Legislature(2021 - 2022)BARNES 124
05/03/2021 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB44 | |
| HB176 | |
| SB40 | |
| HJR19 | |
| Workers' Compensation Board | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 44 | TELECONFERENCED | |
| *+ | HB 176 | TELECONFERENCED | |
| + | HB 58 | TELECONFERENCED | |
| + | SB 40 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HJR 19 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 176-DIRECT HEALTH AGREEMENT: NOT INSURANCE
3:50:15 PM
CO-CHAIR SPOHNHOLZ announced that the next order of business
would be HOUSE BILL NO. 176, "An Act relating to insurance;
relating to direct health care agreements; and relating to
unfair trade practices."
3:50:57 PM
REPRESENTATIVE SARA RASMUSSEN, Alaska State Legislature, as
prime sponsor, introduced HB 176, which would establish direct
health care agreements for medical providers to provide direct
primary care to patients. She emphasized that direct health
care agreements do not take the place of insurance.
3:52:21 PM
CRYSTAL KOENEMAN, Staff, Representative Sara Rasmussen, Alaska
State Legislature, presented the sectional analysis of HB 176 on
behalf of Representative Rasmussen, prime sponsor, which read as
follows [original punctuation provided]:
Section 1: AS 21.03.025 Direct health care
agreements. Adds a new section to AS 21.03 creating
direct health care agreements.
Subsection (a) outlines that a direct health care
agreement is between a health care provider and a
government entity, individual patient, employer
of a patient, or a representative of a patient.
The health care agreement must:
? Describe the services to be provided by
the health care provider;
? Specify the fees associated with the
agreement;
? Prominently state that the agreement is
not health insurance and that it does not
meet health insurance mandates that may be
required by federal law; and
? Prominently state that patients under the
agreement are not entitled to the
protections under existing state insurance
statutes.
Subsection (b) allows for the policy to be
terminated after a 30-day written notice from
either party.
Subsection (c) provides that the direct health
care agreement and health care services provided
under the agreement are subject to other consumer
protection statutes and regulations.
Section 2: AS 45.45.915 Direct health care
agreements. Adds a new section under Trade Practices.
Subsection (a) prevents health care providers
from declining or terminating direct health care
agreements based on a patient's protected class
under federal or state law that prohibits
discrimination.
Subsection (b) provides that a provider may
decline or terminate a direct health care
agreement if the provider is unable to provide
the level or type of care the patient requires.
The provider shall ensure the patient is
transferred to a health care provider who is able
to provide the level or type of care required and
agrees to provide said care.
Subsection (c) provides definitions for a "direct
health care agreement" and a "health care
provider."
Section 3: AS 45.50.471(b) Unlawful acts and
practices. Updates definitions for "unfair methods of
competition" and "unfair or deceptive acts or
practices" to include violating direct health
agreements under AS 45.45.915.
3:55:40 PM
REPRESENTATIVE SNYDER noted that the sponsor statement uses the
term "direct primary care" but the text of the proposed
legislation uses the term "direct health care", which she
thought may broaden the care provided beyond primary care.
REPRESENTATIVE RASMUSSEN responded that it was her understanding
that a prior version of the proposed legislation was considered
during the Thirty-First Alaska State Legislature but that there
was the need to expand the proposed legislation to include other
healthcare providers such as chiropractors and dentists.
MS. KOENEMAN clarified that both terms are used interchangeably
within the healthcare industry.
CO-CHAIR SPOHNHOLZ recalled understanding that the restriction
to primary care was the policy decided upon during the Thirty-
First Alaska State Legislature, and that the sponsor statement
is not consistent with the text of the proposed legislation.
3:57:41 PM
REPRESENTATIVE SNYDER asked whether additional regulation would
be needed to enforce and monitor the implementation of the
program under the proposed legislation.
REPRESENTATIVE RASMUSSEN deferred to Ms. Koeneman.
3:58:30 PM
MS. KOENEMAN replied that Representative Rasmussen's staff is
working on the questions of implementation and enforcement.
3:59:28 PM
RENEE GAYHART, Director, Division of Health Care Services,
Department of Health & Social Services, said that Medicaid is
considered to be "comprehensive health coverage," and providers
bill Medicaid for services. She said that the idea is for
Medicaid to be exempt from HB 176.
CO-CHAIR SPOHNHOLZ expressed that there seems to be no clear
regulatory authority, and if the proposed legislation is to
cover areas of health care beyond primary care, then every board
that regulates a health care provider could be involved.
4:00:55 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community, and Economic Development, expressed
agreement that various boards would be involved in regulation
and oversight of the provisions under HB 176. She said that the
Special Litigation and Consumer Protection section of the Office
of the Attorney General would likely be involved to oversee
consumer protections.
4:02:05 PM
REPRESENTATIVE NELSON asked for an explanation of how an
individual would use the health care agreement.
4:02:44 PM
WADE ERICKSON, MD, Owner, Capstone Clinic, explained that a
direct health care agreement is an alternate payment model. A
patient pays a defined amount of money on a subscription basis,
and the health care provider provides the defined service. He
said that primary care has a fee of approximately $100 per
month, and the service includes "relatively unlimited access"
with reduced additional costs. He said that the provider's
overhead is reduced by approximately 25 percent, and
hospitalizations, as well as visits to emergency rooms and
urgent care centers, have been reduced significantly. He said
the likely users of such agreements would be the uninsured
population or those with high-deductible insurance plans, and
some states are testing the model for their Medicaid programs.
4:05:28 PM
REPRESENTATIVE NELSON asked about the difference between a
direct care agreement and urgent care.
DR. ERICKSON explained that urgent care is a type of primary
care, usually offered by primary care physicians and defined by
"open access" and extended hours. He said that agreements may
or may not include urgent care, and that the defined agreement
is an important aspect of the proposed legislation.
4:07:03 PM
REPRESENTATIVE MCCARTY asked whether a statute would be required
in order to participate in direct care agreements.
DR. ERICKSON responded that's correct. He said that the current
regulations under AS 21 are vague enough that it could be
construed that the provisions are regulated by the Division of
Insurance. The purpose of the proposed legislation is to
exclude that type of regulation, he said, because direct care
agreements are intended to not replace or be a form or
insurance.
REPRESENTATIVE MCCARTY asked about the difference between paying
"out-of-pocket" and having a direct care agreement.
DR. ERICKSON answered that the difference is access. The
current system is a "fee-for-service" model, existing on a cash
basis. When insurance companies are involved, he said, the
price offered to the insurance company is different from the
price offered to the patient, especially when factoring in
copays, coinsurance, and deductibles.
REPRESENTATIVE MCCARTY asked whether direct care agreements
could free health care providers from being locked into
contracts with insurance companies.
DR. ERICKSON replied that there are several ways in which
providers and patients could enter into direct care agreements.
He said that Capstone Clinic would be working on a hybrid model,
accepting Medicare and Medicaid patients, and other types of
patients. He said that insurance companies mandate that
providers cannot have concurrent agreements with insured
patients.
REPRESENTATIVE MCCARTY directed attention to the text of the
proposed legislation, page 1, lines 10 through 14, which read as
follows:
The health care provider may not assess charges or
receive compensation other than the periodic fee for
health care services and additional fees specified in
the agreement. However, a patient may submit a health
care insurance claim and the health care provider may
assess charges or receive compensation for health care
services not included in the agreement.
REPRESENTATIVE MCCARTY expressed that the text may give the
provider the option to bill insurance, and he mentioned
"superbills."
DR. ERICKSON replied that an insurance policy and a direct care
agreement may cover different services, and that a patient may
be reimbursed by insurance for services not covered by the
direct care agreement.
REPRESENTATIVE MCCARTY said that he went to Costa Rica to have a
hip replacement. He then summed up his understanding of the
concept of direct care agreements, and asked what services would
be offered.
DR. ERICKSON responded that HB 176 is, from a contractual
standpoint, intentionally vague. He said that the goal of the
proposed legislation is to define direct health care agreements
outside of the provisions under AS 21, subsequently allowing the
free market to both define the services, and determine who
provides them. He then addressed Representative Snyder's
earlier note about consumer protections, and he clarified that
the Department of Law would handle consumer protections, and
individual provider governing boards would be in the charge of
the practices.
4:14:51 PM
REPRESENTATIVE SNYDER pointed out that some states exempt direct
primary care agreements from the statutory insurance code. She
asked whether exempting direct care agreements from the
provisions under AS 21 would streamline the regulatory process.
MS. WING-HEIER responded that doing so would make the process
more complicated for the providers; they would have to file a
certificate of authority with the state, provide financials and
operating practices, and be subject to taxes.
4:17:05 PM
CO-CHAIR SPOHNHOLZ opened invited testimony on HB 176.
4:17:30 PM
DR. ERICKSON, having previously responded to to questions, now
testified in support of HB 176. He said that the proposed
legislation would benefit employers and patients, especially
those with high-deductible insurance plans, and that it would
increase access to care for individuals experiencing financial
barriers.
4:19:01 PM
REPRESENTATIVE MCCARTY asked whether the agreements would be put
in place by the clinic or by a third party.
DR. ERICKSON replied that he believes most individual clinics,
like his, would be handling their own agreements.
REPRESENTATIVE MCCARTY asked, "What's a bonding element to know
that those facilities are going to be good for ... the money
that's being paid out?"
DR. ERICKSON asked for clarification.
REPRESENTATIVE MCCARTY asked how to ensure that a facility will
provide the service for which it's being paid instead of taking
money from consumers and leaving the state.
DR. ERICKSON replied that agreements have termination clauses.
He said that if a clinic doesn't have a good reputation, it
won't get many enrollees in its plan.
4:21:17 PM
CLINT FLANAGAN, MD, Founder & Chief Executive Officer (CEO),
Nextera Healthcare, described a history of patients experiencing
difficulty in accessing health care, as well as paying high co-
pays or deductibles, and physicians spending time on
administrative paperwork instead of taking care of patients. He
said that his clinics began instituting care agreements, in
which patients' primary and urgent care needs would be met in
exchange for a regular, monthly fee. He explained that
insurance could still be used for catastrophic health needs such
as an emergency room visit or surgery, but regular care was
handled through the agreement. He said that Nextera Healthcare
has 30 clinics in Colorado and nearly 80 clinics across the
country, and that approximately 84 percent of its members are
employers.
DR. FLANAGAN pointed out that insurance is not billed for
primary care. He said that in a fee-for-service practice, a
doctor might see 35 patients per day, while in a care agreement
practice a doctor might spend up to an hour with a patient,
seeing 10 to 15 patients per day. He said that because fee-for-
service doctors see more patients and don't spend as much time
with them, those patients tend to see specialists more often and
to have more visits to the emergency room or urgent care. He
pointed out that the term "direct primary care" was defined by
primary care physicians, and he stressed that a direct primary
care agreement is not health insurance. He said that the
doctors are board certified and licensed through the state, and
that he's never heard of a doctor taking money for an agreement
and then leaving the state. He said that the client retention
rate of over 95 percent.
4:26:43 PM
REPRESENTATIVE SNYDER asked for a breakdown of who ultimately
pays for the agreements.
DR. FLANAGAN responded that most of the care recipients at
Nextera Healthcare have memberships through employers, and that
the employers typically pay 100 percent of the cost for the
employee, often including dependents. He said that
approximately 20 percent of the members pay for their own
memberships out of pockets, and that they are often insured,
with high-deductible plans. He said the average patient hits
their insurance deductible once every seven years, so the care
agreement members use the agreement for regular primary care and
urgent care, and they use their insurance for any catastrophic
health issues. He said that their doctors are available for
same-day urgent care appointments, as well as after-hours care
and telehealth.
4:29:14 PM
BRANDON OUSLEY, Chief Executive Officer (CEO), Anchorage
Fracture & Orthopedic Clinic, shared that he is an advocate for
health care savings. He said that direct care agreements allow
management of health care facilities to budget, provide better
service to employees, and track productivity. He said that he
sees direct care agreements as proactive, prepaid medical care,
and he expressed that surgery outcomes for direct primary care
patients are better than those for fee-for-service patients. He
said that patients in direct primary care agreements are better
able to maintain their health care and remain more engaged than
fee-for-service patients, who would need to pay a co-pay for
every visit.
4:32:46 PM
REPRESENTATIVE MCCARTY stated that he is trying to understand
the details. He expressed the opinion that by having insurance,
someone is "prepaying" for health care. He asked how a direct
primary care agreement would help an individual manage their
health.
MR. OUSLEY explained that when health care is prepaid, the level
of engagement is different, and the patient and provider are
more of a team. A patient who has regular insurance, he said,
may hesitate to make a doctor's appointment due to high copays
or unmet deductibles. With direct primary care, it's much
easier to text the clinic or set up a telehealth appointment
when the bill has already been taken care of, he said. He said
that surgical outcomes tend to be better because the level of
engagement is higher; after a surgery the doctor and patient are
able to check in often.
4:36:19 PM
CO-CHAIR SPOHNHOLZ added that surgeries have improved outcomes
because people with direct care agreements address their
underlying health issues, not because the surgeon uses the
agreements.
MR. OUSLEY replied, "That is correct."
4:36:53 PM
REPRESENTATIVE MCCARTY asked how direct care agreements benefit
providers.
4:37:47 PM
DR. FLANAGAN explained that direct care agreements mean higher
fixed revenue. In a fee-for-service insurance setting, he said,
the type of revenue makes it very difficult to run a clinic.
During COVID-19, he said, primary care practices saw a 50 to 75
percent decrease in revenues because providers were not seeing
patients face-to-face. In fixed revenue circumstances, he said,
providers are spending time with patients instead of on the
administrative work that goes with dealing with insurance
companies.
CO-CHAIR SPOHNHOLZ noted that instead of spending time on all of
the tasks that surround billing, the clinic just charges a
credit card every month.
4:40:04 PM
REPRESENTATIVE MCCARTY expressed frustration with insurance
billing.
4:40:27 PM
CO-CHAIR SPOHNHOLZ announced that HB 176 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 44 Bill version A.PDF |
HL&C 5/3/2021 3:15:00 PM HSTA 3/11/2021 3:00:00 PM |
HB 44 |
| HB 44 Testimony - Received as of 2.23.21.pdf |
HL&C 5/3/2021 3:15:00 PM HSTA 3/11/2021 3:00:00 PM |
HB 44 |
| HB 44 Legal Services Memo 3-17-2021.pdf |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM HSTA 3/23/2021 3:00:00 PM |
HB 44 |
| HB 44 Legal Services Memo 3-15-2021.pdf |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM HSTA 3/16/2021 3:00:00 PM |
HB 44 |
| HB44 Additional Information - AKCPA Amendment Memo 3.4.21 .pdf |
HL&C 5/3/2021 3:15:00 PM HSTA 3/11/2021 3:00:00 PM |
HB 44 |
| CS HB 44 (STA) Fiscal Note, DCCED, 4.6.21.pdf |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM |
HB 44 |
| CS HB 44 (STA) v. I.PDF |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM |
HB 44 |
| HB 176 Sectional Analysis.pdf |
HL&C 5/3/2021 3:15:00 PM |
HB 176 |
| HB 176 v. A.PDF |
HL&C 5/3/2021 3:15:00 PM |
HB 176 |
| HB 176 Supporting Document - Direct Primary Care Laws and Providers.pdf |
HL&C 5/3/2021 3:15:00 PM |
HB 176 |
| HB 176 Sponsor Statement.pdf |
HL&C 5/3/2021 3:15:00 PM |
HB 176 |
| SB 40 VSO duties.pdf |
HL&C 5/3/2021 3:15:00 PM SSTA 3/4/2021 3:30:00 PM |
SB 40 |
| SB 40 Letter of Support Ron Siebels.pdf |
HL&C 5/3/2021 3:15:00 PM SL&C 3/29/2021 1:30:00 PM |
SB 40 |
| SB 40 Research VSO duties 4.13.2021.pdf |
HL&C 5/3/2021 3:15:00 PM HMLV 4/22/2021 1:00:00 PM |
SB 40 |
| SB 40 Fiscal Note 3.4.21.pdf |
HL&C 5/3/2021 3:15:00 PM HMLV 4/22/2021 1:00:00 PM |
SB 40 |
| SB 40 Sponsor Statement 2.23.21.pdf |
HL&C 5/3/2021 3:15:00 PM HMLV 4/22/2021 1:00:00 PM |
SB 40 |
| SB 40 Testimony Challenge Alaska 3.8.21.pdf |
HL&C 5/3/2021 3:15:00 PM HMLV 4/22/2021 1:00:00 PM |
SB 40 |
| SB 40 Testimony Received by 4.25.2021.pdf |
HL&C 5/3/2021 3:15:00 PM |
SB 40 |
| SB 40 ver A 3.12.21.pdf |
HL&C 5/3/2021 3:15:00 PM HMLV 4/22/2021 1:00:00 PM |
SB 40 |
| HJR 19 v. A.PDF |
HL&C 5/3/2021 3:15:00 PM |
HJR 19 |
| HJR 19 Supporting Document - Associated General Contractors, 4.28.21.pdf |
HL&C 5/3/2021 3:15:00 PM |
HJR 19 |
| HJR 19 Supporting Document - Presentation, Alaska Telecom Association, 4.28.21.pdf |
HL&C 5/3/2021 3:15:00 PM |
HJR 19 |
| HJR 19 Supporting Document - Presentation, Port of Alaska, 4.28.21.pdf |
HL&C 5/3/2021 3:15:00 PM |
HJR 19 |
| CS HB 44 (STA) Explanation of changes version A to I.pdf |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM |
HB 44 |
| CS HB 44 (STA) Sponsor Statement, v. I.pdf |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM |
HB 44 |
| CS HB 44 (STA) Sectional Analysis, v. I.pdf |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM |
HB 44 |
| HB 176 Letters of Support Received as of 5.3.21.pdf |
HL&C 5/3/2021 3:15:00 PM |
HB 176 |
| CS HB 44 (STA) Sectional Analysis v. I.pdf |
HL&C 5/3/2021 3:15:00 PM HL&C 5/12/2021 3:15:00 PM |
HB 44 |