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SB0121C -1- CSSB 121(L&C)
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CS FOR SENATE BILL NO. 121(L&C)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE SENATE LABOR AND COMMERCE COMMITTEE
Offered: 4/15/26
Referred: Finance
Sponsor(s): SENATORS GIESSEL BY REQUEST, Gray-Jackson
A BILL
FOR AN ACT ENTITLED
"An Act relating to insurance; establishing standards for health insurance provider 1
networks; relating to settlement of health insurance claims; relating to allowable charges 2
for health care services or supplies; and providing for an effective date." 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
* Section 1. AS 21.07 is amended by adding a new section to read: 5
Sec. 21.07.035. Minimum provider network standards. (a) A health care 6
insurer shall take the network requirements of this section into account when 7
calculating the benefits of, or other contractual requirements applicable to, a covered 8
person's health care insurance policy that, as determined by the director, 9
(1) requires the covered person to use a limited network of health care 10
providers, as defined in regulation by the director; or 11
(2) creates a substantial financial or other incentive or disincentive for 12
the covered person to use a limited network of health care providers. 13
(b) A health care insurer's provider network must include each hospital, 14
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skilled nursing facility, or mental health or substance abuse facility licensed in the 1
state and each physician, physician assistant, or advanced practice registered nurse 2
licensed in this state who is employed or contracted by one of these hospitals or 3
facilities to provide medical care at the hospital or facility. A health care insurer's 4
provider network must include each health care facility operated by an Alaska tribal 5
health organization and each physician, physician assistant, or advanced practice 6
registered nurse employed or contracted by the organization to provide medical care at 7
that location. A physician, physician assistant, or advanced practice registered nurse 8
who is employed or contracted by a hospital, skilled nursing facility, mental health or 9
substance abuse facility, or Alaska tribal health organization to provide medical care is 10
not included when calculating the health care insurer's minimum network standards set 11
out in (d) of this section. 12
(c) A health care insurer's provider network must include a sufficient number 13
of physicians, physician assistants, and advanced practice registered nurses in each 14
contracting region in which the insurer provides coverage to meet the minimum 15
network standards set out in (d) of this section. Only a physician, physician assistant, 16
or advanced practice registered nurse who is licensed in this state, meets the 17
credentialling standards of the health care insurer, and whose principal practice 18
location is physically located in the applicable contracting region may be included 19
when determining whether a health care insurer meets the minimum network standards 20
set out in (d) of this section. If an insurer treats the physician, physician assistant, or 21
advanced practice registered nurse as contracted for the purposes of all insurance 22
benefit determinations, a health care insurer may include in the provider network a 23
physician, physician assistant, or advanced practice registered nurse who is not a 24
contracted network health care provider to meet the standards set out in (d) of this 25
section. Each physician, physician assistant, or advanced practice registered nurse 26
included in the health care insurer's provider network, including a physician, physician 27
assistant, or advanced practice registered nurse that is not a contracted network health 28
care provider, must be shown as an in-network provider in the insurer's directory of 29
network providers. 30
(d) For purposes of this section, the state is divided into six contracting 31
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regions: the Municipality of Anchorage; the Matanuska-Susitna Borough; the 1
Fairbanks North Star Borough and Southeast Fairbanks Census Area; the Kenai 2
Peninsula Borough; the City and Borough of Juneau, Ketchikan Gateway Borough, 3
and City and Borough of Sitka; and the remainder of the state. A health care insurer 4
that provides coverage in the Municipality of Anchorage contracting region must 5
include in the insurer's provider network at least 70 percent of the total number of 6
actively practicing physicians, physician assistants, and advanced practice registered 7
nurses in each specialty recognized for a Medicare advantage plan network adequacy 8
requirement for the Centers for Medicare and Medicaid Services physically located in 9
the region and at least 70 percent of the provider groups in each specialty. A health 10
care insurer that provides coverage in the Matanuska-Susitna Borough contracting 11
region or the Fairbanks North Star Borough and Southeast Fairbanks Census Area 12
contracting region must include in the insurer's provider network at least 75 percent of 13
the total number of actively practicing physicians, physician assistants, and advanced 14
practice registered nurses in each specialty recognized for a Medicare advantage plan 15
network adequacy requirement for the Centers for Medicare and Medicaid Services 16
physically located in those regions and at least 75 percent of the provider groups in 17
each specialty. A health care insurer that provides coverage in the Kenai Peninsula 18
Borough contracting region, the City and Borough of Juneau, Ketchikan Gateway 19
Borough, and City and Borough of Sitka contracting region, or the contracting region 20
covering the remainder of the state must include in the insurer's provider network at 21
least 80 percent of the total number of actively practicing physicians, physician 22
assistants, and advanced practice registered nurses in each specialty recognized for a 23
Medicare advantage plan network adequacy requirement for the Centers for Medicare 24
and Medicaid Services physically located in those regions and at least 80 percent of 25
the provider groups in each specialty. 26
(e) A health care insurer may make a written request to the director for an 27
exception to the minimum provider network standards set out under this section. The 28
director may grant an exception only for a specified limited period not to exceed 36 29
months. The director shall adopt regulations specifying the procedure for requesting 30
an exception and the standards for granting an exception. The director shall require the 31
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health care insurer to submit a plan to achieve the minimum network standards within 1
the time frame of the exception granted by the director and submit annual progress 2
reports to the director. 3
(f) A health care insurer shall annually attest whether the insurer meets or 4
exceeds the minimum provider network standards in this section for each contracting 5
region in which the insurer provides coverage and provide to the director supporting 6
documentation to demonstrate compliance as part of the insurer's required rate filings. 7
If a health care insurer does not meet a specific standard, the insurer shall submit a 8
plan for corrective action for consideration by the director. 9
(g) The director may adopt regulations necessary to implement this section. 10
The director may adopt in regulation minimum provider network standards by 11
contracting region that exceed the minimum network standards set out in (d) of this 12
section. 13
* Sec. 2. AS 21.36 is amended by adding a new section to read: 14
Sec. 21.36.497. Standards for settlement of health insurance claims. (a) In 15
the absence of a contract between a health care insurer and a health care provider that 16
sets allowable charges for health care services and supplies furnished to a covered 17
person, the director shall set by regulation the standards that a health care insurer must 18
use to set allowable charges for health care services or supplies furnished to a covered 19
person by a health care provider in the state. The director shall require a health care 20
insurer to use a statistically credible methodology to set allowable charges. Allowable 21
charges must be based on the most current data available that shows amounts charged 22
by health care providers in the state for the service or supply over a 12-month period, 23
must be the same across the state, and must be at least 345 percent of the federal 24
Centers for Medicare and Medicaid Services physician fee schedule for the state in 25
effect at the time of delivery of the health care service or supply. 26
(b) The director shall periodically audit and validate the methodology used by 27
a health care insurer under (a) of this section to ensure that the insurer is setting 28
allowable charges in accordance with this section. Unless otherwise required by the 29
director, a health care insurer shall review and update allowable charges at least every 30
five years, but not more often than every three years. 31
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(c) A health care insurer shall uniformly and equally apply reimbursement 1
rates for an allowable charge under (a) of this section for the same type of health care 2
service or supply and for health care providers who are practicing within the scope of 3
the provider's license and who are authorized to bill for health care services or supplies 4
under the Current Procedural Terminology code adopted by the American Medical 5
Association or other industry standard method of coding. 6
(d) In this section, 7
(1) "allowable charge" means the minimum amount that a health care 8
insurer may use to set reimbursement rates for health care providers and to calculate 9
benefits and pay health insurance claims on behalf of a covered person; 10
(2) "health care insurer" has the meaning given in AS 21.54.500; 11
(3) "health care provider" means a physician or other medical 12
professional licensed in this state. 13
* Sec. 3. AS 21.07.020(3) is repealed. 14
* Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 15
read: 16
TRANSITION: CALCULATION OF ALLOWABLE CHARGES. Notwithstanding 17
AS 21.36.497, added by sec. 2 of this Act, a health care insurer shall set allowable charges for 18
services and supplies for calendar year 2027 based on the most current data available that 19
shows the amounts charged by health care providers in the state for the services and supplies 20
over a 12-month period beginning in 2024 or earlier. Beginning in calendar year 2030, 21
allowable charges must be based on the most current data available at that time that shows the 22
amounts charged by health care providers in the state for the services and supplies over a 12-23
month period. 24
* Sec. 5. This Act takes effect January 1, 2027. 25