02/28/2024 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB121 | |
| SB115 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 121 | TELECONFERENCED | |
| + | SB 115 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 28, 2024
1:34 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Click Bishop, Vice Chair
Senator Elvi Gray-Jackson
Senator Kelly Merrick
Senator Forrest Dunbar
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Justin Ruffridge
Senator Löki Tobin
COMMITTEE CALENDAR
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 121
"An Act relating to the Board of Pharmacy; relating to
insurance; relating to pharmacies; relating to pharmacists;
relating to pharmacy benefits managers; relating to patient
choice of pharmacy; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 115
"An Act relating to physician assistants; relating to
physicians; and relating to health care insurance policies."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 121
SHORT TITLE: PHARMACIES/PHARMACISTS/BENEFITS MANAGERS
SPONSOR(s): SENATOR(s) GIESSEL BY REQUEST
03/31/23 (S) READ THE FIRST TIME - REFERRALS
03/31/23 (S) L&C, FIN
02/08/24 (S) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
02/08/24 (S) L&C, FIN
02/28/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 115
SHORT TITLE: PHYSICIAN ASSISTANT SCOPE OF PRACTICE
SPONSOR(s): SENATOR(s) TOBIN BY REQUEST
03/27/23 (S) READ THE FIRST TIME - REFERRALS
03/27/23 (S) HSS, L&C
01/23/24 (S) HSS AT 3:30 PM BUTROVICH 205
01/23/24 (S) Heard & Held
01/23/24 (S) MINUTE(HSS)
02/06/24 (S) HSS AT 3:30 PM BUTROVICH 205
02/06/24 (S) Heard & Held
02/06/24 (S) MINUTE(HSS)
02/15/24 (S) HSS AT 3:30 PM BUTROVICH 205
02/15/24 (S) Moved CSSB 115(HSS) Out of Committee
02/15/24 (S) MINUTE(HSS)
02/19/24 (S) HSS RPT CS 3DP 2AM SAME TITLE
02/19/24 (S) DP: WILSON, KAUFMAN, DUNBAR
02/19/24 (S) AM: TOBIN, GIESSEL
02/28/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR CATHY GIESSEL, District E
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 121.
BRANDY SEIGNEMARTIN, Executive Director
Alaska Pharmacy Association
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
PALMER WETZELL III, Deputy Director
Chief Andrew Isaac Health Center
Fairbanks, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 121.
ASHLEY SCHABER, Chair
Alaska Board of Pharmacy
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation SB 121.
BARRY CHRISTENSEN, Pharmacist
Island Pharmacy
Ketchikan, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
DIRK WHITE, Owner
White's Pharmacy
Sitka, Alaska
POSITION STATEMENT: Testified by invitation on SB 121.
PATRICK SHIER, Alaska Membership Representative
Pacific Health Coalition
Wasilla, Alaska
POSITION STATEMENT: Testified in opposition to SB 121.
BRENDA SNYDER, Lead Director
State Government Affairs
CVS Health
Seattle Washington
POSITION STATEMENT: Testified in opposition to SB 121.
TONIA NEAL, Senior Director
Pharmaceutic Case Management Association
Shelten, Washington
POSITION STATEMENT: Testified in opposition to SB 121.
DESIREE MOLINA, representing self
Palmer, Alaska
POSITION STATEMENT: Testified in support of SB 121.
HARRY ROGERS, representing self
Petersburg, Alaska
POSITION STATEMENT: Testified in support of SB 121.
DELILAH BERNALDO, representing self
Petersburg, Alaska
POSITION STATEMENT: Testified in support of SB 121.
CATHERINE KOWALSKI, representing self
Petersburg, Alaska
POSITION STATEMENT: Testified in support of SB 121.
GREG LOUDON Consultant
Employee Benefits
Parker, Smith and Feek Insurance
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 121.
MARY STOLL, Legal Counsel
Pacific Health Coalition
Seattle, Washington
POSITION STATEMENT: Testified in opposition to SB 121.
LUCY LAUBE, Manager
State Government Relations
National Psoriasis Foundation
Portland, Oregon
POSITION STATEMENT: Testified in support of SB 121.
THOMAS WADSWORTH, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 121.
KAREN MILLER, Director
Denali Pharmacy
Fairbanks Memorial Hospital
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 121.
GARY STRANNIGAN, Vice President
Congressional and Legislative Affairs
Premera Blue Cross Blue Shield of Alaska
Seattle, Washington
POSITION STATEMENT: Testified in opposition to SB 121.
SENATOR LÖKI TOBIN, District I
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 115 by request.
MACKENZIE POPE, Staff
Senator Löki Tobin
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided the sectional analysis for SB 115.
JENNIFER FAYETTE, Co-Chair
Legislative Committee
Alaska Academy of Physician Assistants
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 115.
CHRISTI FROILAND, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 115.
WENDY SMITH, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 115.
MEGHAN HALL, representing self
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 115.
ACTION NARRATIVE
1:34:05 PM
CHAIR JESSE BJORKMAN called the Senate Labor and Commerce
Standing Committee meeting to order at 1:34 p.m. Present at the
call to order were Senators Gray-Jackson, Merrick, Dunbar,
Bishop, and Chair Bjorkman.
SSSB 121-PHARMACIES/PHARMACISTS/BENEFITS MANAGERS
1:35:05 PM
CHAIR BJORKMAN announced the consideration of SPONSOR SUBSTITUTE
FOR SENATE BILL NO. 121, "An Act relating to the Board of
Pharmacy; relating to insurance; relating to pharmacies;
relating to pharmacists; relating to pharmacy benefits managers;
relating to patient choice of pharmacy; and providing for an
effective date."
1:35:22 PM
SENATOR CATHY GIESSEL, District E, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 121. She stated that this
legislation addresses a very complex subject and highlighted the
secretive - yet dangerous - nature of the work done by Pharmacy
Benefit Managers (PBM). PBMs are employed by pharmaceutical drug
chains. She said that PBMs significantly affect the cost of
prescription medications - and these effects are not
transparent. She stated that she has been working with various
agencies to put forth the best legislation possible. She
explained that the Department of Law became involved when they
unsuccessfully attempted to access details of "secret" contracts
between the PBMs and the State of Alaska. There is a companion
bill. She commented that former Senator Egan worked on similar
legislation many years ago.
1:38:11 PM
SENATOR GIESSEL said that in 2018, she worked with former
Representative Guttenberg to pass the first pharmaceutical
transparency legislation; this removed a gag rule that had
prevented pharmacists from sharing information about lower cost
alternatives to prescribed medications. She explained that the
intention of SB 121 is transparency in pricing and freedom of
choice for patients. She said that the largest three PBMs take
in more than $300 billion per year. She added that this money
comes from customer pockets - and from the State of Alaska. She
noted that Congress is attempting to address this as are many
individual states. She drew attention to a bibliography in
members' packets that provides additional information.
1:41:00 PM
CHAIR BJORKMAN announced Representative Ruffridge joined the
meeting at 1:35 p.m.
1:41:24 PM
BRANDY SEIGNEMARTIN, Executive Director Alaska Pharmacy
Association, Anchorage, Alaska, testified by invitation on SB
121. She said that she is a pharmacist and teaches with the UAA
Doctor of Pharmacy program. She said that the current system has
allowed a few PBMs to monopolize the marketplace and drive local
brick and mortar pharmacies out of business. She then gave a
presentation titled: SB 121: Transparency in Prescription
Pricing & Patient Freedom of Pharmacy Choice. She moved to slide
2 and discussed the role of Pharmacy Benefit Managers (PBM):
[Original punctuation provided.]
What is a Pharmacy Benefit Manager (PBM)?
• Third party companies that act as intermediaries
between insurance companies, drug manufacturers,
pharmacies, & patients
• Originally created to help insurers control drug
spend, but have become perversely incentivized to
increase drug spend
Why are they incentivized to increase drug spend?
• Create and manage formularies
• Negotiate rebates
• Process claims
• Manage pharmacy networks
• Operate mail-order and "specialty" pharmacies
MS. SEIGNEMARTIN said that PBMs only exist in the United States
and suggested that this is one reason pharmaceuticals are more
expensive in this country. She stated that PBMs take advantage
of rebate systems, increasing the cost of brand name
pharmaceuticals as they negotiate rebates. She acknowledged that
many employers depend on the rebates to offset their costs and
pointed out that rebates are not addressed in SB 121. She stated
that PBMs also operate their own low-cost mail-order pharmacies
and they demand and/or coerce Alaskan patients to use these
pharmacies.
1:44:10 PM
MS. SEIGNEMARTIN read from a letter from the National
Association of Attorneys General:
[Original punctuation provided.]
RE: Support for Reforming Pharmacy Benefit Managers
Dear Speaker Johnson, Majority Leader Schumer,
Minority Leader Jeffries, Minority Leader McConnell,
In recent years, our offices and other offices of
state attorneys general have worked to hold Pharmacy
Benefit Managers (PBMs) accountable.
The PBMs' original purpose was to protect and
negotiate on behalf of employers and consumers after
pharmaceutical manufacturers were criticized for
overpricing medications. Unfortunately, in recent
years, the PBMs have only made the pharmaceutical
market more opaque and have been a cause of rising
drug prices.
A small number of PBMs hold significant market power
and are reaping abundant profits at the expense of the
patients, employers, and government payors the PBMs
are supposed to help. Pharmaceutical buyers and
sellers have little choice but to employ PBMs,
allowing them to extract both monopoly profits from
individuals and monopsony profits from the market.
Moreover, PBMs often dictate reimbursement rates and
rules to independent pharmacies, making it difficult
for many to survive.
Our offices and other state attorneys general are very
concerned about actions taken by PBMs that have unduly
raised drug prices for consumers, and we are engaging
on the issue on a number of fronts, including
investigation, litigation, and advocating for
legislative and policy reforms.
Further, state legislatures have taken action to
regulate PBMs with new and amended state laws that are
often more stringent than federal law. For example, in
2018 and 2019, respectively, Ohio and Arkansas passed
legislation prohibiting spread pricing, in which a PBM
charges payors such as Medicare more than they pay the
pharmacies supplying the medication, keeping the
difference for the PBM. The U.S. House of
Representatives also passed legislation barring spread
pricing for Medicaid just this month, but it is still
awaiting a vote in the Senate.
While state law can provide the basis for oversight of
and lawsuits against PBMs, States often face arguments
by PBMs that federal jurisdiction and preemption limit
states' authority to regulate PBMs. For instance, in
response to early State efforts to regulate PBM
pricing, a PBM trade association launched a barrage of
litigation across the country arguing such regulations
were preempted by the Employee Retirement Income
Security Act of 1974 and those efforts largely
succeeded until, years later, the Supreme Court
unanimously rejected that argument in Rutledge v.
PCMA, 592 U.S. 80 (2020). And now, PBMs routinely try
to evade state law and obstruct state regulatory
efforts by refusing to disclose data to state
regulators as well as their own clients (i.e., health
plans operated by employers and the government).
Thus, the FTC and Congress must act to ensure fulsome
regulation of PBMs nationwide. Such legislation should
reform PBM practices to curtail their ability to
unreasonably raise the price of drugs and to require
greater transparency. Such transparency should, among
other things, require PBMs to produce pricing data to
health plans and federal and state regulators in a
standardized format. This will enable health plans to
negotiate better deals with PBMs and will allow
regulators to better hold PBMs accountable.
Proposed legislation to combat high healthcare costs
is before Congress and deserves debate and inclusion
in much needed reforms. The DRUG Act (S1542/HR6283),
Protecting Patients Against PBM Abuses Act (HR2880)
and The Lower Costs, More Transparency Act (HR5378),
which is in the Senate following recent House passage,
are three such bills; and we believe several of the
proposals they convey would be an important step
toward reforming this industry. With stronger federal
law, state and federal regulators can work together to
better meet their shared responsibility to hold PBMs
accountable and improve the country's health care
system overall.
1:45:35 PM
MS. SEIGNEMARTIN moved to slide 3 and discussed how PBMs impact
healthcare costs:
[Original punctuation provided.]
How PBMs Impact Healthcare Costs
• How do they increase drug costs?
o Rebates and fees demanded of manufacturers
for formulary placement - responsible for
42% of every dollar spent on brand medicines
in the commercial market
o Incentivize spend on higher-cost drugs in
order to maximize profit margin
o Reimburse self-owned pharmacies at higher
rates than other pharmacies
o Invented the fallacy of "specialty" pharmacy
as a guise to increase spend on higher-
profit margin prescriptions that they steer
to their owned pharmacies
o Spread pricing - charging the plans more for
a claim than they reimburse the pharmacies
MS. SEIGNEMARTIN said that the three big PBMs control the flow
of commerce and data in the prescription marketplace. She shared
a story of her experience working as a pharmacist and being
required to offer a higher cost medication to a patient when a
cheaper option was available.
1:47:40 PM
MS. SEIGNEMARTIN stated that PBM audits do not include the
action of the PBM side of the claim. She gave an example of
"spread pricing."
1:49:54 PM
SENATOR BISHOP asked if spread pricing is real.
MS. SEIGNEMARTIN replied yes. She added that there are many
reports detailing the scale and scope of this issue and offered
two examples, one in Ohio and one in Utah. She commented that
Alaska may not be able to access the full data to determine how
much this is occurring in the state, as this is often kept as
proprietary data.
SENATOR BISHOP said that as a union member this is alarming.
MS. SEIGNEMARTIN agreed and stated that many pharmacies have
closed and/or have business disrupted as a result of these
practices.
1:52:31 PM
MS. SEIGNEMARTIN moved to slide 4:
[Original punctuation provided.]
PBMs are Harming Alaskans
• Pharmacies across Alaska are closing crumbling
public health infrastructure due to deceptive
practices by Pharmacy Benefit Managers
• 25 percent of independent pharmacies have closed
since 2018, even more chain and independent
pharmacies limited staffing and hours. Tribal
health systems feel the impact on overall care.
• Recently closed or closing soon: Ron's Apothecary
(Juneau), Foodland Drug (Juneau), Medical Center
Pharmacy (Fairbanks), Infusion pharmacies x2
(Anchorage), Geneva Woods (Anchorage and Wasilla)
• Limited services: Walgreens (rolling closures at
various locations), Fred Meyer break with Express
Scripts, Most have limited hours / staffing in
some form
• At risk of limited services or closing this year:
Tribal health organizations, 35 percent of
surviving independent and chain pharmacies
MS. SEIGNEMARTIN noted that chain pharmacies support SB 121. She
emphasized that this is a broken reimbursement model and that
PBMs monopoly power must be broken.
1:54:20 PM
SENATOR DUNBAR questioned where the monopoly power comes from.
He expressed his understanding that it does not come from access
to the drugs but from reimbursements.
MS. SEIGNEMARTIN replied yes and advanced to slide 5 to show how
the monopoly power works. She stated that PBMs have not been
regulated before now. They are considered third-party
administrators and are therefore not beholden to any rules and
regulations (at the state or federal level) that insurance plans
are. As a result, they have profited greatly from the system
they have created. Referring to the slide, she explained the
role of vertical integration and noted that the stars on the
slide indicate fortune 500 companies and their placement.
1:56:07 PM
MS. SEIGNEMARTIN moved to slide 13, showing how three large BPMs
monopolize 79 percent of the marketplace. This includes CVS (33
percent), Express Scripts (24 percent) and OptumRx (22 percent).
She asserted that, as a result of this power imbalance,
pharmacies have zero negotiating power. She pointed out that
there are very few state laws governing the contracts and added
that more laws would put guardrails around the system and allow
more fair trade to occur. She said that if pharmacists go
against the PBM contracts, the contracts can be pulled. These
"big three" PBMs are under investigation by Congress and the
Federal Trade Commission (FTC). According to the FTC, PBM are
stonewalling requests for information.
1:57:24 PM
SENATOR DUNBAR asked what "pull the contract" means. He asked
for clarification that the contract is between the pharmacy and
the insurance company.
MS. SEIGNEMARTIN returned to slide 5 and explained that the
contract is between the pharmacy and the PBMs. She reiterated
that the direct contracting is vastly unregulated and expressed
concern that SB 121 would not go into effect until 2025-2026,
allowing time for many more pharmacies to go out of business.
She then scrolled through headlines of Alaska news that show the
limiting of medications and pharmacy closures. She returned to
slide 5 and explained that the companies shown are PBMs and
companies abusing the system. She surmised that any testimony
against SB 121 would be directly from PBMs or from companies
concerned (as a result of bullying from PBMs) that this would
increase costs. She emphasized that this is not the case. She
noted that other states have passed similar legislation and have
not seen an increase in costs.
1:59:42 PM
MS. SEIGNEMARTIN returned to slide 13 and discussed the vertical
integration and stonewalling that is occurring. She emphasized
that this is indicative of a pattern of questionable actions and
stonewalling by PBMs.
2:00:20 PM
SENATOR GRAY-JACKSON commented that this is alarming and asked
if PBMs make more money through mail order versus when
prescriptions are filled at local pharmacies.
MS. SEIGNEMARTIN replied that patients are steered to PBM mail
order partners and in doing so the PBMs increase their profit.
2:01:30 PM
MS. SEIGNEMARTIN moved to slide 14 and discussed spread pricing:
[Original punctuation provided.]
Spread Pricing
• Harms Alaskan employers, patients, and
pharmacies!
• Alaska Employer Example
• Alaska Care
• In other states, investigations have found that
PBMs were overcharging their plans by millions of
dollars
o $223.7 million in Ohio in one year
o Utah uncovered $8 per prescription average
spread
MS. SEIGNEMARTIN stated that spread pricing is rampant and
ubiquitous. She declared that this practice must cease
immediately. She noted that Congress is slowly working toward
change but insisted that the state Legislature must take
immediate action. She then shared an example of a pharmacy where
spread pricing was discovered related to an employee's
prescription. When they began to investigate, the pharmacist was
told to cease and desist their investigation and sharing of
proprietary information, or they would have all contracts
pulled. She emphasized that this hurts Alaskans. She also shared
examples from the state of Ohio.
2:04:18 PM
SENATOR BISHOP asked if the PBMs in Ohio made changes once this
was discovered.
MS. SEIGNEMARTIN replied that Ohio has taken extensive
legislative action to change PBMs behavior.
2:04:46 PM
CHAIR BJORKMAN announced Senator Tobin joined the meeting.
MS. SEIGNEMARTIN moved to slide 15:
[Original punctuation provided.]
Anti-competitive, unfair trade practices
• Monopolistic practices lead to artificially
inflated drug costs because PBMs control the flow
of pharmacy commerce, reap the benefits by
driving business to themselves
• Anti-competitive practices to discourage or
squash competition:
o Make ludicrous requirements and fees for
pharmacies wanting to dispense "specialty"
drugs to edge out competition
o Contractually disallow local pharmacies from
mailing prescriptions
• As PBMs grow in power and continue to have lack
of oversight, they are crushing Alaska pharmacies
with non-negotiable contracts and forcing them
out of business
• Reports show that PBMs reimburse their affiliated
pharmacies at much higher rates than local
pharmacies
MS. SEIGNEMARTIN pointed out that pharmacists hold advanced
degrees and have a depth of knowledge of all medications. She
asserted that the reason PBMs have additional requirements for
"specialty" medications is solely based on financial gain.
2:07:05 PM
MS. SEIGNEMARTIN advanced to slide 16, which showed a graph
titled, "Brand Name Margin Over Acquisition Cost by Pharmacy
Grouping in Top 6 MCOs, 2018-2019 (Excl. 340B)" and explained
that PBM-owned pharmacies show a much higher rate of
reimbursement (~$79-$206) over the acquisition cost of the drug
when compared to smaller pharmacies (~$1-$4). She asserted that
this is wrong.
2:08:25 PM
MS. SEIGNEMARTIN moved to slide 17:
[Original punctuation provided.]
Patient Steering
PBMs steer patients to their own high-cost, low
quality mail-order pharmacies
head2right Causes delays in patient care, poor outcomes,
increased healthcare costs
Patients deserve the right to choose where they get
their medications!
MS. SEIGNEMARTIN stated that steering patients to PBM-owned
mail-order pharmacies causes many problems. She explained that
often, patients show up in a panic because their medication did
not arrive, or it froze in transit and is no longer useable.
This causes delayed and fractured care, which leads to poor
prognosis and poor patient outcomes, including hospitalization.
With respect to clinician-administered drugs - a.k.a. "white-
bagging" and "brown bagging" - she stated that the practice of
mandatory patient steering creates a system that circumvents the
federal Drug Supply Chain Security Act (DSCSA). This act ensures
the safe and proper chain of custody for drug products. She
explained that clinician-administered drugs are often used in
situations such as chemotherapy for cancer treatment. She
pointed out that chemotherapy medications need to be dosed and
administered within a short time (often a single day) after the
patient's lab work was done. She asserted that it is not
possible for medications to arrive to Alaska from Florida within
this timeframe. When the medication does not arrive in time,
doctors must find a work-around. She reiterated that this often
results in poor patient outcomes and increases the risk of
medication errors. She emphasized that this is a dangerous
situation.
2:11:19 PM
SENATOR BISHOP asked who is liable in these situations.
2:11:25 PM
MS. SEIGNEMARTIN replied that this is a great question. She
explained that many healthcare systems in Alaska have disallowed
the practice of white bagging and brown bagging, because the
clinician is liable. She said that if the medication is sent to
the mail room at the hospital or if it is brought by an
individual - rather than being handled properly at the pharmacy
- the pharmacist is responsible for ensuring that the patient is
safe through this process. She stated that this puts a great
deal of liability on the healthcare systems and pointed out that
this is one reason why the Alaska Hospital and Healthcare
Association (AHHA) is in support of SB 121.
2:12:15 PM
MS. SEIGNEMARTIN moved to slide 18 and discussed Tribal Health
impacts:
[Original punctuation provided.]
Tribal Health Patient & Pharmacy Impacts
head2right Patients are often unable to fill prescriptions
at Tribal Health Organization (THO) pharmacies
head2right THO pharmacies forced to either send
prescriptions out to PBM-owned mail order
pharmacies or "eat" 100% of the cost of what
should be a covered prescription
head2right This is not only an issue for the private sector
THOs ability to provide care is impacted as
well
MS. SEIGEMARTIN reiterated that PBMs are not beholden to
insurance laws and explained how this impacts Tribal healthcare
Organizations (THO). She stated that PBMs ignore the
congressionally mandated payments required by the Indian
Healthcare Improvement Act (IHCIA). She explained that IHCIA
requires that if insurance covers a service in other locations,
it must also cover the treatment at THOs. However, PBMs are able
to control the flow of commerce away from THO pharmacies, which
impacts patient care.
2:13:19 PM
MS. SEIGNEMARTIN moved to slide 19:
[Original punctuation provided.]
To whom are PBMs responsible?
head2right Currently, the big PBMs are only beholden to their
shareholders
head2right Should PBMs have a responsibility to the health of
Alaskans?
MS. SEIGNEMARTIN stated that SB 121 would extend this fiduciary
responsibility to plan sponsors and to the state of Alaska,
ensuring that patients and employers pay the lowest possible
price. She opined that this is appropriate.
2:13:51 PM
At ease
2:14:18 PM
CHAIR BJORKMAN reconvened the meeting.
2:14:34 PM
MS. SEIGNEMARTIN moved to slide 20:
[Original punctuation provided.]
Impacts of PBM Practices on Alaskans
head2right Crumbling public health infrastructure
head2right Pharmacy closures and reduction in hours,
staffing
head2right Increased healthcare costs for employers and
patients
head2right Poor health outcomes
head2right Shipping delays, breaks in therapy, fractured
care, lack of care coordination
head2right Disease progression and poor prognosis
MS. SEIGNEMARTIN stated that these negative impacts are
heightened in patients with low health literacy and those who
experience social determinants of health that make navigating
the healthcare system difficult. She shared a story of a
chemotherapy patient who was required to utilize a PBM mail-
order pharmacy for medication - which resulted in a delay in
treatment.
2:16:04 PM
MS. SEIGNEMARTIN moved to slide 21:
[Original punctuation provided.]
SB 121 / HB 226 Provisions
head2right Gives patients right to access medication at
pharmacy of their choice
• Bans patient steering to PBM-owned or
affiliated pharmacies
head2right Ensures safe access to physician-administered
medications
• Bans PBM-required white bagging and brown
bagging
head2right Requires a transparent reimbursement model
• Saves money for patients and plan sponsors
on prescription drug spend
• Gets rid of complicated and opaque
reimbursement methodologies
head2right How?
• Bans spread pricing
• Requires reimbursement floor of NADAC +
dispensing fee
• Requires payment parity between PBM-owned
pharmacies and local pharmacies
• Fiduciary responsibility from PBMs to plan
sponsors
2:18:49 PM
SENATOR DUNBAR asked how the NADAC price is determined.
MS. SEIGNEMARTIN replied that the Centers for Medicare and
Medicaid Services (CMS) sends out a weekly survey. The survey
gathers information for various National Drug Codes (NDC) based
on invoice prices.
2:20:35 PM
SENATOR DUNBAR commented that Alaska is a small state without
much impact on the national price average. He asked if there is
a regulatory agency that would limit the price increase if more
states were to adopt similar legislation.
MS. SEIGNEMARTIN replied that the NADAC is based on the purchase
price from wholesaler rather than on the reimbursement amount;
therefore, it would not be affected.
2:21:25 PM
SENATOR DUNBAR asked if there are enough competitive prices
amongst wholesalers to prevent the NADAC price from ratcheting
up.
MS. SEIGNEMARTIN replied yes.
2:22:03 PM
MS. SEIGNEMARTIN NADAC continued her discussion of slide 21. She
reiterated that the actual cost of drugs is not known, and NADAC
is the only transparent pricing available. She said that
overpayment to PBM-owned mail-order pharmacies needs to be
disincentivized. This would be done by requiring payment parity
between PBM pharmacies and local pharmacies. She said that the
fiduciary responsibility between PMB and plan sponsors is
necessary to ensure that the state health plan, plan
beneficiaries, and other employers and employees in the state
are at the heart of the contract.
MS. SEIGNEMARTIN clarified that SB 121 does not limit the sight
of care for clinician administered drugs. She said that SB 121
only applies to where the drug is dispensed - PBMs would no
longer be able to specify what pharmacy can be used.
Additionally, SB 121 requires that a pharmacy become a network
pharmacy and agree to network terms in order to participate in
the network prior to serving patients. This includes price
guarantees and ensures that pharmacies cannot demand higher
payment for services than the network contract allows.
2:24:14 PM
MS. SEIGNEMARTIN moved to slide 22:
[Original punctuation provided.]
Supporters of SB 121
• Alaska Native Health Board & All Tribal Health
Organizations
• Alaska Hospital and Healthcare Association
• Alaska Primary Care Association
• Alaska Medical Board
• Alaska Board of Pharmacy
• Alaskan Chain Drug Stores - National Association
of Chain Drug Stores Fred Meyer,
Carr's/Albertsons, Walgreens, Costco
• Alaska Independent Pharmacies
• Patient Protection Groups
MS. SEIGNEMARTIN commented the, in effect, the entire Alaska
health care system is in support of SB 121
2:25:22 PM
PALMER WETZELL III, Deputy Director, Chief Andrew Isaac Health
Center, Fairbanks, Alaska, testified by invitation on SB 121. He
continued the presentation. He moved to slide 23, titled "Alaska
DRB 2022 Overall Rx Spend vs. SB121 Pricing (utilizing NADAC +
$13.36*)" and explained the potential fiscal impact of SB 121.
He noted that if the formula included in SB 121 would have been
in place in 2022, the state would have saved approximately $4.3
million.
2:26:20 PM
MR. WETZEL moved to slide 24 and explained that the Division of
Retirement and Benefits (DRB) could potentially save up to $7.9
million.
MR. WETZEL moved to slide 25, and said it is based on 2019
Kaiser Family Foundation (KFF) prescription data utilized for
data analysis for SB 121. He explained that, if claim numbers
remain consistent and with a dispensing fee of $13.36 for each
claim, SB 121 would add close to $50 million to the local
economy with dispensing fees alone. He added that Alaskan
employers would save money.
2:27:22 PM
MR. WETZEL moved to slide 26 and stated that Alaska employers
overall cost savings potential is $43.8 million.
MR. WETZEL moved to slide 27 and discussed an example of spread
resulting from under-reimbursement. He explained the following
data and stated that it is evidence of the urgent need for
transparency:
Acquisition Cost: $366,342.84
Reimbursed: $16,207.98
Fair Reimbursement: $832,980.20
2:29:11 PM
MR. WETZEL moved to slide 28 titled, "SB121/HB226 is Pro-Alaska
economy by preventing forced mail order and patient
steering/coercion." He explained how SB 121 would benefit
patients by allowing them to fill prescriptions locally if they
choose. Currently, pharmacies can only fill for 30 days and
amounts over 30 days must be done by mail order. He said that
this would potentially infuse $34 million to $36 million
annually into Alaska's local economy while saving employers
money.
2:31:31 PM
SENATOR BJORKMAN referred to slide 23 commented that the cost
savings to DRB would be about $4.3 million and asked how much
DRB would receive of the $49.4 million on slide 25.
MR. WETZEL answered that this number is an extrapolation of the
roughly 3.7 million claims for commercial Medicare. He explained
that this number would be divided by the 668 thousand claims to
reach this number, which he estimated to be around $5.53
[million]. He surmised that the number of claims has likely
increased since 2019 and therefore the total would be much more.
2:32:58 PM
SENATOR BISHOP asked if SB 121 would increase the time to 90
days in Anaktuvuk Pass.
MS. SEIGNEMARTIN replied yes and clarified that there would be
no limitations.
SENATOR BISHOP commented that the recent cold spell in Fairbanks
grounded flights for up to a week or more. He said that 30 days
would be on the edge, while 90 days would provide extra padding.
2:33:39 PM
SENATOR DUNBAR referred to slide 21 and inquired about the
enforcement mechanism for the provision.
2:34:21 PM
SENATOR GIESSEL replied that the Division of Insurance would be
responsible for enforcement.
2:34:33 PM
SENATOR DUNBAR expressed curiosity about what enforcement would
look like. He commented that the companies in question are some
of the largest in the country and questioned how the Division of
Insurance would get them to pay fines and cease these
activities.
SENATOR GIESSEL differed to Lori Wing-Heier, Director of the
Division of Insurance.
2:35:27 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development, Anchorage, Alaska,
answered questions on SB 121. She stated some of this (fines and
penalties) would be addressed in regulations. She pointed out
that SB 121 has a large fiscal note due to the added
responsibilities required by SB 121. She added that this would
include working with consultants and contractors to determine
where a PBM has not met the intent of the law. She said that the
Division of Insurance currently does this with market conduct.
2:36:35 PM
SENATOR DUNBAR asked about the effectiveness of the regulations
created by other states.
MS. WING HEIR replied that Oklahoma and New Hampshire have spent
a great deal of time enforcing regulations like those included
in SB 121. Ohio has also had to hire additional enforcement
staff.
2:37:56 PM
ASHLEY SCHABER, Chair, Alaska Board of Pharmacy, Anchorage,
Alaska, testified by invitation on SB 121. She gave a brief
history of her experience working on the issues addressed by SB
121. She said the goal of SB 121 is to ensure an adequate
pharmacy infrastructure in Alaska. She stated that the Alaska
Board of Pharmacy (ABP) unanimously supports this legislation.
This legislation gives patients the right to access medication
at the pharmacy of their choice, if their pharmacy is a willing
provider and contracted with a PBM. Additionally, SB 121
provides a framework for transparency and fair reimbursement for
pharmacies and patients and protects patient access to
clinician-administered medication by restricting the practice of
white-bagging and brown-bagging. She explained that the board
updates its strategic plan yearly and noted that the FY2023 plan
includes the goal of growing the Alaska economy while promoting
community health and safety. The board believes this goal is met
by SB 121. She said that the board's mission is to promote,
preserve, and protect the public health, safety, and welfare by
and through the effective control and regulation of the practice
of pharmacy. She noted that over the last few years the board
has received comment from the public, Alaska pharmacists,
technicians, and organizations regarding the current practices
limiting access to Alaskan pharmacies and compromising the
safety of medications received in the state.
2:40:10 PM
MS. SCHABER stated that multiple community and infusion
pharmacies have closed since efforts on SB 121 began, which
severely limits access. She added that this legislation will
help to ensure that Alaska's pharmacies will continue to safely
serve Alaskans.
2:40:36 PM
SENATOR BISHOP asked if passage of SB 121 would result in local
pharmacies making a comeback.
MS. SCHABER stated her belief that it would encourage local
pharmacies to return to business or start a business by
decreasing barriers to providing services.
2:41:45 PM
BARRY CHRISTENSEN, Pharmacist, Island Pharmacy, Ketchikan,
Alaska, testified by invitation on SB 121. He said that he is a
2nd generation pharmacist and added that his father opened their
family pharmacy over 50 years ago. He said that the future of
his pharmacy - and the patients he serves - is in jeopardy and
requested support of SB 121. He explained that Island Pharmacy
is the only pharmacy in Ketchikan that offers unique services
such as compliance packaging and the compounding of commercially
unavailable medications. He stated that if his pharmacy were to
close, like 25 percent of individual pharmacies have, patients
would suffer from lack of services. He pointed out that SB 121
impacts pharmacies across the state. He said that six years ago
he testified in favor of the prescription benefit manager
legislation. He explained that, at that time, opponents claimed
that the resulting costs would be financially damaging to plan
sponsors. However, it did not drive costs up. He shared his
belief that SB 121 would allow plan sponsors to save money while
providing relief to Alaska pharmacies and the patients they
serve. He said his pharmacy currently employs 12 people - all
Alaskans - and emphasized their dedication to serving their
fellow Alaskans. He contrasted this with PBM employees, who are
entirely out-of-state. He expressed gratitude and the hope that
committee members would support this legislation.
2:43:44 PM
DIRK WHITE, Owner, White's Pharmacy, Sitka, Alaska, testified by
invitation on SB 121. He said that he has a family of
pharmacists and has run White's Pharmacy for 40 years. He has 35
employees. He said that he has witnessed the rise of PBMs and
continued rise in pharmaceutical costs. He stated that PBMs
claim to reduce costs - yet the US has the highest percentage of
gross domestic product (GDP) spent on pharmaceuticals in the
world. He expressed confusion at the promotion of this money-
saving fallacy. He commented that PBMs take egregious actions to
steal money from community pharmacies - causing them to close or
reduce services.
2:45:13 PM
MR. WHITE said that since 2020 payroll is up 40 percent
(primarily due to the Covid-19 pandemic) and health insurance
has gone up 17 percent. He shared that in the previous month, he
paid $17 thousand with 1-2 percent claim on the insurance. He
stated that his workers' compensation insurance has gone up 45.5
percent - with zero claims, which he asserted is even worse. In
response to an earlier question about pharmacy contracts, he
explained that he must contract with the PBM, who then contracts
with the insurance companies. He stated that reimbursements have
gone down over the past four years on all these contracts and
emphasized that they are required, non-negotiable contracts. He
went on to say that, when questioned, PBMs claim that increased
costs are a part of doing business. He reiterated that his costs
have gone up while his reimbursements have gone down. He
referenced a $10 thousand audit from a PBM (not named for fear
of retribution) and explained that the audit was for two
medications for one patient. In this case, a single field was
not properly filled in on the forms (although this information
was on the prescription). He questioned why someone did not stop
and request the information, which could have easily been
supplied by the pharmacist. He shared a story about a patient
who was told that her insulin was not covered. She was told to
contact the PBM's mail order pharmacy, where it would likely be
covered. He expressed hope that his pharmacy would be able to
provide whatever the PBM requires in order for this patient to
receive her insulin.
2:50:45 PM
CHAIR BJORKMAN opened public testimony on SSSB 121.
2:51:09 PM
PATRICK SHIER, Alaska Membership Representative, Pacific Health
Coalition, Wasilla, Alaska, testified in opposition to SB 121.
He briefly explained that the Pacific Health Coalition (PHC)
represents individuals whose healthcare is paid for through
health and welfare benefit trusts. He noted that the trusts are
regulated by the Employee Retirement Income Security Act of 1974
(ERISA). He added that the penalty for falling short of ERISA
requirements is jailtime and fines; therefore, most individuals
are careful to meet these requirements. He said that the PHC
trusts hire, fire, and manage PBMs. He explained that this is
done on the advice of expert council and consultants who have
been in the business for many years. This is done to maximize
pharmacy spend and efficacy and is based on the best available
scientific and market knowledge. He said that PHC also offers a
purchasing option called National Cooperative Rx - a nonprofit,
member owned and operated organization that negotiates
aggressively with PBMs to provide nation-leading benefits at the
lowest possible price and best possible quality. He suggested SB
121 be held for further analysis due to the complexity of the
issues addressed.
2:54:23 PM
BRENDA SNYDER, Lead Director, State Government Affairs, CVS
Health, Seattle Washington, testified in opposition to SB 121.
She said that CVS believes that access to care is paramount to
improving health outcomes and supports policies that expand
access to quality and affordable healthcare. However, she stated
that SB 121 is a "cost driver" rather than a "cost saver". She
asserted that this legislation would not increase access to
healthcare in Alaska. She stated that employer insurance,
insurance, and governments choose to hire PBMs to manage drug
spend and drug portion of healthcare benefits. She said that
PBMs offer a menu of options that plan sponsors can choose from
- and SB 121 takes away the sponsor's ability to choose by
creating mandates. She highlighted two cost drivers: the
mandated dispensing fee and restrictions on pharmacy networks.
She expressed concern about how SB 121 would effect the patient.
She reiterated that her organization supports policies that
increase access to care but added that it also needs to continue
to be affordable.
2:56:56 PM
TONIA NEAL, Senior Director, Pharmaceutic Case Management
Association, Shelten, Washington, testified in opposition to SB
121. She said Pharmaceutic Case Management (PCM) is the national
association for PBMs. She stated that PCM has not been involved
in any of the work sessions for SB 121. She indicated that the
depiction of PBMs has been one-sided. She said that PBMs provide
multiple services, from providing databases to pharmacies to
negotiating with manufacturers and pharmacies for price. She
explained that pharmacy negotiations occur through a Pharmacy
Services Administrative Organization (PSAO) - which she said is
the equivalent of a PBM. She clarified that during these
negotiations, the insurance plans are represented by the PBM and
the pharmacy is represented by the PSAO. She disagreed that PBMs
maintain a monopoly. She said that PBMs want to be involved in
these discussions. She stated that their goal is for the plans
and patients to have the best access and price available.
2:59:43 PM
CHAIR BJORKMAN commented that he has made requests for data from
various organizations but has not received a reply. He expressed
willingness to meet and discuss these issues with those who have
expressed concerns with the changes put forth by SB 121;
however, he surmised that when requests for information are
ignored, it is likely that the answers to those questions are
not good.
3:00:25 PM
DESIREE MOLINA, representing self, Palmer, Alaska, testified in
support of SB 121. She said she is a fourth-year student in the
University of Alaska Anchorage (UAA)/Idaho State University
(ISU) doctor of pharmacy program. She is currently employed as a
pharmacist intern. She said that during the course of her study
and work as an intern, she has seen firsthand how unethical PBM
practices harm patients. She shared a story about a patient who
needed to receive medication to treat a blood clot. The patient
was unable to receive the medication due to restrictions set by
their PBM. The patient was told they needed to use the PBMs
mail-order pharmacy rather than the local pharmacy. When they
attempted to opt-out, their co-pay made the medication cost-
prohibitive and they were forced to go without. The patient
returned to the hospital after several days. They were placed in
intensive care and later died. She emphasized that this death
was preventable and asserted that the lives of Alaskans should
not be in the hands of PBMs. She drew attention to the number of
pharmacies that have been forced to close. She stated that this
is a health crisis that must be addressed.
3:02:55 PM
HARRY ROGERS, representing self, Petersburg, Alaska, testified
in support of SB 121. He shared a personal story related to
prescription medications. When he attempted to fill a
prescription at the local pharmacy, he was told his medication
would come through a specialty pharmacy located in Florida. His
medication needed refrigeration, which would be provided for 48
hours; however, it is not possible for deliveries to reach
Alaska in this amount of time. This prescription was then sent
to a pharmacy in Seattle where again, shipment was not possible.
He said he suggested gold streak; however, this was not an
option. He explained that his local pharmacy was able to get the
medication for him in the end - a month after the medication was
prescribed.
3:05:44 PM
DELILAH BERNALDO, representing self, Petersburg, Alaska,
testified in support of SB 121. She said she is a retired nurse.
She expressed her belief that patients have a right to choose
where they get their medications. She expressed satisfaction
with her local pharmacy. She added that she has asked the PBM
pharmacy not to call her and this request has been repeatedly
ignored.
3:06:59 PM
CATHERINE KOWALSKI, representing self, Petersburg, Alaska,
testified in support of SB 121. She said that she has been a
pharmacist for 35 years and her family has operated a pharmacy
for 55 years. She briefly detailed her experience in the
industry and expressed support for the patient's right to use
the pharmacy of their choice. She said that patients pay into a
benefit and should not be coerced to use an out-of-state,
specialty pharmacy or bombarded by phone calls from PBMs. She
asserted that SB 121 makes economic sense by requiring
transparency and accountability from PBMs. Additionally, money
would stay in the state. She questioned how closing local
pharmacies benefits healthcare or the economic viability of
communities.
3:09:49 PM
GREG LOUDON, Consultant, Employee Benefits, Parker, Smith and
Feek Insurance, Anchorage, Alaska, testified in opposition to SB
121. He said he works as a consultant for the Pacific Health
Coalition (PHC). He spoke to the financial impact of SB 121. He
said PHC has ten groups and 24,841 lives participating in PBM
contracts that PHC has helped negotiate. He said PBMs act as a
third-party administrator that helps the insurance plans
purchase prescription drugs. He said that five of the ten groups
us an exclusive specialty plan design. He offered a breakdown of
the savings for various plans. He said that, using lower-end
numbers, there would be a $2.7 million increase in costs for the
ten plans.
3:11:43 PM
MARY STOLL, Legal Counsel, Pacific Health Coalition, Seattle,
Washington, testified in opposition to SB 121. She said that SB
121 seeks to regulate PBMs who serve as third-party vendors to
ERISA health benefit plans. Regulating PBMs at a state level
would force ERISA health plans in Alaska to redesign benefit
plan provisions - including existing preferred and specialty
pharmacy arrangements. She stated that this conflicts with
federal laws regulating ERISA. She referred to PCMA v Mulready
in Oklahoma and explained why this ruling would also apply to SB
121. She asserted that it is crucial to consider the legal
challenges this legislation may face based on established
precedent. She pointed out that ERISA was enacted 50 years ago
to ensure a consistent nationwide framework for the
administration of health and pension plans. Congress included a
preemption clause to prevent conflicting state law that could
impede plan administrators' ability to design benefits that are
in the best interest of their participants. She suggested that
stakeholders be engaged in meaningful dialogue to address the
concerns while respecting ERISTA guidelines and legal precedent.
3:13:56 PM
LUCY LAUBE, State Government Relations Manager, National
Psoriasis Foundation, Portland, Oregon, testified in support of
SB 121. She said that she takes medication that requires
refrigeration and she empathized with those who are concerned
about their life-saving medications on time. She explained that
for individuals suffering from psoriatic arthritis, this can
have irreversible, long-term effects. She said that the top
three PBMs control 80 percent of the market - and regardless of
whether this is considered a "monopoly," it is a power
imbalance. She agreed that supporting local pharmaceutical
businesses makes financial sense for Alaska and opined that it
is common sense for insurance companies to reimburse local
Alaskan pharmacies at the same rate as PBM mail-order and
specialty pharmacies. She emphasized the danger and
inconvenience and danger of steering patients to these
pharmacies - medications that must come from out-of-state run
the risk of arriving late and/or freezing in transit - both of
which can be life-threatening. She surmised that the potential
for inclement weather and long transit times impact Alaska more
than other states. She said she has seen similar laws passed in
other states and suggested that this issue deserves extra
consideration in Alaska.
3:16:36 PM
THOMAS WADSWORTH, representing self, Anchorage, Alaska,
testified in support of SB 121. He said that while he is the
interim Dean of the University of Alaska Anchorage/Idaho State
University (UAA/ISU) Doctor of Pharmacy program, he is speaking
as a pharmacist and executive who operates a non-profit pharmacy
that is loosely tied to UAA/ISU. He explained that the UAA/ISU
pharmacy program began with the intent of creating a non-profit
community pharmacy that would serve some of the more remote
communities in Alaska. He emphasized that this pharmacy would be
a not-for-profit with the mission of serving underserved
communities. The pharmacy program has partnered closely with the
Board of Pharmacy and the Alaska Pharmacist Association in order
to achieve this goal. With respect to the question of whether SB
121 would result in the return of local pharmacies, he shared
his belief that this would absolutely happen. He explained that
the system is currently "upside-down" - making a non-profit
pharmacy untenable. He emphasized that the changes contained in
this legislation would make it possible for the non-profit
pharmacy to open. He said they will continue to pursue this goal
and explained how the non-profit pharmacy would operate. He
stated that many UAA/ISU pharmacy graduates would like to open
local pharmacies; however, payment models preclude them from
doing so.
3:19:14 PM
KAREN MILLER, Director, Denali Pharmacy, Fairbanks Memorial
Hospital, Fairbanks, Alaska, testified in support of SB 121.
She shared her belief that PBMs are hurting Alaskans. She added
that PBMs are not lowering healthcare costs or drug prices for
patients. She said that her job is to safely discharge patients
from the hospital in a timely manner - and an extra day or two
in the hospital drives up healthcare costs. She shared a story
involving a patient with Clostridioides difficile (C. diff) and
the medication required for treatment. She briefly explained the
roadblocks to access that patients face.
3:22:23 PM
GARY STRANNIGAN, Vice President, Congressional and Legislative
Affairs, Premera Blue Cross Blue Shield of Alaska, Seattle,
Washington, testified in opposition to SB 121. He said that
Premera is not owned and does not own a PBM. He added that
Premera supports access to pharmacies and transparency for
members. He requested that section 14 be removed. He expressed
concern that this section could cause already high premiums to
increase by as much as 10 percent. He pointed to the ban on
spread pricing and the in-network versus out-of-network pay
parity provision as particularly troubling. He said that the
latter is anti-competitive. He stated that Premera also opposes
the dispensing fee in section 9. He explained that the
dispensing fee would insulate pharmacy services from competitive
pressures and accountabilities and would have a negative impact
on the cost and quality of members' pharmacy services. He
commented that SB 121 is a complicated bill and suggested that
careful consideration be given to this complex issue. He
expressed concern that restrictions for PBMs and spread pricing
are not equal for all players. He noted extreme prescription
markups by hospitals. He emphasized that Premera depends on
pharmacists to meet the needs of members and expressed the
importance of working together to meet these needs in a way that
maintains the importance of quality, cost, and value. He
asserted that with sections [9] and 14 included, SB 121 does not
maintain this standard.
3:24:57 PM
CHAIR BJORKMAN held SSSB 121 in committee.
3:25:01 PM
At ease
SB 115-PHYSICIAN ASSISTANT SCOPE OF PRACTICE
[CSSB 115(EDC) was before the committee.]
3:26:43 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 115 "An Act relating to
physician assistants; relating to physicians; and relating to
health care insurance policies."
3:27:06 PM
SENATOR LÖKI TOBIN, District I, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 115 by request. She gave a brief
overview of SB 115. She explained that SB 115 would allow
physician assistants to provide care to patients without the
direct oversight of a physician. She emphasized that SB 115 has
clear stipulations about education requirements and time in
active practice in collaboration with a physician. She commented
that healthcare practitioners do not operate independently and
often call upon one another with questions when dealing with
complex issues. She said that currently, there is a limited
number of physicians available to meet the demand of care in the
state. She stated that 69 percent of primary care providers are
located in urban areas, while more than 90 percent of Alaska's
physician assistants (PA) operate in rural areas, where they
provide basic, quality medical care. For these PAs, their
collaborating physicians may be far away - which does not allow
for direct oversight. She explained that SB 115 was amended by
the Senate Health, Education and Social Services Standing
Committee so that PAs with more than 4,000 hours would be able
to operate independently. She noted that PAs have a great deal
of professional and lived experience and added that, on average,
PAs have over 3,000 hours of direct patient care prior to
entering into an accredited PA program.
3:29:35 PM
SENATOR TOBIN said that accepted into a PA program, students
learn via classroom and in a clinical setting often alongside
other students for 27 months. She said that graduates must
complete 100 continuing education hours every two years - and
take a comprehensive exam every ten years. This is in addition
to the required national certifying exam and licensing in SB.
She clarified that, in spite of this education, PAs are not
medical doctors. She pointed out that Alaskans face high needs
and high costs for medical services - and the laws governing PAs
are some of the most limiting in the country. She went on to
explain that PAs are subject to the prescription drug monitoring
program and must comply with the SB Drug Enforcement Agency. She
noted that national laws grant PAs prescriptive privileges in
states where pharmaceutical training standards are met. She
reiterated that PAs play an important role in medical care and
their work is broad in scope. She said that SB 115 would allow
them to do so - as long as they receive adequate training and
education.
3:32:17 PM
MACKENZIE POPE, Staff, Senator Löki Tobin, SB State Legislature,
Juneau, SB, provided the sectional analysis for SB 115:
[Original punctuation provided.]
Senate Bill 115: Sectional Analysis
Section 1. Amends AS 08.64.107 by changing the term
"regulation" to "licensure and scope of practice."
Section 2. Amends AS 08.64.107 by adding four new
subsections:
Subsection (b) describes the procedures and
evaluations physician assistants can perform,
including their ability to: perform comprehensive
health histories and physical examinations of
patients; treat disease and injury; and
prescribe, dispense, order, and administer
schedule II, III, IV, or V controlled substance
under federal law if the physician assistant has
a valid federal Drug Enforcement Administration
registration number.
3:33:16 PM
MS POPE continued the sectional analysis for SB 115:
[Original punctuation provided.]
Subsection (c) establishes that a physician
assistant with less than 2,000 hours of practice
may practice only under collaborative agreement
with one (or more) physician to provide care in a
hospital, clinic, or other clinical setting.
These collaborative agreements must be in writing
and describe how the collaboration will be
executed between the physician and physician
assistant.
Subsection (d) requires that a physician
assistant in a collaborative agreement or the
collaborating physician shall provide a copy of
their collaborative agreement and relevant
documentation to the State Medical Board upon
request.
Subsection (e) defines collaborative agreement.
Section 3. Amends 08.64.170 to authorize a physician
assistant to practice medicine independently, with
those practicing with less than 2000 hours required to
operate under a collaborative agreement as authorized
in the previous section.
Section 4. Amends AS 11.71.900 to include physician
assistants under the definition of "practitioner."
Section 5. Amends AS 21.07.010 to disallow a contract
between a participating health care provider and
health care insurer from including a provision that
imposes a practice, education, or collaboration
requirement on physician assistants which is
inconsistent with or more restrictive than the
requirements stipulated under AS 08.64.107.
Section 6. Removes the direct supervision requirement
for physician assistants under the definition of
"attending physician" as stated in AS 23.30.395, which
allows employees to designate physician assistants as
responsible for their care under the Alaska Workers
Compensation Act.
3:35:09 PM
MS. POPE continued the sectional analysis for SB 115:
[Original punctuation provided.]
Section 7. Removes the direct supervision requirement
for physician assistants under the definition of
"health care provider" as stated in AS 33.30.901,
which allows physician assistants to provide medical
services as a health care provider within the
Department of Corrections statute definition.
3:35:31 PM
SENATOR TOBIN stated she has many invited testifiers who can
speak to the rigor of their academic performance, expertise, and
answer questions.
3:35:57 PM
SENATOR BJORKMAN announced invited testimony.
3:36:19 PM
SENATOR BJORKMAN turned the gavel over to Senator Gray-Jackson.
3:36:25 PM
JENNIFER FAYETTE, Co-Chair, Legislative Committee, Alaska
Academy of Physician Assistants, Anchorage, Alaska, testified by
invitation on SB 115. She said she is a lifelong Alaskan and
practicing PA in Anchorage. She stated that PAs provide
essential, high-quality medical patient-centered care throughout
the state. She surmised that all those present have a family
member who has received treatment from a PA. She explained that
PAs diagnose illnesses, develop and manage treatment plans,
manage their own patient panels, and often serve as the
patient's principal healthcare provider. The latter is
particularly true in rural areas. She said that PAs hold a state
medical license, medical liability insurance, and Drug
Enforcement Administration (DEA) license. She stated that PAs
are responsible for the care that they provide. She asserted
that PAs are crucial to Alaska's healthcare system. She pointed
out that healthcare worker shortages have long been an issue in
the state and demand is increasing. She noted that Alaska is
faced with unique challenges for access to - and delivery of -
medical care. She said that these challenges occur in rural
areas as well as urban specialty care clinics. She added that
some patients will wait over nine months to see a medical
specialist - this is a worsening problem. She said that state
projections indicate that Alaska is expected to have the most
significant shortages of any state moving forward. She stated
that, since its creation in the 1960s, the primary goal of the
PA program has been to increase access to care. She opined that
Alaska would benefit from updating PA practice laws. She
suggested that this would make Alaska more appealing to local PA
program graduates and providers from other states.
3:38:29 PM
[SENATOR GRAY-JACKSON returned the gavel to Chair Bjorkman.]
MS. FAYETTE stated that PAs are highly trained healthcare
professionals whose broad generalist medical education allows
them to adapt to the evolving needs of the healthcare system.
She noted that there are 306 accredited PA programs in US, with
only one independent accrediting body. The Accreditation Review
Commission on Education for the Physician Assistant (ARC-PA)
includes representatives from a variety of medical organizations
and ensures that these programs adhere to a high accreditation
standard. She explained that PA curriculum is modeled after
medical school curriculum and includes clinical rotations
alongside other medical students. She noted that the average PA
program applicant has over 3,000 hours of direct patient contact
prior to applying. PAs must also complete specific prerequisites
during their undergraduate education.
MS. FAYETTE detailed how students progress through the program.
Graduates must complete a comprehensive national exam. The exam
must be taken every ten years and PAs must complete 100 hours of
continuing education each year, in addition to state
requirements. She briefly shared her own education experience.
She stated that PAs are not doctors and their education is not
equivalent. However, they are well-trained medical providers who
are capable of providing medical care to Alaskans. She said that
PAs want to fill this role for Alaskans. She stated that as
president of AK APA, she was contacted by clinics and asked to
explain current state regulations and how to comply with them.
She said she was often asked why anyone would hire a PA when it
also involves securing an MD to supervise them. She explained
that restrictive regulations impact patients and PAs. She said
that research has shown that the most successful teams fully
utilize the skills of each member and support efficient,
patient-centered healthcare and added that collaborative care
models have been modified in many states. These modifications
allow PAs to fully utilize their education, training, and
experience, and range from no requirement for post-graduate
hours to 10,000 hours.
3:42:08 PM
MS. FAYETTE noted that the several branches of federal
government, including military and native agencies, have removed
or modernized the supervisory/collaboration requirements,
recognizing that PAs are capable of practicing autonomously. She
referred to a recently published ten-year study that found that
removing these restrictive requirements does not increase the
risk to patients or rates of malpractice. She stated that many
similar reports show the positive potential of PAs. She said
that SB 115 would define the PA scope of practice, ensuring that
Alaskans' access to care is not restricted. It would also remove
the oversight requirements after a set amount of post-graduate
clinical hours. Additionally, PAs would be recognized as
practitioners alongside medical doctors. She opined that PAs are
an essential part of the healthcare system and asserted that
barriers to PA practice must be removed in order to meet the
needs of the healthcare system in Alaska.
3:43:55 PM
CHRISTI FROILAND, representing self, Anchorage, Alaska,
testified by invitation on SB 115. She said she is a PA with 16
years of experience in the area of medical dermatology. She said
that medicine should be a collaborative practice. She shared a
story about her experience as a PA working closely with doctors
both as mentors and team members. She explained how her skills
work alongside - and independently of - the doctors on her team.
She explained how her broad skillset benefits doctors who
specialize in a particular field of study. She shared her
experience working as a PA in the dermatology field. She said
that in addition to teaching at Providence Medical Center, she
is a faculty member at the University of Washington, where she
teaches dermatology to medical residents; however, to practice,
she has to have a signed collaborative agreement. She said that
when discussing collaborative agreements, she is often asked
about her liability. She added that this seems to be doctors'
main concern, in spite of her high level of experience.
3:45:58 PM
MS. FROILAND expressed frustration that she likely has more
specialized experience doing in-office procedures than many
practicing doctors - yet is continually asked this question. She
asserted that her skills and education complement general
medicine quite well. She shared a recent experience in which the
liability of PAs was a concern - despite their having anywhere
from 5 to 15 years of experience. She said that PAs have the
education and training needed to do the jobs they are asked to
do and are liable for the care that they provide.
3:46:50 PM
She stated that SB 115 defines the PA scope of practice and
would recognize PAs alongside other medical practitioners. She
expressed concern about the fees charged in collaborative
agreements and explained the various collaborative agreement
scenarios and fees that impact PAs. In some cases, a doctor may
take as much as 50 percent of collections, which she asserted is
extortion. These high fees are prohibitive. She explained that a
PA can hire a new doctor, mentor and train them, and the doctor
can simultaneously supervise the PA. She asserted that this
needs to change to reflect how PAs practice and serve Alaskans.
She stated that SB 115 is about recognizing PAs as medical
providers and recognizing their scope of practice at the statute
level. She said that Alaska is one of the most difficult states
for PA licensing, which decreases access to care.
3:49:12 PM
CHAIR BJORKMAN opened public testimony on SB 115.
3:49:30 PM
WENDY SMITH, representing self, Juneau, Alaska, testified in
support of SB 115. She said she is a PA with over 20 years of
experience and is currently working at Juneau Urgent and Family
Care. She opined that one profession relying on another in order
to do its job is ridiculous. She said that for over 60 years,
PAs have been proving the safety and efficacy of their work and
it is time to modernize, which is what SB 115 would do. She
opined that being tied to one physician is archaic and there is
no longer a financial benefit to making collaborative
agreements. PAs are considered a liability as they do not bring
financial benefit to physicians working as part of a system. She
stated that access to care is important. She explained that when
working for a small practice that is directed by one physician,
the second collaborating physician must be outsourced. If this
relationship dissolves, the PA is not able to continue working.
She reiterated that the current statutory regulations limit her
ability to provide excellent care.
3:51:57 PM
MEGHAN HALL, representing self, Anchorage, Alaska, testified in
support of SB 115. She said she is a PA working in Anchorage and
SB 115 would keep Alaska relevant in the increasingly
competitive healthcare market for providers. She pointed out
that the healthcare industry has evolved over the past 50 years.
While PAs were initially intended to extend the reach of
physicians in a primary care setting, they now work in every
area of medicine. She said that this increases patients' access
to vital care. She acknowledged that PA is a relatively new
profession and is continually evolving and adapting to patient
needs and the changing healthcare system. PAs are committed to
patient safety and collaborative medicine. She said that SB 115
allows the profession to continue to grow and adapt. PAs have
moved into specialty and subspecialty care in response to the
demands for highly educated providers and treatment options that
require expertise. She asserted that letters from specialists
who oppose SB 115 is indicative of a move toward even greater
specialization; however, a medical system cannot function with
only specialist providers. She stated that PAs are trained as
medical generalists and are thus able to efficiently fill gaps
in care. She said that Alaska is struggling to recruit and
retain healthcare providers and SB 115 would advance PA practice
- and the healthcare system.
3:54:01 PM
CHAIR BJORKMAN held public testimony open.
[CHAIR BJORKMAN held SB 115 in committee.]
3:55:04 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:55 p.m.