HB 193-HEALTH CARE; BALANCE BILLING  3:56:15 PM REPRESENTATIVE TARR announced that the next order of business would be HOUSE BILL NO. 193, "An Act relating to insurance trade practices and frauds; and relating to emergency services and balance billing." 3:56:39 PM REPRESENTATIVE JASON GRENN, Alaska State Legislature, paraphrased from the Sponsor Statement [included in members' packets], which read: House Bill 193 is focused on protecting Alaskans in emergency situations from being surprised with unexpected medical bills. The most common occurrence for balance billing is during emergency situations where patients are left without the option or wherewithal to ensure they are treated by an in- network provider. As a result, they find themselves on the hook for hefty medical bills, despite having proper health insurance. HB 193 would help Alaskans already dealing with the turmoil of a medical emergency by removing them from the billing side of the equation. When a patient is already in a dire situation, they should not be punished for the inability of an in-network provider to respond to their crisis. HB 193 bans the practice of medical providers from balance billing in emergency situations and requires insurance providers to hold harmless their clients. This covers emergency situations inside and outside of hospitals. If a patient was transported to a hospital, or an emergency arose during a medical procedure requiring an out-of-network provider, this legislation mandates the insurance and medical providers to develop a fair and equitable payment agreement. Instead of being left to handle the labyrinth of medical billing on their own, the patient will be held harmless in these situations. Medical costs are a major concern in Alaska. HB 193 is a part of a national movement to protect consumers from unexpected costs in an already difficult situation. Twenty-one states have a ban of some kind on balance billing and more states are looking are into the issue. Unexpected and excessive medical bills from out-of-network providers contribute to the growing problem of consumer medical debt, which continues to be a significant cause of personal bankruptcy. The goal of this legislation is to hold a patient harmless while the medical and insurance providers come to an agreement for the services rendered. 3:58:50 PM REPRESENTATIVE EDGMON moved to adopt the proposed committee substitute (CS) for HB 193, labeled 30-LS0466\T, Wallace, 3/6/18, as the working draft. 3:59:01 PM REPRESENTATIVE TARR objected for discussion. 3:59:08 PM RYAN JOHNSTON, Staff, Representative Jason Grenn, Alaska State Legislature, paraphrased from the Sectional Analysis, which read: Section 1: Establishes a "Hold Harmless" standard for insurance providers in the situation where a covered person receives medical care from an out-of-network medical provider in an emergency. An insurance provider will hold a covered person harmless to ensure that the covered person only pay what would have been paid if the medical provider was an in-network provider. Outlines the standards to establish the situations where a medical provider cannot balance bill a covered person. An insurance provider shall pay a non-network health care provider if the health care provider renders to a covered person; emergency services or treats an emergency medical condition services at an in-network facility services for which a referral was made by an in- network health care provider to an out of-network health care provider without the explicit written consent of the covered person. The covered person is still required to pay the in- network rates for the deductible, coinsurance and copayment. The amount paid by the covered person is required to be counted towards the covered persons deductible. The final payment determined for the medical provider will subtract any amount paid by the covered person. The insurance provider is to pay the greater of three possible amounts; the median negotiated contract rate generated using the in-network health care providers for the service provided; That is equal to the 80th percentile of charges for the services calculated using a method that establishes a statistically credible profile that reflects the general cost differences between the geographical area where the service was preformed and the other geographical areas when performed by a health care provider in the same or similar specialty; or That would be paid under Medicare for the service provided. Medical providers are required to send all bills to the insurance provider, except for the deductible, coinsurance and copayment. Contains a clause that if a covered person knowingly elects to use an out-of-network medical provider then they can be balanced billed for the services. 4:01:41 PM REPRESENTATIVE KITO asked for clarification regarding the determination of the calculations. MR. JOHNSTON explained that the greater of three possible amounts model was taken from an [PP]ACA [Patient Protection and Affordable Care Act] regulation that was adopted at the time of its federal adoption. He stated that the 80th percentile, the usual and customary rate, had been used as the standard by the State of Alaska, a precedent had already been set for its use. 4:02:41 PM MR. JOHNSTON continued to paraphrase from the Sectional Analysis, which read: Section 2: Health care insurance plans obtained under AS 39.30.090 or provided under AS 39.30.091 will be subject to the requirements of secs. 21.36.512 and 21.36.513. Section 3: Bans the practice of "Balance Billing" by a medical provider under the criteria of section 1 of the bill. Stipulates that the medical provider can still bill for the deductible, coinsurance and copayment. States that a medical provider will be paid according to section 1 of the bill. Section 4: Establishes the punishment for medical providers under the Unfair Trade Practices and Consumer Protection. 4:03:36 PM REPRESENTATIVE TARR mused that Version T of the proposed bill did not have an effective date. REPRESENTATIVE KITO asked whether the consumer was responsible for the balance billing. MR. JOHNSTON replied that the patient would not be responsible for balance billing, and that the patient would only be required to pay the co-insurance co-payment and deductible at the in- network rates. The insurance provider, after providing the three possible amounts, would choose the greater, which would be the reimbursement amount for the medical provider. REPRESENTATIVE SULLIVAN-LEONARD offered her belief that the insurance through the State of Alaska already covered patients for emergency room treatment. She asked if the care for many patients was not being covered in the emergency room. 4:05:10 PM REPRESENTATIVE GRENN explained that initially the proposed legislation had been suggested by a constituent who had this experience with another insurance provider in Alaska. He said that insurance for State of Alaska employees was still under investigation, although statements from the Department of Administration indicated that the state did not balance bill in emergency situations as those focused on by the proposed bill. 4:06:01 PM REPRESENTATIVE SULLIVAN-LEONARD asked for additional information to those statistics for non-coverage of emergency situations by insurance companies in Alaska as well as other states. 4:06:27 PM MR. JOHNSTON said that he would provide that information. 4:06:36 PM REPRESENTATIVE JOHNSTON asked, as there were insurance companies which did cover balance billing, whether this would "level the field for everybody." 4:07:10 PM MR. JOHNSTON replied that the proposed bill only covered private insurers and would "not catch all the plans like self-funded plans." He stated that this would be the standard for out of network plans with billings for emergency situations. REPRESENTATIVE JOHNSTON suggested to expand the breadth of the proposed bill. She mused that, as 21 states were currently offering this, it would be good to have those benchmarks, how long they had been offering this program, and if there had been any cause and effect. She asked about the proposed 80th percentile, which she deemed was "very different than the current 80th percentile, cause you're using a geographic region." She offered her belief that this was a business geographic region, and asked how this would change if there were certain fees. She shared that past problems with this 80th percentile had arisen as, although the policy and the purpose was very good, it had caused a "hockey stick" in a representative chart of medical costs. She suggested to take some emergency fees and see what would happen. 4:09:49 PM MR. JOHNSTON replied that he had been reviewing various databases and that his experimentation for the geographical area, using FAIR Health, had revealed a similar rate. He acknowledged that "the geographical area has been an interesting part of this conversation." 4:10:44 PM REPRESENTATIVE JOHNSTON acknowledged that the database he had used, FAIR Health, was an excellent source, except that it was voluntary. She stated that an advantage for only using the Municipality of Anchorage was that a local ordinance allowed someone to ask a medical facility about a procedure and then "get the rack rate." 4:11:12 PM REPRESENTATIVE CLAMAN asked about the lack of a definition for balance billing in the proposed bill, as it was not necessarily a term that was easily understood. MR. JOHNSTON offered his belief that, as the proposed bill focused on the emergency situations, balance billing was what was stipulated in the bill, and the bill itself was "kind of the definition." He acknowledged that balance billing was a much broader term. 4:12:16 PM MEGAN WALLACE, Attorney, Legislative Legal Counsel, Legislative Legal Services, reiterated that the bill described the instance of balance billing, and she opined: because the explanation in Section 3 of the bill that talks, that uses the term balance bill, specifically states that the balance bill cannot result in charges that are more than those out of pocket expenses that the covered person would incur in an in-network facility or being treated by an in-network health care provider. That the bill is sufficiently clear to articulate what the balance bill would be for. 4:13:15 PM REPRESENTATIVE TARR mused that, as some insurers covered Providence [Alaska Medical Center] and some covered Alaska Regional [Hospital], a person would be taken to the closest hospital in an emergency. The proposed bill would eliminate the possibility that a person would pay extra charges even though they had not been taken to the hospital covered by their insurance. 4:14:17 PM REPRESENTATIVE GRENN expressed his agreement with her explanation for the intent of the proposed bill, pointing out that this was only for emergency situations as it was not always possible to indicate which hospital. 4:14:55 PM REPRESENTATIVE TARR removed her objection. There being no further objection, Version T was adopted. 4:16:34 PM NATHAN PAIMANN, MD, Bartlett Regional Hospital, in response to Representative Tarr, explained that some physicians staffing at hospitals were independent, and had to independently contract with the network to be in-network providers. Although the hospital could be in-network, the providers may not be an in- network provider. He stated that the proposed bill "would change this so you had no surprise insurance gap billing, outside of what your usual and customary charges would be." 4:18:17 PM REPRESENTATIVE KITO shared some anecdotes of hospital situations for physicians not in-network which resulted in surprise billings for the patients. 4:19:04 PM MS. LATHAM, in response to Representative Sullivan-Leonard, stated that there was an 80th percentile regulation already in effect, which had been adopted to include the treatment of emergency services and services at an in-network hospital or ambulatory surgical center, as explained on page 2, lines 4 - 6 of the proposed bill. She added that the proposed bill "does broaden the scope of coverage services to services for which a referral was made by an in-network health care provider to the non-network health care providers without written consent of the covered person." She declared that this did strengthen provisions for consumers. She directed attention to page 4, line 27, which created a violation of the [Alaska] Unfair Trade Practices and Consumer Protection Act. She expressed concern that, as the Division of Insurance had never regulated state health plans, Section 2 of the proposed bill [page 4, line 5] moved AS 39 under AS 21, which she deemed to be "unusual." 4:21:23 PM REPRESENTATIVE SULLIVAN-LEONARD expressed that she had concerns with the application and possible outcome because of Section 4 [page 4, lines 27 - 29]. MS. LATHAM replied that, as this was enforced by the Department of Law, it offered "very, very strong consumer protections." 4:22:01 PM REPRESENTATIVE SULLIVAN-LEONARD asked if the bill sponsor could review that section. REPRESENTATIVE JOHNSTON asked if the concern for Section 2 [page 4, lines 6 - 11] was because it was an additional responsibility, and whether it was for the possibility of "opening up a door that might go beyond this." MS. LATHAM said that this was similar to House Bill 25, a contraceptive coverage bill, as this proposed bill also just included the state self-insured, non-federal health plans, which had never been under the jurisdiction of AS 21 and was unprecedented. 4:23:05 PM REPRESENTATIVE KITO asked if she was referencing the state employee plans. MS. LATHAM said, "that's exactly what I'm referencing." 4:23:36 PM