SB 121: "An Act relating to settlement of health insurance claims; relating to allowable charges for health care services or supplies; and providing for an effective date."
00 SENATE BILL NO. 121 01 "An Act relating to settlement of health insurance claims; relating to allowable charges 02 for health care services or supplies; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 21.36 is amended by adding a new section to read: 05 Sec. 21.36.497. Standards for settlement of health insurance claims. (a) In 06 the absence of a contract between a health care insurer and a health care provider that 07 sets allowable charges for health care services and supplies furnished to a covered 08 person, the director shall set by regulation the standards that a health care insurer must 09 use to set allowable charges for health care services or supplies furnished to a covered 10 person by a health care provider in the state. The director shall require a health care 11 insurer to use a statistically credible methodology to set allowable charges. Allowable 12 charges must be based on the most current data available that shows amounts charged 13 by health care providers in the state for the service or supply over a 12-month period 14 and must be the same across the state. An allowable charge may not be less than the
01 75th percentile of charges in the state for a health care service or supply as defined by 02 the Current Procedural Terminology adopted by the American Medical Association or 03 other industry standard method of coding, but the director may set an allowable charge 04 at a higher percentile. Allowable charges for primary care providers must be the 05 greater of the allowable charge or 450 percent of the federal Centers for Medicare and 06 Medicaid Services fee schedule for the state in effect at the time of delivery of the 07 health care service or supply. 08 (b) The director shall periodically audit and validate the methodology used by 09 a health care insurer under (a) of this section to ensure that the insurer is setting 10 allowable charges in accordance with this section. Unless otherwise required by the 11 director, a health care insurer shall review and update allowable charges at least every 12 five years, but not more often than every three years. 13 (c) A health care insurer shall uniformly and equally apply reimbursement 14 rates for the same type of health care service or supply and for health care providers 15 who are practicing within the scope of their license and who are authorized to bill for 16 health care services or supplies under the Current Procedural Terminology code 17 adopted by the American Medical Association or other industry standard method of 18 coding. 19 (d) In this section, 20 (1) "allowable charge" means the minimum amount that a health care 21 insurer may use to set reimbursement rates for health care providers and to calculate 22 benefits and pay health insurance claims on behalf of a covered person; 23 (2) "health care insurer" has the meaning given in AS 21.54.500; 24 (3) "health care provider" means a physician or other medical 25 professional licensed in this state. 26 * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 TRANSITION: CALCULATION OF ALLOWABLE CHARGES. Notwithstanding 29 AS 21.36.497, added by sec. 1 of this Act, a health care insurer shall set allowable charges for 30 services and supplies for calendar year 2026 based on the most current data available that 31 shows the amounts charged by health care providers in the state for the services and supplies
01 over a 12-month period beginning in 2023 or earlier. Beginning in calendar year 2029, 02 allowable charges must be based on the most current data available at that time that shows the 03 amounts charged by health care providers in the state for the services and supplies over a 12- 04 month period. 05 * Sec. 3. This Act takes effect January 1, 2026.