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SB 205: "An Act relating to health care benefits, to health care providers, and to the Alaska Health Insurance Corporation; relating to hospitals; relating to certain insurers; relating to duties of the Department of Health and Social Services that are related to health care; and providing for an effective date."

00SENATE BILL NO. 205 01 "An Act relating to health care benefits, to health care providers, and to the 02 Alaska Health Insurance Corporation; relating to hospitals; relating to certain 03 insurers; relating to duties of the Department of Health and Social Services that 04 are related to health care; 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. 29 * Sec. 3. AS 08.64 is amended by adding a new section to article 3 read: 30 Sec. 08.64.363. COMPLIANCE WITH REQUIREMENTS OF STATE 31 HEALTH INSURANCE CORPORATION. A physician shall comply with the

01 provisions of AS 21.56 that are applicable to physicians including regulations adopted 02 by the Alaska Health Insurance Corporation. 03 * Sec. 4. AS 18.20 is amended by adding a new section to read: 04 Sec. 18.20.078. COMPLIANCE WITH REQUIREMENTS OF STATE 05 HEALTH INSURANCE CORPORATION. A hospital shall implement the utilization 06 review guidelines established by the Alaska Health Insurance Corporation under 07 AS 21.56.110 and comply with other provisions of AS 21.56. 08 * Sec. 5. AS 21.39.020 is amended to read: 09 Sec. 21.39.020. APPLICABILITY. (a) This chapter applies to disability 10 insurance and to all forms of casualty insurance, including fidelity, surety, and 11 guaranty bonds, to all forms of fire, marine, and inland marine insurance, and to a 12 combination of any of them, or risks or operations in this state. Inland marine 13 insurance includes insurance defined by statute, or by interpretation of statute, or if not 14 defined or interpreted, by ruling of the director, or as established by general custom 15 of the business, as inland marine insurance. 16 (b) This chapter does not apply to 17 (1) reinsurance, other than joint reinsurance to the extent stated in 18 AS 21.39.110; 19 (2) [DISABILITY INSURANCE; 20 (3)] insurance of vessels or craft, their cargoes, marine builders' risks, 21 marine protection and indemnity, or other risks commonly insured under marine, as 22 distinguished from inland marine insurance policies; 23 (3) [(4)] insurance against loss of or damage to aircraft or against 24 liability, other than workers' compensation and employer's liability, arising out of the 25 ownership, maintenance, or use of aircraft; or, to insurance of hulls of aircraft, 26 including their accessories and equipment. 27 * Sec. 6. AS 21.39.030(a) is amended to read: 28 (a) Rates shall be made in accordance with the following provisions: 29 (1) rates may [SHALL] not be excessive, inadequate, or unfairly 30 discriminatory; 31 (2) consideration shall be given to past and prospective loss experience

01 inside and outside this state, to the conflagration and catastrophe hazards, to a 02 reasonable margin for underwriting profit and contingencies, to dividends, savings, or 03 unabsorbed premium deposits allowed or returned by insurers to their policyholders, 04 members, or subscribers, to past and prospective expenses both countrywide and those 05 specially applicable to this state, and to all other relevant factors inside and outside this 06 state; 07 (3) the systems of expense provisions included in the rates for use by 08 an insurer or group of insurers may differ from those of other insurers or group of 09 insurers to reflect the requirements of the operating methods of the insurer or group 10 of insurers with respect to any kind of insurance, or with respect to a subdivision or 11 combination of them [THEREOF] for which subdivision or combination separate 12 expense provisions are applicable; 13 (4) risks may be grouped by classifications for the establishment of 14 rates and minimum premiums; classification rates may be modified to produce rates 15 for individual risks in accordance with rating plans that establish standards for 16 measuring variations in hazards or expense provisions, or both; the standards may 17 measure any differences among risks that can be demonstrated to have a probable 18 effect upon losses or expenses; 19 (5) in the case of fire insurance rates, consideration may be given to 20 the experience of the fire insurance business during a period of not more than the most 21 recent five-year period for which experience is available; 22 (6) when there is an established program to inspect new and existing 23 dwellings and the program has been certified by the director as likely to reduce the 24 incidence of fires in inspected dwellings, then in any rate plan used in this state, 25 dwellings that have been found by the inspection to meet the standards established by 26 the program shall have credits applied to the rate in amounts approved by the director; 27 (7) in the case of disability insurance rates, 28 (A) rates shall be made on a statewide basis; rates may vary 29 depending on age, sex, family status, and other generic risk factors as may 30 be established under regulations of the Alaska Health Insurance 31 Corporation under AS 21.56.110;

01 (B) in addition to other relevant factors in determining 02 whether a proposed rate should be approved, the director shall consider 03 changes in the amount of utilization of covered services, changes in the 04 intensity of covered services provided, changes in medical technology or 05 health care delivery that may affect the cost of providing health care, and 06 changes in provider charges that have been approved under AS 21.56.350. 07 * Sec. 7. AS 21.39 is amended by adding a new section to read: 08 Sec. 21.39.035. PROHIBITED DISABILITY INSURANCE RATE 09 INCREASE. (a) Notwithstanding any other provisions of this chapter, a disability 10 insurance rate filing that would increase the rate by a percentage greater than the 11 percentage increase in the Consumer Price Index for the previous year may not be 12 approved by the director unless the director makes a written finding that the rate 13 increase is justified under the requirements of AS 21.39.030. Before authorizing a rate 14 increase in excess of percentage increase in the Consumer Price Index, the director 15 shall solicit and consider comments from the Alaska Health Insurance Corporation. 16 (b) In this section, "Consumer Price Index" means the Consumer Price Index 17 for all urban consumers for the Anchorage Metropolitan Area, compiled by the Bureau 18 of Labor Statistics, United States Department of Labor. 19 * Sec. 8. AS 21.51 is amended by adding a new section to read: 20 Sec. 21.51.015. CLAIMS PROCESSING REQUIREMENT. A policy subject 21 to this chapter is also subject to the requirements in AS 21.54.015 and 21.54.025. 22 * Sec. 9. AS 21.54 is amended by adding a new section to read: 23 Sec. 21.54.015. REQUIRED UNIFORM BENEFITS POLICY. An insurer that 24 is authorized to transact disability insurance in the state, in addition to any other form 25 of insurance that it may offer, shall offer coverage under a uniform benefits policy as 26 required under AS 21.56. 27 * Sec. 10. AS 21.54 is amended by adding a new section to read: 28 Sec. 21.54.025. CLAIMS PROCESSING AND UTILIZATION REVIEW 29 REQUIREMENTS. (a) An insurer authorized to transact disability insurance in the 30 state shall 31 (1) use the claims clearinghouse designated by the Alaska Health

01 Insurance Corporation under AS 21.56.260 for the processing of claims submitted for 02 health care services rendered in the state; 03 (2) require that all claims be submitted using the methods of 04 submission and the formats specified by the Alaska Health Insurance Corporation 05 under AS 21.56.260; 06 (3) pay each claim within 15 business days after a claim is received by 07 the claims clearinghouse designated by the Alaska Health Insurance Corporation under 08 AS 21.56.260 or, within that same time period, shall give the provider notice that the 09 claim is denied; 10 (4) adopt a claims grievance procedure and submit the procedure for 11 approval to the Alaska Health Insurance Corporation under AS 21.56.110; after the 12 procedure has been approved, the insurer shall follow the procedure; and 13 (5) use the utilization review guidelines that are adopted by the Alaska 14 Health Insurance Corporation under AS 21.56.110, and accept the utilization review 15 determinations of a hospital, in accordance with the corporation's guidelines. 16 (b) If a claim form is fully completed and an insurer fails to pay a claim or 17 give notice that the claim is denied within the time specified in (a) of this section, the 18 insurer shall pay interest at the rate specified under AS 45.45.010, from the 16th 19 business day after the claim was received until paid, on the amount finally determined 20 to be due. 21 (c) If an insurer denies a claim, the notice that the claim is denied must 22 include a statement of the reason for the denial. The statement must be sufficiently 23 clear to allow the provider to understand the reason for the denial and to take 24 corrective action, including resubmission of the claim, if appropriate. 25 (d) An insurer may deny a claim against a group or blanket disability 26 insurance policy only for a reason that has been specified as an acceptable reason for 27 denial in regulations of the Alaska Health Insurance Corporation under AS 21.56.110. 28 (e) An insurer providing disability insurance is not required to pay for health 29 care services or supplies covered under a disability policy that 30 (1) were provided in violation of the utilization review guidelines 31 adopted by the Alaska Health Insurance Corporation under AS 21.56.110; or

01 (2) exceed a mandatory expenditure limit adopted by the Alaska Health 02 Insurance Corporation under AS 21.56.350; an insurer shall receive a refund of an 03 amount paid in violation of this paragraph, but may not seek a refund from the insured. 04 * Sec. 11. AS 21 is amended by adding a new chapter to read: 05 CHAPTER 56. STATE HEALTH INSURANCE. 06 ARTICLE 1. ALASKA HEALTH INSURANCE CORPORATION. 07 Sec. 21.56.010. CREATION AND PURPOSE. (a) The Alaska Health 08 Insurance Corporation is established. The corporation is a public corporation and an 09 instrumentality of the state in the Department of Commerce and Economic 10 Development but has a legal existence independent of and separate from the state. The 11 exercise by the corporation of the powers conferred by this chapter is considered an 12 essential function of the state. 13 (b) The purpose of the corporation is to establish and maintain a program for 14 providing uniform health insurance coverage for eligible residents of the state and 15 employees in the state on a basis calculated to contain or reduce both the costs of the 16 program and the costs of obtaining health care in general in the state. 17 Sec. 21.56.020. BOARD OF DIRECTORS. (a) The corporation is governed 18 by a board of seven directors. The directors are 19 (1) the commissioner of commerce and economic development or the 20 designee of the commissioner; 21 (2) a person who, at the time of appointment, is an employee of a city, 22 borough, unified municipality, or school district and who is recommended by the 23 Alaska Municipal League; 24 (3) a person representing an insurance company that is licensed to 25 transact disability insurance in the state and who is recommended by the 26 Comprehensive Health Insurance Association created under AS 21.55.010; 27 (4) the chief executive officer of a hospital or nursing home that is 28 licensed by the state but not owned or operated by the state or federal government and 29 who is recommended by the Alaska State Hospital and Nursing Home Association; 30 (5) a physician licensed to practice medicine in the state who is not 31 employed by the state or a political subdivision of the state and who is recommended

01 by the Alaska State Medical Association; 02 (6) a person who is actively engaged in private business in the state 03 who is recommended by the Alaska State Chamber of Commerce; and 04 (7) a person representing consumers of health services who does not 05 have a direct or indirect interest in an entity that provides health care services and who 06 has recognized competence and experience in health insurance, health care, or 07 employee benefits. 08 (b) An organization described in (a) of this section may submit a list of three 09 recommended directors to the governor. 10 Sec. 21.56.030. APPOINTMENT AND REMOVAL OF DIRECTORS. The 11 directors of the corporation, including the designee, if any, of a director under 12 AS 21.56.020(1), are appointed by the governor and serve at the pleasure of the 13 governor. A director may be removed only for good cause. 14 Sec. 21.56.040. TERM OF SERVICE. The term of a director is three years. 15 Terms of directors shall be staggered. A director may not be appointed to more than 16 two successive terms. A director appointed to fill a vacancy serves for the unexpired 17 term of the director. A term shall be measured from January 1 of the year in which 18 the term of the vacant position begins, regardless of when the vacancy is filled. This 19 section does not apply to a director appointed under AS 21.56.020(a)(1). 20 Sec. 21.56.050. COMPENSATION AND EXPENSES. (a) A director 21 appointed under AS 21.56.020(2) - (7) shall receive compensation at a rate of $400 for 22 each day the member is engaged in the actual performance of duties as a member of 23 the board. The corporation may provide by regulation for compensation for partial 24 days during which a member is engaged in actual performance of duties as a member 25 of the board. 26 (b) In addition to compensation under (a) of this section, a director is entitled 27 to travel and per diem expenses authorized by law for boards and commissions under 28 AS 39.20.180. 29 Sec. 21.56.060. OFFICERS. At the first meeting of each year, the board of 30 the corporation shall elect a chair and a vice-chair from among its members. The 31 corporation shall prescribe their duties by regulation.

01 Sec. 21.56.070. MEETINGS AND QUORUM. The board of the corporation 02 shall meet at least once every three months. Four members of the board constitute a 03 quorum for the transaction of business and the exercise of the powers and duties of the 04 corporation. 05 Sec. 21.56.080. ADMINISTRATIVE PROCEDURE. (a) Actions of the 06 corporation under this chapter are subject to AS 44.62 (Administrative Procedure Act) 07 except as provided in (b) of this section and in AS 21.56.310(c). 08 (b) The corporation shall issue a decision within 30 days after the submission 09 to the corporation of the proposed decision of a hearing officer under AS 44.62.500. 10 The decision of the corporation, except a decision to refer the case to a hearing officer 11 under AS 44.62.500(c), is a final administrative order under AS 44.62.560. 12 Sec. 21.56.090. EMPLOYMENT OF PERSONNEL. The corporation shall 13 employ and determine the salary of an executive director who is responsible for the 14 day-to-day operations of the corporation and who serves at the pleasure of the board. 15 With the approval of the board, the executive director may select and employ 16 additional staff. The executive director and other employees are in the exempt service 17 under AS 39.25. 18 Sec. 21.56.100. GENERAL POWERS. The corporation may 19 (1) make contracts and execute all instruments necessary or convenient 20 for carrying out its business; 21 (2) acquire, own, hold, dispose of, and encumber personal property and 22 lease real property in the exercise of its powers; 23 (3) enter into agreements or transactions with a federal, state, or 24 municipal agent, or other public institution, or with a private individual, partnership, 25 firm, corporation, association, or other entity; 26 (4) perform all other acts necessary and proper to carry out the duties 27 of the corporation. 28 Sec. 21.56.110. DUTIES. The corporation shall 29 (1) adopt regulations to implement this chapter; 30 (2) annually develop a target state health care expenditure budget; 31 (3) implement a program to monitor and control expenditures in the

01 state for health care in compliance with this chapter; 02 (4) implement a state health insurance program in compliance with this 03 chapter; 04 (5) develop a schedule of uniform health care services that enrollees 05 in the state health insurance program are entitled to receive; 06 (6) at least annually, review the schedule of uniform health care 07 services developed under (5) of this section and revise it as determined by the 08 corporation, taking into consideration the health care needs of the state, available 09 funding, and other relevant factors as determined by the corporation; 10 (7) adopt a uniform claims form; 11 (8) designate a claims clearinghouse located in the state to perform the 12 functions specified in AS 21.56.260; 13 (9) with funds from the state health insurance program fund, procure 14 insurance coverage under the uniform benefits policy from one or more companies 15 licensed to transact health insurance in the state for all persons who are eligible to be 16 enrollees of the state health insurance program; 17 (10) contract with health care providers to perform cost control by peer 18 review and reduction of health care payments when target budget segments under 19 AS 21.56.350 are exceeded; 20 (11) establish for each fiscal year a standard fee and a sliding scale fee 21 schedule specifying the fee that must be paid by or on behalf of each enrollee, taking 22 into consideration the corporation's cost of procuring insurance, the funds available 23 from the state health insurance program fund, the income, assets, and financial 24 obligations of the enrollee, and other relevant factors as determined by the corporation; 25 (12) establish and publish, at least annually, comprehensive comparative 26 lists of charges for commonly provided health care services as described in 27 AS 21.56.290; 28 (13) establish uniform utilization review guidelines for hospitals; 29 (14) define acceptable reasons for the denial of claims under the 30 uniform benefits policy; 31 (15) establish generic risk factors that may be the basis for health

01 insurance premium rates in the state; 02 (16) monitor the utilization review activities of hospitals under 03 AS 18.20.077 to ensure compliance with the corporation's uniform utilization review 04 guidelines; 05 (17) review proposed grievance procedures that are submitted by health 06 insurance companies under AS 21.54.025 and approve the procedures if they comply 07 with criteria established by the corporation; 08 (18) monitor and enforce compliance by employers with 09 AS 23.10.600 - 23.10.620, under regulations adopted by the corporation; 10 (19) conduct studies concerning the status of health care in the state, 11 with an emphasis on monitoring and assuring appropriate patient outcomes, and 12 concerning the effect on consumers and businesses of programs established under this 13 chapter; publish the results of studies at least biennially. 14 Sec. 21.56.120. HEALTH INSURANCE FUND. The state health insurance 15 program fund is established as a separate account in the general fund. the fund shall 16 be administered by the corporation and used to purchase insurance under AS 21.56.110 17 and 21.56.130. The fund consists of fees paid by or on behalf of enrollees, penalties 18 paid by employers under AS 23.10.610, contributions of permanent fund dividends 19 under AS 43.23.021, appropriations by the legislature, and private or government 20 grants. 21 Sec. 21.56.130. PROCUREMENT OF INSURANCE. (a) In the procurement 22 of insurance required under AS 21.56.110, the corporation shall 23 (1) at least annually, solicit proposals from insurance companies that 24 are licensed to transact health insurance in the state and, periodically, contract with one 25 or more selected companies, under the procurement procedures adopted by the 26 corporation under AS 36.30.015(e); 27 (2) select one or more companies with which it will contract to procure 28 insurance, on the basis of the cost of the insurance, the availability from the company 29 of program features directed at reducing the cost of providing health care services, and 30 other relevant factors as determined by the corporation. 31 (b) The corporation may contract for insurance coverage for enrollees for a

01 term that it considers to be the most advantageous to the corporation and its enrollees, 02 for a period not exceeding three years. 03 Sec. 21.56.140. GOVERNMENT EMPLOYEE ENROLLEES. (a) A 04 government employee is eligible to be an enrollee in the state health insurance program 05 if the government employee is eligible for health insurance as an employment benefit 06 under the standards adopted by the employee's employer. 07 (b) An employer of a government employee who is eligible to be an enrollee 08 in the state health insurance program shall, under regulations of the corporation, 09 (1) enroll the employee in the program; and 10 (2) pay to the state health insurance program fund the applicable fee 11 established by the corporation under AS 21.56.110. 12 (c) An employer of a government employee may agree with the employee or 13 the employee's bargaining agent to provide additional health insurance benefits and to 14 provide health insurance on terms more favorable to the employee than the terms of 15 the uniform benefits policy. If an employer enters into an agreement described in this 16 subsection, the policy may be revised to reflect the agreement. The employer must 17 negotiate the amount of an additional premium with the insurance company, and the 18 employer shall pay the additional premium to the insurance company. 19 (d) The procedures established under AS 21.56.150(e) apply to government 20 employee enrollees. 21 Sec. 21.56.150. OTHER ENROLLEES. (a) A person who is not enrolled 22 under AS 21.56.140 is eligible to be an enrollee in the state health insurance program 23 under this chapter in a given year if the person 24 (1) has applied for and is eligible for a permanent fund dividend under 25 As 43.23.005 to be paid during that year; 26 (2) has elected to contribute the person's permanent fund dividend to 27 be paid during that year to the state health insurance program fund by making the 28 election on the permanent fund dividend application as authorized in AS 43.23.021, 29 or has paid to the corporation the applicable fee for the first calendar quarter of 30 coverage, as established by the corporation under AS 21.56.110; and 31 (3) has complied with the procedures established by the corporation

01 under (d) of this section. 02 (b) A person who is eligible to be an enrollee shall be enrolled by the 03 corporation in the state health insurance program. 04 (c) The corporation shall cancel an enrollee's coverage if, during the fiscal 05 year, the enrollee becomes ineligible to be an enrollee. 06 (d) The corporation shall establish by regulation appropriate procedures for 07 processing applications for enrollment, for determining the eligibility of enrollees, for 08 enrolling enrollees, for determining and collecting the applicable fees, for canceling 09 an enrollee's coverage, and for processing appeals by enrollees of adverse decisions 10 by the corporation regarding eligibility, enrollment, determination or collection of 11 applicable fees, or cancellation of coverage. 12 Sec. 21.56.160. DISCRIMINATION AGAINST ENROLLEES PROHIBITED. 13 A provider of health care services may not discriminate against an enrollee with 14 respect to the availability, cost, or quality of health care services wholly or in part on 15 the basis of the person's status as an enrollee. 16 Sec. 21.56.170. CONFIDENTIALITY OF ENROLLEE INFORMATION. 17 Medical and financial information regarding applicants or current or former enrollees 18 is confidential and is not subject to public disclosure. The corporation by regulation 19 may establish reasonable standards for the release of limited information in specified 20 circumstances, including the release of reasonably necessary information to insurance 21 companies and the release of information with the written authorization of the 22 applicant or enrollee. 23 Sec. 21.56.180. UNIFORM BENEFITS POLICY. (a) The uniform benefits 24 policy form adopted by the corporation under AS 21.56.110 must include the required 25 terms of coverage in this chapter and other terms adopted under regulations of the 26 corporation. 27 (b) The corporation shall adopt regulations specifying the services required to 28 be covered by a uniform benefits policy, consistent with the general scope of services 29 in (c) of this section and with the required exclusions in (d) of this section, and taking 30 into consideration the cost of providing the services, the cost of procuring the 31 insurance coverage, the funds available in the state health insurance program fund, and

01 other relevant factors as determined by the corporation. 02 (c) A uniform benefits policy shall cover the following services as specified 03 by the corporation: 04 (1) health care services; 05 (2) preventive health care services for adults and children, including 06 prenatal, well-baby, and well-child care; deductibles and copayment amounts may not 07 apply to services described in this paragraph, subject to reasonable annual limits on 08 covered preventive services to be established by the corporation; 09 (3) limited periods of inpatient health care services for alcoholism, 10 chemical dependency, or drug addiction; services described in this paragraph shall be 11 subject to a copayment rate of not more than 50 percent; 12 (d) A uniform benefits policy may not cover the following: 13 (1) services that are not medically necessary; 14 (2) services that have been determined by the corporation to be 15 ineffective or of doubtful value for prevention or remediation of disease or injury; 16 (3) experimental treatments or procedures that are not covered by an 17 approved clinical research protocol; 18 (4) treatment of occupational disease or occupational injury. 19 Sec. 21.56.190. DEDUCTIBLES AND COPAYMENTS. Subject to 20 AS 21.56.180, the corporation shall establish the deductible and copayment amounts 21 applicable under a uniform benefits policy. Covered expenses incurred after the 22 applicable maximum limit has been reached shall be paid at the rate of 100 percent of 23 the lesser of the maximum rate of payment under AS 21.56.250, as periodically 24 adjusted, or the usual, customary, reasonable, or prevailing charges, except that 25 expenses incurred for specified limited periods of inpatient health care services for 26 alcoholism, chemical dependency, or drug addiction shall be paid at a rate of not less 27 than 50 percent of the lesser of the maximum rate of payment under AS 21.56.250, as 28 periodically adjusted, or the usual, customary, reasonable, or prevailing charges. 29 Sec. 21.56.200. PREEXISTING CONDITIONS. Preexisting conditions shall 30 be covered by a uniform benefits policy upon the terms and conditions established by 31 the corporation by regulation.

01 Sec. 21.56.210. EFFECTIVE DATE OF POLICIES. (a) Except as provided 02 in (b) of this section and subject to different policy terms that may be adopted under 03 AS 21.56.140(c), insurance provided under the state health insurance program is 04 effective immediately upon receipt by the corporation of the first quarterly fee and is 05 retroactive to the date of the application if the applicant otherwise complies with the 06 requirements of this chapter. 07 (b) Insurance provided under the state health insurance plan is effective 08 retroactively to the date that the person's previous contract or policy terminated if the 09 person 10 (1) applies for coverage under the state health insurance program within 11 60 days after the previous contract or policy terminated; 12 (2) is accepted by the corporation; and 13 (3) pays the required fee for the period of retroactive coverage. 14 Sec. 21.56.220. LIFETIME LIMIT FOR ENROLLEES OF STATE HEALTH 15 INSURANCE PROGRAM. The minimum standard benefits of a uniform benefits 16 policy for enrollees in the state health insurance program shall be limited by a lifetime 17 maximum of $1,000,000 per individual for usual, customary, reasonable, or prevailing 18 charges or, when applicable, the allowance agreed upon between a provider and the 19 writing carrier for charges for covered medical services performed for an individual 20 covered by the plan. 21 Sec. 21.56.230. SOLICITATION OF ELIGIBLE PERSONS. (a) The 22 corporation, under a plan approved by the director, shall disseminate appropriate 23 information to the residents of the state regarding the existence of the state health 24 insurance program and the means of enrollment. 25 (b) The corporation shall devise and implement a means of maintaining public 26 awareness of the provisions of this chapter regarding the state health insurance 27 program and shall administer this chapter in a manner that facilitates public 28 participation in the state health insurance program. 29 Sec. 21.56.240. PROHIBITION OF INTENTIONAL SHIFTING OF 30 COVERAGE TO STATE HEALTH INSURANCE PROGRAM. (a) A person may 31 not terminate a health care plan or terminate participation in a health care plan by a

01 participating person or refuse to enroll additional participants in a health care plan for 02 the purpose of shifting coverage to the state health insurance program. 03 (b) The director shall seek a waiver of federal legal requirements that may be 04 necessary to enforce the prohibition in (a) of this section. 05 (c) The prohibition in (a) of this section does not apply until the director has 06 obtained any necessary federal waivers and has given public notice of that fact or has 07 given public notice that a federal waiver is not necessary. 08 Sec. 21.56.250. MANDATORY DISCOUNT ON HEALTH CARE 09 SERVICES. (a) A health care provider that provides health care services in the state 10 at a price that is not already discounted is entitled to receive payment for those 11 services at the following percentages of the provider's charges for comparable services 12 to the state Medicaid program under AS 47.07 in fiscal year 1992, as adjusted under 13 (c) and (d) of this section, subject to applicable deductibles and copayments: 14 (1) 95 percent for hospitals and nursing facilities; and 15 (2) for physicians and other individual health care providers, varying 16 percentages depending on location and type of service, determined by the corporation, 17 amounting in the aggregate to 95 percent. 18 (b) The maximum rate of payment applicable to a health care provider that did 19 not participate in the state Medicaid program in 1992 is 95 percent of the median 20 charge in 1992 for each service by similar health care providers in the same 21 geographic area, as adjusted under (c) and (d) of this section, subject to applicable 22 deductibles and copayments. 23 (c) The maximum rate of payment established in (a) and (b) of this section 24 shall be adjusted annually to reflect the change in the Consumer Price Index after 25 1992, under regulations established by the corporation. The corporation may make 26 other adjustments in the maximum rate of payment based on the factors specified in 27 AS 21.56.310(b) and other criteria that may be established by the corporation by 28 regulation. 29 (d) A provider of health care services is not entitled to payment from any 30 source for any portion of the provider's charge for a health care service rendered to 31 a person that exceeds the amount the provider is entitled to be paid under this section,

01 subject to different policy terms that may be adopted under AS 21.56.140(c). 02 (e) The corporation shall by regulation specify limited exceptional 03 circumstances in which payment may be made under the insurance procured by the 04 corporation for covered services rendered to enrollees outside the state. 05 (f) In this section, "charges to the state medicaid program" means the amount 06 charged by the health care provider and does not mean the amount paid by the 07 Medicaid program. 08 Sec. 21.56.260. CLAIMS CLEARINGHOUSE. (a) A provider of health care 09 services shall submit all claims for payment under a health insurance policy to the 10 claims clearinghouse. The corporation may, by regulation, require providers to submit 11 specified additional information pertaining to the cost of providing health care services 12 in the state to the claims clearinghouse. 13 (b) Claims and other required information must be submitted to the claims 14 clearinghouse electronically and in uniform formats to be established by the 15 corporation by regulation. 16 (c) The claims clearinghouse shall process all claims expeditiously so that they 17 may be paid or denied within 15 business days after receipt as required by 18 AS 21.54.025. 19 (d) From the information submitted to the claims clearinghouse, the claims 20 clearinghouse shall abstract data pertaining to health care services in the state and 21 submit the data periodically to the corporation and to the cost control contractor under 22 AS 21.56.110, under regulations adopted by the corporation. 23 (e) The claims clearinghouse's costs of operation in fulfilling the functions 24 required by this section shall be paid by the companies authorized to transact health 25 insurance in the state. 26 Sec. 21.56.270. SINGLE FEE SCHEDULE. (a) Except as provided in (b) of 27 this section, hospitals and physicians shall maintain a single fee schedule for their 28 services and supplies, and all services and supplies shall be charged as required by the 29 schedule. 30 (b) Hospitals and physicians may depart from the fee schedule specified under 31 (a) of this section, if

01 (1) they have entered into a preferred provider arrangement that 02 provides for a different schedule; 03 (2) they have negotiated a discount with an entity, that is not an 04 individual or a family, that is purchasing or contracting for health care services for a 05 group; or 06 (3) different fees are required by law. 07 (c) Subject to the requirements of AS 21.56.300 and 21.56.310, hospitals and 08 physicians may increase a fee not more than once in a calendar year. 09 Sec. 21.56.280. REQUIRED AVAILABILITY OF SAMPLE FEE 10 SCHEDULE. Hospitals and physicians shall make a sample fee schedule consisting 11 of at least 80 percent of the most frequent charges available for review during normal 12 business hours at the hospital or the physician's office. The sample fee schedule shall 13 be made available either by posting the fee schedule in a conspicuous public area in 14 the hospital or the physician's office or by similarly posting a notice that the fee 15 schedule is available for review upon request. 16 Sec. 21.56.290. INFORMATION ON CHARGES FOR HEALTH CARE 17 SERVICES. At least annually, a hospital and a physician shall submit to the 18 corporation copies of their current fee schedules and all fee schedules that have been 19 in effect during the past year. The corporation shall specify by regulation the methods 20 and formats for submitting the fee schedules. The corporation shall make the fee 21 schedules available to the public upon request. 22 Sec. 21.56.300. LIMITATION ON INCREASES IN CHARGES FOR 23 HEALTH CARE SERVICES. (a) Except as provided under (b) of this section, a 24 hospital or a physician may not increase a charge for a health care service if the 25 percentage increase is greater than the percentage increase in the Consumer Price Index 26 for the previous calendar year. 27 (b) The charge limitation imposed under (a) of this section does not apply to 28 an increase in a charge that is approved by the corporation under AS 21.56.310. 29 Sec. 21.56.310. APPROVAL OF CHARGE INCREASES. (a) If a hospital 30 or a physician wishes to increase a charge in excess of the increase authorized under 31 AS 21.56.300, the hospital or physician shall submit the proposed increase to the

01 corporation, and the corporation shall review the proposed increase. If the corporation 02 determines that the increase is not excessive, the corporation shall approve the 03 increase. 04 (b) In determining whether a proposed increase is excessive, the corporation 05 shall consider the following factors: 06 (1) changes in medical technology or health care delivery that may 07 affect the cost of health care; 08 (2) changes in the availability of adequate health care services; 09 (3) changes in the cost of professional liability insurance for health care 10 providers; 11 (4) changes in the amounts of awards, by judgment or settlement, 12 against a health care provider as the result of a professional liability claim; 13 (5) other factors affecting the cost of health care, as determined by the 14 corporation, including epidemics, disasters, and other unforeseen burdens of disease. 15 (c) The corporation shall establish by regulation procedures and may establish 16 additional criteria for the prompt and efficient review of proposed charge increases. 17 The procedures required under this subsection must require that a determination on a 18 proposed charge increase be made on the basis of written verified information 19 submitted by the provider, that the provider have an opportunity to review additional 20 information that may be considered by the corporation and to respond in writing to that 21 information, and that a determination be made within 90 days after the submission of 22 a proposed charge increase. The determination of the corporation is a final 23 administrative order under AS 44.62.560. 24 Sec. 21.56.320. APPLICATION TO OTHER HEALTH CARE PROVIDERS. 25 The corporation may specify by regulation other providers of health care services that 26 shall be subject to the requirements of AS 21.56.270 - 21.56.310. 27 Sec. 21.56.330. COMPARATIVE LISTS OF CHARGES. (a) At least 28 annually, the corporation shall compile comparative lists of charges for commonly 29 provided health care services based on abstracted data provided to the corporation by 30 the claims clearinghouse under AS 21.56.260, on the fee schedules submitted to the 31 corporation under AS 21.56.290, and on other relevant information as determined by

01 the corporation. 02 (b) The lists required under this section shall be prepared to allow 03 identification and comparison of charges made by individual providers for the listed 04 services. Hospital services may be compared on the basis of diagnosis related groups. 05 Sec. 21.56.340. HEALTH CARE EXPENDITURE DATA SYSTEM. (a) The 06 corporation shall develop and periodically update a data system that indicates the total 07 amount expended in the state for health care. To the extent practicable, the data 08 system base year for health care expenditures shall be calendar year 1992 and must 09 contain a separate expenditure breakdown for 10 (1) hospital services; 11 (2) dental services; 12 (3) physician services; 13 (4) psychologic and other counseling services; 14 (5) laboratory services; 15 (6) optometric, occular, and audiologic services; 16 (7) pharmaceutical products and medical supplies; 17 (8) physical medicine and rehabilitation services; 18 (9) nursing home and pioneers' home services; 19 (10) occupational medicine services; 20 (11) radiology services; 21 (12) injured worker services; 22 (13) home nursing services; 23 (14) sports medicine services; 24 (15) durable medical and dental equipment; 25 (16) podiatry; 26 (17) physical therapy; 27 (18) massage therapy; 28 (19) hospice services; 29 (20) chiropractic services; 30 (21) alternative medicine health services; 31 (22) health food services;

01 (23) out-of-state medical, dental, and therapy expenses; 02 (24) medical travel expenses; and 03 (25) subcategories of the above listed services and products and other 04 health services or products that the corporation determines appropriate. 05 (b) In addition to the data collected under (a) of this section, the corporation 06 shall collect data on the following: 07 (1) aging of the population; 08 (2) general inflation factors and other overhead factors; 09 (3) technological advances in medical science; 10 (4) health care productivity; 11 (5) unnecessary health care services; 12 (6) access to medical and dental services; 13 (7) demographic cost determinants; 14 (8) the effect of statewide health care expenditure goals; and 15 (9) other factors that may affect the cost of providing health care that 16 the corporation determines appropriate. 17 Sec. 21.56.350. STATEWIDE HEALTH CARE EXPENDITURE LIMITS. (a) 18 The corporation shall prescribe by regulation statewide health care expenditure limits, 19 based on the data obtained under AS 21.56.340. To the extent practicable, the base 20 year for the statewide health care expenditure limits shall be calendar year 1992. 21 (b) The corporation annually shall adjust the health care expenditure limits 22 established under this section to reflect changes in the Consumer Price Index, changes 23 in provider charges authorized by the corporation under AS 21.56.310 and other 24 appropriate factors. 25 Sec. 21.56.360. VOLUNTARY HEALTH CARE PROVIDER COMPLIANCE. 26 The health care expenditure limits adopted by the corporation under AS 21.56.350 27 shall constitute a recommended target for expenditures within each specified category 28 or subcategory of health care services or products. Health care providers may 29 voluntarily comply with the expenditure limits and may take all appropriate steps not 30 prohibited by law to attempt to ensure that annual expenditures for health care in the 31 state do not exceed the expenditure limit adopted by the corporation.

01 Sec. 21.56.370. MANDATORY HEALTH CARE PROVIDER COMPLIANCE. 02 (a) Based on the data compiled under AS 21.56.340, the corporation shall monitor the 03 success of voluntary compliance under AS 21.56.360. At any time beginning three 04 years after the voluntary expenditure limits have been in effect, if the corporation 05 concludes that voluntary compliance has failed substantially to achieve the adopted 06 expenditure limits, the corporation by regulation shall impose mandatory expenditure 07 limits. Mandatory expenditure limits may be imposed on one or more of the 08 categories or subcategories specified under AS 21.56.340(a). 09 (b) A health care provider shall comply with the mandatory expenditure limits 10 established by the corporation under (a) of this section. A person who receives a 11 charge that does not comply with the mandatory expenditure limits imposed under this 12 section is not required to pay that portion of the charge that exceeds the mandatory 13 expenditure limit. A health care provider shall refund an amount received that exceeds 14 the mandatory expenditure limit. 15 (c) The corporation by regulation shall establish procedures for monitoring 16 compliance with mandatory expenditure limits and for providing notice to a person 17 who is determined to have been overcharged. 18 Sec. 21.56.400. DEFINITIONS. In this chapter, 19 (1) "clearing house" means the claims clearing house designated by the 20 corporation under AS 21.56.110; 21 (2) "Consumer Price Index" means the Consumer Price Index for All 22 Urban Consumers, United States City Average, All Items Index, compiled by the 23 Bureau of Labor Statistics, United States Department of Labor; 24 (3) "corporation" means the Alaska Health Insurance Corporation 25 established in AS 21.56.010; 26 (4) "eligible resident" means a person who is eligible for a permanent 27 fund dividend under AS 43.23.005; 28 (5) "enrollee" means a person whose application for coverage under the 29 state health insurance program has been accepted by the corporation, who has 30 completed applicable enrollment procedures, who is covered by insurance under the 31 program and includes the dependents of the person;

01 (6) "government employee" means an employee of the state, the 02 University of Alaska, a political subdivision of the state, or a school district, including 03 retired government employees or dependents of government employees; 04 (7) "health care services" means preventive, diagnostic, medical, 05 surgical, reproductive, psychiatric, psychologic, rehabilitative, dental, podiatric, 06 optometric, optical, audiologic, and chiropractic care; prescription drugs, laboratory and 07 radiologic services, medical supplies, durable medical equipment and devices; inpatient 08 and outpatient care; home health care; hospice care; and long-term or institutional care; 09 (8) "health insurance" means an individual or group contract or other 10 plan providing coverage of health care services that is issued by a health insurance 11 company, a hospital service corporation, a medical service corporation, or a health 12 maintenance organization; "health insurance" includes disability insurance under 13 AS 21.12.050; 14 (9) "health insurance company" means an insurer that is authorized to 15 transact health insurance; 16 (10) "hospital service corporation" has the meaning given in 17 AS 21.87.330; 18 (11) "medical service corporation" has the meaning given in 19 AS 21.87.330; 20 (12) "state health insurance program fund" is the fund established in 21 AS 21.56.120. 22 * Sec. 12. AS 23.10 is amended by adding a new article to read: 23 ARTICLE 9. EMPLOYEE HEALTH INSURANCE. 24 Sec. 23.10.600. REQUIRED UNIFORM HEALTH BENEFITS POLICY. (a) 25 Subject to AS 23.10.610 and 23.10.615, an employer shall offer to its employees 26 enrollment in the state health insurance coverage for the employees and the employees' 27 dependents under either a uniform benefits policy as provided for in AS 21.56 or under 28 a policy with benefits equal to those of a uniform benefits policy or a policy with 29 benefits more favorable to the employee. As a condition of employment, an employer 30 may require that the employee pay the portion of the premium not required to be paid 31 by the employer.

01 (b) An employer who has provided other health insurance benefits to 02 employees may terminate that coverage and offer coverage under a uniform benefits 03 policy under (a) of this section. 04 (c) In this section, "offer" means to procure the required insurance and to pay 05 at least that portion of the premium that equals 50 percent of the standard fee for a 06 uniform benefits policy. 07 Sec. 23.10.610. PENALTY FOR FAILURE TO OFFER REQUIRED HEALTH 08 CARE COVERAGE. An employer that fails to offer at least the coverage under a 09 uniform benefits policy that is required by AS 23.10.600 shall pay a penalty to the 10 state in the amount equal to 60 percent of the standard fee for a uniform benefits 11 policy for coverage for the employee and the employee's dependents. 12 Sec. 23.10.615. DUPLICATE COVERAGE NOT REQUIRED. An employer 13 is not required to offer health care insurance coverage to an employee or to a 14 dependent of an employee who is covered by other insurance that provides at least the 15 benefits included in a uniform benefits policy. 16 Sec. 23.10.620. DEFINITIONS. In AS 23.10.600 - 23.10.620, 17 (1) "employee" means an employee engaged in commerce or other 18 business in the state, or the production of goods or materials in the state, or the 19 provision of services in the state; 20 (2) "employer" means an employer, wherever located, who employs 21 employees in the state; 22 (3) "standard fee for a uniform benefits policy" means the standard fee 23 established by the Alaska Health Insurance Corporation under AS 21.56.110; 24 (4) "uniform benefits policy" means a policy described in AS 21.56. 25 * Sec. 13. AS 36.30.015(e) is amended to read: 26 (e) The board of directors of the Alaska Railroad Corporation, [AND] the 27 board of directors of the Alaska Aerospace Development Corporation, and the board 28 of directors of the Alaska Health Insurance Corporation shall adopt procedures to 29 govern the procurement of supplies, services, professional services, and construction. 30 The procedures must be substantially equivalent to the procedures prescribed in this 31 chapter and in regulations adopted under this chapter.

01 * Sec. 14. AS 39.25.110(11) is amended to read: 02 (11) the officers and employees of the following boards, commissions, 03 and authorities: 04 (A) Alaska Gas Pipeline Financing Authority; 05 (B) Alaska Permanent Fund Corporation; 06 (C) Alaska Industrial Development and Export Authority; 07 (D) Alaska Commercial Fisheries Entry Commission; 08 (E) Alaska Commission on Postsecondary Education; 09 (F) Alaska Aerospace Development Corporation; 10 (G) Alaska Health Insurance Corporation; 11 * Sec. 15. AS 43.23.005(a) is amended to read: 12 (a) An individual is eligible to receive one permanent fund dividend each year 13 in an amount to be determined under AS 43.23.025 if 14 (1) the individual applies to the department; 15 (2) on the date of application the individual is a state resident; 16 (3) the individual was a state resident for at least the calendar year 17 immediately preceding January 1 of the current dividend year; 18 (4) the individual has been physically present in the state at some time 19 during the prior two calendar years before the current dividend year; [AND] 20 (5) the individual is 21 (A) a citizen of the United States; 22 (B) an alien lawfully admitted for permanent residence in the 23 United States; 24 (C) an alien with refugee status under federal law; or 25 (D) an alien that has been granted asylum under federal law; 26 and 27 (6) the individual either 28 (A) is eligible to receive health care benefits under an 29 employer sponsored or other group health insurance plan, an individually 30 purchased health insurance policy, the medical assistance program under 31 AS 47.07 or AS 47.25, the medical assistance program under 42 U.S.C.

01 1301 - 1396, a health care benefits program of the Veterans Benefits 02 Administration, a health care benefit plan for active or retired military, a 03 health care benefits program of the Indian Health Service of the United 04 States Public Health Service, a health care benefits program of an Alaska 05 Native health corporation receiving funds from the Indian Health Service, 06 or a generally equivalent program as determined by the Alaska Health 07 Insurance Corporation under AS 21.56.140(a)(2); or 08 (B) on the application, makes the election authorized by 09 AS 43.23.021 to contribute the dividend to the state health insurance 10 program fund. 11 * Sec. 16. AS 43.23 is amended by adding a new section to read: 12 Sec. 43.23.021. CONTRIBUTIONS TO STATE HEALTH INSURANCE 13 PROGRAM FUND. An individual may contribute the individual's permanent fund 14 dividend to the state health insurance program fund established under AS 21.56.120. 15 The permanent fund dividend application form must provide a place for the individual 16 to indicate that the individual wishes to make this contribution. Annually, after 17 calculating the amount of the permanent fund dividend under AS 43.23.025, the 18 commissioner shall transfer funds from the dividend fund under AS 43.23.045 to the 19 state health insurance program fund under AS 21.56.120 in an amount equal to the 20 dividends that individuals elected to contribute to the state health insurance program 21 fund. 22 * Sec. 17. AS 43.23.055 is amended to read: 23 Sec. 43.23.055. DUTIES OF THE DEPARTMENT. The department shall 24 (1) annually pay permanent fund dividends from the dividend fund; 25 (2) subject to AS 43.23.011 and [PARAGRAPH] (8) of this section, 26 adopt regulations under AS 44.62 (Administrative Procedure Act) that establish 27 procedures and time limits for claiming a permanent fund dividend; the department 28 shall determine the number of eligible applicants by October 1 of the year for which 29 the dividend is declared and pay the dividends by December 31 of that year; 30 (3) adopt regulations under AS 44.62 (Administrative Procedure Act) 31 that establish procedures and time limits for an individual upon emancipation or upon

01 reaching majority to apply for permanent fund dividends not received during minority 02 because the parent, guardian, or other authorized representative did not apply on behalf 03 of the individual; 04 (4) assist residents of the state, particularly in rural areas, who because 05 of language, disability, or inaccessibility to public transportation need assistance to 06 establish eligibility and to apply for permanent fund dividends; 07 (5) annually determine, in cooperation with the Department of 08 Corrections, the number and identity of individuals ineligible for a permanent fund 09 dividend under AS 43.23.005(d); 10 (6) adopt regulations that are necessary to implement AS 43.23.005(d); 11 (7) adopt regulations that establish procedures for the parent, guardian, 12 or other authorized representative of a disabled individual to apply for prior year 13 permanent fund dividends not received by the disabled individual because no 14 application was submitted on behalf of the individual; 15 (8) adopt regulations that establish procedures for an individual to apply 16 to have a dividend warrant reissued if it is returned to the department as undeliverable 17 or it is not paid within two years of the date of its issuance; however, the department 18 may not establish a time limit within which an application to have a warrant reissued 19 must be filed; 20 (9) annually provide to the Alaska Health Insurance Corporation 21 established under AS 21.56.010 the identity of individuals who are eligible for a 22 permanent fund dividend under AS 43.23.005. 23 * Sec. 18. AS 44.62.330(a) is amended by adding a new paragraph to read: 24 (59) Alaska Health Insurance Corporation. 25 * Sec. 19. AS 47.05.010 is amended by adding a new paragraph to read: 26 (15) upon request by a hospital, deputize a qualified employee of each 27 hospital that has a capacity of 45 or more beds to determine eligibility for Medicaid 28 assistance under AS 47.07 and eligibility for general relief assistance under 29 AS 47.25.120, subject to subsequent review and disapproval by a state employee for 30 failure to comply with the applicable legal requirements; in this paragraph, "hospital" 31 has the meaning given in AS 18.20.130.

01 * Sec. 20. TRANSITION. (a) The Alaska Health Insurance Corporation established in 02 sec. 11 of this Act shall develop an implementation plan and begin the implementation of 03 AS 21.56 by July 1, 1994, and shall fully implement AS 21.56 before July 1, 1996. 04 (b) The director of the division of insurance, in consultation with representatives of 05 the insurance industry, shall develop a plan to implement the 06 (1) statewide rating of disability insurance required under AS 21.39.030(a), as 07 amended in sec. 6 of this Act; and 08 (2) preexisting conditions coverage required under AS 21.56.200, enacted in 09 sec. 11 of this Act. 10 (c) The plan required under (b) of this section shall be phased in over a three-year 11 period and shall be completed by July 1, 1997. 12 (d) The initially appointed members of the board of the Alaska Health Insurance 13 Corporation that are serving staggered terms shall serve terms set by the governor under 14 AS 39.05.055(2). 15 * Sec. 21. (a) This Act takes effect only if an Act requiring that a civil action against a 16 health care provider by a person less than six years of age be brought before the claimant's 17 eighth birthday, limiting noneconomic damages to $250,000 for each claim, allowing 18 prejudgment interest on a medical malpractice judgment to bear interest at the prevailing 19 federal discount rate, prohibiting prejudgment interest on future and punitive damages, 20 requiring mandatory arbitration in medical malpractice actions, changing the expert advisory 21 panel in a medical malpractice action from three persons to one person, requiring periodic 22 payment of certain future damages, and limiting the liability of hospitals for nonemployees 23 is passed by the Eighteenth Alaska State Legislature and is signed into law by the governor. 24 (b) If the condition described in (a) of this section is fulfilled, this Act takes effect 25 July 1, 1994.