Legislature(2013 - 2014)CAPITOL 106
03/27/2014 03:00 PM House HEALTH & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SB169 | |
| HB319 | |
| HB355 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 347 | TELECONFERENCED | |
| *+ | HB 355 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 169 | TELECONFERENCED | |
| += | HB 319 | TELECONFERENCED | |
SB 169-IMMUNIZATION PROGRAM; VACCINE ASSESSMENTS
3:04:48 PM
CHAIR HIGGINS announced that the first order of business would
be CS FOR SENATE BILL NO. 169(FIN), "An Act establishing in the
Department of Health and Social Services a statewide
immunization program and the State Vaccine Assessment Council;
creating a vaccine assessment account; requiring a vaccine
assessment from assessable entities and other program
participants for statewide immunization purchases; repealing the
temporary child and adult immunization program; and providing
for an effective date."
3:05:44 PM
DAVID TEAL, Legislative Fiscal Analyst, Legislative Finance
Division, Alaska State Legislature, referred to Fiscal Notes 6
and 7 [Included in members' packets], and explained that Fiscal
Note 6 was for the fund capitalization, and Fiscal Note 7 was
for epidemiology. He directed attention to Fiscal Note 7, and
pointed to the almost $4.5 million in the governor's Fiscal Year
2015 budget from general funds, which was also listed as a
negative figure in the requested appropriation. He explained
that $4.5 million was being taken away from epidemiology and the
Division of Public Health, Fiscal Note 6, and moved to the
Vaccine Assessment Account fund, Fiscal Note 7. He clarified
that there was not any spending of new general funds, that the
purpose of the funds remained the same, and that this would
create a more permanent program. Referring back to Fiscal Note
6, he pointed to the almost $27 million from the general fund
receipts, which were raised from the assessment fee for
vaccines. He explained that these funds are used to buy more
vaccine, which was distributed after payment of assessment fees,
and then these fees were sued to maintain the cycle. He pointed
out that there would not be any need for additional general
funds, as long as the assessment fees were used to replenish the
fund. He had questioned whether the $31 million in Fiscal Note
6 was sufficient, and Department of Health and Social Services
had assured him that the $31 million would not be exceeded. He
concluded that the net effect on the general fund was zero, as
money was simply being moved from one place to another.
3:10:04 PM
JILL LEWIS, Deputy Director - Juneau, Central Office, Division
of Public Health, Department of Health and Social Services,
clarified that the vaccine was not sold or re-sold, but that the
assessments were based on the projected cost for the annual
purchase of vaccines. She said that there were also assessments
and payments made throughout the year that generated the revenue
over the course of the year to keep pace. She reported that the
program bought vaccine every month, allowing management for the
expiration dates and the necessary volume to respond to any
disease outbreaks or demand in the state. She explained that
the aforementioned $4.5 million was enough capitalization as 50
percent of the children's vaccine was purchased with a federal
grant, which, as it was not forwarded to the state coffers, did
not reflect in the fiscal notes. She pointed out that, as there
was already vaccine on the shelf to use, this would be enough
capital to get started. She declared that this system had
worked well in other states.
CHAIR HIGGINS offered his understanding that the program worked
well in other states as those were only pediatric programs,
whereas the proposed bill included adult vaccines. He asked if
the assessment value to the insurers had been determined.
MS. LEWIS replied that the amount of assessment per dosage had
not yet been determined, although it was $50 - $200 per person
in other states. She explained that there were a variety of
variables for determining the assessment.
CHAIR HIGGINS returned attention to the assessment formula and
asked about letters of support from the insurance carriers.
MS. LEWIS offered her belief that there had only been the letter
of support from Premera Blue Cross [Included in members'
packets], although the Medicaid program had plans to
participate, and its program covered "a significant portion of
the population."
CHAIR HIGGINS asked if, as payment of the assessment was
important, it would be beneficial to have letters of support
from the insurance industry.
MS. LEWIS replied that there had been discussions with the human
resource departments and Dr. Hurlburt regarding the willingness
to participate in the program. She pointed out that Premera
Blue Cross served almost 75 percent of the private health care
market in Alaska.
CHAIR HIGGINS surmised that a lot of confusion had arisen from
the Fiscal Note.
3:17:27 PM
JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State
Legislature, referred to the sectional analysis [Included in
members' packets]. She directed attention to the two graphics
titled SB 169 Statewide Immunization Program [Included in
members' packets] which offered a pictorial analysis of each
step of the program.
MS. CONWAY paraphrased from the SB Statewide Immunization
Program Sectional Analysis (LS 1219\I), which read:
Sec. 18.09.200(a). Establishes a statewide
immunization program in the Department for the purpose
of monitoring, purchasing, and distributing vaccines
to providers.
Sec. 18.09.200(b). The Department of Health and Social
Services shall maintain a list of recommended vaccines
for inclusion in the program; establish the 1st year's
assessment
& thereafter make annual assessments based on
commission determinations; notify insurers and other
program participants of the assessment amount; devise
a method for crediting overpayments; coordinate the
bulk purchase of vaccine; set procedures for
distributing vaccines; and review appeals for errors.
Sec. 18.09.210. Establishes the State Vaccine
Assessment Council within HSS for the purpose of
determining the assessment amount. The commission has
8 members appointed by the Commissioner: the state's
Chief Medical Officer (chair); Division of Insurance
Director; 3 health care insurers, one of whom must be
a plan administrator; 2 health care providers; and 1
representing a tribal or public health insurance plan
who serve without compensation or reimbursement of
expenses. Terms are 3 years with a 2- term limit. HSS
will provide staff and other assistance to the
commission. The commission establishes and implements
a plan of operation, submits an annual financial
report to HSS each July 1st, and monitors compliance
with the program.
CHAIR HIGGINS asked who would run the assessment council.
MS. CONWAY directed attention to page 2, line 19, of the
proposed bill, which discussed the makeup of the council. She
reported that the council would be chaired by the Chief Medical
Officer for the [Division] of [Public] Health. She directed
attention to page 2, line 24, which described that the council
consisted of eight members appointed by the commissioner, and
included the "department's chief medical officer for public
health," two health care providers licensed in the state, and
three members representing health care insurers licensed in the
state, one of whom must be a health care plan administrator.
She noted that each insurer member must represent a different
organization in the state. She continued, and stated that there
would also be a representative of a tribal or public health
insurance plan, and the director of the division of insurance or
the designee.
CHAIR HIGGINS acknowledged that, although Vermont included an
adult portion in their program, the state was "still working out
the nuts and bolts even though they've been at it for a few
years." He pointed out that Vermont was now having a company
run this program, and he asked if the bill sponsor had
investigated this option.
MS. LEWIS directed attention to page 3, line 8, which read:
"The department shall provide staff and other assistance to the
council." She relayed that seven of the nine states with
similar programs had contracted with a company experienced in
administration of these programs. She noted that those costs
were included as a surcharge in the assessment and program
receipts, so there were no state general funds in support. She
estimated that cost to be about one percent, $300,000, each
year.
CHAIR HIGGINS reported that the fee in Vermont for the overall
cost of vaccines was $50,000 annually, three percent the first
year, two percent the second year, and one percent for the third
year.
3:23:06 PM
MS. CONWAY returned to her discussion of the sectional analysis,
and paraphrased the section, which read:
Sec. 18.09.210(f)(1). The "plan of operation" must
include the method for calculating the assessment
amount for each covered individual; the method for
determining proportional costs to assessable
entities/participants; procedures for the collection
and deposit of assessment fees; procedures for
collecting data which includes at a minimum the number
of covered individuals and vaccine usage; and a system
for crediting overpayments.
Sec. 18.09.220(a). Requires the assessable
entities/participants to pay the assessment to the
department for each covered individual; provide
information about number of covered individuals and
actual usage; and provide audited financial statements
upon request.
Sec. 18.09.220(b). Requires that the assessment
include reasonable costs for overhead. The provider's
fee for administration of the vaccine is excluded from
the assessment.
Sec. 18.09.220(c). States that an assessment is a
medical expense for the assessable entity/participant.
Sec. 18.09.220(d). Provides for a process to appeal
the assessment determination to the commissioner.
Sec. 18.09.225. Allows health care providers to opt
into the program to purchase vaccine.
Sec. 18.09.230. Creates a special account in the
general fund for the purpose of purchasing vaccines.
The legislature may appropriate program receipts from
vaccine assessments, money from other sources, and
interest earned. Appropriations do not lapse.
REPRESENTATIVE KELLER, referencing Sec. 18.09.225, asked why
someone would not be approved.
MS. LEWIS explained that she could only think of a very rare
instance when a provider was not already enrolled with the
immunization program, and had not yet completed the paperwork.
She stated that the department would work with the provider to
fulfill the requirements.
3:26:27 PM
MS. CONWAY paraphrased the next section, which read:
Sec. 18.09.240. Allows the commissioner to determine a
monetary penalty for noncompliance.
MS. LEWIS, in response to Chair Higgins, explained that should
an entity not pay, the commissioner may assess a penalty "on top
of the assessment," although the penalty was not required.
CHAIR HIGGINS asked for clarification that assessment payments
would be quarterly.
MS. LEWIS replied that this was currently being discussed, as it
was the most common payment schedule in other states. She
shared that there was also the possibility for monthly payments,
and could be determined by the best cash flow scenario for the
payers and providers.
CHAIR HIGGINS suggested that quarterly payments be paid up
front, prior to the start of the quarter, to ensure
participation in the program and to eliminate any need for a
penalty.
MS. LEWIS expressed her agreement.
MS. CONWAY moved on to paraphrase Section 2, page 5, line 16,
which read:
Section 2. 18.09.900. Defines the terms assessable
entity, commissioner (Health & Social Services),
council, covered individual, other program
participant, program, provider, recommended vaccine,
and vaccine.
Sec. 18.09.900(3). An "assessable entity" means a
health care insurer, the state health care plan, a
public or private entity that offers a publicly funded
plan (to the extent allowed by law), and third-party
administrators.
MS. CONWAY paraphrased Section 3, Section 4, Section 5, Section
6, and Section 7, which read:
Section 3. Requires assessable entities to provide
information to the department under (AS 21.09.242)
Section 4. Adds the vaccine assessment account to the
list of special accounts for program receipts in (AS
37.05.146(c))
Section 5. Repeals Ch. 24, SLA 2012 (HB310), a
temporary statewide immunization program.
Section 6. Redirects the remaining HB310 funds to be
deposited to the vaccine account.
Section 7. Makes the act effective July 1, 2014.
3:30:05 PM
CHAIR HIGGINS opened public testimony.
3:30:34 PM
WARD HURLBURT, MD, Chief Medical Officer/Director, Division of
Public Health, Central Office, Department of Health and Social
Services, declared that five years earlier, Alaska had been 49th
nationally in immunization rates for two year olds; however, the
vaccine money for the uninsured and underinsured had improved
the immunization rates for 2 year olds in Alaska to 37th or
38th. He stated that although this was not good, it was
significantly better than it had been, and further improvement
was intended. Directing attention to the aforementioned
comparable programs in nine other states, he offered his belief
that the proposed program presented the best of these programs.
He noted that Premera Blue Cross was the chair for the vaccine
advisory commission in the State of Washington, and had shared
its experiences. He stated that essentially all the insurers in
Alaska had participated in that Washington vaccine advisory
council. He mentioned that New Hampshire had improved its
immunization rates for two year olds and was now second only to
Hawaii. He explained that the approach by Alaska was to do "the
right thing" and provide all Alaskans with the immunizations
recommended for national standards by the [Advisory] Committee
on Immunization Practices (ACIP), although it was understood
that the state could not be placed in financial risk for more
general funding to the program. He stated that the insurers and
the vendors needed an assurance of no risk for double payment or
a higher cost. He offered examples that the proposed
legislation offered the flexibility to prioritize. He noted
that if there were any savings over current costs, and the
surcharge covered administrative costs with sufficient funding
for the uninsured and underinsured, then the program would offer
all the recommendations of vaccines for all Alaskans. However,
kids would have priority over adults, and certain diseases would
have priority. He noted that there would be a review of the
return on investment, as some vaccines were a much better
investment for the benefits. He declared that the state would
continue to purchase children vaccines on the favorable federal
schedule, and there were multi-state purchasing cooperatives for
adult vaccines, if necessary. He shared that some states
included Employment Retirement Income Security Act (ERISA)
employers. He stated that the administrative surcharge would be
kept as low as possible, with a long term projection of 1
percent. He pointed out that Alaska could not mandate
participation by federal programs or the Tribal Health system,
although there had been discussion with these entities for the
level of participation. He noted that Tricare wanted to pay
retail prices to providers after the fact, although there were
discussions for the advantages to saving money and getting
better immunization rates. He relayed that Idaho had allocated
some general funds to provide immunizations for Tricare children
beneficiaries. In the other states with similar programs, it
was about 60 percent more likely for protection of the
population through immunizations. He declared that there was
strong support in Alaska from the Alaska chapter of the American
Academy of Pediatrics, the Alaska Primary Care Association,
Premera Blue Cross, and the Alaska Nurses Association. He noted
that the proposed bill would allow medical professionals to
provide immunizations more easily. He reiterated that the
administration of the program would be contracted, and that the
vaccine assessment council would be comprised of representatives
of providers and payers. He declared that involvement from the
private sector would be much stronger.
REPRESENTATIVE REINBOLD asked which adult vaccines would be
provided.
DR. HURLBURT replied that the most cost effective adult vaccines
were the annual flu vaccine and the once-given pneumococcal
vaccine to prevent pneumonia. He reported that the shingles
vaccine, which was not recommended until 60 years of age, was
more expensive and was about 50 percent effective.
REPRESENTATIVE REINBOLD offered her belief that it was necessary
to have vaccine plans for adults, and asked whether it was the
state, the federal government, the insurance company, or the
patient who would save money with this program.
DR. HURLBURT replied that the Affordable Care and Patient
Protection Act required the provision of vaccines, although not
everyone would be insured. He noted that those insured through
a private company or Medicaid would purchase vaccines at retail,
while there could be significant increases to premiums in the
plans under the Affordable Care and Patient Protection Act in
the next year. Lower cost for vaccines could mitigate these
premium increases, as well as the costs to Medicaid. He opined
that there would be fewer people either underinsured or without
coverage.
REPRESENTATIVE REINBOLD asked who was going to save money.
DR. HURLBURT replied that, as the costs of the immunization
services were divided and would cost less for those with
coverage, then the premiums would cost less, it would lower
Medicaid costs, and it would save tax dollars.
3:45:42 PM
REPRESENTATIVE KELLER expressed his approval that the providers
were engaged in the program. He opined that the size of the
fund defined the number of immunization services offered. He
asked if there would be a higher assessment to the providers if
the wholesale price changed. He opined that this system would
fluctuate with supply and market demand, and that the council
would have to make these decisions.
DR. HURLBURT replied that vaccines did become more expensive and
there were more diseases that could be prevented with vaccines.
He offered his belief that the cost of vaccines for a two year
old was now about $1700, and was continuing to increase. He
welcomed any constraints for expenses, and opined that, even if
the costs go up, the savings would still come to the payers,
insurance companies, and the employers. This program made the
vaccines more available and easier for the providers. He
explained that providers that chose not to participate would not
receive the vaccines.
REPRESENTATIVE KELLER asked to confirm that the priority for use
would be set by the council, and would be determined by cost
effectiveness.
DR. HURLBURT said that the upper limit would be all the vaccines
recommended by ACIP for all the citizens. He relayed that 50
percent of children were vaccinated through funding by the
federal program, Vaccines for Children. He said that about 25
percent now had insurance coverage. He stated that the goal was
to get immunizations for all the Alaskans who accepted it. He
reminded the committee that the priorities would be implemented
if there was not enough money.
CHAIR HIGGINS asked for clarification regarding the vaccines for
tribal health.
DR. HURLBURT replied that the Vaccines for Children program
covered all the Alaskan Native children, as well as those on
Medicaid. He said that the tribal entity was able to purchase
vaccines through the federal authority, and they could be a
community resource.
CHAIR HIGGINS pointed out that the tribal health was not part of
the assessment value, as they did not contribute to it. He
noted that the other providers would have to "front that portion
out for that." Reading from the proposed bill, he asked whether
an individual residing in the state was provided coverage for
recommended vaccines if they did not have insurance coverage.
DR. HURLBURT said that the intent of the proposed bill was to
cover everybody, whereas a portion of the savings by the
insurers would be paid as an assessment to provide the pool of
money.
3:56:33 PM
PATRICIA SENNER, Professional Practice Director, Alaska Nurses
Association, testified in support of SB 169. She relayed that
she had directed a clinic serving homeless teenagers, and
service had included immunizations for youth and its staff. She
explained that current Universal Coverage legislation required
separation when purchasing and storing the vaccines. She
pointed out that market rates for vaccines not eligible for
state vaccine programs were much more expensive. She reminded
the committee that young parents also needed vaccines in order
to protect their children who were too young to be vaccinated.
She reported that it was not possible to buy single doses of
vaccines, as most were sold in packages of ten, whether or not
that quantity was necessary. Reimbursement only came after
patient use, and the price to her clinic had been much more than
either the government or large providers paid. She stated that
access to vaccines sold through a state exchange would afford a
great savings to the providers. She pointed out that providers
were already familiar with the state vaccine depot. She offered
an anecdote about a case of polio in her clinic, and the
rapidity for transmission of diseases throughout the world. She
offered her belief that the proposed bill would reduce the
amount of reimbursement for immunizations by insurance companies
to providers.
4:00:09 PM
JODYNE BUTTO, Past President, American Academy of Pediatrics,
stated her agreement with the earlier testimony supporting the
proposed bill. She pointed to the ease for a universal system,
instead of a separate stash of vaccines, and separate
documentation for its use.
4:02:08 PM
PAUL RICHARDS, introduced another PhRMA representative and
offered to answer questions.
KURT STEMBRIDGE, Task Force Chair, PhRMA, relayed that Idaho had
started a pediatric [vaccine] assessment program in 2010. He
shared that PhRMA recommended three amendments to the proposed
bill. He directed attention to page 5, line 27, and recommended
that "an adult" be deleted, which would make this a pediatric
only program, similar to the other states. The second
recommendation was on page 2, line 19, and he suggested that a
member of each body of the Alaska State Legislature be added to
the State Vaccine Assessment Council. His final recommendation
was to designate that one of the health care provider council
members be a pediatrician.
MR. STEMBRIDGE, referencing his first suggestion for making the
immunization program pediatric only, explained that Idaho had
struggled with ERISA plans, which were governed by federal, not
state, control and allowed an option to either pay-in or pay-
out. He stated that Tricare was one of the biggest ERISA plans,
and that Tricare had not paid in in Idaho. He reported that, as
Idaho had to keep the program solvent, it was necessary to
support the program with state money. He pointed out that
Alaska had $4.6 million to cover the cost of getting the
pediatric program "up and running," and that there was time to
work through any problems if the ERISA plans did not pay into
the assessment. He declared that the problem with the ERISA
plans would be compounded with an adult program. He stated that
the Tricare adult program would not pay if the Tricare pediatric
program did not pay. He reported that there was also the
possibility that Medicare would not pay into the assessment. He
opined that there would be more time to get the program running
if it was pediatric only. He pointed out that there was only
one other state with an adult vaccination program, which limited
the modeling possibilities. He declared that there was a
"vibrant, growing adult market out there right now, where
people, because of the ACA [Affordable Care and Patient
Protection Act], requires that all insurance companies cover
preventative services." He stated that the adult portion would
only cover people with insurance. He offered his belief that,
although the bill declared that this was voluntary, it was not,
and he offered an anecdote in support. He explained that, under
the ACA, a person could not be charged for any out of pocket
expenses, and that any reimbursement to the pharmacist would be
denied because once an insurance company paid into the
assessment they would sever the reimbursement mechanism so they
would not be billed twice. He opined that there were only two
choices: join the program or don't give immunizations.
MR. STEMBRIDGE directed attention to the second recommendation
he had presented regarding the appointment of legislators to the
assessment council. He pointed out that, otherwise, there were
no elected officials on a council which had been given the
ability to tax without any accountability to the voting public.
He noted that Idaho had put two legislators on its vaccine
assessment council. Referring to his third suggestion to add
two practicing pediatricians to the council, he explained that
they would provide expertise on vaccines. He declared that the
proposed adult program would subsidize insurance companies "off
the back of the pharmaceutical industry." He reported that the
industry spent billions every year to invent medications and
vaccines to prevent diseases, and that the ACA coverage of
vaccines was built into the premiums. He declared his pride for
working in an industry that was "looking for the next cure" and
preventing more diseases.
CHAIR HIGGINS asked for clarification whether the provider
submitted billing for vaccinations was denied by the insurance
companies under the Idaho pediatric assessment program.
MR. STEMBRIDGE replied that insurance companies would not
reimburse for vaccines after the pediatric assessment program
was initiated, as the insurance companies declared this was a
double billing. He said that this would happen with an adult
assessment program, as well.
MR. STEMBRIDGE said that PhRMA wanted to provide as many
vaccines as possible to the people of Alaska, as vaccines saved
money and benefited the citizens.
CHAIR HIGGINS said that Alaska worked toward taking care of its
people. He offered an anecdote about enhanced dentistry
treatment in rural Alaska for adults.
MR. STEMBRIDGE added that the proposed bill did not address
patients without insurance. He referred to the analysis of
Fiscal Note 7, and read "all except uninsured adults and there
is not payer." He suggested putting effort and money into
support for those with no insurance, as opposed to subsidizing
the insurance industry.
4:14:03 PM
MR. STEMBRIDGE, in response to Representative Reinbold, said
that, as insurance companies were already paying into the
assessment program, they did not want to also reimburse claims
for vaccines.
REPRESENTATIVE REINBOLD asked who were the potential winners and
losers.
MR. STEMBRIDGE replied that, without the proposed PhRMA
amendments for this to become a pediatric bill, the winners were
the insurance companies, as they would receive a benefit for
covering all the immunizations. He declared that the adult
provision was merely a subsidy to the insurance companies.
REPRESENTATIVE KELLER asked for clarification that the drug
industry controlled the prices.
MR. STEMBRIDGE replied that competition set the prices. He
explained that multiple pharmaceutical companies were soliciting
flu vaccines for the upcoming year. He reported that the
contract had been designed and negotiated with Centers for
Disease Control and Prevention (CDC) for a very specific
clientele, those with no insurance, or insurance that does not
cover, as well as Native Alaskans. He questioned the
consequence if CDC said that this contract could not be
accessed.
4:19:06 PM
DENISE DANIELLO, Executive Director, Alaska Commission on Aging,
Division of Senior and Disabilities Services, Department of
Health and Social Services (DHSS), explained that the Alaska
Commission on Aging was a governor appointed commission that
planned services for seniors, educated Alaskans about senior
issues, and advocated for the needs of older Alaskans. She
declared support for the proposed bill, and reported that the
commission had been involved in prior legislation for ensuring
those un-insured and under-insured for access to vaccines. She
explained that the immune systems of seniors weakened with age,
hence the importance for access to vaccines. She listed the
recommended vaccines, which included influenza, shingles, and
pneumonia vaccines. She allowed that there was some
underutilization for some of these vaccines, noting that only 11
percent of seniors took advantage of the shingles vaccine. She
reported that lack of co-payment and deductible funds was often
the reason. She opined that the proposed bill would offer
improved access to the vaccines. She pointed out that the
proposed bill would also benefit grandparents who were living on
a fixed income and raising grandchildren.
4:22:24 PM
CHAIR HIGGINS said that public testimony would be kept open and
SB 169 was held over.