03/01/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

           HB 219-FIRE AND EMERGENCY MEDICAL SERVICES                                                                       
                                                                                                                                
8:06:28 AM                                                                                                                    
                                                                                                                                
CHAIR MUNOZ announced  that the first order of  business would be                                                               
HOUSE BILL NO.  219, "An Act exempting  certain emergency medical                                                               
and fire department services from regulation as insurance."                                                                     
                                                                                                                                
8:06:47 AM                                                                                                                    
                                                                                                                                
MICHAEL PASCHALL, Staff, Representative  Eric Feige, Alaska State                                                               
Legislature, speaking  on behalf  of the  sponsor, Representative                                                               
Feige,  first  disclosed that  he  is  an  assistant chief  of  a                                                               
volunteer fire department and Representative  Feige is a chief of                                                               
a volunteer  fire department  that could be  impacted by  HB 219.                                                               
Mr. Paschall opined that the last  hearing on HB 219 became a bit                                                               
sidetracked  pertaining to  certification  under Alaska  statute.                                                               
The sponsor's opinion is that  statute doesn't specifically state                                                               
that  certification is  required.   He noted  that the  committee                                                               
packet  should include  a legal  opinion  from Legislative  Legal                                                               
Services dated  February 29, 2012,  which relates  the conclusion                                                               
that  the language  is ambiguous  regarding  certification.   Mr.                                                               
Paschall pointed out  that HB 219 isn't  about certification, but                                                               
rather  exempts nonprofit  municipal  organizations that  provide                                                               
fire, ambulance,  and emergency  medical services (EMS)  from the                                                               
requirements of Title 21 of statute.                                                                                            
                                                                                                                                
MR. PASCHALL  informed the committee  that although  the Division                                                               
of Insurance provides exemptions similar  to those proposed in HB
, those  existing exemptions don't reach  fire, ambulance, and                                                               
EMS providers that aren't  a municipality, nonprofit association,                                                               
or nonprofit  medical services corporation.   He opined  that the                                                               
provisions  in  AS  21.87,  which were  referenced  at  the  last                                                               
hearing, were  designed to apply to  medical service corporations                                                               
that  provide health  care  across  a broad  range  such as  Blue                                                               
Cross.  He further opined that  the intent of that statute wasn't                                                               
to  deal with  small municipal  or nonprofit  ambulance services.                                                               
He noted  that creating a nonprofit  medical services corporation                                                               
is much  more difficult  than simply creating  a nonprofit.   For                                                               
example, a medical  services corporation has to  have available a                                                               
minimum of $100,000  in assets to cover six  months of operations                                                               
in order to  be certified by the Division of  Insurance.  Most of                                                               
the organizations  HB 219 seeks  to help don't have  the $100,000                                                               
and  are  struggling  to get  by.    The  goal  is to  provide  a                                                               
mechanism  for  an  organization,   large  or  small,  to  entice                                                               
donations and  financial support by  allowing them to  waive fees                                                               
to those  who provide an  agreed upon level of  financial support                                                               
in  advance  of  services.    He  emphasized  that  there  is  no                                                               
guarantee the  organization will provide those  services, just as                                                               
there  is no  guarantee today  that the  same organization  would                                                               
provide  those  services.    This  legislation  would  allow  the                                                               
organization to waive  fees in order to literally  keep the doors                                                               
open by paying  day-to-day expenses.  With regard  to the concern                                                               
regarding  these  organizations  receiving  funds  from  multiple                                                               
sources, Mr.  Paschall said that's  already the case for  many of                                                               
the  ambulance  services  that  are  municipally  run  or  funded                                                               
through tax  revenue.  For  instance, when the City  of Fairbanks                                                               
fire department, which is supported  by city taxes, responds to a                                                               
wreck within  the city, the owner  of the vehicle will  be billed                                                               
for the call.  Therefore,  the scenario of concern already occurs                                                               
and won't be changed by HB 219.                                                                                                 
                                                                                                                                
8:12:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  asked  if   it's  possible  for  a  fire                                                               
department  that's  supported  by  property taxes  to  also  have                                                               
subscriptions.                                                                                                                  
                                                                                                                                
MR. PASCHALL  said that  they would have  to review  a department                                                               
that's run by a municipality  and one that's contracted through a                                                               
service  area.    For  example,  he presumed  that  the  City  of                                                               
Fairbanks could enact a program  for subscriptions such that when                                                               
they  run  a  call  for  which they  would  normally  bill,  they                                                               
wouldn't bill  for [when there is  a subscription].  In  the case                                                               
of  most  service area  departments,  they  are nonprofits  under                                                               
contract  with the  municipality to  provide services.   Although                                                               
the revenue  generates from property taxes,  it's not necessarily                                                               
paid to them  in the form of  a percentage of a  property tax but                                                               
rather is based on a budget  that they submitted.  He opined that                                                               
both fire and EMS would be able to do the aforementioned.                                                                       
                                                                                                                                
REPRESENTATIVE GARDNER expressed  concern with the aforementioned                                                               
because  a  property  taxpayer is  already  paying  for  service,                                                               
albeit that it might be inadequate.                                                                                             
                                                                                                                                
MR. PASCHALL acknowledged  the concern, but pointed  out that the                                                               
legislation  doesn't   change  the  types  of   funding  [certain                                                               
emergency medical and fire department  services] can obtain.  The                                                               
legislation merely allows  them to accept the  funding upfront to                                                               
defer the  fee, as  a way  to place more  operating funds  in the                                                               
department's budget in advance.   "From a practical standpoint, I                                                               
think  what  you're  looking  at  there is  what  works  in  each                                                               
individual community," he opined.                                                                                               
                                                                                                                                
8:14:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  asked if  the emergency medical  and fire                                                               
departments keep records  for those who pay  for the subscription                                                               
service  so that  people only  receive service  up to  the amount                                                               
paid.                                                                                                                           
                                                                                                                                
MR. PASCHALL  responded that he  isn't aware of  any subscription                                                               
service  that  is  based  on  the  amount  of  the  subscription.                                                               
However, he  suggested that the amount  of funding [subscription]                                                               
could  be  based   on  the  amount  of  property.     Often,  the                                                               
[subscription fee] for an average home  is $100 while a home over                                                               
3,000 square feet would have a  [subscription fee] of $150.   For                                                               
a  business,  the   [subscription  fee]  might  be   $200.    The                                                               
[subscription fee],  he said, is  based upon the  perceived level                                                               
of need  in the  event of  an emergency or  the likelihood  of an                                                               
emergency.    When the  actual  response  occurs, the  [level  of                                                               
service] isn't based on the amount  paid.  From the prior hearing                                                               
on  HB  219  he  recalled  the  question  regarding  whether  the                                                               
subscription department responds to  everyone or only subscribers                                                               
and specified that it depends upon the department's structure.                                                                  
                                                                                                                                
8:16:45 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER   inquired  as  to  how   the  department                                                               
establishes the amount of the subscription fee.                                                                                 
                                                                                                                                
MR. PASCHALL  confirmed that the  amount of the  subscription fee                                                               
is  determined   by  the  department's  annual   budget  and  the                                                               
estimated number of folks who will  subscribe as well as what the                                                               
market  will bear.   Common  subscription fee  amounts that  have                                                               
been in place for a number of years have been $75-$100.                                                                         
                                                                                                                                
8:17:25 AM                                                                                                                    
                                                                                                                                
MR.  PASCHALL,  in  response  to   Chair  Munoz,  said  that  the                                                               
certification issue  only arose in  terms of the  current statute                                                               
and  this proposed  statute wouldn't  require certification.   He                                                               
maintained that  the issue  of certification  is for  a different                                                               
debate.                                                                                                                         
                                                                                                                                
8:19:11 AM                                                                                                                    
                                                                                                                                
CHAIR  MUNOZ, upon  determining no  one else  wished to  testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
8:19:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE AUSTERMAN moved to report  HB 219 out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 219 was reported  from the                                                               
House Community and Regional Affairs Standing Committee.                                                                        
                                                                                                                                
8:20:13 AM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.