02/27/2018 03:00 PM House HEALTH & SOCIAL SERVICES

        HB 313-RECOVERY OF PAYMENT BY INSURANCE PROVIDER                                                                    
                                                                                                                                
3:04:46 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ announced that the  first order of business would                                                               
be HOUSE BILL NO. 313, "An  Act relating to payments to providers                                                               
and  covered persons  and  recovery of  payments  by health  care                                                               
insurers."                                                                                                                      
                                                                                                                                
3:05:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JASON    GRENN,   Alaska    State   Legislature,                                                               
paraphrased from the Sponsor Statement, which read:                                                                             
                                                                                                                                
     32  states have  implemented a  statute of  limitations                                                                    
     for   the    ability   of   insurance    companies   to                                                                    
     retroactively  recoup  indemnities   from  health  care                                                                    
     providers. A  common practice of many  health insurance                                                                    
     companies  is to  perform  an audit  to  make sure  the                                                                    
     claims paid to them were  accurate, a practice that any                                                                    
     business   trying  to   become  more   efficient  would                                                                    
     perform.  Currently  in  Alaska  there  is  no  maximum                                                                    
     number  of years  that  limits  insurance companies  to                                                                    
     retroactively recouping indemnities due  to our lack of                                                                    
     a statute like the one presented in HB 313.                                                                                
                                                                                                                                
     HB 313  simply implements  a statute of  limitations of                                                                    
     18  months  on  health insurance  companies  to  recoup                                                                    
     mistakenly paid  amounts from health care  providers in                                                                    
     Alaska. HB  313 provides exceptions to  this limitation                                                                    
     in  instances of:  a  fraudulently  submitted claim,  a                                                                    
     duplicate claim, in the  instances of misrepresented or                                                                    
     wrongly   identified  services   by  the   health  care                                                                    
     provider,  a claim  that is  subject  to adjustment  by                                                                    
     another health  care insurer, or  any payment  or claim                                                                    
     that is  the subject of legal  action. These exceptions                                                                    
     are  the  only instances  under  which  the statute  of                                                                    
     limitation is flexible for or voided.                                                                                      
                                                                                                                                
     HB  313  is  not  only  a bill  that  focusses  on  the                                                                    
     efficiency of Health Insurers,  but most importantly is                                                                    
     legislation that  ensures that  a financial  burden may                                                                    
     not  be passed  onto the  customer unexpectedly  at any                                                                    
     time after their visit to  the doctor. With the lack of                                                                    
     a statute  of limitation in  this area there  exists an                                                                    
     inherent  liability  that  can  be  passed  on  to  any                                                                    
     Alaskan at essentially any time.                                                                                           
                                                                                                                                
     House  Bill 313,  serves as  a simple  fix for  a large                                                                    
     risk that  resides in the current  statutes surrounding                                                                    
     our  health billing  structure. HB  313, takes  care of                                                                    
     patients,  doctors, and  all health  care providers.  I                                                                    
     humbly  ask   for  your  support   in  this   piece  of                                                                    
     legislation that has  proven to be a simple  fix to our                                                                    
     outdated precedence.                                                                                                       
                                                                                                                                
3:07:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON  moved  to adopt  the  proposed  committee                                                               
substitute  (CS)  for  HB   313,  labeled  30-LS0852\J,  Wallace,                                                               
2/14/18, as the working draft.                                                                                                  
                                                                                                                                
CHAIR SPOHNHOLZ objected for discussion.                                                                                        
                                                                                                                                
3:08:11 PM                                                                                                                    
                                                                                                                                
SHEA  SIEGERT, Staff,  Representative Jason  Grenn, Alaska  State                                                               
Legislature,  explained that  the  proposed committee  substitute                                                               
(CS),  Version J,  added Section  3  to the  proposed bill  which                                                               
would  amend AS  39.90  to be  subject to  the  provisions in  AS                                                               
21.54.020(d) and AS  21.54.050(d).  He reported  that this change                                                               
would  only affect  a  small  number of  plans  in  the State  of                                                               
Alaska, in  this instance.   In response  to Chair  Spohnholz, he                                                               
explained  that AS  39 dealt  with the  state employee  insurance                                                               
plans, provided through Alaska Care,  and the insurance companies                                                               
which had contracted  with the state for  state employee benefit;                                                               
whereas, AS  21 dealt with all  the other plans for  an insurance                                                               
company doing business in Alaska.                                                                                               
                                                                                                                                
3:09:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  asked about the anticipated  timeline for                                                               
a  claim  before  it  became  the subject  of  the  legal  action                                                               
mentioned in the proposed bill.                                                                                                 
                                                                                                                                
MR. SIEGERT  deferred to  the Department  of Administration.   He                                                               
reported that  the administrative  code, 3AAC 26.10,  stated that                                                               
"health care  insurers shall  give a written  notice to  a health                                                               
care provider, a health care facility,  or a consumer at least 30                                                               
calendar  days before  insurer  seeks  recovery for  overpayment.                                                               
The  notice must  include adequate  information.  ... The  health                                                               
care insurer  may not  initiate recovery  of an  overpayment more                                                               
than 365 days after the date  of the original payment was made to                                                               
a health care provider, a health  care facility."  He stated that                                                               
the intent of  the proposed bill was to make  this change through                                                               
administrative code, and it would only  affect AS 21.  He replied                                                               
to Representative Eastman  that he would have to  "check with our                                                               
legal team on that."                                                                                                            
                                                                                                                                
3:11:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN   directed  attention  to   the  proposed                                                               
committee substitute, Version  J, and asked if  this referenced a                                                               
health care insurer seeking recovery from a provider.                                                                           
                                                                                                                                
3:11:55 PM                                                                                                                    
                                                                                                                                
MR. SIEGERT replied, "yes."                                                                                                     
                                                                                                                                
3:11:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  mused that, should the  provider not want                                                               
to  pay, there  was  an incentive  to wait  out  the health  care                                                               
insurer for  18 months, and  then use  the statute as  a defense.                                                               
He asked if there was any way to prevent this situation.                                                                        
                                                                                                                                
MR. SIEGERT  explained that the  intent of the proposed  bill was                                                               
"to give  notice of the initial  search of the recovery  of funds                                                               
before  that  18 months,  and  so  after  they give  the  initial                                                               
request for more funds, we would  expect that they would do so in                                                               
a timely process."  He offered  his belief "that would have to do                                                               
with regulations put forth by the regulating body."                                                                             
                                                                                                                                
3:13:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD asked  about the ramifications if                                                               
this was not completed within the 18 months.                                                                                    
                                                                                                                                
MR. SIEGERT  replied that there would  not be the option  to seek                                                               
recovery of those funds.                                                                                                        
                                                                                                                                
3:13:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SULLIVAN-LEONARD  asked   if   there  were   any                                                               
exceptions.                                                                                                                     
                                                                                                                                
MR.  SIEGERT  reported  that  there  were  five  exceptions:  for                                                               
fraudulent claims,  for payments of duplicate  claims, for health                                                               
care  services  identified in  a  claim  that were  not  actually                                                               
delivered by  the health  care provider,  for payments  or claims                                                               
subject to adjustment  by another health care insurer,  and for a                                                               
payment or claim that was subject of legal action.                                                                              
                                                                                                                                
3:14:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  asked  for  the  reason  to  18                                                               
months, instead of 24 or 36 months.                                                                                             
                                                                                                                                
MR.  SIEGERT  replied that  the  sponsor  had contacted  multiple                                                               
people  and reviewed  other  states.   He  shared that  currently                                                               
three  states had  a  six-month provision,  twelve  states had  a                                                               
twelve-month provision,  and seven  states had  an eighteen-month                                                               
provision.   He opined that this  was the most fair  and adequate                                                               
timeline after  all payments and  transactions had been  made and                                                               
the insurance  company was  conducting an  audit of  the business                                                               
transactions.                                                                                                                   
                                                                                                                                
3:15:52 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ mused that this  appeared to be the outside limit                                                               
of regulation allowed.                                                                                                          
                                                                                                                                
MR. SIEGERT  added that eight states  allowed twenty-four months,                                                               
Connecticut  allowed sixty  months,  and  Florida allowed  thirty                                                               
months.                                                                                                                         
                                                                                                                                
CHAIR SPOHNHOLZ  commented that this  was "the sweet spot  in the                                                               
middle."                                                                                                                        
                                                                                                                                
3:16:32 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  removed her objection.   There being  no further                                                               
objection, Version J was adopted as the working document.                                                                       
                                                                                                                                
3:16:58 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
3:17:21 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  brought the committee  back to order  and opened                                                               
public testimony on HB 313.                                                                                                     
                                                                                                                                
3:17:44 PM                                                                                                                    
                                                                                                                                
DEBORAH  RIESER,   Owner,  Spectrum  Medical   Billing  Services,                                                               
explained that she offered medical  billing services to about 100                                                               
providers,  the  bulk  of  which   were  small  practices.    She                                                               
paraphrased from  a letter  she had  submitted to  the committee,                                                               
dated  January 31,  2018, [Included  in  members' packets]  which                                                               
read:                                                                                                                           
                                                                                                                                
     I'm writing  in response to  House Bill 313,  to change                                                                    
     the Statute  AS 21.54.020(d)  from an  unlimited amount                                                                    
     of  time  a  medical   insurance  company  (Payer)  can                                                                    
     request a refund from HealthCare providers.                                                                                
                                                                                                                                
     Currently,  Alaska  is  1  of 3  states  that  have  an                                                                    
     unlimited timeframe  a Payer can request  a refund from                                                                    
     a provider. I've had a  handful of experiences the last                                                                    
     few years that prompted me  to look at Alaska Statutes.                                                                    
     Currently, most payers require  the Providers to submit                                                                    
     claims within  a certain period.  Most are 1  year from                                                                    
     the date of service, and some  are 6 months, or 90 days                                                                    
     from  the date  of  service. In  turn,  the Payers  can                                                                    
     request a  refund from  anytime in  the future  if they                                                                    
     did  not  process  the claims  correctly.  Here  are  a                                                                    
     couple examples  that happened to Providers  I provider                                                                    
     services to:                                                                                                               
                                                                                                                                
     2016   EBMS request a refund  for 5 dates of service in                                                                    
     2013 as they  continued to pay after  the patients plan                                                                    
     terminated.   The  provider   had   to  repay   approx.                                                                    
     $1,200.00.  Thankfully  the  patient  had  a  secondary                                                                    
     insurance that we could appeal for a payment.                                                                              
                                                                                                                                
     2016   Cigna  requesting a refund for  2014 claims they                                                                    
     paid in error as the patient was not eligible.                                                                             
                                                                                                                                
     2017   Cigna  requesting a refund for  2015 claims paid                                                                    
     in error.                                                                                                                  
                                                                                                                                
     2018 -  EBMS requesting a  refund for 2015  claims that                                                                    
     were paid after the patient was no longer eligible.                                                                        
                                                                                                                                
     2018    Cigna requesting  a refund  for claims  paid in                                                                    
     2016.                                                                                                                      
                                                                                                                                
     All  of  the above  examples  are  not from  fraudulent                                                                    
     claims  but the  Payer should  have some  processed the                                                                    
     claims  correctly the  first  time.  Now the  financial                                                                    
     burden is on the Provider  to refund the Payer. In turn                                                                    
     the patient,  if still in  Alaska, will  be responsible                                                                    
     for these charges.                                                                                                         
                                                                                                                                
     I am for  limiting the timeframe a Payer  can request a                                                                    
     refund.  The  Providers  only have  a  sometimes  small                                                                    
     timeframe  they  can submit  charges  to  a Payer.  The                                                                    
     Payer  should  be  expected   to  process  the  charges                                                                    
     against the policies of the  patient within a timeframe                                                                    
     as well.                                                                                                                   
                                                                                                                                
3:20:46 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ reiterated  that  although there  was a  limited                                                               
amount of  time to file a  claim, there was not  a limited amount                                                               
of time to collect on an  over payment of a claim, which appeared                                                               
to be a one-sided relationship.                                                                                                 
                                                                                                                                
MS. REISER expressed her agreement.                                                                                             
                                                                                                                                
3:21:11 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ announced that HB 313 would be held over.