04/15/2011 09:00 AM Senate FINANCE

HOUSE BILL NO. 13                                                                                                             
                                                                                                                                
     "An Act relating to fees and charges for medical                                                                           
     treatment or services as they relate to workers'                                                                           
    compensation; and providing for an effective date."                                                                         
                                                                                                                                
                                                                                                                                
9:34:52 AM                                                                                                                    
                                                                                                                                
CONRAD  JACKSON, STAFF,  REPRESENTATIVE OLSON,  explained HB
 was an act relating  to the medical treatment and service                                                                    
fees as related to worker's  compensation. He stated that in                                                                    
2005 the  legislature amended AS 23.30.095(J)  to expand the                                                                    
scope  of the  Medical Services  Review Committee  to assist                                                                    
and  advise  the  Department  of   Labor  and  the  Worker's                                                                    
Compensation    Board     in    matters     involving    the                                                                    
appropriateness, necessity  and cost of medical  and related                                                                    
services.  He referred  to pages  11 and  12 of  the excerpt                                                                    
from  the Medical  Services  Review  Committee report  dated                                                                    
November 2009 (copy  on file). He stated  that one intention                                                                    
of the report was to set  the medical fee schedule in place.                                                                    
The legislation puts the fee  schedule in place prior to the                                                                    
current  expiration of  June 30,  2011. He  referred to  the                                                                    
sponsor statement  (copy on file) which  discussed the basis                                                                    
of the new schedule.                                                                                                            
                                                                                                                                
9:37:39 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman pointed out the fiscal note.                                                                                   
                                                                                                                                
9:37:49 AM                                                                                                                    
                                                                                                                                
Senator Olson asked  how business owners had  reacted to the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Mr. Jackson  replied that contact  with business  owners had                                                                    
not  been  made. Representatives  of  industry  had been  in                                                                    
agreement  that  the new  fee  schedule  was necessary.  The                                                                    
expiration of  the current fee schedule  was problematic and                                                                    
without  the new  fee schedule  in place  increased premiums                                                                    
were expected.                                                                                                                  
                                                                                                                                
Senator Olson wondered if medical  providers had offered and                                                                    
opinion on the legislation.                                                                                                     
                                                                                                                                
Mr.  Jackson  remarked  that  provider  attention  had  been                                                                    
placed on  a different bill.  He stressed that the  bill did                                                                    
not change what is already in place.                                                                                            
                                                                                                                                
9:39:25 AM                                                                                                                    
                                                                                                                                
Senator Olson  expressed concern that employees  handing the                                                                    
codes should be properly educated on how to process them.                                                                       
                                                                                                                                
Mr. Jackson  clarified that  the codes  existed, but  not in                                                                    
the fee  schedule. So the  people processing the  codes were                                                                    
educated about  them, the codes  were simply not  covered in                                                                    
the current fee schedule.                                                                                                       
                                                                                                                                
LINDA  HALL, INSURANCE  DIRECTOR,  DEPARTMENT OF  INSURANCE,                                                                    
DEPARTMENT    OF   COMMERCE,    COMMUNITY,   AND    ECONOMIC                                                                    
DEVELOPMENT,   discussed  the   charts;  "Medical   Benefits                                                                    
Constitute the  Majority of Total  Benefit Cost  in Alaska",                                                                    
"Alaska Medical Average Cost  per Case vs. Countrywide"(copy                                                                    
on file). She stated that 75  percent of the system costs in                                                                    
Alaska were  medical benefits,  countrywide the  average was                                                                    
58 percent.                                                                                                                     
                                                                                                                                
9:41:34 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:42:19 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:42:28 AM                                                                                                                    
                                                                                                                                
Ms.  Hall offered  that the  state had  substantially higher                                                                    
benefits  costs  than  the lower  48.  The  "Alaska  Medical                                                                    
Average  Cost per  Case vs.  Countrywide" chart  illustrated                                                                    
that the average  cost per case in 2009 was  $37,000 and the                                                                    
average  cost countrywide  was $27,000,  resulting  in a  37                                                                    
percent  higher  average  per  case  cost  for  Alaska.  She                                                                    
referred to the two page  Oregon study (copy on file), which                                                                    
showed that  Alaska had moved  from first place,  having the                                                                    
highest  worker's compensation  premium,  to  number 2.  She                                                                    
concluded that the  purpose of the charts  was to illustrate                                                                    
the  high cost  of worker's  compensation costs.  She stated                                                                    
that the  cost cap  would not be  onerous. The  fee schedule                                                                    
would  be  based at  the  90th  percentile and  most  health                                                                    
insurance policies used 70 to  80th percentile. She believed                                                                    
that  the  fee  schedule   was  generous  and  would  enable                                                                    
physicians  to treat  workers  injured on  the  job and  not                                                                    
prohibit any type of medical care.                                                                                              
                                                                                                                                
9:45:34 AM                                                                                                                    
                                                                                                                                
Senator Olson  wondered what effect  the bill would  have on                                                                    
the injured employee.                                                                                                           
                                                                                                                                
Ms. Hall  felt that  the users  experience would  either get                                                                    
easier or stay relatively the same.                                                                                             
                                                                                                                                
Senator Olson  hoped that workers  under Medicare  would not                                                                    
be denied coverage by physicians.                                                                                               
                                                                                                                                
Ms.  Hall assured  the committee  she was  not aware  of any                                                                    
medical office  that had suggested  not caring  for patients                                                                    
under Medicare.                                                                                                                 
                                                                                                                                
HB  13  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:47:09 AM