HB 176-DIRECT HEALTH AGREEMENT: NOT INSURANCE  4:31:26 PM CO-CHAIR ZULKOSKY announced that the final order of business would be HOUSE BILL NO. 176, "An Act relating to insurance; relating to direct health care agreements; and relating to unfair trade practices." 4:31:44 PM CRYSTAL KOENEMAN, Staff, Representative Sara Rasmussen, Alaska State Legislature, on behalf of Representative Rasmussen, prime sponsor, gave a sectional analysis of HB 176. She stated that HB 176 would establish direct health care agreements for medical providers to provide Direct Primary Care (DPC) to patients. She explained that DPC would be a membership based alternative payment model where patients, employers, or health plans pay primary care providers flat, simple periodic fees directly, in exchange for access to a broad range of primary care services. She reported that the previous committee of referral had done quite a bit of work on the proposed legislation, and it suggested going through the sectional analysis to better understand all the many intricate parts of the bill. CO-CHAIR ZULKOSKY requested a reading of the sectional analysis. MS. KOENEMAN gave a sectional analysis of HB 176 [copy included in the committee packet], which read as follows [original punctuation provided]: Section 1: AS 21.03.025 Direct health care agreements. Adds a new section to AS 21.03 creating direct health care agreements. Subsection (a) outlines that a direct health care agreement is between a health care provider and a government entity, individual patient, employer of a patient, or a representative of a patient. Subsection (b) states the provider shall disclose the services provided under the agreement and establish an annual fee comparable to other agreements. Subsection (c) The health care agreement must be legible and in language an individual with no medical training can understand. It must: Describe the services to be provided by the health care provider; Specify the annual fees associated with the agreement; Prominently state that the agreement is not health insurance and that it does not meet health insurance mandates that may be required by federal law; Include contact information for the person receiving and addressing complaints; State the annual fee under the agreement; and Specify the number of patients the health care provider has the capacity to serve and the number they are currently serving. Subsection (d) allows for the policy to be terminated within 30 days of entering into the agreement from the patient. Subsection (e) allows for the policy to be terminated after a 30-day written notice from either party. Subsection (f) allows for the policy to be terminated in accordance with the agreement. Subsection (g) allows for policy modification Subsection (h) States that the services and agreements are subject to consumer protection laws Subsection (i) specifies that the offering or execution of an agreement is not engaging in the business of insurance or underwriting in the state. Subsection (j) [states that a person may not make, publish or disseminate an assertation that is untrue or deceptive.] Subsection (k) providers that enter into agreements shall file a report with the Division of Insurance on or before September 1 each year. Subsection (l) defines the terms "health care practice", "health care provider", and "health care service" Section 2: AS 45.45.915 Direct health care agreements. Adds a new section under Trade Practices. Subsection (a) prevents health care providers from declining or terminating direct health care agreements based on a patient's protected class under federal or state law that prohibits discrimination. Subsection (b) provides that a provider may decline or terminate a direct health care agreement if the provider is unable to provide the level or type of care the patient requires. The provider shall ensure the patient is referred to a health care provider who is able to provide the level or type of care required and agrees to provide said care. Subsection (c) allows for a provider to decline to enter into an agreement if they do not have the capacity to accept new patients. Subsection (d) defines the terms "direct health care agreement" and "health care provider." Section 3: AS 45.50.471(b) Unlawful acts and practices. Updates definitions for "unfair methods of competition" and "unfair or deceptive acts or practices" to include violating direct health agreements under AS 45.45.915. Section 4: Amends uncodified law for the Division of Insurance to adopt regulations. Section 5: provides an immediate effective date for Section 4. Section 6: provides for a January 1, 2023, effective date. 4:37:48 PM REPRESENTATIVE PRAX pointed out that the proposed legislation provides that DPC would not be insurance. He questioned why the Division of Insurance would regulate DPC. MS. KOENEMAN explained that the proposed legislation is similar to the laws for air ambulance service. She stated that this service is also not insurance; however, it does fall under Title 21, which allows for a regulatory authority to oversee the agreements. She stated that other options were discussed, such as placing the bill under Title 8 as a medical statute or giving the Department of Health and Social Services oversight. She reported that the Division of Insurance was chosen as this would increase consumer protection, as the providers would be required to provide documentation to the division. 4:39:23 PM REPRESENTATIVE SPOHNHOLZ pointed out that the decision to put the DPC under the Division of Insurance was made in the House Labor and Commerce Standing Committee, which she co-chairs. She explained that the choice was made based on the Division of Insurance having the expertise to prioritize consumer protection while implementing this novel way to access health care. 4:40:28 PM REPRESENTATIVE FIELDS added that the House Labor and Commerce Standing Committee, which he also co-chairs, wrote the "not insurance, consumer protection" regulation language with the director of the Division of Insurance. Instead of any problem requiring a new bill, he expressed the need to allow for timely resolutions to implementation issues. He stated that as a new healthcare vehicle, it was decided the division would be the best to have regulatory oversight. He cited the director of the division's institutional knowledge and expertise in consumer protection. 4:41:18 PM CO-CHAIR ZULKOSKY asked whether similar types of agreements between businesses and consumers existed in Alaska. She questioned whether the framework would be a similar to other agreements. She suggested that the proposed legislation could create a brand-new consumer dynamic. MS. KOENEMAN explained that because statute does not explicitly prohibit these types of agreements, there are providers already using them. She stated that it would be advantageous for the state to create a regulatory system for these agreements based on the framework which already exists. This way providers and patients would have any future disputes addressed. 4:43:06 PM REPRESENTATIVE PRAX referred to language in Section 2 which addresses price discrimination. He expressed the understanding that often life insurance costs less for women, while health insurance costs more. He questioned whether this would be the type of discrimination the language is trying to prevent. MS. KOENEMAN explained that the intent of the legislation is to facilitate fair and equitable agreements, which would allow anyone to enter a DPC agreement without fear of discrimination. MS. KOENEMAN, in response to a follow-up question, reiterated that the intent is for there to be no price discrimination. She reported that in states where DCP agreements have been legalized there are set rates for individuals, families, adults, and children, but there were no rates based on gender. 4:45:40 PM REPRESENTATIVE FIELDS recollected that the language was written to include "age bands" with different rates, but discrimination between genders within these age bands would not be allowed. He requested confirmation of this from the director of the division. CO-CHAIR ZULKOSKY explained that the committee would follow up with the director outside of the meeting. 4:46:12 PM CO-CHAIR ZULKOSKY announced that HB 176 was held over.