02/14/2022 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s) | |
| SB41 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 41 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 14, 2022
1:35 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Joshua Revak, Vice Chair
Senator Peter Micciche
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Gary Stevens
COMMITTEE CALENDAR
CONFIRMATION HEARING(S)
Alaska Workers' Compensation Board
Sarah Lefebvre - Fairbanks
Sara Faulkner - Homer
Randy Beltz - Anchorage
Brad Austin - Auke Bay
- CONFIRMATIONS ADVANCED 5/2/22
Marijuana Control Board
Ely Cyrus - Kiana
Eliza Muse - Anchorage
- CONFIRMATIONS ADVANCED 5/2/22
SENATE BILL NO. 41
"An Act relating to health care insurers; relating to
availability of payment information; relating to an incentive
program for electing to receive health care services for less
than the average price paid; relating to filing and reporting
requirements; relating to municipal regulation of disclosure of
health care services and price information; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 41
SHORT TITLE: HEALTH INSURANCE INFO.; INCENTIVE PROGRAM
SPONSOR(s): SENATOR(s) HUGHES
01/25/21 (S) PREFILE RELEASED 1/15/21
01/25/21 (S) READ THE FIRST TIME - REFERRALS
01/25/21 (S) L&C, FIN
04/07/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/07/21 (S) Heard & Held
04/07/21 (S) MINUTE(L&C)
05/14/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
05/14/21 (S) <Bill Hearing Canceled>
02/14/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SARAH LEFEBVRE, Appointee
Alaska Workers' Compensation Board
Department of Labor and Workforce Development (DOLWD)
Fairbanks, Alaska
POSITION STATEMENT: Testified for reappointment to the Alaska
Workers' Compensation Board.
RANDY BELTZ, Appointee
Alaska Workers' Compensation Board
Department of Labor and Workforce Development (DOLWD)
Anchorage, Alaska
POSITION STATEMENT: Testified for reappointment to the Alaska
Workers' Compensation Board.
BRADLEY AUSTIN, Appointee
Alaska Workers' Compensation Board
Department of Labor and Workforce Development (DOLWD)
Auke Bay, Alaska
POSITION STATEMENT: Testified for reappointment to the Alaska
Workers' Compensation Board.
SARA FAULKNER, Appointee
Alaska Workers' Compensation Board
Department of Labor and Workforce Development (DOLWD)
Homer, Alaska
POSITION STATEMENT: Testified for reappointment to the Alaska
Workers' Compensation Board.
ELY CYRUS, Appointee
Marijuana Control Board
Department of Commerce, Community and Economic Development
Kiana, Alaska
POSITION STATEMENT: Testified as an appointee to the Marijuana
Control Board.
ELIZA MUSE, Appointee
Marijuana Control Board
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified as an appointee to the Marijuana
Control Board.
LACY WILCOX, President
Alaska Marijuana Industry Association (AMIA)
Juneau, Alaska
POSITION STATEMENT: Testified that AMIA likes what it has seen
so far about Ely Cyrus for the rural seat on the Marijuana
Control Board and opposes the appointment of Eliza Muse to the
public health seat on the Marijuana Control Board.
SENATOR SHELLEY HUGHES
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 41.
BUDDY WHIT, Staff
Senator Shelley Hughes
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the changes between version A and
version I for SB 41.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Provided information and answered questions
during the hearing on SB 41.
ACTION NARRATIVE
1:35:26 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:35 p.m. Present at the call to
order were Senators Gray-Jackson, Revak, and Chair Costello.
Senator Micciche arrived during the course of the meeting.
^CONFIRMATION HEARING(S)
CONFIRMATION HEARING(S)
Alaska Workers' Compensation Board
Marijuana Control Board
1:36:29 PM
CHAIR COSTELLO announced the consideration of Governor
Appointees to boards and commissions. She asked Sarah Lefebvre
to tell the committee why she is interested in being reappointed
to the Alaska Workers' Compensation Board.
1:37:17 PM
SARAH LEFEBVRE, Alaska Workers' Compensation Board, Fairbanks,
Alaska, stated that she holds one of the two industry seats on
the board and has served since about 2008. She described the
work the board does as very important because the cases involve
somebody's life, livelihood, and future. A lot is at stake in
each decision the board makes, whether it is regulation or
adjudication. Because the learning curve for this board is so
steep, there is benefit from the longevity among its members.
She holds the industry seat but views herself as fairly
moderate. She weighs and balances all factors and follows the
statutes when making decisions. She opined that she brings
strong value to the board and system.
CHAIR COSTELLO thanked her for her service.
1:39:12 PM
SENATOR REVAK asked what value she brings to the board and what
challenges and potential solutions does she foresee.
MS. LEFEBVRE explained that she spends considerable time
carefully reading and considering the documents the panel
assigns, the northern panel in particular. Further, having heard
so many cases and read so many decisions and orders as well as
compromises and releases, she has a good grasp of the history,
trends, and challenges within the system, which is valuable in
the regulatory process. She added that she also advocates for
certain changes to the system through the Fairbanks Chamber of
Commerce, the Association of General Contractors, and the
legislature.
1:42:02 PM
CHAIR COSTELLO asked if the board initially finds out about
cases after a worker visits a health care provider and indicates
on a form that the visit is related to a workers' compensation
claim.
MS. LEFEBVRE explained that the board never hears about the
majority of injury cases. It is only when a case becomes
complicated and there is a dispute over who should pay the
medical bills. In those instances the case becomes a claim,
which then goes to the board.
CHAIR COSTELLO found no further questions.
1:43:56 PM
CHAIR COSTELLO asked Randy Beltz to tell the committee about
himself, his experience on the board and why he is interested in
continuing to serve.
1:44:08 PM
RANDY BELTZ, Appointee, Alaska Workers' Compensation Board,
Anchorage, Alaska, stated that he was born and raised in Alaska
and has family who also live and work in the state. He is a
manager at North Star Terminal and Stevedoring Services and the
incoming president of the Alaska Alliance. He stated that he has
served on the Alaska Workers' Compensation Board for the last
three years and has enjoyed the work. He opined that he has a
well-rounded base of experience to guide him in considering
regulations and hearing cases. This past experience is valuable
when considering the complex cases that come before the board.
He looks forward to continuing to serve.
CHAIR COSTELLO asked him to clarify when he was appointed and
when his term expires because the official website shows that he
was appointed March 1, 2019 and that his term expires in 2025.
MR. BELTZ offered his understanding that the appointment was for
three years, starting in March 2019. He started going through
the reappointment process about a month ago.
CHAIR COSTELLO thanked him for his service.
CHAIR COSTELLO asked Brad Austin to introduce himself.
1:47:00 PM
BRADLEY AUSTIN, Appointee, Alaska Workers' Compensation Board,
Auke Bay, Alaska, stated that he has lived in Juneau for more
than 50 years and formerly was the training coordinator and
instructor for United Association Plumbers and Pipefitters Local
262. He related that this is a reappointment and he agrees with
previous testimony that longevity is important for this board.
The issues the board hears when claims come to hearing are very
complex both legally and medically. The board also does
important regulation work. He opined that the board has a good
start on the regulations that have helped to lower the cost of
workers' compensation. He said he has been serving on the board
since 2010 and would like to continue.
CHAIR COSTELLO asked if individuals in the system travel out of
state because the medical procedures are less expensive.
MR. AUSTIN answered that the travel outside the state is often
because a specialist is needed. The board sometimes assigns a
second independent medical examiner and they are often located
outside of Alaska.
CHAIR COSTELLO thanked him for his service.
1:49:26 PM
SENATOR MICCICHE joined the committee.
CHAIR COSTELLO asked Sara Faulkner to introduce herself and
provide some background.
1:49:38 PM
SARA FAULKNER, Appointee, Alaska Workers' Compensation Board,
Homer, Alaska, stated that her appointment is to the industry
for Southcentral. She has been a resident of Alaska for more
than 40 years and formerly worked in various roles for Arco
Alaska. She has served on the board since 2019 and has enjoyed
it for the positive effect the work has on the lives of injured
workers and the improvements to business practices. She is a
good listener, which is an important skill for board members.
CHAIR COSTELLO expressed appreciation for her contributions to
Alaska.
1:51:02 PM
CHAIR COSTELLO asked Eli Cyrus to tell the committee about his
interest in serving on the Marijuana Control Board.
1:51:23 PM
ELY CYRUS, Appointee, Marijuana Control Board, Kiana, Alaska,
stated that he was appointed to the rural seat on the Marijuana
Control Board. He related that he is 30 years old and has lived
in Kiana his entire life. He currently works as the city
administer of the City of Kiana and serves several committees of
NANA Regional Corporation. He explained his interest in serving
on this board stems from his belief that the marijuana industry
offers an opportunity for economic development in rural areas.
He wants to be part of helping the state foster a good
relationship between this industry and the people living in
rural Alaska. He opined that the state will be in a good
position to help the industry grow and provide jobs for Alaskans
once the federal law changes.
CHAIR COSTELLO asked what he sees as the challenges facing the
marijuana industry in Alaska.
MR. CYRUS said the industry as a whole has problems in rural
Alaska associated with complying with federal regulations.
Moving marijuana products to and from rural Alaska is
problematic because air carriers in particular are regulated by
the federal government. Banking receipts from marijuana
businesses is also an impediment and will be as long as
marijuana is illegal at the federal level.
CHAIR COSTELLO found no further questions.
CHAIR COSTELLO asked Eliza Muse to tell the committee about her
interest in serving on the Marijuana Control Board.
1:55:05 PM
ELIZA MUSE, Appointee, Marijuana Control Board, Anchorage,
Alaska, stated that her appointment is to the public health
seat. She related that she is a lifelong Alaskan who has worked
since 2011 for the Department of Health and Social Services
(DHSS), Division of Public Health (DPH). She holds a master's
degree in health policy and administration. She said she has
tracked cannabis policies since it was legalized and
participated in efforts to understand the public health
implications of increased access to cannabis products. She
oversees the marijuana education program that the legislature
funded in 2018, which uses data and science to understand how
legalization has affected public health. Grant funding is used
to specifically address cannabis use. The reasons she wants to
serve on this board include that she supports a well-regulated
cannabis industry that balances the needs of cannabis consumers
with public health to ensure that products are safely available,
tested, intuitively labeled, and the packaging is child-proof.
She brings her training in public health, knowledge of the data
systems used to understand the health effects of cannabis use,
and a willingness to work with board members and the cannabis
industry to ensure that rulemaking balances industry and public
health and safety. She clarified that she represents Alaskans'
public health when rulemaking and her positions on these issues
are her own and not DHSS, unless she notes otherwise.
CHAIR COSTELLO asked her to share how legalizing marijuana in
Alaska has affected youths and their rate of usage.
MS. MUSE related that the division's Youth Risk Behavior Survey
has tracked cannabis use by youths for over 15 years and the
data shows that rates have remained stable pre and post
legalization.
CHAIR COSTELLO asked what she attributes that to since there is
greater access.
1:58:23 PM
MS. MUSE said a variety of factors could account for that,
including that this might be one of the healthiest generations
the country has seen. There has been decreased use of alcohol,
tobacco and nicotine products so the fact that marijuana use is
stable could indicate there is a problem.
1:59:42 PM
CHAIR COSTELLO opened public testimony on the Governor
Appointees.
1:59:56 PM
LACY WILCOX, President, Alaska Marijuana Industry Association
(AMIA), Juneau, Alaska, stated that AMIA is neutral, but leaning
toward supporting the appointment of Ely Cyrus to the rural seat
on the Marijuana Control Board. There has not been sufficient
time to observe him as a board member, but AMIA likes what it
has heard so far.
MS. WILCOX stated that AMIA opposes Eliza Muse for the public
health seat on the Marijuana Control Board. She has been
unwilling to work with AMIA and has demonstrated a clear lack of
knowledge about cannabis in general. She relayed that Ms. Muse
had hindered businesses, had been inconsistent in her voting,
and had "flip flopped," which causes stress for applicants who
have come forward with innovations. She voiced concern that Ms.
Muse appears to be using her position on the board as an
extension of her day job, which is prohibitive toward cannabis.
She maintained that Ms. Muse seems to be extending the efforts
to keep cannabis out of the hands of youths to the general
population, which if continued will hurt the industry. Ms. Muse
continues to produce cannabis related educational material [in
her day job], but has not contacted AMIA, which is the only
statewide trade group, and she has not responded to AMIA's
efforts to consult.
MS. WILCOX stated that members and nonmembers alike have called
on AMIA to loudly oppose the confirmation of Ms. Muse to the
Marijuana Control Board. The general belief among operators is
that Ms. Muse does not want to be educated and is firm in her
disdain for cannabis as a compound, often calling it a chemical.
MS. WILCOX said AMIA is very aware of the need for a public
health seat on this regulating board, but believes that Ms. Muse
could do more damage than good if she is confirmed because she
is neither knowledgeable nor supportive of the cannabis
industry.
2:03:51 PM
At ease
2:06:13 PM
CHAIR COSTELLO reconvened the meeting and asked Ms. Muse if she
would like to respond to the previous testimony.
2:06:32 PM
MS. MUSE expressed appreciation for the feedback from AMIA and
restated that she believes in and supports a well-regulated
cannabis industry in Alaska. That means that cannabis products
are safely available for individuals 21 years of age and older.
She stressed that she did not want to return to prohibition
times. "I don't think that's in the best interest of Alaskans'
health and that's not what Alaskans voted for in 2014. And being
part of this board will help move regulations to a place where
these products are safe." She said her conversations with the
industry have been about ensuring that products available
through the marketplace are safe and tested because currently
they are having to compete with the illicit market. She said she
believes in the industry and she wants to serve in the public
health seat on the board.
CHAIR COSTELLO asked Senator Micciche to read the requirements
for this seat.
2:08:23 PM
SENATOR MICCICHE paraphrased AS 17.38.080(b)(1)-(5) Marijuana
Control Board; appointment and qualifications.
(b) The board members shall be appointed by the
governor and confirmed by a majority of the members of
the legislature in joint session. A member of the
board may not hold any other state or federal office,
either elective or appointive. The board consists of
five voting members as follows:
(1) one person from the public safety sector;
(2) one person from the public health sector;
(3) one person currently residing in a rural
area;
(4) one person actively engaged in the marijuana
industry; and
(5) one person who is either from the general
public or actively engaged in the marijuana industry.
SENATOR MICCICHE paraphrased AS 17.38.080(e)(4), which reads as
follows:
(e) In this section,
(4) "public health sector" means a state,
federal, or local entity that works to ensure the
health and safety of persons and communities through
education, policymaking, treatment and prevention of
injury and disease, and promotion of wellness;
CHAIR COSTELLO asked him to repeat the last portion and he
complied.
2:09:33 PM
CHAIR COSTELLO discerned that there were no other testifiers and
closed public testimony on the foregoing appointments to the
Alaska Workers' Compensation Board and the Marijuana Control
Board.
CHAIR COSTELLO stated that she would hold the appointments until
the website for boards and commissions accurately reflects the
appointment and expiration dates for all the appointees.
2:10:27 PM
At ease
SB 41-HEALTH INSURANCE INFO.; INCENTIVE PROGRAM
2:12:23 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO. 41
"An Act relating to health care insurers; relating to
availability of payment information; relating to an incentive
program for electing to receive health care services for less
than the average price paid; relating to filing and reporting
requirements; relating to municipal regulation of disclosure of
health care services and price information; and providing for an
effective date."
CHAIR COSTELLO noted that the bill was heard last year and today
there was a committee substitute for the committee to consider.
2:12:42 PM
SENATOR REVAK moved to adopt the work draft committee substitute
(CS) for SB 41, work order 32-LS0247\I, as the working document.
CHAIR COSTELLO objected for an explanation of the changes.
2:13:09 PM
SENATOR SHELLEY HUGHES, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 41 thanked the committee for hearing the
bill a second time. She stated that this bill provides an
opportunity to help with the high cost of healthcare in the
state.
2:13:56 PM
BUDDY WHIT, Staff, Senator Shelley Hughes, Alaska State
Legislature, Juneau, Alaska, read the changes between version A
and version I for SB 41. He explained that the CS makes
structural changes to the bill, but it does not change the
result.
[Original punctuation provided.]
Page 1, Line 3
Replaces "the average price paid" in the title with
"the median of the contract rates recognized by an
insurer." This change is made throughout Version I.
Sec. 2 Page 1
Version I removes entirely the previous section 2,
which required health care providers to provide to any
uninsured patients estimates of total charges that
include any financial assistance available from the
provider and direct the patient to any available
websites that provide information about standard
charges for that type of health care service. The
following sections are renumbered accordingly.
2:15:17 PM
Sec. 3 AS 21.36.100 Page 3, Lines 2-18
Adds to statute an exception for the incentive program
described in section 4, AS 21.96.220, to allow for
rebates of premiums payable for health insurance
coverage.
Sec. 4 AS 21.96 Page 3, Lines 19-31, Page 4, Lines
1-31, Page 5, Lines 1-31, Page 6, Lines 1-15
Version I inserts the title "Article 2. Health Care
Insurance Incentive Program," before adding new
sections.
In section 21.96.210, the term "a health care insurer"
is updated to specify "a health care insurer that
offers a health care insurance policy in the group or
individual market." This change is made throughout
Version I. In Version A, this section requires health
care insurers to provide an interactive online
mechanism for covered individuals to request
information on payments made by the insurer to network
health care providers for services and compare prices
among network providers. In Version I, this section
requires that health care insurers must provide
comprehensive comparison guidance by telephone and
online, and further, must allow a covered individual
to compare the amount of cost sharing that he would be
responsible for paying. The health care insurer must
comply with the federal code regarding the maintenance
of such a price comparison tool.
2:16:48 PM
In section 21.96.220(a), the language is updated to
specify "a monetary incentive" instead of "an
incentive." Version I removes the list of specific
health care service categories which a health care
insurer must include in the incentive program.
The language in section 21.96.220(b) from Version A is
separated into three subsections in Version I: (b),
(c), and (d). Additional language is inserted to
specify that a health care insurer is not required to
provide an incentive payment if the cost savings to
the insurer is $200 or fewer. The previously lettered
subsection (c), which stated that the average price
must be based on a period that does not exceed one
year is removed in Version I.
2:17:44 PM
In subsection (e), Version I states that an incentive
payment is not a violation of AS 21.36.100, which is
also specified in section 3 of the bill.
Sec. 21.96.260 is updated from requiring that health
care insurers file annual reports regarding their
incentive programs with the director of the Division
of Insurance, to requiring that they provide that
information to the director if requested. Subsection
(b) is updated to include this information in the
director's annual report, submitted to the House and
Senate Labor & Commerce Committees, rather than in a
separate report.
Sec. 21.96.280 is a new section in Version I which
specifies that sections 21.96.210 - 21.96.300 apply to
a health care insurance policy or contract but do not
apply to excepted exempted benefits, except for those
benefits provided under dental and vision insurance
policies.
Section 21.96.300 replaces the definition of "health
care insurance plan" with definitions for "health care
insurance" and "policy" to conform to technical
language fixes made throughout Version I.
2:19:05 PM
Sec. 8 Page 7, Lines 13-18
Version I specifies that the director of the Division
of Insurance may adopt regulations necessary to
implement this Act, rather than broadly the Department
of Commerce Community and Economic Development.
Sec. 10 Page 7, Line 20
Updates the effective date from January 1, 2022 to
January 1, 2023, for all sections but 7 and 8, which
take effect immediately.
2:19:35 PM
CHAIR COSTELLO asked what Sections 7 and 8, which take effect
immediately, are about.
MR. Whit explained that Section 7 is uncodified law about the
report that was mentioned and Section 8 is transition language
for the regulations for this Act, which fall under the director
of the Division of Insurance.
CHAIR COSTELLO observed that this allows the division to start
the regulation process before the law becomes effective.
MR. WHIT replied that is correct.
SENATOR HUGHES offered her belief that the changes in this
committee substitute enhance what the bill seeks to do. For
example, version I says a health care insurer is not required to
provide an incentive payment if the cost savings to the insurer
is less than $200. Also, the insurance companies only have to
file the reports at the request of the director, not
automatically. The CS also specifies that the incentive to get
people to shop will be monetary, which is in line with the goal
to reintroduce free market principles into the healthcare
industry. Somebody who shops for a less expensive provider will
share in the savings. She noted that the online tool, which did
not work when the bill was heard last year, will be required at
the federal level and that will make this bill work. The target
date for those online tools has been extended to July 1, 2022.
2:22:02 PM
CHAIR COSTELLO removed her objection. Finding no further
objection, version I was adopted.
SENATOR GRAY-JACKSON asked for a brief explanation of what the
bill does.
2:22:57 PM
At ease.
2:23:45 PM
CHAIR COSTELLO reconvened the meeting and asked the sponsor to
refresh the members' recall of what SB 41 does.
SENATOR HUGHES explained that this is a pro-consumer bill that
seeks to reduce health care costs for Alaskans. She cited the
example of somebody who gets knee surgery. The individual would
be able to use an online tool through their insurance company to
find the providers for the procedure and the cost. If the cost
ranges from $5,000 to $15,000, the average would be $10,000. If
the individual selects a provider that charges $7,000, the
individual, the employer, and the insurance company each would
realize a $1,000 savings. She opined that this monetary
incentive would make individuals shop. This is more user
friendly for the consumer than previous legislation that also
intended to reduce health care costs.
She relayed that several states have passed similar legislation
and it has proved to be successful. She posited that over time
the providers who charge the most may nudge their prices down.
She said more expensive care does not equate to better care and
her belief is that someone who shops is more likely to listen to
their provider and take better care of their health.
CHAIR COSTELLO observed that the language on page 4, line 17
talks about median rates and paragraph (21) on page 4 says the
consumer receives at least 50 percent of the difference between
what they selected and the median rate. She asked the sponsor to
comment.
SENATOR HUGHES offered her understanding that if an employer is
not providing the insurance, the consumer would split the
savings 50:50 with the insurance company.
CHAIR COSTELLO welcomed Lori Wing-Heier.
2:28:34 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, introduced herself.
CHAIR COSTELLO asked how SB 41 will affect the health care of
Alaskan consumers.
MS. WING-HEIER explained that the bill tells consumers that they
will benefit from the savings if they find an out of network
provider that is charging less for a given procedure. On an
employer sponsored plan the savings would be split equally
between the employer, the insurance company, and the consumer.
Each would receive one-third of the savings. The individual
market does not have employer-sponsored plans so the split would
be 50:50. The bill helps encourage Alaskans to look at the cost
of health care, how much their insurance company would pay, and
to consider selecting the best price. The incentive is that the
consumer will recognize some of the savings from their
selection.
2:29:56 PM
SENATOR MICCICHE said he likes the concept, but wonders whether
the reimbursement could possibly be greater than the out-of-
pocket payment. He provided a hypothetical example of a heart
surgery with costs much higher and much lower than the median
cost of $150,000. The insured's selection saved $50,000 and
their out-of-pocket payment was $6,000. He asked if the consumer
could profit from that savings or if there would be a cap.
MS. WING-HEIER said the bill does not cap what the insured can
recover. She explained that most plans have an annual out-of-
pocket maximum so the consumer's portion of the savings could
exceed what they spent out of pocket.
SENATOR MICCICHE asked if this could also apply to elective
surgery such as braces.
MS. WING-HEIER answered yes.
2:31:55 PM
SENATOR GRAY-JACKSON provided a hypothetical example of a
surgery that ranged in cost from $75 to $100. She asked if the
$25 difference was the amount that would be split.
MS. WING-HEIER answered yes; the insured is not required to go
to the out-of-network doctor that charges less for the
procedure, but it is an option for the insured. A consumer that
selects that option may benefit from the savings.
She referenced the Chair's earlier observation and explained
that the division asked the sponsor to use the median rate in
the bill because that is the measure required in the federal No
Surprise Act.
CHAIR COSTELLO referenced Senator Gray-Jackson's example and
offered her understanding that the bill does not apply to any
cost that is less than $200.
MS. WING-HEIER replied that is correct.
SENATOR MICCICHE noted the bill packet contains information
about legislation enacted in Florida that authorizes insurers to
participate in the individual and small group markets to develop
shared savings programs for enrollees. He asked if any other
states have an incentive similar to SB 41 and if the savings can
be above the out-of-pocket costs.
MS. WING-HEIER recalled that New Hampshire and Maine have a
similar statute, but she did not know if those allow realized
savings that are above the out-of-pocket amount.
2:34:56 PM
CHAIR COSTELLO asked if the consumer has to talk to all the
doctors involved in a given procedure to determine which option
is cheaper.
MS. WING-HEIER answered no; the incentive is based on what the
surgeon charges and it would be a separate incentive program if
the insured wanted to price compare anesthesiologists as well.
She noted that a consumer looking for an overall price generally
will know the surgery center and the anesthesiologist the doctor
uses.
CHAIR COSTELLO asked what happens if the consumer is not able to
get the information from the provider because they're told "it
depends." She relayed her experience
2:37:11 PM
MS. WING-HEIER said federal law requires providers to give a
good faith estimate, but acknowledged the possibility of
unforeseen circumstances that could increase the charge. It
happens but it is not an everyday occurrence.
CHAIR COSTELLO asked how the division contemplates educating
Alaskans about the bill.
MS. WING-HEIER replied, should the bill be signed into law, the
division would work with the insurance companies to ensure they
tell their policy holders that this exists. The division would
also post the information on its website and through social
media.
CHAIR COSTELLO asked what happens if the insured finds an in-
network provider that is cheaper.
MS. WING-HEIER replied that should not affect the incentive.
Theoretically, she said there should not be much difference
between what providers in the same network are paid.
2:39:47 PM
SENATOR REVAK asked if the insured could realize savings in
excess of the deductible.
MS. WING-HEIER replied it is possible.
SENATOR REVAK said he appreciates the idea of shared savings. He
relayed that his office looked at shared savings for Medicaid
and found that other states imposed a timeframe because people
were trying to game the system to get cash back. He suggested
that was a consideration.
CHAIR COSTELLO observed that in some instances the deductible
could be as low as $250. She asked Ms. Wing-Heier to comment.
MS. WING-HEIER said that for a large more expensive procedure,
the differential between the network rate and the less expensive
out-of-network rate could exceed the deductible. It's less
likely if the procedure is less costly.
SENATOR REVAK restated that he was not opposed to the idea, but
when he looked at it in the Medicaid context he found the
feedback from other states about unintended consequences
interesting. He didn't know if a fix was necessary, but it was
something to think about, he said.
MS. WING-HEIER responded that the bill is meant to benefit
consumers and if the division saw somebody trying to game the
system they would use the statutory authority available to stop
it as quickly as possible.
2:43:57 PM
CHAIR COSTELLO asked whether the bill provides the authority for
the division to write regulations to address Senator Revak's
concerns.
MS. WING-HEIER answered yes; the bill authorizes the division to
adopt regulations. The division would work with the public, the
providers, and the payers to identify gamers and take action
accordingly.
CHAIR COSTELLO asked whether travel to an urban center for
surgery would be factored in.
MS. WING-HEIER answered that traveling to a place where there
are more facilities and more competitive prices would have to be
a piece. The procedure itself would fall under the bill, but she
did not believe there would be incentive programs to pay for
travel.
2:45:26 PM
At ease
2:47:47 PM
CHAIR COSTELLO reconvened the meeting and asked Ms. Wing-Heier
if she would like to comment.
2:48:00 PM
MS. WING-HEIER stated that she would return when the bill is
heard next with different scenarios for how the bill would
affect out-of-pocket and deductible costs and if there would be
a way to impose a cap so no one is able to profit or game the
system.
CHAIR COSTELLO suggested the members send any questions to her
office for distribution to the sponsor and the division
director. Those responses would also be reviewed at the same
time.
CHAIR COSTELLO held SB 41 in committee for future consideration.
2:49:01 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:49 p.m.