04/05/2016 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing: Alaska Gasline Development Corporation Board of Directors | |
| HB155 | |
| SB201 | |
| SB175 | |
| SB156 | |
| SB193 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 155 | TELECONFERENCED | |
| += | SB 201 | TELECONFERENCED | |
| += | SB 175 | TELECONFERENCED | |
| + | SB 156 | TELECONFERENCED | |
| + | SB 193 | TELECONFERENCED | |
| + | HB 268 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 5, 2016
1:36 p.m.
DRAFT
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Cathy Giessel, Vice Chair
Senator Kevin Meyer
Senator Gary Stevens
Senator Johnny Ellis
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CONFIRMATION HEARING
Alaska Gasline Development Corporation Board of Directors
Augustine J. Merrick - Anchorage
- CONFIRMATION ADVANCED
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 155(FIN)
"An Act repealing an exploration incentive credit; amending the
calculation of adjusted gross income for purposes of the tax on
gambling activities aboard large passenger vessels; repealing
the amount that may be deducted from the motor fuel tax to cover
the expense of accounting and filing for the monthly tax return;
repealing a provision allowing an investigation expense under
the Alaska Small Loans Act to be in place of a fee required
under the Alaska Business License Act; repealing the amount that
may be deducted from the tobacco excise tax to cover the expense
of accounting and filing for the monthly tax return; repealing
the discount on cigarette tax stamps provided as compensation
for affixing the stamps to packages; and providing for an
effective date."
- MOVED SCS CSHB 155(L&C) OUT OF COMMITTEE
SENATE BILL NO. 201
"An Act relating to the Board of Pharmacy; relating to the
licensing and inspection of certain facilities located outside
the state; relating to drug supply chain security; and creating
a position of executive administrator for the Board of
Pharmacy."
- MOVED SB 201 OUT OF COMMITTEE
SENATE BILL NO. 175
"An Act relating to the registration and duties of pharmacy
benefits managers; relating to procedures, guidelines, and
enforcement mechanisms for pharmacy audits; relating to the cost
of multi-source generic drugs and insurance reimbursement
procedures; relating to the duties of the director of the
division of insurance; and providing for an effective date."
- MOVED CSSB 175(L&C) OUT OF COMMITTEE
SENATE BILL NO. 156
"An Act relating to insurance coverage for contraceptives and
related services; relating to medical assistance coverage for
contraceptives and related services; and providing for an
effective date."
- HEARD & HELD
SENATE BILL NO. 193
"An Act extending the exemption from regulation by the
Regulatory Commission of Alaska for certain facilities or plants
generating energy from renewable energy resources."
- HEARD & HELD
HOUSE BILL NO. 268
"An Act relating to the dividends from the Alaska Industrial
Development and Export Authority; relating to the meaning of
'mark-to-market fair value,' 'net income,' 'project or
development,' and 'unrestricted net income' for purposes of the
Alaska Industrial Development and Export Authority; and
providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 155
SHORT TITLE: FEES; WAIVERS; CREDITS; DEDUCTIONS; TAXES
SPONSOR(s): REPRESENTATIVE(s) THOMPSON
03/20/15 (H) READ THE FIRST TIME - REFERRALS
03/20/15 (H) FIN
04/02/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/02/15 (H) -- MEETING CANCELED --
04/03/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/03/15 (H) <Bill Hearing Canceled>
04/06/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/06/15 (H) Heard & Held
04/06/15 (H) MINUTE (FIN)
04/09/15 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/09/15 (H) Scheduled but Not Heard
04/13/15 (H) FIN RPT CS (FIN) NT 6DP 2NR
04/13/15 (H) DP: EDGMON, GATTIS, WILSON, PRUITT,
SADDLER, THOMPSON
04/13/15 (H) NR: MUNOZ, GUTTENBERG
04/13/15 (H) FIN AT 9:00 AM HOUSE FINANCE 519
04/13/15 (H) Moved CSHB 155(FIN) Out of Committee
04/13/15 (H) MINUTE (FIN)
04/16/15 (H) TRANSMITTED TO (S)
04/16/15 (H) VERSION: CSHB 155(FIN)
04/17/15 (S) READ THE FIRST TIME - REFERRALS
04/17/15 (S) L&C, FIN
01/28/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
01/28/16 (S) Heard & Held
01/28/16 (S) MINUTE (L&C)
04/05/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 201
SHORT TITLE: PHARMA BD & EMPLOYEES; DRUG DIST/MANUFAC
SPONSOR(s): SENATOR(s) GIESSEL
02/22/16 (S) READ THE FIRST TIME - REFERRALS
02/22/16 (S) L&C, FIN
03/31/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/31/16 (S) Heard & Held
03/31/16 (S) MINUTE (L&C)
04/05/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 175
SHORT TITLE: PHARMACY BENEFITS MANAGERS
SPONSOR(s): SENATOR(s) GIESSEL BY REQUEST
02/10/16 (S) READ THE FIRST TIME - REFERRALS
02/10/16 (S) L&C, FIN
03/31/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/31/16 (S) Heard & Held
03/31/16 (S) MINUTE (L&C)
04/05/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 156
SHORT TITLE: INSURANCE COVERAGE FOR CONTRACEPTIVES
SPONSOR(s): SENATOR(s) GARDNER
01/22/16 (S) READ THE FIRST TIME - REFERRALS
01/22/16 (S) HSS, L&C
02/24/16 (S) HSS AT 1:30 PM BUTROVICH 205
02/24/16 (S) Heard & Held
02/24/16 (S) MINUTE (HSS)
03/30/16 (S) HSS AT 1:30 PM BUTROVICH 205
03/30/16 (S) Moved CSSB 156(HSS) Out of Committee
03/30/16 (S) MINUTE (HSS)
04/01/16 (S) HSS RPT CS 2DP 1NR SAME TITLE
04/01/16 (S) DP: STEDMAN, ELLIS
04/01/16 (S) NR: STOLTZE
04/05/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 193
SHORT TITLE: EXTEND EXEMPTION FOR SMALL POWER PLANTS
SPONSOR(s): SENATOR(s) MCGUIRE
02/22/16 (S) READ THE FIRST TIME - REFERRALS
02/22/16 (S) NRG, L&C
03/15/16 (S) NRG AT 1:00 PM BUTROVICH 205
03/15/16 (S) Heard & Held
03/15/16 (S) MINUTE (NRG)
03/31/16 (S) NRG AT 3:30 PM BELTZ 105 (TSBldg)
03/31/16 (S) Moved CSSB 193(NRG) Out of Committee
03/31/16 (S) MINUTE (NRG)
04/01/16 (S) NRG RPT CS 3DP 1NR SAME TITLE
04/01/16 (S) DP: BISHOP, MICCICHE, EGAN
04/01/16 (S) NR: HOFFMAN
04/05/16 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
AUGUSTINE "Joey" MERRICK, Appointee
Alaska Gasline Development Corporations Board of Directors
Anchorage, Alaska
POSITION STATEMENT: Testified as appointee to the Alaska Gasline
Development Corporations Board of Directors.
WESTON EILER, Staff
Senate Labor and Commerce Committee and Senator Mia Costello
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented changes in version P of HB 155 and
information on SB 175.
REPRESENTATIVE STEVE THOMPSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 155.
BRODIE Anderson, Staff
Representative Steve Thompson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information on SB 155.
DIRK WHITE, past president of the Board of Pharmacy
Sitka, Alaska
POSITION STATEMENT: Testified on SB 175 and testified in support
of SB 156.
JANE CONWAY, Staff
Senator Cathy Giessel
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis of SB 175.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to SB 175.
DAVID BALTO, former Policy Director
Federal Trade Commission
Washington, DC
POSITION STATEMENT: Testified in support of SB 175.
ASHLEY REED, Lobbyist
Pharmacy Groups - CVS Health and Geneva Woods
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to SB 175.
SENATOR BERTA GARDNER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 156.
KATIE BRUGGEMAN, Staff
Senator Berta Gardner
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided information on SB 156.
MICHELE MICHAUD, Chief Health Official
Division of Retirement and Benefits
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Provided information related to SB 156.
ERIN NARUS, Pharmacy Program Manager
Division of Health Care Services
Department of Health and Social Services
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to SB 156.
CHRISTINE NIEMI, Member
League of Women Voters-Alaska
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 156.
ALYSON CURREY, Representative
Planned Parenthood Votes Northwest and Hawaii
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 156.
ELIZABETH FIGUS, representing herself
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 156.
SAMANTHA SAVAGE, representing herself
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 156.
ROBIN SMITH, representing herself
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 156.
KENNI PSENAK-LINDEN, representing herself
Palmer, Alaska
POSITION STATEMENT: Testified in support of SB 156.
DAN NELSON, Director of Pharmacy
Tanana Chiefs Conference
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 156.
SHEELA TALLMAN, Senior Manager of Legislative Policy
Premera Blue Cross
Seattle, Washington
POSITION STATEMENT: Testified about implementation concerns with
SB 156.
MOLLY GRAY, Executive Director
Alaska Pharmacists Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 156.
CATRIONA REYNOLDS, Manager
Kachemak Bay Family Planning Clinic
Homer, Alaska
POSITION STATEMENT: Testified in support of SB 156.
JESSE LOGAN, Staff
Senator Lesil McGuire
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 193 on behalf of the sponsor.
BOB PICKETT, Chairman
Regulatory Commission of Alaska
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to SB 193.
DUFF MITCHELL, Executive Director
Alaska Independent Power Producers Association
POSITION STATEMENT: Testified in support of SB 156.
ACTION NARRATIVE
1:36:07 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:36 p.m. Present at the call to
order were Senators Ellis, Giessel, and Chair Costello. She
reviewed the agenda.
^CONFIRMATION HEARING: Alaska Gasline Development Corporation
Board of Directors
CONFIRMATION HEARING
Alaska Gasline Development Corporation Board of Directors
1:37:12 PM
CHAIR COSTELLO announced the confirmation hearing of Augustine
J. Merrick, appointee to the Alaska Gasline Development
Corporation (AGDC) Board of Directors. She voiced appreciation
for Mr. Merrick's willingness to continue to serve the state in
this capacity.
1:38:04 PM
AUGUSTINE "Joey" MERRICK, Business Manager, Laborers' Local 341,
testified as appointee to the Alaska Gasline Development
Corporations Board of Directors. Mr. Merrick shared his
background and work history in the field of construction, as
well as his involvement with the Laborers' Local 341. He said he
represents 5,000 members of the union and is involved in
workforce development. He noted he is the president of the
Alaska Petroleum Joint Craft Council.
MR. MERRICK spoke of his understanding of contracts and
negotiation processes. He opined that these are critical skills
in light of the current fiscal crisis.
1:41:12 PM
CHAIR COSTELLO asked what he sees as the major challenges and
opportunities as a board member.
MR. MERRICK noted challenges due to decreases in oil prices. He
thought the board could work well together on all challenges. He
related that he serves on the technical committee and the
regulatory committee.
1:42:34 PM
CHAIR COSTELLO asked whether the Department of Labor and
Workforce Development has shared its plan to focus on Alaska
hire regarding the gas pipeline.
MR. MERRICK recalled that presentation was made before his
appointment to the board. He believes that Alaska hire is
critical and it is most important that all Alaskans get the
first opportunity to work. He noted that pipeline training is
geared for the work that is expected.
1:44:18 PM
CHAIR COSTELLO asked about his statement about working toward
the best project for Alaska. She inquired if he sees that
project being Alaska Liquefied Natural Gas (AKLNG) and whether
he is committed to following the guidelines of SB 138.
MR. MERRICK spoke of his commitment to AKLNG as the future of
Alaska. The only work outside of AKLNG is the Alaska Stand Alone
Pipeline (ASAP) work on environmental issues, which can also be
used with AKLNG.
1:45:19 PM
SENATOR GIESSEL expressed appreciation for his work on the
board. She asked how he manages a full time job and serving on
the board.
MR. MERRICK agreed it is challenging and a big responsibility,
but something he is willing to do. He spoke of the great team he
works with at the labor union.
1:46:55 PM
CHAIR COSTELLO closed public testimony and thanked Mr. Merrick.
CHAIR COSTELLO said that concludes the consideration of sixty
nominees to state boards and commissions reviewed in the Senate
Labor and Commerce Committee. She thanked all the nominees and
said the committee would move forward with the committee report.
She stated, "In accordance AS 39.05.080, the Labor and Commerce
Committee reviewed the attached nominees and recommends the
appointees be forwarded to a joint session for consideration.
This does not reflect an intent by any member of the committee
to vote for or against the confirmation of the individuals
during any further session."
1:47:51 PM
At ease
HB 155-FEES; WAIVERS; CREDITS; DEDUCTIONS; TAXES
1:49:30 PM
CHAIR COSTELLO announced the consideration of HB 155; "An Act
repealing an exploration incentive credit; amending the
calculation of adjusted gross income for purposes of the tax on
gambling activities aboard large passenger vessels; repealing
the amount that may be deducted from the motor fuel tax to cover
the expense of accounting and filing for the monthly tax return;
repealing a provision allowing an investigation expense under
the Alaska Small Loans Act to be in place of a fee required
under the Alaska Business License Act; repealing the amount that
may be deducted from the tobacco excise tax to cover the expense
of accounting and filing for the monthly tax return; repealing
the discount on cigarette tax stamps provided as compensation
for affixing the stamps to packages; and providing for an
effective date." She noted this is the second hearing on the
bill and public testimony is closed. [CSHB 155(FIN) was before
the committee.]
1:49:58 PM
SENATOR GIESSEL moved to adopt the Senate CS for CS for HB 155,
labeled 29-LS0715\P, as the working document.
CHAIR COSTELLO objected for an explanation of the changes.
1:50:21 PM
WESTON EILER, Staff, Senate Labor and Commerce Committee and
Senator Mia Costello, Alaska State Legislature, related that the
first change removes Section 5 of the original bill. This
section dealt with motor fuel taxes and was removed at the
request of the sponsor. Conforming changes include the
renumbering of sections.
The second and third changes change the effective date in
Section 11 to January 1, 2017, and the effective date in Section
12 to July 1, 2016, due to collection dates of taxes.
CHAIR COSTELLO removed her objection and the CS was adopted.
1:52:07 PM
REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, sponsor
of SB 155 said he accepts the changes. Motor fuel taxes are
being addressed in another bill and the conforming date changes
make the bill apply this year instead of last year when the bill
was drafted.
He noted the bill came about because of a report two years ago
on indirect expenditure requirements. SB 155 is the start of
trying to reduce excessive indirect expenditures, tax credits,
and fees.
1:53:18 PM
SENATOR MEYER said it is a great bill, but he noted it is not
comprehensive and there are many tax credit bills in play. He
asked if there are more such bills that should be considered.
REPRESENTATIVE THOMPSON agreed that there are many tax credit
bills. This bill targets low-hanging fruit and could start the
process. He pointed out that the comprehensive report has sunset
dates every two years that will require reviews.
BRODIE ANDERSON, Staff, Representative Steve Thompson, Alaska
State Legislature, added that Legislative Finance identified the
items terminated by SB 155.
SENATOR MEYER asked how many different tax credits there are.
MR. ANDERSON stated that within the Department of Revenue, there
are a little over 10, but less than 20, designated tax credits.
The genesis of the indirect expenditure report was to go beyond
the scope of the credit and look at other ways the state might
have been losing revenue. The first report had over 150 pages of
expenditures identified from three or four departments.
1:56:00 PM
SENATOR GIESSEL moved to report the SCS for CSHB 155, labeled
29-LS0715\P, from committee with individual recommendations and
attached fiscal note.
CHAIR COSTELLO announced that without objection, SCS CSHB
155(L&C) is reported from the Senate Labor and Commerce Standing
Committee.
1:56:22 PM
At ease
SB 201-PHARMA BD & EMPLOYEES; DRUG DIST/MANUFAC
1:58:09 PM
CHAIR COSTELLO announced the consideration of SB 201; "An Act
relating to the Board of Pharmacy; relating to the licensing and
inspection of certain facilities located outside the state;
relating to drug supply chain security; and creating a position
of executive administrator for the Board of Pharmacy." She noted
this is the second hearing.
CHAIR COSTELLO continued public testimony.
DIRK WHITE, past president of the Board of Pharmacy, offered to
answer questions on SB 201.
1:59:47 PM
SENATOR GIESSEL moved to report SB 201, labeled 29-LS1482\A,
from committee with individual recommendations and attached
fiscal note.
CHAIR COSTELLO announced that without objection, SB 201 is
reported from the Senate Labor and Commerce Standing Committee.
2:00:09 PM
At ease
SB 175-PHARMACY BENEFITS MANAGERS
2:02:05 PM
CHAIR COSTELLO announced the consideration of SB 175; "An Act
relating to the registration and duties of pharmacy benefits
managers; relating to procedures, guidelines, and enforcement
mechanisms for pharmacy audits; relating to the cost of multi-
source generic drugs and insurance reimbursement procedures;
relating to the duties of the director of the division of
insurance; and providing for an effective date." She noted this
is the second hearing of the bill and there is a proposed
committee substitute (CS).
SENATOR GIESSEL moved to adopt the CS for SB 175, labeled 29-
LS1110\H, as the working document.
2:03:04 PM
CHAIR COSTELLO objected for an explanation of the changes.
WESTON EILER, Staff, Senate Labor and Commerce Committee and
Senator Mia Costello, highlighted two elements in SB 175. The CS
moves the regulation of pharmacy benefit managers (PBMs) and
their registration to the section of statute that deals with
third-party administrators. It also addresses some issues with
regard to interest and adjudicating claims, and the effective
date.
JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State
Legislature, presented an explanation of changes between the
original version W and version H of SB 175.
2:07:15 PM
Section 1. Adds a new section concerning Pharmacy
Benefits Managers.
Section 21.27.901 Registration of pharmacy benefits
managers; scope of business practice. Moves the
pharmacy benefit manager registration to 21.27.630
that governs third party administrators. Outlines what
a PBM may do under this chapter and deletes lines 8-20
of version W regarding registration.
Sec. 21.27.905 Renewal of registration. Changes
renewal of registration from annual to biannual.
Section 21.27.910 Pharmacy audit procedural
requirements. Adds "Unless required under AS
21.36.495, a" (this statute governs procedure for
timely payment of claims) and that during adjudication
of a claim, no interest will accrue.
In (d) (1) and (2) clarifies that it must be a
pharmacist licensed and in good standing in AK and in
compliance with AS 08.80 (Pharmacy Statute) when the
audit involves clinical or professional judgment.
Sec. 21.27.915. Overpayment or underpayment. Adds
language that does not allow extrapolation of figures
in calculation of an over or underpayment unless PBMs
and pharmacy agree to a statistically agreed-upon
projection.
Sec. 21.27.920. Recoupment. Removed reference to
"corrective action plan" in (b).
Section 21.27.930. Pharmacy audit appeal; future
repayment. Clarifies in (c) that it is the PBM's
appeal process that must be exhausted.
Section 21.27.935. Fraud. Deletes entire text in W,
and rewords it: "When a pharmacy benefits manager is
conducting an audit of a pharmacy, fraudulent activity
is defined as an intentional act of theft, deception,
misrepresentation or concealment committed by the
pharmacy, which is discovered during the course of an
audit. Unintentional clerical or record-keeping
errors, including typographical errors, writer's
errors, or computer errors regarding a required
document or record, shall not be considered fraudulent
activity."
Sec. 21.27.950. Multi-source generic drug appeal. Adds
in (e) A network pharmacy may request a hearing under
AS 21.06.170 - AS 21.06.240 that governs procedure for
hearings by the Div. of Insurance and takes out the 30
calendar days language in (f) and deletes (g) since
that would all be covered by AS 21.06.170 - AS
21.06.240.
Sec. 21.27.955. Definitions. Defines all selective
wording as used in Section 1.
Section 2. Adds a new section on Applicability as it
applies to audits of pharmacies as conducted by
pharmacy benefits managers.
Section 3. Adds a new section as to Transitional
Provisions for adopting Regulations.
Section 4. Adds a new section stating the Revisor's
Instructions.
Section 5. Effective date clause for Bill section 3.
Section 6. Effective date clause for this Act except
as provided.
2:08:17 PM
CHAIR COSTELLO asked for an explanation of the purpose for the
change in the overpayment and the underpayment provision in Sec.
21.27.915.
MS. CONWAY said it is common practice during PBM audits that if
they find an error that might reoccur, there is a model to
extrapolate that cost out a number of times for a specific
period. She gave an example of an error of $89 being
extrapolated out and resulting in a $9,000 bill. The pharmacies
view this as unfair. This provision provides the opportunity for
an agreement in the contract on the model that will be used.
CHAIR COSTELLO asked Ms. Wing-Heier if the state uses PBMs and
how the bill would affect the state.
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development, said the state
does use a PBM but the Department of Administration would have
to speak to the impact on the state benefit plan. She noted that
PBMs have become commonplace in both the insured and self-funded
plans for pharmaceutical needs.
2:11:53 PM
SENATOR STEVENS asked if there have been unreasonable audits in
the past.
MS. WING-HEIER said the division isn't aware of any audits. She
explained that PBMs should be registering with the Division of
Insurance, but just two have done that so they aren't currently
licensed in Alaska.
2:13:07 PM
DAVID BALTO, former Policy Director, Federal Trade Commission,
testified in support of SB 175. He shared his extensive
background dealing with PBMs. He focused on the reforms
suggested in the proposed CS dealing with PBMs. He noted the
bill is similar to reforms that have been adopted in other
states. He spoke of the disproportionate bargaining powers
between pharmacies and PBMs. He maintained that pharmacies are
almost never able to negotiate and that is why the bill is
needed. It assures that payments are timely and audits are
practical. Other provisions in the bill speak to a fair process
for audits. The bill is especially beneficial to small, local
pharmacies and their consumers.
DIRK WHITE, past president of the Board of Pharmacy, testified
on SB 175. He presented examples of egregious audits by a PBM
regarding wheelchairs.
2:21:30 PM
SENATOR STEVENS thanked Mr. White and agreed that the examples
were egregious.
2:22:30 PM
At ease
2:23:54 PM
ASHLEY REED, Lobbyist, Pharmacy Groups - CVS Health and Geneva
Woods, testified in opposition to SB 175. He noted similar bills
have been around before and they never went anywhere. He
maintained that there are problems with the bill. This bill will
cost the state money. He said PBMs are an effort to hold down
health care costs. He maintained that the state cannot trump
federal law. He opined that the egregious audits are on the
federal level, not at the local level. He cautioned to take time
to understand this complex issue. He concluded that SB 175 is
going to take away an important tool.
2:35:22 PM
CHAIR COSTELLO thanked Mr. Reed for his testimony and stated her
intent to move the bill today. She noted that next it goes to
the Senate Finance Committee, which can address fiscal and
actuarial issues.
SENATOR GIESSEL noted the zero fiscal note comes from the
Division of Insurance and she believes the fiscal note is
authentic.
2:37:01 PM
SENATOR GIESSEL moved to report the CS for SB 175, labeled 29-LS
1110\H, from committee with individual recommendations and
attached zero fiscal note.
CHAIR COSTELLO announced that without objection, CSSB 175(L&C)
is reported from the Senate Labor and Commerce Standing
Committee.
2:37:15 PM
At ease
SB 156-INSURANCE COVERAGE FOR CONTRACEPTIVES
2:38:54 PM
CHAIR COSTELLO announced the consideration of SB 156; "An Act
relating to insurance coverage for contraceptives and related
services; relating to medical assistance coverage for
contraceptives and related services; and providing for an
effective date." She noted that this is the first hearing of the
bill. [CSSB 156(HSS) was before the committee.]
SENATOR BERTA GARDNER, Alaska State Legislature, sponsor of SB
156, explained that with the exception of religious exemptions,
everyone is mandated to have health insurance and all policies
include coverage for birth control. Oftentimes, insurers make
self-administered hormonal birth control available on a monthly
or three-month increment. Passage of SB 156 would mean that,
after an initial three-month usage to demonstrate that a woman
is not experiencing complications, she'd be able to request a
12-month supply if she wished to do so. All existing copays
would remain in effect. Not every woman would want an entire
year's supply.
She said the goal is narrow. An individual who is covered by
insurance can opt to get a 12-month supply of hormonal
contraception, if she wants to.
SENATOR GARDNER reported that states that have implemented this
policy have seen a cost savings in all insurance pools that are
affected by the law. Washington State has experienced a savings
of about $4 million in Medicaid savings since implementation.
The fiscal note for SB 156 shows a savings of about $1.35
million a year.
2:41:21 PM
SENATOR GARDNER said much public testimony showed numerous
problems and barriers in the ability for women to obtain a
consistent supply of birth control. They are limited by clinic
hours, privacy concerns, and long stretches of time where they
are in remote areas.
She concluded that the bill is good policy and saves the state
money and offers benefits for women who use birth control.
2:42:08 PM
CHAIR COSTELLO asked how the savings would be made.
2:42:26 PM
KATIE BRUGGEMAN, Staff, Senator Berta Gardner, Alaska State
Legislature, referred to the fiscal note for SB 156 that shows
the Department of Health and Social Services estimated a savings
of $1.35 million. Cost savings would come in two main ways, by
preventing unintended pregnancies covered by Medicaid, and
through lower costs for bulk orders negotiated by insurance
companies. Washington experienced these cost savings.
2:43:40 PM
MICHELE MICHAUD, Chief Health Official, Division of Retirement
and Benefits, Department of Administration, explained that the
division administers the Alaska Care Employee Health Plan and
Retiree Plan, and SB 156 does not impact the division directly.
The employee plan offers extensive benefits and they are working
on surrendering "grandfather status" on January 1, 2017, which
means they would offer the full suite of contraceptive benefits
that are afforded under the Affordable Care Act. As a preventive
service they would be provided without copay. She noted they
have the ability within their plan to offer an extended supply
of contraceptives in the case of travel or being otherwise
unavailable to receive them. She noted they also offer mail-
order prescriptions to rural areas.
She said she does not oppose this bill, but it does not really
apply to the division. She believes that Alaska Care benefits
are equal to or better than the provisions in the bill. She
opined that the division will not see a large decrease in
pregnancies, nor cost savings to its plan should the bill pass.
2:46:22 PM
CHAIR COSTELLO asked if the fiscal note would change in the
future as it applies to Alaska Care.
MS. MICHAUD said there would be some savings for bulk orders and
reduced dispensing fees, but they have a different population
than the Medicaid population.
2:46:59 PM
SENATOR GIESSEL asked about their mail order option and whether
local pharmacies are used.
MS. MICHAUD explained their mail orders are from a third-party
administrator in another state.
2:47:29 PM
ERIN NARUS, Pharmacy Program Manager, Division of Health Care
Services, Department of Health and Social Services, offered to
answer questions related to SB 156.
SENATOR GIESSEL said the bill covers more than prescription
contraceptives. She read the list on page 1, lines 10-12, and
asked if it expands Medicaid benefits.
MS. NARUS said those items are under a different section of
commercial pay insurance. The Medicaid section of SB 156 begins
on page 3, line 5.
SENATOR GIESSEL asked if some prescriptions are dispensed
without copay. She asked if that is the standard for all
prescriptions under Medicaid.
MS. NARUS said there are copays for certain drugs. She provided
examples.
2:50:31 PM
SENATOR GIESSEL commented that it would absolve the beneficiary
of a copay.
MS. NARUS said yes.
2:51:18 PM
CHRISTINE NIEMI, Member, League of Women Voters-Alaska,
testified in support of SB 156. She read the following prepared
statement:
At the national level, the League of Women Voters
supports primary care for all, care that includes pre-
natal and reproductive health. When women have the
consistent ability to plan their pregnancies, their
families benefit through greater financial well-being,
healthier living conditions, healthier children,
greater opportunities, and a myriad of additional
benefits. While improving the quality of life for
families, the ability to avoid unintended pregnancies
also reduces the cost for state and federal
governments.
In 2010, according to the Guttmacher Institute, the
State of Alaska spent nearly $43 million on health
costs related to unintended pregnancies, while the
federal government added another $71 million for the
total cost of $114 million. Guttmacher reports that 48
percent of all pregnancies in Alaska in 2010 were
unplanned and 64 percent of Alaska's unplanned
pregnancies were publicly funded, representing the $43
million cost.
In addition, the cost benefits of supporting women in
their efforts to plan their pregnancies goes far
beyond the cost of the pregnancy itself. A woman who
is able to plan a pregnancy can better guarantee that
her health is at optimum levels prior to pregnancy,
reducing the risk of a difficult pregnancy and trauma
to the child. Such planning reduces the possibility of
increased health problems for the child; problems
which can follow the child for years and require
increased health and education costs for the state.
A planned pregnancy increases a woman's ability to
manage her role as an income provider for a family and
allows the family the best opportunity to remain as
financially independent as possible. Supporting
affordable contraceptives prescribed on a 12-month
basis will undoubtedly reduce the number of unintended
pregnancies in Alaska, thereby increasing family
wellbeing and reducing state costs. SB 156 can assist
women and families to plan pregnancies so they are
ready for the added responsibility of a child. In
addition, cost to the state for unintended pregnancies
can be reduced.
2:54:50 PM
SENATOR GIESSEL asked if she said a child born as a result of an
unplanned pregnancy is at a disadvantage.
MS. NIEMI responded that children who are unplanned often are
not able to be cared for by their families as well as planned
pregnancies.
SENATOR GIESSEL responded, "I guess I would, using logic,
construe that you're saying that they're better off having never
been born."
MS. NIEMI countered that she would not say it quite that way.
SENATOR GIESSEL said, "I'm sure not."
2:56:02 PM
ALYSON CURREY, representative, Planned Parenthood Votes
Northwest and Hawaii, testified in support of SB 156. She spoke
in support of insurance coverage for a 12-month supply of birth
control when prescribed by a healthcare provider. She thanked
the sponsor for her leadership and work on the bill. She read
from the following prepared statement:
As an advocate and provider of reproductive health
care for all, Planned Parenthood (PP) has long
supported sincere efforts to expand access to birth
control. We believe that every women should have full
access to the birth control method of her choosing
without barriers based on cost and availability. A
year's supply of birth control at a time is a solution
that lowers barriers and works for women.
One in four women say they have missed pills because
they could not get the next pack in time. Consistent
use of birth control is the best way to prevent
unintended pregnancy for those who are sexually
active. Getting a one-year supply dramatically
improves consistent use. According to a study
published in Obstetrics and Gynecology, dispensing a
one-year supply at a time reduces the odds of
experiencing an unintended pregnancy by 30 percent and
is also associated with a 46 percent drop in the
chance of needing an abortion. Furthermore, dispensing
twelve months of birth control would save significant
money for the state and private insurance carriers.
A study from the University of California - San
Francisco, found that insurance plans that dispense a
one-year supply of birth control lower their direct
costs on follow up visits and pregnancy tests, as well
as long-term pregnancy management. Women on Medicaid
would also experience lower rates of unintended
pregnancies and save the state money.
We believe that a woman's consistent access to birth
control should not depend on her insurance carrier,
and we continue to be committed to working with other
stakeholders to create the best possible legislation
for all parties in order to help reduce barriers to
contraceptives, prevent unintended pregnancy, and save
the state additional money.
2:58:27 PM
CHAIR COSTELLO asked about the correlation between the lack of
birth control and unplanned pregnancies. She inquired how that
data is collected.
MS. CURREY offered to provide follow up information.
SENATOR GIESSEL noted the bill sounds benign, but entails
volunteer sterilization procedures.
MS. CURREY said she believes that language was in the bill
because the procedure is included in the Affordable Care Act.
3:00:33 PM
ELIZABETH FIGUS, representing herself, testified in support of
SB 156. She spoke of her work as a captain of an Alaska trawl
tender. She urged support of the bill in order to help make it
possible for Alaska women to receive contraceptives for twelve
months at a time. She noted that so many residents of Alaska
spend a significant portions of the year in remote locations,
herself included. She spoke of the barriers to getting
contraceptives during this time. She believes the bill will save
individual women money and time and avoid unwanted pregnancies.
She clarified that this bill is a fiscally responsible choice
for women's health.
She pointed out that the bill does not focus on children that
are unplanned, but on women who are legally receiving
contraception and whether or not they can receive it for 12
months.
3:02:27 PM
SAMANTHA SAVAGE, representing herself, testified in support of
SB 156. She stated that Alaska women face more barriers when
trying to access all medications due to geographical and
occupational and financial reasons. She related a personal
experience of difficulty in trying to obtain oral contraceptives
while going to school and working.
3:03:46 PM
ROBIN SMITH, representing herself, testified in support of SB
156. She said it's inconvenient to get just 30 pills at a time
and there are a lot of reasons other than unwanted pregnancy to
be on birth control. She gave examples of other reasons for
being on birth control including ovarian cancer and endometrial
cancer.
3:07:40 PM
KENNI PSENAK-LINDEN, representing herself, testified in support
of SB 156. She shared her personal story of being diagnosed with
endometriosis and the difficulty of only having a prescription
for 30 days at a time. She attributed the ability to graduate
from college to the ability to have access to hormonal birth
control.
3:09:42 PM
DAN NELSON, Director of Pharmacy, Tanana Chiefs Conference,
testified in support of SB 156. It will save the state and
federal government millions of dollars. Patients in rural areas
will avoid the difficulty and inconvenience of running out of
contraceptive medication.
3:11:45 PM
SHEELA TALLMAN, Senior Manager of Legislative Policy, Premera
Blue Cross, testified about implementation concerns with SB 156.
She said it is unclear whether the coverage provision imposes a
new mandate on health care plans. She encouraged careful review
of the bill. The bill would also impact private and group
grandfathered health care plans. This could be as high as 3-4
percent of premium, so they are asking for an exception for
grandfathered plans.
She discussed an amendment they submitted to the sponsor to
ensure that the insured is receiving a supply not to exceed 12
months total. Finally, they are requesting an effective date of
January 1, 2018, because it isn't feasible to make these changes
before then.
3:14:54 PM
MOLLY GRAY, Executive Director, Alaska Pharmacists Association,
testified in support of SB 156. She suggested changing the 90-
day requirement for the first filling of the prescription
because it would create insurance issues. She thought that
section had been removed from the House version of the bill. She
concluded that the bill aligns with the Alaska Pharmacists
Association mission.
3:16:15 PM
CATRIONA REYNOLDS, Manager, Kachemak Bay Family Planning Clinic,
testified in support of SB 156. She noted she submitted written
testimony. She noted that Medicaid currently has no copay for
contraceptives. She highlighted that many women only use 21 days
of a 30 day supply so 17 packs could be needed for one year. She
provided anecdotes of clients who do not have insurance and how
they are able to receive birth control for 12 months.
3:18:32 PM
DIRK WHITE, Pharmacist and past president of the Board of
Pharmacy, stated support for SB 156.
3:19:19 PM
CHAIR COSTELLO stated she would keep public testimony open and
hold SB 156 in committee.
SB 193-EXTEND EXEMPTION FOR SMALL POWER PLANTS
3:19:51 PM
CHAIR COSTELLO announced the consideration of SB 193; "An Act
extending the exemption from regulation by the Regulatory
Commission of Alaska for certain facilities or plants generating
energy from renewable energy resources." [CSSB 193(NRG) was
before the committee.]
3:19:53 PM
JESSE LOGAN, Staff, Senator Lesil McGuire, Alaska State
Legislature, introduced SB 193 on behalf of the sponsor. He said
the bill seeks to extend the regulatory exemption for power
plants utilizing renewable resources of under 65 megawatts from
January 2016 to January 2020. The electrical demand of this very
small and dispersed population of Alaska is generally served by
regulated utilities. The Regulatory Commission of Alaska is
challenged and charged with certifying utilities, regulated
rates, resolving disputes, and protecting customers. However,
Alaska has seen increasing private sector investment in the
development of renewable energy systems across the state.
Alaska has exempted small power producers from regulations
provided they sell power on a wholesale basis to regulated
utilities that distribute the power to local customers. The
exemption lowers the barrier cost of entry, but it expired on
January 1, 2016.
He noted regulations can increase the cost of a project and pose
barriers to investment, and also increase the cost of
government. SB 193 continues to put Alaska in a middle ground
between a thoroughly deregulated market and a highly regulated
electrical market. This arrangement maintains state oversight on
the power purchasing agreement and thereby continues to provide
a layer of protection to rate payers.
He provided an example of Fire Island Wind, the CIRI subsidiary
that sells wind power to Chugach Electric in Southcentral
Alaska, which came to light as a result of deregulation.
3:22:20 PM
BOB PICKETT, Chairman, Regulatory Commission of Alaska, offered
to answer questions related to SB 193.
CHAIR COSTELLO asked if the exemption has worked as planned.
MR. PICKETT said it's fair to say that the initial concerns have
been alleviated. How it will work going forward, if it's
extended, will hopefully add clarification about avoidable
costs. The commission has not taken a position on the bill, but
the narrow exemption has performed as envisioned.
3:24:56 PM
DUFF MITCHELL, Executive Director, Alaska Independent Power
Producers Association, testified in support of SB 193. The
exemption has resulted in a growing cadre of power producers.
Alaska is the only state that regulates small power producers.
He called it state overreach. This bill does nothing but extend
what is already on the books.
CHAIR COSTELLO asked how many members are in the association.
MR. MITCHELL said nine.
CHAIR COSTELLO noted that RCA provides oversight, and federal
regulations address concerns the public might have.
MR. MITCHELL opined that the legislation does not fix state
overreach. He maintained that Alaska is over regulated for small
power producers. SB 193 maintains what is already permitted.
3:27:06 PM
CHAIR COSTELLO held SB 193 in committee with public testimony
open.
3:27:22 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:27 p.m.