Legislature(2021 - 2022)BARNES 124
04/11/2022 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB174 | |
| HB176 | |
| HB276 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 176 | TELECONFERENCED | |
| + | SB 174 | TELECONFERENCED | |
| += | HB 276 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 176-DIRECT HEALTH AGREEMENT: NOT INSURANCE
3:28:05 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."
3:28:38 PM
The committee took a brief at-ease.
3:28:52 PM
REPRESENTATIVE SNYDER moved that the committee adopt the
proposed committee substitute (CS) for HB 176, version 32-
LS0784\B, Marx, 4/7/22 ("Version B"), as the working document.
3:29:12 PM
REPRESENTATIVE SNYDER objected for the purpose of discussion.
3:29:23 PM
CO-CHAIR SPOHNHOLZ noted that the proposed CS is substantive and
the intention in adopting Version B is to get a new version on
the record for the committee to review in depth. She explained
that Version B includes consumer protections as recommended by
Ms. Lori Wing-Heier, Director, Division of Insurance, Alaska
Department of Commerce, Community, and Economic Development
(DCCED), during a previous hearing on the bill.
3:30:13 PM
CHELSEA WARD-WALLER, Staff, Representative Ivy Spohnholz, Alaska
State Legislature, reviewed the changes made in the proposed CS
for HB 176, Version B. She spoke from a document in the
committee packet, titled "Summary of Changes, CSHB 176(L&C)
Version A to Version B," which read:
Section 1
Page 1, [line 7]; Removes "or the representative of
the patient" and makes conforming changes throughout
the bill.
Page 1, line [8]; Replaces "periodic" with "annual"
and makes conforming changes throughout the
subsection.
Page 1, [lines 9-11; Adds new subsection (b),
reordering language from version A].
Page 1, [lines 11-14]; Inserts new language requiring
that annual fees must be comparable for comparable
services and may not be based solely on the patient's
health status or sex.
Page 2, [lines 5-6]; Adds a new subsection (c) and
reorders following subsections accordingly. [Adds
language to clarify what entities are involved in
direct health care agreements.]
Page 2, lines [14-23];
Removes language in subsection (4) and replaces it
with additional requirements for the direct health
care agreement as follows:
(4) it must be printed in a font not smaller than 12
points and written using plain language that an
individual with no medical training can understand;
(5) it must identify and include contact information
for the person responsible for receiving and
addressing a complaint made by a patient; and
(6) it must state that the annual fee under the
agreement for services must be comparable to other
patients under the provider's other direct health care
agreements and may not be based solely on the
patient's health status or sex.
Page 2, [lines 24-30];
Inserts a new subsection (d), which allows a patient
to terminate a health care agreement in writing within
30 days of entering the agreement. This subsection
also provides that if a patient terminates an
agreement, the provider must refund to the patient
payments made less payments made for services already
performed within 30 days. A nominal termination fee
may be charged.
Page 2, [line 31 page 3, line 13];
Adds language [in subsection (e)] and a new subsection
(f) to state that a direct health care agreement may
be terminated in writing after at least 30 days'
notice or in accordance with the agreement. An
agreement must provide for a refund and may provide
for a nominal termination penalty or nominal
termination fee.
Additionally, a new subsection (g) is added, which
allows the parties to a direct health care agreement
to modify or renew the agreement by written agreement
of the parties. A health care provider may not change
the annual fee under the agreement more than once a
year and shall provide at least 45 days' written
notice of a change in the annual fee.
Page 3, lines [14-16]; Reverses language in version A
to make direct health care agreements subject to AS
21.07 (Patient Protections Under Health Care Insurance
Policies) and AS 21.36 (Trade Practices and Frauds).
Page 3, line [28 page 4, line 20];
Inserts new subsection (j), that a person may not
make, publish, or disseminate an assertion,
representation, or statement with respect to the
business of direct health care agreements, or with
respect to a person in the conduct of the person's
direct health care agreement business, if that is
untrue, deceptive, or misleading, and may not[:]
(1) misrepresent the benefits, advantages, conditions,
sponsorship, source, or terms of a direct health care
agreement;
(2) use a name or title of a direct health care
agreement misrepresenting its true nature; or
(3) make a false or misleading statement as to a
direct health care agreement.
Additionally, inserts a new subsection (k), which
requires that health care providers entering into
health agreements file a report with the division of
insurance no later than [September] 1 that includes
(1) the number of health care providers in the health
care practice;
(2) the number of direct health care patients the
health care practice has the capacity to serve;
(3) the number of government entities, patients, and
employers of patients that entered or maintained a
direct health care agreement with the health care
practice in the preceding calendar year and the annual
fee paid by each government entity, patient, and
employer of a patient, as applicable, under the direct
health care agreement; and
(4) other information requested by the division.
Page [4, lines 22-23]; Inserts a new subsection (1)
defining a "health care practice" as "a firm,
corporation, association, institution, or other person
licensed or otherwise authorized in this state to
provide health care services;" and renumbers
subsections accordingly.
Page [5, lines 20-22]; Inserts a new subsection (c),
which allows health care providers to decline entering
into a direct care agreement with a new patient if the
health care provider does not have the capacity to
accept new patients.
Page [5, line 26]; References the definition for
"health care provider" in AS 21.03.025(l).
Page [5, line 28]; Inserts a new subsection (58), to
add violating AS 21.03.025 (direct health care
agreements) under the unlawful acts and practices
statute of Article 3, Unfair Trade Practices and
Consumer Protection, and renumbers the following
subsection accordingly.
3:34:59 PM
CO-CHAIR SPOHNHOLZ noted that the page numbers and line numbers
in the Summary of Changes are incorrect, but the content is
correct. She stated that a [corrected] summary of changes would
subsequently be provided to members.
3:35:40 PM
REPRESENTATIVE SNYDER removed her objection to adopting the
proposed CS, Version B, as the working document.
3:35:50 PM
REPRESENTATIVE MCCARTY objected. He asked when members would be
receiving the corrected summary of changes.
CO-CHAIR SPOHNHOLZ replied that members would receive the
corrected summary of changes by 10:00 a.m. [on 4/12/22]. She
reiterated that the content presented was correct, but the line
numbers and page numbers were off. She explained that adopting
the proposed CS will allow for getting Version B of HB 176 on
the public record so the committee can then start drafting
amendments to Version B.
REPRESENTATIVE MCCARTY removed his objection to adopting Version
B as the working document.
3:37:30 PM
CO-CHAIR SPOHNHOLZ announced that there being no further
objection, the proposed CS for HB 176, Version B, was adopted as
the working document.
3:38:09 PM
REPRESENTATIVE KAUFMAN stated that a concern he had with the
original version of the bill [on page 3, Section 2(b), lines 20-
26] was the intractability for the health care provider to shift
somebody to another provider or to cease.
3:39:01 PM
LORI WING-HEIER, Director, Division of Insurance, Alaska
Department of Commerce, Community, and Economic Development
(DCCED), responded that she's not sure whether that continuity
of care provision is included in Version B, which includes many
consumer protections.
CO-CHAIR SPOHNHOLZ interjected that the continuity of care
provision referenced by Representative Kaufman is included in
Version B, Sec. 2(b), on page 5, lines 10-16.
3:39:37 PM
REPRESENTATIVE SNYDER stated she wants to keep close attention
on the issue of primary care providers. She offered her
appreciation for decreasing the patient panel size which
increases the amount of time a provider can spend with an
individual patient, but expressed her concern that reducing the
provider's patient panel effectively means fewer primary care
providers per the population. She related that, according to
what she is reading, the patient panels with direct primary care
agreements are between one-half and one-third.
MS. WING-HEIER answered that before the committee's next meeting
she will pull the number of primary care facilities for
providers in Alaska. Regarding patient panels, she surmised
Representative Snyder is asking how many patients a doctor would
take under a direct primary care agreement. She said it would
be subject to what the doctor wanted, but she believes that, in
testimony, it was stated that the number is somewhere around
600.
REPRESENTATIVE SNYDER recalled that according to what she is
reading the typical target panel size is between 400 and 1,000.
She asked what the current panel size is under the present model
of care so it can be used for comparison moving forward.
MS. WING-HEIER replied that she would get back with an answer.
3:41:52 PM
REPRESENTATIVE MCCARTY recalled testimony [on 3/23/22, provided
by Dr. Lee Gross of Epiphany Health Direct Primary Care, North
Port, Florida], in which [Dr. Gross] stated that this is the
only model his clinic does and any patients needing more intense
treatment are referred outside his practice. He expressed his
concern that Alaska does not have as many physicians as do
Florida and other states. He asked whether Ms. Wing-Heier would
have any concerns if providers were to do direct primary care
agreements as well as being a preferred provider organization
(PPO) with insurance companies under which the provider uses a
CPT code for charges, but the provider is doing the exact same
services under the direct agreement.
MS. WING-HEIER requested clarification on whether Representative
McCarty is asking if the provider is basically double billing
because the provider would get the fee under the contract as
well as billing the insurance company.
REPRESENTATIVE MCCARTY clarified maybe not double dipping but
maybe choosing which is going to pay them the most.
MS. WING-HEIER responded that the doctor or provider will be
able to determine what services are going to be offered in the
[direct primary care agreement] contract. She posed a scenario
in which the provider charges $100 per month under the agreement
and someone wants an MRI or other test that is going to cost
more than the annual fee. Such tests, she said, should be
outside the direct care agreement because otherwise the facility
would go underwater. That will be watched by the division, she
continued, and providers will be given the benefit of a doubt
that they know how to price for the flus, sore throats, and
annual exams that will be covered in these agreements, and that
anything of real extensive cost or that takes a specialist will
be referred out and/or the insurance company charged.
CO-CHAIR SPOHNHOLZ added that from a consumer protection
standpoint the committee must ensure that there is not a
situation where folks are gaming the system. She suggested that
the committee may therefore need to explore this area further to
ensure that consumers don't get hurt along the way.
3:45:21 PM
REPRESENTATIVE MCCARTY stated he can see clients getting
services while providers spend money on billing trying to get
paid and perhaps must write off a tremendous amount because they
can't go after the patient. Through this [proposed] format, he
continued, providers would get paid lots of money upfront and
would be responsible for following the contract's format. He
said he is concerned about physicians who make money through
referrals to a lab they own or a procedure they do and that they
may make unnecessary referrals as a "bait and switch operation."
MS. WING-HEIER replied that those are the things any state would
have to watch for. However, she noted, attendees at today's
Lunch and Learn by Senator Wilson will hear providers talk about
how hard it is to recruit and retain physicians and staff
overall. Yet [during the bill's previous hearing], speakers
said that doctors or providers prefer these types of agreements
because they don't become so burned out and they are not trying
to chase making money off referrals to labs or other additional
tests. Part of [the division's] issue with the cost for health
care under the fee-for-service is that the more [a physician]
sends [a patient] out, the more the physician can make. It is
an antiquated model without a doubt, she said, and this is a new
model that has not been tried in Alaska, but it has some merit.
REPRESENTATIVE MCCARTY stated he is not labeling health care
people as scoundrels, but he wants to make sure there are
provisions in the bill which will make it easy to spot
scoundrels if they do show up.
MS. WING-HEIER expressed her agreement and advised that this is
going to be trial and error. She said the committee has put in
for an annual report to come back to the division and perhaps
there will be facts or data that can be tracked to see if there
is a concern with the way these are being utilized.
CO-CHAIR SPOHNHOLZ added that the annual report was put in by
the committee partly to be able to get some recommendations and
prompt feedback from the division. She said it will provide
clarity on what is happening, whether retooling is needed to
protect Alaskans, and that health care "spend" is not actually
growing rather than improving the experience of folks on both
ends of the health care relationship.
3:49:37 PM
CO-CHAIR FIELDS stated he wants to ensure that people do not
migrate from a health insurance plan to a direct primary care
plan because it is cheaper. He asked whether this has happened
in states that have legalized or encouraged direct primary care.
MS. WING-HEIER responded that she has neither heard nor read
anything about that. But, she advised, [the division] will
watch for that during the first few years as these roll out
after the bill's enactment.
CO-CHAIR FIELDS clarified that he supports greater primary care
access but wants to ensure [the bill] would not unintentionally
encourage a migration away from health insurance.
3:51:08 PM
REPRESENTATIVE KAUFMAN drew attention to page 5, lines 10-18,
and asked whether there might be other language that wouldn't be
so prohibitive from someone entering into the agreement as this
is presently phrased.
3:51:52 PM
HEATHER CARPENTER, Health Care Policy Advisor, Department of
Health and Social Services (DHSS), answered that she would look
at this. She noted that when it comes to Medicaid in this bill
it is a little bit more complicated. The stance of the
department, she advised, is that it would be cleaner if Medicaid
was exempted from direct health care agreements because of
concern over audit trails as well as Medicaid is a care of last
resort and DHSS must track down any third-party liability before
Medicaid can be a payer. In terms of looking at agreements it
gets really complicated fast when there are direct health care
agreements and consideration for a Medicaid population.
REPRESENTATIVE KAUFMAN said he would like to have a conversation
off-line about this. He said his concern is that the committee
comes up with something that works, and that nothing is built
into it that is an impediment on either side of the arrangement.
3:53:09 PM
CO-CHAIR SPOHNHOLZ announced that HB 176 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 174 Sectional Analysis v. W 2.28.2022.pdf |
HL&C 4/11/2022 3:15:00 PM |
SB 174 |
| SB 174 Support Letters Received as of 2.27.22.pdf |
HL&C 4/11/2022 3:15:00 PM SL&C 2/28/2022 1:30:00 PM |
SB 174 |
| SB 174 Sponsor Statement v. G 2.10.2022.pdf |
HL&C 4/11/2022 3:15:00 PM SEDC 2/16/2022 9:00:00 AM SEDC 2/23/2022 9:00:00 AM |
SB 174 |
| CS HB 176 (L&C) v. B.pdf |
HL&C 4/11/2022 3:15:00 PM |
HB 176 |
| CS HB 176 (L&C) v. B Summary of Changes.pdf |
HL&C 4/11/2022 3:15:00 PM |
HB 176 |
| SB 174 Letter 2.18.22.pdf |
HL&C 4/11/2022 3:15:00 PM |
SB 174 |
| SB 174 Fiscal Note_DOLWD.pdf |
HL&C 4/11/2022 3:15:00 PM |
SB 174 |
| SB 174 Fiscal Note_DEED.pdf |
HL&C 4/11/2022 3:15:00 PM |
SB 174 |
| HB 276 ver. I 4.5.22.pdf |
HL&C 4/11/2022 3:15:00 PM |
HB 276 |
| HB 276 Sectional Analysis ver. I 4.11.22.pdf |
HL&C 4/11/2022 3:15:00 PM |
HB 276 |
| CS HB 176 (L&C) v. B Summary of Changes_corrected 4.12.22.pdf |
HL&C 4/11/2022 3:15:00 PM |
HB 176 |