Legislature(2011 - 2012)BARNES 124
02/16/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB264 | |
| Presentation: Yk Village Cluster Consolidated Services Model Plan | |
| HB219 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 264 | TELECONFERENCED | |
| *+ | HB 219 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HB 219-FIRE AND EMERGENCY MEDICAL SERVICES
8:59:41 AM
CHAIR MUNOZ announced that the final order of business would be
HOUSE BILL NO. 219, "An Act exempting certain emergency medical
and fire department services from regulation as insurance."
8:59:47 AM
REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, speaking as
the sponsor of HB 219, paraphrased from the following written
sponsor statement:
HB 219 allows local fire and emergency medical
agencies to solicit funding as a form of prepayment
for services. This type of program has been successful
in allowing such organizations to raise needed
operating funds while limiting financial risk to those
that may need the agency's services.
In a typical scenario, an individual or family pays a
set fee to the local emergency medical service on an
annual basis. The agency then will respond and
transport the individual or family member without
additional charge to the individual.
Under current statute, it is the opinion of the
Division of Insurance that this type of activity is
deemed insurance and is regulated by that division. HB
219 will clarify that this type of program is not
insurance and is not regulated by the division.
9:02:05 AM
REPRESENTATIVE GARDNER requested the sponsor explain the
reference in the sponsor statement to "limiting financial risk
to those that may need the agency's services."
9:02:26 AM
MICHAEL PASCHALL, Staff, Representative Eric Feige, Alaska State
Legislature, began by clarifying that medical and fire services
are interchangeable in the scenarios presented. Basically, an
individual who pays a fee upfront for fire and emergency medical
services and who requests those services may see a bill for the
services, but won't have to pay it. To be clear, he pointed out
that the individual's insurance company may be billed, but the
individual wouldn't be held responsible for any of the
additional charges beyond the fee.
REPRESENTATIVE FEIGE highlighted that it takes funds in order to
have a fire department, staff, and equipment ready and warm.
Therefore, there has to be a mechanism to raise the funds ahead
of time to pay its bills, training costs, and insurance. He
related that even with an upfront fee, the service is still
dependent upon volunteer staff. The benefit of the upfront fee
for the community is that the insurance rates for the community
can be lowered if the fire department can reach a certain level
of proficiency, equipment, and staff. Therefore, there is a
financial benefit to the community to have a fire department as
well as an emotional benefit in terms of potential fires in the
community.
9:06:09 AM
REPRESENTATIVE GARDNER acknowledged that the current sources of
funding for fire and emergency medical services may be
inadequate to meet the needs or maintain the level of response
capability desired. She then inquired as to the proportions of
the funding for fire and emergency medical agencies, which she
assumed included some state funds, federal funds, grants,
donations, and insurance payments.
MR. PASCHALL answered that it varies per department. Therefore,
there are departments that are funded through tax levies and
departments that are funded totally from voluntary funds [and in
between]. In the case of the fire department with which he
works, over the last year about 20 percent of its funding was
generated from donations, about 40 percent of its funding was
from the community corporation, and the remaining 40 percent of
its funding was from the department's contract with the Alaska
Division of Forestry to provide additional assistance for wild
land fire protection. The contract funds are the single largest
source of revenue because they can earn enough money in one year
that it can be spread out over years when it doesn't earn money.
9:08:19 AM
REPRESENTATIVE GARDNER surmised that although the fire
department has made a contract with the Alaska Division of
Forestry and has an obligation to respond, the department still
has to rely on volunteers. She asked if that places the
department in a difficult position.
MR. PASCHALL noted that his fire department has additional
equipment available specifically for the contract services in
order to avoid depleting the response capabilities to the
community as a whole. Furthermore, volunteers are hired to
standby for the Alaska Division of Forestry contract. Since any
fire during high fire season is a risk to wild land fires, the
division allows the fire department to respond to a structure
fire because they respond as well. The only time the contract
services would take away from the local resources is when
equipment is moved to the location of a fire.
REPRESENTATIVE FEIGE clarified that the contract with the Alaska
Division of Forestry isn't very specific as it's basically a
contingency situation in which the division agrees to pay so
many dollars per hour per day when it uses the department to
fight a state fire. He emphasized that it's not guaranteed
ahead of time, and thus that element of funding isn't steady.
9:10:39 AM
REPRESENTATIVE AUSTERMAN inquired as to how many local
organizations currently have a fee for service arrangement [such
that it's a fundraising method].
MR. PASCHALL related that he knew of two fire departments that
operate under the subscription arrangement and one ambulance
service that's part of a fire department that waives the fee if
they provide services. The City of Delta Junction had an
ordinance to do this, but discontinued it because the city's
attorney and the Division of Insurance told them it would be
regulated as insurance.
REPRESENTATIVE AUSTERMAN related the assumption that additional
cost would be the only reason to not offer [the subscription
arrangement].
MR. PASCHALL agreed.
REPRESENTATIVE FEIGE interjected that essentially it's a
hindrance for communities that aren't a municipality and don't
have the ability to raise funds through taxation on their own.
REPRESENTATIVE AUSTERMAN said he understands the principle
behind the [subscription arrangement].
9:13:45 AM
CHAIR MUNOZ directed attention to the committee packet in which
documents relate that there may be only 20 percent participation
in the subscription fee arrangement. She inquired as to what
happens to those who don't subscribe when they have a fire and
there is a reluctance to respond. She also inquired as to
whether the funds from 20 percent of the population would cover
the true costs of the service being provided.
REPRESENTATIVE FEIGE reminded the committee that HB 219 doesn't
mandate anything; rather it just allows such a subscription fee
to be charged. Each community will be different in terms of the
basic limitations on cost. He informed the committee that it
costs about $6,000 per year to run his local fire department,
which he characterized "as very bare bones." He noted that in
the past his fire department has received capital grants from
the legislature in the amount of about $250,000 and those funds
have been used to purchase equipment. He further noted that his
fire department is heated mainly with waste oil heaters, which
doesn't cost anything. He stated that the cost will be
dependent upon how much each community will be willing to pay
and how many in the community pay. Generally, about 35 folks in
his community sign up [and pay] for service, which when combined
with other funding sources covers his fire department's basic
cost of providing the service.
9:16:28 AM
CHAIR MUNOZ then asked whether those who don't pay the
subscription fee receive service.
REPRESENTATIVE FEIGE acknowledged that there is the desire to
take care of as many people as possible. However, the reality
is that money is necessary to pay the insurance and the money
has to come from somewhere. In his community, the policy is
that the fire department will respond to every wild land fire,
but will only respond to structure fires of subscribers. From a
legal perspective when the fire department responds to a
structure fire of a nonsubscriber and doesn't respond to a
subsequent nonsubscriber, the fire department is open to a
lawsuit. Therefore, the fire department has to commit to those
who subscribe to the service and no one else.
9:18:05 AM
REPRESENTATIVE CISSNA related her understanding that doing due
diligence in terms of safety would hold water in court.
9:20:04 AM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community & Economic Development, noted that the
committee packet should include a letter from the Division of
Insurance that relates the division's belief, after legal
research, that these subscription programs would fall under the
definition of insurance, as statute is currently written. She
clarified that she's really speaking to the fire department
portion of the legislation, and opined that this is strictly a
policy call of the legislature. She noted that other things are
exempted from the broad definition of insurance. To offer
insurance [a fire department] can either become an insurance
company, which is an expensive and impractical route, or find an
insurance company that's willing to provide a backstop. The
latter has been utilized in the state with medical transports.
She explained that the membership group still has to be licensed
to sell the product, which is a fairly inexpensive process.
Although the aforementioned isn't difficult, there may be some
difficulty finding the backstop. As HB 219 proposes, the
subscription program can be exempted from the title requiring
insurance. She then expressed concern with subsection (f)
located on page 1, line 6 regarding "ambulance and emergency
services". The division's title, AS 21.87.010, already provides
almost the identical language and considers the transportation
for medical services to be part of health insurance, and thus is
covered in the definition of health insurance. She pointed out
that AS 21.87.010(5) says: "(5) ambulance or emergency medical
services provided by a municipality, nonprofit medical service
corporation, or nonprofit association if the person providing
the services is certified under AS 18.08.082." The reference to
AS 18.08.082 is part of the health and social services' statutes
that require the individual providing the emergency medical
services to obtain a certificate that is granted upon
[completion] of training. The language in subsection (f) of
Section 1 of HB 219 is very open and doesn't require any
certification, and therefore would allow any nonprofit or
municipality to start an ambulance service. The regulations
under health and social services already cover this type of
circumstance. Ms. Hall informed the committee that she has been
involved in the medical transport area in the fire department
service charges. There is one membership program that has an
insurance backdrop and another that would qualify as a nonprofit
and have been exempted under the aforementioned statute.
Therefore, she opined that the ability to provide these services
as a membership program is available for the nonprofits and thus
she expressed her preference to not enact subsection (f) of HB
219 because it seems to be covered in the division's title and
has worked. The actual exclusion of air ambulance services,
which HB 219 proposes, was proposed about five years ago. At
the time she said she supported the legislation while the House
Health and Social Services Standing Committee didn't want those
services exempted from the Division of Insurance's title. In
closing, Ms. Hall urged the committee to consider that HB 219
would allow services that don't meet any criteria.
9:27:44 AM
REPRESENTATIVE AUSTERMAN asked if HB 219 is broad enough to
include the air ambulance service for which [one can subscribe].
MR. HALL answered that the legislation is broad enough that it
would take away any of the Division of Insurance's oversight of
that type of an entity.
REPRESENTATIVE AUSTERMAN said that is of concern.
9:28:44 AM
REPRESENTATIVE CISSNA asked whether the sponsor would be willing
to specify a size of community in the legislation.
9:30:47 AM
REPRESENTATIVE GARDNER surmised then that the division doesn't
have much concern with the subscription service, but does have
concern about the ambulance carrier portion of the legislation.
MS. HALL replied yes.
9:31:18 AM
REPRESENTATIVE GARDNER asked whether the sponsor would oppose
language that would allow a fire department to require
subscription service for communities where property owners are
already paying property taxes to help support the fire
department. She indicated the need to make sure the
aforementioned isn't possible.
9:32:10 AM
SEBASTIAN SAARLOOS, Member, City Council, City of Delta
Junction, related support for HB 219. He also related that when
the City of Delta Junction had a subscription service the City
of Delta Junction fire department and the rural Deltana
volunteer fire department would respond to all calls, no matter
whether it was the property of a subscriber or nonsubscriber.
Since the Division of Insurance deemed the subscription plan
would be regulated as insurance, it was ended and the donations
from the community have decreased significantly.
9:33:37 AM
CHAIR MUNOZ reviewed the points raised today for the sponsor to
consider.
9:34:20 AM
MR. PASCHALL returned to the Division of Insurance's concern
regarding certification of ambulance services. He related that
after pointing out that statute does not require an ambulance
service to be certified in the state, Legislative Legal Services
agreed that there is only a provision for being certified in
order to collect insurance. He also noted that in Alaska there
is no requirement to have an emergency medical technician (EMT)
in the ambulance.
9:35:29 AM
REPRESENTATIVE GARDNER surmised then that an ambulance service
without certification can't obtain insurance for the transport
from that service.
MR. PASCHALL replied yes.
9:36:09 AM
MR. PASCHALL then returned to the type of organization and
informed the committee that the air service businesses are
typically for profit. The sponsor doesn't intend for HB 219 to
apply to for-profit businesses and doesn't believe that it's
written to apply to a for-profit business. The goal was to
primarily target smaller communities. In response to
Representative Cissna's comment regarding the size of the
community, such a provision could be inserted. With regard to
Representative Gardner's concerns about fire departments that
obtain funding from property taxes also charging a subscription
fee, Mr. Paschall related that currently almost all EMS services
charge, even if they receive tax funding. Fire departments are
also going to that model, particularly when there are multiple
calls [to the same location] for fire alarms. He recalled that
the City of Fairbanks charges for [fire and EMS services] called
to a motor vehicle accident.
9:37:54 AM
CHAIR MUNOZ announced that the committee will continue to work
on HB 219, and thus HB 219 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 219 Sponsor Statement.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |
| HB219 Div of Insurance.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |
| HB219 Tri Valley Support News miner.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |
| HB219-DCCED-INS-02-10-12.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |