Legislature(2025 - 2026)BUTROVICH 205
03/11/2025 03:30 PM Senate HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| SB121 | |
| SB122 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 121 | TELECONFERENCED | |
| *+ | SB 122 | TELECONFERENCED | |
SB 122-HEALTH INSURANCE NETWORK STANDARDS
4:33:30 PM
CHAIR DUNBAR announced the consideration of SENATE BILL NO. 122
"An Act relating to insurance; establishing standards for health
insurance provider networks; and providing for an effective
date."
4:33:44 PM
SENATOR GIESSEL speaking as the sponsor introduced SB 122 and
read the sponsor statement:
[Original punctuation provided.]
Sponsor Statement (vsn N)
"An Act relating to insurance; establishing standards
for health insurance provider networks; and providing
for an effective date."
Senate Bill 122 will establish state-defined minimum
standards for health insurer provider networks
tailored to Alaska. Standards are necessary to ensure
Alaska patients have access to a network of providers
sufficient to meet their healthcare needs. Thirty-
eight states and territories have adopted provider
network minimum standards. The National Association of
Insurance Commissioners has stated that provider
network minimum standards are the most important
mechanisms to ensure a well-functioning healthcare and
health insurance market. In many states, insurers
often establish and market products with a limited
subset of the providers available in the area, or a
"narrow network". Because all of Alaska is a federally
designated provider shortage area, narrow networks
would be detrimental to Alaskans' health by hindering
access to needed providers. Narrow networks can also
result in barriers to care by creating long waiting
times for appointments. This bill would establish
simple standards tailored to the geography and
distribution of population and providers in Alaska. It
makes provision for a phase-in period to avoid
insurance market disruption and a process for insurers
to request exceptions when standards can't be met.
Standards are designed to ensure that the full range
of specialties in a community are represented in the
network. Senate Bill 122 would proactively protect
Alaskans from the access issues that have arisen with
narrow networks elsewhere in the country. Please join
me in supporting this commonsense bill to protect
Alaska patients' access to needed health care while
supporting local providers in the community.
4:36:02 PM
JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State
Legislature, Juneau, Alaska, provided the sectional analysis for
SB 122. She read the following portion of the sectional
analysis:
[Original punctuation provided.]
? (d) Divides Alaska into 6 contracting (network)
regions:
-Municipality of Anchorage Network must include 85
percent of total active physicians, PAs and APRNs in
each specialty and at least 85 percent of each
provider groups in each specialty.
-Mat-Su Borough Network must include at least 9
percent of active physicians, PAs and APRNs in each
specialty and at least 90 percent of the provider
groups in each specialty.
-Fairbanks North Star Borough and Southeast Fairbanks
Census Area 90 percent same as Matsu
-Kenai Peninsula Borough Network must include at least
95 percent of active physicians, PAs and APRNs in each
specialty and at least 95 percent of the provider
groups in each specialty.
-City and Borough of Juneau, Ketchikan Gateway Borough
and City and Borough of Sitka 95 percent - same as
Kenai Peninsula Borough
-Remaining areas of the state
4:38:04 PM
MS. CONWAY moved to section 1 of the sectional analysis for SB
122:
[Original punctuation provided.]
Section 1. Amends AS 21.07 Patient Protections Under
Health Care Insurance Policies
Adds new section 21.07.035 Minimum provider
network standards.
In this section a health care insurer
? Must take into account the network requirements set
out in this new section when calculating the benefits
or contractual requirements of the covered person.
4:38:22 PM
MS. CONWAY continued with the sectional analysis for SB 122:
? (b) A health care insurer's provider network must
include each hospital, skilled nursing facility or
mental health/substance abuse facility in the state
and each physician, PA and APRN employed by them. This
would be the same for any tribal health organization.
? However, the physicians, PAs and APRNs are not
included when calculating the health care insurer's
minimum network standards set out in (d) of this
section.
? (c) A health care insurer's provider network must
include a sufficient number of physicians, PAs and
APRNs in each region to meet the minimum standards set
out in (d). The provider network may include
physicians, PAs and APRNs who are not contracted
network health care providers, but they must be shown
as in-network providers in the insurer's directory of
network providers and treated as in-network when
determining benefits for a covered person.
? In (e) a health care insurer may request to the
director an exception to the minimum provider network
standard for up to 36 months. The process for an
exemption will be set in regulation by the director.
The insurer must submit a plan to comply and also
submit annual progress reports to the director.
? In (f) a health care insurer must attest or prove they
meet the minimum provider network standards and
provide supporting documentation to the director as
part of their required rate filings. If standards are
not met, the insurer must submit a plan of corrective
action.
? In (g) allows the director to adopt regulations to
implement this section and may also require that a
contracting region exceed the minimum network
standards
Section 2. Repeals AS 21.07.020(3):
Sec. 21.07.020. Required contract provisions for
health care insurance policy. A health care insurance
policy must contain a provision
(3) that covered medical care services be reasonably
available in the community in which a covered person
resides or that, if referrals are required by the
policy, adequate referrals outside the community be
available if the medical care service is not available
in the community;
Section 3. Sets an effective date for January 1, 2026
4:41:44 PM
At ease.
4:42:08 PM
CHAIR DUNBAR reconvened the meeting and invited Mr. Davis to
testify.
4:42:18 PM
JEFFREY DAVIS, Principal, Weston Group Consulting LLC,
Wenatchee, Washington, began his presentation, Provider Network
Minimum Standards for Health Insurers. He said SB 122 purpose is
to create provider network minimum standards and is a way to
ensure health care for all Alaskans.
4:42:51 PM
MR. DAVIS moved to slide 2, What is a Narrow Provider Network,
and stated that narrow network limits, which providers are
included, is a common tactic in the Lower 48 where some markets
exclude up to 80 percent of providers. He said out-of-network
benefits are typically minimal, though Alaska currently requires
them, something some payers want to change. he said insurers use
narrow networks to gain market leverage by offering lower rates
to one provider group while excluding another, which can reduce
costs but also makes patient access to care more difficult.
4:43:56 PM
MR. DAVIS moved to slide 3, Why Does Alaska Need Minimum Network
Standards, and stated that Alaska is already a federally
designated healthcare provider shortage area, and allowing plans
with even fewer providers could create networks too narrow to
meet patient needs. The National Association of Insurance
Commissionersconsidered the gold standardstates that the most
important step a state can take is establishing minimum provider
standards for a functioning healthcare and insurance market. By
2019, 38 states and territories had such standards, but Alaska
does not. Without state-defined criteria, it's difficult to
judge whether a network is adequate. This proposal would
establish those standards, and some insurers have publicly
expressed interest in offering these narrow-network products in
Alaska.
4:45:31 PM
MR. DAVIS moved to slide 4, Impact of Narrow Networks, and
stated that Narrow networks can limit access by excluding key
specialty groups, creating longer wait times or forcing patients
to seek care outside Alaska. He said consumers often judge plans
simply by checking whether their current doctors are included,
but they may not realize the network lacks needed specialists,
something they only discover after developing a serious
condition. He said narrow networks with little or no out-of-
network coverage leave patients without needed care and also
financially harm excluded providers, especially in markets like
Alaska with only a few major insurers and already fragile
practices.
4:47:24 PM
MR. DAVIS moved to slide 5, Solution and stated that the
proposed solution is for the state to adopt Alaska-specific
minimum network standards. Other states' models don't work well
due to Alaska's unique geography and provider distribution, so a
simpler, percentage-based approach is recommended. He said the
plan includes a phased-in process, applies across specialties,
and requires insurers to include a broad share of both providers
and practicesfor example, 85 percent of cardiologists and 85
percent of cardiology practices, not just one dominant group.
This approach helps ensure adequate access and restores balance
in insurer-provider negotiations. SB 122 would establish these
Alaska-tailored standards.
4:49:21 PM
SENATOR CLAMAN opined that narrow networks are a bigger issue in
large population centers like Seattle or San Francisco, where
insurers can significantly limit access by excluding many
providers. He said Alaska already functions like a narrow
network simply because there are so few providers and few
insurance carriers. He asked how Alaska achieves reasonable
provider rates when the system already lacks both provider
numbers and insurer competition.
4:50:20 PM
MR. DAVIS replied that the concern is that narrow networks
function in large markets with many carriers and ample providers
without destabilizing the system. He said Alaska is already in a
provider-shortage area with a naturally narrow network. Further
narrowing would strain the system and harm both patients and
providers. Without state protections that limit how narrow a
network can be, these products could negatively affect Alaskans
and the provider community.
4:51:32 PM
SENATOR CLAMAN asked whether adopting SB 122 would create a
state regulated price structure, and if not why not.
4:51:40 PM
MR. DAVIS replied that it is his belief that this isn't creating
a state-regulated price structure because it addresses network
adequacy, not prices. He said while insurers may claim narrow
networks help lower costs, they also risk harming patients by
limiting access and harming providers in an already small
market. Minimum standards simply prevent networks from becoming
too limited. Thirty-eight states and the NAIC consider such
standards essential, and the goal is to put protections in place
before narrow-network products enter Alaska and cause harm.
4:52:44 PM
CHAIR DUNBAR noted that he personally has a narrow-network plan
through TRICARE and is often surprised by how few providers
accept it. At times, no specialist in the entire state will take
his insurance.
4:53:11 PM
SENATOR HUGHES noted that SB 122 won't fix Tricare. She asked
what the insurance providers think of the proposal and whether
they're likely to oppose it. She asked how current networks
compare to the proposed 8595 percent standards in the
communities affected, and whether insurers might push back in a
way that could limit the availability of insurance products in
Alaska.
4:54:28 PM
MR. DAVIS said he can't speak for insurers, but he's confident
they will push back. He said he doesn't know the current
percentage of provider participation.
4:54:52 PM
SENATOR HUGHES reminded Mr. Davis of her second question about
the 85-95 percent range.
MR. DAVIS replied that that narrow-network products haven't
reached Alaska yet but are well established in the Lower 48.
Since Alaska is already a provider-shortage area. He said the
goal is to proactively set state-defined standards to prevent
insurers from offering networks that include too few providers,
which could limit access to care when patients need it.
4:56:06 PM
SENATOR HUGHES viewed SB 121 and 122 being in tandem. Between
2014 and 2017, some providers remained outside the network,
driving higher prices and influencing the 80th-percentile
standard. While SB 121 allows some providers to stay out of
networks, SB 122 seeks to require broader inclusion. She asked
if SB 122 is intended to prevent providers from opting out under
SB 121 and is that why the two bills are paired.
4:57:07 PM
MR. DAVIS replied that the two bills work in tandem but have
different purposes. SB 122 aims to prevent insurers from pushing
providers out of networks to pit groups against each other and
suppress rates. He noted that after most providers moved in-
network, reimbursement levels were flat or declining under the
80th percentile, suggesting mainstream providers were not the
ones driving costs uponly a few outliers outside the network
were. He stated his belief that the price increases came from
those outliers, not the broader provider community.
4:58:56 PM
CHAIR DUNBAR held SB 122 in committee.