Legislature(2019 - 2020)CAPITOL 106
04/04/2019 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB84 | |
| HB89 | |
| HB92 | |
| HB114 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 84 | TELECONFERENCED | |
| *+ | HB 89 | TELECONFERENCED | |
| *+ | HB 92 | TELECONFERENCED | |
| *+ | HB 114 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 92-DIRECT HEALTH: NOT INSUR; ADD TO MEDICAID
4:01:30 PM
CO-CHAIR ZULKOSKY announced that the next order of business
would be HOUSE BILL NO. 92, "An Act exempting direct health care
agreements from regulation as insurance; establishing a direct
care payment program for medical assistance recipients; and
providing for an effective date."
4:01:44 PM
ERIN SHINE, Staff, Representative Jennifer Johnston, Alaska
State Legislature, paraphrased the Sponsor Statement [Included
in members' packets], which read:
HB 92 amends the state insurance code by exempting
direct care agreements from the definition of
insurance. It also, includes conditional language for
the Department of Health and Social Services to apply
for a State Plan Amendment with the Centers for
Medicare & Medicaid Services to allow for direct care
agreements for and, if approved, requires that
providers accept Medicare and Medicaid patients up to
20 percent of their patient population. This bill does
not mandate that direct care practices be formed; it
only exempts them from regulation by the division of
insurance.
Direct care agreements consist of a practitioner or
group of physicians who contract with individual
patients to provide care outlined in a contract for a
monthly, quarterly or semiannual fee. The relationship
between physician and patient is contractual and the
contractual relationship can be altered or amended by
the same means that already govern existing
contractual relationships. Through this arrangement
patients gain access to as much care as they need.
Under existing care models, a patient sees a doctor
and then the doctor bills the patient's insurance. In
a direct care practice, no bill is submitted to a
third-party payer. The only money exchanged is the
patient's monthly, quarterly or semi-annual membership
payments. This arrangement liberates the physician
from all involvement with insurance and are relieved
from paperwork required by payers. Physicians have
more time to spend on direct patient care.
The American Academy of Family Physicians "Principles
for Reform of the U.S. Health Care System" holds that:
"Less complicated administrative systems are essential
to reduce costs, create a more efficient health care
system, and maximize funding for health care
services."
HB 92 creates an environment where a new market for
the delivery of health care can exist and grow by
allowing direct care agreements to create a less
complicated administrative system.
4:04:20 PM
REPRESENTATIVE DRUMMOND asked if the requirement that doctors
accept Medicare and Medicaid patients for up to 20 percent of
their patient population would increase the availability of
primary care providers to those patients.
MS. SHINE offered her belief that this would create an avenue to
access care and that a provider with a direct care agreement
practice would be one more provider accepting Medicare and
Medicaid patients.
4:05:14 PM
REPRESENTATIVE JACKSON asked if this offered practitioners and
physicians the opportunity to set up a co-op for affordable care
between the physician and the patient.
MS. SHINE replied that it allowed patients to pay a revolving
fee to a provider or a group of providers for access to care as
outlined in a contract. She pointed out that this was not
insurance and that the proposed bill exempted them from the
definition of insurance.
REPRESENTATIVE JACKSON stated her support for legislation that
would allow physicians to have direct payment from patients as
an alternative for those without insurance. She asked about
making this mandatory for physicians to accept Medicaid and
Medicare patients.
MS. SHINE said that providers who accepted Medicare and Medicaid
patients could continue as status quo, whereas the proposed bill
would allow a provider to set up a different form of health care
delivery. This would allow a contract directly with the patient
and not with a third party. The proposed bill stated that a
physician who chose to set up this type of practice must accept
Medicare and Medicaid patients.
4:08:01 PM
REPRESENTATIVE CLAMAN expressed concern that the proposed bill
would provide access to middle class whereas those with "much
tighter financial situations really would never be able to take
advantage of this kind of situation." He asked how this would
work with medical savings accounts.
MS. SHINE offered her belief that this was an affordable way for
the patients in 25 states to access primary care. She opined
that Alaska would be the first state to open-up for other forms
of care, and not direct that this be primary care. She said
that the use of medical savings accounts was a grey area and
that there were testifiers who could more adequately answer the
question.
REPRESENTATIVE CLAMAN asked what areas beyond traditional
primary care did the bill propose to offer.
MS. SHINE explained that this had been left broad to determine
whether this was a good model for access to care in a more
efficient manner. She offered her assumption that most
providers would set up an agreement practice for primary care as
most general surgery could not charge enough on a monthly basis.
REPRESENTATIVE CLAMAN asked if there were specialties more
likely to be interested in this beyond primary care.
MS. SHINE offered her belief that some states were currently
trying to expand the scope beyond primary care.
4:12:18 PM
REPRESENTATIVE DRUMMOND asked about statistics, history in the
states where the program is allowed, and the cost to consumers
for the direct care agreements. She asked if those other states
with direct care agreements contained the Medicare and Medicaid
percentage requirement.
MS. SHINE offered her belief that about 25 states had direct
primary care agreements, although she did not know anything
about the cost of care. In response, she opined that, although
no other states included the proposed Medicare and Medicaid
percentage requirement, that was not to say that Medicare and
Medicaid patients did not access this form of care.
REPRESENTATIVE DRUMMOND offered her belief that it was difficult
to find primary care physicians that accepted Medicare in
Alaska, even as Medicare accepting physicians were much more
available in other states while being reimbursed at a better
rate. She opined that this could also be true for Medicaid.
4:14:35 PM
LEE GROSS, MD, Epiphany Health, reported that he was a full-time
practicing family doctor. He stated that this model could
simplify health care delivery, reduce the cost of care, lower
barriers to access, reduce physician burn-out, and restore the
central focus of the health care system to the patient. He
shared the history of his practice, noting that the name,
Epiphany Health, evolved from the question for why to insure
primary care as this created far too many barriers between the
doctor and the patient. He stated that health insurance was
being used incorrectly. He declared that routine health care
should be made affordable for everyone, with predictable, price
transparency, that insurance should be a hedge against
catastrophic loss, and not to pay for basic, essential care. He
reported that, in 2010, his practice had created a membership
based primary care program for patients aged five years and
older with a flat monthly fee of $60 per month for an adult,
which covered all the services his practice provided. He added
that a child was $25 per month, with each additional child in
the family for $10 per month. He pointed out that there were
not any co-pays for any services which could be done in the
office. He explained that, in order to practice outside a
traditional third-party payment system, he had reached out to
independent labs, image services, and others to secure wholesale
prices. He compared the prices of these services to those
through a traditional office visit. He reported that,
currently, there were about 1,000 of these practices with a
direct primary care model. He added that some of these
practices also offered wholesale dispensing of medications to
allow affordable access. He reiterated that there were 25
states with legislation to protect this practice model, pointing
out that no states had regulated against the provision of direct
primary care services. He noted that he did oppose provisions
in the proposed bill that set quotas for Medicare and Medicaid,
pointing out that no other states set these quotas, and that
portion of the proposed bill would be the first in the nation to
mandate participation in Medicare and Medicaid. He stated his
enthusiastic support for the rest of the proposed bill.
4:20:04 PM
CO-CHAIR SPOHNHOLZ asked how the rates were developed.
DR. GROSS replied that, as the cost for routine care was cheaper
than a cell phone plan, they had determined that this was a
reasonable price. He added that this had also stabilized the
finances for his practice. He noted that prior to shifting his
practice model, his office was not a Medicaid provider, but with
his new primary care model, he did have Medicaid patients as
they could afford the services provided.
CO-CHAIR SPOHNHOLZ asked about the risks to the consumers if a
patient became too expensive to care for.
DR. GROSS replied that, under existing law, a doctor could drop
a patient for any reason, adding that the provision in the
proposed bill which allowed for cancellation by either party
with two months' notice was longer than the notice which existed
in current law. He pointed out that the model was designed to
attract people with chronic diseases, heavier utilizers,
although it was not always the same utilizer each month. He
stated that these were the people a practice should keep.
CO-CHAIR SPOHNHOLZ asked how many patients he had let go in the
last year.
DR. GROSS replied that he had not terminated anyone, and that he
had a three month wait list for new patients to his practice.
CO-CHAIR SPOHNHOLZ asked how this practice model made money
without culling the expensive patients.
DR. GROSS explained that this practice was not financially
viable as a fee for service insurance-based practice because of
all the expenses necessary to provide medical care through the
insurance companies, which included proprietary software,
staffing, and the other 60 percent of overhead necessary to bill
the insurance companies. He noted that his overhead was now
some of the lowest in the country, between 20 - 30 percent. He
shared some of the costs, noting that there was little incentive
to cull the high utilizers.
4:25:20 PM
DR. GROSS, in response to Representative Claman, said that the
main office for his practice was in North Fork, Florida, with an
expansion office in rural Florida where there was a 50 percent
uninsured rate with a median income of $25,000 per year. He
added that they had integrated with the critical access rural
hospital an employee benefit into their health plan as an option
to a traditional health plan. He reported that 80 percent of
the hospital employees signed up for membership with his
practice, a projected savings of more than $1 million in the
first year for the hospital while also reducing employee
premiums 20 percent and eliminating their network restrictions,
co-pays, and deductibles for routine care.
REPRESENTATIVE CLAMAN asked how many physicians were in his main
clinic.
DR. GROSS replied that there were two doctors and a nurse
practitioner. In response to Representative Claman, he
acknowledged that he was one of the doctors.
REPRESENTATIVE CLAMAN asked about Medicaid payments.
DR. GROSS explained that his practice did not take any money
directly from Medicaid as the Medicaid patients paid his
practice directly. He reported that, because the State of
Florida had a Medicaid share of cost with a high patient
deductible which reset every month, the patients could not
afford access to chronic care management.
REPRESENTATIVE CLAMAN asked if the State of Florida offered any
reimbursement to Medicaid recipients for payment to his
practice.
DR. GROSS replied that it was most likely easier for Medicaid
recipients to pay his monthly fee out of pocket instead of
trying to work through the Medicaid system for routine primary
medical services. He declared that it was difficult to find a
doctor in Florida who took Medicaid.
REPRESENTATIVE CLAMAN asked if the monthly fee included
prescription medications.
DR. GROSS said that his practice encouraged patients to have
insurance for non-routine and catastrophic expenses. He
reiterated that the monthly fee only included services provided
in his office. He reported that some practices did offer
medications as a path through cost directly to the patient, and
he shared the prices of some generic drugs used to manage
chronic conditions. He noted that often it was more expensive
for a patient to use their insurance to pay for the medications
instead of paying cash.
REPRESENTATIVE CLAMAN asked if medication services as a pass-
through cost did not add to the base monthly fee and was only
reimbursed to his office.
DR. GROSS agreed that there would be a pass-through cost for the
wholesale cost for the medication.
REPRESENTATIVE CLAMAN asked how many providers similar to his
clinic were in Florida.
DR. GROSS offered that there were about 60 providers, and that
the legislation had only just passed about one year prior. He
added that the Florida legislature was already looking to expand
this.
4:31:21 PM
REPRESENTATIVE JACKSON stated that she thought this was a great
idea and asked if the current laws under the Patient Protection
and Affordable Care Act (PPACA) recognized this process.
DR. GROSS said that Section 1301 of the PPACA did contain a
provision that specifically allowed direct primary care with a
wrap around catastrophic plan to qualify as minimal coverage in
order to avoid the tax penalty.
4:32:58 PM
REPRESENTATIVE DRUMMOND asked if the prescriptions for a Type II
diabetic counted as a heavy utilizer in his practice.
DR. GROSS said that the Type I and Type II diabetics were the
ideal patients in his practice because they came in for visits
"five, six, seven times a year." He noted that, as the A1C test
for the three-month average blood sugar monitoring, was
administered in his office there was no charge for the point of
care testing. He explained that these patients could be managed
over the phone, by text, or by e-mail. He reported that one
diabetic patient could no longer afford to see the
endocrinologist because of the $600 per visit.
REPRESENTATIVE DRUMMOND asked about the cost of the insulin, as
it had skyrocketed in the last few years even though the
medication had not changed.
DR. GROSS expressed his agreement that the new pricing for
insulin was a national problem. He said they did the best they
could given the available resources and would often work
directly with the manufacturers. He noted that sometimes, given
the income level of his patients, they did not have to pay
anything for medications.
REPRESENTATIVE DRUMMOND asked how diabetic patients could afford
the best insulins. She asked if these prescriptions were
covered by insurance.
DR. GROSS said that patients who did have insurance would use it
to pay for the prescriptions, although his practice would work
with the manufacturers for patients without insurance. He
reported that Type II diabetics required more time to teach them
lifestyle changes and wean them away from the medications. He
declared that it took 3 minutes to prescribe a medication but 30
minutes to not prescribe a medication.
REPRESENTATIVE DRUMMOND asked if the manufacturers supplied free
insulin forever to a Type I diabetic who could not live without
insulin.
DR. GROSS replied, "at the moment, they do. Forever, I can't
certainly tell you that." He explained that, if a patient was
not eligible for a government program such as Medicare,
Medicaid, or benefits, and they were not presently getting
health insurance, then, in most cases they would qualify for
free insulin based on income. He expressed his desire to see
federal changes to the pharmacy benefits management as it could
not be fixed at the direct primary care level.
4:40:34 PM
CO-CHAIR ZULKOSKY shared concern that an exemption for direct
care agreements from insurance regulations would remove consumer
protections, and ultimately limit patients to contractual items
contained in the care agreements. She asked about the
regulation of rates and the guaranteed coverage allowed through
the various care agreements ensuring that clients who may get
sick outside the contracts were able to receive coverage.
DR. GROSS explained that they were not asking for physicians to
not be regulated, but that physicians should not be regulated as
insurance companies. He declared that physicians were very
heavily regulated and that would not change for direct primary
care.
CO-CHAIR ZULKOSKY asked if regulations of these direct care
agreements were managed through contractual law in the State of
Florida.
DR. GROSS replied that this law managed the actual agreement;
whereas, the conduct of the practice, the practitioner, and the
delivery of care was monitored through the State Medical Board.
CO-CHAIR ZULKOSKY asked if the Division of Insurance had
conducted an analysis for the impact on consumer protections in
Alaska with the exemption of direct care agreements from
insurance regulations.
4:43:06 PM
ANNA LATHAM, Deputy Director, Juneau Office, Division of
Insurance, Department of Commerce, Community & Economic
Development, said that the division had not analyzed any impact
to consumers should these agreements occur. She directed
attention to a report by the Office of the Insurance
Commissioner in the State of Washington. She said that
Washington had been groundbreaking in direct care practices,
with 41 direct care practices currently exempted from the
insurance code. She noted that direct care and concierge
medicine had been prevalent in Washington since the early 2000s
and were exempted in 2007. She reported that part of the
regulation required an extensive report to the Office of the
Insurance Commissioner. She suggested that this report could
have some analysis for the consumer impact. She pointed out
that these agreements were very transparent for what services
were provided.
CO-CHAIR ZULKOSKY asked for the history to the management and
regulation of rates and coverages within the direct care
agreements. She suggested that they were managed largely by the
provider groups and not through regulation by the Division of
Insurance.
MS. LATHAM explained that the rates were set by the practices.
She offered some information to the variance of the rates in the
past two years. From 2016 - 2018, 11 practices increased fees,
6 decreased fees, and 5 offered no changes in fees. According
to the Direct Primary Care coalition, the median fee was about
$70 per person per month, or $165 per month for a family of
four.
CO-CHAIR ZULKOSKY asked about the percentage of average
increase.
MS. LATHAM said that she could provide the Office of the
Insurance Commissioner report.
REPRESENTATIVE CLAMAN asked if Health Savings Accounts could be
used to pay the fees.
MS. LATHAM offered her belief that the use of Health Savings
Accounts was not allowed for these plans. She noted that there
had been some federal effort in 2017 to allow for this but the
bill did not pass.
DR. GROSS expressed his agreement that Health Savings Accounts
could not be used to pay for direct care contracts, as they were
not eligible under federal code.
DR. GROSS, in response to Representative Jackson, said that the
Health Savings Accounts had to be used with a qualifying high
deductible health plan. He pointed out that these high
deductible health plans could not cover direct primary care as
it was first dollar coverage. He offered his belief that most
people believed that direct primary care membership should
qualify under the Internal Revenue code.
4:49:34 PM
CO-CHAIR ZULKOSKY opened public testimony.
4:49:58 PM
CO-CHAIR ZULKOSKY closed public testimony.
[HB 92 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB084 Sectional Analysis 4.3.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Sponsor Statement 3.28.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Supporting Document- Breast Cancer in Women Firefighters.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Supporting Document- Letter of Support ACAT 4.3.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Supporting Document- Asbestos 03.28.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Supporting Document- RADS in Police from Chemical Spill 3.28.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Fiscal Note DLWD WC 04.03.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Letter of Support- APOA 3.28.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Opposition Document- AML Joint Insurance Association 3.29.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM HL&C 2/26/2020 3:15:00 PM |
HB 84 |
| HB084 Presentation 4.3.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/25/2019 3:00:00 PM |
HB 84 |
| HB0089 Supporting Document-DHSS Handout 03.27.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB0089 Supporting Document-Support Letter 04.03.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB0089 Supporting Document-Support Letters 1.27.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB0089-Opposing Document-Opposition Letter 04.03.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB0089 Draft Proposed Blank CS ver U 04.03.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB0089 Explanation of Changes ver U 04.03.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB0089 Sectional Analysis ver A 03.27.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB0089 Sponsor Statement 03.27.2019.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |
| HB092 ver U 3.27.19.PDF |
HHSS 4/4/2019 3:00:00 PM |
HB 92 |
| HB92 Fiscal Note DCCED-IO 3.31.2019.pdf |
HHSS 4/4/2019 3:00:00 PM |
HB 92 |
| HB92 Fiscal Note DHSS-MS 3.31.2019.pdf |
HHSS 4/4/2019 3:00:00 PM |
HB 92 |
| HB92 Sponsor Statement 3.31.19.pdf |
HHSS 4/4/2019 3:00:00 PM |
HB 92 |
| HB092 Sectional Analysis ver U 3.27.19.pdf |
HHSS 4/4/2019 3:00:00 PM |
HB 92 |
| HB114 Letters of Support 04.03.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 114 |
| HB114 Sectional Analysis 04.03.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 114 |
| HB114 SHARP-2 Final Report to Legislature 04.01.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 114 |
| HB114 Sponsor Statement 04.03.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 114 |
| HB114 DHSS Presentation 04.01.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 114 |
| HB114 Fiscal Note DCCED CBPL 04.01.19.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 114 |
| HB089 ver U Presentation.pdf |
HHSS 4/4/2019 3:00:00 PM HHSS 4/9/2019 3:00:00 PM |
HB 89 |