Legislature(2009 - 2010)SENATE FINANCE 532

04/07/2009 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
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Moved CSSB 1(FIN) Out of Committee
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 133                                                                                                           
     "An   Act   creating   a   statewide   electronic   health                                                                 
     information   exchange  system;   and  providing   for  an                                                                 
     effective date."                                                                                                           
9:31:55 AM                                                                                                                    
Senator Joe Paskvan discussed the legislation.                                                                                  
     Alaska  health care  providers  and  patients continue  to                                                                 
     rely on  an outdated healthcare infrastructure,  with many                                                                 
     providers   using   only   paper  based   systems,   which                                                                 
     contributes   to  dangerous   drug  interactions,   missed                                                                 
     diagnoses,   costly   delays,    duplicate   testing   and                                                                 
     administrative  overhead. According  to national  studies,                                                                 
     these problems  contribute to  approximately 5%  of health                                                                 
     care expenditures  or $250 million annually  in Alaska and                                                                 
     unnecessarily degrade  the quality of health  care for all                                                                 
     SB  133 modernizes  Alaska's healthcare  IT infrastructure                                                                 
     by  developing  a  secure  electronic  Health  Information                                                                 
     Exchange  (HIE)   system  to  improve  the   safety,  cost                                                                 
     effectiveness, and  quality of healthcare in  Alaska. This                                                                 
     standards-based  electronic  health   network  will  allow                                                                 
     individual  Alaskans to  have  their  own personal  health                                                                 
     record  and to  authorize their  health care  providers to                                                                 
     exchange electronic  medical records  in a  timely, secure                                                                 
     The  use of  such technology  requires careful  and strict                                                                 
     privacy  protection measures.  Current  Federal and  State                                                                 
     laws already  provide a number  of standards  protecting a                                                                 
     patient's  privacy and  personal information.  The privacy                                                                 
     and  security  rules  contained in  the  Health  Insurance                                                                 
     Portability and  Accountability Act (HIPAA)  most directly                                                                 
     and extensively  impact the HIE system.  HIPAA establishes                                                                 
     individuals' right  to review and  obtain a copy  of their                                                                 
     health information, requires  notice of privacy practices,                                                                 
     limits  the   use  of  records   and  the   disclosure  of                                                                 
    information, and institutes strict security standards.                                                                      
     SB 133 establishes further strict  standards to secure and                                                                 
     protect  the confidentiality  of individually  identifying                                                                 
     health information  of a patient. These  standards include                                                                 
     a secure  and traceable  electronic audit system  to allow                                                                 
     patients to see who  has viewed their record, restrictions                                                                 
     on   how  information   may  be   used,  patient   consent                                                                 
     requirements,  an  ability  to   opt  out  of  the  health                                                                 
     information   exchange   system,   and   notification   of                                                                 
     confidentiality violations.                                                                                                
     When  complete,  the  Health Information  Exchange  System                                                                 
     will have  the capability  to provide  any Alaskan  with a                                                                 
     secure  Personal  Health Record,  including  authorization                                                                 
     for their  health care  providers on  the network  to have                                                                 
     access to  electronic records  required for  continuity of                                                                 
     care,  such   as  hospitalization   records,  prescription                                                                 
     information,  vaccinations,  allergies,  imaging  records,                                                                 
     laboratory   results,  etc.   The  Network   will  support                                                                 
     telemedicine  services, the  transfer  of high  resolution                                                                 
     images  for patient  care, video  conferencing, and  Voice                                                                 
     over Internet applications for providers.                                                                                  
     Over  300  health organizations  in  Alaska  are eager  to                                                                 
     participate in the  electronic Health Information Exchange                                                                 
JAKE HAMBURG, STAFF, SENATOR  PASKVAN, presented the PowerPoint                                                                 
slide  show  "Deploying  a   Health  Information  Exchange  for                                                                 
Alaskans. He  began with  Slide 2 "Medical  Care From  Paper to                                                                 
   „Alaska's health care providers are now making major                                                                        
     investments  ($100M+)  in  moving from  paper  records  to                                                                 
     Electronic Medical Records                                                                                               
   „Alaska's health care providers are aligned in support of                                                                   
     creating a  statewide Health Information  Exchange network                                                               
     so  patient  records  may be  securely  exchanged  between                                                                 
     providers for timely and safe patient care                                                                                 
   „State of Alaska plays a key role as a partner in Alaska's                                                                
     developing Health Information Exchange                                                                                     
9:33:42 AM                                                                                                                    
Mr. Hamburg discussed Slide 3, "Health Information Exchanges,                                                                   
National Effort: State Solutions":                                                                                              
   „National Health Information Network" concept created in                                                                    
          Bush   administration    and   enhanced    in   Obama                                                                 
          administration through ARRA 2009 stimulus                                                                             
   „Successful State Models:                                                                                                   
        …DHIN - Delaware Health Information Network                                                                            
   „Statewide and regional health information exchanges                                                                        
          have developed over the last 10 years in other                                                                        
        …CalRHIO - California, Los Angeles County                                                                              
        …FHIN - Florida Health Information Network                                                                             
        …Regenstrief - Indiana Eight County Network                                                                            
9:36:23 AM                                                                                                                    
Alaska eHealth Network: Slide 5:                                                                                                
   „Provide rapid access by authorized providers to critical                                                                   
     patient information at the point of care                                                                                   
     medical history          allergies                                                                                         
     medication status        laboratory reports                                                                                
     immunization status      imaging reports                                                                                   
   „Reduce redundancy in medical testing and procedures                                                                        
   „Improve   patient  safety   through  reducing   medication                                                                 
     reconciliation errors                                                                                                      
  „Reduce provider administrative costs for data management                                                                    
   „Expedited response to public health emergencies                                                                            
9:36:56 AM                                                                                                                    
Alaska eHealth Network.  Slide 6:                                                                                               
   „Do   not  require   centralized   patient  health   record                                                                 
          repositories: health providers continue to own their                                                                  
   „Facilitate  connectivity  with patient's  Personal  Health                                                                 
          Record choices                                                                                                        
   „Respect   patient   decisions   to  opt-out   of   network                                                                 
   „Provide significant penalties for data breaches                                                                            
9:37:15 AM                                                                                                                    
Slide 7:                                                                                                                        
   „Federal  and  private  research  projects  5%  savings  in                                                                 
     annual U.S. health care expenditures from full deployment                                                                  
     of inter-operable electronic medical records                                                                               
   „For  Alaska's $5B  health  care  industry, annual  savings                                                                 
     could reach $250M.                                                                                                         
   „For the State of  Alaska's $250M GF Medicaid expenditures,                                                                 
     annual savings could exceed $10M                                                                                           
Slide 8:                                                                                                                        
   „5  year $35  million project  to deploy  a secure  network                                                               
     supporting the exchange of electronic health records                                                                       
     between all Alaska health care providers                                                                                   
   „$12.0 million currently awarded  through 2008 from Federal                                                               
     Communications Commission, US Dept. of Health and Human                                                                    
     Services, State of Alaska, Alaska Federal Health Care                                                                      
9:37:35 AM                                                                                                                    
Board of directors.  Slide 9:                                                                                                   
   „Incorporated non-profit August 2008                                                                                        
        …Alaska Native Tribal Health Consortium (designated                                                                    
          lead partner)                                                                                                         
        …Alaska State Hospitals and Nursing Homes Association                                                                  
        …Alaska Primary Care Association                                                                                       
        …Premera Blue Cross/Blue Shield                                                                                        
        …State of Alaska DHSS                                                                                                  
        …Alaska Federal Health Care Partnership (DOD, VA,                                                                      
          USCG, Indian Health Service)                                                                                          
        …University of Alaska                                                                                                  
        …Alaska E.H.R. Alliance (private physicians)                                                                           
        …American Association of Retired Persons                                                                               
9:38:29 AM                                                                                                                    
Next Steps: 2009-2010. Slide 16:                                                                                                
   „Secure $1.3M for FY2010 and $1.0M in FY2011 from State of                                                                
     Alaska for network development                                                                                             
        …Ensures match for federal stimulus funds                                                                              
   „Engage contractor/vendors to deploy Health Information                                                                   
     "bridging" software to interconnect Alaska's various                                                                     
     Electronic Medical Records systems                                                                                         
   „Align the Health Information Exchange with State systems:                                                                
     MMIS, API, Public Health data                                                                                              
   „Add Internet2 connectivity for telemedicine applications,                                                                
     teleconferencing, voice-over-internet,  and consults from                                                                  
     lower-48 academic/teaching hospitals                                                                                       
9:39:22 AM                                                                                                                    
Sustainability: Slide 17                                                                                                        
     Establish the Alaska eHeath Network business structure to                                                                
     sustain network and software services through provider                                                                     
     and payor contributions                                                                                                    
     AeHN Estimated recurring costs after FY11: $5.0M                                                                         
               $1.3M administration/business operations                                                                         
               $3.7M    contractual   HIE    technical/software                                                                 
     Estimated recurring AeHN revenues after FY11: $5.0M                                                                      
        …$1.5M     1500+ physicians/clinicians                                                                                 
        …$0.5M     26 Hospitals                                                                                                
        …$0.5M     Laboratories/Pharmacies/Imaging Centers                                                                     
        …$1.0M     State of Alaska                                                                                             
        …$1.0M     Private Insurers                                                                                            
       …$0.5M     Alaska Federal Health Care partners                                                                          
SB133 Facilitates HIE development: Slide 18.                                                                                    
   „Positions Alaska for substantial stimulus funding                                                                          
   „Demonstrates state commitment to support and participate                                                                   
     in Alaska's Health Information Exchange development                                                                        
   „Provides for DHSS oversight, engagement, and long-term                                                                     
     participation plan                                                                                                         
   „Provides framework for designation of a qualified state                                                                    
     Health Information Exchange entity                                                                                         
   „Ensures privacy protections                                                                                                
9:40:52 AM                                                                                                                    
Summary recommendations: Slide 20:                                                                                              
   „A. Passage of SB133                                                                                                        
   „B. State DHSS oversight, support, and  designation      of                                                                 
     HIE organization                                                                                                           
   „C. Provide stimulus match of $1.3M in  FY10 and $1.0M in                                                                   
The outcomes: Slide 21:                                                                                                         
   „Timelier access to safer health care for Alaskans                                                                          
   „$1M annual State investment yields ~5% savings in future                                                                   
     State expenses for Medicaid, employee health care, state-                                                                  
     operated health care programs                                                                                              
Co-Chair Hoffman  asked about  the $5  billion spent  on health                                                                 
care  and   potential  annual  savings  of   $250  million.  He                                                                 
requested more  information about the  amounts and how  much is                                                                 
dedicated  to personnel.  He asked  for  the breakdown  between                                                                 
private entities  versus the state's  savings. How much  of the                                                                 
savings will pertain to the state.                                                                                              
Mr.  Hamburg answered  that  the cost  savings  to the  state's                                                                 
healthcare  system  is the  annual  $250  million. The  state's                                                                 
savings is $10 to $12 million dollars annually.                                                                                 
9:42:46 AM                                                                                                                    
Co-Chair  Hoffman  requested  identification  of  the  saving's                                                                 
location.  Mr.  Hamburg replied  that  the  state is  currently                                                                 
paying  for  duplicate  testing   existing  during  moves  from                                                                 
facility to  facility. Costs are reduced  by the implementation                                                                 
of a health information exchange system.                                                                                        
Senator Paskvan  stated that Rebecca  Madison was  available to                                                                 
add specific detail to answer Co-Chair Hoffman's question.                                                                      
Co-Chair  Stedman  noted  that the  fiscal  note  reflects  the                                                                 
assumption  that the  state will  accept  the federal  stimulus                                                                 
money. He asked about the  consequences of refusing the federal                                                                 
funds. Senator Paskvan replied that  the loss of stimulus funds                                                                 
equals $13 million dollars for  the current year and $7 million                                                                 
for the following year.                                                                                                         
Co-Chair  Stedman asked  if the  amounts are  reflected in  the                                                                 
fiscal note.                                                                                                                    
Mr.  Hamburg  added  that  the   capital  dollar  requests  are                                                                 
requested in  FY10 to ensure  that the state qualifies  for the                                                                 
greatest amount of federal dollars.                                                                                             
9:44:35 AM                                                                                                                    
Senator  Olson noted  that the  acceptance of  federal stimulus                                                                 
dollars will  prolong set up  of the program. He  wondered what                                                                 
supplemental amount  the state is  then responsible for  in the                                                                 
following year. Mr. Hamburg noted  that the state's involvement                                                                 
includes the capital funds and  either the designated operating                                                                 
cost or the user fees.                                                                                                          
Senator   Olson   commented    that   some   private   practice                                                                 
practitioners might have difficulty  connecting to the network.                                                                 
Mr. Hamburg  explained that  the plan  requires five  years for                                                                 
full   implementation.   Senator   Olson  asked   if   a   solo                                                                 
practitioner will contribute via  affordable fee structure. Mr.                                                                 
Hamburg replied  that the  issue is  resolved in  regulation or                                                                 
non-profit solution.                                                                                                            
9:46:23 AM                                                                                                                    
Mr. Hamburg  stated that the  federal stimulus makes  it easily                                                                 
accessible for  providers to access involvement  in the system.                                                                 
Senator Olson  asked about rural clinics  and their involvement                                                                 
in the  program. Mr.  Hamburg answered that  there is  a native                                                                 
health  system developing  an electronic  health record  system                                                                 
and striving to network into the state system.                                                                                  
Senator Thomas  understood that more than  one large depository                                                                 
is available. He  noted the fiscal note with  three dollars for                                                                 
every dollar that the state has spent.                                                                                          
Mr. Hamburg answered that the fiscal  note is based on a $54.34                                                                 
million federal  match for  2012 and beyond.  He noted  that if                                                                 
the state designated the entity  the cost is less and dependent                                                                 
upon the user fee charged for system participation.                                                                             
9:48:48 AM                                                                                                                    
WILLIAM  STREUR, DEPUTY  COMMISSIONER, MEDICAID  & HEALTH  CARE                                                                 
POLICY, DEPARTMENT  OF HEALTH AND  SOCIAL SERVICES  stated that                                                                 
the administration's position on the  bill is in support of the                                                                 
concept  and  creation  of a  health  information  network.  He                                                                 
informed  that   the  administration   felt  that   too  little                                                                 
information  is   available  regarding  the   ramifications  of                                                                 
accepting  the stimulus  funds. The  administration is  waiting                                                                 
for additional guidance regarding acceptance of the funds.                                                                      
Co-Chair Stedman requested clarification  as the fiscal note is                                                                 
$27.9  million.  He asked  if  the  state secures  the  federal                                                                 
stimulus  funds, will  the administration  go forward  with the                                                                 
Mr.  Streur   clarified  that  the   administration's  position                                                                 
regards the concept of health  information exchange. Due to the                                                                 
expense involved, the administration  cannot take a position on                                                                 
the funding itself.                                                                                                             
9:50:55 AM                                                                                                                    
MR. SAM  TRIVETTE, SELF, spoke in  support of SB 133.  He urged                                                                 
consideration of moving the legislation  forward. He noted that                                                                 
legislation  frequently pits  one person  against another,  but                                                                 
this bill allows everyone to  win. He encouraged spending money                                                                 
to save money. He relayed  a personal story regarding a medical                                                                 
PAT  LUBY, ADVOCACY  DIRECTOR,  ALASKA  ASSOCIATION OF  RETIRED                                                                 
PERSONS  (AARP), ANCHORAGE  (testified via  teleconference). He                                                                 
testified in  support of  SB 133.  He stated  that SB  133 will                                                                 
reduce  medical  errors  in hospitals.  He  informed  that  the                                                                 
electronic  health  records  could provide  information  for  a                                                                 
person who might not be able to speak for themselves.                                                                           
9:54:22 AM                                                                                                                    
REBECCA  MADISON, ALASKA  TRIBAL  HEALTH CONSORTIUM  (testified                                                                 
via  teleconference).  She  reported that  providers  in  other                                                                 
states  with  electronic   health  records  report  significant                                                                 
savings  to  Medicaid   through  health  information  exchange.                                                                 
Multiple  health  care  agencies  in Alaska  support  the  bill                                                                 
including  federal  agencies,  the  Department  of  Health  and                                                                 
Social  Services, private  physicians, primary  care providers,                                                                 
hospitals and nursing homes.                                                                                                    
Senator Olson asked if the  health corporations have weighed in                                                                 
on the legislation and cost.                                                                                                    
Ms. Madison  asked if  Senator Olson  was referring  to Alaskan                                                                 
health  corporations.  Senator  Olson  concurred  that  he  was                                                                 
referring  to Alaskan  corporations.  Ms.  Madison stated  that                                                                 
many Alaskan corporations entered partnership agreements.                                                                       
9:56:28 AM                                                                                                                    
SHELLY HUGHES,  ALASKA PRIMARY  CARE ASSOCIATES  (testified via                                                                 
teleconference).  She  expressed  appreciation  to  the  Senate                                                                 
Finance  Committee. She  appreciated  Senator  Paskvan and  his                                                                 
sponsorship  of  the  bill.  She relayed  that  much  time  and                                                                 
consideration has gone  into the creation of SB  133. She noted                                                                 
that the Primary Care Associates  appreciates the protection of                                                                 
the patient's confidentiality.                                                                                                  
9:58:08 AM                                                                                                                    
Co-Chair Stedman  asked about  the issue  of the  acceptance or                                                                 
refusal  of  the stimulus  money.  He  asked  if this  is  time                                                                 
sensitive assuming that the administration accepts the money.                                                                   
9:59:10 AM                                                                                                                    
Mr. Streur  answered that  the timeline  for acceptance  of the                                                                 
money includes a  90 percent match plus 100%  funding to assist                                                                 
in the  development during 2010  and 2011.  At the end  of 2011                                                                 
the  department returns  to the  Medicaid match  rate of  54.24                                                                 
Co-Chair Stedman  asked about the  six full time  positions and                                                                 
the capital  expenditures of  27.9 million  of which  $25.1 are                                                                 
federal. He  noted that the  legislature does not have  to take                                                                 
action  on the  bill. He  struggled  with the  timing issue  as                                                                 
session  ends  soon.  Does  this  put us  in  any  jeopardy  to                                                                 
postpone accepting the money? Mr.  Streur responded that he was                                                                 
unable to answer the question at this time.                                                                                     
Co-Chair Hoffman  requested the  information the  department is                                                                 
lacking. Mr. Streur explained that  the department must vet out                                                                 
the information  ensuring that there are  no "strings attached"                                                                 
to these funds prior to moving forward.                                                                                         
10:01:27 AM                                                                                                                   
Co-Chair  Hoffman  recalled  Mr.   Streur  commenting  that  he                                                                 
anticipated  an   answer.  He  asked  who   would  provide  the                                                                 
department with the information.                                                                                                
Mr. Streur  replied that the  information would  be forthcoming                                                                 
from  the  federal  government. Co-Chair  Hoffman  asked  if  a                                                                 
specific person was in contact with the department.                                                                             
Mr. Streur stated that the  department corresponds with various                                                                 
people in  the center for  Medicaid and Medicare  services. Co-                                                                 
Chair  Hoffman asked  when the  department expects  a response.                                                                 
Mr. Streur answered  that he would have the  information by the                                                                 
end of the session.                                                                                                             
Co-Chair Stedman noted that the  legislation had a large fiscal                                                                 
impact. He noted concern about  the legislation adopted without                                                                 
the   federal  funds   coming   through.   He  requested   more                                                                 
information about the timing once the department has it.                                                                        
10:02:42 AM                                                                                                                   
Mr. Streur  was hopeful  that a decision  would be  made sooner                                                                 
rather than later.                                                                                                              
SB  133   was  HEARD   and  HELD   in  Committee   for  further                                                                 

Document Name Date/Time Subjects
SB 1 Additional Backup.pdf SFIN 4/7/2009 9:00:00 AM
SB 1
SB 1 Amendment 1 C.1.pdf SFIN 4/7/2009 9:00:00 AM
SB 1
SB133_Backup_AK_HISPC_Project_Summary.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB133_Backup_Cost_Savings.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB133_Backup_Media.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB133_Backup_NCSL_HIT_State_Legislation.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB 1 proposed CS Version C.pdf SFIN 4/7/2009 9:00:00 AM
SB 1
SB 170 proposed CS Version S.pdf SFIN 4/7/2009 9:00:00 AM
SB 170
SB133_Backup_AK_HISPC_Project_Summary.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB 170 Additional Backup.pdf HFIN 4/8/2009 1:30:00 PM
SFIN 4/7/2009 9:00:00 AM
SB 170
SB 133 Additional backup.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB 170 Amendment 1 S.1.pdf SFIN 4/7/2009 9:00:00 AM
SB 170
SB133_Explanation_of_CS_Changes.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB133_Letters_of_Support.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB133_Presentation_AeHN overview April 2009.ppt SFIN 4/7/2009 9:00:00 AM
SB 133
SB170 frequently asked questions.pdf SFIN 4/7/2009 9:00:00 AM
SB 170
SB133_Sponsor Statement.pdf SFIN 4/7/2009 9:00:00 AM
SB 133
SB170 letters of support.pdf SFIN 4/7/2009 9:00:00 AM
SB 170
SB170 sponsor statement.pdf SFIN 4/7/2009 9:00:00 AM
SB 170
SB170 supporting information.pdf SFIN 4/7/2009 9:00:00 AM
SB 170