I recently attended the annual State of Reform Health Policy Conference.

I have attended this conference each year since its inception.  This year 293 attended and there were 57 speakers.  Despite the highest attendance on record the mood was noticeably more negative than past years.  Many healthcare policy discussions turned quickly to that of Alaska’s budget crisis and speculation on how the budget will impact both public and private healthcare.  On the global scale much time was devoted to whether or not the ACA will be repealed and replaced and when such action may occur.  Senator Sullivan indicated that he foresees no action on healthcare until after January 1.

The conference is divided into 3 tracks of 5 sessions.  I typically select tracks and sessions that I think relevant to most clients.  This year I found most sessions to be lacking in the practicality and found little advancement of either policy reform or operational reform that a practitioner can implement.

Key takeaways:

1)      Universal concern for Alaska’s budget instability.  While this is no surprise, what is new is that most practitioners are no-longer decoupling the lack of a balanced State budget from the actual health of the Alaska economy.  Now the two are discussed in conjunction and there is real concern.

2)      Commercial payors are acknowledging that Alaska is on an unsustainable trajectory of premium costs.  Payors continue to blame providers for this cost, but now they are openly admitting that the market cannot sustain (in the individual and small group) current or anticipated premiums.  Payors are now suggesting new Coordinated Care Organization and Accountable Care Organization models.  Moda in particular is pressing for the CCO model and points to its early success with this approach in Oregon.  Given Moda’s tremendous instability, it is difficult to look to this payor as a guiding light.  But, the takeaway is that all payors are now openly discussing these alternatives.

3)      Commercial payors are signaling that the fee-for-service contract model will terminate likely in the next 2-3 years.  This means that providers must prepare for value-based contracting and even those providers who are not participating in CMS or the MIPS program will likely have to participate in MIPS-like reporting as a condition of contracting.  The rationale being many providers do participate in CMS and MIPS and that the commercial payors are reluctant to introduce new quality reporting criteria.  So, while the federal healthcare policy is allegedly not a single payor system, we take another step in that direction though the adoption of CMS criteria by commercial payors.

4)      Price transparency. The municipal attorney made a short and concise presentation on AO 2017-26 (the subject of my March 13, 2017 Update).  Representative Andy Josephson (D – Anchorage) presented HB 123, the House price transparency bill.  In sum, HB 123 is not as sophisticated as AO 2017-26 and for those providers in Anchorage, compliance with AO 2017-26 will result in compliance with HB 123.  That said, HB 123 may be taken up in January by the Legislature  and may change in substance before passage.  I’ll keep you posted on developments.

5)      The 80th Percentile Rule. (See my Updates dated December 8, 2016 and January 10, 2017). On the discussion panel was Lauren Cover, a contracting consultant with Aldrich; Dr. Graham Glass, immediate past president of the Alaska State Medical Association, but who quickly clarified that he was appearing in his personal capacity; and Albert Fogel, an employee benefits consultant with Northrim Benefits Group.  Surprisingly Dr. Glass supports significant revision of the rule or even outright repeal.  Not surprising is that Aldrich, which is in the business of negotiating payor contracts, and Northrim Benefits Group, which is in the business of selling health insurance, both support repeal. The push back from the provider attendees was spirited.  Most disheartening on this issue were statements by State Senator Cathy Giessel made during the lunch keynote in which she indicated that she would introduce legislation to repeal the rule this January.  However, Alaska Division of Insurance Director, Lori Wing-Heier, in her closing comments indicated a far more informed understanding of the rule, its intent and effect on the patient. 10 months after the initial scoping hearing on the issue and Director Wing-Heier appears to be supportive of the rule and might turn out to be the most important champion of out of network providers.

6)      Providers seek alternative practice models. While not a topic of any panel, my discussions with clients and non-clients at the conference confirm that providers are becoming exhausted by over-regulation and uncertainty of future regulation.  They seek alternative practice models that avoid participation in government healthcare plans and now even avoidance of commercial payors. Some alternative models include subscriber-based medicine.  This model works best with established volume primary care or occupational medicine practice.  Is this a solution to the Alaska crisis? Likely not on a large scale.  Alaska will continue to need providers willing to participate in government programs due to the sheer numbers of beneficiaries.  However, it may be a solution for some frustrated providers. I am researching various models and will share in a future Update.


Peter M. Diemer



Healthcare Law Update — State of Reform Conference Report