HOUSE BILL NO. 178 "An Act relating to workers' compensation fees for medical treatment and services; providing for an effective date by amending the effective date of sec. 5, ch. 63, SLA 2014; and providing for an effective date." 2:49:28 PM CONRAD JACKSON, STAFF, REPRESENTATIVE KURT OLSON, offered a sponsor statement of the legislation: For many years Alaska has faced the highest workers' compensation rates in the nation. During the second session of the 28th Legislature, House Bill 316 was passed. The bill was a more sweeping solution to the challenge of the previous medical services fee schedule than we have experienced in many years. HB 316 tasked the Medical Services Review Committee (MSRC) with setting a conversion factor and a geographic differential to be used in conjunction with a basic fee schedule based on a relative value unit methodology. Once set, the conversion factor will be approved by the Commissioner of the Department of Labor prior to adoption by regulation by the Workers' Compensation Board. All this was to be accomplished by July 1, 2015. Since passage of HB 316, the MSRC has been reactivated and met numerous times. They have nearly completed their part in establishing the conversion factors. More work remains to be done to ensure the reform can take effect. House Bill 178 grants a 5 month extension to complete this important step in lowering workers' comp costs in both the public and private sector. Without this extension, time may run out before the comprehensive reforms instituted last year can be implemented. Mr. Jackson noted the zero fiscal note and stated that once the new fee schedules were in place there would be a realized reduction in worker's compensation rates. 2:52:15 PM AT EASE 2:52:44 PM RECONVENED Senator Dunleavy asked what impact the five-month extension would have on the fee rate changes. Mr. Jackson responded that there was no impact expected on the fee schedule. 2:53:28 PM Co-Chair MacKinnon OPENED public testimony. 2:54:09 PM MIKE MONAGLE, DIRECTOR, DIVISION OF WORKERS COMPENSATION, DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT, stated that the committee was formed in 2005, but had remained dormant since 2009. He said that when HB 316 passed the committee experience a rebirth, new committee members were appointed and medical data was gathered through the state's procurement process. He shared that an upcoming meeting would establish the adoption of a final conversion factor, at which time the committee would submit its recommendations to the commissioner. He relayed that the commissioner would review the recommendations and take public comment, and then all of the information would be forwarded to the board. He explained that the board would then propose regulations and return after public comment for final adoption. He asserted that the extension would allow the commissioner, and the board, to complete the regulatory work by the end of summer 2015. 2:56:28 PM Co-Chair MacKinnon CLOSED public testimony. HB 178 was HEARD and HELD in committee for further consideration. Co-Chair MacKinnon discussed housekeeping.