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  • Writer's pictureEmily Pasternak

Alaska's 80th Percentile Rule Repealed

I wanted to share what information I have on the repealing of the 80th Percentile Rule as of October, 2023 including direct links, FAQs, examples of how this will affect out-of-network billing and a notice to in-network providers that your contracts may be up for review in 2024 with all major private insurance companies.

This does NOT apply to Medicare, Medicaid, Indian Health Services, VA, TriCare, or self-funded health plans.

What was the 80th Percentile Rule?

3AAC 26.110(a) in relevant part provides “a person that provides coverage in this state for health care services or supplies on an expense incurred basis for which benefits are based on an amount that is less than the actual amount billed for the health care services or supplies shall….determine the final payment for a covered service or supply based on an amount that …is equal to or greater than the 80th percentile of charges (based on a statistically credible profile for each geographical area) for the health care services or supplies.”

The 80th percentile rule did not mean insurances paid 80% of what was billed. Different health care providers may charge different amounts for the same health care service. When these different charges are listed from the lowest charge to the highest charge, the 80th percentile would be the data point where 80 percent of the number of listed charges fall below the data point and 20 percent of the number of listed charges fall above the data point.

You may be receiving notices from private insurance plans regarding their proposed payment methodology for out-of-network claims starting in January, 2024. I do not receive these notices as I am not a provider but if you would like further clarification about any proposed changes / notices, please just forward them to me and I would be happy to help make sense of it.

So far I have received a News Brief from Premera stating they will be reimbursing out-of-network providers between 125% and 200% the Alaska adjusted Medicare rate starting with dates of service January 1, 2024. I have attached an example of 2023 Medicare rates and the respective reimbursement rates for 125%-300% the Federal and Alaska fee schedules.

Here are some links to the state webpages with the most up to date information and their contact information for provider complaints and questions as well. Patients can also file reimbursement complaints here.

I hope this helps make sense of the upcoming changes and as always, feel free to reach out with your questions.

FAQ 80th Percentile Regulation 10.30.2023
Download PDF • 248KB

Request for Written Input on the Future of Health Care Costs and Reimbursement in Alaska -
Download • 273KB

Medicare Based Pricing Methodology - Sheet1
Download PDF • 79KB

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