Legislature(2021 - 2022)BELTZ 105 (TSBldg)
03/21/2022 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB19 | |
| HB111 | |
| SB193 | |
| SB197 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 111 | TELECONFERENCED | |
| += | SB 193 | TELECONFERENCED | |
| *+ | SB 197 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 19 | TELECONFERENCED | |
SB 197-DIRECT HEALTH CARE AGREEMENTS
2:19:06 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SENATE BILL NO. 197 "An Act relating to direct
health care agreements; and relating to unfair trade practices."
She noted that this was the first hearing and the intention was
to hear both invited and public testimony.
2:19:29 PM
SENATOR SHELLEY HUGHES, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 197, introduced the legislation. The
sponsor statement read as follows:
Senate Bill 197 establishes guidelines for direct
health care agreements between medical providers and
patients. Direct Health Care (DHC) is a subscription
for health care services in which patients, employers,
or health plans pay primary care providers a flat,
simple periodic fee in exchange for access to a
clearly established broad range of health care
services.
DHC removes some of the financial barriers patients
encounter in accessing routine primary care, including
preventive, wellness, and chronic care services. With
a DHC plan, health care providers aren't burdened with
time-consuming insurance paperwork, leaving more time
to spend with patients. Under DHC agreements (there
are currently over 1,400 direct primary care practices
in 48 states), patients typically get same day access
or next day visits and the option to call or text
their clinic 24/7.
Health outcomes for patients improve under direct
health as there is a focus on routine and preventative
health care. Patients also feel less restrained from
interacting with their provider and typically seek
care before their symptoms become serious.
Consequently, visits to the emergency room are also
reduced.
Senate Bill 197 clearly spells out the elements of a
DHC agreement and emphasizes consumer protections.
Further, the bill clearly defines that Direct Health
Care agreements are not insurance. They do, however,
lower the hurdles to access for many Alaskans.
Alaskans spend more on health care per capita than any
other state in the union. At a time when many Alaskans
fear the uncertainties of the economy, pandemic, and
global instability, direct health care agreements can
provide an option for low-cost, stable access to
quality healthcare.
SENATOR HUGHES reported that 32 states had adopted similar
agreements and Alaska was one of 12 states with pending
legislation. She expressed hope that the committee would agree
that it was time for the legislature to make this sensible
option available to Alaskans.
CHAIR COSTELLO asked Mr. Whitt to provide the sectional
analysis.
2:22:45 PM
BUDDY WHITT, Staff, Senator Shelley Hughes, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 197 on behalf of the sponsor. It read as follows:
Section 1 18.23.500 Page 1, Line 4 through Page 4,
Line 14
Adds new section “Direct Health Care Agreements” to
Chapter 23 of Title 18.
Section (a), page 1, line 6 through page 2, line 20 –
Defines a Direct Health Care Agreement as a written
agreement between patient, government entity or private
business and a provider for specific services in
exchange for an annual fee, that services provided for
the fee must be specified, and that the patient may
submit an insurance claim for services rendered beyond
those specified in the agreement.
Section (b), page 2, lines 21 through 27 – Directs that
providers must allow a patient to terminate the
agreement within 30 days and that if the agreement is
terminated, the provider shall provide a refund of the
payments made under the agreement, less payments made
for services already provided.
Section (c), page 2, line 28 through page 3, line1 – An
agreement between provider and patient may be terminated
in writing after thirty days, and the provider may give
a refund, charge a termination penalty or termination
fee.
Section (d), page 3, lines 2 through 5 – An agreement
between provider and employer or government entity may
be terminated in writing after thirty days, and the
provider may give a refund, charge a termination penalty
or termination fee.
Section (e), page 3, lines 6 through 10 – Modifications
or renewal to an existing agreement can be made upon
written agreement between both parties. A provider may
not make a change to the annual fee more than once a
year and a 45-day written notice must be given prior to
a change in fee.
Section (f), page 3, lines 11 through 14 – Specifies
that a direct health care agreement is not subject to
the consumer protections in Title 21 (Insurance) but are
subject to other consumer protections including AS
45.45.915 (Section 2 of the bill).
Section (g), page 3, lines 15 through 24 – A Direct
Health Care Agreement provider may not misrepresent
themselves or the services that they provide in a direct
health care agreement.
Section (h), page 3, line 25 through page 4, line 14 –
Specifies that a direct health care agreement is not
health insurance or underwriting, that direct health
care agreement services are exempt from regulation by
the Division of Insurance, and that a certificate of
authority or license to market is not required to offer
or execute such an agreement. The definitions of “health
care provider” and “health care service” are given in
subsections 1 and 2 of this section.
Section 2 AS 45.45.915 Page 4, line 16 through page
5, line 5
Adds new section “Direct Health Care Agreements” to
Chapter 45 of Title 45
Section (a), page 4, lines 16 through 22 – A health care
provider may not refuse to enter into a Direct Health
Care Agreement based upon any characteristic of a class
of persons protected by federal and state laws that
prohibit discrimination.
Section (b), page 4, line 23 through page 5, line 5 – A
health care provider may only decline to enter an
agreement or cancel an existing agreement if the
patients care needs are beyond that which the health
care provider can provide. An existing agreement may
only be terminated once the provider has transferred the
patient to a health care provider that can provide the
needed level of care and has agreed to provide the
patient with that needed level of care. The definitions
of “direct health care agreement” and “health care
provider” are the same as those found in section [1,
page 4, lines 6-14].
Section 3, Page 5, Lines 6 through 8
Adds violations of sections 1 and 2 of the bill to the
list of unlawful acts under the unfair trade practices
and consumer protections clause of the AS 45.50.471(b).
2:27:14 PM
MR. WHITT advised that the sponsor asked him to draft a response
to the analysis of the fiscal note from the Department of
Health, OMB Component Number 242. He offered to speak to that
now if that was the chair's wish.
2:28:10 PM
CHAIR COSTELLO expressed her preference to wait until a
subsequent hearing.
She asked if this would be a limitation for providers because
they are essentially committing to be available on short notice
to the individuals that paid for the service.
SENATOR HUGHES replied that she was aware of clinics that were
merging the models of insurance and direct-pay healthcare
agreements so in those settings it would be the provider's
choice. The model clearly defines the set of services so
subscribers that need services outside the list would have to
pay for the extra items.
CHAIR COSTELLO observed that the bill indicates that insurance
is not involved until the patient goes outside the list of
preapproved services. She asked if that means that the monthly
fee does not count toward the insurance deductible.
SENATOR HUGHES replied that's correct. She added that she
neglected to mention during the introduction that this is a good
option for small employers. They could offer health insurance
for catastrophic events and a direct-pay healthcare agreement
would cover primary care and preventative treatment. Nationwide,
it is generally primary care providers that are using these
direct-pay healthcare agreements, but the option is available
for specialists as well.
2:30:55 PM
SENATOR GRAY-JACKSON asked who determines the monthly fee.
SENATOR HUGHES replied it is an agreement between the provider
and the patient, but the model is that each patient would pay
the same fee.
SENATOR GRAY-JACKSON asked for an estimate of what the fee might
be.
MR. WHITT replied the fees vary from state to state but his
research has found fees ranging from $100 to $250 per month. The
demographic makes a difference but it's based on the number of
items on that list that are covered under the agreement.
CHAIR COSTELLO asked Ms. Wing-Heier to come forward.
2:33:17 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community, and Economic Development, Anchorage,
Alaska, introduced herself.
SENATOR STEVENS asked if there would be an advantage for
insurance companies to cover the fee [for direct-pay healthcare
agreements].
MS. WING-HEIER replied insurance companies will stay out of
direct-pay healthcare agreements. She posed a hypothetical to
demonstrate that a $100 per month direct-pay healthcare
agreement could make good, cost-saving sense for a family that
had a $15,000 deductible health insurance plan.
SENATOR STEVENS asked for confirmation that Medicare would not
pay the fee for a direct-pay healthcare agreement.
MS. WING-HEIER replied Medicare won't touch direct-pay
healthcare agreements but the division believes that Alaskans on
Medicare will find them beneficial because it can be so
difficult to find primary care physicians who treat Medicare
patients.
2:35:04 PM
SENATOR GRAY-JACKSON asked if the fee for a family of four would
be different than for an individual.
MS. WING-HEIER replied she would assume so.
CHAIR COSTELLO offered her understanding that individuals within
a group would be paying the same fee and this could include a
small business. This is an option that encourages preventative
care.
2:36:29 PM
SENATOR STEVENS asked Ms. Wing-Heier if she had any concerns
about these agreements.
MS. WING-HEIER replied the division supports the bill, but to
avoid confusion, AS 21.03 would need to be amended to list the
other types of practices that are not insurance. She added that
the division is fairly sure these agreements are already in use
in Alaska, but because they are not allowed right now, she did
not want to hear testimony about this practice here in the
state.
SENATOR MICCICHE asked why they aren't already allowed.
MS. WING-HEIER explained that the definition of direct-care
health care sounds very much like insurance but the specific
definition has not been added to AS 21.03, which is the scope of
code for insurance. Until that's done, there is a problem
because it sounds as though the doctor is the insurance company.
SENATOR MICCICHE pointed to paragraph (3) on page 2, lines 7-9
that says these agreements must clearly state they are not
health insurance and they don't meet any federal mandate for
health insurance. He asked why one of these agreements wouldn't
fulfill the mandated insurance coverage under federal law if it
provided those services and care.
MS. WING-HEIER replied the federal law only recognizes insurance
companies and self-insured plans, not doctors providing the care
under these agreements. The agreement could list all the
essential benefits and provide the same services, but still not
be a qualified health plan.
SENATOR MICCICHE asked if that was a gap in the Affordable Care
Act. If ACA's goal was to provide adequate health care for all
Americans, he said these agreements are a more creative
solution.
MS. WING-HEIER replied they are creative but they do not cover
catastrophic losses because there would be too few people to
spread the risk for such things as a million dollar baby or
someone with hemophilia. A private practice could not support
that kind of risk.
CHAIR COSTELLO listed the individuals available to answer
questions.
2:40:58 PM
At ease
2:42:10 PM
CHAIR COSTELLO reconvened the meeting.
2:42:23 PM
CHAIR COSTLLO found no one who wished to comment and she closed
public testimony on SB 197.
She held SB 197 in committee for future consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 19 Letters of Support Received as of 3.21.22.pdf |
SL&C 3/21/2022 1:30:00 PM |
HB 19 |
| HB 111 v. I Sponsor Statement 2.10.2022.pdf |
SL&C 3/21/2022 1:30:00 PM |
HB 111 |
| HB 111 v. I Sectional Analysis 2.10.2022.pdf |
SL&C 3/21/2022 1:30:00 PM |
HB 111 |
| HB 111 Supporting Document - FAQs 2.16.22.pdf |
SFIN 4/21/2022 9:00:00 AM SL&C 3/21/2022 1:30:00 PM |
HB 111 |
| SB 193 Version I.pdf |
SL&C 3/21/2022 1:30:00 PM |
SB 193 |
| SB 193 Explanation of Changes, version B to I.pdf |
SL&C 3/21/2022 1:30:00 PM |
SB 193 |
| SB 197 Sponsor Statement.pdf |
SL&C 3/21/2022 1:30:00 PM |
SB 197 |
| SB 197 Sectional Analysis.pdf |
SL&C 3/21/2022 1:30:00 PM |
SB 197 |
| SB 197 Fiscal Note 242 - DOH.pdf |
SL&C 3/21/2022 1:30:00 PM |
SB 197 |
| SB 197 Supporting Document - Pioneer Health DHCA White Paper.pdf |
SL&C 3/21/2022 1:30:00 PM |
SB 197 |