HB 313-RECOVERY OF PAYMENT BY INSURANCE PROVIDER  3:04:46 PM CHAIR SPOHNHOLZ announced that the first order of business would be HOUSE BILL NO. 313, "An Act relating to payments to providers and covered persons and recovery of payments by health care insurers." 3:05:23 PM REPRESENTATIVE JASON GRENN, Alaska State Legislature, paraphrased from the Sponsor Statement, which read: 32 states have implemented a statute of limitations for the ability of insurance companies to retroactively recoup indemnities from health care providers. A common practice of many health insurance companies is to perform an audit to make sure the claims paid to them were accurate, a practice that any business trying to become more efficient would perform. Currently in Alaska there is no maximum number of years that limits insurance companies to retroactively recouping indemnities due to our lack of a statute like the one presented in HB 313. HB 313 simply implements a statute of limitations of 18 months on health insurance companies to recoup mistakenly paid amounts from health care providers in Alaska. HB 313 provides exceptions to this limitation in instances of: a fraudulently submitted claim, a duplicate claim, in the instances of misrepresented or wrongly identified services by the health care provider, a claim that is subject to adjustment by another health care insurer, or any payment or claim that is the subject of legal action. These exceptions are the only instances under which the statute of limitation is flexible for or voided. HB 313 is not only a bill that focusses on the efficiency of Health Insurers, but most importantly is legislation that ensures that a financial burden may not be passed onto the customer unexpectedly at any time after their visit to the doctor. With the lack of a statute of limitation in this area there exists an inherent liability that can be passed on to any Alaskan at essentially any time. House Bill 313, serves as a simple fix for a large risk that resides in the current statutes surrounding our health billing structure. HB 313, takes care of patients, doctors, and all health care providers. I humbly ask for your support in this piece of legislation that has proven to be a simple fix to our outdated precedence. 3:07:47 PM REPRESENTATIVE EDGMON moved to adopt the proposed committee substitute (CS) for HB 313, labeled 30-LS0852\J, Wallace, 2/14/18, as the working draft. CHAIR SPOHNHOLZ objected for discussion. 3:08:11 PM SHEA SIEGERT, Staff, Representative Jason Grenn, Alaska State Legislature, explained that the proposed committee substitute (CS), Version J, added Section 3 to the proposed bill which would amend AS 39.90 to be subject to the provisions in AS 21.54.020(d) and AS 21.54.050(d). He reported that this change would only affect a small number of plans in the State of Alaska, in this instance. In response to Chair Spohnholz, he explained that AS 39 dealt with the state employee insurance plans, provided through Alaska Care, and the insurance companies which had contracted with the state for state employee benefit; whereas, AS 21 dealt with all the other plans for an insurance company doing business in Alaska. 3:09:42 PM REPRESENTATIVE EASTMAN asked about the anticipated timeline for a claim before it became the subject of the legal action mentioned in the proposed bill. MR. SIEGERT deferred to the Department of Administration. He reported that the administrative code, 3AAC 26.10, stated that "health care insurers shall give a written notice to a health care provider, a health care facility, or a consumer at least 30 calendar days before insurer seeks recovery for overpayment. The notice must include adequate information. ... The health care insurer may not initiate recovery of an overpayment more than 365 days after the date of the original payment was made to a health care provider, a health care facility." He stated that the intent of the proposed bill was to make this change through administrative code, and it would only affect AS 21. He replied to Representative Eastman that he would have to "check with our legal team on that." 3:11:41 PM REPRESENTATIVE EASTMAN directed attention to the proposed committee substitute, Version J, and asked if this referenced a health care insurer seeking recovery from a provider. 3:11:55 PM MR. SIEGERT replied, "yes." 3:11:58 PM REPRESENTATIVE EASTMAN mused that, should the provider not want to pay, there was an incentive to wait out the health care insurer for 18 months, and then use the statute as a defense. He asked if there was any way to prevent this situation. MR. SIEGERT explained that the intent of the proposed bill was "to give notice of the initial search of the recovery of funds before that 18 months, and so after they give the initial request for more funds, we would expect that they would do so in a timely process." He offered his belief "that would have to do with regulations put forth by the regulating body." 3:13:15 PM REPRESENTATIVE SULLIVAN-LEONARD asked about the ramifications if this was not completed within the 18 months. MR. SIEGERT replied that there would not be the option to seek recovery of those funds. 3:13:31 PM REPRESENTATIVE SULLIVAN-LEONARD asked if there were any exceptions. MR. SIEGERT reported that there were five exceptions: for fraudulent claims, for payments of duplicate claims, for health care services identified in a claim that were not actually delivered by the health care provider, for payments or claims subject to adjustment by another health care insurer, and for a payment or claim that was subject of legal action. 3:14:12 PM REPRESENTATIVE SULLIVAN-LEONARD asked for the reason to 18 months, instead of 24 or 36 months. MR. SIEGERT replied that the sponsor had contacted multiple people and reviewed other states. He shared that currently three states had a six-month provision, twelve states had a twelve-month provision, and seven states had an eighteen-month provision. He opined that this was the most fair and adequate timeline after all payments and transactions had been made and the insurance company was conducting an audit of the business transactions. 3:15:52 PM CHAIR SPOHNHOLZ mused that this appeared to be the outside limit of regulation allowed. MR. SIEGERT added that eight states allowed twenty-four months, Connecticut allowed sixty months, and Florida allowed thirty months. CHAIR SPOHNHOLZ commented that this was "the sweet spot in the middle." 3:16:32 PM CHAIR SPOHNHOLZ removed her objection. There being no further objection, Version J was adopted as the working document. 3:16:58 PM The committee took a brief at-ease. 3:17:21 PM CHAIR SPOHNHOLZ brought the committee back to order and opened public testimony on HB 313. 3:17:44 PM DEBORAH RIESER, Owner, Spectrum Medical Billing Services, explained that she offered medical billing services to about 100 providers, the bulk of which were small practices. She paraphrased from a letter she had submitted to the committee, dated January 31, 2018, [Included in members' packets] which read: I'm writing in response to House Bill 313, to change the Statute AS 21.54.020(d) from an unlimited amount of time a medical insurance company (Payer) can request a refund from HealthCare providers. Currently, Alaska is 1 of 3 states that have an unlimited timeframe a Payer can request a refund from a provider. I've had a handful of experiences the last few years that prompted me to look at Alaska Statutes. Currently, most payers require the Providers to submit claims within a certain period. Most are 1 year from the date of service, and some are 6 months, or 90 days from the date of service. In turn, the Payers can request a refund from anytime in the future if they did not process the claims correctly. Here are a couple examples that happened to Providers I provider services to: 2016 EBMS request a refund for 5 dates of service in 2013 as they continued to pay after the patients plan terminated. The provider had to repay approx. $1,200.00. Thankfully the patient had a secondary insurance that we could appeal for a payment. 2016 Cigna requesting a refund for 2014 claims they paid in error as the patient was not eligible. 2017 Cigna requesting a refund for 2015 claims paid in error. 2018 - EBMS requesting a refund for 2015 claims that were paid after the patient was no longer eligible. 2018 Cigna requesting a refund for claims paid in 2016. All of the above examples are not from fraudulent claims but the Payer should have some processed the claims correctly the first time. Now the financial burden is on the Provider to refund the Payer. In turn the patient, if still in Alaska, will be responsible for these charges. I am for limiting the timeframe a Payer can request a refund. The Providers only have a sometimes small timeframe they can submit charges to a Payer. The Payer should be expected to process the charges against the policies of the patient within a timeframe as well. 3:20:46 PM CHAIR SPOHNHOLZ reiterated that although there was a limited amount of time to file a claim, there was not a limited amount of time to collect on an over payment of a claim, which appeared to be a one-sided relationship. MS. REISER expressed her agreement. 3:21:11 PM CHAIR SPOHNHOLZ announced that HB 313 would be held over.