04/15/2015 01:30 PM Senate FINANCE

HOUSE BILL NO. 178                                                                                                            
                                                                                                                                
     "An  Act relating  to  workers'  compensation fees  for                                                                    
     medical  treatment  and   services;  providing  for  an                                                                    
     effective date  by amending the effective  date of sec.                                                                    
     5, ch.  63, SLA  2014; and  providing for  an effective                                                                    
     date."                                                                                                                     
                                                                                                                                
2:49:28 PM                                                                                                                    
                                                                                                                                
CONRAD JACKSON, STAFF, REPRESENTATIVE KURT OLSON, offered a                                                                     
sponsor statement of the legislation:                                                                                           
                                                                                                                                
     For many  years Alaska  has faced the  highest workers'                                                                    
     compensation  rates in  the nation.  During the  second                                                                    
     session  of the  28th Legislature,  House Bill  316 was                                                                    
     passed. The  bill was a  more sweeping solution  to the                                                                    
     challenge   of  the   previous  medical   services  fee                                                                    
     schedule than we have experienced in many years.                                                                           
                                                                                                                                
     HB  316 tasked  the Medical  Services Review  Committee                                                                    
     (MSRC)  with   setting  a   conversion  factor   and  a                                                                    
     geographic differential to be  used in conjunction with                                                                    
     a basic  fee schedule  based on  a relative  value unit                                                                    
     methodology. Once  set, the  conversion factor  will be                                                                    
     approved  by  the  Commissioner of  the  Department  of                                                                    
     Labor prior  to adoption by regulation  by the Workers'                                                                    
     Compensation Board. All this  was to be accomplished by                                                                    
     July 1, 2015.                                                                                                              
                                                                                                                                
     Since passage of HB 316,  the MSRC has been reactivated                                                                    
     and  met numerous  times.  They  have nearly  completed                                                                    
     their  part  in  establishing the  conversion  factors.                                                                    
     More work remains  to be done to ensure  the reform can                                                                    
     take effect.                                                                                                               
                                                                                                                                
     House Bill 178  grants a 5 month  extension to complete                                                                    
     this important step in lowering  workers' comp costs in                                                                    
     both  the  public  and  private  sector.  Without  this                                                                    
     extension, time  may run  out before  the comprehensive                                                                    
     reforms instituted last year can be implemented.                                                                           
                                                                                                                                
Mr. Jackson noted the zero  fiscal note and stated that once                                                                    
the  new  fee schedules  were  in  place  there would  be  a                                                                    
realized reduction in worker's compensation rates.                                                                              
                                                                                                                                
2:52:15 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:52:44 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Senator Dunleavy asked what  impact the five-month extension                                                                    
would have on the fee rate changes.                                                                                             
                                                                                                                                
Mr. Jackson responded  that there was no  impact expected on                                                                    
the fee schedule.                                                                                                               
                                                                                                                                
2:53:28 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
2:54:09 PM                                                                                                                    
                                                                                                                                
MIKE  MONAGLE, DIRECTOR,  DIVISION OF  WORKERS COMPENSATION,                                                                    
DEPARTMENT OF  LABOR AND WORKFORCE DEVELOPMENT,  stated that                                                                    
the committee was  formed in 2005, but  had remained dormant                                                                    
since 2009.  He said that  when HB 316 passed  the committee                                                                    
experience a  rebirth, new committee members  were appointed                                                                    
and   medical  data   was  gathered   through  the   state's                                                                    
procurement  process. He  shared  that  an upcoming  meeting                                                                    
would establish  the adoption of a  final conversion factor,                                                                    
at   which    time   the   committee   would    submit   its                                                                    
recommendations  to the  commissioner. He  relayed that  the                                                                    
commissioner  would  review  the  recommendations  and  take                                                                    
public comment,  and then  all of  the information  would be                                                                    
forwarded to  the board. He  explained that the  board would                                                                    
then  propose regulations  and return  after public  comment                                                                    
for  final adoption.  He asserted  that the  extension would                                                                    
allow  the  commissioner, and  the  board,  to complete  the                                                                    
regulatory work by the end of summer 2015.                                                                                      
                                                                                                                                
2:56:28 PM                                                                                                                    
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
HB  178  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair MacKinnon discussed housekeeping.