Legislature(2017 - 2018)BARNES 124
04/09/2018 03:15 PM LABOR & COMMERCE
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HB 193-HEALTH CARE; BALANCE BILLING 3:39:04 PM CHAIR KITO announced that the next order of business would be HOUSE BILL NO. 193, "An Act relating to insurance trade practices and frauds; and relating to emergency services and balance billing." 3:39:21 PM RYAN JOHNSTON, Staff, Representative Jason Grenn, introduced HB 193 on behalf of Representative Grenn, prime sponsor. He paraphrased the sectional analysis [included in committee packet], which reads as follows [original punctuation provided]: Section 1: Establishes a "Hold Harmless" standard for insurance providers in the situation where a covered person receives medical care from an out-of-network medical provider in an emergency situation. An insurance provider will hold a covered person harmless to ensure that the covered person only pay what would have been paid if the medical provider was an in- network provider. Outlines the standards to establish the situations where a medical provider cannot balance bill a covered person. An insurance provider shall pay a non-network health care provider if the health care provider renders to a covered person; • emergency services or treats an emergency medical condition • services at an in-network facility • services for which a referral was made by an in- network health care provider to an out-of-network health care provider without the explicit written consent of the covered person. The covered person is still required to pay the in- network rates for the deductible, coinsurance and copayment. The amount paid by the covered person is required to be counted towards the covered persons deductible. The final payment determined for the medical provider will subtract any amount paid by the covered person. The insurance provider is to pay the greater of three possible amounts; • the median negotiated contract rate generated using the in-network health care providers for the service provided; • That is equal to the 80th percentile of charges for the services calculated using a method that establishes a statistically credible profile that reflects the general cost differences between the geographical area where the service was preformed and the other geographical areas when performed by a health care provider in the same or similar specialty; or • That would be paid under Medicare for the service provided. Medical providers are required to send all bills to the insurance provider, except for the deductible, coinsurance and copayment. Contains a clause that if a covered person knowingly elects to use an out-of-network medical provider then they can be balanced billed for the services. Section 2: Health care insurance plans obtained under AS 39.30.090 or provided under AS 39.30.091 will be subject to the requirements of secs. 21.36.512 and 21.36.513. Section 3: Bans the practice of "Balance Billing" by a medical provider under the criteria of section 1 of the bill. Stipulates that the medical provider can still bill for the deductible, coinsurance and copayment. States that a medical provider will be paid according to section 1 of the bill. Section 4: Establishes the punishment for medical providers under the Unfair Trade Practices and Consumer Protection. 3:43:23 PM REPRESENTATIVE BIRCH asked whether the bill sponsor has heard concerns about equity for small businesses. MR. JOHNSTON answered that was the motivation behind Section 2. He said that requiring private insurers to follow the directive, the state plan should be held to the same standard. He said some aspects could not be addressed at the state level. REPRESENTATIVE BIRCH asked about the fiscal note (FN). MR. JOHNSTON answered it should be a cost savings for the state. He said that currently the Division of Retirement and Benefits pays 100 percent of the billed amount in an emergency situation. He added the state does hold state employees harmless. He stated the proposed bill states that it has to be in the state in which the service was rendered, for example for an emergency room visit in Oregon, the state would just use Oregon's 80 percentile. He said the language could be made clearer. 3:46:27 PM DR. ANNE ZINK, MD, Matsu Emergency Department, testified in support of HB 193. She presented a PowerPoint presentation on "HB 193: A Patient Protection Bill,[included in committee packet]. She said the question is what is right for the patient. She stated the bill would end the "surprise insurance gap." She described a scenario of someone in an emergency situation and the subsequent related billing for services. She explained the scenario in terms of in and out of network services. She explained that the bill would put a ban on balance bill, ending the "surprise insurance gap." She underlined that in order to preserve a safety net for patients, the system has to be geographically relevant. REPRESENTATIVE WOOL asked about health spending versus health costs. DR. ZINK answered she was speaking to health spending. 3:56:56 PM DR. ZINK spoke to "Alaska and the 80th Percentile Regulation: Myth and Reality." She said Alaska is not the most expensive area in the country for health care, as it follows the District of Columbia. She said that rural states pay more for physicians. She remarked that the 80th percentile rule did not change the Alaska per capita private health insurance spending curve. She added that Connecticut and New York established the 80th percentile as a benchmark for payment in 2014 and many states are considering similar patient protection measures. She underlined there were no increases in charges after the 80 percentile was adopted. DR. ZINK pointed out that the National Insurance Commissioners model legislation regarding out-of-network balance billing stated as a guide: A. For the purposes of this subsection, "usual and customary cost" shall mean the eightieth percentile of all charges for the particular health care service performed by a provider in the same or similar specialty and provided in the same geographical area as reported in a benchmarking database maintained by a nonprofit organization specified by the commissioner. The nonprofit organization shall not be affiliated with a carrier. 4:00:02 PM DR. ZINK went on to explain how emergency costs are coded between Anchorage, Alaska, and Seattle, Washington, for in- network and out-of-network services. She showed that emergency costs are already the same or less that th neighboring states. She said that the 80 percentile is a patient protection issue. CHAIR KITO asked whether Americas Health Insurance Association had indicated it would be harder to bring physicians into the network if the proposed bill were to pass. He asked Dr. Zink to give her thoughts. DR. ZINK answered she does not have concerns. She explained that if there is a relatively good out-of-network minimum, it encourages providers to be in-network. REPRESENTATIVE BIRCH asked where the hospitals fit into the issue. DR. ZINK shared her understanding the hospitals would be held to the same provision in the proposed bill. 4:04:45 PM REPRESENTATIVE WOOL asked Dr. Zink to explain the database she mentioned in her presentation. DR. ZINK answered that the proposed bill does not specify how geographic relevance and a non-profit database would be established. REPRESENTATIVE WOOL asked about non-emergency medical services. DR. ZINK answered that anything a patient feels is an emergency has to be examined. She said the issue of emergency definitions is defined in federal law. CHAIR KITO mentioned a scenario in which an insurance employee made a point of asking the anesthesiologist whether he or she is in or out of network before proceeding. DR. ZINK added that at time the person who is in network is not available for the procedure and someone who is out-of-network is used. REPRESENTATIVE WOOL asked whether the answer is to ask the medical professional prior to any procedure whether they are in- network. DR. ZINK answered in the affirmative. She added that is why it is so important to pass the proposed legislation, as in an emergency that scenario would not be possible. 4:11:14 PM CHAIR KITO opened public testimony on HB 193. CHAIR KITO held over HB 193.