Legislature(2019 - 2020)ADAMS ROOM 519

01/29/2020 01:30 PM FINANCE

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Audio Topic
01:33:30 PM Start
01:34:15 PM HB205 || HB206
01:34:20 PM Fy 21 Department Budget Overview; Mental Health and Trust Authority
03:02:02 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ FY21 Dept. Budget Overview: TELECONFERENCED
Mental Health & Trust Authorities
HOUSE BILL NO. 205                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    capitalizing   funds;    making                                                                    
     appropriations under art.  IX, sec. 17(c), Constitution                                                                    
     of the State of  Alaska, from the constitutional budget                                                                    
    reserve fund; and providing for an effective date."                                                                         
HOUSE BILL NO. 206                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
1:34:15 PM                                                                                                                    
^FY 21  DEPARTMENT BUDGET OVERVIEW; MENTAL  HEALTH AND TRUST                                                                  
1:34:20 PM                                                                                                                    
Co-Chair  Foster  invited the  testifiers  to  the table  to                                                                    
begin the presentation.                                                                                                         
MIKE ABBOTT,  CHIEF EXECUTIVE OFFICER, ALASKA  MENTAL HEALTH                                                                    
TRUST AUTHORITY, introduced himself.                                                                                            
MARY JANE  MICHAEL, CHAIR, BOARD OF  TRUSTEES, ALASKA MENTAL                                                                    
HEALTH TRUST  AUTHORITY, introduced  herself. She  began the                                                                    
PowerPoint   Presentation:  "Alaska   Mental  Health   Trust                                                                    
Authority Legislative  Presentation" by reviewing  the other                                                                    
trustees as  listed on slide  2. They included  Chris Cooke,                                                                    
Vice-Chair; Ken McCarty,  Secretary; Verne' Boerner, Program                                                                    
and   Planning  Committee   Chair;  Laraine   Derr,  Finance                                                                    
Committee Chair;  Anita Halterman, Audit and  Risk Committee                                                                    
Chair;  and  John  Sturgeon, Resource  Management  Committee                                                                    
Chair. She  also noted  the most  recent appointment  of the                                                                    
governor, Rhonda Boyles from Fairbanks.                                                                                         
1:35:34 PM                                                                                                                    
Ms.  Michael continued  to slide  3: "Trust  Beneficiaries."                                                                    
She reported  that in  the previous  fall the  Alaska Mental                                                                    
Health   Trust   Authority  (AMHTA)   celebrated   the   25                                                                     
anniversary  of the  landmark  settlement  that created  the                                                                    
trust. The  settlement was a significant  moment in Alaska's                                                                    
history, and over the last  25 years the Trust had increased                                                                    
its  assets  and  served   thousands  of  beneficiaries  who                                                                    
experienced  mental   illness,  developmental  disabilities,                                                                    
substance abuse  disorders, Alzheimer's disease  and related                                                                    
dementia, and  traumatic brain injuries.  The Trust  was the                                                                    
only organization of  its kind in the United  States. It was                                                                    
a  state corporation  that maintained  a unique  position in                                                                    
Alaska government.  The Trust's funds, similar  to a private                                                                    
foundation,  were self-generated  and  granted to  projects,                                                                    
partnerships,   and   programs   that   promoted   long-term                                                                    
systematic change  and improved the lives  and circumstances                                                                    
of the Trust's beneficiaries.                                                                                                   
Ms. Michael  continued that looking  back in  history, prior                                                                    
to  statehood,  there  were  little,  if  any,  services  in                                                                    
Alaska. Children and adults with  disabilities were sent out                                                                    
of  state to  Morningside Hospital  in Portland,  Oregon, an                                                                    
institution that provided custodial  care at the time. Often                                                                    
the individuals  were never reunited with  their families or                                                                    
communities  again. Significant  progress had  been made  in                                                                    
Alaska  since  then.  The Trust  had  invested  heavily  and                                                                    
successfully   in    community-based   services    such   as                                                                    
residential  supports, case  management, family  caregivers,                                                                    
supported employment, and day  programs. All of the services                                                                    
she  mentioned were  far less  expensive than  institutional                                                                    
care and insured a better  quality of life with families and                                                                    
Ms. Michael  maintained that  over the  years the  Trust had                                                                    
partnered with  the state on many  transformational projects                                                                    
by investing staff time and  resources. One such partnership                                                                    
was  the  closure  of  Harborview  Developmental  Center  in                                                                    
Valdez in  1997. It  was the  state's institution  that once                                                                    
served   people   with    intellectual   and   developmental                                                                    
disabilities.  Another  was,  "Bring   the  Kids  Home,"  an                                                                    
Alaskan initiative which brought  kids with severe emotional                                                                    
disabilities who had been placed  out of state for treatment                                                                    
back to Alaska. More recently  in 2016, the Trust approved a                                                                    
multi-year $10  million commitment to support  the necessary                                                                    
administrative and  consultant services needed  to implement                                                                    
Medicaid reform.  The results were impressive.  According to                                                                    
the  Department of  Health and  Social Services  (DHSS), the                                                                    
state saved more  than $210 million in less than  4 years by                                                                    
implementing the reforms.                                                                                                       
Ms.  Michael   reported  that   currently,  the   Trust  was                                                                    
committed to  improving the psychiatric crisis  continuum of                                                                    
care. The recent challenges  at Alaska Psychiatric Institute                                                                    
(API)  highlighted   the  gaps  in   community-based  crisis                                                                    
intervention which, if  in place, could reduce  the need for                                                                    
in-patient treatment  for many beneficiaries. The  Trust was                                                                    
working with  DHSS and other  community partners to  look at                                                                    
national  models  that  could  be replicated  in  Alaska  to                                                                    
reduce the  need for long-term  psychiatric care.  The topic                                                                    
would  be  discussed  in greater  detail  further  into  the                                                                    
Ms. Michael  relayed that the Trust's  land office continued                                                                    
to  make significant  progress. The  results of  10 or  more                                                                    
years  of work  could be  seen on  the United  States Forest                                                                    
Service  Federal  Land  Exchange.  The Icy  Cape  and  Heavy                                                                    
Mineral Project  continued exploration  activities finishing                                                                    
a  sixth field  session  in the  coming  summer. The  recent                                                                    
closed-bid  sale  of  the  Juneau  sub-port  property  would                                                                    
generate $20  million for the  Trust and  its beneficiaries.                                                                    
Not only did  the Trust Land Office generate  new revenue to                                                                    
add  to  the  Trust  investment  earnings,  it  had  been  a                                                                    
stimulus for local economies and created jobs.                                                                                  
Ms.  Michael  spoke  of  the   Trust's  involvement  in  its                                                                    
internal  organization. The  Trust  responded  to the  audit                                                                    
findings  presented to  the legislature  in the  prior year.                                                                    
The  Trust  also  increased  staff  and  trustee  trainings,                                                                    
established   committee   charters    and   protocols,   and                                                                    
streamlined   operations  to   get  more   grant  funds   to                                                                    
organizations serving beneficiaries sooner.  The Trust had a                                                                    
remarkable group  of dedicated a resourceful  staff. It also                                                                    
had a  strong leader and  a board  of trustees she  had been                                                                    
proud  to serve.  The board  and stakeholders  realized that                                                                    
the  work of  the Trust  would continue,  as there  were new                                                                    
challenges and  future generations of beneficiaries  that it                                                                    
would  need  to  care  for.  The  Trust  was  dedicated  and                                                                    
prepared to meet the challenges it encountered.                                                                                 
Co-Chair Foster  indicated Representative Tilton  had joined                                                                    
the meeting.                                                                                                                    
1:40:39 PM                                                                                                                    
Representative LeBon thought he  heard Ms. Michael mention a                                                                    
land sale  of $20  million. Ms.  Michael responded  that she                                                                    
was  referring  to  the  sub-port  property  that  had  been                                                                    
discussed over the years.                                                                                                       
Representative LeBon asked if the  term of the sale was cash                                                                    
or  whether the  Trust provided  any financing.  He wondered                                                                    
about the Trust's policies on  conducting a sale. Mr. Abbott                                                                    
replied that the Trust could  dispose of property in several                                                                    
different  ways. In  the  case of  the  sub-port, the  buyer                                                                    
would  acquire  the  sale  by  depositing  approximately  $5                                                                    
million per  quarter for 4  quarters. The Trust  expected to                                                                    
receive  the final  installment in  the third  calendar year                                                                    
quarter  of  2020.  The  acquisition   would  occur  at  the                                                                    
beginning of FY 21. In  the meantime, the funds would remain                                                                    
in an escrow until the transaction closed.                                                                                      
Representative LeBon  inquired about  the rate  of interest.                                                                    
Mr. Abbott indicated the Trust  would receive a small amount                                                                    
of interest  during a 12-month  period. Once the  funds were                                                                    
accumulated,  they  would  be  deposited  along  with  other                                                                    
similar receipts  into the Mental  Health Trust  Fund corpus                                                                    
and managed by the  Alaska Permanent Fund Corporation (APFC)                                                                    
for long-term income generation.                                                                                                
Representative LeBon asked if  the Trust financed sales. Mr.                                                                    
Abbott replied  that the Trust sometimes  financed sales. He                                                                    
explained that when  the Trust sold a piece of  land, it was                                                                    
not uncommon for the buyer to  contract with AMHTA to pay it                                                                    
off over time essentially financing the sale.                                                                                   
Representative  LeBon asked  for the  Trust's typical  rates                                                                    
and conditions.  Mr. Abbott  responded that  the rate  was 3                                                                    
percent over prime.                                                                                                             
Mr. Abbott turned  to slide 4 showing  the overall financial                                                                    
position of  the Trust. He  brought approximately  23 years'                                                                    
worth of the Trust's invested  assets to show the committee.                                                                    
He  pointed  out  that  the  trend line  on  the  slide  was                                                                    
positive with  the exception of  a couple of bad  years from                                                                    
FY  08 to  FY  10. The  Trust had  been  very successful  in                                                                    
stewarding its assets. The invested  assets were the primary                                                                    
source  of income  for  the Trust's  work.  The assets  have                                                                    
accumulated by  reinvesting earnings  in some  instances and                                                                    
through  income   generated  from  the  Trust's   lands.  He                                                                    
explained that whenever the Trust  disposed of an asset, the                                                                    
assets were required to be invested rather than spent.                                                                          
Co-Chair Johnston  asked if the  Trust's real  estate equity                                                                    
was land. Mr. Abbott responded  that the equity described on                                                                    
the  slide was  the  equity in  the  commercial real  estate                                                                    
investments acquired  by the Trust  over a 5-year  or 6-year                                                                    
period.  The equity  amounted to  approximately $50  million                                                                    
which had grown over time as  described on the slide. It was                                                                    
managed differently  than either the reserves  or the corpus                                                                    
and  was  the  reason  for highlighting  it  as  a  separate                                                                    
investment type on the slide.                                                                                                   
1:45:27 PM                                                                                                                    
Co-Chair  Johnston  asked  who was  currently  managing  the                                                                    
fund. Mr.  Abbott replied that  it was being managed  by the                                                                    
Trust  Land Office  with support  from a  reputable external                                                                    
real estate  advisor, Harvest  International, who  the Trust                                                                    
secured late  in the  prior year.  The company  assisted the                                                                    
Trust  in  making  choices around  selling  assets,  leasing                                                                    
strategies, and management strategies.                                                                                          
Co-Chair Johnston  queried where  the other assets  were and                                                                    
how they were being invested.                                                                                                   
Ms. Michael responded  that there was a  portion of invested                                                                    
assets that were  managed by APFC. The Trust's  funds were a                                                                    
co-mingled  asset  with  the  Alaska  Permanent  Fund  (PF).                                                                    
Approximately  1 percent  of APFC's  funds under  management                                                                    
were   actually    mental   health   funds.    The   Trust's                                                                    
approximately   $500   million   being   managed   by   APFC                                                                    
represented about 1 percent of  APFC's $60 billion that they                                                                    
actively managed.  The Trust received  the benefit  of being                                                                    
blended with  APFC's assets. The investment  types that APFC                                                                    
had access  to were broader and  potentially more beneficial                                                                    
than those  the Trust would  be able  to obtain if  it stood                                                                    
alone as  a self-managed  entity. In  addition to  access to                                                                    
different investment types, the  Trust received a great deal                                                                    
on  investment expenses.  He elaborated  that  by virtue  of                                                                    
APFC  managing $60  billion, the  Trust was  able to  strike                                                                    
attractive  deals with  APFC's managers  on fees.  The Trust                                                                    
paid  a pro-rata  share of  their earnings.  The arrangement                                                                    
was  part of  the  original settlement  struck  in 1974  and                                                                    
definitely benefited the Trust.                                                                                                 
Mr.  Abbott  turned  to  slide  5 which  showed  the  FY  21                                                                    
earnings and available funding. He  reported that at the end                                                                    
of FY 19 the Trust had  more than $450 million in its corpus                                                                    
and $125  million in  reserves. He noted  that a  portion of                                                                    
the reserves  were managed by  APFC and another  portion was                                                                    
managed by  the Department  of Revenue.  There was  also the                                                                    
real  estate  equity  he  described.   The  Trust  had  been                                                                    
operating  with  a  percent of  market  value  (POMV)  style                                                                    
revenue generating  mechanism for  most of  the 25  years of                                                                    
its existence.  The Trust  was using  a 4.25  percent payout                                                                    
rate based on  a 4-year average (4 prior  years) of invested                                                                    
assets. He  pointed to  the lower  left-hand portion  of the                                                                    
slide reporting that  it generated more than  $24 million of                                                                    
the  total $33  million of  spendable income  in FY  21. The                                                                    
other revenue stream  totaled over $3 million  and was prior                                                                    
year funds  carried forward. He  reported nearly  $5 million                                                                    
of spendable revenue  came from the Trust  Land Office which                                                                    
differed from  the investable revenue it  generated. He also                                                                    
noted  revenue in  the form  of interest  earnings from  the                                                                    
Trust's liquid assets (essentially cash) managed by DOR.                                                                        
Mr. Abbott  highlighted the lower right-hand  portion of the                                                                    
slide.  He  reported  that  the   Trust  expected  to  spend                                                                    
$33 million in FY 21 which  was an appreciable increase over                                                                    
its  spendable  income  in  prior   years  and  reflected  a                                                                    
pleasant trend  line. If  the Trust  made what  it expected,                                                                    
its  spendable  income  should increase  by  $1  million  to                                                                    
$2 million per year  for the following 5 years.  It would be                                                                    
positively   influenced  when   the   Trust  deposited   the                                                                    
$20 million  from the  sub-port sale.  As it  rolled through                                                                    
the 4-year  averaging mechanism, the  $20 million at  a 4.25                                                                    
percent payout  would generate $850,000 of  spendable income                                                                    
every year  forever as currently managed.  He emphasized the                                                                    
income of such an investment.                                                                                                   
1:50:25 PM                                                                                                                    
Representative  LeBon asked  for the  Trust's definition  of                                                                    
real estate  equity. He wondered  if it  was the value  on a                                                                    
cost-basis at  the time  of purchase  or the  current market                                                                    
value. If it  was current market value, he  inquired how the                                                                    
Trust determined market value.                                                                                                  
Mr. Abbott explained that it  represented the Trust's equity                                                                    
which equaled  market value minus  debt. The  properties had                                                                    
approximately  $40 million  or $45  million of  debt against                                                                    
them. The Trust was in a  positive position in terms of debt                                                                    
versus equity.  The Trust determined  market value  by doing                                                                    
an appraisal every 3 years. In  the second and third year of                                                                    
the cycle, the Trust obtained  a broker's letter. Every year                                                                    
the Trust was  capturing an estimate of  value. He clarified                                                                    
that  he  was  only  talking about  7  discreet  properties.                                                                    
Therefore, it was not a  significant management challenge to                                                                    
conduct the evaluations.                                                                                                        
Representative  Carpenter  asked  if the  earnings  were  in                                                                    
perpetuity. Mr.  Abbott responded that it  was absolutely in                                                                    
perpetuity.  The Trust  had  set  a relatively  conservative                                                                    
payout  rate  designed  to  generate  substantial  spendable                                                                    
income while leaving funds  available for inflation proofing                                                                    
or for other  uses. The Trust was managing its  assets as if                                                                    
it was going to be around forever.                                                                                              
Representative  Josephson asked  who held  the mortgages  on                                                                    
the  properties.   Mr.  Abbott  responded  that   6  of  the                                                                    
properties were  mortgaged separately.  He did not  know who                                                                    
the  mortgage  holders  were   offhand.  However,  he  could                                                                    
provide  the   information.  The  loans   were  market-based                                                                    
through institutional grade financers.                                                                                          
Representative Josephson asked if the  Trust was in a better                                                                    
position  to  borrow  against  its   holdings  when  it  was                                                                    
reconstituted in  the 80s. Mr.  Abbott explained that  the 7                                                                    
properties  that had  debt were  acquired  between 2010  and                                                                    
2015   (or  2016).   They  were   obtained  separately   and                                                                    
subsequently  mortgaged. The  mortgage  was only  applicable                                                                    
against  the property  in question.  The  6 properties  were                                                                    
held in  limited liability  corporations (LLC)  wholly owned                                                                    
by the  Trust. Therefore, the mortgages  could not penetrate                                                                    
the LLC. The  only property at risk in  the debt arrangement                                                                    
was a single property.                                                                                                          
1:54:11 PM                                                                                                                    
Representative Wool  asked if the  lands were  purchased. He                                                                    
was  unaware of  the Trust  purchasing its  own real  estate                                                                    
similar to APFC.                                                                                                                
Mr. Abbott informed  the committee that in  2010 trust funds                                                                    
of about $40  million to $50 million were used  to acquire 7                                                                    
properties over a  period of about 5 years.  The funds could                                                                    
have been  diverted to APFC  and invested.  However, shortly                                                                    
after the market crash the  trustees looked for alternatives                                                                    
to increase  Trust income while still  maintaining the value                                                                    
of its  invested assets.  The properties  consisted of  2 in                                                                    
Alaska, 1  in Washington, 1  in Utah,  and 3 in  Texas. They                                                                    
were acquired, mortgaged, and were  currently managed by the                                                                    
Trust.  He   reported  that  in  the   Trust  Land  Office's                                                                    
spendable   income,   approximately   $2  million   of   the                                                                    
$4.7 million shown on  the slide, was the net  income of the                                                                    
7 properties. The properties were  generating income for the                                                                    
Trust to use for beneficiaries every year.                                                                                      
Representative Wool asked  if the Trust had  moved away from                                                                    
purchasing  real   estate  and   was  simply   managing  its                                                                    
currently owned  properties. Mr.  Abbott responded  that the                                                                    
Trust  presently   had  no  plans  of   making  any  further                                                                    
investments in  real estate. As  the Trust  acquired assets,                                                                    
they were sent to APFC for management.                                                                                          
Vice-Chair  Ortiz asked  if there  was an  annual review  of                                                                    
whether  the Trust  was keeping  up  with the  needs of  its                                                                    
Mr. Abbott responded that the  State of Alaska and the Trust                                                                    
recently  adopted  a  new iteration  of  the  comprehensive,                                                                    
integrated mental  health plan for  the state. The  plan was                                                                    
required by  statute but  had not  been adopted  since 2006.                                                                    
The  new plan  would  guide Trust  investment and  hopefully                                                                    
guide state investment  as well. One of the  elements of the                                                                    
plan  would  be measuring  the  Trust's  progress against  9                                                                    
different  goals. In  future presentations,  the legislature                                                                    
should expect the Trust to  bring the data demonstrating its                                                                    
progress against  the expectations outlined in  the plan. He                                                                    
opined that  the legislature should  hold the  Department of                                                                    
Health and Social Services to the same expectations.                                                                            
Representative Carpenter  returned to the subject  of a 4.25                                                                    
percent payout.  He wondered  if the  Trust had  modeled the                                                                    
payout at 4.5 percent or 5  percent. He asked if either were                                                                    
feasible for maintaining the  principle into perpetuity. Mr.                                                                    
Abbott  responded  that  the   Trust  had  not  modeled  the                                                                    
percentages  in the  prior  5 years.  He  thought the  Trust                                                                    
would  be  doing an  analysis  of  its reserves  within  the                                                                    
following  year.  The  Trust  set a  target  level  for  its                                                                    
reserves which had not been  revisited in more than 5 years.                                                                    
A review  of the  payout rate  had not  been done  in recent                                                                    
years and would likely be conducted in FY 22.                                                                                   
Representative  Carpenter wondered  if it  was feasible  the                                                                    
last time the payout rate  was reviewed. Mr. Abbot responded                                                                    
that it  was designed  to grow  the Trust's  invested assets                                                                    
and  provide funding  for  beneficiary-related  work in  the                                                                    
near-term. He  did not believe  that the goals  would change                                                                    
during the  next review.  He noted that  in the  early years                                                                    
when  the Trust's  assets  were  significantly smaller,  the                                                                    
payout was  around 2 percent.  The rate  ramped up  over the                                                                    
first 7  or 8  years then  settled to  4.25 percent.  As the                                                                    
Trust's assets became healthier  and more diversified by the                                                                    
PF, the  Trust became  less subject  to volatility,  and the                                                                    
payout  rate  increased.  He  would   not  be  surprised  if                                                                    
advisors  showed the  Trust  a way  to  increase the  payout                                                                    
rate,  at least  marginally, while  maintaining the  Trust's                                                                    
objectives about long-term health.                                                                                              
2:00:39 PM                                                                                                                    
Mr.  Abbott reviewed  the pie  chart reflecting  the Trust's                                                                    
spending  plan  on slide  6.  He  reported  that the  FY  21                                                                    
spending plan, as  approved by the trustees, was  made up of                                                                    
3 components  that were  described in  bright colors  on the                                                                    
chart.  He   brought  attention  to  the   2  administrative                                                                    
budgets,  the  Trust  Authority Office  (housed  within  the                                                                    
Department  of Revenue)  and the  Trust Land  Office (housed                                                                    
within the  Department of Natural Resources)  which could be                                                                    
found in the upper right-hand portion of the pie chart.                                                                         
Mr. Abbott  moved clockwise on  the pie chart to  the Mental                                                                    
Health   Trust   Authority  Authorized   Receipts   (MHTAAR)                                                                    
section. He  explained that MHTAAR funds  were authorized by                                                                    
the trustees to be used by  state agencies. The funds had to                                                                    
have  receipt  authority  in  the   form  of  a  legislative                                                                    
appropriation.  Most  of  the funds  were  included  in  the                                                                    
mental health  budget bill  and some  were in  the operating                                                                    
budget  bill. He  noted that  legislative appropriation  for                                                                    
the  administrative budgets  was also  required by  terms of                                                                    
the Trust's settlement.                                                                                                         
Mr. Abbott  reported that the authority  grants, represented                                                                    
by the  largest pie on  the chart,  were the grants  made to                                                                    
non-state  agencies for  programmatic work.  The funds  were                                                                    
given  to non-profits,  tribes,  and  local governments  and                                                                    
included  the  Trust's  mini grant  funds.  The  funds  were                                                                    
authorized by the trustees and  were not appropriated by the                                                                    
legislature.   The  spending   did  not   show  up   on  any                                                                    
legislative budgeting  materials. However, he had  plenty of                                                                    
information on the subject and offered to provide it.                                                                           
Co-Chair   Johnston    commented   that   the    state   was                                                                    
transitioning in terms  of a behavioral health  waiver and a                                                                    
fee for service.  She noted the state grants  for the mental                                                                    
health  community  were  reduced  in  the  prior  year.  She                                                                    
wondered if  Mr. Abbott  thought the  state could  return to                                                                    
its previous level of services.                                                                                                 
Mr.  Abbott responded  that  the  Trust was  a  part of  the                                                                    
arrangement  through  SB  74  [Legislation  passed  in  2016                                                                    
regarding  Medicaid  reform].  From the  Trust's  view,  new                                                                    
Medicaid money would go  towards behavioral health. However,                                                                    
it meant  state grants would decrease.  Since Medicaid money                                                                    
came from the federal  government, general fund (GF) funding                                                                    
in  grants would  be reduced.  The  Trust was  aware of  the                                                                    
circumstances.  In   the  previous   year,  the   Trust  was                                                                    
concerned with  cutting grants  before the  Medicaid funding                                                                    
came in.  He was  informed by  the department  that agencies                                                                    
that lost grant  funds have made them up  in Medicaid funds.                                                                    
He encouraged  the legislature to  speak to  the department.                                                                    
The  Trust, because  the start  of the  funding was  choppy,                                                                    
provided  "bridge money"  to agencies  that would  otherwise                                                                    
have been  forced to  close their  doors. The  state funding                                                                    
showed  up by  August.  The  Trust tried  to  help with  the                                                                    
transition  away from  grants towards  Medicaid. There  were                                                                    
certain services  Medicaid would not reimburse.  He believed                                                                    
there  would continue  to be  reductions as  the waiver  and                                                                    
other Medicaid-funded services came online.                                                                                     
2:07:04 PM                                                                                                                    
Co-Chair Johnston suggested that the  $13 million was in the                                                                    
budget because  the mental health waiver  was not completely                                                                    
implemented. She wondered if the  information was taken into                                                                    
consideration. Mr.  Abbott responded that the  Trust took it                                                                    
into   consideration.  He   emphasized   that  the   Trust's                                                                    
$13 million was not a substitute  for the state's behavioral                                                                    
health grants. The  funds went out to  hundreds of different                                                                    
providers and mini-grant awardees  for a variety of purposes                                                                    
around the state.  Only a small fraction of  the $13 million                                                                    
was used to  bridge the gap of a timing  issue rather than a                                                                    
delivery challenge. The Trust's  message to providers was to                                                                    
get  to Medicaid.  The Trust  provided significant  help and                                                                    
resources to  assist providers in  training and  building up                                                                    
their  technologies  to bill  Medicaid.  The  Trust was  not                                                                    
encouraging people to rely extensively  on grants for things                                                                    
that could be funded through Medicaid.                                                                                          
Representative  Josephson   asked  how  providers   knew  to                                                                    
telephone  the Trust.  Mr. Abbott  reported  that the  Trust                                                                    
reached out  to providers  who were  awarded grants  but had                                                                    
not yet received  the funds. There were  some providers that                                                                    
did  not  have the  resources  to  float until  the  funding                                                                    
arrived. The Trust applied its funds to those providers.                                                                        
Representative Josephson  asked Mr.  Abbott to  describe the                                                                    
appropriate  answer   to  a  query  about   why  there  were                                                                    
community matching grants and behavioral grants.                                                                                
Mr.  Abbott  indicated  he  would  channel  his  inner  Jeff                                                                    
Jessie,  the long-time  CEO of  the Trust  for 23  years. He                                                                    
relayed that when  the Trust was re-established  in 1994, it                                                                    
was  made  clear  that  the  Trust  neither  had  sufficient                                                                    
resources  to  back-fill  the  state's  responsibility,  nor                                                                    
should  it  have  that  responsibility.  The  constitutional                                                                    
obligation of the state to  ensure the health and welfare of                                                                    
its  citizens was  not diminished  by the  existence of  the                                                                    
Trust. The Trust's money was designed  to layer on top of an                                                                    
appropriate  layer of  state and  federal funding  for Trust                                                                    
beneficiaries and  to do more  to help improve  their lives.                                                                    
The Trust also employed money  in partnership with state and                                                                    
federal  agencies  to  help  state   and  federal  money  go                                                                    
further, of  which Medicaid reform  was a good  example. The                                                                    
Trust  contributed $10  million  that  would have  otherwise                                                                    
been GF money to Medicaid  expansion and reform knowing tens                                                                    
of  thousands of  Trust beneficiaries  would gain  access to                                                                    
care  and improved  care. From  the Trust's  point of  view,                                                                    
Medicaid expansion  and reform had  been a huge  success for                                                                    
Trust beneficiaries.                                                                                                            
2:11:55 PM                                                                                                                    
Mr.   Abbott    turned   to   slide   7:    "FY   21   GF/MH                                                                    
Recommendations."   He  spoke   about  the   governor  being                                                                    
required to  submit an operating  budget for the  Trust. The                                                                    
Trust   was  required   to  make   recommendations  to   the                                                                    
administration  and  the  legislature  which  would  support                                                                    
Trust beneficiaries.  He pointed  to the GF/MH  column which                                                                    
showed  what the  Trust recommended.  He clarified  that the                                                                    
column  really  represented  GF  even  though  it  indicated                                                                    
GF/MH. The column  was titled GF/MH because it  was based on                                                                    
a  recommendation  of the  Trust.  He  highlighted that  the                                                                    
orange  columns,  which  reflected the  governor's  proposed                                                                    
budget  for FY  21, did  not  include all  of the  trustees'                                                                    
recommendations for  GF contributions.  He would  not review                                                                    
all of  the related pros  and cons,  but the Trust  would be                                                                    
working   with   the   finance   committees   and   relative                                                                    
subcommittees   through  the   budget   process.  He   would                                                                    
encourage  members to  consider adding  some of  the funding                                                                    
back into the budget. Developing  a budget was a multi-stage                                                                    
process.  The trustees  developed  their recommendations  in                                                                    
September of  the prior year,  the governor submitted  it to                                                                    
the  legislature along  with the  operating  budget in  mid-                                                                    
December, and the legislature took action.                                                                                      
Vice-Chair  Ortiz  asked  how  the  Trust  arrived  at  its'                                                                    
recommendations. Mr. Abbott responded  that it was difficult                                                                    
to provide  a definitive  answer, as it  was somewhat  of an                                                                    
art. He  opined that it  did not represent every  dollar the                                                                    
Trust   thought   could  or   should   be   spent  to   help                                                                    
beneficiaries. The Trust was spending  some of its own money                                                                    
in certain  areas while encouraging the  state to contribute                                                                    
GF in a complimentary way.  The process was more qualitative                                                                    
than quantitative, and, therefore  difficult to describe. He                                                                    
was happy  to discuss the  merits of each of  the individual                                                                    
budget items at another time.                                                                                                   
2:15:34 PM                                                                                                                    
Co-Chair  Foster mentioned  GF money  in terms  of what  the                                                                    
board  was   recommending  versus  what  the   governor  was                                                                    
proposing.  He  asked  if   the  governor  was  recommending                                                                    
$5.5 million less than what the  board was recommending. Mr.                                                                    
Abbott  replied that  the  difference equaled  approximately                                                                    
$4.5 million.  The Trust recommended  $5.9 million. Whereas,                                                                    
the governor's budget recommended $1.5 million.                                                                                 
Co-Chair  Johnston  asked  about the  request  for  matching                                                                    
funds from  the GF. She wondered  if a program would  end if                                                                    
matching funds  were not provided. Mr.  Abbott reported that                                                                    
the  Trust   might  revisit  its  contribution   to  certain                                                                    
programs if  the state  did not provide  the match  that was                                                                    
anticipated.  In certain  instances, it  might not  be worth                                                                    
doing the  program if  it was  significantly less  money. In                                                                    
some  cases, programs  started out  as  state priorities  to                                                                    
which  the Trust  made smaller  contributions. If  the state                                                                    
was not interested in certain  programs any longer, it might                                                                    
not be worth the investment of  the Trust. Each of the items                                                                    
would require a different calculation.                                                                                          
Co-Chair  Johnston   highlighted  the   Homeless  Assistance                                                                    
Program. She wondered if the  program would be crippled. Mr.                                                                    
Abbott  thought  the  question should  be  directed  to  the                                                                    
Alaska Housing  Finance Corporation (AHFC). He  suspected it                                                                    
would  significantly reduce  the  impact or  benefit of  the                                                                    
program. He did not want to speak to its ultimate impact.                                                                       
Co-Chair Johnston  inquired about the Special  Needs Housing                                                                    
Grant.  She  did   not  think  the  project   could  be  cut                                                                    
altogether.  She  asked  if she  was  accurate.  Mr.  Abbott                                                                    
believed she  was correct.  He thought that  in the  case of                                                                    
the Special  Needs Housing  Grant there  was a  reduction in                                                                    
funding of about $1.75 million.  The program could remain in                                                                    
operation at a reduced funding level.                                                                                           
Co-Chair Johnston  asked about the Holistic  Defense Project                                                                    
in Bethel. Mr.  Abbott responded that the  project could not                                                                    
operate  at the  level of  $193,000.  The state  had been  a                                                                    
large  contributor.  He  would  not expect  the  program  to                                                                    
continue the way in which  it operated currently without all                                                                    
or most of the state GF contribution.                                                                                           
Co-Chair  Johnston asked  about  the  IT Telehealth  Service                                                                    
System  Improvement  Project.  She queried  whether  funding                                                                    
went  towards licensing  or for  something else.  Mr. Abbott                                                                    
would have to follow-up with the committee.                                                                                     
2:19:55 PM                                                                                                                    
Representative  Carpenter what  to clarify  the vision  that                                                                    
had  been discussed  on previous  slides regarding  Medicaid                                                                    
and authority grants. He thought  he heard Mr. Abbott report                                                                    
that  there were  particular  grants that  came  out of  the                                                                    
$13 million  the  Trust  had  encouraged  entities  to  seek                                                                    
funding through Medicaid. He asked if he was correct.                                                                           
Mr. Abbott  responded, "Not exactly." He  explained that the                                                                    
funding the Trust provided was  not likely to be replaced by                                                                    
Medicaid  funding.  The grants  that  could  be replaced  by                                                                    
Medicaid  funding  were  the state  GF  (behavioral  health)                                                                    
grants.  In  the  previous year  the  grants  totaled  about                                                                    
$50 million. The grants had been  shrinking. As Medicaid was                                                                    
increasing,  the grants  were supposed  to decline  in equal                                                                    
fashion.  State  GF funds,  rather  than  Trust funds,  were                                                                    
being replaced by Medicaid funds.                                                                                               
Representative Merrick referred to page  7, line item 3. She                                                                    
noted the MHTAAR request for  $300,000 and $1 million in GF.                                                                    
The governor's budget proposed $1.3  million for MHTAAR. She                                                                    
asked  why  the  numbers  were combined  in  the  governor's                                                                    
Mr.  Abbott thought  Representative  Merrick  asked a  great                                                                    
question.  It  was new  for  the  governor to  recommend  an                                                                    
increase in the Trust's  contribution to a program. Legally,                                                                    
the  administration or  the legislature  could increase  the                                                                    
Trust's   contribution.  He   explained  that   MHTAAR  were                                                                    
authorized receipts. If  the Trust's money did  not show up,                                                                    
it would not get spent. He  would not be surprised if it was                                                                    
a mistake on  the part of the governor. He  thought it would                                                                    
be adjusted  in the governor's  amended budget or  the Trust                                                                    
would work  with the  finance committees  to make  a change.                                                                    
Presently, the  Trust was not planning  on contributing more                                                                    
than $300,000 in the trustees' proposal.                                                                                        
Representative  Josephson asked  about the  Holistic Defense                                                                    
Project. Mr. Abbott deferred to someone else from AMHTA.                                                                        
2:23:10 PM                                                                                                                    
STEVE  WILLIAMS,  CHIEF  OPERATING  OFFICER,  ALASKA  MENTAL                                                                    
HEALTH TRUST AUTHORITY, explained  that the Bethel Wholistic                                                                    
Defense Project was  a joint project in which  the Trust had                                                                    
been  working with  the Public  Defender  Agency and  Alaska                                                                    
Legal  Services. It  was a  pilot  model from  a program  in                                                                    
Brooklyn, NY. Several  people had conducted a  site visit to                                                                    
observe   the  model.   The   model   brought  together   an                                                                    
individual's  criminal  charges,  looked  into  whether  the                                                                    
person had  any civil  cases or legal  issues going  on, and                                                                    
brought  them  together  working  in  concert  to  get  them                                                                    
resolved simultaneously.                                                                                                        
Co-Chair Foster  wondered if the program  would continue, as                                                                    
it had  been referred  to as a  pilot program.  Mr. Williams                                                                    
responded  that the  program  was  currently operating.  The                                                                    
funds  were  in  Bethel.  The additional  funds  would  help                                                                    
maintain the Bethel project as  well as look at expansion in                                                                    
either Nome or Kotzebue.                                                                                                        
Mr. Abbott  continued to slide  8 which discussed  the Trust                                                                    
Land Office. He mentioned it  was a separate division within                                                                    
DNR wholly  dedicated to managing  the Trust's  land assets.                                                                    
The Trust owned  approximately 1 million acres  of land that                                                                    
was  part  of  its   original  entitlement.  The  Trust  had                                                                    
disposed of about  30,000 of the acres which led  to some of                                                                    
the  receipts seen  earlier in  the presentation.  The slide                                                                    
showed 1  year (FY 19)  of Trust Land revenue  activity. The                                                                    
Trust received  revenues from all  sorts of  resource types.                                                                    
The  ratios  between  the   different  asset  types  changed                                                                    
radically  from year-to-year  depending on  commodity prices                                                                    
and other  variables. For instance,  some years  there might                                                                    
be  less  revenues  from  timber   but  more  revenues  from                                                                    
minerals. The  slide provided a  1-year snap shot. In  FY 19                                                                    
roughly half  of the  money was  generated in  a such  a way                                                                    
that it had to be invested.  The other half was generated in                                                                    
such a way  that it was available  for spending immediately.                                                                    
In some  years it was  balanced differently. In  the current                                                                    
year it was about a  50/50 split in spendable revenue versus                                                                    
investible revenue.                                                                                                             
2:26:32 PM                                                                                                                    
Vice-Chair Ortiz asked Mr. Abbott  to elaborate about a land                                                                    
exchange  in Southeast  Alaska between  AMHTA  and the  U.S.                                                                    
Forest Service.                                                                                                                 
Mr.   Abbott  responded   that  several   years  prior   the                                                                    
U.S. Congress  and   the  Alaska   Legislature  specifically                                                                    
authorized  an exchange  of lands  whereby  the Trust  would                                                                    
give  up  a significant  quantity  of  acreage in  Southeast                                                                    
Alaska  generally located  near or  adjacent to  communities                                                                    
including   Ketchikan,  Petersburg,   Wrangel,  Sitka,   and                                                                    
Juneau. In  Exchange, the Trust  would acquire lands  in the                                                                    
Tongas National Forest. The Trust's  interest was in gaining                                                                    
access to  lands less objectionably developed  than lands it                                                                    
owned at  the time.  For a variety  of reasons  residents of                                                                    
Ketchikan did not  want to see Dear  Mountain harvested. The                                                                    
purpose of  the Trust owning  land was to  generate revenue.                                                                    
It was not a multi-use  land manager. The Trust was managing                                                                    
for money for  its beneficiaries. The Trust  was required to                                                                    
measure  the  use  of  properties for  the  benefit  of  its                                                                    
beneficiaries. As a result of  community interests and other                                                                    
interests, it  was determined that the  Trust should acquire                                                                    
lands primarily on  Prince of Wales Island  and Shelter Cove                                                                    
near Ketchikan.                                                                                                                 
Mr. Abbott  continued to report  that the Trust  was towards                                                                    
the   end  of   the   exchange  process   which  had   taken                                                                    
significantly  longer  than  anticipated. The  exchange  had                                                                    
been broken  into phases. Phase  1 had been  completed which                                                                    
meant that some  of the parcels near  Ketchikan had reverted                                                                    
to the U.S.  Forest Service, and some of the  parcels in the                                                                    
area  of Prince  Wales Island  had been  transferred to  the                                                                    
trust  and were  actively being  harvested. He  relayed that                                                                    
the Trust  had a harvesting operation  under contract before                                                                    
the  exchange  was consummated.  It  was  contingent on  the                                                                    
exchange going  through. There was  a significant  amount of                                                                    
interest in  the timber. The largest  timber manufacturer in                                                                    
Alaska was at risk of losing  access to any wood. There were                                                                    
a number of entities invested  in seeing the deal finalized.                                                                    
Phase  2 was  currently under  way, and  he anticipated  its                                                                    
completion in  the middle of  the following year.  The Trust                                                                    
remained committed  to completing the exchange.  He believed                                                                    
it would  net millions of  dollars-worth of value  which the                                                                    
Trust would deploy to its beneficiaries.                                                                                        
2:30:19 PM                                                                                                                    
Mr. Abbott  continued to  slide 9:  "25 Years  of Supporting                                                                    
Beneficiaries."    Some    of    the    Trust's    signature                                                                    
accomplishments had  been in the  areas listed on  the slide                                                                    
including  Harborview, Bring  the  Kids  Home, and  Medicaid                                                                    
reform and expansion.                                                                                                           
Mr. Abbott turned to slide  10 detailing Medicaid reform and                                                                    
expansion.  The   Trust  made   an  initial   investment  or                                                                    
commitment  of  investment  of $10  million  about  4  years                                                                    
prior. By  the end of FY  20 the $10 million  would be fully                                                                    
expended. The money had given  the department the ability to                                                                    
move  forward  with  several  key  elements  of  the  reform                                                                    
process. There  were several pieces of  Medicaid reform that                                                                    
impacted Alaskans generally. The  ones that had impacted the                                                                    
Trust's  beneficiaries  included   the  development  of  the                                                                    
administrative  services organization  and the  1115 waiver.                                                                    
They  were both  underway  and moving  forward. He  believed                                                                    
Medicaid  expansion and  reform  had been  a  "big win"  for                                                                    
Trust beneficiaries.                                                                                                            
Mr.  Abbott  advanced  to slide  11  and  reviewed  Medicaid                                                                    
reform success. One  of the state's major  objectives was to                                                                    
expand care  without increasing GF  expense. He looked  at a                                                                    
graph at  the bottom right of  the slide. The green  line on                                                                    
the  top described  the increase  in enrollment  or Medicaid                                                                    
users.  The growth  was primarily  associated with  Medicaid                                                                    
expansion. The  columns indicated  the amount of  money that                                                                    
had been spent. He drew  attention to the blue portions. The                                                                    
GF  portions,  had  not  grown  significantly.  Essentially,                                                                    
state GF  spending had been  flat while service  to Alaskans                                                                    
had gone  up radically.  Many of  the Alaskans  being served                                                                    
(either  originally   served  through  Medicaid   or  served                                                                    
through expansion) were Trust beneficiaries.                                                                                    
Representative Josephson  stated that about 10  to 11 months                                                                    
earlier  there  had been  a  number  of hearings  where  the                                                                    
administration  proposed cutting  the state  contribution to                                                                    
Medicaid by excluding certain  classes of beneficiaries (not                                                                    
Trust beneficiaries  but Medicaid beneficiaries)  and making                                                                    
efforts with the Centers for  Medicare and Medicaid Services                                                                    
(CMS) to  exclude them  formally. He asked  if AMHTA  took a                                                                    
position on the issue.                                                                                                          
Mr. Abbott  replied in the  affirmative. He  elaborated that                                                                    
adult  dental  was  the  specific   service  type  that  the                                                                    
administration  recommended be  removed from  base Medicaid.                                                                    
Over the  years, adult dental  moved in  and out of  being a                                                                    
core   service  in   Medicaid.   He   reported  that   about                                                                    
8 to 10 years  earlier AMHTA  had provided  start-up funding                                                                    
to   ensure   adult   preventative   dental   benefits   for                                                                    
beneficiaries.  The   trust  opposed   the  administration's                                                                    
efforts to  exclude adult dental  from Medicaid. He  did not                                                                    
believe  the department  anticipated any  service reductions                                                                    
as a result of their  FY 21 Medicaid funding proposal. There                                                                    
were several cost savings measures  that were intended to be                                                                    
enacted  but  not  ones  that  would  appreciatively  change                                                                    
service levels. He was not  authorized to speak on behalf of                                                                    
the department but had heard it many times.                                                                                     
2:35:44 PM                                                                                                                    
Mr. Abbott discussed the gap  in services in the psychiatric                                                                    
crisis  continuum   of  care  presented  on   slide  12.  He                                                                    
indicated the  gap in crisis  care was  seen as a  result of                                                                    
the pressure that had been  placed on the Alaska Psychiatric                                                                    
Institute  (API) and  had not  been  addressed. He  provided                                                                    
several examples of  the crisis. He spoke of  the impacts on                                                                    
emergency rooms  that were becoming boarding  facilities for                                                                    
Alaskans with psychiatric issues  requiring care beyond what                                                                    
they could  provide for themselves.  The problem  existed in                                                                    
Alaska's jails which were  also becoming boarding facilities                                                                    
for  Alaskans with  psychiatric requirements.  The backs  of                                                                    
police  cars  were  becoming  de  facto  holding  areas  for                                                                    
individuals in a wide range of crisis circumstances.                                                                            
Mr. Abbott  continued that the  Trust along  with department                                                                    
had been working  together to address the needs  in the area                                                                    
of  psychiatric crisis  to reduce  the impact  on hospitals,                                                                    
first  responders,  and  correctional  facilities.  Maricopa                                                                    
County in the Phoenix Metro  Area in Arizona had a different                                                                    
approach to  crisis care  which had  been tested  and vetted                                                                    
for more than  10 years. The Trust contracted  with the same                                                                    
entity,  RI,  that  helped Maricopa  County  deal  with  the                                                                    
issue.  Representatives from  RI met  in Anchorage,  Mat-Su,                                                                    
and  Fairbanks  with  dozens   of  stakeholders  across  the                                                                    
continuum  of   care.  Based  on  their   visit,  they  made                                                                    
recommendations to  the Trust that  could be  implemented in                                                                    
Alaska.  The  Trust  had  been   working  closely  with  the                                                                    
department who  shared the Trust's eagerness.  He gave kudos                                                                    
to  Deputy Commissioner  Al Wall  for elevating  the concern                                                                    
inside state  government and  by identifying  solutions like                                                                    
the  ones  in  Arizona.  He  would  be  proposing  that  the                                                                    
trustees  add significant  funding for  crisis care  work to                                                                    
the Trust's  FY 21  budget at  their next  meeting scheduled                                                                    
for the following morning.                                                                                                      
2:39:22 PM                                                                                                                    
Mr. Abbott reviewed the Crisis  Now Model on slide 13. There                                                                    
were  three  areas of  focus.  The  first was  to  implement                                                                    
regional  statewide crisis  call centers.  The call  centers                                                                    
would  be staffed  with clinically  trained staff  available                                                                    
24/7 to  support Alaskans dealing  with a variety  of crisis                                                                    
care  requirements. The  crisis care  lines in  Arizona were                                                                    
able  to address  the needs  of the  majority of  people who                                                                    
called  them  without  needing  any  further  service.  They                                                                    
helped people  address the near-term needs  and steered them                                                                    
to longer-term solutions.                                                                                                       
Mr. Abbott continued that if  the crisis care lines were not                                                                    
enough  to address  an issue  for an  individual, responders                                                                    
would have the ability to  dispatch another new service type                                                                    
that  did  not  currently  exist in  Alaska:  mobile  crisis                                                                    
teams.  They  were  typically  2   person  teams  that  were                                                                    
available  24/7   and  worked  hand  in   glove  with  first                                                                    
responders  providing  support   and  ultimately  addressing                                                                    
crisis care  requirements. Crisis  care responders  would be                                                                    
deployed  to sites  such homes,  work  places, and  schools.                                                                    
Many of the crisis events  in Phoenix took place in schools.                                                                    
The  teams went  to assisted  living facilities  or wherever                                                                    
the  need  existed.  Maricopa   County,  serving  4  million                                                                    
people,   had  26   different   teams   which  allowed   for                                                                    
significant  24/7 coverage.  He thought  scaling would  be a                                                                    
challenge  for  Alaska.  In  Maricopa  County,  if  a  first                                                                    
responder or a  dispatcher identified a need,  a crisis team                                                                    
responded  immediately.  Typically,  the response  time  was                                                                    
less  than  20 minutes.  In  almost  every case,  the  first                                                                    
responder left  upon the arrival  of the crisis  team unless                                                                    
there  was a  dire safety  concern. In  many instances,  the                                                                    
first   responder  leaving   the   scene  de-escalated   the                                                                    
situation.  He  relayed  that  typically  the  team  members                                                                    
consisted  of a  clinician and  a peer,  a person  with some                                                                    
lived experience  such as being  in recovery  from substance                                                                    
abuse. In  most cases,  the teams were  able to  address the                                                                    
need  in  place, help  stabilize  the  individual and  their                                                                    
environment,  provide the  individual with  information, and                                                                    
follow up with outreach.                                                                                                        
Mr. Abbott indicated  that the third focus of  the model was                                                                    
to  provide residential  stabilization  programs. They  were                                                                    
typically short-term drop-off  or receiving facilities where                                                                    
people  in crisis  could go.  If  a mobile  crisis team  was                                                                    
unable to help a person, the  individual could be taken to a                                                                    
drop-off facility. No  one was turned away,  the hallmark of                                                                    
the program in  Arizona. It was a "no  wrong door" approach.                                                                    
Many people that arrived at  the facilities were transported                                                                    
in the  backs of police  cars. He reported that  the typical                                                                    
hand-off  time  in  Maricopa County  was  1.5  minutes.  The                                                                    
police officers  pulled up, got  the person out of  the car,                                                                    
reported what  they knew  about them,  and released  them to                                                                    
the   clinicians   at    the   facility.   The   residential                                                                    
stabilization programs  had 2 types of  facilities including                                                                    
a  23-hour  non-residential  care  facility  and  a  72-hour                                                                    
short-term  care  facility.  The   programs  had  been  very                                                                    
successful. Most  of the  people at  the facilities  left on                                                                    
their  own and  returned to  the continuum  of care  getting                                                                    
community-based mental  health care. Medicaid would  pay for                                                                    
many of  the services.  The Crisis  Now Model  was something                                                                    
the state  needed and the  Trust wanted to help  support. He                                                                    
indicated  that  the program  would  be  implemented in  the                                                                    
urban  areas to  start. It  was recommended  that the  Trust                                                                    
make a multimillion-dollar contribution in  FY 21 to get the                                                                    
program off the ground. Presently,  the Trust was not asking                                                                    
the state for GF.                                                                                                               
Co-Chair   Foster  wondered   how  the   program  would   be                                                                    
implemented in rural Alaska. He  understood that the program                                                                    
would likely start in the  urban centers but hoped an effort                                                                    
would  extend to  rural Alaska.  Mr.  Abbott was  optimistic                                                                    
that  at  least  the  call   center  could  be  a  statewide                                                                    
operation  in  the beginning.  The  Trust  was committed  to                                                                    
working with  tribal providers  in rural  Alaska to  see how                                                                    
much of the model could  be implemented. It would not likely                                                                    
have the  same level of  emergent service delivery  that was                                                                    
more plausible in greater density  areas. He reiterated that                                                                    
the Trust was  100 percent committed to  extending the model                                                                    
to rural Alaska. Co-Chair Foster  appreciated the efforts of                                                                    
the Trust to look outside the box and to try new things.                                                                        
2:49:28 PM                                                                                                                    
Vice-Chair Ortiz asked if the  Trust had determined any cost                                                                    
savings for  the program. Mr. Abbott  responded that Phoenix                                                                    
experienced a net cost savings.  All of the different payers                                                                    
that paid  into their healthcare system  had seen neutrality                                                                    
or savings. He was  certain that hospitals, the correctional                                                                    
system,   and  first   responders   in   Alaska  would   see                                                                    
significant  improvement.   He  could   not  speak   to  the                                                                    
potential  savings  the  Fairbanks  Police  Department,  for                                                                    
instance, might  experience because  of officers  being able                                                                    
to  focus  their  time   doing  more  public  safety-related                                                                    
duties.  He did  not know  how entities  would deploy  their                                                                    
resources. The  Trust was working under  the assumption that                                                                    
it would  not cost the  state additional monies.  The monies                                                                    
would  come primarily  through Medicaid.  As  the Trust  did                                                                    
more  planning and  more implementation  it would  have more                                                                    
information. If  the Trust  wanted to  build out  the system                                                                    
beyond   what  typical   health  payers   would  pay,   then                                                                    
discretionary  contributions  might  have to  be  made.  The                                                                    
contributions might be community-based.                                                                                         
2:52:58 PM                                                                                                                    
Co-Chair  Johnston appreciated  having  been  to Arizona  to                                                                    
look  at the  crisis model.  She  noted that  Phoenix had  a                                                                    
managed Medicare system unlike Alaska.  She did not want the                                                                    
problems to  side-line the Trust's  project. She  also noted                                                                    
that  Arizona's Medicaid  paid for  telehealth in  the home.                                                                    
The  Native  health  service also  offered  telehealth.  She                                                                    
indicated telehealth  for mental health treatment  seemed to                                                                    
be an  effective model.  Mr. Abbott  relayed that  the state                                                                    
was  moving  to  managed  care  for  behavioral  health.  He                                                                    
reported that  Optimum Health  was currently  under contract                                                                    
to  provide  administrative  services. It  would  feel  like                                                                    
managed  care for  behavioral  health  through Medicaid.  He                                                                    
speculated  that it  would facilitate  the movement  towards                                                                    
the new  crisis model. Co-Chair  Johnston added she  did not                                                                    
want efforts to be premature and delay progress.                                                                                
Mr. Abbott had a couple more  slides on the Crisis Now Model                                                                    
but  thought he  had  presented enough  information. He  was                                                                    
available for questions.                                                                                                        
2:56:46 PM                                                                                                                    
Representative Wool applauded  the Trust's behavioral health                                                                    
efforts  towards  intervention.   He  noted  the  population                                                                    
difference in Arizona versus Alaska.  He had talked with the                                                                    
Department  of Corrections  (DOC) about  the number  of beds                                                                    
filled  with people  with mental  health issues.  There were                                                                    
far  more beds  filled  in correctional  facilities than  at                                                                    
API. The  model would lighten the  load for DOC and  for law                                                                    
enforcement.  He  thought  if  the crisis  teams  could  get                                                                    
mobile it  would be incredibly  helpful in urban  centers as                                                                    
well  as in  rural  areas. He  also  thought telehealth  for                                                                    
behavioral health was already  available in Alaska. He noted                                                                    
that people  in custody were  not eligible for  Medicaid. He                                                                    
reiterated  that he  thought Alaska  already had  telehealth                                                                    
for behavioral health through Medicaid.                                                                                         
Mr. Abbott  confirmed that there  was telehealth  in Alaska.                                                                    
Typically, the  format was  clinic-to-clinic. Representative                                                                    
Johnston was  referring to telehealth being  provided in the                                                                    
Representative  Wool   noted  HIPPA  being  an   issue  with                                                                    
unsecured telephone  lines. Mr. Abbott indicated  there were                                                                    
challenges  with  HIPPA  and  telehealth.  However,  it  was                                                                    
likely the challenges would be defeated.                                                                                        
Representative  Josephson  asked  if the  Crisis  Now  Model                                                                    
could  be found  in the  budget bill.  Mr. Abbott  indicated                                                                    
there was  nothing to see  in the  budget, as it  was funded                                                                    
through other means including money from the Trust.                                                                             
Representative  Josephson  recalled  Mr.  Abbott  mentioning                                                                    
that  several  Trust budgetary  items  did  not have  to  be                                                                    
appropriated through the legislative  process. He noted that                                                                    
every penny  spent by the  university had to be  approved by                                                                    
the legislature. Mr. Abbott commented,  "This is better." He                                                                    
thanked the committee for questions from members.                                                                               
Co-Chair Foster reviewed the agenda for the following day.                                                                      

Document Name Date/Time Subjects
Trust 2020 H FIN Final 1.28.20.pdf HFIN 1/29/2020 1:30:00 PM
H FIN Follow Up_AK Mental Health Trust Authority_2.5.20.pdf HFIN 1/29/2020 1:30:00 PM
AMHTA Response to Overview Questions