Legislature(1995 - 1996)
04/11/1995 08:40 AM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 301
"An Act relating to the medical assistance program; and
providing for an effective date."
Co-Chair Hanley explained the intent of HB 301. The State
of Alaska at this time has two methods of controlling
Medicaid spending:
1. Regulation of "amount, duration and scope"; and,
2. Turning on and off optional services through
appropriation levels.
He continued, the Department of Health and Social Services
(DHSS) has regulatory control over "amount, duration and
scope", whereas the Legislature controls funding of optional
services. HB 301 was introduced to lessen the impact of
recent short-funding of the optional services list.
Co-Chair Hanley stated that Medicaid provides medical
coverage under two service lists, mandatory and optional.
Federal law requires DHSS to provide all eligible Alaskans
mandatory services. Congress allows states to provide, and
will help pay for, services not on the mandated list. Those
services are included in Alaska's Medicaid plan through
amendment AS 47.07.035, referred to as the "options list".
Although, Co-Chair Hanley pointed out that the options list
has not been fully funded for several fiscal years, but
advising that all optional services are available to
children regardless of the appropriation levels.
Co-Chair Hanley summarized that the enclosed attached Letter
of Intent would clarify that the Medical Assistance
Division, DHSS would have to live within the appropriation
level made in the FY96 operating budget.
Representative Brown asked if management of the list would
be determined by the individual need or a class of service.
Co-Chair Hanley commented that the Department should make
that decision. He reflected on the success of the Oregon
Health Plan and noted information in the file regarding that
system.
KAREN PERDUE, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, explained that there are clear definitions
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explaining which services are essential in federal law. She
stressed that they should not be violated. Commissioner
Perdue emphasized that the 10.6% growth rate had been a
modest projection and noted that it would not be feasible to
"squeeze" out significant coverage from the existing
Medicaid budget.
Commissioner Perdue stressed that the Department does not
want to spend supplementally, although implementing HB 301
would create that need. It would not be possible to
"squeeze" out enough money to cover the variety of mandatory
options.
She added that the legislation would require the Department
to extensively investigate each option which would demand a
long period of analysis time. She requested that the
responsibility of rewriting the options be part of a public
process. Commissioner Perdue recommended that at this time,
the focus should be on the seven (7) options previously
funded. Commissioner Perdue requested more flexibility to
the Department to investigate those options as opposed to
the others. Commissioner Perdue pointed out that the most
essential options would be #9 (optometry service), #8
(speech, hearing and language) and #6 (adult dental). She
concluded that all of the services are important, but the
three above mentioned services are the most serious.
RANDY SUPER, ACTING DIRECTOR, DIVISION OF MEDICAL
ASSISTANCE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
provided the Committee with a handout, "Division of Medical
Assistance". [Attachment #1]. He explained that the charts
illustrate the percentage of the population covered by
Medicaid in Alaska for the last year.
Children represent the majority of those served by the
program, although their services accounted for 35% of all
Medicaid eligible payments, whereas the disabled adult group
showed the highest percentage of Medicaid spending.
Mr. Super continued, 30% of all Medicaid payments go to
hospitals, then nursing homes receive 19%, followed by
physicians receiving 18%. He added that nursing home
expenditures for the aged are the largest single
service/assistance category of Medicaid spending amounting
to nearly $30 million for nursing home services last year.
Alaska Families with Dependant Children (AFDC) recipients
both children and adults account for the largest amounts of
Medicaid spending for hospital, physician services, and
dental care. He added that disabled persons account for the
most spending followed by pharmacy services; followed by the
intermediate care facilities for the mentally retarded.
Commissioner Perdue pointed out that those persons with
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disabilities and the senior citizens are heavy users of the
system and that they have great medical needs. She stressed
that this creates a large management challenge even thought
these are the people who really need the services.
Co-Chair Hanley requested more information on how the
formula and growth rate were determined. He suggested the
inclusion of intent language with the bill. Co-Chair Hanley
noted his frustration in determining the growth cause and
asked that the Department to develop more accountability in
that system.
Mr. Super noted that the first ten services listed on Page 7
of the handout are currently not funded.
NANCY WELLER, DIVISION OF MEDICAL ASSISTANCE, DEPARTMENT OF
HEALTH AND SOCIAL SERVICES, spoke to the public hearing
process sponsored by the Department for individuals to voice
their concerns regarding which programs should be
eliminated. She advised that the dental, speech, hearing
and vision services were of greatest concern to the
Department. Ms. Weller elaborated that there are no other
providers of these services, consequently, no other options
for the recipients.
The Department only covered emergency relief of pain and
acute infection for dental problems. She reminded the
Committee that the cost of dental services in Alaska is the
highest in the nation and that many low income people are at
high risk for poor dental health because of their poverty.
Ms. Weller stressed that many of these people have disabling
conditions which require them to use medications that
destroy oral health. She emphasized that this was the most
medically necessary service on the list.
The speech and language limitation creates a negative effect
for those persons receiving rehabilitation for stroke and
traumatic brain injuries necessary to restore their
cognitive abilities. The only place that a person would be
able to receive those services would be in a nursing home, a
cost which is inordinately high.
Ms. Weller continued, hearing loss is a major concern of the
Native organizations. The loss of those services has
removed funding for hearing aids. A person not being able
to purchase a hearing aid becomes a quality of life issue as
hearing aids are very expensive but can dramatically change
a persons ability to participate.
Representative Martin questioned expenses in the division
between those persons qualified for Public Health Services
and Native hospitals.
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JAY LIVEY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, explained that many Indian Health Service
beneficiaries are Medicaid eligible. If an Indian Health
Service beneficiary was also Medicaid eligible, and received
services, the federal government would pay 100% for that
person's service. He added that there are certain services
which are not provided by the Indian Health Service. There
currently exists a service delivery system oriented toward
in-patient services.
Commissioner Perdue added that in-patient services are well
covered by the Indian Health Services although many of the
out-patient services are not fully covered. She
acknowledged that a problem exists with "double counting",
citing five doors of "eligibility" for Medicaid services.
Commissioner Perdue summarized her concerns for the
Department. She stated that the bill provides too much
flexibility, in particular, creation of the scenario that no
other costs should be added to the program. There currently
exists authority to "squeeze" costs from the system under
that itemized coverage. She added that the bill would allow
the Department to pick and choose among the options.
Although, she felt that the essential focus of the debate
should be with items #9, #8 and #6. She stated that
covering those options was most important.
Commissioner Perdue added, under the 10.6% growth rate, the
Department could not "squeeze" enough money from the system
to meaningfully cover options #9, #8 or #6. She asked to
return to the Committee with a reduced amount of money,
reduced scope and duration plan of scope in order to cover
some parts of options #9, #8 and #6.
Commissioner Perdue explained that the Medicare population
of citizens are very desperate. These are people with high
medical needs, usually disabled or elderly. Their need for
some services on the list would be far more than the average
insurance actuarial pool. She emphasized that there are
currently 25,000 children receiving coverage.
Representative Parnell commented that the list was limiting,
although was not accurately reflecting the priorities.
Commissioner Perdue responded that the Department does not
want to or have the time to rewrite the option list. She
emphasized that this would be a major responsibility and
that it should be a public process. She asked to limit the
authority to options agreed upon in advance.
(Tape Change, HFC 95-82, Side 2).
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Co-Chair Hanley observed the need to reevaluate the
priorities list. He pointed out that 2% of the population
is consuming 41% of the funds. Commissioner Perdue
acknowledged that the frustrations are real and voiced her
enthusiasm to embark on an Oregon Plan type process. She
emphasized to do this through a suspension of regulations
would not be helpful.
Representative Parnell questioned the Department's intention
in addressing the Medicaid situation for the next 3.5 years.
Commissioner Perdue requested the opportunity to create
dialogue during the interim with selected members of the
Legislature regarding the reasonable growth rate of the
program.
HB 301 was HELD in Committee for further discussion.
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