Legislature(2013 - 2014)BELTZ 105 (TSBldg)
02/18/2014 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB159 | |
| SB99 | |
| SB140 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 159 | TELECONFERENCED | |
| *+ | SB 99 | TELECONFERENCED | |
| *+ | SB 140 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 159-AIR AMBULANCE SERVICES
1:33:36 PM
CO-CHAIR DUNLEAVY announced the consideration of SB 159."An Act
relating to air ambulance service providers, air ambulance
membership agreements, and regulation of air ambulance service
providers and air ambulance membership agreements by the
division of insurance; and providing for an effective date."
1:33:55 PM
CHRISTIE JAMIESON, Staff, Senator Bert Stedman, sponsor of SB
159, introduced the bill on behalf of the sponsor. She read the
following sponsor statement into the record: [Original
punctuation provided.]
Since January 2009, Airlift Northwest, the Seattle
based provider of lifesaving air medical transport
services, has offered the popular AirCare membership
program to residents of Southeast Alaska. Over 1,600
Southeast households are enrolled in the program. Air
medical transportation is expensive and insurance may
not cover all the costs. The purpose of the AirCare
program is to cover all out-of-pocket expenses such as
deductibles and coinsurance amounts that may not be
covered by the primary payer. As an AirCare member,
only your insurance company receives a bill. Airlift
Northwest is secondary to all payers and works
directly with your insurance company for claims
processing. The AirCare program directly helps fund
Airlift Northwest so they can transport critically ill
or injured patients to hospitals with levels of care
not locally available.
Since its inception, the AirCare program was offered
to Alaskans under a regulatory exemption it received
from the Alaska Division of Insurance. However, after
an organizational restructuring, the Division of
Insurance deemed the program no longer exempt from
insurance regulation as stated in AS 21.87.010 under
which Airlift Northwest was providing the program. As
a result, the Division of Insurance ordered Airlift
Northwest to cease enrolling new members. Airlift
Northwest is allowed to honor their existing
memberships but is not allowed to renew expired
memberships.
If Airlift Northwest wants to continue offering the
AirCare program, then the program must either be fully
insured by a health insurer authorized by Alaska or
Airlift Northwest must obtain a certificate of
authority pursuant to AS 21.09 to transact health
insurance in Alaska. Since Airlift Northwest operates
under the umbrella of University of Washington's
medical system, becoming a licensed insurer in Alaska
is not an option for them.
Senate Bill 159 will exempt air ambulance services
from the state's insurance code, thereby allowing
Airlift Northwest to continue offering the AirCare
program to Alaskans.
1:37:33 PM
SENATOR OLSON asked the reason for the restructuring that
eliminated the regulatory exemption.
SENATOR STEDMAN suggested the Division of Insurance answer the
question.
SENATOR OLSON asked what other medevac services in the state
would be affected by this legislation.
MS. JAMIESON offered her understanding that Apollo [MT] from
Fairbanks would also be affected and they haven't voiced an
opinion on the legislation.
SENATOR OLSON asked if Apollo MT is owned by an Alaskan company
or an outside entity.
MS. JAMIESON said she didn't know.
SENATOR OLSON asked if Airlift Northwest and Guardian are
ineligible to receive a certificate of insurance in Alaska
because they're owned by outside entities.
MS. JAMIESON said she didn't know.
l1:39:19 PM
SENATOR ELLIS joined the committee.
SENATOR OLSON
MARTY HESTER, Acting Director, Division of Insurance, introduced
himself.
SENATOR OLSON asked why the division undertook a regulatory
change that eliminated the exemption.
MARTY HESTER clarified that it wasn't the division that changed
regulations. The division was approached by another company that
wanted to offer similar membership agreements and operate under
the same exemption as Airlift Northwest. The division deemed
that the new company did not meet the Title 21 exemption. After
inquiry, the division subsequently determined that Airlift
Northwest no longer qualified for the exemption that was offered
in 2008, because in 2010 the company restructured to become a
nonprofit under the University of Washington.
Airlift Northwest is considered a municipality under Washington
statute and they petitioned the Division of Insurance to be
considered a municipality under Alaska statute or a nonprofit
medical service corporation under AS 21.87.010. After
discussions with Department of Law, the division deemed that
Airlift Northwest neither qualified as a municipality under
Alaska statute nor as a nonprofit medical service corporation
because they weren't offering a medical service. The company was
in fact offering a benefit by waiving deductibles and
coinsurance of members that purchased the agreements. Thus, the
Division of Insurance contacted Airlift Northwest and asked the
company to cease and desist.
SENATOR OLSON commented that it sounds as though it was a
reinterpretation of AS 21.87.010.
MR. HESTER clarified that Airlift Northwest changed structure in
2010 to become a nonprofit under the University of Washington.
Responding to further questions, he restated the forgoing
explanation.
SENATOR OLSON asked if Airlift Northwest aircraft are designated
as public use aircraft since they're a municipality under
Washington statute.
MR. HESTER said he wasn't sure.
1:45:01 PM
SENATOR OLSON offered his view that anybody who flies a sick
person to get medical care is offering a service. He opined that
the division did the people of Alaska a disservice by issuing
the cease and desist order. He asked if it's true that medevac
services are no longer available.
MR. HESTER clarified that the division's determination was that
an air ambulance service provider can't offer the membership
agreement. They can still operate, but they can't offer the
benefit to not balance bill the additional cost.
SENATOR OLSON reiterated that this is working against the public
interest and putting some people in dire straits.
MR. HESTER responded that part of the mission statement of the
Division of Insurance is to protect the consumer. In conjunction
with Department of Law, the division determined that the product
that was being offered by Airlift Northwest did not meet the
required exemptions under AS 21.87.010. He also pointed out that
a product was still available to Alaskans when this decision was
made. The division determined that it was protecting consumers
by applying the statute as it was written.
SENATOR OLSON maintained that from a medical standpoint the
decision is working to the detriment of the patient.
1:48:28 PM
SENATOR STEDMAN voiced concern that the lack of competition is
driving the price structure of air ambulance services. He asked
the division's opinion about altering the statute to allow
further competition.
MR. HESTER responded that the division sees that SB 159 would
provide consumer protections and allow additional business for
products that Alaskans have asked for to be written in the
state.
SENATOR STEDMAN said he takes that as a statement of support for
the bill.
1:50:06 PM
MR. HESTER restated the division's mission statement to regulate
the insurance industry to protect Alaskan consumers. He
continued to say that consumers need products in Alaska and the
state needs to be open for business to provide those products to
Alaskans. SB 159 provides the protections that consumers need
and allows the products consumers are asking for, he said.
SENATOR STEDMAN disclosed that he is a licensed life and health
insurance agent.
1:51:14 PM
CO-CHAIR DUNLEAVY asked what happens to a member who needs a
plane and one isn't available.
MR. HESTER said the products that were sold in the past did not
guarantee service and any sold in the future wouldn't either.
Companies may decide to offer reciprocity but he couldn't speak
to the specifics because he hadn't seen those products.
CHAIR DUNLEAVY observed that something could be written into the
agreement.
MR. HESTER agreed.
SENATOR MICCICHE referenced Section 2 subsection (c) on page 2,
lines 6-9, and summarized that a third party isn't required to
provide air ambulance service. He asked if state law requires
somebody who is available to respond to a person who is in
medical need.
MR. HESTER offered to follow up with the answer.
SENATOR MICCICHE asked if other companies currently operate
under the existing exemption.
MR. HESTER answered no, but one underwritten company is offering
the product and it is compliance with Title 21.
1:54:08 PM
SHELLY DEERING, Regional Manager, Airlift Northwest, Juneau,
Alaska, introduced herself.
CHRIS MARTIN, Executive Director, Airlift Northwest, University
of Washington, Seattle, Washington, introduced herself.
MS. DEERING said she is testifying in support of SB 159, which
seeks to provide Alaskans with the ability to participate in
membership programs for air medical transportation. She has been
the regional manager of Airlift Northwest ("Airlift") for 21
years, and the company has been transporting patients from
Southeast and other regions of Alaska for 32 years. She and the
staff of 19 nurses and pilots live in Juneau. She explained that
Airlift sold air care membership in Alaska from 2008 until
November 2013 when the Division of Insurance asked the company
to stop due to a restructure of Airlift Northwest and an
interpretation of the regulations. Airlift currently has 4,066
members in the program that reside in Southeast.
She said the Division of Insurance has been supportive of
getting legislation that would allow Airlift and any other air
ambulance company to sell memberships to Alaskans. SB 159 does
this and also gives important oversight to the Division of
Insurance.
SENATOR MICCICHE observed that Section 1 appears to clarify that
an air ambulance service provider would have to respond if it
was available when there was a medical emergency, even if that
company didn't have an agreement. He asked if his understanding
was correct.
MS. DEERING stated that Airlift Northwest responds to any
emergent request it receives. The question of insurance isn't
raised.
SENATOR MICCICHE asked if she agrees that Section 1 requires
that.
MS. MARTIN agreed and also confirmed Ms. Deering's statement
that Airlift responds to any request for emergent transport. It
doesn't matter whether the person has an AirCare membership or
insurance. She noted that last year Airlift did over $7 million
in charity care.
SENATOR MICCICHE read Section 1.
1:59:23 PM
SENATOR STEDMAN disclosed that he may be an AirCare member.
SENATOR OLSON asked how Airlift Northwest is able to stay in
business in light of the ruling in Alaska.
MS. MARTIN said the company has four bases in Washington state
in addition to the base in Southeast Alaska, but the issue
really isn't financial. It's the right thing to do for patients.
2:01:49 PM
CHAIR DUNLEAVY opened public testimony. He found none. He
commented that without air ambulance service, his wife and
youngest child wouldn't have survived. He described the service
as crucial to all Alaskans, particularly those in rural regions.
CHAIR DUNLEAVY announced he would hold SB 159 in committee.