Legislature(2017 - 2018)GRUENBERG 120
03/24/2017 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB69 | |
| HB108 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 123 | TELECONFERENCED | |
| + | HB 108 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 69 | TELECONFERENCED | |
HB 123-DISCLOSURE OF HEALTH CARE COSTS
2:04:09 PM
CHAIR CLAMAN announced that the final 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."
2:04:37 PM
REPRESENTATIVE IVY SPOHNHOLZ, Alaska State Legislature,
presented the bill as follows:
HB 123, price transparency and health care cost is
about providing power to consumers. Sir Francis
Bacon, who is the father of the scientific methods and
knowledge is power. I think we all know this to be
true in our everyday lives, but health care is the
only market in which we as consumers don't know the
price before we have the -- before we consider buying
it or we actually use the services.
This removes one of the most fundamental tenets of
capitalism, that is the power of the consumer to make
choices about what they do or what they don't
purchase. While HB 123 isn't the silver bullet we
would all like to see solve the problems of outrageous
inflationary prices in health care costs. It does put
consumers back where they belong and that's in
driver's seat by ensuring that they have more
information as they consider making medical purchases.
An example that I often think of is, you know, a
situation that many of us have been in, and that is,
you know, the parent who went to our kid's Tuesday
night soccer game and there was a head-on collision
between two eight-year olds. And, your child, your
son or your daughter, may have, you know, bonked their
head and as a conscientious parent you may take them
to the ER if you're concerned or the pediatrician, if
you're concerned that they may have a concussion. The
doctor at this time can do a thoroughly rudimentary
physical examination and make recommendations as to
the, you know, next course of action without further
information. How sometimes -- however, sometimes they
may even, despite further evidence, recommend to you
that you consider a very expensive MRI. An MRI which
could cost $2,400 but might not actually change the
outcome of their recommendations to you. It's our
theory, you know -- it's our theory that if consumers
had that information they might actually ask the
question, "Well, would that change your diagnosis,
would it change the treatment, do you need that MRI in
order to properly diagnose my patient -- my child?"
2:07:02 PM
What we've done in HB 123 is, in a manner that is as
simple and cost effective to implement as possible, is
to try to make sure that consumers have that kind of
information. That they have that information in the
reception area of the doctor's office that they go to,
or the emergency room, that they can also look that
information up online, and that that same information
is sent in to the Department of Health and Social
Services. We've done it in a way that we think
reduces the amount of burden to providers. We
understand that medical providers already have a lot
of onerous burdens required of them in the medical
billing system where we just -- notorious for having
about 10,000 different billing codes. But what this
bill would do is simply require that they run a report
of the 25, if they are an individual provider, or 50
if they are a larger facility most commonly offered
procedures in the previous calendar year. Turn that
into a pdf, put it on the wall in their reception
area, put it on their website which any of us can do
pretty simply, and then send it in in an email to the
department. The department would simply put it on
their website. This will give people a lot more
information as consumers.
In the last committee in which this bill was heard
there was a little bit of concern that some consumers
might be turned off by the price that is being --
that's being proposed in this bill to be listed and
that is the -- the undiscounted price. Thank you.
Which is the -- which is the price before any
preferred provider discounts are offered, before, you
know, any other discounts or individual arrangements
are provided. And so, we amended the bill to include
the opportunity for a disclaimer. This was very
important for community health providers who wanted to
hear that -- that they could describe that you
wouldn't necessarily pay the price that was being
listed because they have a sliding fee scale according
to your income. This also gives individual providers
the opportunity to, you know, indicate that they are a
preferred provider with individual health insurance
plans. And, once again, to refer patients to the
doctor or to the billing office for further
information. So, I hope that we've been able to
address that concern. The long and the short of this
is that this is about making sure that consumers have
the kind of information that they need to make
informed decisions.
2:09:56 PM
CHAIR CLAMAN opened public testimony on HB 123.
2:10:22 PM
KIM STALDER acknowledged that her experience was not directly
relevant to this bill, although, it does speak to transparency
in health care. She then related the details of events after
her husband's diagnosis of sleep apnea and referral for a sleep
study. She remarked that she is in favor of transparency that
would allow her to access the information necessary for her
insurance company in order to understand what her costs would be
for a particular medical procedure.
2:12:47 PM
BECKY HULTBERG, Alaska State Hospital and Nursing Association,
advised that the Alaska State Hospital and Nursing Association
supports the concept of price transparency and consumer
engagement in decision making. She related that the health care
payment and delivery system is complex, which makes price
transparency difficult and there is not a simple, easy solution
for this problem without dismantling and rebuilding the entire
system. This legislation is a good first step toward more
transparent pricing, she said.
2:13:58 PM
KYLE MIRKA advised that he owns two businesses in Alaska and
employs approximately 60 employees. During 2016, he was faced
with the decision of whether or not to continue his employer
sponsored health care plan because premiums had gone up almost
40 percent. He pointed out that discontinuing the plan and
simply paying the AC fine would have been substantially cheaper,
but he wanted to provide that benefit to his employees and
ultimately decided to continue providing that plan as a benefit.
Sadly, he said, the premiums did go up and the employees
shouldered that burden of 40 percent increases. In the event
similar price increases occur at the end of this year, his
choice will be clear and he will not be able to provide those
benefits moving forward due to the expense. He related that he
shared this story to shed light on the fact that health care
costs in Alaska are simply out of control. It is the only
industry that an individual is unaware of the costs of service
before the services are rendered. He acknowledged that he asked
his doctor and dentist friends how it is that they charge so
much more for services than in the lower-48, and the standard
answer was that it is expensive to practice in Alaska. He said
he does not claim to know their business, but he does know in
his business, the products he sells are available virtually for
the same price here, as in Seattle, Washington or Pocatello,
Idaho, or Portland, Oregon. Of course, he related, there are
added freight costs for goods and slightly higher labor costs,
but nonetheless his prices in Alaska are similar to those in the
lower-48. Mr. Mirka referred to the "rack rates" mentioned in
prior testimony from people in opposition to this bill. The
testimony was that rack rates don't mean much given all of the
discounts the providers may contribute, but he opined it is
critical to remember that rack rates are the starting point in
which bills are settled. That being said, he commented, the
rack rates lead to pricing that is considered and settled
(indisc.) 80th percentile. He stated that he believes in
transparency, supports HB 123, and also supports removal of the
80th percentile rule.
2:16:50 PM
PERRY ALLARD, Senior Advisor, Wilson Agency, advised that she is
a senior advisor with the Wilson Agency, and a charter member of
the Alaska Association of Health Underwriters and sits on its
legislative committee. She said she is testifying in support of
HB 123, and explained that she has been in the insurance and
employee benefits field for over 30 years in her capacity at the
Wilson Agency, and that she works statewide with Alaskan
employers and their employees and families who at some point are
all consumers of health care. With the rising costs of health
care in Alaska, it is difficult for individuals and families to
cover the cost of this coverage in the first place. In many
cases, she pointed out, the Wilson Agency came to the
realization that it had become commonplace for Alaskan employers
to increase deductibles up to $2,000, and higher. The 2016
United Benefit Advisors Survey in Alaska pointed out that the
average cost for "employee only" coverage is a little over
$14,000, before claims are incurred, and when adding those high
deductibles to that, she related, that is a significant spend.
In her role of assisting employees to be good consumers of
health care, she teaches them to ask a lot of questions. In
Alaska, she said, an employee can gather information regarding
treatment facilities, treatment options, choosing physicians,
discussing what tests are appropriate, and why, but in many
cases the employee comes to a complete roadblock when attempting
to obtain cost information.
That roadblock is the missing link for the employee to assess
their options and make an informed decision. The Wilson Agency
supports passage of HB 123. She remarked that the Municipality
of Anchorage recently passed a similar ordinance requiring
transparency, and HB 123 is a much needed (indisc.) to how they
do business.
2:19:38 PM
RHONDA KITTER, Chief Financial Officer, Public Education Health
Trust, advised that the Public Education Health Trust is a not-
for-profit health insurance provider for employees of public
education in Alaska. Currently, there are 17,000 Alaska
residents with health insurance through the Trust. According to
the Health Care Incentives Improvement Institute, "The question
of how much does it cost is so deeply integrated into the act of
buying that consumers often don't have to ask, prices are
printed on menus, stamped on tags, and posted online among other
places. Rarely do successful professionals get away with
answering that question with 'It's hard to say, you'll know when
you get the bill,' in response to consumers' inquiries about
costs." As a patient, she said she is a consumer of health care
with a deductible and co-insurance; however, her consumer
experience begins long before she is a patient. Her employer
and she are purchasing a product, a product whose costs or
premium is tied back to expected costs. She said, "The theory
of rack rates, undiscounted rates, or charge master, is not paid
by anyone, or that only the insurance companies know the true
consumer cost is not the full story." In the event the rack
rate, the undiscounted amount, has no materiality, then why do
they exist, she asked. The rack rate is what is driving the
allowable amount as defined by the State of Alaska's 80th
percentile regulation for out of network providers on fully
insured products. She related that it is often heard that rates
are confidential, yet once she has incurred the expense, the
rack rate appears on her claim within the explanation of
benefits, also showing the discount or co-insurance amount.
However, she pointed out that service had already occurred and a
legal obligation existed for her to pay the services she
obtained. Once again, she stressed, consumerism begins before
the patient experience. While some (indisc.) of placing the
onerous either on the state creating a larger governmental
administration department or the payor who has limited knowledge
of all providers, and this bill correctly requires the
disclosure of fees at the provider's office. While transparency
for health care is not a silver bullet for a solution of
sustainability, it is one silver BB needed to address the rising
costs, she remarked.
2:22:14 PM
GEORGE McKEE, Member, Mat-Su Borough Assembly, said he considers
this legislation to be the single most important tool to begin
controlling health care costs in Alaska. He referred to
deductibles and co-pays which comes down to employee (indisc.),
everyone testified about that. He commented that the most
important issue in this bill is that it will force competition
into to the industry. He further commented that the difference
between health care costs in Alaska and health care costs in the
Pacific Northwest is absolutely staggering with the Alaska
[deductible] being $5,000, and if they went to Seattle they
could save that money. The Matanuska-Susitna Borough is self-
insured and will go over $7 million in health care costs, and an
80 percent increase has been projected over the next 12 months.
He related that anything to mitigate that, with the economics of
the expenses related to the State of Alaska, would be helpful to
its taxpayers, and the State of Alaska paid over $500 million in
its self-insured health care plan. The maximum penalty of
$2,500 really isn't one to deter people, and a large health care
provider will simply write a check for $2,500 and think nothing
of it. The penalty is insignificant and insufficient, he
stressed.
2:25:14 PM
JOHN MOOSEY, Borough Manager, Matanuska-Susitna Borough
Assembly, advised that the Matanuska-Susitna Borough has over
300 employees and families for which it provides health
insurance, and it supports this bill. He added that this will
provide an incentive for the assembly to require its employees
to make good health care decisions, and it puts power back into
the common person where they can make good financial decisions.
He offered his belief that this will drive up competition which
will be better for health care, and noted that people leave the
State of Alaska, and leave the United States because they can
significantly reduce their health insurance costs. He
reiterated that with the added competition, people will stay
which will be better for Alaska's health care industry.
2:26:30 PM
T.J. ALINEN, Assistant Vice President, Human Resources, Denali
Federal Credit Union, explained that the Denali Federal Credit
Union has 325 employees currently residing in Alaska, and it is
the third largest credit union in the state. He said he
represents the organization and it is in support of HB 123. The
escalation of costs in health care is one of the greatest
challenges many organizations in Alaska are facing, and in the
spirit of a free market it is important to understand that
buyers and sellers engage in some degree of communication in
determining services, goods, and pricing. Unfortunately, he
commented, this does not occur within the health care industry
which ultimately impacts the pocketbooks of consumers and
employers. Market transparency and having information available
will assist the credit union's employees, and all Alaskans in
becoming better consumers of health care, and hopefully drive
the costs down. He indicated that there has been an emphasis on
higher deductible health plans in Alaska, and many organizations
have implemented the higher deductibles as a way to shift costs
between employers and employees. In those situations, it means
that these individuals are responsible for higher amounts at the
frontend of their health care services and meeting their
deductibles. He related that forty percent of the credit
union's employees have high deductible health plans and must
incur the first $2,600 in health care expenses annually. It
comes down to the fact that there is no real way for his
employees to be good consumers because comparing costs between
providers and facilities is not possible. In light of the
health care crisis all Alaskans are facing the credit union
believes it is necessary for the legislature to pass HB 123 to
help manage health care better, he remarked.
2:28:57 PM
TOM WESCOTT, President, Alaska Professional Fire Fighters
Association, advised that the Alaska Professional Fire Fighters
Association supports HB 123, he has worked on health care issues
as an elected union official over a decade, he understands its
complexity, and this legislation is an important first step in
tackling the out-of-control health care costs. Health care
consumers in Alaska are affected by Alaska's geographic
isolation and lack of information, and in order to act as
rational consumers, one must be armed with information.
Unfortunately, he related, obtaining price information for
medical procedures is extremely hard and sometimes not even
available. The lack of pricing information prevents Alaskans
from being rational consumers. He advised that many of the
firefighters in Alaska are in a health care trust with their
brothers and sisters in the State of Washington, and their eyes
have been opened to the price differences charged in both areas.
He pointed out that Alaskan fire fighters currently pay 30
percent more for the identical plan as in the State of
Washington, and "This last year spent nearly $1 million more
than we put in, and this is not related to usage." He continued
that often times in Alaska common procedures can be three to six
times the cost as in the State of Washington. Providing
transparency can be done and it will help consumers act
rationally. He then encouraged the committee to look at the
Oklahoma Surgery Center as a place that provides pricing for all
procedures before walking in the door and walking out the door.
He stressed that all Alaskans share in the burden of health care
costs and the state has a real vested interest in bringing the
cost of health care down. The Alaska Professional Fire Fighters
are in support of HB 123, he reiterated.
2:31:06 PM
REPRESENTATIVE KREISS-TOMKINS asked Mr. Wescott whether he could
remember the price spread between the different procedures and
treatments provided in Alaska, the State of Washington, and the
lower-48.
MR. WESCOTT opined that off the top of his head, the Alaska
Public Media ran an article about an individual who fell on the
blacktop and required shoulder surgery. The individual was
quoted roughly $60,000 or $70,000 in Alaska, and had it done for
$14,000 at the University of Washington in Seattle. He related
that within the Alaska Professional Fire Fighters Association
Trust it has seen a breast cancer procedure, with the same
codes, at $60,000 in Alaska, and $23,000 in the State of
Washington. He offered that the data is being gathered, and
added that it can be anywhere from twice as expensive to 1,000
times more expensive, and as a group it would like to spend its
money at home in Alaska, but it is becoming harder and harder
due to the prices charged for certain procedures. He continued
that this would include shoulder surgery, ACL repairs, and a lot
of the orthopedic injuries that happen to firefighters, police
officers, construction workers, people in physical career
fields, and Alaskans who like to enjoy the outdoors.
2:33:32 PM
REPRESENTATIVE KREISS-TOMKINS requested firm concrete numbers
that the Trust has received from providers in Anchorage, and
also equivalent quotes from providers in the lower-48 for
certain procedures, treatments, or codes, to the extent Mr.
Wescott was comfortable.
MR. WESCOTT responded that the Trust is working on gathering
that data, but obviously it respects privacy. He advised it is
attempting to lay out specific health care issues, such as the
cost of an ACL procedure in Fairbanks, Seattle, or Spokane.
2:34:40 PM
REPRESENTATIVE SPOHNHOLZ pointed to the 2013 Alaska Workers'
Compensation Fee Schedule Comparative Survey prepared by the
Department of Labor & Workforce Development, and pointed out
that it contains price comparisons for certain procedures in the
State of Alaska. The survey includes Medicare schedules for
Washington, Oregon, Idaho, and the Alaska median health care
allowance price which is startling. She explained that at the
top of the survey, the first procedure listed is an arthroscopy
knee with meniscus repair, and the workers' compensation fee
schedule is $5,158.02, the Alaska median health care allowance
is $5,170.00, and the State of Washington's workers'
compensation fee schedule is $912.56. She said that this is an
example of the price comparisons of which has already been
prepared by the state.
2:36:09 PM
REPRESENTATIVE KREISS-TOMKINS noted that he had reviewed that
survey and that it would be helpful for the Department of Labor
& Workforce Development to speak to the origin of the data it
received, and for instance, "cluster and bundle CPT codes to
constitute a particular treatment or procedure, and standardize
that in an apples to apples manner." He said he is also
interested in Mr. Wescott's data as a more non-public sector
actor.
CHAIR CLAMAN agreed that the information is important, but
several people would still like to testify. In the event
Representative Kreiss-Tomkins's follow-up with the previous
testifiers was similar detailed data questions, he has their
contact information.
2:37:23 PM
BLANCHE SHEPPARD, Northrim Benefits Group, advised she is
testifying on her own behalf, works for the Northrim Benefits
Group, and is a member of the Alaska Association of Heath
Underwriters. Ms. Sheppard remarked that on April 2, 2016, she
gave birth, was 28 years old, and it was the first time she had
a major medical occurrence in which she was entirely financially
responsible. Now that she works in the insurance industry, she
can look at her [Explanation of benefits] EOBs and dissect them,
question why something wasn't applied to her deductible or her
out-of-pocket maximum. She said, "I have an in, most Alaskans
don't have that in." She reiterated that she works in insurance
and has looked at enough EOBs to know the going rate of some
procedures, such as epidurals in Anchorage. In the event the
goal is to encourage patients to become the consumers they are
in every other industry, the health industry must be required to
support consumer driven health care by displaying those pricing
structures openly, she related. Once Alaskan consumers begin to
question, they also begin to self-advocate to educate themselves
on their health care pricing, and pricing transparency does not
hurt any industry in Alaska. In fact, she said, it behooves
doctors to have educated and health driven patients, it behooves
patients to be educated as to where they can obtain the best
care at the most cost effective prices, and it behooves
insurance companies to work with doctors to negotiate patient
driven prices and; therefore, reduce claims' costs. She advised
that some of the major insurers have travel programs and they
reimburse patients who travel out-of-state for many procedures
because, even taking into account the price of travel to the
lower-48, the procedures are still significantly cheaper than in
Alaska. Alaskans need to encourage physicians to rise to the
challenge of keeping those patients in Alaska and supporting the
Alaskan economy. She related that she doesn't just work in the
insurance industry, she is an active participant in the health
care system. She then offered support for HB 123, and advised
that in the event the population can be educated to make healthy
choices for their bottom line, and their personal health,
everyone will succeed.
2:40:29 PM
JEFF RANF, Consultant, Alaskans for Sustainable Health Care
Coalition, advised that he is testifying on behalf of the
Alaskans for Sustainable Health Care Coalition, he is a
consultant/broker, and has worked in the health insurance
industry for 30 years. He advised that as a longtime veteran in
the industry, he was compelled to express the importance of
health care transparency because the nation's health care system
is unique amongst the advanced industrial countries. America is
still a free market system, and hence the reason transparency is
needed, just as in any other industry. Most health care in this
country, even though it is publically financed, it is still
delivered privately. This is important in Alaska, not just
because it has the most expensive health care in the USA, but
because it is unknown why it is expensive. He suggested that
one way to address it is to first understand where the cost to
health care is coming from - it begins at the individual level.
Despite what the committee may have heard from others in the
past, the cost of insurance premiums is a direct result of the
underlying costs of health care. However, he pointed out, a
large percentage of Alaskans don't understand this and they only
see their health insurance premiums rising every year. He
expressed that the importance of knowing the cost, and knowing
what the out-of-pocket costs will be before the procedure, seems
logical. Mr. Ranf advised that his health insurance requires
him to pay the first $5,000 before his plan kicks into gear, yet
it seems logical that he would want to know what that $5,000 was
going toward, and any other expenses that it may apply to in his
policy. He related that in the event there were potential costs
that could be billed to him after his insurance reimbursed the
provider, he would definitely want this information before the
procedure was performed. He stated that HB 123 is just one step
in the right direction.
2:43:19 PM
JASON HIPSZER advised that he owns a small business in Alaska,
has professional licensing, and is testifying on behalf of his
family and himself. He said he supports HB 123, because the
health care costs in Alaska are quite extreme, and he advised
that he has traveled and used other health care systems and
received top notch service in other countries for a much lower
price. There is not a lot that "we can control today, it's a
very complicated system," but giving Alaskans transparency and
the ability to see what they are spending their money on is
vital for the free market to function the way it was designed in
this country, he remarked.
2:44:45 PM
DENISE DANIELLO, Executive Director, Alaska Commission on Aging,
Department of Health and Social Services, advised that the
Alaska Commission on Aging is a governor appointed board, within
the Department of Health and Social Services, that plans
services for seniors. The Alaska Commission on Aging educates
Alaskans regarding senior issues, and makes recommendations
directly to the legislature and the governor regarding budget
and policy items affecting seniors. On behalf of the
commission, she stated, she is expressing its support for CSHB
123, and that seniors, more than any other age group, are
consumers of health care and many seniors live on fixed incomes.
She expressed that it is important that seniors have information
about the cost of their health care services to make informed
decisions and have meaningful conversations with their doctors
and other primary care providers. She explained that the board
conducted community forums at senior centers regarding the
Medicaid redesign efforts for the Department of Health and
Social Services, and seniors expressed this need.
2:46:06 PM
REPRESENTATIVE LEDOUX noted that seniors are covered by Medicare
and in that situation, they would not be paying the cost of
their health care.
MS. DANIELLO pointed out that the age of being considered a
senior is "kind of a relative term," and it depended upon who
was talking. For example, she said, in the area of social
security, it could be 67 years of age, Medicare is 65, HUD is
50, and the Administration on Community Living is 60. Older
adults are considered people within the ages 55-64, and they pay
for their own health care. People age 65 years and older are,
for the most part, covered by Medicare, but not everyone because
some people did not contribute to Medicare and they would be
responsible for paying their own health care costs.
2:47:18 PM
REPRESENTATIVE LEDOUX asked what people wouldn't have
contributed to Medicare.
MS. DANIELLO answered that people who have lived a subsistence
lifestyle, and people out of the work world for a variety of
reasons and didn't contribute to Medicare.
2:48:18 PM
REPRESENTATIVE KREISS-TOMKINS noted to Ms. Hultberg that the
bill specifies the top procedure codes, and that the Current
Procedural Terminology (CPT) codes sometimes can be myopic. He
referred to the average community and regional hospitals that
offer a full spectrum of services and asked for examples of the
top 25 procedure codes.
MS. HULTBERG responded that she did not have a specific example,
but the way the bill is currently written, the Alaska State
Hospital and Nursing Association anticipates that at the top of
the list would be labs, CPT codes for blood draws, probably
chest x-rays, and services quite common for a large number of
patients. In speaking with some of the chief financial officers
(CFO), they believe that quite a number of lab charges will be
on the list. She related that she did not have examples of the
top 50 because it hadn't quite polled an exact list from a
facility and there may be surgery procedures, but they won't
know until they run that data.
REPRESENTATIVE KREISS-TOMKINS said he would ask the same
question of the sponsor as to whether she had a sense of what
those codes might be or even a list from a specific provider.
2:50:31 PM
REPRESENTATIVE SPOHNHOLZ explained that she chose CPT codes at
the recommendation of the Alaska State Hospital & Nursing Home
Association (ASHNHA) in an attempt to find an item that could be
a little more inclusive, for example, when looking at the price
of a surgery it included all of the labs, x-rays, and anything
else the patient may receive. She offered that the truth is
that there isn't any one system that has already been designed
out there to do that. The CPT code is the code of choice used
and the Department of Labor & Workforce Development report was
actually defined by a CPT code. She offered that when reviewing
the report again, the second column from the left is the CPT
code. She advised that a local ophthalmologist ran a list for
the sponsor that as an example of the list he gives to his front
desk billing staff.
REPRESENTATIVE SPOHNHOLZ pointed out that the committee had not
yet gotten to the sectional and the members may be missing out
on some key pieces of information that the sectional would
describe. She then read a few of the actual billing codes the
ophthalmologist used, and commented that is the reason for the
specific language that the list be written in a common language
the lay person could understand. She explained that a reason
she asked to keep the list fairly brief was the level of added
work asking doctors and/or healthcare facilities to provide, and
over time it will become the normal description that lay people
will need. The idea for this bill came to her from a
constituent who mentioned that when she received health care in
Florida, a price list was posted on the wall which caused her to
feel empowered as a consumer. As the health care profession
continues to evolve, that piece will be added into the data base
in the future, she said.
2:53:37 PM
REPRESENTATIVE KREISS-TOMKINS commented that he would look at
the workers' compensation report spreadsheet because if a person
was having orthopedic knee surgery there would be a bevy of CPT
codes, and those details are important. Ultimately, he said,
there will be a list of information on the lobby wall that will
be helpful and germane to the consumer. Also, he commented, he
spoke with someone in the health care community who pulled the
top 10 CPT codes for a large self-insured entity, and they were
so arcane that it didn't seem useful.
REPRESENTATIVE SPOHNHOLZ replied that that is why she re-
included that language in the bill. Perhaps, she suggested, the
committee should go through the bill because that discussion had
not yet taken place, and the committee was having a discussion
about what's in the bill when it hadn't agreed on what's in the
bill yet.
2:55:01 PM
REPRESENTATIVE LEDOUX offered that she understands how a person
would use the rack rate in the event they did not have medical
insurance, but why would a person use the rack rate when covered
by insurance. Although, she commented, one reason may be in
trying to determine the deductible or a co-pay.
REPRESENTATIVE SPOHNHOLZ noted that that was a good question,
and a question they spent a lot of time on trying to determine
what price point they would use. She explained that in speaking
with providers and health care field experts, often there may be
as many as 11 different prices a provider may have for one given
service. She further explained that the goal was to balance
access to information with clarity of information and to focus
in on one particular rate, and the undiscounted price, the rack
rate, or the charge master by hospitals, is the rate on which
all other rates are developed so she decided to opt in there
because the rates do vary so much. Although, because that rate
was different from what many people pay, she wanted to be clear
that this was not the price most people would be paying and
included a disclaimer at the bottom of the list. The average
price paid for a service will vary for each provider depending
on what kind of [insurance] patients they treat that year, such
that in the case of a provider seeing a majority of Medicare
patients over the last year, that price would be artificially
low for someone paying through a private insurance company. In
the event a health care provider accepted insurance but was not
in the preferred provider network, once again the rate would be
significantly higher. Therefore, she said she felt the need to
start with some sort of rational basis that for all providers
would be exactly the same since there was a fairness and
transparency issue with all of the other prices.
2:58:42 PM
CHAIR CLAMAN, after ascertaining no one wished to testify,
closed public testimony on HB 123.
2:59:06 PM
REPRESENTATIVE LEDOUX related that she understands why
Representative Spohnholz drafted the bill in this manner, but
the way the bill read now, she was unsure whether it did
anything for the insured person, and asked the number of
uninsured people
2:59:40 PM
REPRESENTATIVE SPOHNHOLZ responded that she could not answer off
the top of her head as to how many uninsured people are located
in Alaska, although it was in the thousands range. She
commented that she was speaking as someone double insured, and
that just because someone was insured did not mean they did not
care about the cost of health care. She asks before any test,
and before a prescription is offered about the cost because she
wanted to be certain there was a high return on investment for
whatever service was being offered. For example, there is
disconnect as to consumers' out-of-pocket costs, and what
something actually costs. She then offered an anecdotal
personal experience. She then commented that the doctor's goal
in her anecdotal experience was to put Representative Spohnholtz
out-of-pocket costs at an absolute minimum, when in fact the
medicine cost roughly $250, and she could have paid $15 for an
over-the-counter medicine. Representative Spohnholz advised
that being the cost hawk she is, she cares about the total cost
of health care even if her out-of-pocket would be lower, and
after her experience she asks whether the prescription is the
correct medicine for her.
3:01:49 PM
REPRESENTATIVE LEDOUX commented that her attitude was quite
laudable but she was not positive that would be the general
attitude of the insured public. Although, she related, assuming
that it was, she still was unsure how the insured cost hawk
patient would be able to figure out anything the way this bill
is written using the rack rates.
REPRESENTATIVE SPOHNHOLZ pointed out that she was not proposing
to solve all health care cost issues with this bill because it
was designed to be one small piece of a large effort. She said
she is calling it the first mile in a marathon, and noted there
are ways to come up with legislation that would be far more
complex to implement such as giving individuals individual
quotes. She said she did not take that route but rather aimed
toward simplicity and getting more information out there.
However, she pointed out, it is important to her to make sure
that having more information in the public domain doesn't get in
the way of people pursuing health care or determining their
actual costs. In that regard, she reiterated that she made
certain a disclaimer was allowed on the publication of prices,
such as on any menu. She explained that this legislation does
not limit the disclaimer and providers can say what they want to
say, and clarify that the rack rate isn't necessarily the price
a patient will pay. It is the rate on which all other rates are
built and it is a fairly rational place to start, she
reiterated.
3:04:35 PM
BERNICE NISBETT, Staff, Representative Ivy Spohnholz, Alaska
State Legislature, explained the changes of HB 123 Version O to
Version I, as follows [original punctuation provided]:
Section 1
AS 18.15.360(a) authorizes the Department of Health
and Social Services to collect, analyze, and maintain
databases of information related to health care
services and price information collected under AS
18.23.400.
3:05:17 PM
MS. NISBETT advised Representative LeDoux that the committee was
working off of Version I.
MS. NISBETT continued the sectional analysis, as follows
[original punctuation provided]:
Section 2
AS 18.23.400 is a new section that mandates the
disclosure and reporting of health care services and
price information.
Subsection (a) (p. 2, lines 7-11) states that health
care providers will compile a list of the 25 most
commonly performed health care services once a year by
January 31st.
Subsection (b) (p. 2, lines 12-16) states that health
care facilities will compile a list of the 50 most
commonly performed health care services once a year by
January 31st.
Subsection (c) (p. 2, lines 17-25) states that both
the health care provider and health care facility will
submit the list to the Department of Health and Social
Services, and publish the list in a public area and on
their website, if they have one.
MS. NIBETT added that the above information will be compiled
annually.
Subsection (d) (p. 2, lines 26-29) states that the
health care facility may include statement with their
price list that the undiscounted prices may be higher
or lower than the amount the individual will pay for
their health care service.
Subsection (e) (p. 2, line 30, p. 3, lines 1-3) states
that the Department of Health and Social Services will
then gather the compiled lists from the health care
providers and facilities and post the information on
the Department of Health and Social Services website.
The information will include the name and location of
the health care providers and facilities. This will be
updated annually into the department's database.
Subsection (f) (p. 3, lines 4-8) states that if a
health care provider or health care facility has fewer
than 25 health care services or fewer than 50 health
care services performed, the provider or facility will
compile a list of all of the health care services and
procedures performed by the provider or facility.
Subsection (g) (p. 3, lines 9-15) states that if the
health care provider or health care facility fails to
comply there will be a civil penalty. The penalty for
health care providers will be $50 a day after March
31st up to $2,500. The person penalized will be
entitled to a hearing conducted by the office of
administrative hearings.
Subsection (h) (p. 3, lines 16-31, p. 4, lines 1-21)
goes over the definitions for department, health care
facility, which excludes the Alaska Pioneers' Home and
the Alaska Veterans' Home, an assisted living home, a
long-term care nursing facility licensed by the
department, a facility operated by an Alaska tribal
health organization, and a hospital operated by the
United States Department of Veterans Affairs, the
United States Department of Defense, or any other
federal institution. Health care provider and health
care service are also defined, as well as undiscounted
price, recipient, and third party.
Section 3
This bill will take effect on January 1, 2018.
3:08:01 PM
REPRESENTATIVE KREISS-TOMKINS said he was looking at the top 10
CPT codes that were pulled for a private insurer, as follows:
0300 laboratory general cost vacation; 0301 laboratory
chemistry, which is similar to her testimony. Reviewing the
workers' compensation data for the costs of an arthroscopic knee
surgery, or a breast cancer procedure is helpful because that is
the bulk of what people pay, those high price CPT codes for
thousands and tens of thousands of dollars. He noted that the
25, 50, or 100 most common CPT codes health providers provide in
plain English descriptions actually do not constitute the real
price and cost of health care that people may be interested in.
Maybe, he offered, an ophthalmologist is not so much the case
because it is a specialty provider and the most common procedure
they provide ends up being the expensive meat of what is
charged. Although, he said, for general service providers, the
"chicken peck" procedures will dominate the list even though
people may be interested in the cost of an MRI, yet an MRI may
not make the list.
3:10:37 PM
REPRESENTATIVE SPOHNHOLZ reiterated that they settled on the CPT
code upon advice of Alaska State Hospital and Nursing Home
Association (ASHNHA), and other professionals in the field. The
CPT code is the standard used within the field and the goal was
to make this practical and practicable for people to proceed
forward in a simple way. She stressed that she wanted this to
be simple to implement and to not create any bureaucracy
because, philosophically, they chose simplicity as the theme in
how to approach this issue. Making it simple for a sole
practitioners to implement because this legislation is not just
about hospitals, it's about country doctors in Talkeetna and
smaller communities. There is a simple comparison from provider
to provider when using the code that is already being used
within the field. With regard to whether or not a provider may
have small individual procedures listed that could take up the
bulk of the prices offered, she said that almost every general
practitioner will have the flu shot and blood draw listed
because those are common procedures. She said she is open to
the possibility of including more services to make sure the
legislation gets to the meat of the issue. She explained that
they didn't want to require providers to list everything because
there are over 10,000 Medicaid codes for health care services.
Also, she pointed out, when addressing the need to know the
prices for a total service, she had a small cyst removed from
her wrist and in order to receive the total estimate in advance
she had to obtain quotes from various institutions. She
remarked she is not trying to deliver a comprehensive estimate
for any one service through this piece of legislation because
the bill asks for services by facility or provider. In the case
of her surgery, she had a surgeon, anesthesiologist, surgery
center, and labs, and most of those providers were within one
[facility]. Although, she pointed out, when discussing an
independent practitioner, a person may receive the estimate for
the cyst removal from the doctor, and labs from a different
place, and so on. She reiterated that this is not about
providing individual estimates, and an individual estimate bill
would be more along the lines of the ordinance recently passed
in Anchorage. This particular bill is more about looking at the
Meta level of health care costs, she said.
[HB 123 was held over.]