HB 187-INS. COVERAGE: AUTISM SPECTRUM DISORDER 3:04:15 PM CO-CHAIR KELLER announced that the first order of business would be HOUSE BILL NO. 187, "An Act requiring insurance coverage for autism spectrum disorders, describing the method for establishing a treatment plan for those disorders, and defining the treatment required for those disorders; and providing for an effective date." 3:04:37 PM REPRESENTATIVE PETE PETERSEN, Alaska State Legislature, read from the Sponsor Statement [Included in the members' packets.] and said that many children diagnosed with an Autism Spectrum Disorder (ASD) would not receive treatment, even though treatment had been shown to improve the symptoms of ASD. He confirmed the exorbitant costs which families paid for treatment, and the incremental societal costs for not treating autism. He explained that "HB 187 would require insurance coverage for autism spectrum disorders, including the behavior therapies that after 30 years of study have shown to be the only effective treatment of these disorders." He confirmed that the cost savings from the treatments far outweighed the cost of treatment or the incremental societal cost of no treatment, which he observed would be "steep." He reported significant savings to the state and local governments with HB 187. He pointed out that the required insurance coverage for ASD would bring qualified ASD professionals to Alaska to meet these needs. 3:07:32 PM ASHLEY ROUSSON, Staff to Representative Pete Petersen, Alaska State Legislature, explained the sectional analysis [Included in the members' packets.] and highlighted that Section 1 amended the current insurance statute to include coverage for autism spectrum disorders. She detailed that treatment would be covered as prescribed by a licensed physician or psychologist; treatment would be provided by an autism service provider; treatment would be outlined in a treatment plan, prescribed by the physician or psychologist, and followed by a comprehensive evaluation; and that treatment would include medically necessary pharmacy care, psychiatric care, psychological care, rehabilitative care, and therapeutic care. She reported that the coverage would include people under the age of 21, and that there would be a maximum annual benefit of $36,000, with an annual inflation adjustment. She continued and explained that Section 2 of HB 187 stated that the coverage would be applied for policies issued on or after January 1, 2010. 3:09:44 PM MS. ROUSSON informed the committee that experts were prepared to testify. 3:10:29 PM The committee took an at-ease from 3:10 p.m. to 3:12 p.m. 3:12:34 PM REPRESENTATIVE SEATON referred to Section 1(a)(2) and asked if the rehabilitative care was for care until there was no longer progress, or was ongoing "as long as the person needs some help." 3:13:43 PM MS. ROUSSON referred to the definition of "medically necessary" in Section 1(a)(1) which explained that the treatment and care was described in subparagraphs (A), (B), and (C). She said that the treatment would include prevention and amelioration for a condition or disability, as well as assistance in achieving maximum functional capacity with daily activities. 3:14:16 PM REPRESENTATIVE SEATON asked to clarify that treatment services would not have a termination date, if the medical analysis was for progression of the condition. 3:15:04 PM MS. ROUSSON agreed, but she pointed out the limitations to coverage contained in the bill. 3:17:21 PM REPRESENTATIVE PETERSEN said that HB 187 was to help people with the disorder, that there had been significant improvements in the treatments, and that there were greater successes, especially when treatment was received at an early age. 3:18:59 PM JAMES BOUDER, COO, The Vista School and The Vista Foundation, explained that he was the COO of a private school in Hershey, PA which provided services to children with autism. He detailed that he had provided cost analysis testimony for similar legislation in many other states. He presented a Power Point titled "The Cost and Benefit of HB 187." [Included in the members' packets.] MR. BOUDER referred to slide 2, "Cost Benefit Analysis," and said he would discuss the effect that mandating coverage would have on commercial insurance rates and state employee claims if the benefit were extended to dependents. He spoke about the long-term savings considerations and he summarized the cost effect to other states. 3:23:20 PM MR. BOUDER pointed to slide 3, "Summary of HB 187," and he stated that HB 187 required private insurance coverage for autism, and provided coverage for a list of medically necessary services. 3:23:49 PM MR. BOUDER explained slide 4, "Commercial Insurance Cost Estimates." He estimated that more than 48,000 Alaskans between the ages of 2 and 20 had insurance under plans subject to HB 187. He explained the "treated prevalence rates" used to establish low, mid, and high range estimates for the number of children seeking treatment. He explained that the highest expenses would be during the early childhood years. He said that applied behavior analysis (ABA) was the most effective, and the most expensive, treatment; and that this was usually provided at younger ages. 3:25:56 PM MR. BOUDER considered slide 5, also titled "Commercial Insurance Cost Estimates," which continued the assumptions discussed on slide 4. He declared that the assumption of 85 percent Medical Loss Ratio was the industry standard, and described this as the percentage of premiums collected that were spent on claims. He directed attention to the estimated premium base of more than $345 million in 2009, and he explained how he collected this information. He declared that the final assumption was for an adequate provider network to be in place by the effective date. He noted that there was not an adequate provider network currently available in Alaska, and that it would take time to recruit, train, and deploy trained providers. 3:28:32 PM MR. BOUDER discussed slide 6, "How Many? Eligible Beneficiaries." He explained the table of eligible beneficiaries, and announced that there would be about 48,000 eligible children in Alaska. He continued on to slide 7, "How Many? Treated Prevalence Assumptions," and he noted that community prevalence was not an assumption to use for autism, as it had a range of severity. He referred instead to four different studies that found about 1 in 500 children with autism. He noted that his assumption was for a more frequent occurrence. He explained that an adequate treatment program would bring more people to utilize these services. 3:31:59 PM MR. BOUDER showed slide 8, "How Much? Low Estimate (Treated Prevalence 1 in 400)," and said that he used an estimate from the actuarial firm, Mercer. He estimated the cost per person to be $2.24 per member per month. 3:34:02 PM MR. BOUDER continued on to slide 9, "How Much? Mid Estimate (Treated Prevalence 1 in 325)." He said that this table used the same actuarial estimates for this mid range estimate of prevalence, and that the cost would be $3.60 per member per month. 3:34:20 PM MR. BOUDER presented slide 10, "How Much? High Estimate (Treated Prevalence 1 in 250)." He noted that the cost would be $5.81 per month. He reminded the committee that all of these estimates assumed that an adequate network of providers was available. 3:35:00 PM MR. BOUDER moved on to slide 11, "Short-Term Cost Estimates." He explained the likely scenarios for cost increases over a four year period with low, mid, and high prevalence rates. 3:36:26 PM MR. BOUDER noted on slide 12, "State Fiscal Impact," that the likely cost per state employee per month with a mid range prevalence would be $3.02 per month. 3:37:15 PM MR. BOUDER assessed slide 13, "Future Savings," and compared the lack of investment in autism treatment to deferred maintenance on a home. He explained that, according to the Jacobson study in 1999, there was a $2 million savings per person with early treatment. He noted that the Ganz study in 2007 showed the incremental societal cost for not treating autism to be about $3.2 million per person. He explained that this included the care and lost productivity for the person with autism, as well as the lost productivity for the parents or primary caregivers. 3:41:25 PM MR. BOUDER directed attention to Attachment A. [Included in the members' packets.] He explained that the first page showed the completed cost analyses for autism legislation which has already been enacted. He pointed out that the estimated premium increase was between .33 and 1 percent. 3:43:34 PM MR. BOUDER mentioned that page 2 of Attachment A listed national actuarial firms hired to find the costs of the legislation, and that all of the firms had agreed that the cost increase for premiums would be one percent or less. He concluded that the costs in Alaska would be similar to that of these other states. 3:44:54 PM REPRESENTATIVE SEATON asked about the estimated percentage of increase for premiums on slide 11. 3:45:38 PM MR. BOUDER explained that the likely total claims impact in year one would be 25 percent of year four; year two would be 50 percent of year four; and year three would be 75 percent of year four. 3:46:23 PM REPRESENTATIVE SEATON asked if transportation costs to the facilities would be required should coverage be mandated. He noted that there were not any transportation expenses in the estimates which Mr. Bouder presented. 3:47:39 PM MR. BOUDER replied that other states had limited provider networks within the state. He noted that the $36,000 cap in the bill would limit the fiscal impact. He explained that the types of services for applied behavior analysis were ordinarily provided in a home setting. 3:48:49 PM DR. GINA GREEN, Board Certified Behavior Analyst, offered to answer any questions about autism. 3:49:41 PM REPRESENTATIVE SEATON asked that as treatment was to be prescribed by a licensed physician or psychologist, would their general knowledge be sufficient to determine whether the best treatment was or was not the most expensive treatment. 3:50:49 PM DR. GREEN responded that the American Academy of Pediatrics endorsed applied behavior analysis as the preferred treatment for autism. 3:53:23 PM REPRESENTATIVE SEATON pointed to Section 1(e)(2) of the bill which listed disorders that were all defined as "autism spectrum disorders." He asked if there were different levels which required different treatments. 3:54:10 PM DR. GREEN acknowledged that the treatment and the needs for all these disorders were similar. She explained that applied behavior analysis treatment was very individualized. She commented that there were all degrees of severity. 3:57:01 PM DR. GREEN began her presentation and explained that applied behavior analysis was a natural science approach to behavior and that autism was just one of the areas of application. She suggested looking at the skill deficits and then developing procedures to reduce the problem behaviors and increase independent functions: self care, communication, social skills, and general awareness. She explained that this procedure was highly individualized. She shared that the training of the parent was also important to make available the opportunities for the child to regularly practice these skills. She specified that there was constant evaluation, so that if there was not progress, the procedures and techniques were changed. She expressed that there were many studies which evaluated specific methods for reducing some of the problem behaviors, as these were contributors to health care costs. She explained that the most effective result for applied behavior analysis (ABA) was for early, comprehensive, and intensive intervention. 4:01:29 PM REPRESENTATIVE COGHILL asked to clarify at what age ABA worked best. 4:02:11 PM DR GREEN said that the brain is more able to absorb at a younger age before behavioral patterns become established. She said that older children would often have slower progress. 4:03:17 PM REPRESENTATIVE COGHILL asked how a medical model could determine the need to intervene early when the problem may be that a developmental stage had not yet matured. 4:03:55 PM DR. GREEN asked what Representative Coghill meant by "medical model." 4:04:03 PM REPRESENTATIVE COGHILL responded that the ABA was a technical screening tool. 4:04:29 PM DR GREEN clarified that ABA was a treatment, not a screening tool. REPRESENTATIVE COGHILL asked if every child could be behaviorally suspect enough to be considered for the ABA. DR. GREEN specified that the child's developmental difficulties needed to meet the diagnostic criteria for autism. She pointed out that trained professionals were good at differentiating autism spectrum disorder from other developmental disabilities. She shared that there was no evidence that people with autism got better with maturity. She stated that without effective intervention, people with autism would remain impaired, and costly to care for. 4:05:46 PM REPRESENTATIVE COGHILL referred to the subjective nature of the diagnostics, and posed the question for finding and helping people with a legitimate need, as opposed to paying people to find a need. 4:06:14 PM DR. GREEN agreed that there were not biological markers for autism spectrum disorder. She declared that the behavioral characteristics were clearly defined, and that experience with these disorders allowed for differentiation. She explained some of the behaviors distinctive to autism spectrum disorder. 4:07:28 PM REPRESENTATIVE COGHILL said that he would maintain this as an ongoing question. 4:07:43 PM REPRESENTATIVE SEATON referred to page 5 of Dr. Green's letter to the U.S Assistant Secretary of Defense for Health Affairs [Included in the members' packets.] and he read: "With effective treatment, military children and youths with ASD can lead happier and healthier lives than they would otherwise." He asked about the connection between military children and youth with ASD. 4:08:11 PM DR. GREEN responded that military health care covered ABA, and that this letter explained the medical necessity of ABA treatment for autism. 4:09:12 PM REPRESENTATIVE SEATON asked how much ABA takes place in the school environment. 4:09:52 PM DR. GREEN explained that most public schools did not have the expertise or the resources. She reported that the interventions needed to be provided in the homes and communities, as well as the schools, to address the needs of children with autism. 4:11:47 PM REPRESENTATIVE SEATON referred to Section 1(b)(5) of the bill, which stated that coverage "must cover treatment that is coordinated with an education program, but may not be contingent on the coordination of treatment with an education program." 4:12:06 PM DR. GREEN, in response to Representative Seaton, said that it worked best for children with autism to coordinate the school and the out-of-school programming to provide consistency. 4:12:49 PM REPRESENTATIVE SEATON asked who would finance the school programs, as this was a mandated coverage. 4:13:27 PM DR. GREEN, in response to Representative Seaton, opined that financing was determined on a state by state basis. She pointed out that all states were required to provide special needs children with "a free and appropriate public education." She reminded the committee that the early intervention treatments started before school age, as it was necessary to teach the child all the basic skills for success in a school environment. She shared that the coordination of programs only became an issue when children were capable of school participation. 4:15:01 PM REPRESENTATIVE LYNN referred to TRICARE military insurance and asked how many children of retired military were diagnosed with autism spectrum disorder. 4:15:35 PM DR. GREEN replied that TRICARE had a program for special needs children of military families. She offered her belief that the retired military insurance package did not include this treatment benefit, but that it was being discussed. 4:17:10 PM REPRESENTATIVE SEATON referred to Section 1(a) and asked the reason for exclusion of a "fraternal benefit society." 4:18:01 PM DENNIS BAILEY, Attorney, Legislative Legal Counsel, Legislative Legal and Research Services, explained that with fraternal benefit societies, such as the Benevolent & Protective Order of Elks or the Loyal Order of Moose, the members provided benefits for themselves which were not considered an insurance program. He explained that this exception was common for mandated coverages. 4:18:32 PM CHRIS SADDLER said that she had a 10 yr. old son with autism. She said that autism was a "huge health issue" in Alaska, as it affected more kids than aids, diabetes, and cancer combined. She shared that the Anchorage School District reported that 1 in 80 kids were on the autism spectrum. She reminded the committee that autism was treatable, and that with early diagnosis and intensive behavior treatment, a majority of the kids would lead "productive, independent lives." She continued on to say that without effective intervention, 80 percent of the kids required more costly, life-long support services, at public expense. She opined that it was a lot easier to deal with a toddler having a tantrum, than an adolescent or adult having a tantrum. She related that there were no intensive treatment programs for autism in Alaska. She recounted that they were able to find a private provider to set up a volunteer based home program patterned after a University of Alaska Anchorage (UAA) research project. She revealed that her son's early education experiences lead to his extreme frustration and that there were no programs for support. She said that the Anchorage School District declined to provide the intensive behavioral program that her son required. She relayed that she was directed, by another parent, to Dr. John McEachin's Autism Partnership clinic in Seal Beach, California. She stated that the clinic staff determined her son's needs, and outlined an intervention program. She shared that it took several months to hire and train a volunteer staff member to provide the 30 hours per week of one-on-one interaction. She emphasized that none of this intervention was covered by either her federal or her husband's State of Alaska insurance. She disclosed that, after a year of documented improvement and tens of thousands of dollars of expenses, they were able to submit a plan of care that was approved by Medicaid, only because her son was also diagnosed with an anxiety disorder. She said that this Medicaid funding paid for the staffing, but did not pay for any of the oversight and direction from Autism Partnership. She said that they were finally able to file a successful due process against the Anchorage School District. She shared that, at this point, they had incurred a debt from the autism program of more than $100,000. She said that the school district was now paying for the current costs, but had declined to reimburse any of the previous expenses. She shared that the resulting legal fees were an additional $100,000. She summarized that early effective treatment for children with autism reduced costs, but that no single service system would bear the entire financial responsibility for payment. She suggested that coordinated support from education funding, Medicaid, and private insurance was necessary. She stated that HB 187 would ensure that private insurance carriers provided coverage of vital health care services for children with autism. She opined that this would save millions of dollars for the state of Alaska over the life of each child. She appealed to the National Federation of Independent Businesses (NFIB) to remove its opposition to any new mandates on insurance coverage. She asked that autism be given the same considerations for treatment as for polio, cancer, or diabetes. She offered her strong support for HB 187. 4:25:22 PM TONJA UPDIKE shared that her child was diagnosed with autism at 18 months. She declared that he began speech, occupational, and physical therapies which all "helped tremendously." She said that her husband's insurance did not cover everything. She pointed out that this early intervention would save money in the long term. She expressed that autism was a growing problem, but that it was treatable. She emotionally described the frustration and concern of trying to meet all of her son's needs, without also having the insurance coverage. She voiced her support for HB 187. 4:29:30 PM LORI KING spoke about her daughter and pointed out the very specific early signs of autism that doctors looked for, which included aggressive behavior, tantrums, and early walking and talking developmental signs. She shared that her daughter required significant clinical treatment. She noted that when her daughter, now 18 years of age, was young, there were not many services available. She described a number of her daughter's early indicators. She said that her insurance policy at the time covered about 50 percent of mental health services, which was the category for autism. She disclosed that the problem was with the wait lists for the services. She explained that most services were provided by non-profits, which needed full payment from as many patients as possible. She reported that as she was working, she did not qualify for Medicaid or Denali Kid Care for her daughter's treatment. She stated that not having "quite enough insurance" resulted in a three year wait for services. She compared the HB 187 funding cap of $36,000 per year to the actual costs of $70,000 for funded services. She expressed her frustration at not having the services available for those crucial first 5 years. She described the necessity for early learning of the social skills. She said that she supported HB 187. 4:39:23 PM MILLIE RYAN, Executive Director, Governor's Council on Disabilities & Special Education, Office of the Commissioner, Department of Health and Social Services, said that the Council was comprised of family members and representatives from state agencies. She relayed that the Council had convened an ad hoc committee on autism to improve the quality of services. She shared that good progress was being made to increase the availability of services. She said that the Council was very supportive of HB 187. 4:41:07 PM KATHY FITZGERALD shared that her daughter was severely autistic, but that her behaviors were not recognized 26 years ago. She reported that her husband's insurance with IBM included coverage for families with special needs children, which paid for a lot of the therapies. She described some of the problems encountered with a severely autistic child. She offered her belief that the insurance mandate would bring more providers to Alaska and would have a "positive and wonderful impact on the state of Alaska." She stated that Medicaid was a payer of last resort, and that any of the services paid for with private insurance would help. She described that this was an issue of parity to ensure that services for autism were included, and that this was a wise investment for Alaska. 4:45:58 PM LINDA HALL, Director, Division of Insurance, Anchorage Office, Department of Commerce, Community, & Economic Development (DCEED), said, in response to Co-Chair Keller, that she did not have detailed cost estimates. She said that about 40 percent of the people covered by private insurance plans in Alaska were in plans regulated by the Division of Insurance. She said that the rest were pre-empted by Employee Retirement Income Security Act of 1974 (ERISA), and therefore not required to follow any mandates. She said that mandates in state statute had no impact on self insured plans. She listed the types of insurance coverage that would not be impacted by legislation, regardless of being good public policy. 4:48:34 PM REPRESENTATIVE COGHILL requested a pie chart to show the insurance market, including ERISA. He opined that it was necessary to review the money being paid toward the services, and to determine if there was enough money to support a service delivery system. 4:51:22 PM MS. HALL explained that ERISA programs were private employers who self funded the health care. 4:51:36 PM REPRESENTATIVE COGHILL listed some of the ERISA employers to include ConocoPhillips, and Alyeska Pipeline Service Company. He asked if it was realistic for this group to support the industry base needed to supply the benefit. 4:52:08 PM MS. HALL referred to a prior hearing for application for conversion from a "not for profit" to a "for profit" for Premera Blue Cross. She mentioned that the studies from that hearing were still available and could be transferred to a pie chart. 4:53:19 PM REPRESENTATIVE COGHILL said that the pie chart would help gain a realistic look of whether a smaller insurance group generated enough pay-out to support the service industry. 4:53:55 PM MS. HALL said that she would supply that data. 4:54:13 PM REPRESENTATIVE CISSNA referred to an Institute of Social and Economic Research (ISER) study and the Department of Health and Social Services investigation of the uninsured. She mentioned that an ISER report was also studying the "under-insured." 4:54:54 PM MS. HALL replied that she had worked with both of them, and that she would utilize those resources. 4:55:09 PM CO-CHAIR HERRON asked Ms. Hall for her written opinion of a mandate in HB 187 as opposed to a mandated offering. 4:55:42 PM REPRESENTATIVE SEATON asked if there was any restraint on a mandate for a condition when a patient claimed there were not services within the state. MS. HALL said that there was not any restriction. 4:56:32 PM REPRESENTATIVE SEATON asked to clarify that the mandate required that available services be made available, even if it meant travel to another state. 4:56:54 PM MS. HALL agreed. 4:57:05 PM [HB 188 was rescheduled for Thursday, March 26, 2009.] 4:57:49 PM REPRESENTATIVE SEATON asked that if coverage was mandated, would that affect funding under Medicaid. 4:58:12 PM MS. HALL, in response to Representative Seaton, said that for a benefit to be mandated, it would be need to be placed in legislation. 4:58:32 PM REPRESENTATIVE SEATON noted that the ABA utilization dropped off after early childhood intervention, and he asked why the bill included coverage through the age 21. 5:00:12 PM MS. ROUSSON said that ABA was one of the most effective treatments for autism spectrum disorders (ASD), especially with intensive treatment at an early age. She listed a variety of other treatments, and noted that the severity of the ASD determined a case by case review for treatment. She explained that the cost analysis reflected necessary care, but that this care varied for each diagnosis. She observed that the ABA was also extremely stressful on the family, and that they did not want the treatment to continue any longer than was necessary. 5:04:13 PM REPRESENTATIVE SEATON asked again about the reason for mandated coverage to continue until age 21. 5:04:42 PM MS. ROUSSON said that the age limitation was based on other similar states' legislation. 5:05:50 PM CO-CHAIR KELLER closed public testimony. 5:06:07 PM REPRESENTATIVE PETERSEN said that HB 187 was a good basic bill, and that any additional questions could be answered. 5:06:37 PM [HB 187 was held over.]