HB 372-OMNIBUS INSURANCE  4:14:57 PM CHAIR OLSON announced that the next order of business would be HOUSE BILL NO. 372, "An Act relating to insurance; relating to expenses for insurance examinations; relating to regulations for insurance utilization review, benefits determination, health care insurance grievance resolution procedures, independent review of adverse determinations or final adverse determinations, independent review organizations, and continuing education providers; relating to required provisions for health care insurance contracts and policies, including health care provider choice; establishing civil penalties for insurers for failure to provide requested records; amending the definition of 'wet marine and transportation' insurance; amending provisions on limited licenses to include crop insurance; relating to third-party administrator notification requirements; relating to certification filing by reinsurance intermediary brokers; relating to rate filings, delivery of insurance policies or endorsements; relating to refunds of variable life insurance policies and variable annuities; establishing limitations on issuance of long- term care insurance; relating to requirements for group health insurance policies; amending the definition of 'group health insurance'; relating to motor vehicle service contracts; relating to notice requirements for meetings of stockholders or members of a domestic insurer; establishing a definition of 'bona fide association'; relating to requirements and penalties for committing a fraudulent or criminal insurance act; updating criteria for examinations; relating to rate filing deviations; establishing civil penalties for certain wilful violations; and providing for an effective date." 4:15:15 PM REPRESENTATIVE HUGHES moved to adopt the committee substitute (CS) for HB 372, Version 29-LS1379\H, Wallace, 3/30/16, as the working document. CHAIR OLSON objected for discussion purposes. 4:15:27 PM LORI WING-HEIER, Director, Division of Insurance, Anchorage Office, Department of Commerce, Community & Economic Development, presented changes made by the CS for HB 372, Version H, as follows: · Beginning on page 3, Section 4 is amended by adding to the title "relating to health care insurance policies" in order to clarify that workers' compensation is not included in the definition of health care insurance policies. · Section 5 is deleted, affecting subsequent section numbers. · Beginning on page 19, Section 31 is changed by adding the words, "the specific" and "the exact change in" in subsection (b). Sections 46 and 50 were deleted, and the foregoing added to clarify that insurers give notice to the consumer of 45 days after changes in the premium and form filings are known. · Beginning on page 7, Section 8 was Section 5, and now applies to obstetrics/gynecology (OB/GYN) in order to avoid federal preemption, and adds the words "a participating health care professional who specializes in obstetrics or gynecology shall agree to adhere to the health care insurer's policies and procedures, including procedures regarding referrals, obtaining prior authorization and providing services under a treatment plan, if any, approved by the health care insurer." MS. WING-HEIER said the above are all the changes made by the CS except for renumbering. 4:20:38 PM REPRESENTATIVE JOSEPHSON asked for the reason to avoid federal preemption. MS. WING-HEIER explained that federal preemption threatens state-based insurance regulations. In addition, state compliance with the [Patient Protection and Affordable Care Act of 2010 (PPACA)] aids in health care reforms, a possible waiver or other provisions, in providing better and more affordable insurance products for consumers, and in interaction with the Centers for Medicare and Medicaid Services (CMS). REPRESENTATIVE HUGHES asked whether the statement needed to comply with federal law is specific to OB/GYN providers. MS. WING-HEIER said yes. Previous iterations of the bill used substantially similar language. REPRESENTATIVE HUGHES questioned whether there has been a reaction from OB/GYN providers in Alaska. MS. WING-HEIER said providers were previously aware of the provision. In further response to Representative Hughes, she offered that the purpose of the provision directed at OB/GYN providers was to provide transparency and avoid miscommunication between the provider, consumer, and the insurer. REPRESENTATIVE HUGHES restated her previous concern that the insurer must not dictate a patient's care; she posed a situation in which an insurer approved a treatment plan and the provider deviated from the plan, and asked whether the insurer would pay for the approved parts of the plan without penalty. MS. WING-HEIER said the consumer always has the right to go out of network for a different procedure, and the insurance company retains the right to pay from the benefit plan; the provision clarifies for the consumer what to expect "so there will not be a surprise billing." 4:25:28 PM REPRESENTATIVE HUGHES restated her concern that this provision is a federal requirement. REPRESENTATIVE LEDOUX confirmed that original Section 5 had been deleted. MS. WING-HEIER said correct. REPRESENTATIVE JOSEPHSON surmised that subsection (h) is part of the policy and values of PPACA to ensure that women's health care is fundamental, and is "part and parcel of a general package of, of primary care." MS. WING-HEIER said she did not disagree in this regard, but declined to explain the intent of PPACA. 4:27:27 PM CHAIR OLSON opened public testimony on HB 372. 4:27:44 PM JEANNIE MONK, Senior Program Officer, Alaska State Hospital and Nursing Home Association (ASHNHA), informed the committee that HB 372 is a complex bill, of which ASHNHA has not had sufficient time to fully understand or vet. The stated intent of the bill is to conform Alaska Statutes to federal law and to the National Association of Insurance Commissioners (NAIC) standards; however, which portions of the bill are based on what model is unknown to ASHNHA. Ms. Monk expressed appreciation that Section 5 had been deleted. However, two areas of concern remain: 1.) on page 8, lines 15-22, Section 11, the definition of emergency medical condition does not include the prudent layperson standard which is a standard in federal law that addresses the need for insurance to cover a visit to an emergency room based not on diagnosis, but on the possibility of serious illness, and ASHNHA urged for the bill to confirm with the definition in PPACA; 2.) on page 20, lines 15 and 20, Section 32, add the term "or omits information" to the definition of a fraudulent insurance act, and ASHNHA is concerned that adding this could turn "any average bill submission into a fraudulent claim," and seeks the deletion of "or omits information," or the addition of "intentionally." REPRESENTATIVE JOSEPHSON returned attention to Section 11, and asked whether the present proposed definition of emergency medical condition is too restrictive, and sets too high a standard for a visit to the emergency room. MS. MONK said yes. The prudent layperson standard is a lower standard. REPRESENTATIVE JOSEPHSON surmised ASHNHA seeks to protect patient rights in Section 11. MS. MONK said that's exactly right. In further response to Representative Josephson, she said in Section 32, ASHNHA's interest is to protect the person who submits an insurance bill, which could be a patient or a provider. REPRESENTATIVE HUGHES pointed out on page 20, line 8, Section 32, read: (b) A fraudulent insurance act is committed by a person who, with intent to injure, defraud, or deceive REPRESENTATIVE HUGHES asked if ASHNHA considered that this language addresses the concern of intent. 4:34:26 PM MS. MONK offered to consult with others on this matter and respond. REPRESENTATIVE LEDOUX opined that the new language, "or omits information" would lead to litigation on whether a claim should be accepted. MS. MONK agreed. MS. WING-HEIER advised that part of addressing the cost of health care is addressing fraud; in fact, any fraudulent act has to have intent and cannot be a simple clerical error, a misstatement, or a one-time occurrence. She said this is not about insurance companies failing to pay claims, but about someone who is committing fraud. REPRESENTATIVE KITO asked how the division determines intent if an insurance company makes an accusation of fraud. MS. WING-HEIER explained the division would not look at one claim or claimant, but the provider would have to file multiple claims against an insurer and establish a pattern of fraud. REPRESENTATIVE HUGHES suggested that the word "incomplete" found on page 20, line 15, equates to "or omits information." MS. WING-HEIER said no, incomplete information is missing information. In further response to Representative Hughes, she added that "incomplete information" could be a form that was half completed, but "omits information" is withholding information that has been requested. 4:40:00 PM JON ZASADA, Policy Integration Director, Alaska Primary Care Association (APCA), informed the committee APCA is the statewide membership organization of Alaska's community health centers. Because APCA members are safety-net health providers, his organization's comments are focused on the potential impact of the bill on its members. Mr. Zasada said APCA members appreciate the deletion of Section 5. Returning attention to page 20, Section 32, subsection (b), paragraphs (2) and (3), he said APCA suggested adding the word "intentionally" in front of "or omits information" after consulting with community health associations in other states. REPRESENTATIVE HUGHES questioned whether page 20, lines 8 and 9 take care of APCA's concern related to fraudulent intent. MR. ZASADA said APCA seeks to add the word intentionally to make the paragraphs "crystal clear." REPRESENTATIVE JOSEPHSON returned attention to page 8, Section 11, and asked whether APCA agrees with ASHNHA's inclusion of the prudent layperson standard in Section 11. MR. ZASADA disclosed that APCA does not provide emergency services, but does agree with ASHNHA. 4:43:56 PM CHAIR OLSON, after ascertaining that no one further wished to testify, closed public testimony. [HB 372 was held over.]