Legislature(2009 - 2010)CAPITOL 106
02/01/2010 08:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| HB317 | |
| HB235 | |
| HB206 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 317 | TELECONFERENCED | |
| += | HB 235 | TELECONFERENCED | |
| += | HB 206 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 235-PROF STUDENT EXCHANGE LOAN FORGIVENESS
8:55:12 AM
CHAIR SEATON announced that the next order of business
would be HOUSE BILL NO. 235, "An Act relating to
professional student exchange program availability and
conditions for loan forgiveness."
8:55:23 AM
KENDRA KLOSTER, Staff, to Representative Cathy Munoz,
Alaska State Legislature, presented the bill, addressed
previous questions from the committee, and reviewed the
fiscal notes. She paraphrased from a prepared statement,
which read as follows [original punctuation provided]:
As discussed before, HB235 establishes a loan
forgiveness program for the healthcare professions
of dentistry, optometry, and pharmacy.
For a quick outline, the WICHE [Western Interstate
Commission for Higher Education] loan forgiveness
program starts at a 25 percent forgiveness on the
principal loan amount for participants who
maintain their Alaska residency, return to the
State, and practice for at least five years. An
additional 25 percent loan forgiveness is provided
to those who practice in an underserved area or
serve patients who are covered under the medical
assistance program.
Specific questions were brought to our attention
during the last hearing and I would like to take a
moment to address those. First, in response to
Rep. Gardner's question regarding other states
programs, there is an addition to your committee
packet which gives an overview of programs offered
in other states. Please take into account the
WICHE program in Alaska will create an incentive
for graduated students to return to the state
through offering the loan forgiveness. We feel
adding the incentive for the student to return to
the state is important to fill the need of
deficiency rates amongst the healthcare
profession.
Connecticut Loan Repayment: Up to $30,000 for
first 2 years, an additional $15,000 for
additional year if health professionals serve in
community health centers.
Arizona: award amounts for dentists & physicians
are up to $20,000 in first two years, $22,000 for
th
third and $25,000 for 4 year.
Minnesota has a minimum service obligation of
three years, up to 4 years of loan forgiveness and
payment directly to participant in annual lump sum
of $25,000.)
Secondly, there was a question regarding the
deficiency rates in the fields of dentistry,
optometry, and pharmacy. There is also more
information and specific charts & data that
address the deficiency rates in each field. The
Alaska Pharmacists Association stated, "To get to
the national average, Alaska would need an
additional 137 pharmacists."
In 2001, about 25% of Alaska dentists were aged 55
and above. This population of dentists is only
getting larger with the number of baby boomers
coming to retirement age. This is the same story
I have heard for healthcare fields across the
state.
During the last hearing we heard from Dr. George
Shaffer from Ketchikan who described the lack of
dentists in his area and unable to sell practices
due to the lack of incoming doctors. I heard a
similar story this past week from a pharmacists
working at the Southeast Regional Health
Consortium (SEARHC) here in Juneau - She said they
were unable to find a pharmacists with the
qualifications so over the course of 6 months they
went through a number of "fill in" pharmacists.
Shelly expressed the danger to the patients with
the number of pharmacists that come through the
program and lack of experienced pharmacists.
Disparity rates for optometrists cover three areas
in the state at this time: the Gulf Coast,
Northern Alaska, and Southwest. This is in a
chart distributed by the division of occupational
licensing. As stated before, we are seeing an
increase in retirees, we need to look forward and
address the decrease in healthcare professionals
before we see a further increase in deficiency
rates.
I believe it was Rep. Buch who had a question
regarding the classification of underserved areas
- the Commissioner of Department of Health and
Social Services has this duty and works with the
definitions, and studies regarding the underserved
areas with the U.S. Department of Health and
Social Services. Alice Rarig from the Department
of Health and Social Services is in the audience
to address any additional questions regarding the
Departments definition and process for underserved
areas.
Also available in the audience is Diane Barrans
from Alaska Commission on Postsecondary Education,
Dr. David Logan from the Alaska Dental Society and
Jim Towel is on the line from the Alaska Dental
Society.
If you would like, let's go ahead and take a look
at the fiscal note.
The program will start with 15 students in FY11 -
5 from each of the three fields, pharmacy,
optometry, and dentistry. These costs are the
WICHE support fees that are paid by the state.
The support fee varies depending on the field of
study. Fees for 2010/2011: Dentistry: $22,700,
Optometry: $15,600, Pharmacy: $6,900.
An additional 15 students are added through FY14,
the total amount of students allowable in the
program cap at 60. The incremental costs starting
in FY15 is the average fee increase of 3.4%, the
average rate determined by the higher education
cost adjustment.
th
I also want to note - beginning in the 5 year
following the program implementation, there will
be an income stream from the participant's
repayments. In FY15 the first 15 participants
will be in repayment, contributing about $40,000
in repayment, $116,400 in FY16 and so on. This
would increase to approximately $420,000 annually.
9:00:45 AM
CHAIR SEATON referred to page 2 line 20, and paraphrased:
"In addition to other loan forgiveness benefits available
to [a] participant, the Alaska Commission on Postsecondary
Education [shall annually] ... forgive 10 percent of the
outstanding principal ...". He questioned how this
language coincides with the 5 percent stipulated in [sub
section] (a).
MS. KLOSTER explained that the loan forgiveness
participants, as defined on page 2, lines 16-19, will
receive 5 percent per year, for 5 years, or a total
forgiveness of 25 percent. In addition to meeting that
criteria, subsection (b) also allows that if a participant
practices in an underserved area, they will receive an
additional 5 percent, to wit 10 percent, for 5 years
totaling a 50 percent forgiveness on their principle loan
amount.
9:03:11 AM
CHAIR SEATON indicated concern that the structure of the
bill may not convey that intent.
REPRESENTATIVE MUNOZ assured the committee that the intent
is to provide a maximum forgiveness of 50 percent. She
said:
But in order to receive the second part of that
forgiveness they have to meet the requirements of
the first section, and, if you go to C, on page 3,
the aggregate amount is 50 percent; it's outlined
in that language.
9:04:47 AM
REPRESENTATIVE BUCH inquired about the determination of
what constitutes an underserved area.
MS. KLOSTER indicated that a representative from Department
of Health and Social Services (DHSS) is available to take
questions.
REPRESENTATIVE BUCH pointed out that only one optometrist
has provided support for this legislation.
MS. KLOSTER conceded that minimal correspondence from
optometrists has been received, however, DHSS occupational
licensing section has research indicating underserved areas
for optometry.
9:06:43 AM
DIANE BARRANS, Executive Director, Postsecondary Education
Commission, Department of Education and Early Development
(EED) indicated that the professional fields included in
the bill are industry proposed priorities. She stated that
it poses no conflicts with the current structure of the
program, but it does create some special features that
would be available to practitioners in the three specified
fields.
9:08:17 AM
CHAIR SEATON directed attention to the CS, page 1, and
paraphrased from subsection (b), "Notwithstanding the
funding priorities established under (a) by the
commission." He asked whether the commission is
comfortable with the language.
MS. BARRANS responded yes.
9:08:55 AM
CHAIR SEATON requested her analysis of the bill and how it
will work within the system that she administers.
9:09:06 AM
MS. BARRANS said the primary change is to provide a
forgiveness feature for these practitioners. Thus, the
state will need to fund that out of the general fund. The
other loans, for other fields of study, are funded via the
Alaska Student Loan Corporation. The allocation is for
five students per year, however, there may not be that many
applying. Should more than five qualified applicants
pursue the available funded seats, the authority to select
is retained by the appropriate institution. She opined,
that other than these minor caveats, the bill does not
present a significant change.
9:10:46 AM
CHAIR SEATON referred to line 6 and read, "... the Alaska
Commission on Postsecondary Education shall provide
adequate funding ...". Thus, the commission will provide
loans for at least five applicants in each of the
categories. He inquired whether this poses any conflicts
with the commission.
9:11:29 AM
MS. BARRANS said if funds are not appropriated by the
legislature, then the loans will not be made with these
terms and conditions.
CHAIR SEATON surmised that the legislature would have to
appropriate separate funds for the forgiveness loans.
9:12:27 AM
MS. BARRANS explained that the forgiveness contracts
entitle the recipients to certain benefits. Because of
that, the loans require up-front funding from the general
fund. The commission will establish a separate
appropriation stream for funding, and incoming payments
will be returned to the general funds. It is the same
process as occurs with WWAMI [Washington, Wyoming, Alaska,
Montana, and Idaho Medical Education Program].
9:13:47 AM
REPRESENTATIVE GARDNER asked if the forgiveness facet isn't
funded, will there be an effect on a qualified applicant's
loan options; could student still receive a loan, that
otherwise would have been available, absent this
legislation.
MS. BARRANS deferred to the assistant attorney general for
that answer. However, she predicted that, if this language
is put into statute and funds are not appropriated, it
could prove to be problematic.
REPRESENTATIVE GARDNER underscored that it could have an
adverse impact on students entering the field.
MS. BARRANS offered to consult with DOL.
9:15:06 AM
REPRESENTATIVE BUCH asked how this differs from the way the
forgiveness policies have worked in the past, and whether
there are other programs structured similarly, other than
WWAMI.
MS. BARRANS said that the way in which Alaska currently
participates in the Professional Student Exchange Program
(PSEP) is a variation from the original structure. Until
1992, all of the Alaskans who participated did so with no
service or loan obligation relative to the support fees.
Around 1998, the legislature stipulated that the student
loan corporation could fund loans to individuals who chose
to borrow the support fee on their own behalf.
Approximately half of the other western states,
participating in the exchange, have some service obligation
related to their resident's participating in the PSEP
program. Typically it is a one to one obligation: one
year of support for one year of obligation for up to four
years. The proposed bill offers two differences: 1) a
partial discharge of the financial obligation; and 2) the
time period required to serve to receive the maximum
benefit.
9:17:25 AM
REPRESENTATIVE BUCH asked how this legislation differs from
the original forgiveness loans offered in Alaska. He
recalled a program that forgave 50 percent of a loan if a
student returned as a resident for five years.
MS. BARRANS concurred that the original general fund
forgiveness loan allowed for a 50 percent discharge if they
completed their degree and returned for five years.
REPRESENTATIVE BUCH remembered that it was dismissed
because of the feeble requirements, and the high level of
default.
MS. BARRANS clarified that it was eliminated when the state
chose to discontinue the program in 1986. A combination of
factors caused this decision including: low oil revenues
versus the cost of the program, minimal underwriting
standards, no credit checks, and default rates in excess of
30 percent. It proved to be a costly program, and only a
relatively small number of residents benefited from the
effort.
9:21:05 AM
REPRESENTATIVE BUCH asked whether the proposed forgiveness
format and venue is an appropriate way to proceed.
MS. BARRANS refrained from offering a value judgment. The
structure is aimed at those who are targeting highly
professional areas, with the possibilities of monetary
security.
9:22:51 AM
CHAIR SEATON recalled previous legislation that proposed a
more general forgiveness program.
MS. BARRANS stated that HB 58 was a loan repayment program
without a built-in entitlement. She said that she will
provide further information to the committee regarding any
cumulative impact of these two pieces of legislation.
9:24:48 AM
REPRESENTATIVE GARDNER pointed out that this program
targets students who are entering highly competitive
fields. She asked if the implication is that these
student's will be less apt to default, and have a higher
probability rate of finishing school.
MS. BARRANS these are students who will have completed an
undergraduate program, and demonstrated academic success to
a level of being admitted to a professional institution
and, as such, are considered a good risk.
REPRESENTATIVE GARDNER surmised that the concern is not
that these candidates could be successful and pay back
their loans without assistance, but rather to mold their
behavior in such a way that they return to Alaska to
practice.
MS. BARRANS reported that the WICHE participants, in the
PSEP, from states that have a forgiveness component, or
service obligation, have a return rate double that of the
states which do not.
9:27:05 AM
CHAIR SEATON opined that the problem may not be the loan
forgiveness aspect, but that many of the openings are held
for residents of the other WWAMI states. He asked if this
program will provide a benefit of gaining slots for
Alaskans to enter professional schools.
9:27:42 AM
MS. BARRANS replied yes, and said that the schools which
participate in the PSEP are reserving a number of slots for
WICHE state residents. Thus, each institution prioritizes
state admits first, then WICHE admits, and anyone else is
considered a non-resident. If there is an over demand by
state admits, the only means for entering an institution is
by being a WICHE/PSEP participant from a sending state.
She pointed out that this is an important access program
for Alaskans.
9:29:58 AM
ALICE RARIG, Planner IV, Department of Health and Social
Services (DHSS), availed herself for questions.
9:30:21 AM
REPRESENTATIVE BUCH referred to page 2, lines 26-28, which
discusses underserved areas, and asked about the standard for
this provision.
9:31:00 AM
MS. RARIG indicated that two processes exist to address this
language, allowing identification of an area as either having a
health professional shortage or being medically underserved.
The bill suggests that the commissioner would apply discretion
to determine which designation might apply. The most readily
available designations are primary care, health professional
shortage areas, and dental health professional shortage areas
for the purposes of this bill. She indicated that there are no
shortage area specifications for optometrists or pharmacists.
She said:
We've suggested to the ... proposers of the bill that
the primary care health professional shortage area,
based on primary care physician shortages would be a
good proxy for shortages of pharmacists and
optometrists.
MS. RARIG said that the occupation licensing data indicates a
distribution of pharmacy and optometry parallel to that of
physicians, so this could be a satisfactory approach.
9:32:48 AM
REPRESENTATIVE BUCH queried whether the commissioner by policy
administers to this oversight, and whether there is written
statute, regulation, or policy that will accompany the bill
through the finance committee.
MS. RARIG responded that there is not a regulation specific to
this proposal, but agreements do exist between the state and
federal governments that allow the department to undertake the
activity of submitting requests for designations. Currently the
designations are used primarily for processing of National
Health Service Corps (NHSC) placements and loan repayment
requests. She said that this is a long standing program that
can be accessed on the internet via the Health Professional
Shortage Areas (HPSA) website.
9:35:07 AM
CHAIR SEATON asked whether bill language could designate an
underserved area for primary care physicians, and eliminate the
need for the department to individually process and identify
underserved areas for the three named professions.
MS. RARIG pointed out that there is no fiscal note for the
department, suggesting that the existing designations of health
professional shortage areas would be used.
9:36:08 AM
CHAIR SEATON expressed concern and suggested that a sponsor
amendment could rectify this oversight.
9:36:48 AM
REPRESENTATIVE P. WILSON established her understanding that the
medical assistance program was reviewed, and it was discovered
that pharmacists and optometrists were found lacking equal to
the underserved areas for physicians. She agreed that an
amendment might be necessary.
MS. RARIG said that the licensing data was examined to establish
the availability and distribution of optometrists and
pharmacists, and how it correlates to physicians. The
information gleaned did not ascertain that the listed, licensed
doctor is in practice, but that they have an Alaska residence in
a particular area of the state. She used this informal process
to establish a rationale for pharmacist and optometrist needs.
9:38:30 AM
REPRESENTATIVE GARDNER recalled the prior statement that this is
industry led legislation, which is not uncommon. However, in
this case the industry will not benefit from the legislation,
but the effects will be evident to all Alaskans.
9:39:34 AM
CHAIR SEATON opined that this may be why letters of support have
been spare. He directed attention to [subparagraph] (B), line
29, and expressed concern that some facilities may not be
identified for benefit, such as the Anchorage Native Hospital,
or the Pioneer's Home. He asked whether this language works to
identify underserved areas adequately.
MS. RARIG acknowledged that the implications in the urban areas
where a person may be employed by an organization with gross
billings exceeding five percent for Medicaid/Medicare, could be
questionable. However, the benefit is evident for areas such as
Ketchikan, which do not meet the federal criteria for a
definition of shortage in the area of dental health. Under
subparagraph (B) a dentist practicing in Ketchikan and
participating in the Medicaid program would be eligible.
9:43:04 AM
CHAIR SEATON read from page 2, lines 29-30: "... who are
covered under the medical assistance program in the state,...",
and asked whether that would include the Native Health Programs,
Medicare, and Medicaid. He pondered whether most dentists in
the state could attribute five percent of their billings to a
medical assistance program.
MS. RARIG suggested that the definition of medical assistance
program should be clarified. She reported that about one third
of Alaska's dentists participate in the Medicaid program, to a
level of claims exceeding $10,000 per year. The department
would rely on an applicant disclosing their gross and Medicaid
billings.
9:45:32 AM
CHAIR SEATON opened public testimony.
9:45:58 AM
DR. DAVID LOGAN, DDS, Alaska Dental Society, stated support for
HB 235, disclosing that he is a benefactor of the Alaska Student
Loan and WICHE programs. These programs are the primary reason
that he was able to attend a professional school and return to
practice in Alaska. He indicated how students graduating dental
school are faced with an overwhelming debt. Five percent of
Medicaid billings for a dental practice, represent a significant
amount of billings. Medicaid is approximately a 50 percent
reimbursement of fees, which translates to 10 percent of a
practice; not an insignificant amount. The goal of the society
is to encourage more participation to alleviate needs of
patients and burdens on practitioners.
9:48:43 AM
REPRESENTATIVE MUNOZ asked if the medical assistance language is
too broad and should stipulate Medicare or other specific
programs.
DR. LOGAN regarding dentistry, Medicare does not cover services,
only Medicaid reimburses dentistry.
9:49:27 AM
REPRESENTATIVE MUNOZ solicited comment from the chair on whether
a definition should be included in subparagraph (B).
CHAIR SEATON opined that subparagraph (B) is unclear and will
need revising as the bill goes forward.
9:50:03 AM
CHAIR SEATON asked whether tracking the Medicaid percentage of
the gross billings, in a typical dentistry office, would pose
any problem in order to qualify for this type of program.
DR. LOGAN responded that it would not.
CHAIR SEATON inquired whether it would present a problem in a
shared office situation.
DR. LOGAN indicated that it would be unusual to not have
separate billings, even when dentists share an office. Modern
dental management systems are computerized to allow for ease of
accountability.
CHAIR SEATON suggested that the pharmacists may be faced with
more of a challenge given the nature of their office structures,
often within large corporate facilities where several
pharmacists may be employed and work in shifts. It is important
for the administrators of the program to clearly delineate
expectations and the verification process.
9:53:36 AM
NANCY DAVIS, Executive Director, Alaska Pharmacists Association,
stated that she will provide information to the committee
regarding the Medicaid questions. She posed two questions. The
first one referred to the previous statement that half of the
participating WICHE states provide forgiveness with a service
attachment. She asked if this applies to the support fees.
Also, she asked if there is a guarantee for instate tuition at
the WICHE school of pharmacy.
9:55:50 AM
MS. BARRANS explained that when a student accepts admission as a
certified student, they agree, if they are supported by the
state, to enter into a service obligation, which they must
discharge, or they will have a financial repayment obligation
relative to the support fee that was paid on their behalf. The
support fee is a negotiated fee set by the WICHE program, in
cooperation with the deans of participating schools. Pharmacy
is a unique situation, in that the support fee has been kept
low, at $6,900 per year. For some schools it does not cover the
differential of what they would otherwise charge the student,
and those schools have the option of recovering directly from
the student that differential. She provided an example using a
resident rate of tuition, plus a support fee. If the non-
resident rate of tuition left a gap, the difference could be
recovered from the student. The WICHE staff indicates that the
schools have refrained from collecting the additional cost from
students, however, that is not likely to continue in perpetuity.
What the WICHE staff would like to do is raise the support fee
for pharmacy to a level that will ensure that schools do not
have a financial deficit in relation to WICHE students.
9:58:12 AM
MS. DAVIS surmised that the support fee does provide instate
tuition to the student.
MS. BARRANS said not in every case, as it depends on the
negotiated terms with individual institutes.
9:59:11 AM
CHAIR SEATON stated that the bill will be held. [HB 235 was
held over.]
9:59:31 AM
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 206 material.pdf |
HEDC 3/27/2009 8:00:00 AM HEDC 4/3/2009 8:00:00 AM HEDC 2/1/2010 8:00:00 AM |
|
| CS HB 206 (EDC) April 22 workdraft.pdf |
HEDC 8/25/2009 9:00:00 AM HEDC 2/1/2010 8:00:00 AM |
|
| HB 206 Sponsor statement.doc |
HEDC 8/25/2009 9:00:00 AM HEDC 2/1/2010 8:00:00 AM |
HB 206 Post Secondary courses for High School Students - HB 206 |
| HB 206 Student Count Briefing.doc |
HEDC 8/25/2009 9:00:00 AM HEDC 2/1/2010 8:00:00 AM |
Dual student count/count averaging - HB 206 HB 206 |
| Briefing paper for high schoolers taking postsecondary courses HB206.doc |
HEDC 8/25/2009 9:00:00 AM HEDC 2/1/2010 8:00:00 AM HEDC 2/5/2010 8:00:00 AM |
HB 206 Post Secondary courses for High School Students - HB 206 |
| HB206_CountChart.xlsx |
HEDC 1/20/2010 8:00:00 AM HEDC 2/1/2010 8:00:00 AM |
HB 206 |
| HB235 version R.pdf |
HEDC 1/22/2010 8:00:00 AM HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| HB235 Sponsor Statement.pdf |
HEDC 1/22/2010 8:00:00 AM HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| Ltr House Ed Comm RE HB235 WICHE.pdf |
HEDC 1/22/2010 8:00:00 AM HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| WICHE Tuition -pharmacy school.xls |
HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| WICHE- Pharmacy Workforce.pdf |
HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| HB235- statistics.doc |
HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| HB 317 materials.pdf |
HEDC 2/1/2010 8:00:00 AM HEDC 2/5/2010 8:00:00 AM |
HB 317 |
| HB235CS-EED-ACPE-01-29-10.pdf |
HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| HB317_EED_ACYA_1-27-10.pdf |
HEDC 2/1/2010 8:00:00 AM HEDC 2/5/2010 8:00:00 AM |
|
| HB317_EED_ESS_1-27-10.pdf |
HEDC 2/1/2010 8:00:00 AM HEDC 2/5/2010 8:00:00 AM |
|
| Scan001 (5).pdf |
HEDC 2/1/2010 8:00:00 AM |
HB 235 |
| Scan001 (6).pdf |
HEDC 2/1/2010 8:00:00 AM |
HB 235 |