Legislature(2023 - 2024)DAVIS 106
03/26/2024 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB187 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 187 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
March 26, 2024
3:04 p.m.
MEMBERS PRESENT
Representative Mike Prax, Chair
Representative Justin Ruffridge, Vice Chair
Representative CJ McCormick
Representative Dan Saddler
Representative Jesse Sumner
Representative Zack Fields
Representative Genevieve Mina
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 187
"An Act relating to utilization review entities; exempting
certain health care providers from making preauthorization
requests for certain services; and providing for an effective
date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 187
SHORT TITLE: PRIOR AUTH EXEMPT FOR HEALTH PROVIDERS
SPONSOR(s): REPRESENTATIVE(s) SUMNER
05/03/23 (H) READ THE FIRST TIME - REFERRALS
05/03/23 (H) HSS, L&C
02/15/24 (H) HSS AT 3:00 PM DAVIS 106
02/15/24 (H) Heard & Held
02/15/24 (H) MINUTE(HSS)
03/14/24 (H) HSS AT 3:00 PM DAVIS 106
03/14/24 (H) Heard & Held
03/14/24 (H) MINUTE(HSS)
03/21/24 (H) HSS AT 3:00 PM DAVIS 106
03/21/24 (H) <Bill Hearing Canceled>
03/26/24 (H) HSS AT 3:00 PM DAVIS 106
WITNESS REGISTER
GREG LOUDON, Principal
Parker, Smith & Feek Insurance, LLC
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in opposition to HB
187.
GARY STRANNIGAN, Vice President
Congressional and Legislative Affairs
Premera Blue Cross
Everett, Washington
POSITION STATEMENT: Gave invited testimony on HB 187.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered committee questions related to HB
187.
MARC REECE, Director
Public Policy
Aetna, Inc
Denver, Colorado
POSITION STATEMENT: Answered committee questions related to HB
187.
EZEQUIEL "ZEKE" SILVA III, MD, Chair
Specialty Society Relative Value Scale Update Committee
American Medical Association; Chair
Council on Legislation
Texas Medical Association
San Antonio, Texas
POSITION STATEMENT: Answered questions during the hearing on HB
187.
PAM VENTGEN, Executive Director
Alaska State Medical Association
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony on HB 187.
JEFF DAVIS, President
Radiation Business Solutions
Wenatchee, Washington
POSITION STATEMENT: Gave invited testimony on HB 187.
SHEELA TOLLMAN, Vice President
External Affairs
UnitedHealth Group, Inc.
Seattle, Washington
POSITION STATEMENT: Gave invited testimony on HB 187.
ACTION NARRATIVE
3:04:45 PM
CHAIR PRAX called the House Health and Social Services Standing
Committee meeting to order at 3:04 p.m. Representatives
Ruffridge, Saddler, Sumner, Fields, Mina, McCormick, and Prax
were present at the call to order.
HB 187-PRIOR AUTH EXEMPT FOR HEALTH PROVIDERS
3:05:47 PM
CHAIR PRAX announced that the only order of business would be
HOUSE BILL NO. 187, "An Act relating to utilization review
entities; exempting certain health care providers from making
preauthorization requests for certain services; and providing
for an effective date."
3:08:09 PM
GREG LOUDON, Principal, Parker, Smith & Feek Insurance, LLC,
gave invited testimony in opposition to HB 187. He explained
that Parker, Smith & Feek has concerns that HB 187 could
possibly promote fraud and medically unnecessary treatments.
3:10:24 PM
REPRESENTATIVE FIELDS asked Mr. Loudon for clarification as to
how Parker, Smith & Feek, LLC approaches prior authorization on
treatments.
MR. LOUDON replied that the way Parker, Smith & Feek, LLC
approaches prior authorization is precedent to all insurance
companies.
3:11:33 PM
REPRESENTATIVE RUFFRIDGE asked Mr. Loudon to explain how prior
authorization could prevent fraud, waste, and abuse.
MR. LOUDON explained that there are examples of medical waste in
the insurance industry, but the goal is to avoid that through
proper prior authorization.
REPRESENTATIVE RUFFRIDGE commented in agreement with Mr. Loudon
that medical waste does exist and asked how the insurance
company "knows best" when it comes to diagnosing a medical
issue.
MR. LOUDON replied that none of the health plans offered by
insurance companies are trying to practice medicine, rather they
are trying to provide a different perspective on insurance
authorization requests.
REPRESENTATIVE RUFFRIDGE asked if a prior authorization's denial
is an exercise of influence over the top of an insurance
provider.
MR. LOUDON answered that the fact is that some of the services
requested by a provider or patient are not medically necessary.
3:14:44 PM
REPRESENTATIVE MINA asked what percentage of services under the
Pacific Health Coalition's (PHC's) health plan require prior
authorization and further questioned how many of those services'
prior authorization requests get disapproved.
MR. LOUDON replied that he does not have an idea of statistics
at the moment.
REPRESENTATIVE MINA asked if PHC works to reduce the wait time
for prior authorization requests.
MR. LOUDON answered yes, PHC does work to reduce wait time for
prior authorization requests, and he added that Aetna, Inc.
processes all of the prior authorization requests for PHC.
REPRESENTATIVE MINA commented that she would like more specifics
related to the encouragement of streamlining of prior
authorization and asked for examples related to difficulties
that insurance providers face when processing prior
authorization requests.
MR. LOUDON answered that he would defer his answer to someone
else because PHC does not handle prior authorization requests
directly.
3:18:21 PM
GARY STRANNIGAN, Vice President, Congressional and Legislative
Affairs, Premera Blue Cross, gave invited testimony on HB 187.
He explained that the role of insurance companies as it relates
to their oversight of prior authorization is to provide a
different perspective on the grants and authorization while not
obstructing proper medical care. He cited a piece of
legislation in the State of Washinton and explained how it
addresses the issue of prior authorization, and he detailed how
Alaska could follow suit by mirroring those policies.
3:22:59 PM
REPRESENTATIVE RUFFRIDGE asked what the average time for a prior
authorization requests' approval is for Alaska.
MR. STRANNIGAN answered under five days for standard turnaround
times and under one day for urgent requests.
REPRESENTATIVE RUFFRIDGE asked if the goal that the State of
Washington set with its prior authorization bill was met on
behalf of Premera Blue Cross.
MR. STRANNIGAN said yes, Premera Blue Cross is granting requests
in under three days as outlined by Washington's legislation.
REPRESENTATIVE RUFFRIDGE asked where Premera Blue Cross got its
figure of $120 million in fraud if HB 187 were to become law.
MR. STRANNIGAN explained that the fraud is actually specific to
a set of out-of-state providers, who are providing a false
residency scheme in Alaska.
3:27:25 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development, answered committee
questions related to HB 187. In response to a request from
Representative Saddler, she clarified for the committee that the
$120 million figure is in incurred claims, not paid claims. She
said that she has Department of Health (DOH) investigators
knocking on doors to verify residency and existence and added
that "body brokers" [insurance scammers] are disproportionately
targeting Alaska Natives, American Indians, and people
experiencing homelessness.
3:30:21 PM
CHAIR PRAX asked if prior authorization could help control body
brokers.
MS. WING-HEIER answered that removing prior authorization would
not help with residency scams.
3:31:41 PM
REPRESENTATIVE FIELDS asked how many people are getting sent to
clinics in the Lower 48 and how many are sent to Alaska.
MS. WING-HEIER answered that DOH is not aware of anyone being
sent to Alaska and said that most are sent to California.
REPRESENTATIVE RUFFRIDGE commented that he finds this testimony
fascinating and shared his opinion that it is not compelling
because Ms. Wing-Heier is claiming that prior authorizations are
needed in a greater degree when, in fact, they are a process
that is currently exacerbating this problem.
MR. STRANNIGAN explained that the point of prior authorization
is to verify medical necessity and said it is a vital tool for
insurance companies to avoid medical waste.
REPRESENTATIVE RUFFRIDGE asked if downward pressure on insurance
scams is helping.
MR. STRANNIGAN replied that the current mode of operations is
not working ideally and added that part of the solution is
removing friction from the system of prior authorization.
3:35:35 PM
REPRESENTATIVE MINA asked what percentage of claims received are
denied and what percent are approved.
MR. STRANNIGAN said that doesn't know the answer and said he
would get back to the committee later.
3:36:34 PM
CHAIR PRAX asked if it is regulation that prior authorization
requests are processed by facsimile ("fax") machine.
MS. WING-HEIER answered that it is not a regulatory requirement
for insurance providers to process prior authorization by fax
machine, but some providers use those machines because that is
the only resource they have.
MR. STRANNIGAN added that Premera Blue Cross has been working to
encourage providers to switch to electronic processing.
3:38:06 PM
REPRESENTATIVE SADDLER asked how electronic processing of prior
authorization requests speeds up approvals.
MR. STRANNIGAN answered that he doesn't have any specific data.
REPRESENTATIVE SADDLER asked if Premera Blue Cross tracks the
number of claims that require prior authorization.
MR. STRANNIGAN said that Premera Blue Cross does track that data
and said he would get the data to the committee in short order.
3:39:26 PM
CHAIR PRAX asked if Premera Blue Cross is the largest insurance
provider in Alaska.
MR. STRANNIGAN confirmed that is correct.
CHAIR PRAX asked whether HB 187 would cover only private
insurance or all insurance policies.
MR. STRANNIGAN answered that HB 187 would cover the fully
insured marketplace, that being individual plans and
small/medium group plans.
CHAIR PRAX asked how the Affordable Care Act (ACA) would affect
HB 187.
MS. WING-HEIER answered that the person picks a plan and carrier
through ACA.
3:42:10 PM
MARC REECE, Director, Public Policy, Aetna, Inc, answered
committee questions related to HB 187. He explained that the
mechanism that most concerns Aetna is the concept of a one-size-
fits-all regulation that outlines 80 percent as a threshold for
prior authorization. He said that over 80 percent of prior
authorization cases are already granted and detailed the
complexities of prior authorization where a proposed blanket
regulation might negatively impact a company's ability to verify
the necessity of a treatment and avoid medical waste.
3:47:02 PM
REPRESENTATIVE SUMNER asked whether there is any percent other
than 80 that Aetna would be comfortable with.
MR. REECE said that Aetna would not be comfortable with a set
percent in statute because each prior authorization request is
so different from each other and said that having a blanket
regulation would hinder insurance companies and remove nuance
from the process of prior authorization approval.
3:49:02 PM
REPRESENTATIVE RUFFRIDGE asked Mr. Reece if he is a healthcare
provider.
MR. REECE answered that he is not a healthcare provider; he is a
subject matter expert.
REPRESENTATIVE RUFFRIDGE asked Mr. Reece to describe who decides
at Aetna whether a prior authorization request is approved or
not.
MR. REECE answered that it depends on the service being
requested. He further detailed that the insurance company has
someone with unique clinical knowledge related to the prior
authorization request and a knowledge of the backdrop of policy.
He gave examples of automated prior authorization requests and
responses and emphasized that insurance companies are trying to
switch to automated electronic prior authorization requests
sooner rather than later.
REPRESENTATIVE RUFFRIDGE noted prior authorization serves as
sort of a check-and-balance to an already clinically complex
medical and policy decision and asked why the onus of a drug
treatment falls to the patient rather than the insurance
provider.
MR. REECE offered the committee to look into the details of the
checklists referenced in prior authorization cases and gave an
example of a diabetic patient with the onset of a new condition
that would require a separate prior authorization request and
explained how the separate cases and insurance providers would
work together to get that person the medical care they need.
REPRESENTATIVE RUFFRIDGE commented that pharmacists exist for
the purpose described in Mr. Reece's example and thanked him for
his testimony.
3:58:46 PM
REPRESENTATIVE MINA asked how a provider differentiation program
would work.
MR. REECE answered that providers look at member outcome and
history of service from that provider to that member. He said
that some providers would draw parallels between a provider
differentiation program and a blanket percentage for prior
authorization approval and said that there is not a one-size-
fits-all solution for HB 187.
REPRESENTATIVE MINA asked what percentage of insurance providers
is part of the differentiated status and further questioned the
specifics of the processes and opportunities of the
differentiated status for providers.
MR. REECE replied that he does not have information specific to
Alaska, but reassured the committee that there are over 1,000
insurance providers in the nation enrolled in the provider
differentiation program and gave an example of how the program
is executed in practice.
REPRESENTATIVE MINA asked what actions Aetna has taken to speed
up the prior authorization process for patients.
MR. REECE explained that the process of prior authorization is
improving day by day. He credited automation of prior
authorization cases with the majority of its improvements and
clarified again that he does not have any Alaska-specific
numbers.
REPRESENTATIVE MINA asked what the percentage of services billed
as prior authorization is denied and further asked about the
turnaround time for approved cases of prior authorization.
MR. REECE answered that he doesn't have the number for the
percentage of services that require prior authorization and
added that the percentage of approval/denial for prior
authorization claims is 80 approval and 20 percent denial. He
finalized his remarks by saying that the turnaround time for
prior authorization cases is generally 5 days for non-urgent
cases and less than 24 hours for urgent cases.
4:07:27 PM
CHAIR PRAX offered his understanding that relatively few
procedures compared to the whole of procedures performed by a
medical care provider actually required prior authorization.
MR. REECE responded that that is a fair statement.
CHAIR PRAX added to his previous statement that comparing part
of prior authorization cases to the total number of prior
authorization cases isn't a fair way to describe the issue.
MR. REECE responded that there is logic behind every prior
authorization case and said that Aetna takes pride in its
improvements in the prior authorization process.
CHAIR PRAX asked what percentage of denied prior authorization
request win their appeal case.
MR. REECE replied that he did not have that information
currently and would follow up with the committee later.
4:10:04 PM
REPRESENTATIVE RUFFRIDGE asked for an example of an "urgent"
prior authorization request as previously mentioned.
MR. REECE explained that the general idea behind an urgent
precertification is that the request is not a medical emergency;
however, it could be something like a new drug regimen, an
admission to a hospital, or certain medical or surgical
procedures. He added that something like a knee replacement
wouldn't be considered as "urgent".
REPRESENTATIVE RUFFRIDGE asked Mr. Reece to send to the
committee a list of examples of specific cases that would be
labeled as "urgent."
4:12:58 PM
EZEQUIEL "ZEKE" SILVA III, MD, Chair, Specialty Society Relative
Value Scale Update Committee, American Medical Association;
Chair, Council on Legislation, Texas Medical Association,
answered questions during the hearing on HB 187. He began by
saying that Texas passed the first "gold card" bill in the
United States and explained the adverse effects of prior
authorization in healthcare, attributing declining health and
loss of life to prior authorization.
REPRESENTATIVE RUFFRIDGE asked about the similarities between
Texas' 2021 "gold card" legislation and Alaska's current
proposed legislation.
DR. SILVA explained that Texas' threshold in its 2021
legislation was 90 percent and Alaska's proposed threshold is 80
percent. He shared the Texas Medical Association's (TMA's)
belief that the threshold is not what led to the shortcomings
of prior authorization in Texas, rather it is how the insurance
companies make their determinations.
4:17:17 PM
REPRESENTATIVE MINA asked if the 2021 Texas "gold card"
legislation only covered physicians.
DR. SILVA said yes.
REPRESENTATIVE MINA asked how the passage of the 2021 Texas
"gold card" legislation impacted fraud and abuse of prior
authorization in Texas.
DR. SILVA answered that the passage of the legislation in Texas
gave the presumption of good will and good practice to
physicians by giving them legal tools to make the judgement of
the necessity of a prior authorization request.
REPRESENTATIVE MINA asked how the passage of the 2021 Texas
"gold card" legislation impacted delay of treatment in prior
authorization requests.
DR. SILVA answered by giving an example of how prior
authorization requests could lead to an "avoidable service" and
explained that the solution most often utilized to combat a
delay of prior authorization services is to send the patient to
the emergency department of a given hospital.
4:22:32 PM
CHAIR PRAX asked if physicians are specialized in the fields for
which they are sending prior authorization requests.
DR. SILVA explained that the focus of prior authorization cases
is on the outcome of the patients and emphasized that the point
of a "gold card" is to ensure that one certain physician will
always be approved once they are proven as a provider in their
specific field of medicine.
4:25:26 PM
PAM VENTGEN, Executive Director, Alaska State Medical
Association (ASMA), gave invited testimony in support of HB 187.
She made clear to the committee that she was present primarily
to answer committee questions. She emphasized that the "gold
card" proposed under HB 187 is targeted towards physicians who
consistently receive approval for prior authorization in the
past, not physicians who've received approval once or twice in
the past.
REPRESENTATIVE FIELDS asked what the balance is between
legitimate mental health treatment and systematic abuse of prior
authorization by a fraudulent person.
MS. VENTGEN answered that there have been egregious cases of
fraud, but those cases were primarily happening before HB 187
was a prospect for Alaska's medical industry.
4:29:22 PM
CHAIR PRAX asked if certain prior authorizations requests are
being consistently turned down compared to others.
MS. VENTGEN answered that an approval or denial of a prior
authorization case depends on the type of practice and type of
procedure being given. She used oncologists as an example of
prior authorization requests being granted and explained that a
person who is granting prior authorization requests might not be
in the specific field of medicine that is being practiced by the
specialist submitting the request.
4:32:30 PM
REPRESENTATIVE RUFFRIDGE asked Ms. Ventgen to explain how a
given physician would prove that a patient is in need of the
care that the physician is requesting that the insurance
companies cover.
MS. VENTGEN answered by giving a list of daily living obstacles
that a patient might be experiencing and how those obstacles
might supplement a doctor's case for an insurance approval
request.
4:35:20 PM
REPRESENTATIVE MINA asked how insurance companies are working to
lower wait times for patients seeking prior authorization.
MS. VENTGEN explained that there are several factors affecting
the current delay in services, most of them being analogue
processing services that are hindering electronic processing
services. She added that there are many cases where physicians
were plainly unaware that a patient might need medication in the
first place.
REPRESENTATIVE MINA asked Ms. Ventgen to give examples of how
outside companies are pressuring patients and physicians to take
certain treatments and further questioned how the ASMA is making
efforts to promote more affordable patient-focused care in
Alaska.
MS. VENTGEN replied that there is a heavy influence from
commercial pharmaceutical companies on both patients and
physicians to take a certain drug or participate in a certain
treatment and said that the biggest issue in pressuring
pharmaceuticals is mass advertising.
4:39:43 PM
JEFF DAVIS, President, Radiation Business Solutions, gave
invited testimony on HB 187. He began his testimony by giving a
history of his career in Alaska and gave his support for HB 187.
He emphasized the effect that prior authorization and its issues
have on patients rather than insurance providers or physicians.
He said that prior authorization was noble in its conception but
has deteriorated in its honest intention over time. Delays in
treatment as a result of prior authorization have caused more
harm than good for patients and physicians across Alaska. He
concluded his opening remarks by saying that the goal of HB 187
is to set a clear standard of prior authorization approval for
insurance providers and physicians.
4:45:30 PM
REPRESENTATIVE MINA asked Mr. Davis if he could respond to
concerns that HB 187 would not allow for insurance companies to
check or substantiate a new type of treatment.
MR. DAVIS explained that a physician would be "gold carded" for
a specific medical service, not a new procedure or medication.
4:48:06 PM
CHAIR PRAX asked if most of the prior authorization requests
that were initially denied were approved on appeal.
MR. DAVIS explained that a denial of a prior authorization goes
through an appeals process and gave his understanding that the
success of an appeal is driven by the patient being physically
present to the attending physician, who may then explain to the
reviewing physician their justification for the appeal. He
added that in unusual circumstances, certain companies might
take a month or up to two months to grant final approval to a
prior authorization request.
CHAIR PRAX asked how common the one- to two-month approval times
were.
MR. DAVIS shared his belief that Premera Blue Cross and Aetna
are good companies that do the best for patients and further
explained that there are quite a few companies below those two
that cause issues for the rest.
4:55:38 PM
SHEELA TOLLMAN, Vice President, External Affairs, UnitedHealth
Group, Inc. (UHG) gave invited testimony on HB 187. She began
by giving explanation to a federal rule that is meant to
simplify the process of prior authorization for insurance
providers that she believed hadn't yet been taken into
consideration for HB 187 and said that there must be steps taken
by all parties to get to a real-time prior authorization
approval process.
REPRESENTATIVE RUFFRIDGE asked Ms. Tollman whether UHG is in
support of HB 187.
MS. TOLLMAN answered that UHG is supportive of trying to
simplify the burden on patients and physicians but still
recognizes the importance of prior authorization.
REPRESENTATIVE RUFFRIDGE commented that he would like to see
written comment from UHG to the committee on how it would amend
HB 187 and added his belief through experience that federal
rules often don't streamline processes, rather they make them
more complex.
5:01:58 PM
REPRESENTATIVE MINA asked what percentage of UHG's services
require prior authorization and further questioned the
turnaround time for prior authorization requests.
MS. TOLLMAN said UHG would follow up with the committee later.
5:03:16 PM
CHAIR PRAX asked Ms. Tollman when the new federal rule that
impacts prior authorization will be implemented.
MS. TOLLMAN said that the respective rules would go into effect
in 2026 and 2027.
5:04:43 PM
REPRESENTATIVE RUFFRIDGE asked whether the new federal rule
would govern all types of insurance plans.
MS. TOLLMAN responded that the new federal rule would be
applicable to all insurance plans in Alaska.
CHAIR PRAX asked whether the proposed "gold card" idea may be
negotiated in or out of network health care plans.
5:06:27 PM
MS. WING-HEIER answered that the DOH sees no reason why the
proposed "gold card" idea may not be negotiated into agreement
with insurance providers around the State.
CHAIR PRAX asked whether the federal rule would be required by
the Centers for Medicare and Medicaid services to be adopted by
all other providers in the nation.
MS. WING-HEIER explained that it would take DOH time and money
to analyze how federal bills would affect Alaska.
5:08:28 PM
REPRESENTATIVE MINA asked whether Ms. Wing-Heier had a breakdown
of Alaskans that are covered by insurance companies that would
be affected by the new federal rule.
MS. WING-HEIER answered that she would send that information to
the committee after the meeting.
CHAIR PRAX announced that HB 187 was held over.
5:10:14 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 5:10 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 187 Pacific Health Coalition Opposition.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |
| HB 187 Premera One Pager.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |
| HB 187 Denali Oncology Support.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |
| HB187 Community Oncology Alliance Support.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |
| HB 187 Alaska Regional Hospital Support.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |
| HB 187 United Health Testimony.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |
| HHSS 3.26.24 DOI Follow Up.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |
| HHSS Committee Follow Up Premera on 3.26.24.pdf |
HHSS 3/26/2024 3:00:00 PM |
HB 187 |