HOUSE BILL NO. 136 "An Act requiring the governor's fiscal plan to include certain information." 8:36:18 AM Co-Chair Stoltze referred to two amendments. Representative Thompson MOVED to ADOPT Amendment 2, 28- LS1362\P.1, Wallace, 4/8/14 (copy on file): Page 1, line 11: Delete "board and adopted by reference" Insert "medical services review committee [BOARD] and adopted by the board [REFERENCE]" Page 2, line 21: Delete "(1)" Delete "board" Insert "medical services review committee" Page 2, line 22: Delete "board" Insert "medical services review committee" Page 2, line 23, following "adopted": Insert "by the board" Page 2, line 23: Delete ";" Insert "." Page 2, lines 24 - 29: Delete all material. Page 3, following line 23: Insert a new subsection to read: "(p) The medical services review committee shall formulate a conversion factor and submit the conversion factor to the commissioner of labor and workforce development. If the commissioner does not approve the conversion factor, the medical services review committee shall revise the conversion factor and submit the revised conversion factor to the commissioner for approval." Page 4, following line 15: Insert a new bill section to read: "* Sec. 4. AS 23.30.395 is amended by adding a new paragraph to read: (42) "medical services review committee" means the committee established under AS 23.30.0950)." Renumber the following bill sections accordingly. Page 4, line 16: Delete "AS 23.30.097(j) - (o)" Insert "AS 23.30.097(j) - (p)" Page 4, line 18: Delete "sec. 4" Insert "sec. 5" Co-Chair Stoltze OBJECTED for discussion. Representative Thompson explained that Amendment 2 would allow the medical services review committee to directly set the conversion rates for the new fee schedule. Subsequently, the schedule would be submitted to the Department of Labor and Workforce Development commissioner for approval. In the current bill version the conversion factors were set by the 18 member workers' compensation board. The medical services review committee was made up of 9 people including members of the state medical association, chiropractic society, nursing home association, a healthcare provider, four non-healthcare providers, and the commissioner's designee. He communicated that the amendment streamlined the process and had come at the bill sponsor's request. Co-Chair Stoltze reiterated that the amendment language had been brought to the committee by the sponsor. ANNA LATHAM, STAFF, REPRESENTATIVE KURT OLSON, confirmed the sponsor's support of Amendment 2. Co-Chair Stoltze asked for verification that the amendment language had originated from the sponsor. Ms. Latham replied in the affirmative. Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment 2 was ADOPTED. Representative Gara MOVED to ADOPT replacement Amendment 1: Page 2, line 19: Insert "(4) The fee schedules of (A) - (C) of this subsection shall not be used for any procedure or service unless they satisfy the service charge of providers in an area so that patient access to quality medical care is not compromised." Co-Chair Stoltze OBJECTED for discussion. Representative Gara pointed to a concern that the workers' compensation rate would be the Medicare or Medicaid rate. He understood that it was not the sponsor's intention; therefore, replacement Amendment 1 clarified that the workers' compensation rate would not be the Medicare or Medicaid rates unless they were adequate to ensure patient access to quality medical care. He stated that the sponsor intended that there would be a multiplier at some point in time. Ms. Latham believed the amendment had good intention; however, she believed it was unnecessary for two reasons. First, it created confusion in the interpretation that Medicare or Medicaid rates would be used. Second, currently 32 states used the methodology with a conversion factor set by the state. The bill had been referred to the House Finance Committee because of its $62,000 fiscal note associated with the medical services review committee setting the conversion factors. Representative Gara asked for verification that the Medicare and Medicaid language in the bill did not mean that the state would adopt those rates if they were inadequate to provide quality medical services and access. Ms. Latham replied in the affirmative and pointed out that the conversion factor was a large component of the legislation for that reason. Representative Gara was satisfied with the information put on record by the sponsor's staff. He WITHDREW Amendment 1. 8:42:16 AM Vice-Chair Neuman referred to the unique nature of widespread costs in Alaska due to availability of medical services statewide. He imagined that cost differentials in rural Alaska could be quite varied. He wondered about alignment with Medicaid values. He asked if comparisons had been done statewide to determine how costs would average out. Ms. Latham replied that the geographical differential had been included specifically for rural areas. She added that the bill included an exemption for rural (critical access) hospitals. Representative Wilson asked if there was a place on the board for physical therapists. Ms. Latham replied that there was one open seat for a healthcare provider on the medical services review committee. She relayed that based on testimony, physical therapists did not account for the application of a conversion factor. The testifiers had discussed their experiences using Medicare rates, which was not the intent of the legislation. She believed some confusion existed related to the testimony. Representative Wilson pointed out that there was an opportunity for physical therapists to apply for a medical services review committee seat if they were interested. Representative Costello discussed the fiscal notes including one fiscal impact note from the Department of Labor and Workforce Development totaling $62,000 in FY 15 and $54,000 in FY 16 through FY 20; and one indeterminate note from the Department of Administration. Vice-Chair Neuman MOVED to REPORT CSHB 316(FIN) out of committee with individual recommendations and the accompanying fiscal notes. CSHB 316(FIN) was REPORTED out of committee with "no recommendation" and with one new fiscal impact note from the Department of Labor and Workforce Development and one new indeterminate note from the Department of Administration. 8:45:42 AM AT EASE 8:47:53 AM RECONVENED