Legislature(1999 - 2000)

05/06/1999 01:55 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE BILL NO. 187                                                                                                              
                                                                                                                                
An Act relating to the certificate of need program for                                                                          
nursing care facilities and other facilities; and                                                                               
providing for an effective date.                                                                                                
                                                                                                                                
Co-Chair Therriault advised that the committee substitute                                                                       
would provide for a "tighter" title.                                                                                            
                                                                                                                                
Representative Bunde MOVED to adopt work draft, 1-LS0708\D,                                                                     
Lauterbach, 5/6/99, as the version before the Committee.                                                                        
There being NO OBJECTION, it was adopted.                                                                                       
                                                                                                                                
Representative Bunde noted that he had been involved with                                                                       
the Long Term Health Care Task Force which spent much time                                                                      
discussing nursing concerns and costs related to nursing                                                                        
home facilities.  He pointed out that the legislation would                                                                     
address the State's need for a nursing home facility.                                                                           
                                                                                                                                
SHEILA PETERSON, STAFF, SENATOR GARY WILKEN, stated that                                                                        
Alaska has had a Certificate of Need (CON) law since 1976.                                                                      
The purpose of that law is to insure the development of an                                                                      
accessible, cost-effective health care system with quality                                                                      
service.  Currently, the Department of Health and Social                                                                        
Services reviews all nursing home expansion projects with an                                                                    
estimated cost of over $1 million dollars. The review of                                                                        
each request is limited to factors of accessibility and                                                                         
quality in order to determine if the service is available                                                                       
and could be provided in a quality manner.                                                                                      
                                                                                                                                
Under the proposed legislation, a new standard of need would                                                                    
be adopted for nursing home CON requests.  The revised                                                                          
standard allows decisions to be made based on additional                                                                        
criteria such as need, financial feasibility and                                                                                
availability of alternatives.  Under the change, a new                                                                          
nursing home project would need to demonstrate cost                                                                             
effectiveness and appropriateness of the service.                                                                               
                                                                                                                                
Ms. Peterson advised that the Department of Health and                                                                          
Social Services estimates that on the average, ten new                                                                          
nursing home beds would increase the Medicaid budget by                                                                         
about $1 million dollars annually.  The decision to expand                                                                      
existing nursing home facilities has long-term implications                                                                     
to both the State treasury, senior citizens and those with                                                                      
disabilities.  The legislation will give the Department of                                                                      
Health and Social Services the tools necessary to make                                                                          
informed decisions.                                                                                                             
                                                                                                                                
Co-Chair Therriault pointed out that a primary concern is                                                                       
that the beds are eligible for Medicaid participation. If a                                                                     
facility over bills and has fixed costs, those costs are                                                                        
passed on to the State through Medicaid billings.  The                                                                          
proposed method allows front-end participation.                                                                                 
Representative Bunde recommended that it is financially                                                                         
advisable to limit the number of nursing home beds.  The                                                                        
legislation would encourage more home and community care.                                                                       
                                                                                                                                
Co-Chair Therriault referenced Page 4, asking if CON would                                                                      
continue to be in place for other medical facilities.                                                                           
Representative G. Davis asked how the proposed legislation                                                                      
would apply to HB 161.  Co-Chair Therriault explained that                                                                      
Medicaid considerations are exempt from HB 161 because they                                                                     
are exempt from statute mechanisms addressing costs and the                                                                     
options list.                                                                                                                   
                                                                                                                                
JAY LIVELY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND                                                                       
SOCIAL SERVICESS pointed out that language had been included                                                                    
to clarify that existing standards would apply to acute care                                                                    
and that new standards will only apply to long term care.                                                                       
Mr. Lively commented that the Department strongly supports                                                                      
the legislation.                                                                                                                
                                                                                                                                
In response to Representative J. Davies, Mr. Lively                                                                             
stipulated that some home care provided for individuals who                                                                     
would have been eligible through the nursing home component,                                                                    
would now be eligible through home and community based                                                                          
services.  Waiver costs are considerably less than nursing                                                                      
home costs.  The legislation provides for alternative use to                                                                    
the most expensive care.                                                                                                        
                                                                                                                                
Representative Bunde pointed out that in order to be                                                                            
Medicaid eligible, a person would need to be impoverished.                                                                      
Representative J. Davies elaborated that it would ultimately                                                                    
be cheaper for those people to stay in their own homes.                                                                         
Representative Bunde noted that group would still require                                                                       
State payment.                                                                                                                  
                                                                                                                                
RICK SOLIE, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS                                                                           
MEMORIAL HOSPITAL, FAIRBANKS, spoke in support of the                                                                           
legislation.  He reiterated that this bill is the product of                                                                    
the Long-Term Care Task Force recommendations and would also                                                                    
represent a good effort on the part of providers and users,                                                                     
to address future problems of a growing elderly population.                                                                     
                                                                                                                                
LISA WOLF, (TESTIFIED VIA TELECONFERENCE), DIRECTOR OF                                                                          
PLANNING, PRIVIDENCE MEDICAL CENTER, ANCHORAGE, voiced                                                                          
support of the proposed legislation.                                                                                            
                                                                                                                                
Representative Kohring asked if a certificate would be                                                                          
required of all nursing care facilities which receive                                                                           
Medicaid funds.  Mr. Lively replied that would be a portion                                                                     
of any nursing home cost.  He added that the nursing homes                                                                      
in Alaska are primarily funded (about 85%-90%) by Medicaid.                                                                     
Care in this State is so expensive that most people can not                                                                     
afford to pay for it privately.                                                                                                 
                                                                                                                                
Representative Foster MOVED to report CS HB 187 (FIN) out of                                                                    
Committee with individual recommendations and with the                                                                          
accompanying fiscal note.  There being NO OBJECTION, it was                                                                     
so ordered.                                                                                                                     
                                                                                                                                
CS HB 187 (FIN) was reported out of Committee with "no                                                                          
recommendation" and with a fiscal note by Department of                                                                         
Health and Social Services dated 4/26/99.                                                                                       

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