03/24/2017 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB69 | |
| HB108 | |
| HB123 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 123 | TELECONFERENCED | |
| + | HB 108 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 69 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
March 24, 2017
1:04 p.m.
MEMBERS PRESENT
Representative Matt Claman, Chair
Representative Zach Fansler, Vice Chair
Representative Jonathan Kreiss-Tomkins
Representative Gabrielle LeDoux
Representative David Eastman
Representative Lora Reinbold (telephonic)
MEMBERS ABSENT
Representative Chuck Kopp
Representative Charisse Millett (alternate)
Representative Louise Stutes (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 69
"An Act repealing the Workers' Compensation Appeals Commission;
relating to decisions and orders of the Workers' Compensation
Appeals Commission; relating to superior court jurisdiction over
appeals from Alaska Workers' Compensation Board decisions;
repealing Rules 201.1, 401.1, and 501.1, Alaska Rules of
Appellate Procedure, and amending Rules 202(a), 204(a) - (c),
210(e), 601(b), and 603(a), Alaska Rules of Appellate Procedure;
and providing for an effective date."
- MOVED CSHB 69(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 108
"An Act adopting and relating to the Revised Uniform Fiduciary
Access to Digital Assets Act."
- HEARD & HELD
HOUSE BILL NO. 123
"An Act relating to disclosure of health care services and price
information; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 69
SHORT TITLE: REPEAL WORKERS' COMP APPEALS COMMISSION
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/20/17 (H) READ THE FIRST TIME - REFERRALS
01/20/17 (H) L&C, JUD
02/06/17 (H) L&C AT 3:15 PM BARNES 124
02/06/17 (H) Heard & Held
02/06/17 (H) MINUTE (L&C)
02/10/17 (H) L&C AT 3:15 PM BARNES 124
02/10/17 (H) Moved HB 69 Out of Committee
02/10/17 (H) MINUTE (L&C)
02/13/17 (H) L&C RPT 5DP 1NR
02/13/17 (H) DP: SULLIVAN-LEONARD, STUTES, BIRCH,
KNOPP, KITO
02/13/17 (H) NR: JOSEPHSON
02/22/17 (H) JUD AT 1:30 PM GRUENBERG 120
02/22/17 (H) Scheduled but Not Heard
02/27/17 (H) JUD AT 1:00 PM GRUENBERG 120
02/27/17 (H) Heard & Held
02/27/17 (H) MINUTE (JUD)
03/10/17 (H) JUD AT 1:30 PM GRUENBERG 120
03/10/17 (H) Heard & Held
03/10/17 (H) MINUTE (JUD)
03/20/17 (H) JUD AT 1:00 PM GRUENBERG 120
03/20/17 (H) Scheduled but Not Heard
03/24/17 (H) JUD AT 1:00 PM GRUENBERG 120
BILL: HB 108
SHORT TITLE: FIDUCIARY ACCESS TO DIGITAL ASSETS
SPONSOR(s): CLAMAN
02/08/17 (H) READ THE FIRST TIME - REFERRALS
02/08/17 (H) L&C, JUD
03/08/17 (H) L&C AT 3:15 PM BARNES 124
03/08/17 (H) Heard & Held
03/08/17 (H) MINUTE (L&C)
03/10/17 (H) L&C AT 3:15 PM BARNES 124
03/10/17 (H) Moved HB 108 Out of Committee
03/10/17 (H) MINUTE (L&C)
03/13/17 (H) L&C RPT 7DP
03/13/17 (H) DP: SULLIVAN-LEONARD, STUTES, WOOL,
JOSEPHSON, BIRCH, KNOPP, KITO
03/24/17 (H) JUD AT 1:00 PM GRUENBERG 120
BILL: HB 123
SHORT TITLE: DISCLOSURE OF HEALTH CARE COSTS
SPONSOR(s): SPOHNHOLZ
02/13/17 (H) READ THE FIRST TIME - REFERRALS
02/13/17 (H) HSS, JUD
03/02/17 (H) HSS AT 3:00 PM CAPITOL 106
03/02/17 (H) Heard & Held
03/02/17 (H) MINUTE (HSS)
03/09/17 (H) HSS AT 3:00 PM CAPITOL 106
03/09/17 (H) Moved CSHB 123(HSS) Out of Committee
03/09/17 (H) MINUTE (HSS)
03/10/17 (H) HSS RPT CS (HSS) 5DP 2NR
03/10/17 (H) DP: JOHNSTON, TARR, EDGMON, SULLIVAN-
LEONARD, SPOHNHOLZ
03/10/17 (H) NR: KITO, EASTMAN
03/24/17 (H) JUD AT 1:00 PM GRUENBERG 120
WITNESS REGISTER
DEBORAH BEHR, Commissioner
Uniform Law Commission
Alaska Uniform Law Delegation
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 108, offered
testimony and answered questions.
KEN HELANDER, Advocacy Director
American Association of Retired Persons (AARP)
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 108, offered
support for the legislation.
REPRESENTATIVE IVY SPOHNHOLZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 123 on behalf of the House
Health and Social Services Standing Committee, Representative
Spohnholz, chair.
KIM STALDER
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for health care price transparency.
BECKY HULTBERG
Alaska State Hospital and Nursing Association
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for health care price transparency, and answered
questions.
KYLE MIRKA
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
PERRY ALLARD
Senior Advisor
Wilson Agency
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
RHONDA KITTER, Chief Financial Officer
Public Education Health Trust
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
GEORGE McKEE, Member
Mat-Su Borough Assembly
Palmer, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
JOHN MOOSEY, Borough Manager
Matanuska-Susitna Borough Assembly
Palmer, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
T.J. ALINEN
Assistant Vice President
Human Resources
Denali Federal Credit Union
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
TOM WESCOTT, President
Alaska Professional Fire Fighters Association
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation, and answered questions.
BLANCHE SHEPPARD
Northrim Benefits Group
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
JEFF RANF, Consultant
Alaskans for Sustainable Healthcare Coalition
Unknown City
POSITION STATEMENT: During the hearing of HB 123, stressed the
importance of health care transparency.
JASON HIPSZER
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
DENISE DANIELLO, Executive Director
Alaska Commission on Aging
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 123, offered
support for the legislation.
BERNICE NISBETT, Staff
Representative Ivy Spohnholz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Spohnholz,
presented the sectional explanation of changes.
ACTION NARRATIVE
1:04:51 PM
CHAIR MATT CLAMAN called the House Judiciary Standing Committee
meeting to order at 1:04 p.m. Representatives Claman, LeDoux,
Fansler, Eastman, and Reinbold (telephonically) were present at
the call to order. Representatives Kreiss-Tomkins arrived as
the meeting was in progress.
HB 69-REPEAL WORKERS' COMP APPEALS COMMISSION
1:06:45 PM
CHAIR CLAMAN announced that the first order of business would be
HOUSE BILL NO. 69. "An Act repealing the Workers' Compensation
Appeals Commission; relating to decisions and orders of the
Workers' Compensation Appeals Commission; relating to superior
court jurisdiction over appeals from Alaska Workers'
Compensation Board decisions; repealing Rules 201.1, 401.1, and
501.1, Alaska Rules of Appellate Procedure, and amending Rules
202(a), 204(a) - (c), 210(e), 601(b), and 603(a), Alaska Rules
of Appellate Procedure; and providing for an effective date."
CHAIR CLAMAN noted that subsequent to the last hearing, his
office received the white paper prepared by the Office of
Administrative Hearings during the prior governor's
administration. He advised that the white paper had been
distributed and members should have had an opportunity to review
that copy.
1:07:41 PM
REPRESENTATIVE EASTMAN asked whether the intention of the chair
was to pass this bill out shortly, whether there were any
decisions to be made other than voting on the bill itself, and
whether the white paper had inspired any thoughts.
1:08:00 PM
REPRESENTATIVE LEDOUX said that her reading of the white paper
was that it appeared to be a discussion about the Workers'
Compensation Appeals Commission's physical location rather than
any substantive changes in procedure.
REPRESENTATIVE EASTMAN commented that he found the discussion of
saving every single piece of paper since its inception
interesting, and yet still not having a full file room. He
asked whether there would be more testimony.
CHAIR CLAMAN advised that public testimony was closed, and if
someone had questions they could be raised. He noted that his
read on the white paper was a housing question about where to
put the folks. The question this bill raised was whether the
existing structure was working with four volunteer public
members and one lawyer that sits as the chair of the commission.
He offered that it appeared the public members are "a little on
fringes of the process" and there had been a lot of turnover in
the position of the commission chair. He continued that this
was a significant savings because according to the white paper,
it could save a little rent and have a more efficient use of
space. He related that the white paper would have saved some
money but nowhere close to the same amount as in HB 69.
1:10:22 PM
REPRESENTATIVE EASTMAN noted that the jurisdiction was first
with the superior court with enough consternation on all parties
to create the commission, and now there seems to be a similar
amount of consternation at the commission level. He commented
that it didn't go so well in the courts, and nothing had changed
to expect a better outcome than last time.
1:11:16 PM
REPRESENTATIVE LEDOUX advised that she was in the legislature
when it was transferred from the superior court to the Workers'
Compensation Appeals Commission. She said she never thought
anyone had presented compelling evidence that there was a
problem with the courts and that this new Workers' Compensation
Appeals Commission needed to be created. She has ultimately
come down on the side of the fact that almost everything else
moves from an administrative hearing to the superior court.
Therefore, should workers' compensation cases be treated
differently, she asked. Her thoughts about moving jurisdiction
to the Office of Administrative Hearings was that there had been
no commitment that it would not require extra staff, and thus a
fiscal note. Hence, she expressed, let it go back to the
courts.
1:12:58 PM
VICE CHAIR FANSLER moved to report CSHB 69, Version 30-GH1773\O,
as amended out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, CSHB
69(JUD) passed from the House Judiciary Standing Committee.
HB 108-FIDUCIARY ACCESS TO DIGITAL ASSETS
1:13:32 PM
CHAIR CLAMAN announced that the next order of business would be
HOUSE BILL NO. 108, "An Act adopting and relating to the Revised
Uniform Fiduciary Access to Digital Assets Act."
[Chair Claman passed the gavel to Vice Chair Fansler.]
1:14:12 PM
CHAIR CLAMAN moved to adopt CSHB 108, Version 30-LS0210\U as the
working document. There being no objection, Version U was
before the committee.
1:14:50 PM
CHAIR CLAMAN, in presenting CSHB 108, Version U, advised that in
2015, 74,000 Alaskans, 9.9 percent of Alaska's population, were
over the age of 65. Due to the increasingly computer savvy
senior population, fiduciary access to digital assets is more
important than ever. He explained that this legislation
provides fiduciaries the legal authority to manage assets, such
as computer files, digital photographs, and electronic
communications.
1:15:46 PM
DEBORAH BEHR, Commissioner, Uniform Law Commission, Alaska
Uniform Law Delegation, presented her testimony as follows:
Good afternoon. I'm Deborah Behr and I'm a Uniform
Law Delegation member from the State of Alaska.
Alaska has been a member of the Uniform Law Delegation
since about 1914. And, Uniform Law Commission is a --
what I consider to be a state right's organization.
Each state sends their representative to meet annually
to deal with problems that cross state lines, like
commerce, like digital assets. And, we come up with a
solution after great negotiations that works for all
of the states. And this bill is the result of that in
terms of digital assets. Twenty -- twenty-four states
have already enacted it, it is the law in 24 states.
And it is presently pending on 18 states, of which of
those 18 states - 2 are sitting on governors' desks.
So this is a -- an actively moving bill and it has
been generally accepted in other states. And, the
Uniform Law Commissioners have reviewed the -- the
Alaska delegation have reviewed the CS and we do
support the CS and the changes to it.
What I thought I'd do is give an overview of the bill
and then ask if you folks have any questions. The Act
itself was the result of senior groups coming to the
Uniform Law Commission and saying that they had
difficulties when a family -- when a family member
died and the fiduciary -- in typical cases a husband
and wife, the wife is the fiduciary, she's the one
that the husband trusted to deal with her -- his
assets when he passed on. And, there's a problem in
digital assets right now. The law has not kept pace
with digital assets, such that in a typical case, the
husband -- and the example of digital assets is like
the family photo album. In my house, my husband takes
all the family photos, puts them on some cloud or some
-- some server that I don't quite understand, and has
a -- they're password protected or encrypted so that
the average person can't get to his photos. He has
also signed a contract with the custodian of those
photos and in that contract they agree to keep them
confidential, people can't generally have access to
it. And, that's generally where the problem is with
digital assets and why they're different than your --
your deed, your house, your car, whatever will
transfer at your death. Because they are password
protected and there's also been a contract promise
between -- in my case, it would be my husband that
passed away, there would be a contract promise between
the custodian Google, Facebook, whatever, to keep my
husband's documents on file with them confidential.
1:18:27 PM
So, we -- we reported -- we received cases from all
over the United States about people wanting to get
even the most basic thing like the family photo album.
And when they would go to Google or Facebook for it,
and they'd say, "Geez, we'd really like to help you
but your husband, the decedent - the user, when he
signed the Terms of Service Agreement with Google or
Facebook, he asked for us to keep it confidential.
That's our standard form and we're stuck with that.
Please get a court order." Court orders are expensive
to get and there's a delay in getting them, and it's
also at a time for families when it's very stressful
for them, there's been a death in the family, there's
been a disability in the family, and it just takes
time. And, in some cases that time has actual money
costs of family. One example that someone gave me was
where someone had -- became disabled and he was a sole
proprietor of a business. He has all his business
records in the cloud, paperless in his office and
somebody had to come and run his business while he
recuperated. Well, the problem is, the husband at
that point did not have capacity to say what his
passwords were or even where they were -- where the
digit assets were located. So, it ended up being a
big mess for the family. The family defaulted on
loans, they had to pay extra interest that they
wouldn't have to deal with. And so, that's -- those
are the kinds of problems that came to the Uniform Law
Commission.
1:19:58 PM
Why we thought a uniform law was important across
state lines, because first of all, digital commerce
goes across states lines. We don't have any choice in
that. And also, residents of Alaska travel a lot.
And so you want to make sure that their expectations
are followed and then the bill basically says that you
look at the residency of where the user, in this case
my deceased husband, would be -- what kind of law
would apply. So, in this case it would be Alaska law
applied.
So, what is the solution that the Uniform Law
Commissioners came up with? And, this -- this is a
result of a two-year public process, its open public,
anybody can come to our meetings. Google, Facebook,
the industry was there, senior groups were there, and
just anybody who cared to. And, after the end of a
two-year process it came up with what I call and "opt
in" system. So that the decedent, the person when
they're alive has to say to Google or Facebook, this
is how I would like my digital assets handled. And,
it's called an "online tool," that's the buzz word for
it. So, Google or Facebook will have an online tool
so that when you open the account, it will come up as
a separate electronic document that you will decide
whether you want to use it or not. You don't have to,
there's no requirement that you do. And, if you do
use it, then that sets the clear path for the family
photos to go to whoever the decedent had wanted at the
time that he opened the account with Google or
Facebook. And, you can change it readily, and the
nice thing about it, people have asked me about it,
you don't need a lawyer to do the online tool. You
can have a different person who has access to your
family photos, or your music, whatever makes sense.
Like in your financial records, you may not want your
children to have access to them, you may want your
brother who's a CPA to do them if you pass away. But,
your music or the family photos can have children,
something like that might be just fine. So, it's an
opt in system, person does nothing, they don't --
can't take the benefits of the online tool, but the
online tool is available for them.
1:22:10 PM
Okay, what happens if there is no online tool, or the
person just decides not to use it, or in the case of
probably all of us in this room, we have open digital
accounts years ago and this tool wasn't available.
Okay, so the tool isn't available, you go onto, what
is called the -- you look at the person's will and
this bill also covers trusts, powers of attorneys,
guardianship and conservatorship. But, I'm going to
focus on wills because it is easier to understand. If
it is very clear in the will who you want your digital
assets to go to, then that -- the bill sets a priority
system for that. The issue that came up in, when we
were dealing with this, is most wills are the typical,
I give all my assets to my wife, or I give all my
assets to my husband. And, that generally will --
causes a problem because you don't know whether it's
digital assets and you also have this contract that
your husband signed, or your wife signs saying that
they would like to have this doc -- digital assets
treated in a confidential manner. So, if it's clear
enough in the will that you can see it, the digital
assets were intended and there is expressed consent in
there "I want my fiduciary, my wife, or whoever, to
get access to them." Then that's the trigger, that's
the second level of the online system.
The third level of -- supposing you have no online
tool, wasn't available or you just didn't cho -- you
were in a hurry and buzzed through that screen on it.
Your will is a general will or a lot of Alaskans have
no wills. So, you have no will, what happens next?
It's the Terms of Service Agreement applied. And,
that's the Terms of Service Agreement that my husband
signed with Google or Facebook. They are generally
going to mean you've got a court case out of it
because of -- in the Terms of Service Agreement there
generally, you are going to keep this confidential and
so you are basically stuck with a court case on it.
So, but if somebody chooses to do nothing, the -- and
doesn't do an online tool, their will doesn't address
it, then you will look at the Terms of Service
Agreement.
1:24:26 PM
This system has been supported by industry, Google,
Facebook, have -- and technical groups have supported
it, senior groups nationwide, our National Academy of
Elder Attorneys have supported it. In Alaska we're
very pleased that the Alaska AARP has supported it, a
major trust company in Alaska have said "Yes, this is
a problem in Alaska" and they support it, and Alaska
Commission on Aging. You will see those endorsement
letters in this file.
The other interplay with digital assets is, there is a
federal law on this issue dealing with electronic
communications and how you store them, but they have
to be confidential. So, the bill sets up a system for
a special treatment for email, because I think
everybody in this room, when you write an email, you
don't think people are going to be reading over your
shoulder and looking at how you're doing it and all
that. So, how the bill sets up a structure for email
is, if you give consent, express consent - my
fiduciary, my wife can have access to the email, no
question, you can get it onto the bill. The other
option is a court order because courts right now can
monitor that when it's appropriate. If the person has
not done an express consent, and there's no court
order, then the best that the fiduciary gets is -- in
this bill - is what is called the "Catalog of
Electronic Communications." And, what that sets up is
just the "to, from, and the date and the addresses on
it." Not the subject line, not the body of it.
Because the person did not express, during his life --
his or her lifetime, that they would want their
electronic communications viewed by a third party,
even a spouse. And, that's absolutely appropriate.
The fiduciaries in this area have said they can do a
lot with the name and the email address. They can go
and -- if you see 10 emails from Wells Fargo and the
banks, they pretty much have a good idea you have some
financial relationship with Wells Fargo and they can
go forward and deal with them. And, a big issue that
I've done some research recently on is, closing
accounts. There's a whole lot of fraud in this area
when somebody leaves a digital account open after
someone dies. People will go in and open credit cards
on it, they will send out flyers saying "I'm ill and I
need contributions for my medical care." You really
need to close these accounts and this will allow you
to identify the accounts and go forward with it.
1:27:16 PM
REPRESENTATIVE LEDOUX noted that Ms. Behr referred to pictures
and Facebook, and asked whether this would let someone into a
regular Facebook account.
MS. BEHR responded that, currently, Facebook has what is called
a "Legacy Form," so if a person opens a Facebook account today,
her understanding is that the person can say "If I pass away,
this is -- the person can have access to my private part of
Facebook." She commented that she is not an expert in
electronics and can get way ahead of herself easily, but her
understanding is that there is a public part of it where anyone
can look at it, and then there's a private part where the person
has to friend people and people have to come into it, that's the
part that this bill deals with. It also deals with email
communications. The definition of digital asset is pretty
broad, and it can include things that have a value, like domain
names, bit coins - electronic currency. So, it's a big issue
nationwide and a big issue that affects seniors.
1:29:01 PM
REPRESENTATIVE LEDOUX referred to people with prior Facebook
accounts, and asked whether Facebook is amenable to sending a
notice with a link to the legacy form.
MS. BEHR stated that she does not represent Google or Facebook
and doesn't want to speak for these businesses. She did
acknowledged that [the legacy form] is there and people have
been using it. In response to the subset of Representative
LeDoux's question, she said that people have asked her about
training, and the senior groups advised that they will actively
offer education on this topic, and she was advised by the Alaska
Bar Association's Committee on Probate that it is interested in
making sure everyone is aware of it. Also, when searching [the
internet], she found that a tremendous amount of material was
out there. She commented that she doesn't believe it has
trickled up to Alaska much, but it is an issue because Alaska
does have a major trust company that reported it was a real
issue for them.
1:30:27 PM
MS. BEHR continued her testimony as follows:
What happens if I'm a fiduciary and my -- the
decedent, my husband whatever, has said "Yes, you may
have access." All the duties and responsibilities the
fiduciary has such as like, protecting information,
checking on copyrights, things like that. They have
the same responsibilities that you have for other
assets that are in the estate. And, the bill sets up
what kinds of things that they have to give to the
Google or Facebook to get the information. It's
usually things like a certified death certificate,
things like that.
If -- the bill does provide immunity for Google or
Facebook if they do it right, according to the bill,
and if they respond appropriately within 60 days.
And, that's a big deal because right now, this can
languish on for long periods of time while Google is
checking with its attorney or you're getting a court
order. There's no real parameters of trying to get
things out. This puts a limit of 60 days to make sure
that things are done appropriately according to the
bill.
Okay, the bill does not apply to digital assets of
employers. So like there's a lot of private employers
that pretty much allow people to use the business
computer for their own use. It does not -- this bill
does not deal with that, that's separate and apart.
Sec. 1 of the CS, and how it differs from the base
bill, amends the Alaska statutory form of power of
attorney bill to allow people, if they use the canned
statutory form of power of attorney, that they can
specifically give consent for access to electronic
documents. And that was sort of brought to my
attention when I testified last time, that there was
an amendment that needed to be done there, and that's
appropriate.
1:32:41 PM
CHAIR CLAMAN referred to Ms. Behr's example of photographs and
another example of emails, and noted that it sounds like the
bill specifically distinguishes those two. For example, a
person might be comfortable giving someone complete access to
their Facebook account, but wanted to treat emails differently.
In that case, the emails may be set up so that the information
people would have access to would be the communication, who it
was going to, and who it was coming from, only. This bill
allows that distinction to be made, he quiered.
MS. BEHR answered that one of the concerns of privacy groups was
to make sure that the content of the email was confidential.
Also, within federal law, the content of an email has special
privacy rights, which is why it requires an express consent to
get at the content of an email, or a court order, she said.
1:33:52 PM
REPRESENTATIVE EASTMAN said he understands that the Uniform Law
Commission decided a bill was appropriate in this instance, and
asked why this would not be handled simply by encouraging those
who write wills and templets for wills to make sure this was
addressed in that will somewhere.
MS. BEHR explained that there is still the problem with Google
or Facebook. For example, in the event her husband was deceased
and he signed a contract with a third party to keep his
information confidential with a third party, she has no
relationship with that third party. That, she explained, is the
overlay that makes this different from your house, car, or
whatever. Also, her husband's photographs or business records
are password protected or encrypted, and just putting it in a
will does not deal with this major issue of the spouse not being
a party to the contract. She asked, why Google would give her
access to an account when Google doesn't know whether the two
parties have any relationship with each other even though they
are still married.
1:35:31 PM
REPRESENTATIVE EASTMAN asked whether the Uniform Law Commission
distinguishes between emails and photographs on the one hand,
and digital asset passwords on the other hand. In the event his
spouse were to die or vice versa, the passwords would be the
most sought after for bank accounts, or any number of different
reasons. Those passwords would be part of the digital assets
but do not necessarily fall in under Facebook or Google, but
rather it is electronic information that was saved somewhere, he
said.
1:36:16 PM
MS. BEHR pointed out that passwords are an interesting and
difficult issue because passwords are generally linked with a
particular account, such as bank account, Facebook, or whatever,
and a person must know the password to have access. The problem
with passwords is that they change, people have accounts that
they don't necessarily, even for themselves, remember the
password. A system must be provided in that situation where,
for example a sole proprietor had a stroke and the [fiduciary]
didn't know where the accounts or passwords were located. She
related that "You have to be able to go directly into the
accounts and be able to have a relationship with Google,
Facebook, whoever has the electronic assets." She explained
that the bill allows several ways to obtain the documents such
as, in the case of a guardianship or conservatorship wherein
they are limited to financial records. The bill sets up a
system to deal with that because passwords change, and also a
person doesn't want a booklet sitting around with passwords in
it, she said.
1:38:08 PM
REPRESENTATIVE REINBOLD asked whether this has any impact on
"our legislative Facebook accounts?" She referred to former
Representative Gruenberg, and how it would have impacted the
situation with Representative Gruenberg.
MS. BEHR responded that she was unaware of the situation with
former Representative Gruenberg.
1:38:46 PM
REPRESENTATIVE REINBOLD asked Chair Claman to discuss the
situation in that "they didn't have the ability to access some
of his important legislative work and items in his office."
1:39:06 PM
CHAIR CLAMAN related that with respect to Representative
Gruenberg and Facebook, Representative Gruenberg, for whom this
room is named, liked books, papers, and the old style way of
doing things and if he had a Facebook account, no one saw it.
He opined that there were issues involving his actual papers and
who had custody of the papers, and the email communications were
probably more undertaken by his staff than Representative
Gruenberg. He said was unsure how this would fit into that but
in terms of the motivation for the bill, he could assure
Representative Reinbold that Representative Gruenberg's recent
death had absolutely nothing to do with the bill. The Uniform
Law Commission asked him, as the House Judiciary Standing
Committee chair, to introduce this bill due to the increasing
need, on a national level, to address these issues. He added
that as someone fairly familiar with the Uniform Law
Commission's process, this legislation seemed like a good bill
to bring forward due to the issues it raised.
CHAIR CLAMAN opined that in the world of an estate setting, or a
severely disable person who can no longer manage their affairs,
he believed the courts would view access to financial
information from a bank, with that password, would be important
information to let the estate know of their assets, how much
money there was, and what other assets they have that need to be
managed. Whereas, email communications and privacy concerns
enters into a different realm in terms of where does privacy
come in. He related that his executors would have an interest
in knowing where the money was, which is different from emails
in the realm of privacy.
CHAIR CLAMAN commented that most people do not have a will and
the bill makes it easier in the instance of an interesse. It
creates ways for family members to figure that in, and it also
creates a forum for the contractual relationship between places
like Facebook and email carriers to be able to deal with those
things without a will setting out what to do.
1:43:40 PM
REPRESENTATIVE REINBOLD asked whether this bill would have any
impact on a person's work account or a public office and said,
for example, she has a "Representative Reinbold" Facebook
account.
CHAIR CLAMAN opined that the Facebook account reflects a
relationship between you and Facebook even though you have that
relationship in your representative capacity, and your Facebook
account is not formally part of what the Legislative Affairs
Agency manages. Therefore, that becomes a relationship between
you, the individual who happens to be a representative, and
Facebook. Whereas, your email communications in your
Representative Lora Reinbold account, managed by Legislative
Affairs Agency, gets into the more complicated questions about
public officials, public records, and who controls those.
1:45:24 PM
REPRESENTATIVE REINBOLD asked Ms. Behr to answer, as the former
regulatory review [supervisor].
MS. BEHR advised that she had nothing to follow up with as to
Chair Claman's answer.
1:45:58 PM
REPRESENTATIVE LEDOUX noted that when the discussion is about
digital bank account information, she opined there must be a
procedure where the executor goes to the bank after someone
dies, and the bank provides the information. The digital
account is contained in the app, she said.
MS. BEHR said that she noticed that younger attorneys at the
Department of Law are moving their private personal financial
accounts to be totally paperless. In the situation where a
person has a totally paperless account, the concern is the
executor locating the account and how they will find the
account. In this bill, a person can receive a Catalog of
Communications which depicts the following: To, From, Date of
emails. For example, her husband recently received something
from the bank advising that his tax return form was available
and it was around tax time, this information offered a pretty
good idea of some financial relationship. Trust companies
believe this bill is a good idea because a person has to be able
to gather information where the assets are located. The
executor still has to go to the bank and fill out its paperwork
according to the banking and stock broking laws. She pointed
out that this bill helps to locate assets the family or
fiduciary didn't know were available.
1:48:27 PM
REPRESENTATIVE LEDOUX commented that she likes the idea of this
law and she wasn't trying to give Ms. Behr a hard time, but if
she was the executor of her brother's estate and didn't know
where he banked because everything was totally paperless, if she
had any relationship with her brother she would probably know
where he worked and where they were depositing his checks.
MS. BEHR agreed that that was definitely is a possibility, but
there are people without a strong relationship with an employer
or they are self-employed. This bill covers a multitude of
situations, and it addresses the electronic age and brings the
law into conformity with the paperless world, she explained.
Therefore, it will become more and more difficult to locate the
assets that a fiduciary and executor have a duty to gather,
monitor, and pay bills.
1:50:06 PM
REPRESENTATIVE EASTMAN asked how the Uniform Law Commission
looked upon instances where a third party might have an interest
in whether or not certain records are disclosed. For example, a
legislator specifies in their will that they want all of their
digital assets available to their wife. Although, because they
work for the legislature there are confidentiality expectations
with regard to communications that might, in all likelihood, be
part of those records. Or, someone works for the Army, or
whoever, and their employer thinks it has an interest in the
spouse not having access to those kinds of records, he offered.
1:50:44 PM
MS. BEHR pointed out that this bill does not change other laws.
She referred to copyright, and noted that in the event she
receives an asset that is copyrighted, she can't blast it all
over the newspaper because she has to follow copyright law. In
the event she was trying to get a death benefit for her
husband's estate, and acquired confidential medical information,
she has to treat those records confidentially, just as her
husband would. She reiterated that this bill doesn't change
other laws, and it doesn't change how she receives military
benefits, or goes into someone's bank account because she still
has to conform to the law the legislature adopted in banking,
stock, military benefits, and such.
1:51:36 PM
VICE CHAIR FANSLER referred to industry buy in, and noted Ms.
Behr mentioned that Google and Facebook were supportive of this.
He asked whether this was a universal buy in, such that
Microsoft and Yahoo are buying in, and whether there was 100
percent buy in, or whether some companies are not on board with
this.
MS. BEHR explained that, first of all, this bill would not have
passed in 23 or 24 states, and pending on two governor's desks
if people had serious problems with it. She reiterated that it
has been an open public process, and she specifically asked at
the national office if they had received complaints or any
serious opposition, and she was told "No."
1:52:53 PM
VICE CHAIR FANSLER inquired as to whether any thought was given,
since there was work with the industry, whether the industry was
willing to change the user license agreements or terms for their
sites. He commented that that might be a way to assure everyone
that they have to do this, rather than possibly having to change
their will.
MS. BEHR answered that Google and Facebook would say, if they
were at the witness table, that they are following federal law.
Federal law has certain privacy restrictions on electronic
communications; therefore, even if the user agreement was
changed, there would still be the problem with federal law
requiring that it be confidential, and that they have the
consent of the person before "you can get into the content of
their electronic communications." She offered that the nice
thing about the online tool is that it allows industry to
develop the kind of online tool they want for their business.
She said she would imagine that Facebook has something different
than Wells Fargo because the needs are different. She related
that she heard Facebook was setting up legacy pages wherein a
person can explain that their loved one passed away, the
location of the service, and where to send donations.
1:54:43 PM
VICE CHAIR FANSLER referred to the industry end and the opt in
systems, and asked whether they are general blanket opt in, such
that Google has Google G-mail, Google-drive, the calendar and
all the different suites. He further asked whether it is opt in
by one or a general "you opt in and everything goes over?"
MS. BEHR replied that she doesn't have the expertise to answer
that question. Although, the bill sets up for them to have an
online tool and she was unsure whether Google has one for each.
It's possible that they do because maybe the needs are
different, but she was unsure, she said.
1:55:42 PM
VICE CHAIR FANSLER noted that Facebook is a blending of pictures
and media that might be valuable, but a person has Facebook
messenger which is similar to an email chat system. He asked
whether this bill allows a person to delineate between those
two. For instance, say he wanted his future spouse to have
access to all of his pictures but not the messenger part of it
...
MS. BEHR opined that the protections for the content of
electronic communications apply even if it was a blended
account, a person still has to show consent because they have to
get around federal law that says "consent." She noted that she
reviewed some of the standard forms of consent and offered that
it's not something someone easily gives, such that it is similar
to the consent given to doctors to release medical records. She
described that consent as a large couple of sentences so the
person knows what they are doing, and what access they are
giving up. Although, she explained, a more general consent
would be fine for photographs.
1:57:08 PM
VICE CHAIR FANSLER surmised that Ms. Behr was saying that
Facebook would require the more advanced consent because it has
the photographs that need the general consent, but it definitely
has the messenger portion to ...
MS. BEHR pointed out that she doesn't advise Google or Facebook,
but she can tell them they need to look at federal law, and
federal law requires a pretty good consent on giving out
contents of electronic communications.
1:57:39 PM
VICE CHAIR FANSLER opened public testimony on HB 108.
1:57:56 PM
KEN HELANDER, Advocacy Director, American Association of Retired
Persons (AARP), said it had been interesting listening to the
testimony and questions because it underscored that this
proposed legislation was the consequence of this digital age and
the increasing role it plays in everyday lives. Society has
long accepted the legally defined role of conservator, executor,
and agent, in carrying out fiduciary duties with respect to
tangible assets on behalf of the deceased individual or an
incapacitated person unable to make decisions. He commented
that the many accounts a person now opens digitally could
include, commerce, banking, entertainment, research, and social
networking, which are all complex and protected by each
account's rules of privacy. He said, "I know we all read the
fine print on those terms of service agreements," but
nevertheless it can be confusing. Financial digital accounts go
beyond banking and into an online brokerage as to how a person
pays their bills, virtual property accounts like virtual
currencies and bit coins, air miles, and he then listed examples
of many more accounts. He explained that each of the different
types of service have its own terms of service agreement, which
is a contract and companies are reluctant to share information
it promised not to share. The importance of being able to close
accounts, avoid unnecessary expenses, prevent unauthorized
account use, or identity theft, requires new approaches in
managing these affairs. He pointed out that the bill gives
Alaskans the right to treat their digital assets in the same
manner they treat their tangible assets, it allows individuals
to effect advanced life planning, and give a trusted family
member the ability to settle the loved ones financial and
personal affairs. He said AARP Alaska supports the passage of
HB 108.
2:01:38 PM
VICE CHAIR FANSLER, after ascertaining no one wished to testify,
closed public testimony on HB 108.
2:01:59 PM
REPRESENTATIVE EASTMAN asked whether there are any deviations
between this bill and what the Uniform Law Commission
recommended for those other states.
CHAIR CLAMAN noted that it is not the Uniform Law Commission's
recommendation. He pointed out that during the course of
drafting HB 69, they realized that last year the legislature
changed the statutory Power of Attorney form. Consequently, he
said, a subsection was included into the Power of Attorney form
and he advised that Sec. 1, page 3, of the bill is the
modification to the statutory Power of Attorney form.
2:02:53 PM
MS. BEHR remarked that in the area of uniform law, it is
important that this bill be comparable to what other states do,
and she ran this base bill through the Chicago office of the
Uniform Law Commission who said it was just fine. There are
small style changes that are different for Alaska such that
Alaska's definitions are at the end of the bill and in the
uniform law they are at the beginning, but it substantively
doesn't change anything. With regard to the amendment for the
Alaska Pacific Power of Attorney form, the Uniform Law
Commission would have no comment on that because it is not a
uniform form used in other states, she offered.
[Vice Chair Fansler returned the gavel to Chair Claman.]
2:03:54 PM
[HB 108 was held over.]
HB 123-DISCLOSURE OF HEALTH CARE COSTS
2:04:09 PM
CHAIR CLAMAN announced that the final order of business would be
HOUSE BILL NO. 123, "An Act relating to disclosure of health
care services and price information; and providing for an
effective date."
2:04:37 PM
REPRESENTATIVE IVY SPOHNHOLZ, Alaska State Legislature,
presented the bill as follows:
HB 123, price transparency and health care cost is
about providing power to consumers. Sir Francis
Bacon, who is the father of the scientific methods and
knowledge is power. I think we all know this to be
true in our everyday lives, but health care is the
only market in which we as consumers don't know the
price before we have the -- before we consider buying
it or we actually use the services.
This removes one of the most fundamental tenets of
capitalism, that is the power of the consumer to make
choices about what they do or what they don't
purchase. While HB 123 isn't the silver bullet we
would all like to see solve the problems of outrageous
inflationary prices in health care costs. It does put
consumers back where they belong and that's in
driver's seat by ensuring that they have more
information as they consider making medical purchases.
An example that I often think of is, you know, a
situation that many of us have been in, and that is,
you know, the parent who went to our kid's Tuesday
night soccer game and there was a head-on collision
between two eight-year olds. And, your child, your
son or your daughter, may have, you know, bonked their
head and as a conscientious parent you may take them
to the ER if you're concerned or the pediatrician, if
you're concerned that they may have a concussion. The
doctor at this time can do a thoroughly rudimentary
physical examination and make recommendations as to
the, you know, next course of action without further
information. How sometimes -- however, sometimes they
may even, despite further evidence, recommend to you
that you consider a very expensive MRI. An MRI which
could cost $2,400 but might not actually change the
outcome of their recommendations to you. It's our
theory, you know -- it's our theory that if consumers
had that information they might actually ask the
question, "Well, would that change your diagnosis,
would it change the treatment, do you need that MRI in
order to properly diagnose my patient -- my child?"
2:07:02 PM
What we've done in HB 123 is, in a manner that is as
simple and cost effective to implement as possible, is
to try to make sure that consumers have that kind of
information. That they have that information in the
reception area of the doctor's office that they go to,
or the emergency room, that they can also look that
information up online, and that that same information
is sent in to the Department of Health and Social
Services. We've done it in a way that we think
reduces the amount of burden to providers. We
understand that medical providers already have a lot
of onerous burdens required of them in the medical
billing system where we just -- notorious for having
about 10,000 different billing codes. But what this
bill would do is simply require that they run a report
of the 25, if they are an individual provider, or 50
if they are a larger facility most commonly offered
procedures in the previous calendar year. Turn that
into a pdf, put it on the wall in their reception
area, put it on their website which any of us can do
pretty simply, and then send it in in an email to the
department. The department would simply put it on
their website. This will give people a lot more
information as consumers.
In the last committee in which this bill was heard
there was a little bit of concern that some consumers
might be turned off by the price that is being --
that's being proposed in this bill to be listed and
that is the -- the undiscounted price. Thank you.
Which is the -- which is the price before any
preferred provider discounts are offered, before, you
know, any other discounts or individual arrangements
are provided. And so, we amended the bill to include
the opportunity for a disclaimer. This was very
important for community health providers who wanted to
hear that -- that they could describe that you
wouldn't necessarily pay the price that was being
listed because they have a sliding fee scale according
to your income. This also gives individual providers
the opportunity to, you know, indicate that they are a
preferred provider with individual health insurance
plans. And, once again, to refer patients to the
doctor or to the billing office for further
information. So, I hope that we've been able to
address that concern. The long and the short of this
is that this is about making sure that consumers have
the kind of information that they need to make
informed decisions.
2:09:56 PM
CHAIR CLAMAN opened public testimony on HB 123.
2:10:22 PM
KIM STALDER acknowledged that her experience was not directly
relevant to this bill, although, it does speak to transparency
in health care. She then related the details of events after
her husband's diagnosis of sleep apnea and referral for a sleep
study. She remarked that she is in favor of transparency that
would allow her to access the information necessary for her
insurance company in order to understand what her costs would be
for a particular medical procedure.
2:12:47 PM
BECKY HULTBERG, Alaska State Hospital and Nursing Association,
advised that the Alaska State Hospital and Nursing Association
supports the concept of price transparency and consumer
engagement in decision making. She related that the health care
payment and delivery system is complex, which makes price
transparency difficult and there is not a simple, easy solution
for this problem without dismantling and rebuilding the entire
system. This legislation is a good first step toward more
transparent pricing, she said.
2:13:58 PM
KYLE MIRKA advised that he owns two businesses in Alaska and
employs approximately 60 employees. During 2016, he was faced
with the decision of whether or not to continue his employer
sponsored health care plan because premiums had gone up almost
40 percent. He pointed out that discontinuing the plan and
simply paying the AC fine would have been substantially cheaper,
but he wanted to provide that benefit to his employees and
ultimately decided to continue providing that plan as a benefit.
Sadly, he said, the premiums did go up and the employees
shouldered that burden of 40 percent increases. In the event
similar price increases occur at the end of this year, his
choice will be clear and he will not be able to provide those
benefits moving forward due to the expense. He related that he
shared this story to shed light on the fact that health care
costs in Alaska are simply out of control. It is the only
industry that an individual is unaware of the costs of service
before the services are rendered. He acknowledged that he asked
his doctor and dentist friends how it is that they charge so
much more for services than in the lower-48, and the standard
answer was that it is expensive to practice in Alaska. He said
he does not claim to know their business, but he does know in
his business, the products he sells are available virtually for
the same price here, as in Seattle, Washington or Pocatello,
Idaho, or Portland, Oregon. Of course, he related, there are
added freight costs for goods and slightly higher labor costs,
but nonetheless his prices in Alaska are similar to those in the
lower-48. Mr. Mirka referred to the "rack rates" mentioned in
prior testimony from people in opposition to this bill. The
testimony was that rack rates don't mean much given all of the
discounts the providers may contribute, but he opined it is
critical to remember that rack rates are the starting point in
which bills are settled. That being said, he commented, the
rack rates lead to pricing that is considered and settled
(indisc.) 80th percentile. He stated that he believes in
transparency, supports HB 123, and also supports removal of the
80th percentile rule.
2:16:50 PM
PERRY ALLARD, Senior Advisor, Wilson Agency, advised that she is
a senior advisor with the Wilson Agency, and a charter member of
the Alaska Association of Health Underwriters and sits on its
legislative committee. She said she is testifying in support of
HB 123, and explained that she has been in the insurance and
employee benefits field for over 30 years in her capacity at the
Wilson Agency, and that she works statewide with Alaskan
employers and their employees and families who at some point are
all consumers of health care. With the rising costs of health
care in Alaska, it is difficult for individuals and families to
cover the cost of this coverage in the first place. In many
cases, she pointed out, the Wilson Agency came to the
realization that it had become commonplace for Alaskan employers
to increase deductibles up to $2,000, and higher. The 2016
United Benefit Advisors Survey in Alaska pointed out that the
average cost for "employee only" coverage is a little over
$14,000, before claims are incurred, and when adding those high
deductibles to that, she related, that is a significant spend.
In her role of assisting employees to be good consumers of
health care, she teaches them to ask a lot of questions. In
Alaska, she said, an employee can gather information regarding
treatment facilities, treatment options, choosing physicians,
discussing what tests are appropriate, and why, but in many
cases the employee comes to a complete roadblock when attempting
to obtain cost information.
That roadblock is the missing link for the employee to assess
their options and make an informed decision. The Wilson Agency
supports passage of HB 123. She remarked that the Municipality
of Anchorage recently passed a similar ordinance requiring
transparency, and HB 123 is a much needed (indisc.) to how they
do business.
2:19:38 PM
RHONDA KITTER, Chief Financial Officer, Public Education Health
Trust, advised that the Public Education Health Trust is a not-
for-profit health insurance provider for employees of public
education in Alaska. Currently, there are 17,000 Alaska
residents with health insurance through the Trust. According to
the Health Care Incentives Improvement Institute, "The question
of how much does it cost is so deeply integrated into the act of
buying that consumers often don't have to ask, prices are
printed on menus, stamped on tags, and posted online among other
places. Rarely do successful professionals get away with
answering that question with 'It's hard to say, you'll know when
you get the bill,' in response to consumers' inquiries about
costs." As a patient, she said she is a consumer of health care
with a deductible and co-insurance; however, her consumer
experience begins long before she is a patient. Her employer
and she are purchasing a product, a product whose costs or
premium is tied back to expected costs. She said, "The theory
of rack rates, undiscounted rates, or charge master, is not paid
by anyone, or that only the insurance companies know the true
consumer cost is not the full story." In the event the rack
rate, the undiscounted amount, has no materiality, then why do
they exist, she asked. The rack rate is what is driving the
allowable amount as defined by the State of Alaska's 80th
percentile regulation for out of network providers on fully
insured products. She related that it is often heard that rates
are confidential, yet once she has incurred the expense, the
rack rate appears on her claim within the explanation of
benefits, also showing the discount or co-insurance amount.
However, she pointed out that service had already occurred and a
legal obligation existed for her to pay the services she
obtained. Once again, she stressed, consumerism begins before
the patient experience. While some (indisc.) of placing the
onerous either on the state creating a larger governmental
administration department or the payor who has limited knowledge
of all providers, and this bill correctly requires the
disclosure of fees at the provider's office. While transparency
for health care is not a silver bullet for a solution of
sustainability, it is one silver BB needed to address the rising
costs, she remarked.
2:22:14 PM
GEORGE McKEE, Member, Mat-Su Borough Assembly, said he considers
this legislation to be the single most important tool to begin
controlling health care costs in Alaska. He referred to
deductibles and co-pays which comes down to employee (indisc.),
everyone testified about that. He commented that the most
important issue in this bill is that it will force competition
into to the industry. He further commented that the difference
between health care costs in Alaska and health care costs in the
Pacific Northwest is absolutely staggering with the Alaska
[deductible] being $5,000, and if they went to Seattle they
could save that money. The Matanuska-Susitna Borough is self-
insured and will go over $7 million in health care costs, and an
80 percent increase has been projected over the next 12 months.
He related that anything to mitigate that, with the economics of
the expenses related to the State of Alaska, would be helpful to
its taxpayers, and the State of Alaska paid over $500 million in
its self-insured health care plan. The maximum penalty of
$2,500 really isn't one to deter people, and a large health care
provider will simply write a check for $2,500 and think nothing
of it. The penalty is insignificant and insufficient, he
stressed.
2:25:14 PM
JOHN MOOSEY, Borough Manager, Matanuska-Susitna Borough
Assembly, advised that the Matanuska-Susitna Borough has over
300 employees and families for which it provides health
insurance, and it supports this bill. He added that this will
provide an incentive for the assembly to require its employees
to make good health care decisions, and it puts power back into
the common person where they can make good financial decisions.
He offered his belief that this will drive up competition which
will be better for health care, and noted that people leave the
State of Alaska, and leave the United States because they can
significantly reduce their health insurance costs. He
reiterated that with the added competition, people will stay
which will be better for Alaska's health care industry.
2:26:30 PM
T.J. ALINEN, Assistant Vice President, Human Resources, Denali
Federal Credit Union, explained that the Denali Federal Credit
Union has 325 employees currently residing in Alaska, and it is
the third largest credit union in the state. He said he
represents the organization and it is in support of HB 123. The
escalation of costs in health care is one of the greatest
challenges many organizations in Alaska are facing, and in the
spirit of a free market it is important to understand that
buyers and sellers engage in some degree of communication in
determining services, goods, and pricing. Unfortunately, he
commented, this does not occur within the health care industry
which ultimately impacts the pocketbooks of consumers and
employers. Market transparency and having information available
will assist the credit union's employees, and all Alaskans in
becoming better consumers of health care, and hopefully drive
the costs down. He indicated that there has been an emphasis on
higher deductible health plans in Alaska, and many organizations
have implemented the higher deductibles as a way to shift costs
between employers and employees. In those situations, it means
that these individuals are responsible for higher amounts at the
frontend of their health care services and meeting their
deductibles. He related that forty percent of the credit
union's employees have high deductible health plans and must
incur the first $2,600 in health care expenses annually. It
comes down to the fact that there is no real way for his
employees to be good consumers because comparing costs between
providers and facilities is not possible. In light of the
health care crisis all Alaskans are facing the credit union
believes it is necessary for the legislature to pass HB 123 to
help manage health care better, he remarked.
2:28:57 PM
TOM WESCOTT, President, Alaska Professional Fire Fighters
Association, advised that the Alaska Professional Fire Fighters
Association supports HB 123, he has worked on health care issues
as an elected union official over a decade, he understands its
complexity, and this legislation is an important first step in
tackling the out-of-control health care costs. Health care
consumers in Alaska are affected by Alaska's geographic
isolation and lack of information, and in order to act as
rational consumers, one must be armed with information.
Unfortunately, he related, obtaining price information for
medical procedures is extremely hard and sometimes not even
available. The lack of pricing information prevents Alaskans
from being rational consumers. He advised that many of the
firefighters in Alaska are in a health care trust with their
brothers and sisters in the State of Washington, and their eyes
have been opened to the price differences charged in both areas.
He pointed out that Alaskan fire fighters currently pay 30
percent more for the identical plan as in the State of
Washington, and "This last year spent nearly $1 million more
than we put in, and this is not related to usage." He continued
that often times in Alaska common procedures can be three to six
times the cost as in the State of Washington. Providing
transparency can be done and it will help consumers act
rationally. He then encouraged the committee to look at the
Oklahoma Surgery Center as a place that provides pricing for all
procedures before walking in the door and walking out the door.
He stressed that all Alaskans share in the burden of health care
costs and the state has a real vested interest in bringing the
cost of health care down. The Alaska Professional Fire Fighters
are in support of HB 123, he reiterated.
2:31:06 PM
REPRESENTATIVE KREISS-TOMKINS asked Mr. Wescott whether he could
remember the price spread between the different procedures and
treatments provided in Alaska, the State of Washington, and the
lower-48.
MR. WESCOTT opined that off the top of his head, the Alaska
Public Media ran an article about an individual who fell on the
blacktop and required shoulder surgery. The individual was
quoted roughly $60,000 or $70,000 in Alaska, and had it done for
$14,000 at the University of Washington in Seattle. He related
that within the Alaska Professional Fire Fighters Association
Trust it has seen a breast cancer procedure, with the same
codes, at $60,000 in Alaska, and $23,000 in the State of
Washington. He offered that the data is being gathered, and
added that it can be anywhere from twice as expensive to 1,000
times more expensive, and as a group it would like to spend its
money at home in Alaska, but it is becoming harder and harder
due to the prices charged for certain procedures. He continued
that this would include shoulder surgery, ACL repairs, and a lot
of the orthopedic injuries that happen to firefighters, police
officers, construction workers, people in physical career
fields, and Alaskans who like to enjoy the outdoors.
2:33:32 PM
REPRESENTATIVE KREISS-TOMKINS requested firm concrete numbers
that the Trust has received from providers in Anchorage, and
also equivalent quotes from providers in the lower-48 for
certain procedures, treatments, or codes, to the extent Mr.
Wescott was comfortable.
MR. WESCOTT responded that the Trust is working on gathering
that data, but obviously it respects privacy. He advised it is
attempting to lay out specific health care issues, such as the
cost of an ACL procedure in Fairbanks, Seattle, or Spokane.
2:34:40 PM
REPRESENTATIVE SPOHNHOLZ pointed to the 2013 Alaska Workers'
Compensation Fee Schedule Comparative Survey prepared by the
Department of Labor & Workforce Development, and pointed out
that it contains price comparisons for certain procedures in the
State of Alaska. The survey includes Medicare schedules for
Washington, Oregon, Idaho, and the Alaska median health care
allowance price which is startling. She explained that at the
top of the survey, the first procedure listed is an arthroscopy
knee with meniscus repair, and the workers' compensation fee
schedule is $5,158.02, the Alaska median health care allowance
is $5,170.00, and the State of Washington's workers'
compensation fee schedule is $912.56. She said that this is an
example of the price comparisons of which has already been
prepared by the state.
2:36:09 PM
REPRESENTATIVE KREISS-TOMKINS noted that he had reviewed that
survey and that it would be helpful for the Department of Labor
& Workforce Development to speak to the origin of the data it
received, and for instance, "cluster and bundle CPT codes to
constitute a particular treatment or procedure, and standardize
that in an apples to apples manner." He said he is also
interested in Mr. Wescott's data as a more non-public sector
actor.
CHAIR CLAMAN agreed that the information is important, but
several people would still like to testify. In the event
Representative Kreiss-Tomkins's follow-up with the previous
testifiers was similar detailed data questions, he has their
contact information.
2:37:23 PM
BLANCHE SHEPPARD, Northrim Benefits Group, advised she is
testifying on her own behalf, works for the Northrim Benefits
Group, and is a member of the Alaska Association of Heath
Underwriters. Ms. Sheppard remarked that on April 2, 2016, she
gave birth, was 28 years old, and it was the first time she had
a major medical occurrence in which she was entirely financially
responsible. Now that she works in the insurance industry, she
can look at her [Explanation of benefits] EOBs and dissect them,
question why something wasn't applied to her deductible or her
out-of-pocket maximum. She said, "I have an in, most Alaskans
don't have that in." She reiterated that she works in insurance
and has looked at enough EOBs to know the going rate of some
procedures, such as epidurals in Anchorage. In the event the
goal is to encourage patients to become the consumers they are
in every other industry, the health industry must be required to
support consumer driven health care by displaying those pricing
structures openly, she related. Once Alaskan consumers begin to
question, they also begin to self-advocate to educate themselves
on their health care pricing, and pricing transparency does not
hurt any industry in Alaska. In fact, she said, it behooves
doctors to have educated and health driven patients, it behooves
patients to be educated as to where they can obtain the best
care at the most cost effective prices, and it behooves
insurance companies to work with doctors to negotiate patient
driven prices and; therefore, reduce claims' costs. She advised
that some of the major insurers have travel programs and they
reimburse patients who travel out-of-state for many procedures
because, even taking into account the price of travel to the
lower-48, the procedures are still significantly cheaper than in
Alaska. Alaskans need to encourage physicians to rise to the
challenge of keeping those patients in Alaska and supporting the
Alaskan economy. She related that she doesn't just work in the
insurance industry, she is an active participant in the health
care system. She then offered support for HB 123, and advised
that in the event the population can be educated to make healthy
choices for their bottom line, and their personal health,
everyone will succeed.
2:40:29 PM
JEFF RANF, Consultant, Alaskans for Sustainable Health Care
Coalition, advised that he is testifying on behalf of the
Alaskans for Sustainable Health Care Coalition, he is a
consultant/broker, and has worked in the health insurance
industry for 30 years. He advised that as a longtime veteran in
the industry, he was compelled to express the importance of
health care transparency because the nation's health care system
is unique amongst the advanced industrial countries. America is
still a free market system, and hence the reason transparency is
needed, just as in any other industry. Most health care in this
country, even though it is publically financed, it is still
delivered privately. This is important in Alaska, not just
because it has the most expensive health care in the USA, but
because it is unknown why it is expensive. He suggested that
one way to address it is to first understand where the cost to
health care is coming from - it begins at the individual level.
Despite what the committee may have heard from others in the
past, the cost of insurance premiums is a direct result of the
underlying costs of health care. However, he pointed out, a
large percentage of Alaskans don't understand this and they only
see their health insurance premiums rising every year. He
expressed that the importance of knowing the cost, and knowing
what the out-of-pocket costs will be before the procedure, seems
logical. Mr. Ranf advised that his health insurance requires
him to pay the first $5,000 before his plan kicks into gear, yet
it seems logical that he would want to know what that $5,000 was
going toward, and any other expenses that it may apply to in his
policy. He related that in the event there were potential costs
that could be billed to him after his insurance reimbursed the
provider, he would definitely want this information before the
procedure was performed. He stated that HB 123 is just one step
in the right direction.
2:43:19 PM
JASON HIPSZER advised that he owns a small business in Alaska,
has professional licensing, and is testifying on behalf of his
family and himself. He said he supports HB 123, because the
health care costs in Alaska are quite extreme, and he advised
that he has traveled and used other health care systems and
received top notch service in other countries for a much lower
price. There is not a lot that "we can control today, it's a
very complicated system," but giving Alaskans transparency and
the ability to see what they are spending their money on is
vital for the free market to function the way it was designed in
this country, he remarked.
2:44:45 PM
DENISE DANIELLO, Executive Director, Alaska Commission on Aging,
Department of Health and Social Services, advised that the
Alaska Commission on Aging is a governor appointed board, within
the Department of Health and Social Services, that plans
services for seniors. The Alaska Commission on Aging educates
Alaskans regarding senior issues, and makes recommendations
directly to the legislature and the governor regarding budget
and policy items affecting seniors. On behalf of the
commission, she stated, she is expressing its support for CSHB
123, and that seniors, more than any other age group, are
consumers of health care and many seniors live on fixed incomes.
She expressed that it is important that seniors have information
about the cost of their health care services to make informed
decisions and have meaningful conversations with their doctors
and other primary care providers. She explained that the board
conducted community forums at senior centers regarding the
Medicaid redesign efforts for the Department of Health and
Social Services, and seniors expressed this need.
2:46:06 PM
REPRESENTATIVE LEDOUX noted that seniors are covered by Medicare
and in that situation, they would not be paying the cost of
their health care.
MS. DANIELLO pointed out that the age of being considered a
senior is "kind of a relative term," and it depended upon who
was talking. For example, she said, in the area of social
security, it could be 67 years of age, Medicare is 65, HUD is
50, and the Administration on Community Living is 60. Older
adults are considered people within the ages 55-64, and they pay
for their own health care. People age 65 years and older are,
for the most part, covered by Medicare, but not everyone because
some people did not contribute to Medicare and they would be
responsible for paying their own health care costs.
2:47:18 PM
REPRESENTATIVE LEDOUX asked what people wouldn't have
contributed to Medicare.
MS. DANIELLO answered that people who have lived a subsistence
lifestyle, and people out of the work world for a variety of
reasons and didn't contribute to Medicare.
2:48:18 PM
REPRESENTATIVE KREISS-TOMKINS noted to Ms. Hultberg that the
bill specifies the top procedure codes, and that the Current
Procedural Terminology (CPT) codes sometimes can be myopic. He
referred to the average community and regional hospitals that
offer a full spectrum of services and asked for examples of the
top 25 procedure codes.
MS. HULTBERG responded that she did not have a specific example,
but the way the bill is currently written, the Alaska State
Hospital and Nursing Association anticipates that at the top of
the list would be labs, CPT codes for blood draws, probably
chest x-rays, and services quite common for a large number of
patients. In speaking with some of the chief financial officers
(CFO), they believe that quite a number of lab charges will be
on the list. She related that she did not have examples of the
top 50 because it hadn't quite polled an exact list from a
facility and there may be surgery procedures, but they won't
know until they run that data.
REPRESENTATIVE KREISS-TOMKINS said he would ask the same
question of the sponsor as to whether she had a sense of what
those codes might be or even a list from a specific provider.
2:50:31 PM
REPRESENTATIVE SPOHNHOLZ explained that she chose CPT codes at
the recommendation of the Alaska State Hospital & Nursing Home
Association (ASHNHA) in an attempt to find an item that could be
a little more inclusive, for example, when looking at the price
of a surgery it included all of the labs, x-rays, and anything
else the patient may receive. She offered that the truth is
that there isn't any one system that has already been designed
out there to do that. The CPT code is the code of choice used
and the Department of Labor & Workforce Development report was
actually defined by a CPT code. She offered that when reviewing
the report again, the second column from the left is the CPT
code. She advised that a local ophthalmologist ran a list for
the sponsor that as an example of the list he gives to his front
desk billing staff.
REPRESENTATIVE SPOHNHOLZ pointed out that the committee had not
yet gotten to the sectional and the members may be missing out
on some key pieces of information that the sectional would
describe. She then read a few of the actual billing codes the
ophthalmologist used, and commented that is the reason for the
specific language that the list be written in a common language
the lay person could understand. She explained that a reason
she asked to keep the list fairly brief was the level of added
work asking doctors and/or healthcare facilities to provide, and
over time it will become the normal description that lay people
will need. The idea for this bill came to her from a
constituent who mentioned that when she received health care in
Florida, a price list was posted on the wall which caused her to
feel empowered as a consumer. As the health care profession
continues to evolve, that piece will be added into the data base
in the future, she said.
2:53:37 PM
REPRESENTATIVE KREISS-TOMKINS commented that he would look at
the workers' compensation report spreadsheet because if a person
was having orthopedic knee surgery there would be a bevy of CPT
codes, and those details are important. Ultimately, he said,
there will be a list of information on the lobby wall that will
be helpful and germane to the consumer. Also, he commented, he
spoke with someone in the health care community who pulled the
top 10 CPT codes for a large self-insured entity, and they were
so arcane that it didn't seem useful.
REPRESENTATIVE SPOHNHOLZ replied that that is why she re-
included that language in the bill. Perhaps, she suggested, the
committee should go through the bill because that discussion had
not yet taken place, and the committee was having a discussion
about what's in the bill when it hadn't agreed on what's in the
bill yet.
2:55:01 PM
REPRESENTATIVE LEDOUX offered that she understands how a person
would use the rack rate in the event they did not have medical
insurance, but why would a person use the rack rate when covered
by insurance. Although, she commented, one reason may be in
trying to determine the deductible or a co-pay.
REPRESENTATIVE SPOHNHOLZ noted that that was a good question,
and a question they spent a lot of time on trying to determine
what price point they would use. She explained that in speaking
with providers and health care field experts, often there may be
as many as 11 different prices a provider may have for one given
service. She further explained that the goal was to balance
access to information with clarity of information and to focus
in on one particular rate, and the undiscounted price, the rack
rate, or the charge master by hospitals, is the rate on which
all other rates are developed so she decided to opt in there
because the rates do vary so much. Although, because that rate
was different from what many people pay, she wanted to be clear
that this was not the price most people would be paying and
included a disclaimer at the bottom of the list. The average
price paid for a service will vary for each provider depending
on what kind of [insurance] patients they treat that year, such
that in the case of a provider seeing a majority of Medicare
patients over the last year, that price would be artificially
low for someone paying through a private insurance company. In
the event a health care provider accepted insurance but was not
in the preferred provider network, once again the rate would be
significantly higher. Therefore, she said she felt the need to
start with some sort of rational basis that for all providers
would be exactly the same since there was a fairness and
transparency issue with all of the other prices.
2:58:42 PM
CHAIR CLAMAN, after ascertaining no one wished to testify,
closed public testimony on HB 123.
2:59:06 PM
REPRESENTATIVE LEDOUX related that she understands why
Representative Spohnholz drafted the bill in this manner, but
the way the bill read now, she was unsure whether it did
anything for the insured person, and asked the number of
uninsured people
2:59:40 PM
REPRESENTATIVE SPOHNHOLZ responded that she could not answer off
the top of her head as to how many uninsured people are located
in Alaska, although it was in the thousands range. She
commented that she was speaking as someone double insured, and
that just because someone was insured did not mean they did not
care about the cost of health care. She asks before any test,
and before a prescription is offered about the cost because she
wanted to be certain there was a high return on investment for
whatever service was being offered. For example, there is
disconnect as to consumers' out-of-pocket costs, and what
something actually costs. She then offered an anecdotal
personal experience. She then commented that the doctor's goal
in her anecdotal experience was to put Representative Spohnholtz
out-of-pocket costs at an absolute minimum, when in fact the
medicine cost roughly $250, and she could have paid $15 for an
over-the-counter medicine. Representative Spohnholz advised
that being the cost hawk she is, she cares about the total cost
of health care even if her out-of-pocket would be lower, and
after her experience she asks whether the prescription is the
correct medicine for her.
3:01:49 PM
REPRESENTATIVE LEDOUX commented that her attitude was quite
laudable but she was not positive that would be the general
attitude of the insured public. Although, she related, assuming
that it was, she still was unsure how the insured cost hawk
patient would be able to figure out anything the way this bill
is written using the rack rates.
REPRESENTATIVE SPOHNHOLZ pointed out that she was not proposing
to solve all health care cost issues with this bill because it
was designed to be one small piece of a large effort. She said
she is calling it the first mile in a marathon, and noted there
are ways to come up with legislation that would be far more
complex to implement such as giving individuals individual
quotes. She said she did not take that route but rather aimed
toward simplicity and getting more information out there.
However, she pointed out, it is important to her to make sure
that having more information in the public domain doesn't get in
the way of people pursuing health care or determining their
actual costs. In that regard, she reiterated that she made
certain a disclaimer was allowed on the publication of prices,
such as on any menu. She explained that this legislation does
not limit the disclaimer and providers can say what they want to
say, and clarify that the rack rate isn't necessarily the price
a patient will pay. It is the rate on which all other rates are
built and it is a fairly rational place to start, she
reiterated.
3:04:35 PM
BERNICE NISBETT, Staff, Representative Ivy Spohnholz, Alaska
State Legislature, explained the changes of HB 123 Version O to
Version I, as follows [original punctuation provided]:
Section 1
AS 18.15.360(a) authorizes the Department of Health
and Social Services to collect, analyze, and maintain
databases of information related to health care
services and price information collected under AS
18.23.400.
3:05:17 PM
MS. NISBETT advised Representative LeDoux that the committee was
working off of Version I.
MS. NISBETT continued the sectional analysis, as follows
[original punctuation provided]:
Section 2
AS 18.23.400 is a new section that mandates the
disclosure and reporting of health care services and
price information.
Subsection (a) (p. 2, lines 7-11) states that health
care providers will compile a list of the 25 most
commonly performed health care services once a year by
January 31st.
Subsection (b) (p. 2, lines 12-16) states that health
care facilities will compile a list of the 50 most
commonly performed health care services once a year by
January 31st.
Subsection (c) (p. 2, lines 17-25) states that both
the health care provider and health care facility will
submit the list to the Department of Health and Social
Services, and publish the list in a public area and on
their website, if they have one.
MS. NIBETT added that the above information will be compiled
annually.
Subsection (d) (p. 2, lines 26-29) states that the
health care facility may include statement with their
price list that the undiscounted prices may be higher
or lower than the amount the individual will pay for
their health care service.
Subsection (e) (p. 2, line 30, p. 3, lines 1-3) states
that the Department of Health and Social Services will
then gather the compiled lists from the health care
providers and facilities and post the information on
the Department of Health and Social Services website.
The information will include the name and location of
the health care providers and facilities. This will be
updated annually into the department's database.
Subsection (f) (p. 3, lines 4-8) states that if a
health care provider or health care facility has fewer
than 25 health care services or fewer than 50 health
care services performed, the provider or facility will
compile a list of all of the health care services and
procedures performed by the provider or facility.
Subsection (g) (p. 3, lines 9-15) states that if the
health care provider or health care facility fails to
comply there will be a civil penalty. The penalty for
health care providers will be $50 a day after March
31st up to $2,500. The person penalized will be
entitled to a hearing conducted by the office of
administrative hearings.
Subsection (h) (p. 3, lines 16-31, p. 4, lines 1-21)
goes over the definitions for department, health care
facility, which excludes the Alaska Pioneers' Home and
the Alaska Veterans' Home, an assisted living home, a
long-term care nursing facility licensed by the
department, a facility operated by an Alaska tribal
health organization, and a hospital operated by the
United States Department of Veterans Affairs, the
United States Department of Defense, or any other
federal institution. Health care provider and health
care service are also defined, as well as undiscounted
price, recipient, and third party.
Section 3
This bill will take effect on January 1, 2018.
3:08:01 PM
REPRESENTATIVE KREISS-TOMKINS said he was looking at the top 10
CPT codes that were pulled for a private insurer, as follows:
0300 laboratory general cost vacation; 0301 laboratory
chemistry, which is similar to her testimony. Reviewing the
workers' compensation data for the costs of an arthroscopic knee
surgery, or a breast cancer procedure is helpful because that is
the bulk of what people pay, those high price CPT codes for
thousands and tens of thousands of dollars. He noted that the
25, 50, or 100 most common CPT codes health providers provide in
plain English descriptions actually do not constitute the real
price and cost of health care that people may be interested in.
Maybe, he offered, an ophthalmologist is not so much the case
because it is a specialty provider and the most common procedure
they provide ends up being the expensive meat of what is
charged. Although, he said, for general service providers, the
"chicken peck" procedures will dominate the list even though
people may be interested in the cost of an MRI, yet an MRI may
not make the list.
3:10:37 PM
REPRESENTATIVE SPOHNHOLZ reiterated that they settled on the CPT
code upon advice of Alaska State Hospital and Nursing Home
Association (ASHNHA), and other professionals in the field. The
CPT code is the standard used within the field and the goal was
to make this practical and practicable for people to proceed
forward in a simple way. She stressed that she wanted this to
be simple to implement and to not create any bureaucracy
because, philosophically, they chose simplicity as the theme in
how to approach this issue. Making it simple for a sole
practitioners to implement because this legislation is not just
about hospitals, it's about country doctors in Talkeetna and
smaller communities. There is a simple comparison from provider
to provider when using the code that is already being used
within the field. With regard to whether or not a provider may
have small individual procedures listed that could take up the
bulk of the prices offered, she said that almost every general
practitioner will have the flu shot and blood draw listed
because those are common procedures. She said she is open to
the possibility of including more services to make sure the
legislation gets to the meat of the issue. She explained that
they didn't want to require providers to list everything because
there are over 10,000 Medicaid codes for health care services.
Also, she pointed out, when addressing the need to know the
prices for a total service, she had a small cyst removed from
her wrist and in order to receive the total estimate in advance
she had to obtain quotes from various institutions. She
remarked she is not trying to deliver a comprehensive estimate
for any one service through this piece of legislation because
the bill asks for services by facility or provider. In the case
of her surgery, she had a surgeon, anesthesiologist, surgery
center, and labs, and most of those providers were within one
[facility]. Although, she pointed out, when discussing an
independent practitioner, a person may receive the estimate for
the cyst removal from the doctor, and labs from a different
place, and so on. She reiterated that this is not about
providing individual estimates, and an individual estimate bill
would be more along the lines of the ordinance recently passed
in Anchorage. This particular bill is more about looking at the
Meta level of health care costs, she said.
[HB 123 was held over.]
3:16:49 PM
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:16 p.m.