HB 123-DISCLOSURE OF HEALTH CARE COSTS  1:22:33 PM CHAIR CLAMAN announced that the first order of business would be HOUSE BILL NO. 123, "An Act relating to disclosure of health care services and price information; and providing for an effective date." 1:23:27 PM REPRESENTATIVE IVY SPOHNHOLZ, Alaska State Legislature, advised that the bill is about price transparency and bringing an element of the free market into the health care marketplace of which, currently, does not exist. She pointed out that health care consumers do not know their health care services cost unless they call and ask for special quotes and rates. Through this bill, she said, her goal is to introduce more price competition, open up the conversation about price competition to compare prices in health care consumerism. 1:24:34 PM CHAIR CLAMAN referred to a document titled "Top 50 CPT Codes - Hospital 1," and asked Representative Spohnholz to explain the document. REPRESENTATIVE SPOHNHOLZ explained that the list for the top 50 CPT codes most frequently provided was requested of Becky Hultberg, Alaska State Hospital and Nursing Association (ASHNA). This is not exactly the manner in which the services would be listed that the bill requires. She explained as follows: We actually asked for services listed by CPT code, which is the designation, is appropriate in the third column here with a description that is written in plain language so that a non-medical professional can understand it along with the undiscounted price. So, what we're looking at here is a very different sort of list, it is the CPT code description which is for billing purposes, along with the CPT code number, and the number of times this service was offered at this particular hospital over the last -- the 2016 year. So, you can see that the vast majority of services that were offered in this particular hospital were either labs of some kind, or emergency department treatments. 1:26:27 PM REPRESENTATIVE LEDOUX read the title of the second column as "Charge CPT Code," and whether the [third column - 2016 Count] was how many times people have had the procedure. REPRESENTATIVE SPOHNHOLZ responded that the CPT code is the number used for medical billing purposes, and [the third column] "2016 Count" is the number of times that service was provided within that facility. REPRESENTATIVE SPOHNHOLZ clarified that this description of CPT is how the medical billing people see them, not as the bill requires. Also, it is important to note in HB 123 that it distinguished between individual providers of health care and facilities. Therefore, a hospital would clearly fall into the facility category offering more services due to the volume and the scope of its services, and the bill asks for the top 50 CPT codes. In the case of an individual medical practitioner, such as a family doctor, they would list the top 25 most frequently offered services, and their services could differ depending upon the medical services offered by each practitioner. 1:28:08 PM REPRESENTATIVE REINBOLD asked whether their discussion in her office regarding facilities had been fixed in the bill. REPRESENTATIVE SPOHNHOLZ referred to the bill, page 2, lines 26- 29, [Sec. 18.23.400(d)], which read as follows: (d) A health care provider or health care facility may include a statement with a list published under (c) of this section explaining that the undiscounted price may be higher or lower than the amount an individual actually pays for health care services described in the list. REPRESENTATIVE SPOHNHOLZ explained that the bill allowed for a disclaimer to be included on the price list, and the bill did not prescribe what that disclaimer should read specifically. In the case of a community health center with a sliding fee schedule, the Alaska Primary Care Association wanted to be certain that potential health care consumers were not scared off by the undiscounted price listed. The Alaska Primary Care Association wanted to be able to post that there was a sliding fee schedule and that the actual price a consumer would pay would be much different. She offered that this would apply to a private practitioner's needs, such as indicating they are a preferred provider or covered under various health insurance plans. 1:29:55 PM REPRESENTATIVE REINBOLD referred to the Veterans Administration, and having the Indian Health Service publish its top 25 or top 50 "expenses, and I would love that ..." In the event everyone else has that requirement, it is only fair that the government facilities "expose that, as well." REPRESENTATIVE SPOHNHOLZ referred to HB 123, Version I, page 3, lines [24-31, Sec. 18.23.400(h)(2)] which read as follows: (2) ... "health care facility" does not include (A) the Alaska Pioneers' Home and the Alaska Veterans' Home administered by the department under AS 47.55; (B) an assisted living home as defined in AS 47.33.990; (C) a nursing facility licensed by the department to provide long-term care; (D) a facility operated by an Alaska tribal health organization; and REPRESENTATIVE SPOHNHOLZ pointed out that the provision provides a few exclusions because the health care consumed in those services was different. She added that it had been brought to her attention that there could be a separation of powers issue because the legislature did not have authority to mandate federally funded facilities. 1:31:16 PM REPRESENTATIVE REINBOLD reiterated that if the private sector was under this requirement, it was only fair that the public be under the same requirement, especially if it was the government's requirement. She asked Representative Spohnholz to speak to the issue of possibly being in conflict with anti-trust laws. REPRESENTATIVE SPOHNHOLZ responded that she was unsure any specific antitrust statutes related to this, there was a domain issue. She reiterated that state governments cannot tell the federal government what to do; therefore, the legislature cannot legally require, for instance, the Veterans' Administration to list its prices. She related that in the event the committee wanted to propose an amendment changing the body of this bill, perhaps Legislative Legal and Research Services should be brought in to consult on that particular element. She acknowledged that she did not consult with Legislative Legal and Research Services on that particular limitation because she was advised by professionals in the field that it was not advisable. 1:32:57 PM CHAIR CLAMAN pointed out to Representative Reinbold that in terms of offering an amendment, it would be due by 5:00, 3/28/17. He commented that the issue was not a separation of powers, but rather "federal supremacy" which meant no state had the authority to order the federal government to do anything, and this would not be an exception. Frankly, he said, there was no basis for Alaska to require federal agencies to disclose that information. 1:33:39 PM REPRESENTATIVE REINBOLD said she will look into the issue because in the event any state dollars were going into these facilities, it was only prudent for the legislature to be wise. She opined that a lot of Medicaid state funding does go to some of these facilities. REPRESENTATIVE SPOHNHOLZ pointed out that there are facilities receiving public money that will be required to post their fees, and there was not a clear bright line between those as it related to public funding versus not public funding. For example, she pointed to the community health centers that receive a substantial amount of funding through Medicaid, and said they will list their billing amounts. 1:34:46 PM REPRESENTATIVE REINBOLD asked whether this conflicts with federal laws because a couple of doctors sent her laws, although, those laws were not currently in front of her. REPRESENTATIVE SPOHNHOLZ answered that, to her knowledge, this bill does not conflict with federal law beyond the constitutional limitations previously discussed. 1:35:13 PM REPRESENTATIVE LEDOUX commented that just because she was insured did not mean she didn't not care about the costs of service. She offered a scenario of being insured and visiting a doctor with his rack rates on the wall, and she then checking with another doctor who has lower rack rates listed. She asked whether it was conceivable, due to the type of insurance she carried and the relationship between her physician and the insurance company, that the doctor with the higher rack rate was actually charging her insurance company a lower fee than the doctor with the lower rack rates. REPRESENTATIVE SPOHNHOLZ responded that it was possible if the doctor with the higher rack rate was a preferred provider with her insurance provider, and the doctor with the lower rack rate was not. In the event they were both preferred providers they would likely be paid at the same rate. However, she pointed out, there will be some patients who pay the full rate or pay a higher percentage of that full rack rate. Yet, posting the full undiscounted price still has merit because it is the basis for which all prices are derived. 1:36:56 PM REPRESENTATIVE LEDOUX said her question goes back to the person with insurance and why they would care which doctor had the higher rack rate. In the event both providers were preferred providers, one could have a rack rate of $200 and the other a rack rate of $100, and both providers would end up with $50 from the insurance company. She asked whether she was correct. REPRESENTATIVE SPOHNHOLZ noted that, in theory, it was possible, and what Representative LeDoux identified is one of the big challenges in the health care market place, in which it is difficult to determine exactly what [amount] would be paid. She said she does not claim that this bill would solve that problem because the bill's goal is to help consumers understand that some health care is expensive, some is less expensive, and to get more information out to the consumer. It was also designed to stimulate a conversation between individual health care consumers, the billing departments, and their doctors. REPRESENTATIVE SPOHNHOLZ said that in following up on the 3/24/17 discussion, a letter was received from Jeff Ranf, Co- Chair of the Legislative Community Committee, Alaska Association of Health Care Underwriters. Mr. Ranf reminded the committee that it was not always clear to individuals that someone was paying full freight even if they were not paying full freight. Due to the fact that health care costs are dramatically increasing, there is disconnect between the end user of health care services and those charging for it. Representative Spohnholz described this bill as one tiny step forward in the first mile of a long-term marathon in trying to reduce health care costs. This bill is simple to implement, a simple strategy to understand, and it will help inform conversations and dialogs about health care costs, she explained. 1:39:57 PM REPRESENTATIVE KREISS-TOMKINS said he appreciates the place the bill is trying to get to, but he is also cognizant of the legal realities. 1:40:37 PM REPRESENTATIVE EASTMAN asked the sponsor to offer an understanding of "how it is that we get here" with health care and the lack of transparency. He further asked why it was that health care traveled down such a different road than other services to then get to the point of passing a bill like this to fix it. REPRESENTATIVE SPOHNHOLZ related that that's a big question and posited that the journey into opacity in health care pricing occurred when health care insurance was first introduced. The first provider of health care insurance was what is now Premera Blue Cross, a group of doctors came together to put together a funding structure that made it more affordable for regular working people to get health care and afford their services. She opined that that was a laudable goal in financing for health care, but that was the beginning of separating the consumer from the person selling the services. Since that time, the market has gotten more complex with more payors in the market adding to its complexity, and "anytime you're not actually looking at the actual cost and paying attention, you are more likely to not pay attention to the cost" such as, certain young people with their first credit card, she offered. Her hope, she said, is to shine a little more light on the costs of health care, and she looks forward to advancing other bills approaching the issue from a different tact. 1:43:44 PM REPRESENTATIVE EASTMAN asked that since most consumers of health care in Alaska fall under some kind of private or government sponsored health care program, and insurance sets those costs, whether she had considered hitting it dead on and going after the insurance costs side of things and the need for transparency. REPRESENTATIVE SPOHNHOLZ said that she had considered his suggestion and it would possibly be a bill for another day. 1:44:59 PM REPRESENTATIVE REINBOLD, in response to Representative Eastman, offered that previously she was the operations manager for Medical Park Family Care, and that it was difficult to quote a price at someone's request. For example, a person may say they have a sore throat when in reality they have more complicated issues they are not comfortable telling the receptionist. Once the patient was before the doctor, five or six other issues may come up that required a shot or whatever. She said that vaccine charges change often, insurance plans change regularly, and sometimes people come in as a veteran, under TRICARE, or due to a car accident. She related that Medical Park Family Care charged different prices when it was an automobile accident, or workers' compensation', or a contract with unions, or state employees, and it was complicated to determine the fees for "twenty different things" in a comprehensive exam. 1:46:50 PM CHAIR CLAMAN commented that Representative Reinbold's comments were far afield from this bill. REPRESENTATIVE KREISS-TOMKINS noted his appreciation to ASHNA in providing the top 50 most common CPT codes. CHAIR CLAMAN said he found the confusion of price between Hospital 1 and the unidentified hospital interesting, and noted that a complete blood count was the most common procedure. [HB 123 was held over.]