SB 83-TELEHEALTH REIMBURSEMENT RATES   [CSSB 83(HSS)was before the committee.] 1:33:38 PM CHAIR BJORKMAN announced the consideration of CS FOR SENATE BILL NO. 83(HSS) "An Act relating to health care insurance; relating to insurance reimbursement for health care services provided through telehealth; relating to telehealth; providing for an effective date by repealing the effective date of secs. 9 and 10, ch. 38, SLA 2022; and providing for an effective date." 1:34:02 PM SENATOR MATT CLAMAN, District H, Alaska State Legislature, Juneau, Alaska, as the sponsor of SB 83, he the bill: [Original punctuation provided.] Senate Bill 83 was brought forward by health care providers in my district who provide both in-person and telehealth services to Alaskans across the state. SB 83 will ensure pay parity for telehealth, requiring health care insurers to reimburse at the same payment rate for telehealth services as in-person care. 1:34:31 PM SENATOR CLAMAN continued with his presentation: Telehealth reduces barriers to care and allows patients to receive timely and convenient care from the comfort of their own homes. In Alaska, barriers to care affect individuals in rural areas, those with disabilities, and those with limited transportation options. Telehealth is especially important for chronic disease management, mental health services, and preventative care. The COVID-19 pandemic highlighted the critical need for telehealth access, prompting the Centers for Medicare & Medicaid Services (CMS) to temporarily implement telehealth parity. While this federal mandate has expired, some telehealth provisions remain in place. What was once a temporary need is now standard practice, and many states have made efforts to solidify permanent access to these services. Over 33 states have enacted similar legislation to SB 83 to ensure fair reimbursement for telehealth services. Alaska's Medicaid program already has telehealth pay parity. This legislation builds upon that existing framework to require the same parity by private insurers. In our previous committee, we amended to remove the sunset language in Alaska's Medicaid telehealth statutes, ensuring that it will remain in law. Passage of this legislation will expand access to care, improve and maintain quality of care, and incentivize continued telehealth utilization. 1:36:13 PM SARENA HACKENMILLER, Staff, Senator Matt Claman, Alaska State Legislature, Juneau, Alaska, provided the sectional analysis for SB 83: [Original punctuation provided.] Sectional Analysis Version O  Section 1  AS 21.42.422(b). Coverage for telehealth. Adds new paragraph (3) and references the definition of "health care provider" as given in AS 21.07.250. 1:36:38 PM MS. HACKENMILLER continued with the sectional analysis of SB 83, version O: Section 2  AS 21.42.422. Coverage for telehealth. Establishes a new subsection requiring health care insurers to reimburse health care providers for telehealth services, including behavioral health services, at the same rate as for in-person services. Section 3  AS 29.10.200. Limitation of home rule powers. Adds new paragraph (68) "AS 29.20.420 (health care insurance plans)" to the list of provisions which apply to home rule municipalities Section 4  AS 29.20.420. Health care insurance plans. Establishes a new section requiring a home rule or general law municipality offering a group health care insurance plan to meet the requirements of AS 21.42.422(c) (Section 2). Provides the definition of "health care insurance plan" as given in AS 21.52.500. Section 5  AS 39.30.090(a). Authorization for self-insurance and excess loss insurance. Adds a new subsection (13) requiring a policy or policies of group insurance covering state employees and other specific employee groups under the Department of Administration to meet to the requirements of AS 21.42.422(c) (Section 2). Section 6  AS 39.30.091. Authorization for self-insurance and excess loss insurance. Amends this statute to require those employers with a self-insured group health insurance plan covering active state employees to meet the requirements of AS 21.42.422(c) (Section 2). Section 7  Repeals Sections 9, 10, and 13 of ch. 38, SLA 2022. Section 8  Repeals Section 14 of ch. 38, SLA 2022. Section 9  Establishes an effective date of January 1, 2026. 1:38:22 PM CHAIR BJORKMAN announced invited testimony on SB 83. 1:38:40 PM JIM REBITZER, Economist, Boston University, Boston, Massachusetts, testified by invitation on SB 83: [Original punctuation provided.] I am here to testify about a new piece of legislation regarding reimbursement for telehealth services. The bill requires a health insurer to reimburse for telehealth services on the same basis and at least at the same rate as comparable healthcare services provided in person. Let me start with my conclusion: This legislation is reasonable and deserving of your support. However, the reasoning behind it may be of greater use to the committee than my conclusion. As an economist studying management, I generally believe that a state legislature should not determine how much private insurers pay for services. Typically, legislatures lack essential information and incentives, and they respond too slowly to set appropriate reimbursement rates. It is better to leave this to negotiations between insurers and providers. However, telehealth might be the exception that proves the rule. Mandating equal payment can help address an economic issue that private parties cannot resolve independently. Like every new treatment modality, telehealth requires providers to develop new capabilities for delivering care at a distance. Payers may be willing to compensate providers to encourage these costly investments, but will they pay enough on their own? Perhaps not. In our fragmented payment system, each provider treats patients from many different payers: Medicare, Medicaid, the State of Alaska, private insurers, and private employers. This diversity of payers creates an opportunity for free riding. 1:41:27 PM MR. REBITZER continued with his testimony on SB 83: Suppose a provider deals with 10 different payers, each paying $50 for a telehealth visit. Suppose providers are happy to invest adequately in telehealth capacity at this price. What would happen if one payer decided to pay $40 for a telehealth visit? Providers might still be willing to deliver telehealth care to this payer because they have already borne the cost of developing the telehealth capacity. The insurer who pays $40 would, in effect, be "free riding" on the other payers' generosity. That would be annoying to the other payers. If the rest followed suit, the result would be an inadequate investment in telehealth capacity or, in the extreme case, no investment at all. You can see where this is heading. The proposed bill can be beneficial as it makes it more difficult for a single insurer to take advantage of investments in telehealth funded by other payers. Some who object to payment parity might argue that the marginal cost of telehealth is less than in-person health, so "parity" in payments means you are overpaying for telehealth. This reasoning makes sense until you think about it for a minute. Much of the cost of delivering telehealth is determined by what else providers could do with their time. Payment parity has the advantage of not making it more expensive for providers who deliver telehealth services. Although I am not an Alaskan, I am impressed by the vast distances' healthcare providers must travel to reach all Alaskans. The cost of underinvestment in and under provision of telehealth is especially severe for Alaska, so the proposed legislation's value is likely to be high. 1:44:25 PM HOWARD DETWILER, Owner, Arctic Behavior Health LLC, Anchorage, Alaska, testified by invitation on SB 83 and gave an example of when a snowstorm, in Anchorage, prevented two clients from visiting the office, requiring remote consultations for medication management. The technological costs and system failures for telehealth can equal or exceed in-person visits and may increase the risk of emergency consultations. He emphasized an experience of developing military telehealth systems in Iraq and Afghanistan, emphasizing that telehealth is essential for healthcare delivery in Alaska. 1:46:43 PM CHAIR BJORKMAN asked Mr. Detwiler to give examples of how SB 83 would directly affect his business. 1:46:58 PM MR. DETWILER replied that a snowstorm prevented two clients from visiting the office for restricted medications, making in-person evaluation and prescription continuation impossible. He said telehealth is essential to maintain continuity of care, especially given Alaska's distances and challenging climate. [CHAIR BJORKMAN held SB 83 in committee.]