Legislature(2017 - 2018)BELTZ 105 (TSBldg)
03/27/2018 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB119 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 119 | TELECONFERENCED | |
SB 119-HEALTH CARE COSTS: DISCLOSURE;INSURERS;
1:34:13 PM
CHAIR COSTELLO announced the consideration of SB 119 and noted
the proposed committee substitute (CS).
1:34:39 PM
SENATOR MICCICHE moved to adopt the work draft committee
substitute (CS) for SB 119, labeled 30-LS0403\R, as the working
document.
1:34:56 PM
CHAIR COSTELLO objected for an explanation of the changes.
1:35:09 PM
NATASHA MCCLANAHAN, Staff, Senator Mia Costello, Alaska State
Legislature, Juneau, Alaska, reviewed the following explanation
of changes from version U to version R of SB 119:
• Bill title revised to include new items in the
legislation pertaining to pharmacies' disclosure
of cost information.
• Changes AS 08.80.297, adding that pharmacies must
disclose pharmacy retail price and consumer's
cost sharing price when filling a prescription.
• Adds a new section to AS 08.80, directing that
pharmacists in the State must, unless directed
otherwise by the consumer, charge the lesser of
the two prices between the pharmacy retail price
and the consumer cost sharing price.
• Stipulates that pharmacies must retain
prescription and customer cost information for a
period of at least two years.
• A new subsection is added directing the
department to inform the public that a provider
who chose to pay the maximum penalty in lieu of
disclosing their prices, was in violation of this
section.
• Sections 8 and 9 of version U are removed and a
new section is added requiring the Department of
Administration to conduct an analysis of the
possible impacts to the state of Alaska and to
employees under managed plans should the
Department adopt the requirements of AS
18.23.400, AS 18.23.405, and AS 21.96.200-
21.96.300.
1:36:47 PM
SENATOR SHELLEY HUGHES, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 119, offered to have Mr. Witt go through
the sectional.
1:37:08 PM
BUDDY WHITT, Staff, Senator Shelley Hughes, Alaska State
Legislature, Juneau, Alaska, advised that the CS incorporates
legislation by Senator Wielechowski regarding pharmacists. He
highlighted the following changes in version R of SB 119:
Sec. 2, Page 1, line 12 Page 2, Line 2 Adds that a
pharmacist must disclose retail and cost sharing
information when requested.
Sec. 3, Page 2, Line 3 Page 3, Line 4 Amends AS
08.80.297 by adding new subsections regarding
disclosure of prescription drug pricing to consumers.
b. Pharmacists shall charge the lower of the two
prices of a prescription drugs between the retail
prices and the consumers cost sharing price,
unless otherwise directed by the consumer.
c. The pharmacist must inform the consumer if the
retail price is lower that the consumers cost
sharing price.
d. Pharmacies must post a notice that the consumer
may, at the point of sale, request the
pharmacists retail price of a prescription.
e. No contract or agreement may prohibit a pharmacy
from complying with this section.
f. Definitions used in this section.
1:39:32 PM
SENATOR STEVENS noted that on the top of page 2 of the bill it
says, "pharmacy retail price" and "consumer's cost sharing." He
asked if that should be "price" instead of "cost sharing"
because the explanation of changes says, "cost sharing price."
He asked if pharmacists only deal with two prices, the consumer
cost sharing price and the retail price.
MR. WHITT said his understanding is there are only two prices.
One is the price the pharmacy charges on a retail basis and the
other is the copay that an insured person would pay.
SENATOR STEVENS asked him to look into whether the language at
the top of page 2 should say "consumer cost sharing price."
1:41:12 PM
At ease
1:41:41 PM
CHAIR COSTELLO reconvened the meeting. She pointed out that the
definition of cost sharing is on page 2, line 17.
1:42:07 PM
SENATOR MEYER joined the committee.
CHAIR COSTELLO asked Senator Stevens if he wanted further
clarification.
SENATOR STEVENS said not if the chair is happy.
1:42:32 PM
SENATOR GARDNER said it seems the price is set by the retailer
and the cost sharing has to do with the insurance, so it's not
really a price. She asked the impact of this provision on the
pharmacist. They aren't reimbursed sometimes through the
insurance process for the actual price they paid. She asked if
this provision of requiring the pharmacy to sell at the lower
price hurts the bottom line.
MR. WHITT deferred to Senator Wielechowski staff.
SENATOR GARDNER said she'd hold the question.
1:44:16 PM
MR. WHITT continued the sectional analysis for SB 119.
Sec. 4, Page 3, Lines 5 10 AS 08.80.305 is added
instructing pharmacists to maintain pricing and sales
information for no less than two years.
Sec. 5 and Sec. 6, Page 3, Lines 11 24 These two
sections amend AS 08.80.460 to exempt violators of
this section from the maximum penalty of a class B
misdemeanor and includes them in the civil penalties
assessed for violation of the section.
MR. WHITT said pharmacists face severe penalties for violating
certain provisions in Chapter 80. They did not want the
situation of not providing a piece of paper stating someone may
request the retail price to be a violation that resulted in a
class B misdemeanor. The language is to clarify that this
section alone would not result in a maximum penalty if a
pharmacist were in violation.
SENATOR HUGHES said in lieu of paying a penalty, the pharmacist
would have the option to refund the difference to the consumer.
MR. WHITT said he would skip to subsection (g) on page 5 to the
next substantive change.
Sec. 8, Page 4, Line 8 Page 7, Line 31 Adds a new
section to Title 18 for health care services and price
information.
g. Allows the department to disclose to the public
that the health care provider or facility is in
violation of this section should they choose to
pay the maximum penalty in lieu of providing the
requested information.
MR. WHITT explained that if a provider chooses to pay the
penalty in lieu of providing price information for the top 25
health care services, the Department of Health and Social
Services (DHSS) does have the ability to list the fact that the
provider is in violation of the requirement to disclose prices.
CHAIR COSTELLO asked if the penalty is $2,500.
MR. WHITT said that's correct.
MR. WHITT said the rest of the bill is unchanged until Section
13, page 13. This addresses concerns that the Department of
Administration (DOA) voiced that implementing such major policy
changes without the ability to thoroughly vet them might have
unintended consequences.
Sec. 13, Page 13, Lines 6 16 The Department of
Administration shall perform an analysis of the
possible impacts to the state of Alaska and to the
employees under managed plans should the Department
adopt the requirements of AS 18.23.400, AS 18.23.405
and AS 21.96.200 AS 21.96.300.
1:49:14 PM
SENATOR HUGHES said the department was interested in the concept
and what other states have done and whether it might bring
savings. For example, just for the retiree health care per year,
it is about $650 million. They were also willing to implement it
if it's a benefit to the state. That language isn't in the bill
currently, but future committees might want to include that. She
is pleased about the report back. It's a step in the right
direction.
MR. WHITT said the CS makes no changes after Section 13.
1:50:48 PM
SENATOR STEVENS said that the pharmacist must keep the record of
prescriptions for two years. He asked how onerous this will be
for the pharmacist.
MR. WHITT said as the sponsor mentioned, Section 3 asks the
pharmacy to keep the information on hand, so they can refund if
they charged too much. The price is the price at the point of
sale. Retail prices may vary, but the contracted rates with the
insurance company are set for a period of time.
SENATOR STEVENS clarified they have not received feedback from
pharmacists that this would be difficult to do.
MR. WHITT said the sponsor's office has not heard that it will
be onerous.
1:53:39 PM
SENATOR GARDNER said she believes it might be fairly complicated
to figure out the steps on each order. She would like to hear
from pharmacists about what this might entail.
MR. WHITT said this is retail, not wholesale. His understanding
is that information and the consumer cost sharing price are kept
on file and readily available.
SENATOR HUGHES said she appreciates the question. This changes
things, but they are trying not to make this onerous. The retail
price is set every day of the year. For the most part the retail
price will be readily available [through the software used].
1:56:26 PM
SENATOR MEYER asked if this pertains to physician providers in
Alaska only. He asked if telehealth outside the state would be
impacted.
MR. WHITT said he would get clarification, but his understanding
is every health care provider licensed in Alaska would be privy
to the policy.
SENATOR MEYER asked if each physician in a multiple-physician
practice would need to post prices.
MR. WHITT said he would need to check and follow up with the
answer.
SENATOR MEYER asked if physician assistants or nurse
practitioners working with physicians would need to post prices
as well.
1:59:41 PM
At ease
2:00:53 PM
CHAIR COSTELLO reconvened the meeting.
2:01:03 PM
MR. WHITT said his assumption is that the bill addresses all
providers and all health care facilities. He read the language
in Section 8 pages 4 and 5. It's purposefully broad language to
capture as much information as possible.
SENATOR HUGHES added that a primary care clinic that has the
same price list for all the providers would need to have just
one list.
SENATOR MEYER asked if they also put the prices on their or the
department's website.
MR. WHITT said in Section 8 language on page 4, says that a list
is turned in to DHSS for posting on the website and is posted in
a reception area of the facility and on a website, if the
facility has a website.
SENATOR MEYER commented that the onus is for the department to
put it on the website, not the doctor's office.
MR. WHITT restated that the provider facility must post the list
on a website if the provider has a website.
2:04:24 PM
SENATOR MICCICHE said section 8, page 7, has a definition of
health care facility and health care provider.
2:04:44 PM
CHAIR COSTELLO removed her objection; finding no further
objection, version R was adopted.
2:05:25 PM
ELISE SORUM-BIRK, Intern, Senator Bill Wielechowski, Alaska
State Legislature, Juneau, Alaska, said generally this would be
a benefit to pharmacists.
SENATOR GARDNER asked if she has discussed this provision with
pharmacists.
MS. SORUM-BIRK said they have one letter from a pharmacist
organization. They support the idea of the bill but are hesitant
that the onus is on the pharmacist. They would rather it be put
on the pharmacy benefit manager.
SENATOR GARDNER said she would like to hear from a pharmacist or
someone who could tell how this would apply.
CHAIR COSTELLO said no pharmacists were signed in to testify.
SENATOR GARDNER reiterated that she would like to hear from
pharmacists.
2:08:35 PM
At ease
2:09:25 PM
CHAIR COSTELLO reconvened the meeting.
2:09:30 PM
MS. SORUM-BIRK said subsection (e) on page 2, line 14, would be
beneficial to pharmacists because they often now have a gag
order in contracts. Without that gag order, they would be able
to talk more openly about pricing to the consumer.
CHAIR COSTELLO asked if the administration has a position on the
bill.
2:11:30 PM
SARA CHAMBERS, Division Manager, Corporations, Business, and
Professional Licensing (CBPL), Department of Commerce, Community
and Economic Development (DCCED), Juneau, Alaska, said the Board
of Pharmacy looked at SB 209, Senator Wielechowski's initial
bill, but declined to offer a position. The thought from the
board is it's not dramatically different. The division is
reaching out to the board to ensure the chair is aware of the
changes in the bill.
CHAIR COSTELLO asked if she foresees the fiscal note changing
from zero.
MS. CHAMBERS said CBPL hasn't submitted a fiscal note and hasn't
done the analysis on this bill at this time.
2:13:33 PM
CHAIR COSTELLO turned to public testimony.
2:13:51 PM
JOEL ALLUMBAUGH, Visiting Fellow, Foundation for Government
Accountability, Naples, Florida, testified in support of SB 119.
He said the foundation is a nonpartisan think tank. He also owns
and operates an employee benefits business. He lives with the
regulatory choices made. The foundation has been interested in
aligning patient incentives with meaningful transparency as a
simple way to lower health care spending. They support the
efforts of SB 119. What is common across states is widely
variable costs with no tie to quality. Shopping alone won't
solve the problem, but it is part of the low hanging fruit. He
asked them to imagine the possible savings to patients by
choosing lower-cost services and to think of the impact of the
delivery service as providers respond to incentives, just like
patients do. He gave an example of how implementing a similar
program for New Hampshire state employees lowered costs for a
certain treatment.
2:18:59 PM
RICHARD HOLT, Chair, Board of Pharmacy, Eagle River, Alaska,
said he wanted to give his personal perspective as a licensed
pharmacist. The first big impact of the committee substitute
would be providing consumers with cost sharing data. He won't
know the copay until he enters all the information about the
prescription into the computer system. Until he sends all that
information via computer to the insurance company he will have
no idea what the consumer will pay or if it is covered. Second,
there is the retail or cash price and a consumer cost sharing
defined in the bill. Another price is through discount cards,
which also affect prices. It doesn't look like they are a part
of this process, but many patients use discount cards,
especially those who do not have insurance.
MR. HOLT said Senator Gardner had excellent points about Section
3 and the onus on pharmacists. To have to manually look up each
claim when processing hundreds of prescriptions a day and
thinking about clinical concerns, is onerous. He is not a
computer programmer, but it is not user friendly. Regarding
posting notices, patients don't pay attention. He asked why
there is an onus imposed on in-state pharmacies versus out-of-
state pharmacies.
2:25:15 PM
SENATOR STEVENS asked him to reflect on Section 4 and
maintaining costs for two years.
MR. HOLT said it won't be a large burden because most records
are electronic.
2:26:12 PM
At ease
2:27:34 PM
CHAIR COSTELLO reconvened the meeting. Finding no one else who
wanted to comment, she closed public testimony on SB 119.
2:28:03 PM
MR. WHITT said he and the sponsor appreciate Mr. Holt giving his
view of the bill. He pointed out that the sponsor did meet with
every stakeholder they could think of. He will respect Mr.
Holt's view on the bill.
MR. WHITT said that Section 3 of the bill doesn't change the way
a prescription is filled. The bill assumes that everything that
happens is after the prescription is filled. It is simply
letting the consumer know if one of the two prices is lower, so
the consumer can make a purchasing decision. They are asking for
transparency and information for consumers when they fill a
prescription. Second, the bill does not require pharmacists to
give information about cost over the phone.
2:30:42 PM
SENATOR GARDNER said subsection (b) says, "A pharmacist shall,
unless directed otherwise by the consumer charge a consumer the
applicable cost sharing or the current pharmacy retail price for
a prescription medicine, whichever is less." That means a
pharmacist must figure out for every prescription which is less,
so they must complete the submission through the insurance
company for that calculation and check the other price. That is
a lot of work.
SENATOR HUGHES said she is willing to work with Mr. Holt and
others. Her experience is once pharmacists bring up her name the
information is available instantly. It is the point of sale, not
phone requests. Her understanding is that software can
accommodate that. She wants to allow consumers to have the
information they need and ensure consumers are not overcharged
and also make it the least amount of work for pharmacists.
2:32:57 PM
SENATOR GARDNER said she appreciates that. She wants to support
that, but even if someone gets the same prescription filled all
the time, pharmacists have to check the price every time with
insurance companies. Sometimes people are not employed any
longer or filling prescriptions early. It's another step that is
rather laborious. It's a concern and pharmacists not here to
speak about it.
2:34:08 PM
SENATOR MICCICHE asked if there could be an interstate commerce
problem with subsection (e) in Section 3.
MR. WHITT said based on his research, legislation like this has
been passed in Connecticut, Georgia, North Dakota, Louisiana,
and is in committee in Massachusetts. As it relates to the
federal commerce clause, this would be a policy that the state
would enact for pharmacists who are licensed in the state of
Alaska. Those concerns have been addressed in other states and
Legislative Legal hasn't expressed concern with that section.
SENATOR MICCICHE said he's not convinced even though other
states have passed similar legislation. He didn't know how a
state could legislate an out-of-state supplier contract. It
seems problematic and an important consideration.
CHAIR COSTELLO said the bill has a Finance referral and those
concerns can be brought up there.
SENATOR MICCICHE said he would request hearing from affected
parties in Finance.
2:37:51 PM
SENATOR MEYER moved to report the CS for SB 119, version R, from
committee with individual recommendations and attached fiscal
note(s).
2:38:05 PM
CHAIR COSTELLO found no objection and CSSB 119(L&C) moved from
the Senate Labor and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSSB 119 Version R.PDF |
SL&C 3/27/2018 1:30:00 PM |
SB 119 |
| CSSB 119 Explanation of Changes Ver. U to R.pdf |
SL&C 3/27/2018 1:30:00 PM |
SB 119 |
| CSSB 119 Version R - Sectional Analysis.pdf |
SL&C 3/27/2018 1:30:00 PM |
SB 119 |