HB 123-DISCLOSURE OF HEALTH CARE COSTS  10:16:45 AM CHAIR COGHILL announced the consideration of HB 123. [SCS CSHB 123(HSS) was before the committee.] 10:17:11 AM REPRESENTATIVE IVY SPOHNHOLZ, Alaska State Legislature, Juneau, Alaska, sponsor of HB 123, said this bill is a first step in the marathon to address health care costs in Alaska. The first health insurance in the U.S. was created in 1930 and Medicare and Medicaid were added in 1965. She said no one measure will resolve the complex problem of paying for health care, but HB 123 is a first bite at the apple that gives more power to consumers. She continued to introduce HB 123 speaking to the following sponsor statement: HB 123 empowers consumers to make informed decisions about their health care options by ensuring accessible information on medical pricing. The bill will require health care providers to publish health care price information in public spaces and on their websites and to submit that price information to the Department of Health and Social Services. Individual providers must disclose the total undiscounted costs of their 25 most commonly provided health care services and procedures. Larger medical facilities would provide the same price information for their 50 most common health care services and procedures. Alaska has the second most expensive health care costs per person in the nation as a result of a small insurance market with limited provider competition. Health care spending in Alaska increases faster than the rate of inflation despite the fact that Alaska's use of health care services is lower than the nationwide average.) Because of the murkiness around health care prices, consumers have little power to influence the cost of desperately needed medical services. Medical price transparency across the nation could 2 save the U.S. $36 billion in health care spending. More than 30 states are pursuing legislation to increase price transparency across the nation; however, Alaska currently has no price transparency law in place. Price transparency can allow consumers to take financial control of their health care and exercise more choice in their providers. Transparency can also begin the public dialogue between stakeholders in the health care industry regarding the variation of health care costs within Alaska. HB 123 provides a simple approach to comprehensive, consumer-friendly health care price information for consumers. It may also help reduce the price of health care spending and increase the accessibility to quality health care, while being unburdensome to health care providers and facilities. Empowering consumers with price information allows patients to compare providers and "shop" for high-value, cost- effective care. While health care prices are negotiable, health care is not. Alaskans deserve to know what health care services and procedures will cost before they step into the doctor's office. REPRESENTATIVE SPOHNHOLZ advised that during the Interim they made some changes to the bill that passed the House. Originally the bill required only undiscounted prices (rack rate) to be posted. Doctors pointed out that most consumers do not pay that rate and the Senate Health and Social Services amended the bill to list Medicaid rates so a range of prices are described. The bill now also allows a disclaimer that says the actual rate may be different than the listed rates. The billing office or insurance company would have the complete information. She noted that health care providers have broad discretion in what the disclaimer says. Another new provision is for a good faith estimate that is similar to the Municipality of Anchorage ordinance. This would be given to consumers on request. One difference is that inpatient and emergency departments are not required to immediately provide an estimate. The good faith estimate may also be provided verbally if it meets the patient's needs. Efforts were made to come up with something that is practical and easy to implement. The list of most frequently offered services will only need to be run once a year and posted by January 30. REPRESENTATIVE SPOHNHOLZ said HB 123 is not a silver bullet. It will not bend the cost curve in health care this year, but it is a good place to start. 10:24:35 AM CHAIR COGHILL said he was flagging the use of Medicaid to describe the range of prices for discussion at the next hearing. 10:25:21 AM SENATOR WIELECHOWSKI said he believes the bill is a good step forward but wonders about the next step. 10:25:44 AM REPRESENTATIVE SPOHNHOLZ explained that the bill is designed to put information into the community about health care costs to hopefully incentivize further price transparency and the way care is paid for. Health care in the U.S. isn't really an option. Rather, it's sick care. Health care providers are paid to give care when consumers are sick. Helping people to get and stay healthy isn't incentivized. She noted that she and other legislators are looking at ways to explore value-based compensation so health care providers are incentivized to help people get healthier. CHAIR COGHILL said his first response to the bill was more negative than positive because he questioned the value to the consumer. He acknowledged that he was coming around. He asked for sectional review. REPRESENTATIVE SPOHNHOLZ said she appreciates the time he has taken to learn about the bill. Health care is a very complex subject. 10:29:13 AM BERNICE NISBETT, Staff, Representative Ivy Spohnholz, Alaska State Legislature, Juneau, Alaska, reviewed the following sectional analysis for HB 123, version 30-LS0380\B: Section 1  AS 18.15.360. Subsection (a) (p. 1, line 14, p. 2, line 1): has been amended to authorize the Department of Health and Social Services (DHSS) to collect, analyze, and maintain databases of information related to health care services and price information collected under AS 18.23.400. Section 2  AS 18.23.400. (p. 2, line 4): this is a new section that mandates the disclosure and reporting of health care services and price information. Subsection (a) (p. 2, lines 7-16): providers will compile a list of the 25 most commonly performed health care services from the previous year and for each of the services state the procedure code, the undiscounted price, facility fees, and the payment rates for Medicaid. Subsection (b) (p. 2, lines 17-25): facilities will compile a list of the 50 most commonly performed health care services from the previous year and for each of the services state the procedure code, the undiscounted price, facility fees, and the payment rates for Medicaid. Subsection (c) (p. 2, line 26-31): if a provider or facility has fewer than 25 or 50 health care services performed, respectively, the provider or facility will compile a list of all health care services performed with the procedure code, undiscounted price, facility fees, and the payment rates for Medicaid. Subsection (d) (p. 3, lines 1-7): a provider in a group practice is not required to compile and publish a price information list if the group practice compiles and publishes a list, and the prices and fees that the provider charges are reflected in the list published by the group practice. 10:30:59 AM CHAIR COGHILL said he looks for some modification of that provision. 10:31:06 AM MS. NISBETT continued. Subsection (e) (p. 3, lines 8-30): providers and facilities will publish their list each year by January 31stand submit the list to DHSS along with their name and location. The lists will be posted in font size no smaller than 20, in a public area with the DHSS website address listed, and a statement explaining that the price posted may be higher or lower than the amount paid by the patient. The list will also include a statement that says the patient will be provided an estimate upon request, and the provider or facilities' in-network preferred provider. Lastly, the lists will be posted on the website of the facility or provider if they have one. 10:31:49 AM CHAIR COGHILL asked if it will also list an in-network. MS. NISBETT answered yes; it will list the in-network preferred provider for the facility or provider. Responding to a further question she agreed that in a hospital the posting could list multiple providers. MS. NISBETT continued. Subsection (f) (p. 3, line 31, p. 4, lines 1-4): once a year, DHSS will gather the compiled lists from the health care providers and facilities and post the information on their website. The lists will also be entered into the DHSS database under AS 18.15.360(a). Subsection (g) (p. 4, lines 5-25): when a patient requests a good faith estimate (GFE) of nonemergency health care services, the provider, facility, or insurer will have 10 days to provide the GFE verbally, in writing, or by electronic means. If the GFE is received verbally, the provider, facility, or insurer will keep a record of that GFE. The provider, facility, or insurer is not required to disclose the total charges for the anticipated course of treatment but should provide a portion of the total charges of the course of treatment, or a range of the charges for the anticipated service if the provider or facility cannot reasonably assess what the services should be. Subsection (h) (p. 4, lines 26-31, p. 5, lines 1-17): a GFE must include a brief description in plain language of the health care services, products, procedures, and supplies, the in-network preferred providers, the procedure code, facility fees, and the suspected identity of others that may charges for a service, product, procedure or supply in connection with the nonemergent health care service, along with an explanation of whether the charges are included are in the GFE. Subsection (i) (p. 5, lines 18-21): a provider, facility, or insurer that provides an GFE will not be liable for damages if the GFE is different from the amount charged to the patient. Subsection (j) (p. 5, lines 22-25): a facility that is an emergency department will not be required to provide a GRE or post that they will provide GFE upon request. Subsection (k) (p. 5, lines 26-31, p. 6 lines 1-2): Civil penalties for providers and facilities that do not comply with posting the price information in subsections (a) through (e) will be $100 a day after March 31st. This amount will not exceed $10,000. Civil penalties for providers, facilities, or insurers who do not provide a GFE upon request in subsections (g) and (h) after 10 business days will be $100 a day but will not exceed $10,000. Subsection (l) (p.6, lines 3-5): providers and facilities that are penalized are entitled to a hearing conducted by the office of administrative hearings. Subsection (m) (p. 6, lines 6-8): municipalities may not enforce an ordinance that imposes health care price disclosure requirements inconsistent with the regulations in Section 2. CHAIR COGHILL offered his understanding that this is fairly close to the Municipality of Anchorage ordinance. REPRESENTATIVE SPOHNHOLZ confirmed that this was modeled on that ordinance. MS. NISBETT continued. Subsection (n) (p. 6, lines 9-31, p. 7, lines 1-21): health care facility excludes the Alaska Pioneers' Home, the Alaska Veterans' Home, an assisted living home, a long-term care nursing facility licensed by the department, a hospital operated by the United States Department of Veterans Affairs, the United States Department of Defense, or any other federal institution are described. Department, facility fee, health care facility, health care insurer, health care provider, health care service, nonemergency health care service, patient, third party, and undiscounted price are also defined. Section 3  (p. 7, lines 22-26): An individual who has health insurance can request a GFE of nonemergency health care services and receive the same information listed in subsection (g) and (h). Section 4  (p. 7, lines 27-31, p. 8 line 1): The DHSS can adopt regulations to implement the changes in this Act. Section 5  (p. 8, line 2): Section 4 of this Act will take effect immediately. Section 6  (p. 8, line 3): Except for Section 5 of this Act, the effective date is January 1, 2019. 10:38:00 AM CHAIR COGHILL outlined the path for the next hearing and held HB 123 in committee.