Legislature(2017 - 2018)ADAMS ROOM 519

02/21/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 96 TAXES;DEDUCTIONS;FEES;TAX STAMP DISCOUNT TELECONFERENCED
Heard & Held
-- Public Testimony --
+= SB 97 PENSION OBLIGATION BONDS TELECONFERENCED
<Bill Hearing Canceled>
+= HB 176 GROUND EMER. MEDICAL TRANSPORT PAYMENTS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 321 APPROP: SUPPLEMENTAL OP.; FUND; AMENDING TELECONFERENCED
Heard & Held
HOUSE BILL NO. 176                                                                                                            
                                                                                                                                
     "An Act relating to medical assistance reimbursement                                                                       
     for ground emergency medical transportation services;                                                                      
     and providing for an effective date."                                                                                      
                                                                                                                                
1:54:34 PM                                                                                                                    
                                                                                                                                
ROB EARL,  STAFF, REPRESENTATIVE ADAM WOOL,  reviewed a flow                                                                    
chart titled  "HB 176;  IGT Flow Chart"  (copy on  file). He                                                                    
noted  that  the  providers  signified   as  a  blue  circle                                                                    
encompassed  municipalities,  fire departments,  and  tribal                                                                    
organizations.  He  exemplified  a  scenario  of  a  patient                                                                    
transport cost of $1 thousand  that was reimbursed via state                                                                    
Medicaid for  $400 leaving $600  in uncompensated  costs. He                                                                    
indicated   that  the   scenario  represented   the  current                                                                    
reimbursement schedule. The blue circle  to the right of the                                                                    
provider's  circle represented  state  Department of  Health                                                                    
and  Social   Services  (DHSS)   supplemental  reimbursement                                                                    
proposed in HB  176. He expounded that the  provider [in the                                                                    
scenario] would  submit a total  of $300,  which represented                                                                    
half of the  uncompensated cost or non-federal  share plus a                                                                    
20  percent  administrative  fee charged  by  DHSS  totaling                                                                    
$360. He remarked that the  CS language specified "up to" 20                                                                    
percent   for  the   administrative   fee.  The   department                                                                    
submitted  a bill  to federal  Medicaid who  would reimburse                                                                    
the  department for  $360.  He referenced  page  2, lines  3                                                                    
through  7  of the  legislation  that  delineated that  "the                                                                    
provider  may not   exceed  the provider's  actual cost  for                                                                    
providing emergency medical  transportation?." He noted that                                                                    
the reimbursement  provision was explained  in a box  on the                                                                    
lower right of  flow chart. He pointed to  what the provider                                                                    
would  recoup under  the scenario.  The department  kept the                                                                    
$120 in  administrative fees and the  provider recouped $640                                                                    
out of $1,000 total cost.                                                                                                       
                                                                                                                                
1:58:46 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  how  the administrative  fee                                                                    
was calculated and who received  the fee. He believed the 20                                                                    
percent fee  was high.  Mr. Earl answered  that the  fee was                                                                    
higher  than the  actual administrative  cost. He  explained                                                                    
that  federal rules  allowed the  embellished administrative                                                                    
fee.   He  pointed   out  that   under   the  scenario   the                                                                    
administrative fee  was matched  by the  federal government.                                                                    
Representative  Kawasaki  wondered  why the  state  did  not                                                                    
charge  an   even  higher   administrative  fee.   Mr.  Earl                                                                    
responded that the  amount was determined by  the amount the                                                                    
Centers for Medicare & Medicaid  Services (CMS) would likely                                                                    
allow   under  the   state   plan  amendment   negotiations.                                                                    
Representative  Kawasaki asked  for the  reason the  fee was                                                                    
set  at 20  percent. He  wondered if  it was  linked to  the                                                                    
ambulance fee.  He asked whether  there was a  nexus between                                                                    
the  administrative  fee  and the  total  amount.  Mr.  Earl                                                                    
replied in  the negative and  added that the 20  percent was                                                                    
predicated on  a guess regarding a  likely allowable amount.                                                                    
The  actual administrative  cost  was  roughly 2.6  percent.                                                                    
Representative   Kawasaki  surmised   that  the   state  was                                                                    
"getting  more  money from  the  federal  government" at  20                                                                    
percent.                                                                                                                        
                                                                                                                                
2:02:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ADAM  WOOL,   SPONSOR,  concurred  that  the                                                                    
actual  administrative cost  was quite  a bit  less than  20                                                                    
percent. He elaborated that consultants  in other states had                                                                    
relayed  that  20  percent  was  common,  with  some  states                                                                    
charging 27  percent. He presumed  that 20 percent  would be                                                                    
approved by CMS.  The extra money would  help the department                                                                    
and "relieve  pressure on  the UGF  the state  was currently                                                                    
providing." The  idea was to not  "look a gift horse  in the                                                                    
mouth."                                                                                                                         
                                                                                                                                
Representative Kawasaki asked how  much of the reimbursement                                                                    
funding would  go to the provider  doing the transportation.                                                                    
Mr.  Earl  answered that  under  the  scenario none  of  the                                                                    
administrative fee reimbursement was  given to the provider.                                                                    
Representative Kawasaki surmised that even  if a cost of the                                                                    
ambulance  run  was  more  expensive   than  the  amount  of                                                                    
reimbursement  the state  would  not distribute  any of  the                                                                    
administrative reimbursement money to the providers.                                                                            
                                                                                                                                
2:04:04 PM                                                                                                                    
                                                                                                                                
Representative   Wool  answered   that  the   administrative                                                                    
reimbursement did  not go back  to the provider, it  went to                                                                    
the  state.   He  mentioned  that  one   of  the  amendments                                                                    
addressed the issue  and allowed the provider to  add the 20                                                                    
percent  administrative fee  to  the overall  bill and  then                                                                    
would be reimbursed.                                                                                                            
                                                                                                                                
Representative   Tilton  was   concerned  about   setting  a                                                                    
precedent for  a 20 percent  administrative fee  that seemed                                                                    
arbitrary.  She had  previously  been involved  in DHSS  and                                                                    
recounted  discussions  regarding administrative  fees.  She                                                                    
supported getting  as much money  back as possible,  but she                                                                    
was  concerned  over setting  a  20  percent precedent  that                                                                    
could apply  to other grants and  items. Representative Wool                                                                    
understood the  point. He reiterated that  the precedent had                                                                    
already been set  in other states and the  bill mirrored the                                                                    
amount.  He   mentioned  the   state's  obligation   to  pay                                                                    
according to Title 19 of  the Social Security Act. He agreed                                                                    
that  he would  not favor  a 20  percent administrative  fee                                                                    
charged  "across  the  board"  for  every  state  department                                                                    
including DHSS. He thought the  department could address the                                                                    
issue.  He  clarified that  the  bill  proposed "up  to"  20                                                                    
percent.  Representative  Tilton  requested an  answer  from                                                                    
DHSS.                                                                                                                           
                                                                                                                                
2:07:23 PM                                                                                                                    
                                                                                                                                
MARGARET   BRODIE,  DIRECTOR,   DIVISION   OF  HEALTH   CARE                                                                    
SERVICES,  DEPARTMENT OF  HEALTH  AND  SOCIAL SERVICES  (via                                                                    
teleconference),  replied that  she  had conversations  with                                                                    
the  Centers   for  Medicare   and  Medicaid   recently  and                                                                    
discovered that the administrative  fee could only cover the                                                                    
cost of the administrative position.                                                                                            
                                                                                                                                
Representative Tilton wondered  about the state's obligation                                                                    
to continue the program if  the federal government ended its                                                                    
funding. Mr.  Earl referred  to page 1,  lines 9  through 11                                                                    
and  read: "  the amount  of the  supplemental reimbursement                                                                    
paid to  a provider must be  equal to the amount  of federal                                                                    
financial participation?"  He declared  that if  the federal                                                                    
financial participation went away the program would end.                                                                        
                                                                                                                                
2:08:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  1, 30-LS0705\O.7                                                                    
(Glover, 2/20/18) (copy on file):                                                                                               
                                                                                                                                
     Page 1, line 13:                                                                                                           
          Delete "expenses"                                                                                                     
          Insert "fee described in (d) or (e) of this                                                                           
     section"                                                                                                                   
                                                                                                                                
     Page 2, lines 19-22:                                                                                                       
          Delete oil material and insert:                                                                                       
                                                                                                                                
     "(d)   If  the   department  authorizes   the  use   of                                                                    
     intergovernmental transfers under  the   program,   the                                                                    
     deportment  shall charge  on  administrative  fee to  a                                                                    
     provider  to cover  the    deportment's     costs    of                                                                    
     administering the program.  The administrative fee must                                                                    
     be to equal  up to 20 percent of  the non-federal share                                                                    
     the provider  pays to   the department. A  provider may                                                                    
     include the   administrative   fee  in   the provider's                                                                    
     cost for providing  an emergency medical transportation                                                                    
     service to a medical assistance recipient.                                                                                 
                                                                                                                                
     (e) If  the department authorizes the  use of certified                                                                    
     public expenditures  under the program,  the department                                                                    
     may establish an administrative  fee for a provider. If                                                                    
     the department establishes  an administrative fee under                                                                    
     this subsection,  the department  may allow  a provider                                                                    
     to include   the  administrative fee in  the provider's                                                                    
     cost    for    providing     an    emergency    medical                                                                    
     transportation   service   to  a   medical   assistance                                                                    
     recipient."                                                                                                                
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Mr. Earl  explained the amendment.  The amendment  did three                                                                    
things. First,  the fee was  changed to equal to  20 percent                                                                    
versus "up  to." Second, the amendment  allowed the provider                                                                    
to add  the administrative  fee to the  cost of  the medical                                                                    
transport.     Thirdly,  amendment   1  separated   out  the                                                                    
Intergovernmental Transfers  (IGT) method and  the Certified                                                                    
Public  Expenditure   (CPE)  methodology  and   allowed  the                                                                    
department to choose the methodology  and not the providers.                                                                    
He  pointed  to  the  flow  chart  and  furthered  that  the                                                                    
amendment allowed  the providers  to add  the administrative                                                                    
fee to  the total  cost of  transport. Therefore,  under the                                                                    
scenario the provider would receive  a reimbursement of $660                                                                    
from  the   department,  of  which  $330   was  the  federal                                                                    
supplemental  reimbursement.  He  cited   page  2,  lines  3                                                                    
through 7  of the bill  that delineated that the  amount the                                                                    
provider received may not exceed actual costs.                                                                                  
                                                                                                                                
2:11:25 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked who  was charging the  fee. She                                                                    
wondered why  the bill  specified what  the provider  had to                                                                    
charge. Mr.  Earl answered that  the department  charged the                                                                    
provider the fee.                                                                                                               
                                                                                                                                
Representative Wool  elaborated that he wanted  an amendment                                                                    
to Amendment 1  that would revert to "up to  20 percent." He                                                                    
confirmed that the charge was from the department to CMS.                                                                       
                                                                                                                                
Representative  Wilson  stated that  she  did  not have  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
2:12:48 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton MOVED  to ADOPT  Conceptual Amendment  1 to                                                                    
Amendment 1:                                                                                                                    
                                                                                                                                
     Lines 9 and 10, delete "must be equal to" and insert                                                                       
     "may not exceed."                                                                                                          
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Representative Wilson asked Ms.  Brodie to add clarification                                                                    
to the administrative  fee and what amount  was allowable to                                                                    
charge.  Ms.  Brodie  replied that  the  federal  government                                                                    
would only allow to charge  for actual costs. The department                                                                    
would estimate the total costs and  divide it by the cost of                                                                    
the administrative  position divided  by 2 to  calculate the                                                                    
percentage the  department would charge at  the beginning of                                                                    
the fiscal  year. The calculation  would monitor  and likely                                                                    
amend  the   percentage  as  the  fiscal   year  progressed.                                                                    
Representative  Wilson  asked  if the  provider  could  only                                                                    
charge   their  actual   administrative  fees.   Ms.  Brodie                                                                    
answered that they  could only charge the  actual costs that                                                                    
may include administrative fees.                                                                                                
                                                                                                                                
2:15:16 PM                                                                                                                    
                                                                                                                                
Representative  Wilson surmised  that the  amendment allowed                                                                    
providers to recoup their  actual administrative and service                                                                    
costs. Ms. Brodie answered in  the affirmative and qualified                                                                    
that  it was  permissible as  long as  the provider  did not                                                                    
charge the administrative fees to another program.                                                                              
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
2:16:07 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  2, 30-LS0705\O.5                                                                    
(Glover, 2/19/18) (copy on file).                                                                                               
     Page 2, following line 22:                                                                                                 
     Insert a new subsection to read :                                                                                          
                                                                                                                                
          "(e) This  section  authorizes  the  department                                                                       
          to     provide  supplemental   reimbursements  for                                                                    
          ground,   water,   or    air   emergency   medical                                                                    
          transportation  service   provider  only   if  the                                                                    
          United  States  Department  of  Health  and  Human                                                                    
          Services  approves   payments  to  that   type  of                                                                    
          emergency    medical     transportation    service                                                                    
          provider."                                                                                                            
                                                                                                                                
     Re-letter the following subsections accordingly.                                                                           
                                                                                                                                
     Page 2, line 30, through page 3, line I:                                                                                   
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following paragraphs accordingly.                                                                             
                                                                                                                                
     Page 3, lines 8 ? 25:                                                                                                      
     Delete all material and insert:                                                                                            
                                                                                                                                
     "*See. 2.This Act takes effect immediately under AS                                                                        
     01.10.070(c)."                                                                                                             
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Mr. Earl explained the amendment.  He reminded the committee                                                                    
of the  concern that  adding air transport  might jeopardize                                                                    
the entire  program through rejection by  CMS. The amendment                                                                    
separated  ground, water,  and  air transport  to allow  the                                                                    
program  to continue  if federal  Medicaid rejected  the air                                                                    
portion. In addition, the  amendment deleted the conditional                                                                    
effective date language  on page 2 of the  prior version and                                                                    
added an immediate effective date.                                                                                              
                                                                                                                                
Representative  Wilson   asked  Mr.  Earl  to   restate  his                                                                    
explanation.                                                                                                                    
                                                                                                                                
Mr.  Earl replied  that the  CS included  air transport.  He                                                                    
reiterated  that   concerns  were  expressed   that  federal                                                                    
Medicaid may deny coverage for  air transport. He pointed to                                                                    
subsection  (f)  on page  3  of  the  CS and  restated  that                                                                    
ground,  water, and  air transport  were separated  and read                                                                    
the following:                                                                                                                  
                                                                                                                                
     ?reimbursements to a ground,  1 water, or air emergency                                                                    
     medical  transportation service  provider  only if  the                                                                    
     United States  Department of Health and  Human Services                                                                    
     approves   payments to that  type of  emergency medical                                                                    
     transportation service provider.                                                                                           
                                                                                                                                
Mr. Earl outlined that if  CMS approved any specific type of                                                                    
emergency transport the program  could move forward with the                                                                    
approved methods of transport.                                                                                                  
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
2:18:56 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster reported  that the  bill would  be held  in                                                                    
committee for an updated fiscal note.                                                                                           
                                                                                                                                
Co-Chair Seaton requested  more analysis on how  the law was                                                                    
applied in  other states. He  noted the  earlier discussions                                                                    
regarding  the  state's  ability  to charge  more  and  were                                                                    
currently not  accepting federal  dollars that  other states                                                                    
were collecting.                                                                                                                
                                                                                                                                
Representative Wool agreed with  Co-Chair Seaton. He relayed                                                                    
that  he  had been  assured  by  his consultant  that  other                                                                    
states were  charging a  fee of 20  percent and  27 percent.                                                                    
The  department was  using the  ITE  and CPE  methodologies,                                                                    
which might be the source  of the discrepancy between Alaska                                                                    
and the other states. He would follow-up with answers.                                                                          
                                                                                                                                
Representative  Guttenberg  asked  for  clarification  about                                                                    
whether it  was a new  administrative charge on top  of what                                                                    
was currently being done. He  wondered whether the state was                                                                    
receiving  reimbursement  differently  under  the  bill.  He                                                                    
asked  whether  the  prior  method   charged  less  than  20                                                                    
percent. He asked  if the program was displacing  one set of                                                                    
money for another.                                                                                                              
                                                                                                                                
2:21:44 PM                                                                                                                    
                                                                                                                                
Ms. Brodie  replied that there were  two different payments:                                                                    
the  initial billing  went through  the Medicaid  Management                                                                    
Information  System   with  all  other  weekly   bills.  She                                                                    
delineated  that  subsequently,  the department  billed  the                                                                    
provider the  difference between what they  claimed in total                                                                    
cost  and the  amount the  provider initially  received from                                                                    
DHSS plus  the administrative  fee. The department  made two                                                                    
payments  to  the  providers.  The  first  payment  was  the                                                                    
initial  allowable amount.  The  second  payment included  a                                                                    
manual  process where  the state  calculated the  amount the                                                                    
provider  owed the  department. Once  the provider  paid the                                                                    
department it  would release the  supplemental reimbursement                                                                    
and the providers own funds.                                                                                                    
                                                                                                                                
Co-Chair Seaton  asked whether  the department  employed the                                                                    
IGT  methodology  or  the current  method  of  payment.  Ms.                                                                    
Brodie answered  that the current  methodology was  used for                                                                    
the  initial payment  and the  second payment  used the  new                                                                    
methodology.                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  requested  the   sponsor  speak  with  the                                                                    
state's CMS to fully understand what the bill would do.                                                                         
                                                                                                                                
Representative Wool reminded the  committee that the goal of                                                                    
HB 176  was to obtain  more medical  transport reimbursement                                                                    
regardless of the administrative fee.                                                                                           
                                                                                                                                
HB  176  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB096 Supporting Documents Statutes Repealed by HB 96 2.20.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB096 Sponsor Statement ver A 2.12.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB096 Supporting Documents - Indirect Expenditure Report 2.22.17.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB096 Supporting Documents IE HFIN DOR Subcommitee Report 2.12.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB 321 2 19 18 FY18 Supplemental Summary and Detail with LFD Notes.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 CS Workdraft O version 2-20-18.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 Fast Track Agency Summary-Op & Cap.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 Fast Track Supp TransDetail.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 Fast Track StatewideTotals-Op & Cap.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 176 - Amendments 1 & 2.pdf HFIN 2/21/2018 1:30:00 PM
HB 176
HB 176 - Supporting Documents - IGT Flow Chart - 2.20.18 FINAL.pdf HFIN 2/21/2018 1:30:00 PM
HB 176
HB 176 aml comment hb 176 2.20.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 176