SB 258-DENTAL CARE INSURANCE/PREFERRED PROVIDERS  2:03:33 PM CHAIR DAVIS announced the consideration of SB 258. SENATOR HUGGINS, sponsor of SB 258, said SB 258 is an opportunity to assist young people in maintaining oral health. SB 258 avoids a minimum age [for dental coverage]. Similar legislation has been introduced in 20 states and has been passed in one. Whether or not an insurance company should be able to cap fees not covered by the insurance company is also an issue. 2:08:08 PM SHARON LONG, staff to Senator Huggins, said some contracts are in effect in Alaska that do "fee capping" currently. 2:09:00 PM LINDA HALL, director, Division of Insurance, Department of Commerce and Economic Development (DCCED), showed a pie chart and the segment representing the portion of the Alaskan insurance marketplace that the Division of Insurance regulates. When the legislature makes mandates, changes or prohibitions to insurance programs, only a small piece of the pie is affected. These kinds of changes impact individuals and small groups, not employers of over 100 employees. She cautioned that the legislature recognize who the legislation will impact and who it will not impact. She is neutral on SB 258. 2:11:19 PM CHAIR DAVIS said she appreciates that small businesses, etc would be affected by SB 258. She asked if the legislature also could also mandate that the state plan abide by the law. MS. HALL replied that the legislature can choose to have the legislation apply to the state plan. However, federal law cannot be pre-empted to have this proposed law apply to the self- insured groups because they are regulated federally and different qualifications exist for Medicare and Medicaid. 2:12:27 PM SENATOR THOMAS read from Section 1 of SB 258 [amending AS 21.42.392(a)]: (a) A health care insurer who provides coverage for dental care may not include in the health care insurance plan or contract a provision that (1) prohibits a covered person from obtaining dental care services from a dentist of the person's choice, including a specialist;" He asked how many of those, not impacted by SB 258, allow a different tier of compensation outside the preferred provider network. 2:14:05 PM MS. HALL was unsure of Senator Thomas' question. She said SB 258 does not impact a preferred provider network either in the private marketplace or the self-insured market place. SENATOR THOMAS said that a small number of people are affected if SB 258 prevents an insurer from implementing a policy which forces a person to go to certain providers. But other provisions in SB 258 allow an insurer to change the rates if a person goes to a dentist outside the preferred provider group. This seems like a fair compromise. MS. HALL clarified that the part about allowing an individual to go to the dentist of their choice is already in statute. SB 258 addresses kids and says an insurance company cannot deny coverage under a certain age. SB 258 also says the insurance company may put an age cap on a dependent; for example, the company will cover dependents up to 21 and full-time students. 2:17:11 PM SENATOR PASKVAN asked if other types of coverage, such as direct federal or Employment Retirement Income Security Act (ERISA), prohibit establishing a minimum age for receiving dental care. MS. HALL said she does not know but she did not think a standard is applied in statute to the insured plans. 2:18:04 PM CHAIR DAVIS commented that SB 258 will only apply to a small portion of insurers but perhaps other plans are already meeting the mandate. She asked if Ms. Hall agrees that some insurers are already complying. MS. HALL said thinks that even the private insurance marketplace has coverage for young children and caps coverage for dependents at a certain age. SB 258 may have a pro-active intent considering things seen in other parts of the country. SB 258 has a third component involving whether or not insurance companies can negotiate prices with dentists for services that the insurance company does not cover. For example: A dental policy that does not cover orthodontia still puts in their contract that the patient would only pay a certain amount toward orthodontic work. She asked if legislators want to speak about what should or should not be in a contract between an insurance company and a dentist. That is a policy call. 2:20:57 PM PAT SHIER, director, Division of Retirement and Benefits, Department of Administration, confirmed that SB 258 would not apply to the state health and retiree health plan. The state plan does not have a coverage floor for young children. 2:22:00 PM SENATOR PASKVAN clarified there is no minimum age under the state's current plan. MR. SHIER replied that is correct. SENATOR PASKVAN asked if the maximum age at which a person ages out of coverage is established by the state of Alaska. MR. SHIER answered the state plans require that a person be a student after age 18 in order to be covered as a dependent under a parent's plan. Coverage can continue for a student until his or her 23rd birthday. SENATOR PASKVAN said SB 258 would permit the insurer to set the maximum age rather than the employer. He said the state currently sets the maximum age and then self-insures. MR. SHIER responded that Title 21 appears to give the insurer that. 2:24:00 PM DR. DAVID LOGAN, Alaska Dental Society, said SB 258 is valuable for consumers. For the past few years, the dental society has worked with the dental board to allow dental reimbursement for medical providers. Providers are doing things like looking inside mouths and applying fluoride as part of well-baby checks. Alaska is still first in the nation for baby bottle caries. For children and parents facing this problem, reimbursement from dental benefits can be the difference between proceeding with care or not. Regarding insurance company's fee capping on non-covered services: he, like many dentists, were surprised that insurance companies could do that. 2:26:29 PM He said there is no negotiation with insurance companies. About 15 years ago, dentists were prevented from regulating dental advertising. Dentists are prohibited from speaking to or working with contracts as most trade groups would. Dentists individually assess contracts and can talk with specialists but cannot discuss contracts with other dentists or come together to negotiate different terms. Dentists sign up for contracts because a managed care company might direct patients to them. As part of the contract with the insurance company, a dentist agrees to discount fees 50 to 70 percent for covered services and abide by a standard fee structure for non-covered services. 2:29:55 PM A dental business needs to remain profitable. If a managed care company forces costs lower, those costs don't evaporate but get shifted. Dentistry has largely managed to avoid most cost- shifting. DR. LOGAN said if insurance companies were sincere, they would [cover] services and pay a benefit. Services would be covered and could avoid SB 258's prohibition on fee capping. The insurance companies could set a fair premium and cover the consumer. The dentist would agree to a discounted fee structure. As it stands now, insurance companies want to limit dentists' fees without making any sacrifices on their part; they market these plans to employers at the expense of dental offices. CHAIR DAVIS said she knows that Dr. Logan supports SB 258. He asked if Dr. Logan would give his other valuable information to the committee in writing as time is limited. 2:34:10 PM DR. JOHN WALLER, Alaska Dental Society, Fairbanks, agreed with Dr. Logan and added that SB 258 is mainly a business bill. He wanted to illustrate his points with an analogy of being a small hotel owner. He has a certain number rooms not being filled and so contracts with a local tour company who guarantees him more customers, at cost, for the rooms. He is bringing those people in with the assumption that they may spend money on his food, gift items or tours. He can make his profit on the other items even if the rooms are rented at cost. SB 258 prevents an insurer from saying that all services must be operated at cost. As a business person, a contract where costs are all set by the insurance contract is far less attractive and viable because it eliminates the possibility of bringing people in and making a profit on some services. The insurance industry is playing on a dentist's sense of duty to his or her patients in order to fund a marketing scheme that is profitable to the insurance company. He feels the elimination of a minimum age is straight forward; he has done a lot of work on toddlers. 2:37:23 PM CHRIS FRANK, governmental affairs, Aetna Insurance, opposes SB 258 because it prevents insurers from contracting rates with dental providers for both covered and non-covered services. This payment arrangement is common in dental contracts and provides consumers with predictability on out-of-pocket costs and more fee information for dental procedures. Eliminating this arrangement could cause problems for employers when employees complain about increased costs for non-covered services. Aetna has established a fee schedule including nearly every service a dentist provides. That fee schedule is offered to a dentist and who agrees to be contracted under that fee schedule. SB 258 could prevent a dentist from voluntarily agreeing to having these types of services covered in their negotiated rates. The definition of what is or is not a covered service comes into play - benefits may be covered up to a dollar amount and beyond that, it's not a covered service. He questioned what rate consumers would then be charged since some of the service is covered and some is not due to caps or deductibles. 2:40:15 PM SENATOR THOMAS said he thought a non-covered service would only be mentioned in a contract to clarify that it is not covered. MR. FRANK replied Aetna offers many different contracts. It would be administratively complicated to specify what is covered or not for each individual. Aetna is trying to establish one common set of fee schedules for all dental services in the state. SENATOR THOMAS asked if Mr. Frank is saying a single booklet contains all services and then somehow people are supposed to figure out what applies to them, rather than having a pamphlet for each company or group insured with a common plan. MR. FRANK said Aetna has a common fee schedule across the state for all services that Aetna has contracted with the dentist for. An employer may pick and choose different types of benefits, not the costs. The fee schedule is the same but the actual benefit could vary greatly depending on what plan the employer chooses. 2:43:20 PM SENATOR PASKVAN asked if the fee schedule is available for "a la carte selection" by the consumer. MR. FRANK replied that Aetna can provide a consumer with information if he or she calls and asks "what would it cost for X?" Consumers do not choose "I want that fee schedule for that service". The costs are provided when asked but the consumer does not pick and choose which one they want. SENATOR PASKVAN asked, "so you don't make that available to the consumer?" MR. FRANK answered that a consumer can call and ask about their benefits. Or they can ask about their out of pocket exposure for a service. It could become difficult to determine what is a covered benefit and what is not because the dentist could then charge retail rates, not our contracted rates, for some services. That's where unpredictability begins. 2:45:25 PM SENATOR PASKVAN said he can understand that an insurer contracts with a dentist that charges, for example, $75 for a cleaning, twice a year. If a person wanted a third cleaning, that would not be covered and a consumer might be confused if that third cleaning cost more than $75, as a non-covered service. However, he did not understand the pricing mechanism and the fee capping on non-covered service. It is not included in the fee structure that the customer is being charged. 2:46:19 PM MR. FRANK said Senator Paskvan is right; the proposed legislation would not impact Aetna but would impact a consumer who would not have cost predictability. For example, two cleanings per year are $75 each and are covered, but it could cost the consumer $100 for a 3rd cleaning. Or, orthodontic care may be capped at $2,000 and beyond that, what does the dentist charge and what does the consumer pay? If Aetna cannot contract for both covered and non-covered services, the consumer has to find out what the dentist is going to charge for the service now that it is uncovered. He suggested that the legislation include an option for dentists to agree to have both covered and non- covered services provided in their contract with Aetna. 2:47:54 PM CHAIR DAVIS said she the conversation is going beyond what needs to be discussed in health and social services. She would like to move SB 258 from this committee. The next committee of referral is Labor and Commerce. 2:49:01 PM SENATOR PASKVAN moved to report SB 258 from committee with individual recommendations and attached fiscal note(s). CHAIR DAVIS announced that without objection, SB 258 moved from the Senate Health and Social Services Standing Committee. SENATOR PASKVAN told Mr. Frank he is still interested in receiving answers to his questions about the mutuality of obligations under contracts and why it's not an a la carte.