Legislature(2017 - 2018)CAPITOL 106
03/08/2018 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB358 | |
| HB351 | |
| HB193 | |
| HB336 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 358 | TELECONFERENCED | |
| += | HB 351 | TELECONFERENCED | |
| *+ | HB 193 | TELECONFERENCED | |
| += | HB 336 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 193-HEALTH CARE; BALANCE BILLING
3:56:15 PM
REPRESENTATIVE TARR announced that the next order of business
would be HOUSE BILL NO. 193, "An Act relating to insurance trade
practices and frauds; and relating to emergency services and
balance billing."
3:56:39 PM
REPRESENTATIVE JASON GRENN, Alaska State Legislature,
paraphrased from the Sponsor Statement [included in members'
packets], which read:
House Bill 193 is focused on protecting Alaskans in
emergency situations from being surprised with
unexpected medical bills. The most common occurrence
for balance billing is during emergency situations
where patients are left without the option or
wherewithal to ensure they are treated by an in-
network provider. As a result, they find themselves on
the hook for hefty medical bills, despite having
proper health insurance. HB 193 would help Alaskans
already dealing with the turmoil of a medical
emergency by removing them from the billing side of
the equation. When a patient is already in a dire
situation, they should not be punished for the
inability of an in-network provider to respond to
their crisis.
HB 193 bans the practice of medical providers from
balance billing in emergency situations and requires
insurance providers to hold harmless their clients.
This covers emergency situations inside and outside of
hospitals. If a patient was transported to a hospital,
or an emergency arose during a medical procedure
requiring an out-of-network provider, this legislation
mandates the insurance and medical providers to
develop a fair and equitable payment agreement.
Instead of being left to handle the labyrinth of
medical billing on their own, the patient will be held
harmless in these situations.
Medical costs are a major concern in Alaska. HB 193 is
a part of a national movement to protect consumers
from unexpected costs in an already difficult
situation. Twenty-one states have a ban of some kind
on balance billing and more states are looking are
into the issue. Unexpected and excessive medical bills
from out-of-network providers contribute to the
growing problem of consumer medical debt, which
continues to be a significant cause of personal
bankruptcy. The goal of this legislation is to hold a
patient harmless while the medical and insurance
providers come to an agreement for the services
rendered.
3:58:50 PM
REPRESENTATIVE EDGMON moved to adopt the proposed committee
substitute (CS) for HB 193, labeled 30-LS0466\T, Wallace,
3/6/18, as the working draft.
3:59:01 PM
REPRESENTATIVE TARR objected for discussion.
3:59:08 PM
RYAN JOHNSTON, Staff, Representative Jason Grenn, Alaska State
Legislature, paraphrased from the Sectional Analysis, which
read:
Section 1: Establishes a "Hold Harmless" standard for
insurance providers in the situation where a covered
person receives medical care from an out-of-network
medical provider in an emergency. An insurance
provider will hold a covered person harmless to ensure
that the covered person only pay what would have been
paid if the medical provider was an in-network
provider.
Outlines the standards to establish the situations
where a medical provider cannot balance bill a covered
person. An insurance provider shall pay a non-network
health care provider if the health care provider
renders to a covered person;
emergency services or treats an emergency medical
condition
services at an in-network facility
services for which a referral was made by an in-
network health care provider to an out of-network
health care provider without the explicit written
consent of the covered person.
The covered person is still required to pay the in-
network rates for the deductible, coinsurance and
copayment. The amount paid by the covered person is
required to be counted towards the covered persons
deductible.
The final payment determined for the medical provider
will subtract any amount paid by the covered person.
The insurance provider is to pay the greater of three
possible amounts;
the median negotiated contract rate generated
using the in-network health care providers for the
service provided;
That is equal to the 80th percentile of charges
for the services calculated using a method that
establishes a statistically credible profile that
reflects the general cost differences between the
geographical area where the service was preformed and
the other geographical areas when performed by a
health care provider in the same or similar specialty;
or
That would be paid under Medicare for the service
provided.
Medical providers are required to send all bills to
the insurance provider, except for the deductible,
coinsurance and copayment.
Contains a clause that if a covered person knowingly
elects to use an out-of-network medical provider then
they can be balanced billed for the services.
4:01:41 PM
REPRESENTATIVE KITO asked for clarification regarding the
determination of the calculations.
MR. JOHNSTON explained that the greater of three possible
amounts model was taken from an [PP]ACA [Patient Protection and
Affordable Care Act] regulation that was adopted at the time of
its federal adoption. He stated that the 80th percentile, the
usual and customary rate, had been used as the standard by the
State of Alaska, a precedent had already been set for its use.
4:02:41 PM
MR. JOHNSTON continued to paraphrase from the Sectional
Analysis, which read:
Section 2: Health care insurance plans obtained under
AS 39.30.090 or provided under AS 39.30.091 will be
subject to the requirements of secs. 21.36.512 and
21.36.513.
Section 3: Bans the practice of "Balance Billing" by a
medical provider under the criteria of section 1 of
the bill. Stipulates that the medical provider can
still bill for the deductible, coinsurance and
copayment.
States that a medical provider will be paid according
to section 1 of the bill.
Section 4: Establishes the punishment for medical
providers under the Unfair Trade Practices and
Consumer Protection.
4:03:36 PM
REPRESENTATIVE TARR mused that Version T of the proposed bill
did not have an effective date.
REPRESENTATIVE KITO asked whether the consumer was responsible
for the balance billing.
MR. JOHNSTON replied that the patient would not be responsible
for balance billing, and that the patient would only be required
to pay the co-insurance co-payment and deductible at the in-
network rates. The insurance provider, after providing the
three possible amounts, would choose the greater, which would be
the reimbursement amount for the medical provider.
REPRESENTATIVE SULLIVAN-LEONARD offered her belief that the
insurance through the State of Alaska already covered patients
for emergency room treatment. She asked if the care for many
patients was not being covered in the emergency room.
4:05:10 PM
REPRESENTATIVE GRENN explained that initially the proposed
legislation had been suggested by a constituent who had this
experience with another insurance provider in Alaska. He said
that insurance for State of Alaska employees was still under
investigation, although statements from the Department of
Administration indicated that the state did not balance bill in
emergency situations as those focused on by the proposed bill.
4:06:01 PM
REPRESENTATIVE SULLIVAN-LEONARD asked for additional information
to those statistics for non-coverage of emergency situations by
insurance companies in Alaska as well as other states.
4:06:27 PM
MR. JOHNSTON said that he would provide that information.
4:06:36 PM
REPRESENTATIVE JOHNSTON asked, as there were insurance companies
which did cover balance billing, whether this would "level the
field for everybody."
4:07:10 PM
MR. JOHNSTON replied that the proposed bill only covered private
insurers and would "not catch all the plans like self-funded
plans." He stated that this would be the standard for out of
network plans with billings for emergency situations.
REPRESENTATIVE JOHNSTON suggested to expand the breadth of the
proposed bill. She mused that, as 21 states were currently
offering this, it would be good to have those benchmarks, how
long they had been offering this program, and if there had been
any cause and effect. She asked about the proposed 80th
percentile, which she deemed was "very different than the
current 80th percentile, cause you're using a geographic
region." She offered her belief that this was a business
geographic region, and asked how this would change if there were
certain fees. She shared that past problems with this 80th
percentile had arisen as, although the policy and the purpose
was very good, it had caused a "hockey stick" in a
representative chart of medical costs. She suggested to take
some emergency fees and see what would happen.
4:09:49 PM
MR. JOHNSTON replied that he had been reviewing various
databases and that his experimentation for the geographical
area, using FAIR Health, had revealed a similar rate. He
acknowledged that "the geographical area has been an interesting
part of this conversation."
4:10:44 PM
REPRESENTATIVE JOHNSTON acknowledged that the database he had
used, FAIR Health, was an excellent source, except that it was
voluntary. She stated that an advantage for only using the
Municipality of Anchorage was that a local ordinance allowed
someone to ask a medical facility about a procedure and then
"get the rack rate."
4:11:12 PM
REPRESENTATIVE CLAMAN asked about the lack of a definition for
balance billing in the proposed bill, as it was not necessarily
a term that was easily understood.
MR. JOHNSTON offered his belief that, as the proposed bill
focused on the emergency situations, balance billing was what
was stipulated in the bill, and the bill itself was "kind of the
definition." He acknowledged that balance billing was a much
broader term.
4:12:16 PM
MEGAN WALLACE, Attorney, Legislative Legal Counsel, Legislative
Legal Services, reiterated that the bill described the instance
of balance billing, and she opined:
because the explanation in Section 3 of the bill that
talks, that uses the term balance bill, specifically
states that the balance bill cannot result in charges
that are more than those out of pocket expenses that
the covered person would incur in an in-network
facility or being treated by an in-network health care
provider. That the bill is sufficiently clear to
articulate what the balance bill would be for.
4:13:15 PM
REPRESENTATIVE TARR mused that, as some insurers covered
Providence [Alaska Medical Center] and some covered Alaska
Regional [Hospital], a person would be taken to the closest
hospital in an emergency. The proposed bill would eliminate the
possibility that a person would pay extra charges even though
they had not been taken to the hospital covered by their
insurance.
4:14:17 PM
REPRESENTATIVE GRENN expressed his agreement with her
explanation for the intent of the proposed bill, pointing out
that this was only for emergency situations as it was not always
possible to indicate which hospital.
4:14:55 PM
REPRESENTATIVE TARR removed her objection. There being no
further objection, Version T was adopted.
4:16:34 PM
NATHAN PAIMANN, MD, Bartlett Regional Hospital, in response to
Representative Tarr, explained that some physicians staffing at
hospitals were independent, and had to independently contract
with the network to be in-network providers. Although the
hospital could be in-network, the providers may not be an in-
network provider. He stated that the proposed bill "would
change this so you had no surprise insurance gap billing,
outside of what your usual and customary charges would be."
4:18:17 PM
REPRESENTATIVE KITO shared some anecdotes of hospital situations
for physicians not in-network which resulted in surprise
billings for the patients.
4:19:04 PM
MS. LATHAM, in response to Representative Sullivan-Leonard,
stated that there was an 80th percentile regulation already in
effect, which had been adopted to include the treatment of
emergency services and services at an in-network hospital or
ambulatory surgical center, as explained on page 2, lines 4 - 6
of the proposed bill. She added that the proposed bill "does
broaden the scope of coverage services to services for which a
referral was made by an in-network health care provider to the
non-network health care providers without written consent of the
covered person." She declared that this did strengthen
provisions for consumers. She directed attention to page 4,
line 27, which created a violation of the [Alaska] Unfair Trade
Practices and Consumer Protection Act. She expressed concern
that, as the Division of Insurance had never regulated state
health plans, Section 2 of the proposed bill [page 4, line 5]
moved AS 39 under AS 21, which she deemed to be "unusual."
4:21:23 PM
REPRESENTATIVE SULLIVAN-LEONARD expressed that she had concerns
with the application and possible outcome because of Section 4
[page 4, lines 27 - 29].
MS. LATHAM replied that, as this was enforced by the Department
of Law, it offered "very, very strong consumer protections."
4:22:01 PM
REPRESENTATIVE SULLIVAN-LEONARD asked if the bill sponsor could
review that section.
REPRESENTATIVE JOHNSTON asked if the concern for Section 2 [page
4, lines 6 - 11] was because it was an additional
responsibility, and whether it was for the possibility of
"opening up a door that might go beyond this."
MS. LATHAM said that this was similar to House Bill 25, a
contraceptive coverage bill, as this proposed bill also just
included the state self-insured, non-federal health plans, which
had never been under the jurisdiction of AS 21 and was
unprecedented.
4:23:05 PM
REPRESENTATIVE KITO asked if she was referencing the state
employee plans.
MS. LATHAM said, "that's exactly what I'm referencing."
4:23:36 PM