care business may immediately terminate a 31 direct health care agreement if 01 (1) a patient's behavior threatens the safety of the health care provider, 02 the staff of the health care provider or health care business, or other patients of the 03 health care provider or health care business; 04 (2) a patient engages in disrespectful, derogatory, or prejudiced 05 behavior that is within the patient's control and the patient does not stop the behavior 06 even after the health care provider or the staff of the health care provider or health care 07 business requests the patient to stop the behavior; or 08 (3) a patient or the representative of a patient breaches the terms of the 09 agreement. 10 (j) A patient or the representative of a patient may immediately terminate a 11 direct health care agreement if a health care provider or a health care business 12 breaches the terms of the agreement. 13 (k) A health care provider or health care business may not change the periodic 14 fee under the agreement more than once a year and shall provide at least 45 days' 15 written notice of a change in the periodic fee. If a health care provider or health care 16 business increases the amount of the periodic fee, a patient or the representative of a 17 patient may terminate the agreement by providing to the health care provider or health 18 care business written notice of the termination not later than the day before the date on 19 which the change to the periodic fee is scheduled to take effect. 20 (l) Except as otherwise provided in this section, a health care provider, a 21 health care business, a patient, or the representative of a patient may terminate a direct 22 health care agreement for any reason in writing after at least 30 days' notice. 23 (m) A health care provider or health care business may charge a termination 24 fee only for termination of an agreement by a patient or the representative of a patient 25 under (h) of this section. The termination fee may not exceed an amount equal to one 26 month's cost of the periodic fee. 27 (n) Upon termination of an agreement under (k) or (l) of this section, the 28 patient shall pay the health care provider or health care business the periodic fee, 29 prorated through the date of termination of the agreement, and any additional fees for 30 services the health care provider or health care business has already performed that are 31 not included in the periodic fee. 01 (o) A health care provider or health care business may bill a patient or the 02 representative of a patient for the periodic fee only after the end of the period to which 03 the periodic fee applies. 04 (p) A patient's employer may pay the periodic fee and additional fees the 05 patient owes a health care provider or health care business under a direct health care 06 agreement. A payment by the employer under this subsection does not constitute 07 engaging in the business of insurance or underwriting in this state, and the employer is 08 not an insurer, a health maintenance organization, a health care insurer, or a medical 09 service corporation by virtue of the payment. 10 (q) Offering or executing a direct health care agreement does not constitute 11 engaging in the business of insurance or underwriting in this state. A direct health care 12 agreement is not insurance, health insurance, health care insurance, or a health care 13 insurance policy. A health care provider or health care business is not an insurer, a 14 health maintenance organization, a health care insurer, or a medical service 15 corporation by virtue of the offering or execution of a direct health care agreement or 16 the provision of health care services under a direct health care agreement. A certificate 17 of authority or license to market, sell, or offer to sell a direct health care agreement or 18 health care services under a direct health care agreement is not required to offer or 19 execute a direct health care agreement or provide health care services under a direct 20 health care agreement. 21 (r) A health care provider or health care business may not make, publish, 22 disseminate, circulate, broadcast, or place before the public, or cause, directly or 23 indirectly, to be made, published, disseminated, circulated, broadcast, or placed before 24 the public, in a newspaper, magazine, or other publication, or in the form of a notice, 25 circular, pamphlet, letter, or poster, or over a radio or television station, or in any other 26 way, an advertisement, announcement, or statement containing an assertion, 27 representation, or statement that is untrue, deceptive, or misleading with respect to 28 (1) the terms of or the benefits or advantages provided by a direct 29 health care agreement; 30 (2) the characterization of a direct health care agreement, including the 31 characterization of a direct health care agreement as health insurance or an alternative 01 to health insurance; 02 (3) the business of a direct health care agreement. 03 (s) The director shall adopt regulations regulating direct health care 04 agreements that are consistent with this section. In addition to any other penalty 05 provided by law, if the director determines under AS 21.06.170 - 21.06.240 that a 06 health care provider or health care business has violated a provision of this section, the 07 director may 08 (1) impose 09 (A) a civil penalty of not more than $10,000 for each violation; 10 or 11 (B) if the director determines that the person wilfully violated 12 the provisions of this section, a civil penalty of not more than $25,000 for each 13 violation; 14 (2) prohibit the health care provider or health care business from 15 entering into or renewing a direct health care agreement; and 16 (3) suspend or revoke the business registration of a health care 17 provider or health care business for repeat violations. 18 (t) An order issued by the director that levies a civil penalty must specify the 19 period within which the civil penalty must be fully paid. The period may not be less 20 than 15 days or more than one year after the date of the order. 21 (u) In this section, 22 (1) "direct health care agreement" means a written agreement between 23 a health care provider or health care business and a patient or the representative of a 24 patient to provide health care services in exchange for payment of a periodic fee; 25 (2) "health care business" means a business licensed by the state that is 26 entirely owned by physicians licensed under AS 08.64 who have established residency 27 in the state under AS 01.10.055; 28 (3) "health care insurance" has the meaning given in AS 21.12.050(b); 29 (4) "health care insurer" has the meaning given in AS 21.54.500; 30 (5) "health care provider" has the meaning given in AS 21.07.250; 31 (6) "health care service" 01 (A) means a health care service or procedure that is provided in 02 person or remotely by telemedicine or other means by a health care provider 03 for the care, prevention, diagnosis, or treatment of a physical or mental illness, 04 health condition, disease, or injury; 05 (B) does not include "emergency services" as defined in 06 AS 21.07.250; 07 (7) "health insurance" has the meaning given in AS 21.12.050; 08 (8) "health maintenance organization" has the meaning given in 09 AS 21.86.900; 10 (9) "medical service corporation" has the meaning given in 11 AS 21.87.330; 12 (10) "primary care provider" has the meaning given in AS 21.07.250. 13  * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 TRANSITION: REGULATIONS. The director of the division of insurance may adopt 16 regulations necessary to implement this Act. The regulations take effect under AS 44.62 17 (Administrative Procedure Act), but not before the effective date of the law implemented by 18 the regulation. 19  * Sec. 3. Section 2 of this Act takes effect immediately under AS 01.10.070(c). 20  * Sec. 4. Except as provided in sec. 3 of this Act, this Act takes effect January 1, 2024.