Alaska judge rules in state’s favor on repeal of a rule intended to limit health care costs

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By James Brooks

Alaska Beacon

An Anchorage Superior Court judge’s ruling has cleared the way for the state of Alaska to repeal its “80th Percentile Rule,” enacted by the state in 2004 as part of an attempt to reduce health care costs in the state.

The Dunleavy administration repealed the rule in 2024, saying it was counterproductive and argued it contributed to higher health care costs. Medical providers say that isn’t true and that repealing the rule will cause some clinicians to close down. 

In 2023, a group of medical providers sued the state, alleging problems with the process used to repeal the rule. On Aug. 27, following a four-day bench trial in February, Judge Yvonne Lamoureaux ruled in favor of the state. 

In her findings of fact and conclusions of law, Lamoureaux concluded that the repeal was not “unreasonable or arbitrary,” and the state did not conduct an improper procedure.

An appeal to the Alaska Supreme Court is possible.

When in place, the rule required that insurance companies reimburse out-of-network medical providers at a rate equal to the 80th percentile of charges for the given service.

If five clinics provide a given procedure, the required payment would be what the second-most-expensive clinic charges.

The rule was intended to prevent Alaskans from being left with large medical bills after visiting out-of-network clinics. The state and Alaska’s largest health insurance company, Premera Blue Cross Blue Shield of Alaska, contend that it required insurance companies to pay more for services than was warranted, contributing to higher insurance costs.

• James Brooks is a longtime Alaska reporter, having previously worked at the Anchorage Daily News, Juneau Empire, Kodiak Mirror and Fairbanks Daily News-Miner. Alaska Beacon is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.