SB 122-HEALTH INSURANCE NETWORK STANDARDS  4:33:30 PM CHAIR DUNBAR announced the consideration of SENATE BILL NO. 122 "An Act relating to insurance; establishing standards for health insurance provider networks; and providing for an effective date." 4:33:44 PM SENATOR GIESSEL speaking as the sponsor introduced SB 122 and read the sponsor statement: [Original punctuation provided.] Sponsor Statement (vsn N)  "An Act relating to insurance; establishing standards for health insurance provider networks; and providing for an effective date." Senate Bill 122 will establish state-defined minimum standards for health insurer provider networks tailored to Alaska. Standards are necessary to ensure Alaska patients have access to a network of providers sufficient to meet their healthcare needs. Thirty- eight states and territories have adopted provider network minimum standards. The National Association of Insurance Commissioners has stated that provider network minimum standards are the most important mechanisms to ensure a well-functioning healthcare and health insurance market. In many states, insurers often establish and market products with a limited subset of the providers available in the area, or a "narrow network". Because all of Alaska is a federally designated provider shortage area, narrow networks would be detrimental to Alaskans' health by hindering access to needed providers. Narrow networks can also result in barriers to care by creating long waiting times for appointments. This bill would establish simple standards tailored to the geography and distribution of population and providers in Alaska. It makes provision for a phase-in period to avoid insurance market disruption and a process for insurers to request exceptions when standards can't be met. Standards are designed to ensure that the full range of specialties in a community are represented in the network. Senate Bill 122 would proactively protect Alaskans from the access issues that have arisen with narrow networks elsewhere in the country. Please join me in supporting this commonsense bill to protect Alaska patients' access to needed health care while supporting local providers in the community. 4:36:02 PM JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State Legislature, Juneau, Alaska, provided the sectional analysis for SB 122. She read the following portion of the sectional analysis: [Original punctuation provided.] ? (d) Divides Alaska into 6 contracting (network) regions: -Municipality of Anchorage Network must include 85 percent of total active physicians, PAs and APRNs in each specialty and at least 85 percent of each provider groups in each specialty. -Mat-Su Borough Network must include at least 9 percent of active physicians, PAs and APRNs in each specialty and at least 90 percent of the provider groups in each specialty. -Fairbanks North Star Borough and Southeast Fairbanks Census Area 90 percent same as Matsu -Kenai Peninsula Borough Network must include at least 95 percent of active physicians, PAs and APRNs in each specialty and at least 95 percent of the provider groups in each specialty. -City and Borough of Juneau, Ketchikan Gateway Borough and City and Borough of Sitka 95 percent - same as Kenai Peninsula Borough -Remaining areas of the state 4:38:04 PM MS. CONWAY moved to section 1 of the sectional analysis for SB 122: [Original punctuation provided.] Section 1. Amends AS 21.07 Patient Protections Under  Health Care Insurance Policies    Adds new section 21.07.035 Minimum provider  network standards. In this section a health care insurer ? Must take into account the network requirements set out in this new section when calculating the benefits or contractual requirements of the covered person. 4:38:22 PM MS. CONWAY continued with the sectional analysis for SB 122: ? (b) A health care insurer's provider network must include each hospital, skilled nursing facility or mental health/substance abuse facility in the state and each physician, PA and APRN employed by them. This would be the same for any tribal health organization. ? However, the physicians, PAs and APRNs are not included when calculating the health care insurer's minimum network standards set out in (d) of this section. ? (c) A health care insurer's provider network must include a sufficient number of physicians, PAs and APRNs in each region to meet the minimum standards set out in (d). The provider network may include physicians, PAs and APRNs who are not contracted network health care providers, but they must be shown as in-network providers in the insurer's directory of network providers and treated as in-network when determining benefits for a covered person. ? In (e) a health care insurer may request to the director an exception to the minimum provider network standard for up to 36 months. The process for an exemption will be set in regulation by the director. The insurer must submit a plan to comply and also submit annual progress reports to the director. ? In (f) a health care insurer must attest or prove they meet the minimum provider network standards and provide supporting documentation to the director as part of their required rate filings. If standards are not met, the insurer must submit a plan of corrective action. ? In (g) allows the director to adopt regulations to implement this section and may also require that a contracting region exceed the minimum network standards Section 2. Repeals AS 21.07.020(3): Sec. 21.07.020. Required contract provisions for  health care insurance policy. A health care insurance policy must contain a provision (3) that covered medical care services be reasonably available in the community in which a covered person resides or that, if referrals are required by the policy, adequate referrals outside the community be available if the medical care service is not available in the community; Section 3. Sets an effective date for January 1, 2026  4:41:44 PM At ease. 4:42:08 PM CHAIR DUNBAR reconvened the meeting and invited Mr. Davis to testify. 4:42:18 PM JEFFREY DAVIS, Principal, Weston Group Consulting LLC, Wenatchee, Washington, began his presentation, Provider Network Minimum Standards for Health Insurers. He said SB 122 purpose is to create provider network minimum standards and is a way to ensure health care for all Alaskans. 4:42:51 PM MR. DAVIS moved to slide 2, What is a Narrow Provider Network, and stated that narrow network limits, which providers are included, is a common tactic in the Lower 48 where some markets exclude up to 80 percent of providers. He said out-of-network benefits are typically minimal, though Alaska currently requires them, something some payers want to change. he said insurers use narrow networks to gain market leverage by offering lower rates to one provider group while excluding another, which can reduce costs but also makes patient access to care more difficult. 4:43:56 PM MR. DAVIS moved to slide 3, Why Does Alaska Need Minimum Network Standards, and stated that Alaska is already a federally designated healthcare provider shortage area, and allowing plans with even fewer providers could create networks too narrow to meet patient needs. The National Association of Insurance Commissionersconsidered the gold standardstates that the most important step a state can take is establishing minimum provider standards for a functioning healthcare and insurance market. By 2019, 38 states and territories had such standards, but Alaska does not. Without state-defined criteria, it's difficult to judge whether a network is adequate. This proposal would establish those standards, and some insurers have publicly expressed interest in offering these narrow-network products in Alaska. 4:45:31 PM MR. DAVIS moved to slide 4, Impact of Narrow Networks, and stated that Narrow networks can limit access by excluding key specialty groups, creating longer wait times or forcing patients to seek care outside Alaska. He said consumers often judge plans simply by checking whether their current doctors are included, but they may not realize the network lacks needed specialists, something they only discover after developing a serious condition. He said narrow networks with little or no out-of- network coverage leave patients without needed care and also financially harm excluded providers, especially in markets like Alaska with only a few major insurers and already fragile practices. 4:47:24 PM MR. DAVIS moved to slide 5, Solution and stated that the proposed solution is for the state to adopt Alaska-specific minimum network standards. Other states' models don't work well due to Alaska's unique geography and provider distribution, so a simpler, percentage-based approach is recommended. He said the plan includes a phased-in process, applies across specialties, and requires insurers to include a broad share of both providers and practicesfor example, 85 percent of cardiologists and 85 percent of cardiology practices, not just one dominant group. This approach helps ensure adequate access and restores balance in insurer-provider negotiations. SB 122 would establish these Alaska-tailored standards. 4:49:21 PM SENATOR CLAMAN opined that narrow networks are a bigger issue in large population centers like Seattle or San Francisco, where insurers can significantly limit access by excluding many providers. He said Alaska already functions like a narrow network simply because there are so few providers and few insurance carriers. He asked how Alaska achieves reasonable provider rates when the system already lacks both provider numbers and insurer competition. 4:50:20 PM MR. DAVIS replied that the concern is that narrow networks function in large markets with many carriers and ample providers without destabilizing the system. He said Alaska is already in a provider-shortage area with a naturally narrow network. Further narrowing would strain the system and harm both patients and providers. Without state protections that limit how narrow a network can be, these products could negatively affect Alaskans and the provider community. 4:51:32 PM SENATOR CLAMAN asked whether adopting SB 122 would create a state regulated price structure, and if not why not. 4:51:40 PM MR. DAVIS replied that it is his belief that this isn't creating a state-regulated price structure because it addresses network adequacy, not prices. He said while insurers may claim narrow networks help lower costs, they also risk harming patients by limiting access and harming providers in an already small market. Minimum standards simply prevent networks from becoming too limited. Thirty-eight states and the NAIC consider such standards essential, and the goal is to put protections in place before narrow-network products enter Alaska and cause harm. 4:52:44 PM CHAIR DUNBAR noted that he personally has a narrow-network plan through TRICARE and is often surprised by how few providers accept it. At times, no specialist in the entire state will take his insurance.  4:53:11 PM SENATOR HUGHES noted that SB 122 won't fix Tricare. She asked what the insurance providers think of the proposal and whether they're likely to oppose it. She asked how current networks compare to the proposed 8595 percent standards in the communities affected, and whether insurers might push back in a way that could limit the availability of insurance products in Alaska. 4:54:28 PM MR. DAVIS said he can't speak for insurers, but he's confident they will push back. He said he doesn't know the current percentage of provider participation. 4:54:52 PM SENATOR HUGHES reminded Mr. Davis of her second question about the 85-95 percent range. MR. DAVIS replied that that narrow-network products haven't reached Alaska yet but are well established in the Lower 48. Since Alaska is already a provider-shortage area. He said the goal is to proactively set state-defined standards to prevent insurers from offering networks that include too few providers, which could limit access to care when patients need it. 4:56:06 PM SENATOR HUGHES viewed SB 121 and 122 being in tandem. Between 2014 and 2017, some providers remained outside the network, driving higher prices and influencing the 80th-percentile standard. While SB 121 allows some providers to stay out of networks, SB 122 seeks to require broader inclusion. She asked if SB 122 is intended to prevent providers from opting out under SB 121 and is that why the two bills are paired. 4:57:07 PM MR. DAVIS replied that the two bills work in tandem but have different purposes. SB 122 aims to prevent insurers from pushing providers out of networks to pit groups against each other and suppress rates. He noted that after most providers moved in- network, reimbursement levels were flat or declining under the 80th percentile, suggesting mainstream providers were not the ones driving costs uponly a few outliers outside the network were. He stated his belief that the price increases came from those outliers, not the broader provider community. 4:58:56 PM CHAIR DUNBAR held SB 122 in committee.