Legislature(2017 - 2018)CAPITOL 106
03/02/2017 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB123 | |
| HB43 | |
| Presentation: Key Coalition | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 123 | TELECONFERENCED | |
| += | HB 43 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HB 123-DISCLOSURE OF HEALTH CARE COSTS
3:10:52 PM
CHAIR SPOHNHOLZ announced that the first order of business would
be HOUSE BILL NO. 123, "An Act relating to disclosure of health
care services and price information; and providing for an
effective date."
3:11:50 PM
CHAIR SPOHNHOLZ, as the sponsor of proposed HB 123, declared
that "knowledge is power." She stated that health care was the
only industry in which the consumers did not know the price
prior to the purchase or utilization of services. She noted
that this was the removal of "one of the fundamental tenets of
capitalism, that is the power of the consumer to make choices
about what they do or they don't purchase." She offered an
example for a colleague who had sustained an injury and the
subsequent expensive testing and recommended treatment. She
shared that, after the testing, the colleague had questioned the
need for the test, as the test had not altered the course of
treatment. She shared that proposed HB 123 provided consumer
pricing transparency which was simple and clean to implement,
without adding any additional cost to the state.
3:14:32 PM
BERNICE NISBETT, Staff, Representative Ivy Spohnholz, Alaska
State Legislature, stated that the intent of the bill sponsor,
Representative Spohnholz, was to create a foundation to increase
price transparency in health care in Alaska. She said that
transparency and access to health care costs would empower
consumers to take more financial responsibility for their health
care. She explained that the proposed bill required health care
providers and facilities to display the undiscounted prices of
their most common health care procedures in a public area, or on
their website. She declared that it was the intent of the
sponsor to require health care providers to disclose their
costs, but not make it burdensome to provide this information.
She relayed that this was important, as when consumers had this
information, it would give them the power to choose their health
care options. It would also open more conversations regarding
high health care costs in Alaska and consumer control for the
health care market.
3:16:01 PM
MS. NISBETT directed attention to the Sectional Analysis
[Included in members' packets] and explained that Section 1 was
expanded to authorize the Department of Health and Social
Services (DHSS) to collect health services and price
information. She stated that Section 2 was "really the meat of
the bill," it was a new section which said that health care
providers and facilities would compile a list of the most common
procedures along with the undiscounted price. This list would
be compiled once each year, and be posted in a public area or on
the provider's website, as well as provided to DHSS for posting
on the departmental website. She added that failure to provide
these costs could result in a fine, which shall not exceed
$2500. She reported that the effective date for the proposed
bill would be January 1, 2018.
3:17:50 PM
REPRESENTATIVE SULLIVAN-LEONARD asked for an explanation to the
zero fiscal note, as there would be increased labor costs for
maintenance of the DHSS data base and the levying of any fines
for failure to comply.
MS. NISBETT replied that the zero fiscal note was from DHSS.
CHAIR SPOHNHOLZ explained that the proposed bill did not require
a data base, as the information would merely be uploaded to the
department's website. She added that DHS had stated that this
could be absorbed into the regular work load.
REPRESENTATIVE JOHNSTON asked if there was a subjective nature
to the 25 procedures required to be listed.
CHAIR SPOHNHOLZ replied that the decision to require listing of
25 procedures for individual practitioners and 50 procedures for
hospitals was to keep the requirement from becoming too onerous.
She opined that this was a practical number for the most
frequently offered services, although this number was flexible.
REPRESENTATIVE JOHNSTON asked if each facility would decide
which of these procedures were the most frequent.
REPRESENTATIVE SULLIVAN-LEONARD asked for further testimony
regarding the fiscal note from DHSS.
3:20:49 PM
JILL LEWIS, Deputy Director - Juneau, Central Office, Division
of Public Health, Department of Health and Social Services,
explained that the determination for implementation was simple,
that DHSS would accept PDF versions of the cost lists and these
would be posted as-is to the website, most likely
alphabetically. She declared that DHSS did not anticipate much
enforcement, as they expected a good participation rate.
3:22:13 PM
REPRESENTATIVE SADDLER questioned whether the state should be
involved in these private transactions. He asked what
information was to be disclosed, stored, and promulgated. He
asked if the listing would reflect the price for someone
"walking the streets."
MS. NISBETT replied that the definition for price in the
proposed bill would be for the undiscounted price, before any
negotiations. She called this "the charged master price" that
each facility and provider set for themselves.
REPRESENTATIVE SPOHNHOLZ, in response to Representative Saddler,
pointed out that government should enter into this to protect
consumers, as the market itself had not done this.
3:23:56 PM
REPRESENTATIVE CLAMAN asked why it was only the undiscounted
price, and not the other prices which were published.
MS. NISBETT replied that this was an attempt to keep the bill as
simple as possible, and that this price could be used as a
reference point.
REPRESENTATIVE CLAMAN asked if there were any limits, such as
confidentiality with insurance companies, which would prohibit
the disclosure of prices.
MS. NISBETT said that, although it would be in the best interest
to include the insurance costs, the bill would focus on the
undiscounted price to allow consumers to make a decision.
REPRESENTATIVE SADDLER asked how the pricing currently worked.
MS. NISBETT replied that the intent of the sponsor was for the
consumer to have this price information prior to entering a
clinic to receive services.
REPRESENTATIVE SADDLER acknowledged that most consumers would
like to have the cost information, although he questioned
whether there was other information which made it difficult to
attain a fair price.
REPRESENTATIVE SPOHNHOLZ acknowledged that there was a challenge
for health care pricing as there was not a clear agreement for
what was a fair price. As there was a wide range for what was
actually paid, she had opted for simplicity and asked for the
undiscounted price as there were so many different variations.
She stated that there needed to be a pricing starting point.
She relayed that the proposed bill stated that the information
would be posted in a public place in the doctor's office, as
well as on the website, and on the Department of Health and
Social Services' website. She stated that there was not one
price that everyone paid, and although an all payers price list
had been suggested, it had been ruled untenable due to the cost.
REPRESENTATIVE SULLIVAN-LEONARD asked if, as the prices were to
be posted, this would open the door for patients to ask for
discounts on particular procedures.
MS. NISBETT said "yes."
3:30:59 PM
BECKY HULTBERG, President/CEO, Alaska State Hospital and Nursing
Home Association, stated that this was an important issue, and
that it had been raised frequently in the past few months. She
expressed appreciation for the simplicity of the proposed bill
and its goal for avoiding additional administrative costs. She
stated support for the concept of price transparency and
consumer engagement in health care decision making. She relayed
that the structure of the health care payment and delivery
system was complicated, which made price transparency difficult
to implement, even when all the parties agreed on the
desirability. She declared that it was important to have
realistic expectations for the accomplishments from price
transparency. She pointed out that economic theory and reality
supported the idea that most consumers were only price sensitive
and engaged in price shopping up to the point of out-of-pocket
exposure. She declared that low deductibles and low out-of-
pocket maximums meant that most customers would not be concerned
with price transparency. She reported that most public health
care plans in Alaska were maintaining relatively low deductibles
and out-of-pocket maximums, while private sector plans were
moving toward higher deductibles. She pointed out that it was
often the insurer with access to the best data. She suggested
that successful transparency initiatives sometimes also included
an insurance component, which she encouraged as an addition to
the proposed legislation. She reported that some of the larger
insurers in Alaska already offered price transparency tools.
She stated that undiscounted prices were a reference point, as
most consumers were not paying this price. She reported that
insurers paid rates based on contractually negotiated discounts,
and self-pay and charity care discounts were also often offered
to patients without health insurance. She recommended to delete
the words "charged to an individual recipient" from the language
of the proposed bill. She noted that the proposed bill required
that the list be compiled by procedure and diagnostic code. She
explained that diagnostic codes were very specific, there could
be many different codes for a procedure, and she suggested to
instead just use the procedure code which she opined should
accomplish the objective. She suggested that, as DHSS was
required to post the pricing information on its centralized
website, it would be duplicative for individual providers to
also post this information, and she recommended removal of this
requirement for providers. She asked that the sponsor consider
a change of the requirement for posting the price list, to just
make the list available. She offered her belief that this could
stimulate conversation for the consumer cost. She stated that
health care price transparency was a very complex topic, and she
expressed her appreciation for the discussion.
3:36:05 PM
REPRESENTATIVE TARR asked whether there were efforts in any
other states and if these suggestions were in line with those.
MS. HULTBERG replied that states had different frameworks. She
added that the all payer claims data base was the gold standard,
albeit the most expensive option. She allowed that some states
had chosen an approach similar to the proposed bill, whereas
some states had mandated that providers offer individualized
estimates. She declared that this proposed bill was a
foundation and a step to elevate the attention and improve the
provision for pricing information.
MS. HULTBERG, in response to Representative Tarr, said that
generating a conversation between [the patient] and the provider
was optimal. She mused that having the price list available,
but not posted, would generate a conversation. She acknowledged
that there was not a perfect solution to this "Gordian knot of a
problem."
REPRESENTATIVE SADDLER asked about the current transparency for
health care costs in Alaska.
MS. HULTBERG said that this depended on the provider. She
stated that hospital prices were very difficult to understand,
as there were layers of discounts, deductibles, and out-of-
pocket costs. She reported that the hospitals were insuring
that staff were available to help navigate the system and find
out the prices. She acknowledged that, although it was possible
to find the price, it was also difficult. She offered her
belief that the challenge was to make it less difficult given
the structure of the system.
REPRESENTATIVE SADDLER asked if price transparency was
beneficial or detrimental to the hospitals and nursing homes.
MS. HULTBERG expressed agreement that price transparency was
optimal, more information was better for the system and for the
consumer. She questioned how to do this, given how the health
system had evolved for the past 40 years, without adding cost
and still helping the consumer. She stated that there was not a
philosophical difference regarding the good of transparency, but
the difficulty was in how to do it.
REPRESENTATIVE CLAMAN asked if the discounted insurance rates
were published in all states, and if it was possible for these
proprietary rates to also be published.
MS. HULTBERG said she would have to ask about this feasibility.
She shared that many insurers and large employers had tools to
help find the prices and find the most cost effective option in
each area. She agreed that, as not everyone offered these
tools, there was some value in posting prices as a reference
point for those patients without insurance.
REPRESENTATIVE EASTMAN expressed his agreement with the
philosophy, and asked whether the proposed bill captured a good
process for transition or could be improved.
MS. HULTBERG offered her belief that "the beauty in this bill is
the simplicity. I do not think this would be a difficult bill
for us to administer." She stated that she did not have
concerns, at this point, for the transition.
REPRESENTATIVE SADDLER mentioned capital and operating expenses
as elements of pricing, and asked what other elements of health
care services could affect any change in pricing if the proposed
bill was passed.
MS. HULTBERG suggested that a PhD in health care economics was
helpful in pricing. She stated that it was too early to tell
about the price transparency initiatives and whether they would
lower costs.
REPRESENTATIVE JOHNSTON asked about a national site for health
care costs, and the possible use of its data.
MS. HULTBERG replied that there was a national move toward price
transparency. She shared that, as the undiscounted charges were
not what most people paid, it was important for the insurer to
be able to determine the actual out-of-pocket expense. She
emphasized the need for the patient to call the insurer and the
provider to verify the procedures, the co-pay, the out-of-pocket
costs, and whether the provider was in-network.
3:46:33 PM
JOHN ZASADA, Policy Integration Director, Alaska Primary Care
Association (APCA), explained that APCA was the association of
community health centers in Alaska and was required, by law, to
accept patients regardless of ability to pay. He explained that
there was a sliding scale discount based on income. He declared
support for increased price transparency and added that patients
were engaged and educated on the ways to use the care options
and coverage available. He reported that Alaska health centers
mostly provided patients with an estimate of charges for
particular procedures, upon request, and that a large number of
the health centers had expressed an ability to compile and post
a list of prices for the most common procedures, as outlined in
the proposed bill. He expressed concern for effective
explanation regarding the discounts on the sliding scale, so
patients understood what they had to pay. He said that
federally qualified health centers had a unique bundled payment
system, and that the rack rate was often higher than what would
be posted with a private primary care provider. He shared the
concern by health centers that the requirement to post prices on
the health center websites may have an unintended consequence to
serve as a barrier for coming to seek care, especially for low
and moderate income patients and people for whom English was a
second language, as the sliding scale discount was often
presented at the time of appointment. He suggested that posting
the price list at the facility, along with support to better
understand the actual cost to the individual, might be more
effective for ensuring maximum access to care.
3:49:53 PM
REPRESENTATIVE CLAMAN asked about making available the listings
for the negotiated prices.
MR. ZASADA explained that 80 percent of the patients at
community health centers in Alaska were at 80 percent of poverty
or below, and that about 33 percent had commercial insurance,
with another 33 percent being uninsured. He stated that the
sliding scale discount was the primary way to reduce the cost
from the main rack rate. He stated that eligibility staff at
the health centers worked with the patients to provide the
price, so that patients knew the cost.
REPRESENTATIVE SADDLER asked if the transparency of prices would
affect the services of community health centers in Alaska.
MR. ZASADA noted that sharing rack rates on a website could
serve as a barrier to care for those people without health
insurance literacy. He expressed concern for potential patients
not seeking primary and preventative care based on a rack rate.
Other than this, he offered his belief that the proposed bill
would not dramatically affect the care offered.
REPRESENTATIVE SADDLER asked for a definition of rack rate.
MR. ZASADA said that the bundled rate from a community health
center included the presentation of the issue by the patient,
the examination, the procedure, the care coordination and other
factors which were built in by the health center.
REPRESENTATIVE EASTMAN asked if this legislation would allow
disclaimers for price discounts.
MR. ZASADA offered his belief that many health centers would
prefer personal interaction with a patient for those
discussions, as understanding for a sliding scale discount
system was not easily understood via a website. He declared
that it was much easier and clearer in person, especially for
those with limited health insurance literacy.
REPRESENTATIVE EASTMAN asked if the legislation would allow
this.
MR. ZASADA stated that the APCA would prefer not to post the
prices on the website.
REPRESENTATIVE SPOHNHOLZ asked if anyone paid the rack rate.
MR. ZASADA said that there were some uninsured patients with
incomes over 200 percent [of the poverty rate] who were subject
to the full price. He shared that there were also discounts for
early payment. He acknowledged that some people were subject to
the full price.
MS. HULTBERG, in response to the aforementioned question from
Representative Spohnholz, said that she would follow up with
this information.
REPRESENTATIVE SPOHNHOLZ asked why some people would not pay the
full price.
MS. HULTBERG replied that Alaska State Hospital and Nursing Home
Association also used sliding scales and self-pay discounts.
3:56:53 PM
REPRESENTATIVE SPOHNHOLZ said that HB 123 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB043 ver D 2.22.17.PDF |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Sponsor Statement 2.22.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Sectional Analysis ver D 2.22.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - Clinical Trials in Alaska.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - FDA Drug Review Process 2.22.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - Goldwater Institute Fact Sheet 2.22.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - Goldwater Institute Patient Stories 2.22.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - Goldwater Institute Policy Report Summary 2.22.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - Legislative Map 2.22.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Fiscal Note DCCED--DCBPL 2.28.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB43 Supporting Document - Letters of Support 2.27.17.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB 43 Powerpoint Presentation.pdf |
HHSS 2/28/2017 3:00:00 PM HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - Letters of Support 3.2.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB043 Supporting Document - Goldwater Institute Policy Report.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/7/2017 3:00:00 PM |
HB 43 |
| HB0123 ver O 2.22.17.PDF |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| HB0123 Sponsor Statement 2.22.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| HB 123 Sectional Analysis 2.22.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| HB 123 Fiscal Note DHSS DPH 3.1.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| HB0123 Supporting Document-Article ADN-A Doctor's Quest to Remain Human Inside an Insane Medical System 2.22.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| HB0123 Supporting Document-AAMC Price Transparency in the News 2.22.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| HB0123 Supporting Document-American's For Progress-Price Transparency 2.22.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| HB0123 Supporting Document-Truven Health Analytics-Save $36 Billion in US Healthcare Spending Through Price Transparency 2.22.17.pdf |
HHSS 3/2/2017 3:00:00 PM HHSS 3/9/2017 3:00:00 PM |
HB 123 |
| Key Coalition Priorities 3.2.17.pdf |
HHSS 3/2/2017 3:00:00 PM |
Key Coalition |
| Key Campaign Legislative Priorities Presentation.pdf |
HHSS 3/2/2017 3:00:00 PM |
Key Campaign |