HOUSE BILL NO. 13 "An Act relating to fees and charges for medical treatment or services as they relate to workers' compensation; and providing for an effective date." 9:34:52 AM CONRAD JACKSON, STAFF, REPRESENTATIVE OLSON, explained HB 13 was an act relating to the medical treatment and service fees as related to worker's compensation. He stated that in 2005 the legislature amended AS 23.30.095(J) to expand the scope of the Medical Services Review Committee to assist and advise the Department of Labor and the Worker's Compensation Board in matters involving the appropriateness, necessity and cost of medical and related services. He referred to pages 11 and 12 of the excerpt from the Medical Services Review Committee report dated November 2009 (copy on file). He stated that one intention of the report was to set the medical fee schedule in place. The legislation puts the fee schedule in place prior to the current expiration of June 30, 2011. He referred to the sponsor statement (copy on file) which discussed the basis of the new schedule. 9:37:39 AM Co-Chair Stedman pointed out the fiscal note. 9:37:49 AM Senator Olson asked how business owners had reacted to the legislation. Mr. Jackson replied that contact with business owners had not been made. Representatives of industry had been in agreement that the new fee schedule was necessary. The expiration of the current fee schedule was problematic and without the new fee schedule in place increased premiums were expected. Senator Olson wondered if medical providers had offered and opinion on the legislation. Mr. Jackson remarked that provider attention had been placed on a different bill. He stressed that the bill did not change what is already in place. 9:39:25 AM Senator Olson expressed concern that employees handing the codes should be properly educated on how to process them. Mr. Jackson clarified that the codes existed, but not in the fee schedule. So the people processing the codes were educated about them, the codes were simply not covered in the current fee schedule. LINDA HALL, INSURANCE DIRECTOR, DEPARTMENT OF INSURANCE, DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT, discussed the charts; "Medical Benefits Constitute the Majority of Total Benefit Cost in Alaska", "Alaska Medical Average Cost per Case vs. Countrywide"(copy on file). She stated that 75 percent of the system costs in Alaska were medical benefits, countrywide the average was 58 percent. 9:41:34 AM AT EASE 9:42:19 AM RECONVENED 9:42:28 AM Ms. Hall offered that the state had substantially higher benefits costs than the lower 48. The "Alaska Medical Average Cost per Case vs. Countrywide" chart illustrated that the average cost per case in 2009 was $37,000 and the average cost countrywide was $27,000, resulting in a 37 percent higher average per case cost for Alaska. She referred to the two page Oregon study (copy on file), which showed that Alaska had moved from first place, having the highest worker's compensation premium, to number 2. She concluded that the purpose of the charts was to illustrate the high cost of worker's compensation costs. She stated that the cost cap would not be onerous. The fee schedule would be based at the 90th percentile and most health insurance policies used 70 to 80th percentile. She believed that the fee schedule was generous and would enable physicians to treat workers injured on the job and not prohibit any type of medical care. 9:45:34 AM Senator Olson wondered what effect the bill would have on the injured employee. Ms. Hall felt that the users experience would either get easier or stay relatively the same. Senator Olson hoped that workers under Medicare would not be denied coverage by physicians. Ms. Hall assured the committee she was not aware of any medical office that had suggested not caring for patients under Medicare. HB 13 was HEARD and HELD in committee for further consideration. 9:47:09 AM