Legislature(2017 - 2018)BELTZ 105 (TSBldg)

03/19/2018 06:00 PM LABOR & COMMERCE

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         SB 119-HEALTH CARE COSTS: DISCLOSURE;INSURERS;                                                                     
6:01:34 PM                                                                                                                    
CHAIR COSTELLO announced  the consideration of SB  119. She noted                                                               
it is a transparency bill related to health care costs.                                                                         
6:02:20 PM                                                                                                                    
BUDDY  WHITT,   Staff,  Senator  Shelley  Hughes,   Alaska  State                                                               
Legislature,  Juneau, Alaska,  delivered the  following sectional                                                               
analysis for SB 119:                                                                                                            
     Sec. 1, Page 1, Lines  7-10 Adds the Alaska Health Care                                                                  
     Consumer's Right to  Shop Act to the  uncodified law of                                                                    
     the State of Alaska.                                                                                                       
     Sec. 2,  Page 1, Line 11    Page 2, Line  11 Authorized                                                                
     the  Department  of  Health   and  Social  Services  to                                                                    
     collect  and  analyze  data  relating  to  health  care                                                                    
     services and price information.                                                                                            
     Sec. 3, Page  2, Line 12    Page 3, Line 20  Adds a new                                                                  
     section to Title 18 for  health care services and price                                                                    
          a.  Health  care  provider shall  compile  a  list                                                                    
          annually by  procedure code of  the top  25 health                                                                    
          care services from each of  the six category I CPT                                                                    
          code sections.                                                                                                        
CHAIR COSTELLO  noted that  there was  some confusion  between SB
119 and  the transparency bill  in the House  that Representative                                                               
Spohnholz  introduced.  She asked  him  to  clarify that  SB  119                                                               
addresses the top 150 codes, not the top 50 codes.                                                                              
MR. WITT  confirmed that SB 119  addresses the top 150  codes. He                                                               
explained  that  there  are  six categories  of  CPT  or  Current                                                               
Procedural  Terminology codes.  The first  is for  evaluation and                                                               
management.  The second  category  covers  anesthesia. The  third                                                               
category covers  surgery. The  fourth category  covers radiology.                                                               
The fifth category covers pathology  and laboratory services. The                                                               
sixth  category is  classified as  general medicine.  The top  25                                                               
from each  of those  six categories  gives a  total of  150 codes                                                               
that are requested in the bill.                                                                                                 
CHAIR COSTELLO  said she would  follow up and ask  Ms. Wing-Heier                                                               
the  rationale for  picking the  top 25  codes in  each of  those                                                               
categories. She  asked him  to talk briefly  about the  number of                                                               
codes in each of the categories.                                                                                                
MR.  WITT said  there are  300  codes within  just category  one,                                                               
evaluation  and  management.  That  is the  lowest  of  the  six.                                                               
Anesthesiology has  1,949 codes.  Surgery has about  60,00 codes.                                                               
Radiology  has over  9,000. Pathology  and  laboratory has  about                                                               
9,000, and general medicine is  around 8,500. That's about 90,000                                                               
6:06:14 PM                                                                                                                    
SENATOR STEVENS asked how many facilities are in Alaska.                                                                        
MR. WITT said he didn't know, but  the bill would apply to all of                                                               
SENATOR STEVENS  asked if this  includes hospitals,  clinics, and                                                               
doctors' offices.                                                                                                               
MR. WITT said  any facility that is registered  to provide health                                                               
care services in the state would  fall under the parameters of SB
6:06:48 PM                                                                                                                    
SENATOR  SHELLEY   HUGHES,  Alaska  State   Legislature,  Juneau,                                                               
Alaska,  sponsor  of  SB  119, advised  that  it's  important  to                                                               
understand that the  top 25 codes does not mean  the most common.                                                               
It means the codes that a  prudent person would consider of value                                                               
in the management of their own  health care affairs, what is most                                                               
helpful and relevant to the  consumer. The price for each service                                                               
includes any  discounts that may be  applied. The recommendations                                                               
for the  top 25 codes came  from the director of  the Division of                                                               
SENATOR  GARDNER  said  she  would  assume  that  most  providers                                                               
routinely do  certain basic  things, although  there may  also be                                                               
some more exotic procedures. She asked if that was accurate.                                                                    
MR. WITT  replied that is  his understanding. Some  provisions of                                                               
SB 119 do address how patients  would find the cost for specialty                                                               
procedures. The idea of the 150  codes is that anyone could go to                                                               
the  state   website  and  see   the  cost   differences  between                                                               
SENATOR  HUGHES added  that a  consumer  could get  a good  faith                                                               
estimate  of what  their condition  would require.  The value  of                                                               
this  is a  general comparison  of costs.  The other  pieces will                                                               
help the consumer  drill down to know exactly what  to expect for                                                               
MR. WITT continued the sectional for SB 119.                                                                                    
          b.  The  provider  or facility  will  publish  the                                                                    
          lists  above, by  providing it  to the  department                                                                    
          for publishing it on their  website, by posting it                                                                    
          for public review in the  facility or office where                                                                    
          the service(s) are performed and  by posting it on                                                                    
          their website.                                                                                                        
          c.  The  health  care  provider  or  facility  may                                                                    
          include a disclaimer noting the  price paid may be                                                                    
          higher or  lower than listing  of services  due to                                                                    
          unforeseen needs or complications.                                                                                    
          d.  The department  shall compile  the information                                                                    
          provided by  the provider or facility  and post it                                                                    
          on the department's website for public view.                                                                          
          e. If  the provider performs  less than 25  of the                                                                    
          services from  each CPT  code category,  then they                                                                    
          will compile  a list  based upon the  total number                                                                    
          of services that they provide.                                                                                        
          f. Failing to  comply with this section  will result in                                                               
          a  civil penalty  of $50  per  day for  each day  after                                                               
          March 31st that the facility  or provider has failed to                                                               
          provide the  information. This  civil penalty  will not                                                               
          exceed $2,500  annually. An  appeal process  is allowed                                                               
          under this section.                                                                                                   
6:11:30 PM                                                                                                                    
CHAIR COSTELLO asked if some may decide to pay the fine rather                                                                  
than comply.                                                                                                                    
MR. WITT said that could happen.                                                                                                
6:12:36 PM                                                                                                                    
     Sec.  18.23.405 Page  3,  Line 21    Page  4,  Line 28  This                                                             
     section is  added to specify the  provider and/or facilities                                                               
     responsibility to  provide cost  information to  patients or                                                               
     potential patients who have health insurance coverage.                                                                     
          a.  Within five  business days  of request,  a provider                                                               
          must give  a good faith  estimate of the  total charges                                                               
          of  the healthcare  service requested  if the  total of                                                               
          the charges exceeds $250.                                                                                             
          b.  The estimate  of charges  must include  the network                                                               
          status  of  the  provider  under  the  patient's  plan,                                                               
          whether the services of  another provider are necessary                                                               
          and if they are, a  separate request to that additional                                                               
          provider must be made.                                                                                                
          c.  If  the  patient  is  uninsured,  the  health  care                                                               
          provider  must  include   information  about  financial                                                               
          assistance  that  may  be available,  as  well  as  the                                                               
          internet  website   that  provides   information  about                                                               
          standard charges  for the type  of care the  patient is                                                               
          d. The  patient may request the  information in writing                                                               
          or electronically.                                                                                                    
          e.  Estimate of  charges  must represent  a good  faith                                                               
          effort to provide accurate  information, is not legally                                                               
          binding  and  is  not   guaranteed  due  to  unforeseen                                                               
          f.  This section  does not  apply to  emergency medical                                                               
     Sec. 18.23.420 Page  4, Line 29   Page 5  This section gives                                                             
     definitions of terms.                                                                                                      
     Sec. 4,  Page 6   Page  7, Line 4 Adds  healthcare insurance                                                             
     incentive program  to the  list of items  to be  included in                                                               
     the director's annual report.                                                                                              
     Sec.  5, Page  7, Line  5    Page  10,  Line 19  Adds a  new                                                             
     section  to   AS  21.96.   This  section   establishes  news                                                               
     provisions for  health care  insurance companies  to operate                                                               
     in  the state  of Alaska.  This section  deals with  private                                                               
     health  insurance policies  not pre-empted  by ERISA  or any                                                               
     other federal laws.                                                                                                        
     Sec. 21.96.200  Page 7, Lines 6    14 A health  care insurer                                                             
     shall  establish  an interactive  online  tool  so that  the                                                               
     covered person may request and  obtain information about the                                                               
     amount  paid  to  in-network   providers  by  the  insurance                                                               
     company for  specific health  care services  and be  able to                                                               
     compare prices among network healthcare providers.                                                                         
MR. WITT pointed out that the bill has covered two entities--the                                                                
insurance model for in-network providers and the providers                                                                      
themselves--that can provide all the costs associated with a                                                                    
knee replacement or colonoscopy, for example.                                                                                   
     Sec. 21.96.205 Page 7, Line 15  31                                                                                     
          a.  Upon request  of a  covered person,  a health  care                                                               
          insurer  shall provide  within five  days a  good faith                                                               
          estimate  of  out of  pocket  expenses  that a  covered                                                               
          person  will  have  to  pay   for  a  specific  covered                                                               
          medically necessary benefit.                                                                                          
          b. This section does  not prohibit the health insurance                                                               
          provider from imposing fees  for unforeseen services or                                                               
          additional costs that  come up but were  not covered in                                                               
          the estimate provided in Section (a).                                                                                 
          c. The health care insurer  shall disclose that this is                                                               
          an estimate  and the  actual cost  may be  different if                                                               
          unforeseen services or costs arise.                                                                                   
     Sec. 21.96.210 Page 8  Page 9, Line 3                                                                                  
          a. The  health care insurance  company shall set  up an                                                               
          incentive  plan  for  a covered  person  who  elect  to                                                               
          receive  a  health  care service  from  a  health  care                                                               
          provider that charges less  than the average in-network                                                               
          price  paid  by the  insurer  for  that service.  At  a                                                               
          minimum  the health  care services  that apply  to this                                                               
          section shall include:                                                                                                
          1.  Physical and Occupational Therapy Services                                                                        
          2.  OBGYN Services                                                                                                    
          3.  Radiology and Medical Imaging Services                                                                            
          4.  Laboratory Services                                                                                               
          5.  Infusion Therapy Services                                                                                         
          6.  Dental Services                                                                                                   
          7.  Vision Services                                                                                                   
          8.  Behavioral Health Services                                                                                        
          9.  Inpatient and Outpatient Surgical Procedures: and                                                                 
          10. Outpatient   non-surgical  diagnostic   tests   and                                                               
          b. The  insurer shall provide  to the covered  person a                                                               
          cash payment based upon the  shared savings that result                                                               
          from  the covered  person choosing  the provider  whose                                                               
          price  falls below  the average  cost to  the insurance                                                               
          company for that service. For  those whose insurance is                                                               
          provided  as part  of  a group  plan  offered by  their                                                               
          employer,  the shared  savings will  be split  at least                                                               
          equally  between  the  patient, the  employer  and  the                                                               
          insurance company.  For those  who secured  health care                                                               
          insurance  on their  own without  an  employer or  some                                                               
          other third party, the cash  payment will be calculated                                                               
          with at  least 50% of  the shared savings going  to the                                                               
          policy holder.                                                                                                        
6:17:11 PM                                                                                                                    
SENATOR COSTELLO  asked if  he has  information about  the result                                                               
this  has had  in other  states. She  asked if  they are  talking                                                               
about a significant amount of money being paid back.                                                                            
MR. WITT  said similar legislation  just passed in Maine  with an                                                               
effective  date  of  January  1,  2019,  but  major  health  care                                                               
insurers rolled out  a plan this year for  incentive programs. It                                                               
is too early  to tell what the results will  be. In New Hampshire                                                               
this  was implemented  for state  employees in  2014. Within  the                                                               
first two years there was  $12 million in disbursement savings to                                                               
policy holders, but he was waiting  to hear from New Hampshire on                                                               
what the total savings were for the state.                                                                                      
SENATOR HUGHES  said New Hampshire  has less than half  the state                                                               
employees that  Alaska has,  and their overall  costs are  not as                                                               
high. She  estimated the possible disbursement  savings as higher                                                               
in Alaska.                                                                                                                      
6:19:01 PM                                                                                                                    
SENATOR MICCICHE  asked how consumers  can figure out  when there                                                               
are negotiated rates.                                                                                                           
MR. WITT  said the requirement  is not  for the facility  to post                                                               
the  negotiated  rate.  If  the   provider  is  in  network  that                                                               
information will be  provided to the patient.  That isn't public.                                                               
The information posted publicly is  the rack rate, the basic, no-                                                               
discount  rate a  provider is  offering  to a  patient. The  bill                                                               
dictates  that insurance  companies must  provide a  web tool  so                                                               
that  a  policy holder  can  see  the  prices for  an  in-network                                                               
MR. WITT said the consumer has three ways to gain information.                                                                  
     1. Rack rate.                                                                                                              
     2. The provider has five days to provide cost information                                                                  
     based on in-network status.                                                                                                
     3. The insurance company must provide information for the                                                                  
     cost of the procedure amongst all in-network providers who                                                                 
     perform that procedure.                                                                                                    
SENATOR MICCICHE  asked what  happens if  the insured  locates an                                                               
out-of-state clinic that is cheaper.                                                                                            
MR. WITT  said a provision  in the bill  covers that if  they are                                                               
out of  network. In-network providers  that are out of  state are                                                               
still subject to the provisions in the bill.                                                                                    
SENATOR STEVENS asked the definition of rack rate.                                                                              
MR. WITT deferred the question to Ms. Wing-Heier.                                                                               
6:23:36 PM                                                                                                                    
MR. WITT continued the sectional for SB 119.                                                                                    
          c. The health care insurer will base average price                                                                    
          paid to in-network providers within a reasonable                                                                      
          period of time, but not to exceed one calendar year.                                                                  
     Sec. 21.96.215,  Page 9, Lines  4   8 The  incentive program                                                             
     will be made  available as a part of all  qualified plans in                                                             
     the state and  will notice it at time  of initial enrollment                                                               
     or annual renewal                                                                                                          
     Sec.  21.96.220, Page  9, Lines  9    13 Before  offering an                                                             
     incentive program,  the health insurance company  shall file                                                               
     a  description   of  the  program  with   the  Director  for                                                               
     Sec. 21.96.225,  Page 9, Lines 14    20 If a  covered person                                                             
     participates in an incentive program  and chooses an out-of-                                                               
     network provider  that results  in a  savings to  the health                                                               
     care insurer, the health care  insurer will treat the amount                                                               
     paid for the  health care service as though  it was provided                                                               
     by an in-network provider or facility.                                                                                     
MR.  WITT   said  this  addresses  Senator   Micciche    question                                                               
regarding an  out-of-state provider who  is out of network.  If a                                                               
patient goes to a provider out  of network and that saves out-of-                                                               
pocket money for  the consumer and saves the  insurer money, even                                                               
if  the  percentages  paid  out of  network  are  different,  the                                                               
insurance  company  must treat  that  as  though it  happened  in                                                               
network for  the sake of  maximum out of  pocket. It will  not be                                                               
part of the incentive program.                                                                                                  
CHAIR COSTELLO  said people go  to in-network  providers thinking                                                               
there will be a savings. She asked how this happens.                                                                            
MR. WITT  said the  assumption is  the in-network  providers will                                                               
provide the best  bang for the buck. But  without transparency it                                                               
is difficult to find those prices  in network and out of network.                                                               
The  FGA  [Foundation  for Government  Accountability]  developed                                                               
this piece  when they saw  small-scale providers not  included in                                                               
networks  and  their  prices  could be  good  for  patients.  New                                                               
Hampshire, Maine,  and Massachusetts have  seen this be  of value                                                               
to patients who were trying to save money.                                                                                      
6:27:02 PM                                                                                                                    
MR. WITT continued the sectional for SB 119.                                                                                    
     Sec. 21.96.230, Page 9, Lines  21   23 The incentive program                                                             
     will  not be  treated as  an administrative  expense by  the                                                               
     insurer for rate development or rate filing purposes.                                                                      
MR. WITT  explained that if there  is a shared savings,  the only                                                               
time the  incentive occurs  is when  the insurance  company saves                                                               
money. They  put this provision  in, so the insurance  company is                                                               
not using this incentive. That  saves the insurance company money                                                               
as an administrative expense. If  there is an overall savings, he                                                               
said, why  put it toward future  rate hikes that would  happen if                                                               
they  counted   this  as  an  administrative   expense  for  rate                                                               
development purposes.                                                                                                           
     Sec. 21.96.235, Page 9, Line 24  Page 10, Line 9                                                                         
     a.  Provides  instruction  for  the  health  care  insurance                                                               
     company  to   provide  an   annual  report   concerning  the                                                               
     incentive program.                                                                                                         
     b.  Provides instruction  for the  division of  insurance to                                                               
     provide an  aggregate report annually to  the legislature on                                                               
     health care insurance incentive programs in the state.                                                                     
     Sec.  21.96.300,   Page  10,  Lines  10      19  Establishes                                                             
     definitions for terms in this section.                                                                                     
     Sec. 6,  Page 10, Lines 20    22 Adds Sec.  29.35.142 to the                                                             
     list of home rule powers under AS 29.10.200                                                                                
     Sec. 7, Page 10, Line 23    Page 11, Line 5 The authority to                                                             
     regulate the  disclosure or  reporting of  price information                                                               
     for  health  care  services  is reserved  to  the  state  of                                                               
CHAIR COSTELLO asked what Section 6 means.                                                                                      
SENATOR HUGHES  said the  state would  have preemption,  so there                                                               
would not  be a hodgepodge of  laws along these lines  in various                                                               
municipalities throughout the state. There is one set statewide.                                                                
MR. WITT continued with the sectional for SB 119.                                                                               
     Sec.  8, Page  11, Line  6    Page 13,  Line 22  Health Care                                                             
     Insurance   policies   obtained   by   the   Department   of                                                               
     Administration  under AS  39.30.090  must  be in  compliance                                                               
     with requirements  under AS 18.23.400,  AS 18.23.405  and AS                                                               
     21.96.200  AS 21.96.300.                                                                                                   
     Sec. 9,  Page 13, Line 23    Page 14, Line  2 Language added                                                             
     to  AS  39.30.91  providing   additional  guidance  for  the                                                               
     Department   of    Administration   for    compliance   with                                                               
     requirements  under  AS  18.23.400,   AS  18.23.405  and  AS                                                               
     21.96.200  AS 21.96.300.                                                                                                   
MR. WITT said sections eight and  nine are an attempt to make the                                                               
provisions  of   this  bill  compatible  with   health  insurance                                                               
policies attained  by the Department of  Administration (DOA). In                                                               
order for  the DOA to be  compliant with this bill,  they need to                                                               
make additional  changes. They  are having  ongoing conversations                                                               
with DOA  about this. If  state employees  and the state  can see                                                               
benefits from this bill, they want to do that.                                                                                  
CHAIR COSTELLO  said she  understands that  the plans  offered by                                                               
the state do not meet the  definition of health insurer or health                                                               
care insurance  plan. That seems  odd to  her, but Mr.  Witt said                                                               
they are addressing that.                                                                                                       
MR. WITT said conversations are ongoing with DOA about that.                                                                    
6:31:04 PM                                                                                                                    
MR. WITT continued the sectional for SB 119.                                                                                    
     Sec.  10, Page  14,  Lines 3    8  Amended  language to  the                                                             
     uncodified  law of  the  State of  Alaska  allowing for  the                                                               
     Department of Commerce,  Community, and Economic Development                                                               
     to adopt regulations necessary to implement this act                                                                       
     Sec.  11, Page  14,  Line 9  Section 10  of  this Act  takes                                                             
     effect immediately.                                                                                                        
     Sec. 12,  Page 14, Line  10 Except for the  provision above,                                                             
     the act has an effective date of January 1, 2018.                                                                          
CHAIR COSTELLO  asked why the  Department of  Commerce, Community                                                               
and Economic Development would write  the regulations and not the                                                               
Department of Administration.                                                                                                   
MR. WITT said the Division of Insurance falls under commerce.                                                                   
6:32:13 PM                                                                                                                    
SENATOR MEYER  noted the Section 3  civil penalty of $50  per day                                                               
and  not  more  than  $2,500.  He asked  who  would  enforce  the                                                               
MR. WITT  said this  section would fall  under the  Department of                                                               
Health and  Social Services (DHSS) to  implement. Most provisions                                                               
fall  to the  Division  of  Insurance but  keeping  the list  and                                                               
following through with repercussions falls under DHSS.                                                                          
CHAIR  COSTELLO  asked what  happens  if  the department  doesn't                                                               
carry through on its role.                                                                                                      
MR. WITT said he didn't know.                                                                                                   
CHAIR COSTELLO  asked Ms. Wing-Heier  to define rack rate  and to                                                               
provide comments on SB 119.                                                                                                     
6:34:00 PM                                                                                                                    
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce, Community and  Economic Development (DCCED), Anchorage,                                                               
Alaska, explained that  the division interprets rack  rate in the                                                               
context  of  the  bill  to  mean the  undiscounted  rate  that  a                                                               
physician would  charge a  consumer who is  not on  any insurance                                                               
plan. The bill uses that undiscounted rate.                                                                                     
CHAIR  COSTELLO said  negotiated  rates are  much different  from                                                               
rack rates.  She asked what  value there  is in knowing  the rack                                                               
rate  given that  the bill  offers the  consumer three  different                                                               
routes to gain information about the rates.                                                                                     
MS. WING-HEIER said  the division's perspective is  that the rack                                                               
rate  will show  the consumer  what the  charges are  between the                                                               
providers.  To know  what someone  will pay  as a  consumer would                                                               
require going  to the insurer to  see what the plan  provides. An                                                               
uninsured person would pay the  undiscounted rack rate. Each plan                                                               
from  each insurer  has a  different network  provider and  those                                                               
agreements all have  different rates. A consumer will  have to go                                                               
to their insurance company and look  at their version of the bill                                                               
to see how their plan will respond.                                                                                             
CHAIR COSTELLO  said it seems  that the public  information about                                                               
what  the rack  rate  means  will be  important  because she  can                                                               
imagine a provider  who has to post the rack  rate knows that the                                                               
negotiated  rate might  be something  quite different.  She asked                                                               
how to address the fact that  the bill might drive consumers away                                                               
from something that might be  financially beneficial because they                                                               
got turned  away because  of the  rack rate  and went  to another                                                               
provider, not realizing  that if someone is covered  they have to                                                               
go to the insurance company.                                                                                                    
MS. WING-HEIER said that as  they have looked at transparency and                                                               
health care in  general, it is empowering  patients to understand                                                               
what  they have  available to  them  and decisions  they have  to                                                               
make. If they go  to their plan and look at  the DHSS website, it                                                               
will show five  providers and five different  rates. Somehow this                                                               
information needs to  get to the consumers, with  or without this                                                               
bill, that there  is merit in checking what  their plan provides,                                                               
so they do  not end up with  a huge bill. The only  way they will                                                               
know is to find out how their plan responds.                                                                                    
CHAIR  COSTELLO  asked if  some  kind  of statement  for  insured                                                               
people could be on the state website.                                                                                           
MS. WING-HEIER  said a disclaimer  could state that "you  must or                                                               
you should  look at your  individual plan regardless of  who your                                                               
employer is or  the individual market to see what  is going to be                                                               
paid in your particular case."                                                                                                  
6:38:28 PM                                                                                                                    
SENATOR STEVENS asked what will  be required of the director that                                                               
she's not doing now.                                                                                                            
MS.  WING-HEIER replied  gather  information for  the report  and                                                               
create  regulation  for  guidance  to  ensure  the  insurers  are                                                               
complying.  The bill  will  require some  procedures  to make  it                                                               
work, regulations  about how  it is  implemented, who  it applies                                                               
to, and making sure providers and insurers are complying.                                                                       
CHAIR COSTELLO asked if she had  spoken to anyone in Maine or New                                                               
MS.  WING-HEIER said  no. She  was planning  to talk  to the  two                                                               
commissioners  at   the  next   NAIC  [National   Association  of                                                               
Insurance Commissioners] meeting.                                                                                               
6:40:48 PM                                                                                                                    
EMILY   RICCI,  Chief   Health  Policy   Official,  Division   of                                                               
Retirement  and  Benefits,  Department of  Administration  (DOA),                                                               
Juneau,  Alaska,  and  Michele Michaud,  Chief  Health  Official,                                                               
Division    of   Retirement    and   Benefits,    Department   of                                                               
Administration (DOA), Juneau, Alaska, introduced themselves.                                                                    
CHAIR  COSTELLO asked  if the  department has  a position  on the                                                               
bill  and whether  the department  is  willing to  work with  the                                                               
sponsor to include state employees.                                                                                             
MS. RICCI  said the department has  no position on the  bill. The                                                               
Division of Retirement and Benefits  manages the state AlaskaCare                                                               
Health  Plan, which  covers retirees  from the  Public Employees'                                                               
Retirement  System,  the  Teachers' Retirement  System,  and  the                                                               
Judicial Retirement System.  It also manages the  plans for under                                                               
6,000 state of Alaska employees.  The majority of state employees                                                               
have coverage through union health  trusts, which are ERISA plans                                                               
not subject  to this bill. They  are not opposed to  exploring an                                                               
incentive  program.   They  can  do  that   without  legislation.                                                               
Listening to the sponsor's description  of how much New Hampshire                                                               
saved was incredible.                                                                                                           
MS.  RICCI  noted that  the  health  plans administrator  is  the                                                               
commissioner  of  DOA.  The commissioner  has  the  authority  to                                                               
determine  what is  or  what is  not included  in  the plan.  The                                                               
health  plan  has  not  been subject  to  regulation  by  another                                                               
department  or  another division,  such  as  is being  considered                                                               
here. The  bill has areas  that would  be difficult to  comply to                                                               
because it  doesn't apply  to the division,  like a  rate setting                                                               
process.  They   do  have  the   ability  to   implement  without                                                               
legislation. To be  subject to provisions of  another division in                                                               
another department is a little messy.                                                                                           
CHAIR  COSTELLO  asked  why  an  incentive  program  hasn't  been                                                               
implemented if it can provide significant savings.                                                                              
MS. RICCI explained the process to determine if it's feasible.                                                                  
CHAIR COSTELLO  asked if the  fiscal note from the  department is                                                               
zero because it does not affect them.                                                                                           
MS. RICCI  said it is  because the health  plans do not  meet the                                                               
definition of an insurer.                                                                                                       
6:45:41 PM                                                                                                                    
At ease.                                                                                                                        
6:48:16 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting.                                                                                          
SENATOR MEYER  noted that Ms.  Ricci said  the bill would  not be                                                               
applicable  to all  state employees  because some  have different                                                               
health care providers. He asked how many providers there are.                                                                   
6:48:50 PM                                                                                                                    
MS.  MICHAUD answered  there are  four union  health trusts  that                                                               
represent state  employees not covered  by the  AlaskaCare Health                                                               
Plan. They are  the Public Safety Employees  Union; Master, Mates                                                               
and  Pilots; Alaska  State Employees  Association; and  Local 71,                                                               
Labor, Trades, and Crafts.                                                                                                      
SENATOR MEYER  asked if NEA [National  Education Association] has                                                               
its own health trust.                                                                                                           
MS. MICHAUD said they might have a health trust.                                                                                
SENATOR  MEYER   asked  if   there  would   be  savings   if  all                                                               
6:49:58 PM                                                                                                                    
MS. RICCI said  the state undertook a  feasibility study recently                                                               
and it appears  there would be some savings.  Implementation is a                                                               
complex  idea  that  would  cost  over  $3.5  million  in  annual                                                               
expenditures and  involve over 200,000 lives.  The administration                                                               
is  evaluating options  for what  a Health  Care Authority  would                                                               
look like.                                                                                                                      
SENATOR  MEYER referenced  a study  done by  Commissioner Sheldon                                                               
Fisher and the potential saving that was over $100 million.                                                                     
6:51:30 PM                                                                                                                    
SENATOR GARDNER  asked about opening  the state plan  to Alaskans                                                               
who are not state employees.                                                                                                    
MS. RICCI said prior studies  looked at that including the Health                                                               
Care  Authority Feasibility  Study  that DOA  did  last year.  It                                                               
looked at ways  members of the AlaskaCare Health  Plan and others                                                               
could participate in  a new entity or new pool.  Prior to that, a                                                               
Hays Group  study from four or  five years ago looked  at opening                                                               
the AlaskaCare Health Plan participation  to teachers. She didn't                                                               
recall the  financial outcome of  that study. The state  plan has                                                               
16,000  covered  lives,  just under  6,000  employees  and  their                                                               
dependents,  and  that  pool  isn't   large  enough  to  take  on                                                               
additional health risks  without potentially increasing premiums.                                                               
As a self-insured  plan, the state is an entity  that funds those                                                               
premiums  through   employer  and  employee   contributions.  Any                                                               
additional cost  to the plan  would be passed to  the department.                                                               
The  idea of  the  state  leveraging its  volume  to allow  other                                                               
groups  to benefit  is part  of  what the  Health Care  Authority                                                               
Feasibility Study  is looking at.  The AlaskaCare Health  Plan is                                                               
probably  not large  enough to  accept  more risk  by opening  up                                                               
6:53:54 PM                                                                                                                    
CHAIR COSTELLO  held SB  119 in  committee with  public testimony                                                               

Document Name Date/Time Subjects
HB170 Version O.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 Sponsor Statement.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 Sectional Analysis.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 Explanation of Changes.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 DCCED Whitepaper.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 Repealers.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB170CS(JUD)-DCCED-DBS-03-16-18.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB170CS(JUD)-DHSS-SDSA-3-16-18.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 Supporting Documents ANCSA.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 Supporting Documents NASAA.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
HB 170 Senate Labor and Commerce Presentation DBS 03.16.18.pdf SL&C 3/19/2018 6:00:00 PM
HB 170
SB 38 Ver. A.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB 38 Pharmacy Benefit Managers PowerPoint.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB038-DCCED-DOI-3-15-2018.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB038-DOA-DRB-03-15-18.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB 38 Actuarial Letter 2.22.18.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB 38 Letter of Opposition AHIP.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document NCPA 1-26-18.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document PBMs ArkansasMatters 2-21-18.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document PHARMA Supports PBM legislation 3-13-18.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document PHARMA Supports PBM legislation 3-13-18 (1).pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document Reuters-Business Insider Dec. 2017.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document Bismark Tribune 11-13-17.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document Capitol Forum 1-2018.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB38 Supporting Document MAP PBM legislation state by state 2-2018.pdf SL&C 3/19/2018 6:00:00 PM
SB 38
SB119 Support Letter - NFIB.pdf SL&C 3/19/2018 6:00:00 PM
SB 119
SB119 Support Letter Alaska Policy Forum.pdf SL&C 3/19/2018 6:00:00 PM
SB 119