Legislature(2001 - 2002)

03/20/2002 03:20 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 318-UNIFORM PRESCRIPTION DRUG CARD                                                                                         
Number 2173                                                                                                                     
CHAIR MURKOWSKI announced  that the next order  of business would                                                               
be HOUSE  BILL NO. 318,  "An Act  relating to a  health insurance                                                               
uniform prescription drug information  card; and providing for an                                                               
effective date."                                                                                                                
Number 2158                                                                                                                     
AMY  ERICKSON, Staff  to  Representative  Lisa Murkowski,  Alaska                                                               
State Legislature,  informed the committee  that HB 318  has been                                                               
through seven new  drafts since the last time it  was heard.  The                                                               
new  version  is  clean,  concise, and  lists  only  the  minimum                                                               
guidelines necessary to process  prescription claims.  She stated                                                               
that  HB 318  is  intended to  provide  practical guidelines  for                                                               
entities producing  member ID cards  for use in the  drug benefit                                                               
industry so that pharmacists will  have the ability to spend more                                                               
time on patient care and  less time deciphering insurance benefit                                                               
cards.     Additionally,  patients   will  spend  less   time  at                                                               
pharmacies waiting for prescriptions,  and claims processing will                                                               
be more consistent and accurate.                                                                                                
MS.  ERICKSON  reminded   the  committee  that  HB   318  is  now                                                               
applicable to all  health insurance plans, instead  of just group                                                               
plans.   House  Bill 318  also extends  requirements so  that all                                                               
entities  issuing   drug  cards   are  included,   enrollees  and                                                               
dependents can  be listed on the  cards now, and an  insurer does                                                               
not have  to reissue a  second card  if a previously  issued card                                                               
has all the information required in HB 318.                                                                                     
Number 2088                                                                                                                     
REPRESENTATIVE  ROKEBERG inquired  about the  reissuing of  a new                                                               
card,  whereby an  insurer wouldn't  have to  issue another  card                                                               
until "their regular  cycle came up."  He  referred to subsection                                                               
(b) and asked if that clarifies the issue.                                                                                      
MS. ERICKSON said that is accurate.                                                                                             
REPRESENTATIVE  ROKEBERG   asked  if  the  committee   adopted  a                                                               
different recommendation than the one he proposed.                                                                              
MS.  ERICKSON  replied in  the  affirmative.   She  offered  that                                                               
Representative  Rokeberg was  suggesting that  no insurers  would                                                               
have to  reissue a  new card  prior to the  effective date.   She                                                               
explained that "was  one of the points of contention  that we did                                                               
not include in the bill."                                                                                                       
REPRESENTATIVE ROKEBERG  voiced that this would  create a private                                                               
fiscal note.                                                                                                                    
MS.  ERICKSON said,  "Not  if  you decide  that  can't happen  in                                                               
REPRESENTATIVE  MEYER  asked if  the  draft  that is  before  the                                                               
committee is Version R.                                                                                                         
Number 2017                                                                                                                     
REPRESENTATIVE  HALCRO  moved  to adopt  the  proposed  committee                                                               
substitute (CS)  for HB 318, Version  22-LS1061\R, Ford, 3/14/02,                                                               
as the  working document.   There being  no objection,  Version R                                                               
was before the committee.                                                                                                       
Number 1993                                                                                                                     
ERIN  CAREY  BYRNE,  Executive  Director,  Alaska  Pharmaceutical                                                               
Association, testified  via teleconference in support  of HB 318.                                                               
She  noted that  HB 318  was adequately  adjusted to  reflect the                                                               
issues raised by the insurer  opposition.  She noted that Version                                                               
R  is not  [the  Alaska  Pharmaceutical Association's]  "original                                                               
idealized bill."   The time has come for  standard information to                                                               
be provided on insurance benefit cards.                                                                                         
MS.  BYRNE  informed the  committee  that  19 other  states  have                                                               
already  enacted  similar   legislation,  with  eight  additional                                                               
states pending action.   She told the committee  members that the                                                               
end beneficiaries of HB 318  are "your constituents who will wait                                                               
a  minimal amount  of  time for  medication  dispensing and  drug                                                               
therapy counseling."                                                                                                            
Number 1945                                                                                                                     
REPRESENTATIVE   HAYES  asked   why  there   isn't  any   federal                                                               
legislation to get a standardized ID card across the nation.                                                                    
MS. BYRNE agreed that it seems  more logical to enact this on the                                                               
federal level,  but there  is "a  state rights  assertion issue,"                                                               
whereas  if  the state  can't  "work  it  out" then  the  federal                                                               
regulation gets  put into  place.   It would be  a long  and slow                                                               
Number 1903                                                                                                                     
REPRESENTATIVE ROKEBERG referred to page  2, line 11, relating to                                                               
a bank  identification number, and  asked, "Whose bank  ID number                                                               
is this?"                                                                                                                       
MS. BYRNE  replied, "That's an  either/or."  Some  [insurers] use                                                               
the   international   identifier   and    some   use   the   bank                                                               
identification number  (BIN).   That is the  standard that  is on                                                               
cards in order for the claims to be processed.                                                                                  
REPRESENTATIVE ROKEBERG asked if  [the number] is identifying the                                                               
insurance company or the individual person who is covered.                                                                      
MS. BYRNE  replied it  is the company  that is  being identified.                                                               
In  further  response  to   Representative  Rokeberg,  Ms.  Byrne                                                               
explained  that  "it's  not  for the  bank,  it's  ...  whichever                                                               
identifier  number that  the particular  insurer wishes  to use."                                                               
Most [insurers] don't use a [BIN], but it is an option.                                                                         
REPRESENTATIVE ROKEBERG inquired about the international number.                                                                
MS. BYRNE explained  that the international number  is the claims                                                               
processing number.  She offered  that since the committee members                                                               
are  State of  Alaska  employees, these  numbers  are already  on                                                               
their insurance ID cards.  She  said it's simply referred to as a                                                               
"routing number," and  that the [BIN] shouldn't  be confused with                                                               
a bank account number.                                                                                                          
REPRESENTATIVE ROKEBERG asked if the  bank number has anything to                                                               
do with an electronic fund transfer.                                                                                            
MS. BYRNE replied in the negative.                                                                                              
REPRESENTATIVE  ROKEBERG   asked,  "You  want  three   groups  of                                                               
MS. BYRNE  responded by saying  that most of the  insurance cards                                                               
already contain these  numbers.  She offered  that some insurance                                                               
cards  have  the appropriate  information,  but  there are  those                                                               
companies  that  need  to start  incorporating  basic  processing                                                               
information  in  order  for pharmacists  to  better  serve  their                                                               
Number 1743                                                                                                                     
REPRESENTATIVE ROKEBERG referred to page  2, line 1, and asked if                                                               
the  National Council  for  Prescription  Drug Programs  Pharmacy                                                               
Identification Card Implementation Guide  is something that would                                                               
be periodically  adjusted, because  it ties  in with  the mandate                                                               
that  the  director  of  the Division  of  Insurance  shall  make                                                               
regulatory changes.                                                                                                             
MS. BYRNE replied that it may  change, but noted that included on                                                               
the  National  Council  for Prescription  Drug  Programs  (NCPDP)                                                               
advisory committee are the insurers; they're part of the NCPDP.                                                                 
Number 1699                                                                                                                     
REPRESENTATIVE  ROKEBERG  expressed  concern with  directing  the                                                               
Division [of  Insurance] to adopt  regulations to conform  with a                                                               
guide that's  going to change  from time  to time.   He mentioned                                                               
that  this  would  be  granting   legislative  authority  to  the                                                               
"national council [NCPDP]."                                                                                                     
MS.  BYRNE  added that  [HB  318]  only  requires  a card  to  be                                                               
reissued when a  change is substantive.  She  said NCPDP requires                                                               
a 90 percent consensus of all  present to make any change [to the                                                               
Number 1658                                                                                                                     
CHAIR MURKOWSKI  noted that the  [division] director  is directed                                                               
to look to the standards that are  set out in the NCPDP guide, or                                                               
the standards that are outlined in [paragraph] (2).                                                                             
MS.  BYRNE thanked  Representative  Murkowski  and said,  "That's                                                               
absolutely correct."                                                                                                            
REPRESENTATIVE ROKEBERG  restated his  belief that this  would be                                                               
"granting legislative power to the national council by statute."                                                                
CHAIR MURKOWSKI disagreed  with Representative Rokeberg's concern                                                               
and stated, "What  we are doing is directing the  Director of the                                                               
Division  of Insurance  to look  to  the standards  that we  have                                                               
identified  in   [paragraph]  (2)."    She   offered  that  these                                                               
standards might be  more neatly outlined in  the NCPDP's Pharmacy                                                               
Identification Card Implementation Guide  and should be looked at                                                               
as an example of what is expected to be on the card.                                                                            
Number 1543                                                                                                                     
REED STOOPS, Lobbyist for Aetna  and Health Insurance Association                                                               
of America, informed  the committee that he  is representing Mike                                                               
Wiggins [Vice President, National  Accounts, Aetna] who is unable                                                               
to testify today.    He thanked Representative  Murkowski and Ms.                                                               
Erickson  for their  work  on  HB 318  and  trying  to take  into                                                               
account the objections of the  insurance industry.  He noted that                                                               
there are  additional changes that  the insurance  industry would                                                               
like to see made to Version R.                                                                                                  
MR.  STOOPS  explained  that  the   first  problem  is  that  the                                                               
insurance industry  would "strongly  prefer" a  national standard                                                               
because  most  insurers  do  business  in  all  50  states.    He                                                               
mentioned  that  it is  difficult  to  comply with  each  state's                                                               
slightly different set of standards.                                                                                            
Number 1437                                                                                                                     
MR. STOOPS identified a second  concern [his clients have] as the                                                               
uniform  prescription  drug  information  card  that  HB  318  is                                                               
seeking.  The uniform prescription  drug information card that HB
318  is seeking  is  "really different"  from  what the  industry                                                               
usually issues, which is a  multi-purpose, general health benefit                                                               
card.    This card  is  used  when one  goes  to  a doctor  or  a                                                               
pharmacist and  has the name  of the company  on it and  one's ID                                                               
number.    He   explained  that  from  the   perspective  of  the                                                               
pharmacist, they want a uniform  prescription drug card, which is                                                               
an exclusive card that deals with  drugs.  He stated, "What we've                                                               
ended up  with is sort  of a blend,  whereby now we're  trying to                                                               
make our general health care card  a drug card."  There have been                                                               
some conflicts between objectives in trying to make that happen.                                                                
Number 1406                                                                                                                     
MR. STOOPS said  that based on the initial  testimony heard, [his                                                               
clients] thought  that there  was an  agreement that  Aetna, Blue                                                               
Cross,  and  some of  the  other  major insurers  had  sufficient                                                               
information on their  general card, and that  reissuance of those                                                               
cards was not going to be  required by virtue of the legislation.                                                               
Trying  to incorporate  the new  standards  with the  information                                                               
that's already on  the cards would require even  Aetna would have                                                               
to reissue its'  cards.  Aetna has approximately  90,000 cards in                                                               
place in Alaska,  and the cost to reissue those  cards would be a                                                               
couple hundred thousand dollars, or about $2 a card.                                                                            
MR. STOOPS  explained that pharmacists have  an electronic system                                                               
in the pharmacies that link  directly up with [Aetna's] database.                                                               
A lot of  the information that's necessary to process  a claim is                                                               
in that computer  database and not on the card.   Ultimately, the                                                               
way the  payment gets  issued is electronically.   Almost  all of                                                               
the pharmacists  in [Alaska] are linked  electronically, at least                                                               
to Aetna.                                                                                                                       
Number 1318                                                                                                                     
MR. STOOPS next addressed some issues  in the current draft of HB
318, and offered  some amendments.  The first  amendment, on page                                                               
2, lines  22-24, would  be to  clarify that [HB  318] may  not be                                                               
construed  to require  the reissuance  of a  uniform prescription                                                               
drug  information card  issued  before the  effective  date.   He                                                               
noted that would alleviate the concern about a fiscal note.                                                                     
MR. STOOPS also noted that  the National Council for Prescription                                                               
Drug  Pharmacy Program  Identification Card  Implementation Guide                                                               
is  an  either/or  standard.    He  said  this  isn't  a  [normal                                                               
occurrence] in  a piece  of legislation  to leave  the standards,                                                               
which can  change from time to  time, up to the  director of [the                                                               
Division of  Insurance].   He stated,  "I think  it would  be our                                                               
preference just  to state whatever  the standards are  clearly in                                                               
statute, and then  amend those statutes from time to  time if you                                                               
find that those need to be amended in the future."                                                                              
Number 1244                                                                                                                     
MR.  STOOPS  explained  that  [Aetna]  is  trying  to  match  the                                                               
information  on its  card to  "the language  in (C)(i),  (D), and                                                               
(E)."   He stated it's  confusing what those  [sections] actually                                                               
mean, so we  had some suggestions to clarify the  language in (D)                                                               
and (E) so  that we're sure that the  information we're providing                                                               
is what the  statute asked for."  He offered  to submit copies of                                                               
Aetna  and  Blue  Cross'  identification  cards.    He  said,  "I                                                               
couldn't find  what that bank identification  number conformed to                                                               
- at least on the two cards that we had available to us."                                                                       
CHAIR MURKOWSKI asked  if Mr. Stoops indicated that  he wanted to                                                               
delete the international  bank ID number [BIN].   She offered her                                                               
understanding  that there  is an  "international number  and then                                                               
there's a bank identification number."                                                                                          
Number 1189                                                                                                                     
MR. STOOPS  explained that [Aetna's  card] has a group  number, a                                                               
control number,  a payor  number, and  an RX  group number.   The                                                               
Blue Cross  card has a group  number and an RX  group number, but                                                               
it   doesn't   have  anything   that   corresponds   to  a   bank                                                               
identification  number.   Since the  card currently  doesn't have                                                               
the required number, [Aetna] would  have to reissue cards for the                                                               
sake of  providing that number.   He said if the  first amendment                                                               
he suggested were  adopted, [Aetna] wouldn't have  to reissue the                                                               
current card and could "deal with that in the future."                                                                          
MR. STOOPS next  addressed sections (D) and  (E), which indicated                                                               
what  address and  phone numbers  need  to be  on the  card.   He                                                               
     Generally we've got  the name of the  company, which is                                                                    
     Aetna, the  post office box,  the mailing  address, and                                                                    
     there's an 800  number that you as the  enrollee or any                                                                    
     provider can call.   And if its  pharmacists that calls                                                                    
     that 800  number, they can  be routed from  that number                                                                    
     to another pharmacy  claim office.  But  by putting two                                                                    
     numbers  on the  card  then you  create some  confusion                                                                    
     among the enrollee  on "which 800 number  am I supposed                                                                    
     to call?"   And in most  cases you the member  ... just                                                                    
     want a  single 800 number  that can route  you wherever                                                                    
     you need to go for  the information, rather than having                                                                    
     multiple numbers  for multiple purposes.   It's not the                                                                    
     end of the world if we  have to provide it, but it just                                                                    
     seems  that there's  a simpler  way to  accomplish that                                                                    
CHAIR MURKOWSKI asked if this number  requires one "to sit on the                                                               
line for  15 minutes  tracking, [for example],  'OK, now  if your                                                               
last name begins with an M-U-R, you can press 3.'"                                                                              
MR. STOOPS explained  that every time a pharmacist  enters into a                                                               
contract they receive a "special  [phone] number" [so he/she will                                                               
have a direct contact number].                                                                                                  
Number 1058                                                                                                                     
REPRESENTATIVE CRAWFORD asked how often [Aetna] reissues cards.                                                                 
MR. STOOPS said it depends.  A  new card needs to be issued every                                                               
time  a contract  changes.   Normally an  insurance company  will                                                               
have a  contract for  1-3 years  with a  customer, and  when that                                                               
contract  expires if  there's  a  new carrier  the  card will  be                                                               
reissued.  He  stated, "I don't believe there's  any [cards] that                                                               
stay in  effect indefinitely, they're  ... reissued  as necessary                                                               
on a rotating basis."                                                                                                           
REPRESENTATIVE CRAWFORD  related his belief that  there isn't any                                                               
established time in which any of the carriers reissue cards.                                                                    
MR. STOOPS agreed,  but specified that if there is  going to be a                                                               
requirement  to  reissue  the  cards,   then  there  will  be  an                                                               
associated cost  and thus there  is the  need for a  fiscal note.                                                               
Furthermore,  he  inquired  as  to  what  information  is  really                                                               
necessary  for  the  pharmacist.   He  questioned  whether  there                                                               
should be two  separate cards with one for drugs  or should there                                                               
be a single-purpose card.                                                                                                       
Number 0946                                                                                                                     
REPRESENTATIVE HAYES asked whether  anyone has introduced federal                                                               
legislation to deal with this issue.                                                                                            
MR. STOOPS informed  the committee that there  have been meetings                                                               
with  the  National  Pharmacists   by  all  the  major  insurers.                                                               
Although there  was the recommendation for  national legislation,                                                               
he said he wasn't sure whether the legislation was introduced.                                                                  
CHAIR    MURKOWSKI   returned    to   the    international   bank                                                               
identification  number and  related  her  understanding that  the                                                               
insurance  companies worked  with  the  pharmacy associations  on                                                               
this NCPDP  pharmacy identification  card guide.   Therefore, she                                                               
expressed  concern that  Aetna, a  major player  in Alaska,  says                                                               
that it isn't aware of one of the things included in the guide.                                                                 
MR. STOOPS  said that he  understood that there was  an agreement                                                               
that the pharmacists would work  collaboratively in order to seek                                                               
national legislation  such that  all insurers would  have similar                                                               
national  standards.    Mr.  Stoops said  he  didn't  know  which                                                               
insurers participated  in the development of  that implementation                                                               
guide and  whether those  insurers would be  the same  each year.                                                               
Although  all  of the  HIAA  members  or  Aetna wouldn't  all  be                                                               
included,  everyone doing  business in  the state  would have  to                                                               
meet the  guidelines if the  Director of Insurance  specified the                                                               
need to meet the regulations [based on the guidelines].                                                                         
CHAIR MURKOWSKI pointed out the "or" on page 2, line 2.                                                                         
MR. STOOPS  agreed.  However,  he said he  read the bill  to mean                                                               
that it's  in the opinion of  the director and thus  the director                                                               
can look at the standards in  the bill "or" the director can look                                                               
at  the  implementation  guide  and  make a  decision.    If  the                                                               
director  chooses the  implementation guide,  then the  standards                                                               
will  change  [as  time passes].    Therefore,  the  conservative                                                               
preference is to  look to the statutes for what  is required, and                                                               
if  there  is  a  need  to change,  then  the  legislature  would                                                               
determine  the changes  through  a  process such  as  this.   Mr.                                                               
Stoops  emphasized that  of all  the issues  with the  bill, this                                                               
isn't the largest of them.                                                                                                      
REPRESENTATIVE ROKEBERG pointed  out that on page 2,  line 1, the                                                               
language  "current"  means  any  future  guides  with  revisions.                                                               
Therefore, the director  would be forced to review  any change in                                                               
the guide "or" [follow paragraph (2)].                                                                                          
Number 0655                                                                                                                     
LIZ MERTEN, Northwest Regional  Director, National Association of                                                               
Chain  Drugstores  (NACD),  explained, from  the  perspective  of                                                               
pharmacies, that  the real  purpose of this  bill is  to simplify                                                               
the claims processing by ensuring  that all necessary information                                                               
to process a drug claim is contained  on the card in some sort of                                                               
standardized readable  format.  She  informed the committee  of a                                                               
survey contracted by  NACDS in 1999, which found  that 20 percent                                                               
of a  pharmacist's day  was spent  rectifying claims  of patients                                                               
that were standing before them.   In a survey released last month                                                               
by Shearing (ph), now 29 percent  of a pharmacist's time is spent                                                               
on this  matter.  The amount  of time spent on  rectifying claims                                                               
coupled  with the  shortage in  pharmacists and  the increase  in                                                               
prescriptions in  the U.S.  [is of concern].   The  Shearing (ph)                                                               
survey asked pharmacists what would  provide them the opportunity                                                               
to  speed up  the  process  and take  time  with their  patients,                                                               
behind  the answer  of increased  utilization of  technicians was                                                               
the standardized pharmacy identification card.                                                                                  
MS.  MERTEN  directed  attention  to   page  2,  line  18,  which                                                               
specifies  "unless   provided  electronically  at  the   time  of                                                               
adjudication."   She  informed the  committee that  in a  meeting                                                               
with  Blue Cross,  Aetna, and  herself all  agreed to  insert the                                                               
aforementioned language.  That language  was inserted in order to                                                               
address that  when a  pharmacist is  on-line adjudicating  a case                                                               
with Aetna that is where the  phone number appears on the screen.                                                               
Based on the  [same] meeting, the language on page  2, lines 8-13                                                               
was developed after the actual  identifiers that were included in                                                               
earlier  versions  of   the  bill  were  removed.     Ms.  Merten                                                               
highlighted the importance  of the language on page  2, lines 24-                                                               
26,  which  says,  "does  not  require  issuance  of  a  separate                                                               
prescription  drug information  card if  an existing  information                                                               
card contains the information required  under this section."  The                                                               
intent has  never been  to require  a separate  prescription card                                                               
but rather  that in working  with the  insurers, a new  card with                                                               
the necessary information would be issued.                                                                                      
MS. MERTEN turned to  the "or" on page 2, line  2, which she said                                                               
was  inserted  to  address  the  concerns  heard  from  insurance                                                               
companies  who  are  concerned   with  compliance  of  the  NCPDP                                                               
guidelines.    She  recalled  that after  the  meeting  with  the                                                               
insurers, one of the insurers asked  what would happen if the BIN                                                               
number  and the  control number  were no  longer used  to process                                                               
their claims.   Ms. Merten pointed  out that in such  a situation                                                               
the  NCPDP guidelines  would  be so  important  because it  would                                                               
eliminate the  need to return  to the legislature to  address the                                                               
statutes.   The "or" provides  flexibility to not be  locked into                                                               
the laundry list specified in paragraph (2) on page 2, line 3.                                                                  
MS.  MERTEN,   in  response  to  Representative   Hayes'  earlier                                                               
question,  informed  the  committee  that  legislation  has  been                                                               
introduced at  the federal level.   However, that  legislation is                                                               
tied to  senior drug legislation that  has moved very far  in the                                                               
process.    At  this  point,  the  pharmacists  need  help.    In                                                               
conclusion, Ms. Merten encouraged  the committee's support of the                                                               
CHAIR    MURKOWSKI   returned    to   the    international   bank                                                               
identification number.                                                                                                          
TAPE 02-40, SIDE A                                                                                                              
CHAIR MURKOWSKI  asked if  the international  bank identification                                                               
number is  something that must  be included in the  laundry list,                                                               
or could  the language on page  2, lines 8-10, say  that the card                                                               
"may include" the items listed in sub-subparagraphs (i)-(iii).                                                                  
MS.  MERTEN said  that the  BIN  is probably  the most  important                                                               
number  because it's  the one  number that  absolutely has  to be                                                               
available to the  pharmacist for processing.   She explained that                                                               
the BIN  specifies where the pharmacist  is to go to  process the                                                               
claim.  The BIN is required in any claims processing.                                                                           
Number 0174                                                                                                                     
CHAIR  MURKOWSKI expressed  her  confusion,  then, because  major                                                               
companies say that they don't know what the BIN is.                                                                             
MS.  MERTEN pointed  out that  most insurance  companies contract                                                               
the processing of  their claims, and therefore  aren't aware that                                                               
the [processor] uses a BIN [for them].                                                                                          
REPRESENTATIVE ROKEBERG surmised then  that if Blue Cross changed                                                               
its  subcontracting provider,  Blue Cross  would have  to reissue                                                               
the card.                                                                                                                       
MS. MERTEN  replied yes.   In further response  to Representative                                                               
Rokeberg,  Ms.  Merten  wasn't  sure  whether  Blue  Cross  would                                                               
reissue  cards  if  it  changed its  tertiary  care  provider  in                                                               
Number 0349                                                                                                                     
CHAIR MURKOWSKI  asked if there  is any national  discussion with                                                               
regard to  the requirement to  reissue new cards within  the next                                                               
MS. BYRNE  answered that HIPAA  will go into effect  for insurers                                                               
in April 2003.  The piece  that ties into this discussion is that                                                               
there are  a number  of programmatic  changes that  insurers will                                                               
have to  go through in  order to  comply with the  privacy issues                                                               
and with  HIPAA.  Therefore,  insurers will no longer  be allowed                                                               
to  use social  security numbers  as a  unique identifier,  which                                                               
Aetna, Blue Cross, and others  use.  This change will necessitate                                                               
reprogramming of  their software system  and new cards  will have                                                               
to   be  issued.     Therefore,   while   insurers  are   already                                                               
reprogramming their  computers, they might as  well do everything                                                               
at once  for the  HIPAA requirements  and a  uniform prescription                                                               
card.  Ms. Byrne confirmed that  the July 1, 2003, effective date                                                               
falls after the HIPAA requirements take effect.                                                                                 
Number 0559                                                                                                                     
CHAIR MURKOWSKI closed the public  testimony.  She then turned to                                                               
the  concern about  issuing new  cards and  the fiscal  note that                                                               
would  be  required.    The   suggested  language  is  that  [the                                                               
insurers] wouldn't be required to  reissue the benefit card prior                                                               
to the effective  date of this section, July 2003.   As mentioned                                                               
earlier, this time  frame would fall after the  HIPAA changes and                                                               
thus she questioned the concern.                                                                                                
MR.  STOOPS  related his  understanding  that  whether the  HIPAA                                                               
changes will require insurers to  issue a new card is speculation                                                               
at this point.   In regard to his suggested  language, Mr. Stoops                                                               
recalled  from  the first  hearing  that  the major  insurers  in                                                               
Alaska have adequate  information on their cards.   Therefore, to                                                               
make that  clear he  suggested:   "An insurer who  has a  card in                                                               
effect today, before this law  went into effect, wouldn't reissue                                                               
the  card until  they're normally  required to  reissue it."   He                                                               
acknowledged  that  the  opportunity  may  come  when  the  HIPAA                                                               
changes happen.   When those  [HIPAA] changes occur  and whatever                                                               
standards are adopted  by the legislature, then  the change would                                                               
be made then, avoiding the fiscal impact that is of concern.                                                                    
CHAIR  MURKOWSKI asked  if Aetna  regularly reissues  cards on  a                                                               
MR. STOOPS  explained that  when the  state goes  out to  bid for                                                               
insurance, the  terms of  the contract  are changed.   Therefore,                                                               
there  is usually  one  or  more times  in  which  the cards  are                                                               
reissued during the term of a  contract.  With other clients, the                                                               
reissuance of cards would occur  when the client requires such or                                                               
when Aetna  does so for  its own administrative efficiency.   The                                                               
reissuance is done  on a rotating basis, which  he presumed other                                                               
insurers did  as well.   In further response to  Chair Murkowski,                                                               
Mr. Stoops recalled  that Aetna is in year two  of five under the                                                               
current contract  with the state.   He related  his understanding                                                               
that there  is a  plan to  reissue cards before  the end  of this                                                               
contract.   He explained that  this reissuance will  occur partly                                                               
because the state wants changes.   Again, the best way to avoid a                                                               
fiscal impact  is to specify an  effective date and as  new cards                                                               
are  issued,  those  cards  must meet  the  requirements  of  the                                                               
REPRESENTATIVE HAYES asked if there is  any way to find out about                                                               
the  HIPAA requirement  as that  seems to  be the  answer to  the                                                               
question before putting a $200,000 fiscal note on the bill.                                                                     
CHAIR  MURKOWSKI  disagreed that  this  would  create a  $200,000                                                               
fiscal note.  She related  her understanding that HIPAA currently                                                               
says  that  a  social  security  number  can't  be  used  as  the                                                               
identifier.   She asked if  there is  anyone who could  speak [to                                                               
how things are going to go].                                                                                                    
Number 0962                                                                                                                     
STAN   RIDGEWAY,   Deputy   Director,  Division   of   Insurance,                                                               
Department of  Community & Economic Development  (DCED), informed                                                               
the  committee that  the  general belief  is  that HIPAA  privacy                                                               
regulations  are  slated  to  go   into  effect  in  April  2003.                                                               
However, most  believe that April 2003  is too soon and  thus Mr.                                                               
Ridgeway wasn't sure  that the April 2003 date would  be met.  He                                                               
noted that  there is a  website that deals with  frequently asked                                                               
questions  and   answers  with  regard  to   the  uniformity  for                                                               
insurance  cards.   He  said  that the  committee  may find  this                                                               
information helpful.                                                                                                            
REPRESENTATIVE  ROKEBERG recalled  that there  are more  than 600                                                               
pages of federal regulations and  thus the complexity of this has                                                               
made the effective date a moving target.                                                                                        
Number 1071                                                                                                                     
REPRESENTATIVE  ROKEBERG  moved  that  the  committee  adopt  the                                                               
following amendment, Amendment 1:                                                                                               
     Page 2, line 31                                                                                                            
          Delete paragraph (4)                                                                                                  
          Insert "may not be construed to require the                                                                           
      reissuance of a health benefit card issued prior to                                                                       
     the effective date of this section."                                                                                       
REPRESENTATIVE  HAYES objected  and  asked if  Amendment 1  would                                                               
still  leave the  situation in  which the  information isn't  the                                                               
information that the pharmacists want or need.                                                                                  
CHAIR MURKOWSKI  related her  understanding that  at the  date of                                                               
the  adoption of  [this legislation]  everyone would  receive new                                                               
cards.   As  the new  cards are  issued, the  new cards  would be                                                               
subject to the requirements established in this legislation.                                                                    
MS. BYRNE  agreed and specified that  Version R is the  result of                                                               
meetings  through Ms.  Merten with  representatives of  insurance                                                               
companies.   She stressed  that more  than one  insurance company                                                               
was at the table.                                                                                                               
REPRESENTATIVE ROKEBERG remarked that  it doesn't make sense that                                                               
a  company  could  be  required  to reissue  a  card  before  the                                                               
effective date of this legislation.                                                                                             
MS.  BYRNE noted  that  this  was a  request  from the  insurance                                                               
MR.  STOOPS  explained  his  understanding  that  the  effect  of                                                               
Amendment 1  would be  that once  the card  is issued,  until the                                                               
card is  reissued after  the [effective]  date, [the  card] would                                                               
remain in  effect.  Mr. Stoops  clarified that the desire  was to                                                               
keep  the  current card  in  effect  until  it was  necessary  to                                                               
reissue the card in any case,  at which time the standards of the                                                               
bill  would be  incorporated.   Therefore, the  fiscal impact  is                                                               
REPRESENTATIVE CRAWFORD  asked whether Amendment 1  works for the                                                               
Northwest Ironworkers  and other  self-insured groups  around the                                                               
MR. STOOPS stated  that the policy issue is in  regard to whether                                                               
the  legislature feels  that the  standards are  important enough                                                               
that they  should be met now.   However, there would  be a fiscal                                                               
impact to such because it will  cost the insurer a couple dollars                                                               
a card to  reissue the card.   He pointed out that  the cost will                                                               
come right to  [the state for those under the]  State of Alaska's                                                               
system.   However, the insurance  companies for  the self-insured                                                               
groups  will  pay  for  it,   and  therefore  the  enrollee  will                                                               
ultimately pay  the cost.   In response to  Representative Hayes,                                                               
Mr.  Stoops explained  that [were  HIPAA regulations  to go  into                                                               
effect]  and everyone  had to  reissue the  cards, then  the cost                                                               
would be blended  into the cost of doing business.   But, if this                                                               
legislation were  to pass,  reissuing the  cards would  be purely                                                               
because of the legislation.                                                                                                     
REPRESENTATIVE  ROKEBERG pointed  out that  the health  insurance                                                               
industry  is  one  of  the  few  industries  that  has  no  price                                                               
elasticity,  and therefore  it  can pass  along  [the impact]  of                                                               
whatever it wants.                                                                                                              
MR. STOOPS  noted that for the  State of Alaska, [Aetna]  is only                                                               
the  claim  administrator and  the  state  itself determines  the                                                               
Number 1409                                                                                                                     
REPRESENTATIVE  HAYES  inquired  as   to  why  the  language  [in                                                               
Amendment 1] wasn't included in Version R.                                                                                      
CHAIR  MURKOWSKI  recalled  that   the  language  [attempted]  to                                                               
clarify that  the requirement  [came into play]  when a  new card                                                               
was  reissued.   She  said  she didn't  believe  it was  anyone's                                                               
intent  that on  the effective  date of  this act  everyone would                                                               
receive new cards.   However, there was the  assumption that what                                                               
is on the  Aetna cards already met the  requirements being sought                                                               
in the bill.                                                                                                                    
REPRESENTATIVE HAYES withdrew his objection.                                                                                    
There being no objection, Amendment 1 was adopted.                                                                              
Number 1527                                                                                                                     
REPRESENTATIVE ROKEBERG  moved Amendment  2, which would  on page                                                               
1, line  14 - page 2,  line 2, delete references  to the National                                                               
Council  for Prescription  Drug Programs  Pharmacy Identification                                                               
Card Implementation  Guide and renumber  accordingly.   Also, the                                                               
amendment would specify the minimum  requirements for the card in                                                               
the current paragraph (2).                                                                                                      
CHAIR  MURKOWSKI  objected.   She  related  her belief  that  the                                                               
language in paragraph  (1) on page 1,  line 14 - page  2, line 2,                                                               
is to  give the director  some formal  guidelines.  She  said she                                                               
would  want  to know  that  the  director  was looking  at  these                                                               
guidelines  when   implementing  the  standards.     Furthermore,                                                               
because the  guidelines come about  due to the  collaboration and                                                               
the discussion from both the  pharmacy industry and the insurance                                                               
industry it seems important to reference it.                                                                                    
REPRESENTATIVE HAYES  agreed with  Chair Murkowski.   Without the                                                               
"or" he feared  that the problems with the  mechanical code would                                                               
surface here.                                                                                                                   
REPRESENTATIVE  MEYER  noted  his  confusion  with  the  language                                                               
"provisions  of an  implementation guide  prepared by  a pharmacy                                                               
CHAIR MURKOWSKI  clarified that  Aetna is  saying that  it wasn't                                                               
part of  the working group  [that developed the  National Council                                                               
for  Prescription  Drug  Programs  Pharmacy  Identification  Card                                                               
Implementation Guide]  and thus they  don't want to refer  to the                                                               
REPRESENTATIVE ROKEBERG said that  the primary reason he supports                                                               
the  amendment is  because he  believes  that Alaska's  insurance                                                               
people  and  the  director  of  the  Division  of  Insurance  and                                                               
pharmaceutical folks  should all be  at the table together.   The                                                               
guide  referenced in  the legislation  is one  in which  Alaska's                                                               
people weren't  involved.  Therefore,  he recommends  leaving the                                                               
decisions to the director and the local players.                                                                                
CHAIR  MURKOWSKI pointed  out that  under the  current draft  the                                                               
director doesn't have to confer with anyone.                                                                                    
Number 1790                                                                                                                     
MR. RIDGEWAY acknowledged that the  insurers don't want to end up                                                               
with 50 [different] cards.  However,  he pointed out that part of                                                               
the role  of NAIC is  look at uniformity.   Mr. Ridgeway  said he                                                               
feels that the "or" language  offers clarity, and furthermore the                                                               
regulation  process would  allow all  parties to  be part  of the                                                               
development and implementation of those regulations.                                                                            
Upon determining there  was no further discussion  with regard to                                                               
Amendment  2,  a  roll  call vote  was  taken.    Representatives                                                               
Rokeberg  and  Meyer  voted  for the  adoption  of  Amendment  2.                                                               
Representatives  Crawford,  Hayes,   Murkowski,  and  Kott  voted                                                               
against  the adoption  of Amendment  2.   Therefore, Amendment  2                                                               
failed  by  a  vote  of   2:4.    [Although  someone  "voted"  on                                                               
Representative Halcro's behalf, Representative  Halcro was not in                                                               
attendance for this vote.]                                                                                                      
Number 1952                                                                                                                     
REPRESENTATIVE ROKEBERG moved that  the committee adopt Amendment                                                               
3, which reads as follows:                                                                                                      
     Page 2, line 11,                                                                                                           
          Delete sub-subparagraph (i)                                                                                           
REPRESENTATIVE HAYES objected.                                                                                                  
REPRESENTATIVE  ROKEBERG reiterated  earlier testimony  that Blue                                                               
Cross - Washington/Alaska covers over  50 percent of the insureds                                                               
[in   Alaska]  and   does  not   have  the   [international  bank                                                               
identification  number] on  the card.    He said  that he  didn't                                                               
believe it  was on the  Aetna card either.   He pointed  out that                                                               
the adoption of  Amendment 1 means that these  companies can't be                                                               
forced to reissue these cards, and therefore leaving sub-                                                                       
subparagraph (i) in the bill  would result in the companies being                                                               
noncompliant with the law.                                                                                                      
REPRESENTATIVE   HAYES   inquired   as   to  the   use   of   the                                                               
[international bank identification number].                                                                                     
MS.  ERICKSON explained  that  the BIN  is  an electronic  claims                                                               
routing information  number.  She related  her understanding that                                                               
the Blue  Cross and Aetna cards  have the BIN, although  it isn't                                                               
labeled as  such.  For  example, on some  it has been  labeled as                                                               
the "ID NO."  She also  recalled that the payor number of Aetna's                                                               
card is comparable to the BIN.                                                                                                  
REPRESENTATIVE ROKEBERG  pointed out  that per statute,  the card                                                               
would  have to  be labeled  differently, and  therefore the  card                                                               
would have to be reissued.   Furthermore, Representative Rokeberg                                                               
guessed that  every pharmacist  in the Alaska  knows the  BIN for                                                               
Blue Cross - Washington/Alaska.                                                                                                 
CHAIR  MURKOWSKI  inquired as  to  the  problem of  leaving  sub-                                                               
subparagraph  (i) when  the number  is already  included [on  the                                                               
card] not to mention that it's the key identifier.                                                                              
MS.  ERICKSON  indicated  that using  the  language,  "which  may                                                               
include" and then  specifying the laundry list of  items would be                                                               
appropriate because  then the other  components could be  used if                                                               
the BIN isn't available.   Therefore, Ms. Erickson suggested that                                                               
the  committee  not  delete  sub-subparagraph  (i)  and  consider                                                               
including the language "which may include".                                                                                     
Number 2095                                                                                                                     
REPRESENTATIVE  ROKEBERG  agreed  that providing  the  discretion                                                               
with  the language  "which may  include" could  be the  solution.                                                               
Representative  Rokeberg withdrew  Amendment  3.   He then  moved                                                               
that the committee  adopt conceptual Amendment 4,  which reads as                                                               
     Page 2, line 10, after "routing,"                                                                                          
          Delete "including"                                                                                                    
          Insert "may include"                                                                                                  
There being no objection, conceptual Amendment 4 was adopted.                                                                   
The committee took a brief at-ease.                                                                                             
Number 2140                                                                                                                     
MR. STOOPS questioned  whether the standard would be  met if [the                                                               
number is  provided electronically], although a  small percentage                                                               
of  pharmacists  aren't  linked  electronically.    He  expressed                                                               
concern that  the language [on  page 2,  line 17] isn't  clear in                                                               
this regard.   He  explained that  the card  itself has  a number                                                               
that  the  pharmacist can  call  and  be  linked.   However,  the                                                               
pharmacists are  given a direct  number when under  contract with                                                               
Aetna.   The only reason to  not include that number  on the card                                                               
is to avoid the customer calling the pharmacy claim number.                                                                     
REPRESENTATIVE   ROKEBERG   moved   that  the   committee   adopt                                                               
conceptual Amendment 5, which reads as follows:                                                                                 
     Page 2, line 18, after "assistance"                                                                                        
          Insert "or a link to a telephone number for                                                                           
     pharmacy benefit claims assistance"                                                                                        
MR. STOOPS  explained that he  had suggested that the  card could                                                               
specify  an 800  number that  would  link to  the pharmacy  claim                                                               
number as opposed to having two numbers on the card.                                                                            
REPRESENTATIVE ROKEBERG clarified that  if conceptual Amendment 5                                                               
were to be adopted then on  page 2, lines 17-18, subparagraph (E)                                                               
would  read  as follows:    "a  help  desk telephone  number  for                                                               
pharmacy  benefit claims  assistance  or a  link  to a  telephone                                                               
number for  pharmacy benefit  claims assistance,  unless provided                                                               
electronically at the time of adjudication."                                                                                    
There being no objection, conceptual Amendment 5 was adopted.                                                                   
REPRESENTATIVE ROKEBERG moved  on to subparagraph (D)  on page 2,                                                               
lines 14-16, and questioned whether  the language "name" referred                                                               
to the company name.                                                                                                            
REPRESENTATIVE   HALCRO   pointed    out   that   the   "benefits                                                               
administrator" refers  to the company.   He pointed out  that the                                                               
language  specifies  "the  name   and  address  of  the  benefits                                                               
administrator  or  other   entity  responsible  for  prescription                                                               
claims submission ...".                                                                                                         
REPRESENTATIVE ROKEBERG  asked if  Mr. Stoop's concern  with this                                                               
was because  Version R  is drafted  only to  prescription benefit                                                               
claims rather than all benefit medical claims.                                                                                  
MR. STOOPS answered  yes.  He pointed out  that Aetna administers                                                               
the pharmacy  [claims] and thus  Aetna's address  should suffice.                                                               
However, Blue  Cross hires a  [benefits administrator]  and under                                                               
subparagraph (D) ...                                                                                                            
TAPE 02-40, SIDE B                                                                                                              
MR. STOOPS continued:   ... Blue Cross would have  to [insert the                                                               
name and address] of whoever  they contract with for prescription                                                               
benefits.    Therefore,  he  assumed  that  there  would  be  two                                                               
addresses  [on   the  card]  for   those  companies   that  don't                                                               
administer their own  prescription claims:  the  name and address                                                               
of the company and the name and address of the contractor.                                                                      
REPRESENTATIVE  HALCRO  indicated  that the  language  "or  other                                                               
entity responsible" takes care of the aforementioned.                                                                           
REPRESENTATIVE ROKEBERG surmised  that the card would  have to be                                                               
changed every time the insurer changed contractors.                                                                             
REPRESENTATIVE  HALCRO   said,  "You  should  anyways,   I  would                                                               
imagine,  because, of  course,  ... you're  going  to allow  your                                                               
customers to know who to call."                                                                                                 
REPRESENTATIVE   ROKEBERG   pointed   out  that   this   is   for                                                               
correspondence [via] "snail mail."                                                                                              
CHAIR MURKOWSKI clarified  that this language is  in reference to                                                               
submitting claims, and she agreed  that the information [would be                                                               
MR. STOOPS pointed out that insurers  may have claims routed to a                                                               
main address  and part of it  would then be sent  to the pharmacy                                                               
claim section.  He explained that  he felt it would be sufficient                                                               
to have the name and address of the insurer.                                                                                    
REPRESENTATIVE  HALCRO   suggested  that  perhaps   a  disclaimer                                                               
stating  that certain  numbers are  provided for  the use  of the                                                               
pharmacy only.                                                                                                                  
MR.  STOOPS  said that  the  question  then becomes  whether  the                                                               
customer would actually read that disclaimer.                                                                                   
REPRESENTATIVE HAYES remarked that it  would be best to leave the                                                               
language as it  is and if it  is found to be a  problem, it could                                                               
be addressed via amendment on the floor.                                                                                        
REPRESENTATIVE ROKEBERG  reviewed the  language "or  other entity                                                               
responsible" and agreed that it would cover anyone.                                                                             
REPRESENTATIVE  HAYES  disclosed  that   he  has  a  conflict  of                                                               
interest due to his position in the insurance industry.                                                                         
Number 2210                                                                                                                     
REPRESENTATIVE  HAYES  moved  to  report CSHB  318,  Version  22-                                                               
LS1061\R,  Ford,  3/14/02,  as  amended  out  of  committee  with                                                               
individual  recommendations  and  the accompanying  fiscal  note.                                                               
There being  no objection,  CSHB 318(L&C)  was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    

Document Name Date/Time Subjects