Legislature(2023 - 2024)BELTZ 105 (TSBldg)

04/08/2024 01:30 PM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 102 REFUSE UTILITY REGULATIONS TELECONFERENCED
Moved SB 102 Out of Committee
-- Invited & Public Testimony --
-- Testimony <Time Limit May Be Set> --
+= SB 219 PRIOR AUTH EXEMPT FOR HEALTH PROVIDERS TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
-- Testimony <Time Limit May Be Set> --
*+ HB 97 SELF-STORAGE UNITS: LIENS; SALES TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
         SB 219-PRIOR AUTH EXEMPT FOR HEALTH PROVIDERS                                                                      
                                                                                                                                
1:42:31 PM                                                                                                                    
CHAIR  BJORKMAN   reconvened  the   meeting  and   announced  the                                                               
consideration  of  SENATE  BILL  NO.  219  "An  Act  relating  to                                                               
utilization  review  entities;   exempting  certain  health  care                                                               
providers  from  making  preauthorization  requests  for  certain                                                               
services; and providing for an effective date."                                                                                 
                                                                                                                                
1:43:15 PM                                                                                                                    
SENATOR DAVID WILSON, District N, Alaska State Legislature,                                                                     
Juneau, Alaska, sponsor of SB 219, provided the following                                                                       
statement for SB 219:                                                                                                           
                                                                                                                                
[Original punctuation included.]                                                                                                
                                                                                                                                
                       Sponsor Statement                                                                                        
                        Senate Bill 219                                                                                         
        "An Act relating to utilization review entities;                                                                        
      exempting certain health care providers from making                                                                       
      preauthorization requests for certain services; and                                                                       
               providing for an effective date."                                                                                
                                                                                                                                
     SB 219 aims to reduce  the wait time for certain health                                                                    
     care  services  by   exempting  qualified  health  care                                                                    
     providers  from  making preauthorization  requests  for                                                                    
     said  services. Currently,  Alaskans  who need  certain                                                                    
     health care  services must  wait days  or weeks  to get                                                                    
     preauthorized to  receive health care  services because                                                                    
     of  the   processing  time  between  the   health  care                                                                    
     provider and insurance companies.  This bill would help                                                                    
     Alaskans  receive  health  care  services  immediately,                                                                    
     especially health  care services that could  save their                                                                    
     lives.                                                                                                                     
                                                                                                                                
     Health  care  providers  shall   qualify  for  a  prior                                                                    
     authorization  exemption  if  at least  80  percent  of                                                                    
     prior authorization requests submitted  in the past 12-                                                                    
     month  period  were  approved   for  that  health  care                                                                    
     service.  Utilization  review   entities  will  provide                                                                    
     exempted health  care providers with  a list  of health                                                                    
     care services  for which the exemption  applies and the                                                                    
     duration  of   the  exemption.  This   helps  eliminate                                                                    
     unnecessary  delays  in   care  by  granting  providers                                                                    
     exemptions who  have demonstrated  consistent adherence                                                                    
     to   approval  guidelines   from  prior   authorization                                                                    
     requirements.                                                                                                              
                                                                                                                                
     Other states  with prior authorization  exemptions have                                                                    
     seen increased  frequency of  patients who  receive the                                                                    
     health  care  services  they need  and  help  eliminate                                                                    
     unnecessary  delays  in  care.   This  bill  will  help                                                                    
     Alaskans   receive   fast,   efficient,   and   quality                                                                    
     healthcare  when they  need it  without  waiting for  a                                                                    
     preauthorization process that  could cause their health                                                                    
     to decline even more.                                                                                                      
                                                                                                                                
     Please contact Julia  Fonov in my office  at (907) 465-                                                                    
     4711 or [email protected] for any questions.                                                                           
                                                                                                                                
1:45:47 PM                                                                                                                    
CHAIR  BJORKMAN  asked whether  "80  percent  approval for  prior                                                               
authorizations"  is  the  right  number or  the  right  thing  to                                                               
measure. He  asked whether  insurance companies  are incentivized                                                               
to  deny doctors'  prior authorization  requests so  that doctors                                                               
wouldn't qualify.  He suggested the approval  standards should be                                                               
higher than 80  percent. He also suggested that  a better measure                                                               
might be on  the back end if  claims and care given  was paid out                                                               
because the care  was in line with the industry  standard and the                                                               
medical necessity for a patient.                                                                                                
                                                                                                                                
1:46:55 PM                                                                                                                    
SENATOR WILSON  suggested the people prepared  to provide invited                                                               
testimony could speak to the  experience of other states with the                                                               
80 percent  threshold. He said it  was the intent with  SB 219 to                                                               
apply the 80 percent threshold  after claims have been processed,                                                               
so there would  not be the issue of claims  being denied in order                                                               
to disqualify  a practitioner.  He said SB  219 is  modeled after                                                               
legislation  in   other  states.  He  anticipated   testimony  on                                                               
experience with the "back end" of claims.                                                                                       
                                                                                                                                
1:47:55 PM                                                                                                                    
JULIA   FONOV,  Staff,   Senator  David   Wilson,  Alaska   State                                                               
Legislature,  Juneau, Alaska,  presented  the sectional  analysis                                                               
for SB 219.                                                                                                                     
                                                                                                                                
[Original punctuation included.]                                                                                                
                                                                                                                                
                       Sectional Analysis                                                                                       
                      Senate Bill 219 v. A                                                                                      
        "An Act relating to utilization review entities;                                                                        
      exempting certain health care providers from making                                                                       
      preauthorization requests for certain services; and                                                                       
               providing for an effective date."                                                                                
                                                                                                                                
     Section  1:  Amends  AS  21  (Insurance)  .07  (Patient                                                                  
     Protections Under Health  Care Insurance Policies) .005                                                                  
     (Regulations   relating   to  health   care   insurance                                                                  
     policies).                                                                                                               
     Page 1,  line 5,  through line  14: Adds  processes for                                                                  
     the  Director of  Insurance  to  adopt regulations  for                                                                    
     utilization review  entities, who are  individuals that                                                                    
     perform  prior  authorization,   as  established  under                                                                    
     section 2 of this bill.                                                                                                    
                                                                                                                                
     Section 2: Adds a  new section .100 (Utilization review                                                                  
     entities)   to   AS   21   (Insurance)   .07   (Patient                                                                  
     Protections Under Health Care Insurance Policies)                                                                        
     Page 2, line  1 through line 7: Adds  section (a) which                                                                  
     explains  a  healthcare  provider is  not  required  to                                                                    
     complete prior  authorization for  a covered  person if                                                                    
     at  least 80  percent of  prior authorization  requests                                                                    
     submitted by the provider for  that health care service                                                                    
     have been approved in the past 12 months.                                                                                  
                                                                                                                                
     Page 2, line 8 through  line 12: Adds section (b) which                                                                  
     explains  a health  care provider  may be  evaluated if                                                                    
     they  continue to  qualify for  an  exemption not  more                                                                    
     than once  every 12 months,  and an  existing exemption                                                                    
     is not required to be  evaluated and a longer exemption                                                                    
     period may be established.                                                                                                 
                                                                                                                                
     Page  2, line  13 through  14: Adds  section (c)  which                                                                  
     explains health  care providers do not  have to request                                                                    
     an exemption to qualify for an exemption.                                                                                  
                                                                                                                                
     Page  2, line  15 through  20: Adds  section (d)  which                                                                  
     explains  if  a  health  care  provider  is  denied  an                                                                    
     exemption,  they may  request  evidence  once every  12                                                                    
     months  on why  they were  denied an  exemption and  an                                                                    
     explanation  of  how  to appeal  the  denial,  and  the                                                                    
     health care provider may appeal the denial.                                                                                
                                                                                                                                
     Page  2, line  21  through line  30:  Adds section  (e)                                                                  
     which explains  utilization review entities  may revoke                                                                    
     an  exemption after  12 months  if: (1)  they determine                                                                    
     the health care  provider does not meet  the 80 percent                                                                    
     approval criteria based  on a review of  the claims for                                                                    
     the  health  care  service   for  which  the  exemption                                                                    
     applies,  (2) they  provide  the  health care  provider                                                                    
     with  the information  used to  determine revoking  the                                                                    
     exemption,  (3)   they  explain  to  the   health  care                                                                    
     provider how to appeal the determination.                                                                                  
                                                                                                                                
1:50:05 PM                                                                                                                    
MS. FONOV continued the sectional analysis.                                                                                     
                                                                                                                                
     Page 2,  line 31 through  page 3, line 3:  Adds section                                                                  
     (f)  which explains  the  exemption  remains in  effect                                                                    
     until  30  days  after  the  health  care  provider  is                                                                    
     notified of  the decision to  revoke the  exemption or,                                                                    
     if the health care  provider appeals the determination,                                                                    
     five days after the revocation is kept after appeal.                                                                       
                                                                                                                                
     Page 3, line  4 through line 8: Adds  section (g) which                                                                  
     specifies a decision to revoke  or deny an exemption by                                                                    
     a utilization  review entity must  be made by  a health                                                                    
     care  provider  licensed in  Alaska  with  the same  or                                                                    
     similar  specialty as  the health  care provider  being                                                                    
     considered  and  must  have  experience  providing  the                                                                    
     health care  service for which the  requested exemption                                                                    
     applies.                                                                                                                   
                                                                                                                                
     Page  3, line  9  through 13:  Adds  section (h)  which                                                                  
     specifies a  utilization review  entity must  provide a                                                                    
     health care provider who receives  an exemption of this                                                                    
     section with  a notice  that includes: (1)  a statement                                                                    
     that  the   health  care  provider  qualifies   for  an                                                                    
     exemption  from a  prior authorization  requirement and                                                                    
     the duration  of the  exemption, (2)  a list  of health                                                                    
     care services for which the exemption applies.                                                                             
                                                                                                                                
     Page  3, line  14  through line  23:  Adds section  (i)                                                                  
     which  specifies utilization  review  entities may  not                                                                    
     deny  or  reduce  payment for  a  health  care  service                                                                    
     exempted from  prior authorization, including  a health                                                                    
     care  service  ordered  by   an  exempted  health  care                                                                    
     provider  that is  performed or  supervised by  another                                                                    
     health care  provider, unless the health  care provider                                                                    
     providing  the  health   care  service:  (1)  knowingly                                                                    
     misrepresented  the health  care service  in a  request                                                                    
     for  payment with  the specific  intent to  deceive and                                                                    
     obtain an  unlawful payment  from a  utilization review                                                                    
     entity  or, (2)  failed  to  substantially perform  the                                                                    
     health care service.                                                                                                       
                                                                                                                                
1:51:53 PM                                                                                                                    
MS. FONOV continued the sectional analysis.                                                                                     
                                                                                                                                
     Page 3, line  24 through page 4, line  19: Adds section                                                                  
     (j) which defines in this section:                                                                                         
     (1) "health  care service" means: (A)  the provision of                                                                    
     pharmaceutical products,  services, or  durable medical                                                                    
     equipment or,  (B) a health care  procedure, treatment,                                                                    
     or  service provided:  (i) in  a  health care  facility                                                                    
     licensed  in  this  state  or,  (ii)  by  a  doctor  of                                                                    
     medicine,  by a  doctor  of osteopathy,  or within  the                                                                    
     scope of practice of a  health care professional who is                                                                    
     licensed in this state.                                                                                                    
     (2) "health  maintenance organization" has  the meaning                                                                    
     given in  AS 21.86.900 (means a  person that undertakes                                                                    
     to provide  or arrange  for basic health  care services                                                                    
     to enrollees on a prepaid basis).                                                                                          
     (3) "prior  authorization" means the process  used by a                                                                    
     utilization  review  entity  to determine  the  medical                                                                    
     necessity  or  medical  appropriateness  of  a  covered                                                                    
     health care  service before the health  care service is                                                                    
     provided  or a  requirement  that a  covered person  or                                                                    
     health care  provider notify a  health care  insurer or                                                                    
     utilization  review entity  before  providing a  health                                                                    
     care service.                                                                                                              
     (4) "utilization review entity"  means an individual or                                                                    
     entity that  performs prior  authorization for:  (A) an                                                                    
     employer  in  Alaska  with employees  covered  under  a                                                                    
     health benefit  plan or health insurance  policy, (B) a                                                                    
     health   care  insurer,   (C)   a  preferred   provider                                                                    
     organization,  (D)  a health  maintenance  organization                                                                    
     or, (E)  an individual or entity  that provides, offers                                                                    
     to  provide,   or  administers   hospital,  outpatient,                                                                    
     medical,  prescription  drug,   or  other  health  care                                                                    
     benefits to a person treated  by a health care provider                                                                    
     licensed in  Alaska under a  health care  policy, plan,                                                                    
     or contract.                                                                                                               
                                                                                                                                
     Section  3:  Effective   date.  Provides  an  immediate                                                                  
     effective date.                                                                                                            
                                                                                                                                
1:52:12 PM                                                                                                                    
CHAIR BJORKMAN announced invited testimony on SB 219.                                                                           
                                                                                                                                
1:53:06 PM                                                                                                                    
DR. EZEQUIEL (ZEKE) SILVA,  Texas Medical Association, Washington                                                               
D.C., said  he practices medicine  in San Antonio Texas  and that                                                               
he was  speaking for  the Texas  Medical Association  (TMA) which                                                               
collaborated with  the Alaska State  Medical Association  for the                                                               
American Medical Association. He said  the State of Texas was the                                                               
first  state  to  pass  a  law to  address  [the  requirement  by                                                               
insurance   companies  for]   prior  authorization   [of  medical                                                               
services] at the state level  and for state-regulated [insurance]                                                               
plans. He said  the Texas legislation passed in  2021 in response                                                               
to  the   experience  of  physicians  that   prior  authorization                                                               
requirements were  causing them undue  burden, such as  two full-                                                               
time   equivalents    doing   nothing   but    [pursuing]   prior                                                               
authorization on a  weekly basis and the denial  of very commonly                                                               
preformed services, including services  that were very much front                                                               
and center to what the  physicians were experiencing. He said the                                                               
greatest  motivation   [to  pursue  legislation]  in   Texas  was                                                               
physicians  reporting of  significant patient  harm due  to prior                                                               
authorization  requirements.  He  listed  those  harms:  patients                                                               
abandoning  treatment,  not  receiving   treatment  in  a  timely                                                               
fashion, loss of  bodily function and death. He  said the impetus                                                               
was great and TMA is proud of their actions at the state level.                                                                 
                                                                                                                                
DR  SILVA said  the  2021 [Texas]  legislation  went into  effect                                                               
later  in  2021   and  in  2023,  TMA  attempted   to  "tune  up"                                                               
regulations  around  the law.  He  reported  that those  had  not                                                               
passed  and that  improvement  could be  made.  He commended  the                                                               
efforts undertaken with SB 219 for Alaska.                                                                                      
                                                                                                                                
1:55:28 PM                                                                                                                    
CHAIR BJORKMAN asked  whether Dr. Silva could  identify pieces of                                                               
SB 219 that  could be improved or things that  are right and that                                                               
the bill sponsor could be proud of.                                                                                             
                                                                                                                                
1:55:50 PM                                                                                                                    
DR.  SILVA said  SB 219  is  well-constructed. He  opined the  80                                                               
percent  measure  is  reasonable  and his  reading  of  the  bill                                                               
suggested  it  would  apply  to same  service,  for  example,  an                                                               
orthopedic surgeon  being approved to provide  knee replacements.                                                               
If the surgeon  achieved 80 percent approval  for that procedure,                                                               
it would result in a "gold  card", which is an exemption from the                                                               
prior authorization requirement going forward.                                                                                  
                                                                                                                                
DR.  SILVA also  addressed the  requirement to  establish medical                                                               
necessity  for  a  given  service  and  noted  that  it  is  very                                                               
important  to  discern  and document  medical  necessity  through                                                               
examination and sound diagnosis.                                                                                                
                                                                                                                                
DR. SILVA  noted that only  three percent of physicians  in Texas                                                               
have achieved "gold  card" status. He suggested  that was because                                                               
the requirements are  so specific. He said the 80  percent is not                                                               
only per  physician, but it  is per exact procedure  described by                                                               
Current Procedural Terminology (CPT) code  and then per payor and                                                               
sometimes  also  per  individual   payor  product.  He  said  the                                                               
consequence of this degree of specificity  is that it is hard for                                                               
physicians to  achieve 80 percent  across all those  metrics. His                                                               
recommendation  would be  not to  include in  Bill 219  a minimum                                                               
[number  of  approvals]. He  said  this  is  in the  interest  of                                                               
maximizing the  protection of  patients from  the harms  of prior                                                               
authorization.                                                                                                                  
                                                                                                                                
1:58:17 PM                                                                                                                    
CHAIR BJORKMAN asked  whether it would be beneficial  to have the                                                               
80 percent  mark apply to a  group or class of  procedures rather                                                               
than one specific service or procedure.                                                                                         
                                                                                                                                
1:59:19 PM                                                                                                                    
DR. SILVA  said discussion in  Texas centered on  situations like                                                               
hospital   admissions  which   often  include   multiple  patient                                                               
evaluation  and management  codes that  apply to  and describe  a                                                               
patient's situation,  treatment and  response. He opined  that it                                                               
would  be  completely  logical  to have  large  groups  of  codes                                                               
included  in  the  80  percent  benchmark.  He  said  that  would                                                               
maintain  the spirit  of the  legislation which  is to  make sure                                                               
that physicians  are practicing  the best  care possible  and not                                                               
further subject  to prior  authorization, but  also acknowledging                                                               
that patients are different and  even though medicine is grounded                                                               
in science,  it is also  an art. The decisions  between physician                                                               
and  patient may  differ based  on patients  varied circumstances                                                               
and on the evolution of the practice of medicine.                                                                               
                                                                                                                                
2:00:47 PM}                                                                                                                   
JEFF DAVIS, Senior Vice  President, Radiation Business Solutions,                                                               
Wenatchee, Washington,  said he spent  18 years as  the president                                                               
of  Premera Blue  Cross Blue  Shield of  Alaska, part  of a  long                                                               
career in health care, the past  five years on the provider side.                                                               
He hoped  to bring a  balanced perspective to the  discussion and                                                               
said SB  219 is primarily  about patient protection.  He observed                                                               
that patients  are often overlooked  in this debate  and patients                                                               
bear the majority of the  cost of unnecessary prior authorization                                                               
in the form  of physical, emotional and  financial harm resulting                                                               
from  delays in  care. He  said there  are multiple  studies that                                                               
demonstrate the negative impacts  of prior authorization. He said                                                               
it is not trivial  and it is not all about  the provider or about                                                               
the payor, it is about the  patient. He said the original goal of                                                               
prior  authorization  were  good;   it  was  designed  to  reduce                                                               
unnecessary  care and  make sure  things that  were paid  for [by                                                               
payors/insurance]  were needed,  but at  this time  it has  grown                                                               
unchecked and has become a problem rather than a solution.                                                                      
                                                                                                                                
MR. DAVIS said it is important  to remember that SB 219 would not                                                               
eliminate prior  authorization, but  it seeks to  restore balance                                                               
to a  situation that has  become very  one-sided in favor  of the                                                               
payor. He  added that when  a provider signs a  network contract,                                                               
which  allows them  to provide  care as  an in-network  provider,                                                               
there  is a  provision that  says the  provider agrees  to comply                                                               
with the  utilization of requirements  of the payor and  that the                                                               
payor may,  at any  time, amend those  requirements. He  said the                                                               
provider is  often given a period  of time in which  to object to                                                               
those amendments, but the bottom  line is usually if the provider                                                               
doesn't accept  those amendments,  their only  real option  is to                                                               
terminate  the  contract, which  has  many  consequences for  the                                                               
provider  and for  their patients.  He described  this as  a very                                                               
one-sided situation  with payors adding multiple  layers of prior                                                               
authorization  over  the  years  to the  point  that  the  payors                                                               
themselves  recognize   that  it  has   gone  too  far   and  are                                                               
eliminating   scores    of   procedures   that    require   prior                                                               
authorization. He  also noted that  payors themselves  have "gold                                                               
card"   requirements   and  that   if   a   provider  meets   the                                                               
requirements, they are  recognized for that. He said  SB 219 puts                                                               
this recognition and exemption from  prior authorization in place                                                               
for providers across the spectrum  of the health care environment                                                               
rather than  requiring each provider  to go through a  costly and                                                               
time-consuming process of  trying to achieve gold  card status on                                                               
their own.                                                                                                                      
                                                                                                                                
MR. DAVIS  said he does  believe SB  219 restores the  balance in                                                               
the payor-provider  relationship to  a large  degree. He  said he                                                               
believed  a provider  who meets  the standard  80 percent  of the                                                               
time is likely to meet it 100  percent of the time. He said there                                                               
are  very   few  providers  that  require   correction  by  prior                                                               
authorization, but the current system applies to everyone.                                                                      
                                                                                                                                
2:05:41 PM                                                                                                                    
Senator Bishop joined the meeting.                                                                                              
                                                                                                                                
MR. DAVIS noted  studies that show 96 percent of  the time, there                                                               
will be  approval and patients  and providers are  spending their                                                               
time waiting and  the insurers are spending their  time and money                                                               
to go  through a  process that yields  little benefit  for anyone                                                               
involved.                                                                                                                       
                                                                                                                                
2:06:18 PM                                                                                                                    
SENATOR  GRAY-JACKSON  said  one   of  biggest  issues  from  her                                                               
perspective is patient claims being  denied. She asked whether SB
219  could prevent  claim denial.  She noted  the packet  says 15                                                               
percent of  claims are  denied and she  opined the  percentage of                                                               
denials is higher than that.                                                                                                    
                                                                                                                                
2:06:49 PM                                                                                                                    
MR. DAVIS  said according to  his understanding  of SB 219,  if a                                                               
provider has  been exempted from  prior authorization,  it cannot                                                               
later be  denied for lack  of prior authorization. He  said there                                                               
are  other  provisions  in  a   policy,  such  as  the  need  for                                                               
demonstrated medical  necessity and  there could  be a  time when                                                               
medical  necessity might  be found  insufficient after  the fact,                                                               
but he  did not think SB  219 would impact a  situation like that                                                               
negatively and may in fact help on the other side.                                                                              
                                                                                                                                
2:07:58 PM                                                                                                                    
CHAIR BJORKMAN  asked what the  effect of similar  legislation in                                                               
other states has had on the cost of health care.                                                                                
                                                                                                                                
2:08:23 PM                                                                                                                    
MR.  DAVIS  said  he  doesn't have  that  experience  with  other                                                               
states.  He  reiterated  that  96  percent  of  the  time,  prior                                                               
authorization is  approved so he  opined that an exemption  at 80                                                               
percent would  have an  impact on  the cost of  health care  as a                                                               
direct result;  however, he said  there are studies  that suggest                                                               
physicians   spend  10-15   percent  of   their  time   on  prior                                                               
authorization. He said they spend  10-15 percent of their time on                                                               
something that  96 percent of  the time results in  approval and,                                                               
for most  providers, likely 100 percent  of the time. If  all the                                                               
physicians  in  Alaska  were  able   to  be  10-15  percent  more                                                               
productive; if  they were  able to  eliminate positions  in their                                                               
practices  that  deal with  prior  authorization  on a  full-time                                                               
basis, he  speculated the increase in  physician productivity and                                                               
the  decrease in  staff could  have a  stabilizing or  a decrease                                                               
effect  on future  cost  of  health care.  He  noted that  payors                                                               
probably  spend  as   much  time,  energy  and   money  on  prior                                                               
authorization as [providers]  do and if that  were eliminated, it                                                               
would result in some economies on the payor side as well.                                                                       
                                                                                                                                
2:10:52 PM                                                                                                                    
CHAIR BJORKMAN  asked Dr. Silva  whether the  prior authorization                                                               
exemption legislation in  Texas had reduced health  care costs in                                                               
that state or other states of which he was aware.                                                                               
                                                                                                                                
2:11:13 PM                                                                                                                    
DR. SILVA  said he  was not aware  of studies  with documentation                                                               
showing a  reduction in  cost, but he  said anecdotally  there is                                                               
support for  that to be the  case. He said he  hears many stories                                                               
about delays in care leading  to increased utilization of care by                                                               
patients. He told of a young  person with abdominal pain for whom                                                               
the physician could not secure  prior authorization for a CT scan                                                               
for  multiple  days. By  the  time  a  scan was  authorized,  the                                                               
patient's  appendix   had  ruptured  and  the   patient  required                                                               
significantly more  medical intervention. He noted  the increased                                                               
expense from  an economic and  monetary perspective and  also the                                                               
experience  for  the  patient  and  the  physician  in  terms  of                                                               
emotional distress  and the inability  to practice the  best care                                                               
possible. He  said, anecdotally, SB 219  would support physicians                                                               
to  provide timely  care and  the best  care possible  would also                                                               
have economic  benefits. He  hoped for a  study that  would prove                                                               
that and said he would share it when he finds it.                                                                               
                                                                                                                                
2:13:01 PM                                                                                                                    
JOHN  KELLY,  MD;  Senior   Vice  President,  Radiation  Business                                                               
Solutions, Wasilla,  Alaska, said  he is  currently based  out of                                                               
Wasilla and transitioning back to  his home in Fairbanks. He said                                                               
he would tailor his comments  to multiple sclerosis (MS). He said                                                               
he has followed this disease  through his 34-year career. When he                                                               
started his career, he said the  only treatment he could offer MS                                                               
patients was  high-dose intravenous (IV) steroids  for flare-ups.                                                               
He said the first disease-modifying  drugs (interferons) came out                                                               
about 25-30 years ago and  those drugs reduced flare-ups by 25-30                                                               
percent  which  was  better   than  nothing.  Interferons  caused                                                               
terrible  side-effects.  Patients  would have  flu-like  symptoms                                                               
several  days  after each  injection  and  injections were  given                                                               
about once  weekly. He said  there have been  tremendous advances                                                               
in treating  MS and  today there are  treatments that  are highly                                                               
specific and extremely effective, orally or by IV.                                                                              
                                                                                                                                
2:16:03 PM                                                                                                                    
DR. KELLY said there is now a  drug which can be given once every                                                               
six  months  which  allows  for  near  complete  control  of  the                                                               
disease. He  said these  new treatments  are more  expensive than                                                               
the  older  treatments,  but  the   dictum  of  step-therapy  has                                                               
required that treatment begin with  older, less effective, poorly                                                               
tolerated  medications and  prove  that patients  failed that  by                                                               
waiting for them  to have another flare-up. He  noted that flare-                                                               
ups  damage  the  central  nervous   system  every  time  and  MS                                                               
progresses by  a series of  attacks and withdrawals. He  said the                                                               
step therapy  approach is required  by most  insurance companies,                                                               
which mean  starting treatment  with less  expensive [medication]                                                               
even though  it's known to be  less effective, wait for  the drug                                                               
to fail the  patient before moving on to  more advanced therapies                                                               
that are doing such a good job at controlling it.                                                                               
                                                                                                                                
2:17:47 PM                                                                                                                    
DR.  KELLY said  MS treatment  was an  example for  which SB  219                                                               
would help prevent harm to  patients. He said providers track the                                                               
disease clinically and by MRI scan  to follow the volume of white                                                               
matter disease. The clinical outcome  is known for these patients                                                               
as the  disease continues  to progress.  They lose  function, the                                                               
rate of  disability goes up,  cognitive ability goes down  and it                                                               
is an  aggressive disease that requires  aggressive treatment. He                                                               
said MS  is no  place for  the step  therapy approach  favored by                                                               
insurance  companies. He  said  he  has a  high  success rate  of                                                               
getting the  more advanced drugs  approved, but that it  is time-                                                               
consuming to  jump through the  hoops to  get the patient  on the                                                               
best possible drug  from the get-go. He said it  is a frustrating                                                               
process.                                                                                                                        
                                                                                                                                
DR. KELLY  told about  a young, athletic  and active  patient who                                                               
wants to remain  so, but five weeks after diagnosis,  he is still                                                               
trying  to gain  approval for  her treatment  from the  insurance                                                               
company. He said, in the  meantime, the patient worries about the                                                               
possibility of another flare-up and  what that might mean for her                                                               
and  her long-term  quality  of life.  He said  SB  219 would  be                                                               
beneficial   for  these   patients  who   are  relentlessly   and                                                               
irreversibly  harmed  by ongoing  attacks  of  the disease  while                                                               
going through the hoops [of  prior authorization]. He said it was                                                               
not defensible to treat a patient that way.                                                                                     
                                                                                                                                
DR. KELLY shared the story  of another patient, a 17-year-old who                                                               
he saw  after her third episode  of optic neuritis. He  said each                                                               
episode causes  loss of vision.  He diagnosed her with  a variant                                                               
of MS and prescribed a  very specific treatment for her condition                                                               
that  is highly  effective. He  said  nothing else  works and  he                                                               
faced the  same frustration with  insurance companies  wanting to                                                               
go through step  therapy. He emphasized the patient  was 17 years                                                               
old, progressively going blind and there  is no excuse for such a                                                               
delay.  He  said  after  considerable  personal  preparation  and                                                               
effort, he was able to  persuade the insurance company to approve                                                               
his prescribed treatment.                                                                                                       
                                                                                                                                
2:21:56 PM                                                                                                                    
DR. KELLY shared his own story as  a Type II diabetic. He said he                                                               
changed insurance companies,  and it has taken  several months to                                                               
resume the  medications that have  controlled his  condition very                                                               
well  for  years.  In  the  meantime, he  was  compelled  to  try                                                               
different  medications  and   endure  the  accompanying  negative                                                               
effects until he could return  to the medications that worked for                                                               
him.                                                                                                                            
                                                                                                                                
DR.  KELLY urged  that whatever  could be  done to  stop harm  to                                                               
patients is worthwhile.                                                                                                         
                                                                                                                                
2:22:36 PM                                                                                                                    
CHAIR BJORKMAN  noted the  testimony that  the current  system of                                                               
prior authorization requirements leads  to increased frequency of                                                               
negative outcomes. He  asked whether the current  system leads to                                                               
more  utilization  and  higher  costs  because  when  people  are                                                               
eventually  approved   for  care  they  require   more  intensive                                                               
treatment.                                                                                                                      
                                                                                                                                
2:23:10 PM                                                                                                                    
DR. KELLY  concurred. He  said it  may not  seem tangible  to the                                                               
insurance  carrier because  the  current system  leads to  things                                                               
like  long-term  disability  or [reducing]  the  longevity  of  a                                                               
patient's work  life or their  ability to remain  independent and                                                               
walking  and able  to engage  in activities  of daily  living. He                                                               
said those things  aren't costs felt by the  insurance company as                                                               
much  as   by  the  patient.   He  noted  the  cost   of  urinary                                                               
incontinence may be  for "Depends" and urologist  visits from the                                                               
insurance company's  perspective, but they don't  experience what                                                               
the patient is experiencing.                                                                                                    
                                                                                                                                
DR.  KELLY said,  regarding treating  MS, every  patient has  the                                                               
right to  the most effective,  best tolerated treatment  from the                                                               
get-go; not jumping  through hoops with therapies  that are known                                                               
to be less effective and waiting for proof they don't work.                                                                     
                                                                                                                                
2:24:31 PM                                                                                                                    
CHAIR BJORKMAN opened public testimony on SB 219.                                                                               
                                                                                                                                
2:24:55 PM                                                                                                                    
GARY STRANNIGAN, Vice President  of Congressional and Legislative                                                               
Affairs,  Premera Blue  Cross  Blue  Shield, Everett,  Washington                                                               
said  Premera Blue  Cross Blue  Shield  had considerable  concern                                                               
with SB  219. He  said Premera and  other insurance  carriers use                                                               
prior authorization  to try  to put  downward pressure  on waste,                                                               
fraud  and abuse,  which the  American Medical  Association (AMA)                                                               
pegs  at about  25  percent.  He said  it  is  worth noting  that                                                               
Premera  is  currently  fighting,  in  concert  with  the  Alaska                                                               
Department of  Insurance and the Federal  Bureau of Investigation                                                               
(FBI), fraud for claims valued at  about $120 million. He said SB
219 will limit the effectiveness  of the prior authorization tool                                                               
to apply that downward pressure.                                                                                                
                                                                                                                                
MR. STRANNIGAN  opined SB  219 will be  difficult to  comply with                                                               
from an operational program perspective.  He said a program would                                                               
have to  be built  to track  the data,  assure accuracy  and make                                                               
decisions based  on the data.  He suggested  the result may  be a                                                               
situation that doesn't make sense  because SB 219 only applies to                                                               
the  fully insured  market in  the State  of Alaska.  He said  it                                                               
would not apply  to the state employee plan. He  said it would if                                                               
this was good policy and the state  was willing to pay for it. He                                                               
said  SB  219 does  not  apply  to self-funded  insurance  plans,                                                               
either.                                                                                                                         
                                                                                                                                
MR.  STRANNIGAN suggested  the following  consequence of  SB 219.                                                               
The bill may  lead to Premera giving up  on prior authorizations.                                                               
The contracts  [with providers] stipulate the  insurance pays for                                                               
medically  necessary care.  If,  retrospectively,  a service  was                                                               
determined  [by the  insurance company]  not  to be  in the  best                                                               
interest of  a patient,  the insurance  will not  pay for  it. He                                                               
said it will only take one  of two of these incidents for doctors                                                               
to get  the word  out and  develop a plan  to call  the insurance                                                               
company beforehand,  which leads  right back  to the  same crummy                                                               
system with all kinds of  friction, which he acknowledged is real                                                               
and that he is aware of it.                                                                                                     
                                                                                                                                
2:27:38 PM                                                                                                                    
MR. STRANNIGAN suggested  focusing on the friction  and trying to                                                               
minimize  it.  He  said  an   80  percent  threshold  essentially                                                               
eliminates prior authorization. He suggested instead that turn-                                                                 
around times, as  they exist in law, be tightened  from five days                                                               
for standard  turnaround and  one day for  urgent, to  three days                                                               
for  standard  and remain  at  one  day  for urgent.  He  further                                                               
suggested requests for prior authorization  be submitted using an                                                               
electronic portal  rather than fax, which,  necessitates a manual                                                               
process. He said  faxing is what leads to the  friction. He urged                                                               
streamlining the process to make  it work better, not throwing it                                                               
out.                                                                                                                            
                                                                                                                                
2:29:00 PM                                                                                                                    
SENATOR GRAY-JACKSON asked what percentage of claims are denied.                                                                
                                                                                                                                
2:29:16 PM                                                                                                                    
MR. STRANNIGAN said  the percentage is low, but he  does not know                                                               
the number exactly. He offered to  get back to the committee with                                                               
the answer.                                                                                                                     
                                                                                                                                
2:29:36 PM                                                                                                                    
SENATOR GRAY-JACKSON  asked what  percentage of claims  that were                                                               
denied  were  reversed after  appeal.  She  acknowledged that  he                                                               
likely could not  answer in the meeting and asked  for answers to                                                               
both questions.                                                                                                                 
                                                                                                                                
2:30:01 PM                                                                                                                    
SENATOR MERRICK asked  whether an increase from 80  percent to 90                                                               
percent in SB 219 would change his opinion of the bill.                                                                         
                                                                                                                                
2:30:10 PM                                                                                                                    
MR.  STRANNIGAN said  he  did not  think it  would.  He said  new                                                               
programming would  still be  necessary. He  noted that  in Texas,                                                               
there  is a  huge  insurance marketplace  compared with  Alaska's                                                               
very  small  insurance  marketplace   to  spread  the  investment                                                               
across. He said the difference  between 80 percent and 90 precent                                                               
would not  change the  need to build  that program,  whether they                                                               
were serving  Alaskans or Texans.  He said it would  be difficult                                                               
to pencil out.                                                                                                                  
                                                                                                                                
2:31:15 PM                                                                                                                    
CHAIR  BJORKMAN  asked  Deputy  Director  Carpenter  whether  the                                                               
Division of Insurance has any concerns with SB 219.                                                                             
                                                                                                                                
2:31:44 PM                                                                                                                    
HEATHER  CARPENTER,  Deputy   Director,  Division  of  Insurance,                                                               
Department  of  Commerce,  Community  and  Economic  Development,                                                               
Juneau, Alaska said  the Division is neutral on SB  219. She said                                                               
the division  would ask the  committee to consider  changing from                                                               
an immediate  effective date  to a  specific effective  date that                                                               
would allow the division time to write regulations.                                                                             
                                                                                                                                
2:32:16 PM                                                                                                                    
CHAIR BJORKMAN suggested that SB  219 be amended to include state                                                               
insurance  plans  and  asked whether  that  would  influence  the                                                               
Division's position on the bill.                                                                                                
                                                                                                                                
2:32:28 PM                                                                                                                    
MS.  CARPENTER said,  if SB  219  were to  extend beyond  insured                                                               
plans it  would be  necessary to consult  with the  Department of                                                               
Law  as  well as  those  who  represent  Alaska Care.  She  noted                                                               
conversations on another bill in  the Senate Committee on Labor &                                                               
Commerce noting those  plans are not overseen by  the Division of                                                               
Insurance.  She  said  they  follow  Employee  Retirement  Income                                                               
Security Act (ERIS)  laws and lots of other things.  She said the                                                               
insured  market  is   what  is  regulated  by   the  Division  of                                                               
Insurance, which includes the individual  market, small group and                                                               
large group plans,  which comprises about 15% of  the health care                                                               
market in Alaska.                                                                                                               
                                                                                                                                
2:33:22 PM                                                                                                                    
CHAIR BJORKMAN  asked Mr.  Kosin how SB  219 would  affect Alaska                                                               
hospitals and their mission to provide care.                                                                                    
                                                                                                                                
2:33:45 PM                                                                                                                    
JARED KOSIN,  President and CEO,  Alaska Hospital  and Healthcare                                                               
Association,  Anchorage, Alaska,  appreciated previous  testimony                                                               
and the articulation of the issue.  He noted that a hospital will                                                               
treat anyone, regardless of their ability  to pay. He said SB 219                                                               
is all about  putting doctors and patients  together and removing                                                               
unnecessary barriers or hurdles when care is needed.                                                                            
                                                                                                                                
MR. KOSIN  said SB 219  is crafted to take  the best of  the best                                                               
providers who  have gone through the  prior authorization process                                                               
and  achieved a  threshold of  80 or  90 percent  and determining                                                               
that they  no longer be required  to engage the process.  He said                                                               
that would  then eliminate the  delay for patients who  have been                                                               
told they need  a certain procedure and then must  wait until the                                                               
provider and  their team can  work with the insurance  company to                                                               
determine whether that service will be authorized.                                                                              
                                                                                                                                
MR. KOSIN said SB 219 would  remove all the unnecessary steps for                                                               
these  very  specific  instances.  He said  care  would  be  more                                                               
available and in the hands of  the providers and the patients. He                                                               
said that  would be very  consistent with the  hospitals mission.                                                               
He said  SB 219 is reasonable  and it keeps the  process in place                                                               
and provides a reasonable avenue for using it going forward.                                                                    
                                                                                                                                
2:36:29 PM                                                                                                                    
CHAIR BJORKMAN held SB 219 in committee.                                                                                        
                                                                                                                                
2:36:35 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
2:40:27 PM                                                                                                                    
CHAIR  BJORKMAN   reconvened  the   meeting  and   closed  public                                                               
testimony on SB 219.                                                                                                            
                                                                                                                                

Document Name Date/Time Subjects
SB219 DCCED-DOI Response to SL&C re Prior Authorizations 3.19.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Letter of Support-CPH 03.12.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Letter of Support-DOG_COA 03.13.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Letter of Support-DOG_ASCO 03.08.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Letter of Support-MatSu Regional 02.22.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Leeter of Opposition-AHIP 03.12.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Letter of Opposition-PHC 03.20.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 v. A.pdf SL&C 3/13/2024 1:30:00 PM
SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Sponsor Statement.pdf SL&C 3/13/2024 1:30:00 PM
SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Sectional Analysis v. A.pdf SL&C 3/13/2024 1:30:00 PM
SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Fiscal Note-DCCED-DOI-03.08.24.pdf SL&C 3/13/2024 1:30:00 PM
SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Letter of Support-ARH 03.26.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Public Testimony-Letter of Support-FHP 03.28.24.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
SB219 Supporting Documents-WHA_Payer Denials Survey.pdf SL&C 4/8/2024 1:30:00 PM
SB 219
HB97 Ver U.A.pdf SL&C 4/8/2024 1:30:00 PM
HB 97
HB97 Sponsor Statement Ver U.A. 3.25.24.pdf SL&C 4/8/2024 1:30:00 PM
HB 97
HB97 Sponsor's Presentation to SLAC 04.08.24.pdf SL&C 4/8/2024 1:30:00 PM
HB 97
HB97 Sectional Analysis Ver U.A 03.25.24.pdf SL&C 4/8/2024 1:30:00 PM
HB 97
HB97 Fiscal Note GoV-N 02.15.24.pdf SL&C 4/8/2024 1:30:00 PM
HB 97
HB97 Supporting Document-California_Codes 04.28.23.pdf SL&C 4/8/2024 1:30:00 PM
HB 97
HB97 Public Testimony-Letter of Opposition-GlobalFCU 04.14.23.pdf SL&C 4/8/2024 1:30:00 PM
HB 97