03/29/2011 02:00 PM Senate LABOR & COMMERCE

           HB  13-WORKERS' COMPENSATION: MEDICAL FEES                                                                       
                                                                                                                                
3:14:46 PM                                                                                                                    
CHAIR EGAN announced HB 13 to be up for consideration.                                                                          
                                                                                                                                
REPRESENTATIVE KURT OLSON, sponsor of  HB 13, said that this bill                                                               
made it through both bodies last  year, but didn't quite make it.                                                               
It  would update  the state's  workers' compensation  medical fee                                                               
schedule that  hasn't been updated  for a long time.  The current                                                               
schedule died on December 31 and  was extended by the governor by                                                               
an Emergency Regulation;  it will expire again on  June 30, 2011.                                                               
The current  schedule is  missing over  2000 service  codes; this                                                               
bill  covers a  total of  7000. A  new schedule  would take  into                                                               
account geographic areas,  services provided and will  be using a                                                               
national  database  that is  considered  to  be accurate  by  the                                                               
people who are using it now.                                                                                                    
                                                                                                                                
3:17:09 PM                                                                                                                    
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce, Community  and Economic Development  (DCCED), explained                                                               
that  the medical  services fee  schedule was  inadvertently left                                                               
out of  2004 legislation. Since  that time that fee  schedule has                                                               
been in  place and they  merely made  CPI increases to  it, which                                                               
has  resulted  in the  missing  of  approximately 2000  procedure                                                               
codes.{ A graph  shows the medical benefits cost in  Alaska is 75                                                               
percent of  the system  cost compared to  58 percent  system cost                                                               
countrywide. It shows  the cost per case in Alaska  of $37,000 as                                                               
compared to  $27,000 countrywide. The  point of the charts  is to                                                               
show  how  high  the  medical  costs are  in  Alaska,  which  has                                                               
resulted  in for  a number  of  years Alaska  having the  highest                                                               
workers'  compensation costs  in the  country. She  said she  was                                                               
really pleased this year that Alaska was number two.                                                                            
                                                                                                                                
MS. HALL said generally this  bill provides base fee schedule not                                                               
to exceed  "usual, reasonable and customary"  fees as established                                                               
by the  board. And the fee  schedule will be based  on a credible                                                               
profile  of bill  charges that  are  constructed on  geographical                                                               
areas called  "geo-zips" and  Alaska has  three. The  only vendor                                                               
she is aware  of at this time  that can construct a  code for the                                                               
state is "Ingenix."                                                                                                             
                                                                                                                                
3:20:05 PM                                                                                                                    
MISTY STEED,  CorVel Corporation, Anchorage, said  she has worked                                                               
quite  extensively  on some  of  the  programs with  the  Medical                                                               
Services Review Committee, specifically  on the fee schedule. Her                                                               
company supports HB  13 the biggest fear being  that the employer                                                               
will not  be able  to afford its  workers' compensation  rates in                                                               
the future,  because rates would  increase due to  the increasing                                                               
cost of medical procedures if the fee schedule is not in place.                                                                 
                                                                                                                                
3:21:33 PM                                                                                                                    
CHAIR EGAN  thanked everyone for  their testimony and held  HB 13                                                               
for further work. Finding no  further business to come before the                                                               
committee, he adjourned the meeting at 3:21 p.m.