HB 372-OMNIBUS INSURANCE  3:33:05 PM CHAIR OLSON announced that the first 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." [Although not stated on the record of the House Labor and Commerce Standing Committee meeting of 4/4/16, the committee treated HB 372, Version H, as adopted and before the committee.] 3:33:28 PM REPRESENTATIVE HUGHES moved to adopt Amendment 1 labeled 29- LS1379\H.1, Wallace, 4/5/16, which read: Page 8, lines 16 - 22: Delete all material and insert: "(15) "emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, that a prudent person who possesses an average knowledge of health and medicine could reasonably expect that the absence of immediate medical attention would result in serious impairment of bodily functions, serious dysfunction of a bodily organ or part, or would place the person's health or, with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy." CHAIR OLSON objected for discussion purposes. 3:33:57 PM KONRAD JACKSON, staff to Representative Kurt Olson, Alaska State Legislature, informed the committee that Amendment 1 addresses concerns expressed regarding page 8, Section 11, which is the definition of an emergency medical condition. Amendment 1 changes the definition to more closely mirror what exists in the Patient Protection and Affordable Care Act of 2010 (PPACA). He pointed out that the word "layperson" was not included in the requested change in order to conform to the Manual of Legislative Drafting. REPRESENTATIVE LEDOUX asked if there is a difference between a "reasonable person" standard and a "prudent person" standard. 3:35:31 PM MEGAN WALLACE, Attorney, Legislative Legal Counsel, Legislative Legal Services, Legislative Affairs Agency, asked Representative LeDoux to repeat the question. REPRESENTATIVE LEDOUX asked for the difference between the standards applied to define a reasonable person versus a prudent person. Usually, she commented, the term prudent person is used with regard to investment decisions; whereas, a person who has committed a wrong and, as a layperson, should have known better is characterized as a reasonable person. MS. WALLACE replied that, in this case, the prudent person is modified by "a prudent person that possesses an average knowledge of health and medicine" and opined the term is not out of place. She deferred to the Division of Insurance for specialized knowledge as to which term is preferred; further, neither prudent person nor reasonable person is defined in statute. 3:38:05 PM DONALD HALE, Insurance Specialist, Division of Insurance, Department of Commerce, Community & Economic Development, deferred to an attorney. REPRESENTATIVE LEDOUX noted that her question could be resolved in the next committee of referral. CHAIR OLSON suggested that the intent of the change was also to achieve compliance with PPACA. REPRESENTATIVE JOSEPHSON directed attention to page 8, Section 11: AS 21.07, Patient protections under the health care insurance policies. He noted that generally, there is a desire to keep people out of emergency rooms unless necessary. He then observed that the definitions of emergency medical condition in the proposed legislation and in the amendment as written set a high standard, and remarked: You have to find that ... you could suffer serious dysfunction, impairment, or serious jeopardy. ... Are we saying that, that an insurance company could deny coverage at an emergency room, unless it's plausible that the visitor or the patient was reasonably going to expect some of those types of egregious or serious conditions? ... So, I'm just wondering, where this definition gets applied. MR. HALE expressed his understanding that the purpose is to protect someone who seeks emergency care "and [their problem] is not what they thought it was." REPRESENTATIVE JOSEPHSON repeated Mr. Hale's statement that "it's not what they thought it was or it could be precisely what they thought it was." MR. HALE agreed. CHAIR OLSON opined that there are enough safeguards built in and the emergency room would err on the side of caution. REPRESENTATIVE KITO said that, from personal experience, even medical professionals will recommend an emergency room visit out of caution. He said he hoped the definition would protect those individuals who believe they are in danger, or who are advised by medical professionals to go to an emergency room. REPRESENTATIVE LEDOUX, noting that the bill does not have another committee referral, requested a definition of reasonable person versus prudent person from the Division of Insurance. Prudent person appears to be a stricter standard in that the person must be smarter than a reasonable person, she said. MS. WALLACE said a quick search reveals that "a reasonably prudent person" and a "reasonable person" have been used in similar context. She opined that a "prudent person" does not represent a higher standard than a "reasonable person," but merely is a minor differentiation. 3:46:30 PM FRED PARADY, Deputy Commissioner, Office of the Commissioner, Department of Commerce, Community & Economic Development (DCCED), advised that Amendment 1 is useful in that the section relates to patient protections under health care insurance policies, and the Department of Commerce, Community & Economic Development (DCCED) seeks to bring Alaska's insurance statutes up to code with models based on PPACA. He offered to provide additional guidance from the director of the Division of Insurance. REPRESENTATIVE HUGHES expressed interest in the context of the definition; for example, some residents use an emergency room for nonemergency care, and she asked whether the [bill] establishes in statute that an insurance company might not have to cover a charge for a condition not described. MR. PARADY reiterated that he would like to speak with his director in this regard. He stated that statute holds the requirements for contract provisions for health care insurance, one of which is that there be a utilization review process, and the language in the statute defines the review. He opined the definition is patient protection. REPRESENTATIVE HUGHES said one reason health care costs are high is because emergency room care is used for nonemergency medical conditions. She asked whether there is an attempt here to not cover something when a person goes to the emergency room for a nonemergency medical condition. CHAIR OLSON opined there is more coverage under PPACA, not less. 3:50:28 PM CHAIR OLSON removed his objection to Amendment 1. There being no objection, Amendment 1 was adopted. 3:51:21 PM REPRESENTATIVE HUGHES moved to report the committee substitute for HB 372, Version 29-LS1379\H, Wallace, 3/30/16, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 372(L&C) was reported out of the House Labor and Commerce Standing Committee.