Legislature(2023 - 2024)DAVIS 106
03/11/2023 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB47 | |
| HB56 | |
| HB16 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 47 | TELECONFERENCED | |
| *+ | HB 16 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 56 | TELECONFERENCED | |
HB 47-DIRECT HEALTH AGREEMENT: NOT INSURANCE
3:04:03 PM
CHAIR PRAX announced that the first order of business would be
HOUSE BILL NO. 47, "An Act relating to insurance; relating to
direct health care agreements; and relating to unfair trade
practices."
3:04:47 PM
REPRESENTATIVE KEVIN MCCABE, Alaska State Legislature, as prime
sponsor, presented HB 47. He read the sponsor statement
[included in the committee packet], which read as follows
[original punctuation provided]:
House Bill 47 establishes guidelines for direct health
care agreements between medical providers and
patients. Direct Health Care (DHC) is a subscription
for health care services in which patients or
employers pay primary care providers a flat, simple
periodic fee in exchange for access to a clearly
established broad range of health care services.
DHC removes some of the financial barriers patients
encounter in accessing routine primary care, including
preventive, wellness, and chronic care services. With
a DHC plan, health care providers aren't burdened with
time-consuming insurance paperwork, leaving more time
to spend with patients. Under DHC agreements (there
are currently over 1,400 direct primary care practices
in 48 states), patients typically get same day access
or next day visits and the option to call or text
their clinic 24/7.
Health outcomes for patients improve under direct
health as there is a focus on routine and preventative
health care. Patients also feel less restrained from
interacting with their provider and typically seek
care before their symptoms become serious.
House Bill 47 clearly spells out the elements of a DHC
agreement and emphasizes consumer protections against
discriminatory practices. Further, the bill clearly
defines that Direct Health Care agreements are not
insurance. They do, however, lower the hurdles to
access for many Alaskans.
Alaskans spend more on health care per capita than any
other state in the union. At a time when many Alaskans
fear the uncertainties of the economy, pandemic, and
global instability, direct health care agreements can
provide an option for quality healthcare at an
affordable rate.
Please join me in supporting this health care option
for Alaskans.
3:06:18 PM
CHAIR PRAX opened public testimony on HB 47. After ascertaining
there was no one who wished to testify, he closed public
testimony.
3:07:05 PM
REPRESENTATIVE SADDLER directed attention to language on page 2,
line 13, regarding complaints from a patient or representative
of a patient, and he pointed out that this is the only instance
where just the patient alone was referenced; all other
references referred only to representative of a patient. He
inquired whether the language was deliberately omitted in this
one instance.
3:07:57 PM
BUDDY WHITT, Staff, Representative Kevin McCabe, Alaska State
Legislature, on behalf of Representative McCabe, prime sponsor
of HB 47, referred to page 1, lines 5-11 of the proposed
legislation, as this addresses direct health care agreements as
something that a patient, or someone on behalf of the patient,
can enter into. He said that language on page 2, line 19,
directs what these health care agreements must include. He said
the issue might be in the drafting, and how the law works, as
someone may enter into a direct health care agreement on behalf
of the patient, with the rights of the patient focused on in the
mechanism of the agreement itself. He requested that Peter
Diemer further elaborate.
3:09:33 PM
PETER DIEMER, Lawyer, Clayton and Diemer, LLC, concurred with
the explanation. He listed subsection (b), paragraphs (2)
through (5) as using different terms. He concurred with the
Legislative Legal Service's methodology, as it fits in the
framework, and the language allows a complaint to be brought
forward by either the patient or the patient's representative.
3:10:38 PM
REPRESENTATIVE SADDLER asked about language allowing providers
to charge for services that are not part of the periodic fee.
He offered his understanding that should a health care agreement
be terminated under HB 47, the one who initiated the termination
would have to pay a prorated cost of the monthly service fee, as
well as additional fees for services not included. He further
offered the understanding that direct health care agreements
would cover all services. He asked whether a person would be
obligated to pay any fees on services outside of the agreement.
MR. WHITT answered that a direct health care agreement would
charge a fee for a specified number of services. He said there
could be services provided by a health care provider that are
outside of what is included in the set fee. He invited other
speakers to address the health care model.
3:12:26 PM
MR. DIEMER responded that, within the framework of the
legislation, there would be a requirement that all the services
included in the periodic fee must be stated within the
agreement. He said this ensures the patient knows the scope of
the services to be received for the periodic fee. He added that
on the occasion where the medical service required falls outside
of the agreement's scope, it would be considered a traditional
fee for service.
3:13:26 PM
WADE ERICKSON, MD, Capstone Family Medicine, explained that the
agreements would be written in such a way to include laboratory
services to a certain amount, and if the patient requires more
specialty services not available in the clinic itself, then
these would be billed to a laboratory company and passed through
to the patient.
3:14:59 PM
REPRESENTATIVE MINA asked for an outline of the cost-saving
aspects of the bill.
REPRESENTATIVE MCCABE posed the following hypothetical: a
person wants to pay for [the continuation of health coverage]
through the Consolidated Omnibus Budget Reconciliation Act
(COBRA), where COBRA family services would cost more than $1,000
a month. He opined that with a direct health care agreement,
this person could establish an agreement with a medical clinic
at a rate of $100 a month, covering everything in the agreement.
He suggested the savings would be immense for a person who lost
their job, or a younger person who cannot afford medical care.
3:18:25 PM
DR. ERICKSON added that the direct health care payment model
allows for access to primary care in the Lower 48, as well as
dental and optometry, at a reasonable monthly rate. He said
that, while it is not insurance, it is another method of payment
for certain services; it is recommended that people still apply
for insurance or catastrophic plans, on top of the direct plan.
He said the savings to the health care would be through
heightened access to primary care, and costs would be decreased
in light of the decreased severity of disease, as it may be
discovered sooner.
REPRESENTATIVE MINA questioned how many providers would be
interested in pursuing such agreements.
3:21:30 PM
REPRESENTATIVE MCCABE responded that he has spoken to three
different providers who are interested.
DR. ERICKSON explained that anytime there is an additional
option for patients to pay for services, there will be an
uptick, and each practice will determine what its capabilities
are. He suggested that some are already making these agreements
"under the radar;" therefore, the proposed legislation would
allow providers who have not been doing this to offer a similar
service. He stated that this payment model would allow
physicians or practitioners to skirt standard fee-for-service
administrative burdens.
REPRESENTATIVE MCCABE offered his understanding that as of 2020,
1,969 practices in 48 states are doing direct primary care, with
physicians or groups of physicians owning all these practices.
Furthermore, 32 states had legislation like HB 47 in 2020, with
12 pending.
3:25:16 PM
REPRESENTATIVE RUFFRIDGE read page 4, line 25, of the proposed
legislation, which read as follows:
"health care business" means a business licensed by
the state that is 25 entirely owned by health care
providers;
REPRESENTATIVE RUFFRIDGE asked whether this would be limiting to
the state, as not all health care businesses are owned by health
care providers.
MR. DIEMER answered that the definition of health care business
was intentional, as it is designed to be for businesses
completely owned by health care providers and is accusatory to
any type of business ownership structure. He said the
definition ensures that health care businesses that offer direct
health care agreements and are owned by licensed health care
providers would be subject to the state's professional licensing
and board regulations. He explained that this adds a layer of
patient protection because all the providers are subject to such
regulations.
REPRESENTATIVE RUFFRIDGE shared that in his district many
clinics were small and operated by a couple of individuals;
however, over time a larger hospital system acquired the
clinics. He asked whether a hospital system that owns separate
clinics operating primary care would be prohibited from offering
a direct health care agreement.
MR. DIEMER responded that the answer depends on the ownership
structure of the hospital. He said that some hospitals are
physician owned, while some are operated by nonprofit
corporations and do not have a physician-ownership structure
that would meet the proposed definition.
3:29:45 PM
MR. WHITT directed attention to page 4, line 28 of the proposed
legislation, which gives the definition of "health care
provider" in AS 21.07.250, as follows:
(6) "health care provider" means a person licensed in
this state or another state of the United States to
provide medical care services;
MR. WHITT said that medical care services are not limited just
to a doctor, as someone who is licensed to provide medical care
services is considered the medical care provider and would be
able to enter into agreements.
3:30:43 PM
REPRESENTATIVE SUMNER asked whether the term "person" in this
context would include corporate personhood.
3:31:05 PM
CHAIR PRAX added to the question by posing a hypothetical in
which individuals not licensed as health care providers form a
corporation or a partnership but employing a licensed health
care provider. He asked whether the bill would allow this
situation.
3:31:50 PM
REPRESENTATIVE MCCABE answered that the language was put in
place as patient protection. He said a concern was raised at a
previous meeting that businesses, as they grow and become
moneymaking businesses, would be taken over by big health care
consortiums. He stated that HB 47 would seek to return to the
physician-patient relationship rather than "corporate medicine."
He surmised that the language was added into the proposed bill
for this reason.
3:33:39 PM
CHAIR PRAX offered his view that the language opens the door to
more providers, and if it is not opening the door wide enough,
the language can be fixed later.
3:33:53 PM
REPRESENTATIVE SADDLER sought confirmation that the bill would
allow the patient or the provider to cancel an existing health
care agreement on a no-fault basis.
3:34:19 PM
REPRESENTATIVE MCCABE responded in the affirmative and asked Mr.
Diemer to explain.
3:34:43 PM
MR. DIEMER confirmed that Representative Saddler is correct, in
that either party can terminate the agreement with the
appropriate notice. Regarding the composition of a health care
business, he said it is restricted to natural persons who are
licensed health care providers.
REPRESENTATIVE SADDLER asked about the suggestion that it is
possible to have a direct care service agreement, as well as
catastrophic medical insurance. He asked how many providers are
likely to have patients who are dually insured.
DR. ERICKSON responded that the majority of those in the Lower
48 are doing health care this way, where there is a big plan on
top and a direct health plan underneath.
3:36:58 PM
REPRESENTATIVE MINA asked what the status would be of
catastrophic care in Alaska if the state were to implement a
direct health care model.
REPRESENTATIVE MCCABE answered that he has a neighbor who has a
catastrophic policy and is interested in [direct health care]
plans because he recognizes that he does not have any health
coverage.
3:38:10 PM
MR. WHITT pointed to a study by the John Locke Foundation
[included in the committee packet] regarding direct primary
care. He stated that the study relates to implementation and
results [of direct health care] in North Carolina. He conveyed
the study's findings regarding an average direct primary care
agreement, as follows: 55 percent are those that have one
chronic disease and substantial insurance coverage and are on a
direct care agreement and 44 percent are considered low risk and
have a care agreement as a supplement to their current
insurance. He referenced the Primary Institute of Public Policy
Research, which covers research on direct health care
agreements. He stated that it has found that those most
impacted by direct health care agreements are low-income working
families.
REPRESENTATIVE MINA asked whether the implementation of direct
health care agreements in other states has changed the rate of
people shifting from the individual market to these agreements.
MR. WHITT responded that he has not seen any indication that
there has been full-scale movement from the individual market to
direct health care agreements. He said that data suggests that
such agreements are made as add-ons to existing insurance
policies.
REPRESENTATIVE MINA commented that, as a benefit of an
agreement, the contract incentivizes consumers to have more
access to a provider. She asked for a comparison between those
who have agreements and do annual visits with those who use a
traditional fee-for-service model.
3:43:37 PM
DR. ERICKSON explained that in the Lower 48 the impetus is on
the provider to have the patients be seen as quickly as possible
for an evaluation, as this would get the person assessed early
in the contract. He pointed out that direct primary care
providers in the Lower 48 reach out proactively so that patients
would visit sooner and start their care.
3:45:56 PM
MR. DIEMER said that deductibles in insurance are designed to be
implemented to reduce consumption; direct health care is the
opposite, as it is designed to decrease consumption of health
care for a fixed cost, while increasing access. He explained
that those who have a high deductible insurance plan would
benefit from these agreements, as a host of services can be
provided to families at a price not even close to the
deductible. Furthermore, in the event of a catastrophic injury,
people would then have catastrophic insurance in place. He said
that insurers embrace the model because it improves access and
results in a healthier patient population, thereby reducing
claims. He elaborated that the patient benefits from health
care access at a fixed fee for a defined scope rather than a
fee-for-service with the uncertainty of cost.
3:48:40 PM
CHAIR PRAX opined that the bill would correct the misconception
of insurance, in that, insurance is financial protection, and
since people are choosing lower and lower deductibles, it
becomes prepaid medical; therefore, driving up the cost of
medical care because of the extra paperwork. He said that the
health insurance contracts separate that, making insurance
return to being financial protection, and the contract becomes a
lower way to provide the same level of medical service.
3:49:45 PM
REPRESENTATIVE RUFFRIDGE moved to report HB 47 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 47 was reported out of the
House Health and Social Services Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| House Bill 47 Version A.PDF |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| House Bill 47 Sponsor Statement version A.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| House Bill 47 Sectional Analysis version A.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB47.VerA.FiscalNote.DCCED.2.14.23.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB 47 Supporting Document - John Locke Foundation DPC Policy Report.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB 47 Supporting Document - Pioneer Health DHCA White Paper.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| Kaiser Family Foundation Total Health Expenditure per Capita.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| Kaiser Family Foundation Total Health Insurance Expenditures per Capita.pdf |
HHSS 2/18/2023 3:00:00 PM HHSS 2/28/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 47 |
| HB 56 Fiscal Note DCCED-CBPL.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| 2023AKVMA-PDMPFlyer.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| 2023AVKMA-PDMPWhitePaper.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB0056A.PDF |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB56 Sectional Analysis.pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB56 Support Letter.pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| House Bill 56 Sponsor Statement.pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB56 Rep.Ruffridge Presentation.pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB 56 Hearing Slides 2023 (002).pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| Geiger HB56 Support Ltr - Feb 26 2023 - 7-15 PM.pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB56 Delker Support.pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB56 letter removing opposition vets PDMP.pdf |
HHSS 3/2/2023 3:00:00 PM HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB 16 Adult Enhanced Dental Program... - DHSS press release 4.28.2021.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Fiscal Note DOH-MS.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Medicaid Veto leads to Alaskans without teeth - ADN 4.28.2021.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Providers await impacts of Medicaid- AJC 4.28.2021.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Sectional Analysis.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Sponsor Statement.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 State restores Medicaid adult dental coverage... ADN 4.28.2021.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Ver. A.PDF |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Sponsor Substitute.PDF |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Summary of Changes Ver. A to Ver. B.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 56 Support Letter Greg.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 56 |
| HB 16 Powerpoint.pptx |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB 16 Powerpoint Corrected.pptx |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |
| HB0080A.PDF |
HHSS 3/11/2023 3:00:00 PM |
HB 80 |
| SSHB 16 Fiscal Note.pdf |
HHSS 3/11/2023 3:00:00 PM |
HB 16 |