CSSB 121(L&C): "An Act relating to insurance; establishing standards for health insurance provider networks; relating to settlement of health insurance claims; relating to allowable charges for health care services or supplies; and providing for an effective date."
00 CS FOR SENATE BILL NO. 121(L&C) 01 "An Act relating to insurance; establishing standards for health insurance provider 02 networks; relating to settlement of health insurance claims; relating to allowable charges 03 for health care services or supplies; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 21.07 is amended by adding a new section to read: 06 Sec. 21.07.035. Minimum provider network standards. (a) A health care 07 insurer shall take the network requirements of this section into account when 08 calculating the benefits of, or other contractual requirements applicable to, a covered 09 person's health care insurance policy that, as determined by the director, 10 (1) requires the covered person to use a limited network of health care 11 providers, as defined in regulation by the director; or 12 (2) creates a substantial financial or other incentive or disincentive for 13 the covered person to use a limited network of health care providers. 14 (b) A health care insurer's provider network must include each hospital,
01 skilled nursing facility, or mental health or substance abuse facility licensed in the 02 state and each physician, physician assistant, or advanced practice registered nurse 03 licensed in this state who is employed or contracted by one of these hospitals or 04 facilities to provide medical care at the hospital or facility. A health care insurer's 05 provider network must include each health care facility operated by an Alaska tribal 06 health organization and each physician, physician assistant, or advanced practice 07 registered nurse employed or contracted by the organization to provide medical care at 08 that location. A physician, physician assistant, or advanced practice registered nurse 09 who is employed or contracted by a hospital, skilled nursing facility, mental health or 10 substance abuse facility, or Alaska tribal health organization to provide medical care is 11 not included when calculating the health care insurer's minimum network standards set 12 out in (d) of this section. 13 (c) A health care insurer's provider network must include a sufficient number 14 of physicians, physician assistants, and advanced practice registered nurses in each 15 contracting region in which the insurer provides coverage to meet the minimum 16 network standards set out in (d) of this section. Only a physician, physician assistant, 17 or advanced practice registered nurse who is licensed in this state, meets the 18 credentialling standards of the health care insurer, and whose principal practice 19 location is physically located in the applicable contracting region may be included 20 when determining whether a health care insurer meets the minimum network standards 21 set out in (d) of this section. If an insurer treats the physician, physician assistant, or 22 advanced practice registered nurse as contracted for the purposes of all insurance 23 benefit determinations, a health care insurer may include in the provider network a 24 physician, physician assistant, or advanced practice registered nurse who is not a 25 contracted network health care provider to meet the standards set out in (d) of this 26 section. Each physician, physician assistant, or advanced practice registered nurse 27 included in the health care insurer's provider network, including a physician, physician 28 assistant, or advanced practice registered nurse that is not a contracted network health 29 care provider, must be shown as an in-network provider in the insurer's directory of 30 network providers. 31 (d) For purposes of this section, the state is divided into six contracting
01 regions: the Municipality of Anchorage; the Matanuska-Susitna Borough; the 02 Fairbanks North Star Borough and Southeast Fairbanks Census Area; the Kenai 03 Peninsula Borough; the City and Borough of Juneau, Ketchikan Gateway Borough, 04 and City and Borough of Sitka; and the remainder of the state. A health care insurer 05 that provides coverage in the Municipality of Anchorage contracting region must 06 include in the insurer's provider network at least 70 percent of the total number of 07 actively practicing physicians, physician assistants, and advanced practice registered 08 nurses in each specialty recognized for a Medicare advantage plan network adequacy 09 requirement for the Centers for Medicare and Medicaid Services physically located in 10 the region and at least 70 percent of the provider groups in each specialty. A health 11 care insurer that provides coverage in the Matanuska-Susitna Borough contracting 12 region or the Fairbanks North Star Borough and Southeast Fairbanks Census Area 13 contracting region must include in the insurer's provider network at least 75 percent of 14 the total number of actively practicing physicians, physician assistants, and advanced 15 practice registered nurses in each specialty recognized for a Medicare advantage plan 16 network adequacy requirement for the Centers for Medicare and Medicaid Services 17 physically located in those regions and at least 75 percent of the provider groups in 18 each specialty. A health care insurer that provides coverage in the Kenai Peninsula 19 Borough contracting region, the City and Borough of Juneau, Ketchikan Gateway 20 Borough, and City and Borough of Sitka contracting region, or the contracting region 21 covering the remainder of the state must include in the insurer's provider network at 22 least 80 percent of the total number of actively practicing physicians, physician 23 assistants, and advanced practice registered nurses in each specialty recognized for a 24 Medicare advantage plan network adequacy requirement for the Centers for Medicare 25 and Medicaid Services physically located in those regions and at least 80 percent of 26 the provider groups in each specialty. 27 (e) A health care insurer may make a written request to the director for an 28 exception to the minimum provider network standards set out under this section. The 29 director may grant an exception only for a specified limited period not to exceed 36 30 months. The director shall adopt regulations specifying the procedure for requesting 31 an exception and the standards for granting an exception. The director shall require the
01 health care insurer to submit a plan to achieve the minimum network standards within 02 the time frame of the exception granted by the director and submit annual progress 03 reports to the director. 04 (f) A health care insurer shall annually attest whether the insurer meets or 05 exceeds the minimum provider network standards in this section for each contracting 06 region in which the insurer provides coverage and provide to the director supporting 07 documentation to demonstrate compliance as part of the insurer's required rate filings. 08 If a health care insurer does not meet a specific standard, the insurer shall submit a 09 plan for corrective action for consideration by the director. 10 (g) The director may adopt regulations necessary to implement this section. 11 The director may adopt in regulation minimum provider network standards by 12 contracting region that exceed the minimum network standards set out in (d) of this 13 section. 14 * Sec. 2. AS 21.36 is amended by adding a new section to read: 15 Sec. 21.36.497. Standards for settlement of health insurance claims. (a) In 16 the absence of a contract between a health care insurer and a health care provider that 17 sets allowable charges for health care services and supplies furnished to a covered 18 person, the director shall set by regulation the standards that a health care insurer must 19 use to set allowable charges for health care services or supplies furnished to a covered 20 person by a health care provider in the state. The director shall require a health care 21 insurer to use a statistically credible methodology to set allowable charges. Allowable 22 charges must be based on the most current data available that shows amounts charged 23 by health care providers in the state for the service or supply over a 12-month period, 24 must be the same across the state, and must be at least 345 percent of the federal 25 Centers for Medicare and Medicaid Services physician fee schedule for the state in 26 effect at the time of delivery of the health care service or supply. 27 (b) The director shall periodically audit and validate the methodology used by 28 a health care insurer under (a) of this section to ensure that the insurer is setting 29 allowable charges in accordance with this section. Unless otherwise required by the 30 director, a health care insurer shall review and update allowable charges at least every 31 five years, but not more often than every three years.
01 (c) A health care insurer shall uniformly and equally apply reimbursement 02 rates for an allowable charge under (a) of this section for the same type of health care 03 service or supply and for health care providers who are practicing within the scope of 04 the provider's license and who are authorized to bill for health care services or supplies 05 under the Current Procedural Terminology code adopted by the American Medical 06 Association or other industry standard method of coding. 07 (d) In this section, 08 (1) "allowable charge" means the minimum amount that a health care 09 insurer may use to set reimbursement rates for health care providers and to calculate 10 benefits and pay health insurance claims on behalf of a covered person; 11 (2) "health care insurer" has the meaning given in AS 21.54.500; 12 (3) "health care provider" means a physician or other medical 13 professional licensed in this state. 14 * Sec. 3. AS 21.07.020(3) is repealed. 15 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 TRANSITION: CALCULATION OF ALLOWABLE CHARGES. Notwithstanding 18 AS 21.36.497, added by sec. 2 of this Act, a health care insurer shall set allowable charges for 19 services and supplies for calendar year 2027 based on the most current data available that 20 shows the amounts charged by health care providers in the state for the services and supplies 21 over a 12-month period beginning in 2024 or earlier. Beginning in calendar year 2030, 22 allowable charges must be based on the most current data available at that time that shows the 23 amounts charged by health care providers in the state for the services and supplies over a 12- 24 month period. 25 * Sec. 5. This Act takes effect January 1, 2027.