HB 176-DIRECT HEALTH AGREEMENT: NOT INSURANCE  8:58:00 AM CO-CHAIR FIELDS announced that the next 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." 8:58:21 AM CRYSTAL KOENEMAN, Staff, Representative Sara Rasmussen, Alaska State Legislature, on behalf of prime sponsor Representative Rasmussen, told committee members that direct primary care (DPC) agreements would encompass all of the healthcare profession licenses under Title 8, including doctor's visits, mental health counseling, or marriage and family counseling. She clarified that the agreements would not include emergency services or urgent care. 9:00:18 AM JAY KEESE, Executive Director, Direct Primary Care Coalition, presented a PowerPoint on HB 176 [hard copy included in the committee packet]. He said the Direct Primary Care Coalition represents approximately 1,500 direct primary care practices nationwide, and he noted that 35 states have passed legislation relating to direct primary care agreements. He began his presentation with slide 2, "Status of Direct Primary Care in 2021," which displayed a map of the U.S. with green, red, and blue points in various jurisdictions and which read as follows [original punctuation provided]: ? Capitated Monthly Fee Payment model ? Personal relationship with primary care physician Care delivered in any setting virtual, telehealth, at home, in-person ? Innovative, affordable, value-based monthly payment model ? Over 1,400 practices nationwide ? Bipartisan Legislative History: ? Defined in ACA Section 1301 (a) (3) ? 30 + Bipartisan State Laws and Regulations ? CMS Innovation Center to demo Direct Contracting in Medicare ? Presidential Executive Order 13877 ? IRS Proposed Rule 2020 12213 ? Primary Care Enhancement Act: S. 2999 Cassidy HR 3707 Blumenauer passed House in 2018, Included in original CARES Act MR. KEESE presented slide 3, "DPC Laws/Regs Passed in 34 States," which displayed a map of the U.S. showing states with DPC laws in place or proposed, along with a list of the governing legislation in each state. He then presented slide 4, "DPC Reduced Overall Cost of Care," which read as follows [original punctuation provided]: 25.4% reduction in total claims costs** 4.7% reduction in risk scores ER Visits down 53%*** Advanced Radiology down 66% Surgeries down 77% Hospital admission down 33%* Specialist visits down 43% Non-MD Specialists down 39% Primary care visits up 133% 12% reduction from baseline HBA1C Up to 41% reduction in cost of care for chronically ill patients Increased compliance for preventive screenings Why?  ? More primary care utilization ? Reduction in specialty care /hospitalization ? Reduced overall health costs ? Reduced out of pocket costs for consumers ? Predictable fixed costs for employers/payers ? Significantly reduced administrative costs no claims, no disputes, no appeals Data Sources: * Iora Dartmouth Health Connect Study June 2016 ** Nextera/Digital Globe Case Study June 1 Dec. 31, 2015 *** Journal American Board of Family Medicine , Nov. 2015 Qliance employer claims data set 2011-13 MR. KEESE presented slide 5, which read as follows [original punctuation provided]: DPC is associated with a reduction in overall member  demand for health care services outside primary care: ? 19.90% lower claim costs for employers 40% fewer ER visits that those in traditional plans.53.6% reduction in ER claims cost. ? 25.54% lower hospital admissions on an unadjusted basis. Virtual Care and Telehealth are at the core of DPC  service offerings:  ? 99% of all DPC practices surveyed were doing virtual consults via text/phone as a part of the membership fee (two years prior to COVID-19). ? 88% said they provided "telemedicine" benefits (meaning expanded video or additional digital communications assets). DPC is Affordable Primary Care  ? The average adult monthly DPC Fee is $73.92. ? Median age for DPC patient was 31.8 years old ? Concierge patients in MDVIP membership $1,650 - $2,200 annual membership fee MDVIP also bills third- party payers for all services provided to members. 9:06:47 AM REPRESENTATIVE SNYDER referred to the map on slide 2 and asked what the colored circles represent. MR. KEESE explained that green indicates providers that offer only DPC agreements, red represents practices that offer DPC, and the blue and yellow represent practices that offer some combination of DPC and fee-for-service arrangements. REPRESENTATIVE SNYDER referred to slide 3 and asked about the color legend. MR. KEESE noted that the map is out of date. He said the states in blue - Alaska, Minnesota, Wisconsin, Maryland, and the District of Columbia - all have pending DPC legislation. He said that the states in blue and green stripes - Colorado, Oklahoma, Missouri, Iowa, Indiana, and Tennessee - are amending existing legislation. He said the states in gray do not have a law in place, either because there already exist statutes which would render DPC-specific legislation redundant, or because the states just haven't proposed the legislation. 9:10:00 AM REPRESENTATIVE SCHRAGE acknowledged that offering a subscription model makes sense from a business standpoint. He then asked whether capacity has been an issue, and whether there is a remedy for patients who are not able to book an appointment for care due to capacity. MR. KEESE replied that DPC providers usually have a smaller patient panel compared to fee-for-service providers. He said that he doesn't know of any capacity issues. 9:12:41 AM CLINT FLANAGAN, MD, Chief Executive Officer, Nextera Healthcare, expressed his agreement with Mr. Keese's statement that capacity has not been a problem. He described the problems inherent with the fee-for-service model, such as having to wait up to a month for an appointment, that don't exist with the DPC model. He said that fee-for-service practices often have a patient roster of several thousand, while DPC practices have a patient roster of between 500 and 1,000. He said, "Access and time are definite pillars of direct primary care ... as a movement that was created by physicians that solve problems in a fee-for- service insurance model, we want to make sure our patients have that access." He pointed out that DPC agreements are month-to- month, and that if a patient is dissatisfied with the agreement, it can be terminated. 9:14:45 AM REPRESENTATIVE SCHRAGE asked whether the monthly agreement is required, or whether there could be a longer minimum commitment. MS. KOENEMAN responded that the proposed legislation has been written so that providers could determine their own parameters, and consumers could shop for the DPC agreement that best fits their needs. CO-CHAIR FIELDS asked who stands to benefit from a DPC agreement, and what types of consumer protections should be considered. He said, "If you have a direct primary care agreement, and you still have to pay for health insurance for your higher costs, how is that going to work in Alaska with the plans that are out there?" 9:17:05 AM LORI WING-HEIER, Director, Division of Insurance, Department of Commerce, Community, and Economic Development, answered that it's the opinion of the Division of Insurance that there is a benefit to DPC agreements. For example, she said, a young couple that has a health care plan with a deductible of $20,000 might still want regular primary care checkups. She said that they could pay $100 per month for a DPC agreement and receive primary care for non-serious ailments without having to use their insurance. She pointed out the possibility of insurance companies canceling someone's insurance due to the existence of a DPC agreement, and she said that consumers deserve a way to have complaints heard. CO-CHAIR FIELDS asked whether the view is that DPC agreements would primarily benefit those with high-deductible insurance plans or people who "choose" not to have health insurance. MS. WING-HEIER replied, "That's correct." She said many young people have high-deductible plans, some people utilize health sharing ministries, and it's possible that people who are on Medicare may still be able to remain under the care of their long-term providers. CO-CHAIR FIELDS asked whether a DPC agreement would work for a family physician in Anchorage. MS. WING-HEIER responded that there has been interest over the years from clinics in Anchorage and Fairbanks. CO-CHAIR FIELDS asked whether there exists evidence from other states that suggest that establishing such legislation tends to have an impact on the availability of family physicians. MS. WING-HEIER replied that there has been concern about what would happen to Medicaid or lower-income patients if every physician used a fee-for-service model. 9:21:16 AM CO-CHAIR SPOHNHOLZ asked how DPC agreements could relate to Affordable Care Act (ACA) provisions. MS. WING-HEIER said, "In some ways, they complement them." She said that an insurance company cannot credit an individual for buying a DPC agreement, and that insurance would still be required to provide the 10 essential health benefits under ACA. She said that someone cannot negotiate a different health insurance plan simply due to the existence of a DPC agreement. CO-CHAIR SPOHNHOLZ asked what some possible side boards would be. MS. WING-HEIER expressed that discrimination due to health status needs to be addressed, and that providers should be able to cap the number of patients they have. She said that consumers would need to be clear that a DPC agreement doesn't take the place of insurance. CO-CHAIR SPOHNHOLZ noted the importance of transparency. 9:24:35 AM CO-CHAIR SPOHNHOLZ pointed out that the proposed legislation doesn't limit what types of health care may use DPC agreements. She asked Dr. Flanagan whether his practice limits DPC agreements to primary care. DR. FLANAGAN responded that the focus was originally to form a model for patient care that was better than the fee-for-service model. He said that nationwide, Nextera has family medicine, internal medicine, and pediatric doctors, as well as other specialties; in Colorado, clinics include specialists in orthopedics, cardiology, endocrinology, and rheumatology. 9:27:22 AM REPRESENTATIVE KAUFMAN referred to slide 4 of Mr. Keese's PowerPoint, and he asked for an explanation of "risk scores." MR. KEESE explained that the numerous benefits that come from utilization of DPC agreements result in lower levels of risk to involved organizations such as employers and insurance companies. He said liability insurance providers has looked at the benefits of DPC agreements, and that insurance companies see the agreements as "insurance against using your insurance." REPRESENTATIVE KAUFMAN asked whether there exist metrics on the difference between the time spent with patients versus time spent on administrative tasks. MR. KEESE said that there is "virtually no administration" for practices with DPC agreements, versus an average of 40 percent for fee-for-service providers. He said that the process of working with insurance companies in filing the claim, then trying to get paid, then appealing a denied claim, doesn't exist in the DPC model. 9:32:11 AM REPRESENTATIVE SNYDER asked about the attributes of fee-for- service users versus DPC users, and whether those attributes change after a DPC model is in place. DR. FLANAGAN said that change is observable. He said that in a fee-for-service model, a doctor sees one patient every 10 to 15 minutes; the appointment is often for the single, annual checkup; and care is limited by what the insurance plan will cover, so a patient with a chronic illness such as diabetes won't return to the office for a follow-up because of the cost concern. In contrast, he said, DPC patients can be seen six to seven times per year, either in the office or through telemedicine, and a deeper relationship develops between the patient and providers. He shared that his clinic happens to currently be doing a high number of sports physicals for children, and one child was also having some issues with anxiety and depression. The clinic is doing follow-up visits with the child through video chat, at no additional cost to the parents. In a fee-for-service model, he said, those visits may never have happened, because his parents have a high-deductible health plan. He would have gotten his sports physical through the school instead of through his own doctor, and because the financial barrier is removed, his other health issues are being addressed. 9:36:43 AM CO-CHAIR FIELDS opened public testimony on HB 176. 9:37:09 AM CLINT FLANAGAN, MD, Chief Executive Officer, Nextera Healthcare, stated his support for HB 176 and commented that doctors in DPC practices call themselves "happy doctors," because the challenges inherent to the fee-for-service world are removed. He said that happy doctors have happy patients and, because 87 percent of Nextera Healthcare's clientele are employers, the employers are happy. He commented that his fee-for-service colleagues are "burned out." 9:38:14 AM WADE ERICKSON, MD, Owner and Founder, Capstone Clinic, stated his support for HB 176. He shared that there is a standard in the American Academy of Family Practice called "quadruple aim," which is to increase access, reduce costs, improve quality of care, and improve physician quality of life. He said that DPC agreements would help accomplish that aim. He said that his practice, which has been in business for 20 years, currently sees administration taking up 50 percent of its time, which would be greatly improved through the use of DPC agreements. Regarding the concerns mentioned earlier in the meeting regarding access and capacity, he said that access is an issue with fee-for-service providers, and that the market would determine access. 9:40:41 AM BETHANY MARCUM, Chief Executive Officer, Alaska Policy Forum, stated the Alaska Policy Forum's support for HB 176 and said that she can personally attest to the benefits of the DPC model. She said that her access to her provider is unlimited, she pays $75 per month, and that he does not bill insurance for her care. She pointed to studies that found that, when county employees were offered a DPC benefit option, there was a 99 percent satisfaction rate with a 26 percent decrease in monthly costs compared to employees covered by regular insurance. She said that members reported spending almost twice the amount of time with their physician, and 79 percent of patients reported that their health improved. A 2020 case study, she said, found that emergency room visits by DPC patients were 40 percent lower than those with a standard model of insurance. She said that the DPC model has the ability to transform the healthcare landscape in Alaska. 9:42:57 AM ROSE LARSON stated her support for HB 176. She said that she is an independent contractor and business developer, and often works with businesses that experience difficulty in insuring their employees. 9:44:17 AM CO-CHAIR FIELDS asked how Ms. Larson found out about the DPC model. MS. LARSON replied through the Young Republican Party. 9:44:26 AM OAKLEY JACKSON testified in support of HB 176. She said that it's difficult to find health insurance that is both affordable and worth the cost, so being able to access primary care would be good for the younger community. CO-CHAIR FIELDS asked whether she would buy a DPC plan or health insurance. MS. JACKSON said she would pursue a DPC plan over regular health insurance because of the flat rate and the level of support afforded by DPC agreements. She said many people don't go to a doctor unless they're dying, due to the excessive costs. CO-CHAIR FIELDS asked whether she thinks $1,200 per year is affordable. MS. JACKSON said, "Overall, absolutely." 9:46:59 AM CO-CHAIR SPOHNHOLZ asked whether she has tried to get health insurance. MS. JACKSON replied yes. CO-CHAIR SPOHNHOLZ asked whether she looked on the ACA marketplace. MS. JACKSON replied that plans on the marketplace ranged from $450 to $600 per month. She said that she can't afford health insurance, so she deals with any health issues on her own. CO-CHAIR SPOHNHOLZ asked whether she is eligible for any subsidies on the ACA marketplace, and she said that the average Alaskan pays $80 per month, due to subsidies. MS. JACKSON replied that she hasn't had that option. 9:48:13 AM PORTIA NOBLE testified in support of HB 176. She shared her personal experience with DPC in another state and said that she received consistent care that focused on health, supplemental nutrition, exercise, and long-term wellness. She said that she never had any anxiety regarding the cost of the service. "Lower cost, more access, gave me more choice and control of health care for my daughter and I," she said. She said that she valued the sense of privacy within the DPC agreement, having vetted her own provider instead of having to select from in-network providers and have a third party involved in her health care. 9:51:00 AM SARAH HETEMI testified in support of HB 176. She said that as a young professional, she knows how hard it can be to find good insurance, and that self-employed Alaskans would love to have affordable medical care for themselves and their families. She said DPC agreements would expand access to services while increasing the quality and lowering the cost of health care. 9:53:38 AM REPRESENTATIVE MCCARTY asked whether Ms. Hetemi was saying that certain insurance companies require a patient to visit a doctor in their preferred network. MS. HETEMI expressed confusion at the suggestion that she made that claim. 9:54:24 AM CRYSTAL NYGARD, Deputy Administrator, City of Wasilla, testified in support of HB 176. She said that she has years of experience helping small business navigate health insurance and finding health care for herself and her family. She said that she has experienced "drastic" savings by simply asking how much a service costs, and that she has worked directly with providers and insurers on payments, navigating the red tape inherent in the system. She said that she has been a purchaser of health care plans for 25 years, and that health care is one of the top four expenses of small businesses. 9:58:41 AM CO-CHAIR FIELDS, after ascertaining that no one else wished to testify, closed public testimony on HB 176. [HB 176 was held over.]