Legislature(2005 - 2006)CAPITOL 120


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 193(HES) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 114(HES) Out of Committee
HB 193-LICENSING MEDICAL OR CARE FACILITIES                                                                                   
HB 114-TERM. PARENTAL RTS/CINA/DELINQUENCY CASES                                                                              
[The  long titles  of HB  193 and  HB 114,  which were  discussed                                                               
together at this point, can be found in the committee calendar.]                                                                
CHAIR WILSON said  the department has stressed  the importance of                                                               
keeping licensing  separate from  the [financing portion]  of the                                                               
program.  She told the committee  that there is a bill sitting in                                                               
committee  that can  be gutted  and used  for certain  proposals.                                                               
She said  there is a disconnect  between the two portions  of the                                                               
program, and  she explained that  whenever a decision is  made on                                                               
the  licensing side,  she would  like to  have somebody  from the                                                               
funding side involved.                                                                                                          
9:14:05 AM                                                                                                                    
REPRESENTATIVE GARDNER  said HB 193 was  originally envisioned as                                                               
a bill that would be worked  on over the interim and brought back                                                               
the following year;  however, that changed to the  point that the                                                               
bill is "moving  through the system at a pretty  good clip."  She                                                               
asked  what  could  be  done  to  ensure  that  a  separate  bill                                                               
regarding the funding issues is also moved at a good pace.                                                                      
CHAIR WILSON said  that because the vehicle for  the bill already                                                               
exists, it could be pushed on to other committees.                                                                              
9:14:57 AM                                                                                                                    
REPRESENTATIVE  CISSNA emphasized  the amount  of people  who are                                                               
not getting  served.  She  said, "There's more of  the department                                                               
than  there  are  legislators  here, and  if,  in  fact,  they're                                                               
willing  to  put this  kind  of  muscle  into getting  your  bill                                                               
through  - and  ... I'll  want to  have a  guarantee that  that's                                                               
going to happen - I'd love it."                                                                                                 
9:16:10 AM                                                                                                                    
REPRESENTATIVE ANDERSON stated that he  would not want to gut the                                                               
bill  for use  as a  separate  vehicle for  the financial  aspect                                                               
unless  there  is  a  commitment from  the  commissioner  of  the                                                               
Department of Health  and Social Services (DHSS)  and an analysis                                                               
of what  the department would  be supporting.  He  explained that                                                               
the commissioner can "use the  governor, and they can call folks,                                                               
and the bill  dies in the next committee."   He encouraged making                                                               
amendments  to address  all the  issues within  [HB 193],  saying                                                               
that doing  so would  result in  a better  chance of  helping the                                                               
people running assisted living homes.                                                                                           
9:17:35 AM                                                                                                                    
JOEL  GILBERTSON,  Commissioner,   Office  of  the  Commissioner,                                                               
Department of Health and Social Services (DHSS), stated:                                                                        
     The position  of the  department hasn't  changed; we're                                                                    
     perfectly  willing  to  implement the  change.    We're                                                                    
     looking for  the advice  of the  legislature on  how to                                                                    
     move forward  on this.  We  will have all of  our staff                                                                    
     available at the hearings.   We'll provide testimony as                                                                    
     to  the effect  and implications  of the  amendment and                                                                    
     we'll work through the process.   I don't think there's                                                                    
     any  effort  by the  department  to  not see  this  get                                                                    
     passed, and so I'm kind of confused by that tone.                                                                          
9:18:47 AM                                                                                                                    
JOHN  BITNEY,  Lobbyist,   Thunderbird  Home  Health  Management,                                                               
stated  that  regulations  impact  the ability  of  the  assisted                                                               
living homes to stay in  business, and he stressed the importance                                                               
of the bill.                                                                                                                    
REPRESENTATIVE ANDERSON  asked for details regarding  the gutting                                                               
of a  bill to include  the financial  aspect of the  issue before                                                               
the committee.                                                                                                                  
CHAIR  WILSON  initially  offered   her  understanding  that  the                                                               
vehicle to use  would be HB 112; however,  after some discussion,                                                               
she said the vehicle the committee would use is HB 114.                                                                         
9:21:35 AM                                                                                                                    
COMMISSIONER GILBERTSON  said that the  language for [the  new HB
114] has  been recently  drafted.   He said there  is not  yet an                                                               
official fiscal note; however, "the  current expectation from the                                                               
department with the  language that we provided is  that the total                                                               
fund cost  would be $363,500 and  the general fund cost  would be                                                               
CHAIR WILSON said,  "If we put on  that that it is  the intent of                                                               
this  committee  that  those  funds come  out  of  the  whatever,                                                               
[Budget  Review Unit  (BUR)] -  I mean  I don't  know how  you do                                                               
that, but  whichever one  it is  that is  with the  personal care                                                               
attendants, it's to  come out of that area -  then you guys would                                                               
have a guide of what is expected of us.  Can we do that?"                                                                       
COMMISSIONER GILBERTSON replied  that he may be  the wrong person                                                               
to ask.                                                                                                                         
REPRESENTATIVE CISSNA  said, "Because  this amendment that  is in                                                               
here  doesn't  have the  restructuring  so  that you  could  have                                                               
companion  services.   ...   And  ...  if, in  fact,  as the  new                                                               
amendment on  that was written, ...  it's not supposed to  have a                                                               
fiscal impact; it merely broadens."                                                                                             
9:23:31 AM                                                                                                                    
MR. BITNEY said:                                                                                                                
     What the  amendment proposes  is to  create a  piece of                                                                    
     legislation that the sole content  of it is a statement                                                                    
     of intent  by the legislature.   So, that's  the extent                                                                    
     of what the legislation does.                                                                                              
[SEVERAL UNIDENTIFIED SPEAKERS] said, "No, it's not."                                                                           
MR. BITNEY corrected  himself and acknowledged, "It  has now been                                                               
modified to say the uncodified law."                                                                                            
CHAIR  WILSON   directed  attention   to  a   document  entitled,                                                               
"Proposal to Implement Proposed 300%'er  Change."  She asked that                                                               
the committee bring HB 114 before the committee.                                                                                
9:26:18 AM                                                                                                                    
REPRESENTATIVE ANDERSON moved to  bring before the committee CSHB
114(STA), [although the committee did  not notice HB 114 for this                                                               
CHAIR WILSON objected for discussion purposes.                                                                                  
REPRESENTATIVE  ANDERSON   moved  Amendment  1,  which   read  as                                                               
     Page 1, line 1 thru 8:                                                                                                     
          Delete all material in the Title and Insert "An                                                                     
     Act relating  to Medicaid personal needs  allowance for                                                                  
     assisted living home residents."                                                                                         
     Page 1, line 10 thru page 12, line 15:                                                                                     
          Delete all material and Insert new bill sections                                                                      
     to read:                                                                                                                   
     *Sec.1. The  uncodified law of  the State of  Alaska is                                                                    
     amended by adding a new section to read:                                                                                   
          It is the Intent of the Legislature that the                                                                          
     Department of  Health and Social Services  Repeal 7 AAC                                                                    
     43.1058(k)(1)(B) effective July 1, 2005.                                                                                   
     The  Department of  Health  and  Social Services  shall                                                                    
     adopt   new   emergency  regulations   establishing   a                                                                    
     personal needs allowance for  recipients residing in an                                                                    
     assisted living  facility equal  to the  monthly income                                                                    
     limit  set in  AS  47.04.020(b)(6) minus  $260.   Until                                                                    
     such   time  as   the   department   can  adopt   these                                                                    
     regulations at  7 AAC 43.1058(k)(1)(B),  the department                                                                    
     shall  apply personal  needs  allowance for  recipients                                                                    
     residing in  an assisted  living facility equal  to the                                                                    
     monthly income  limit set  in AS  47.04.020(b)(6) minus                                                                    
     $260.  This  meets the requirements for a  finding of a                                                                    
     public, health  safety and  welfare emergency  under AS                                                                    
     *Sec.3.  Section 1  of  the Act  takes  effect July  1,                                                                    
     *Sec.4.  Section 2  of this  Act takes  effect July  2,                                                                    
9:27:18 AM                                                                                                                    
JON  SHERWOOD, Medical  Assistance Administrator,  Office of  the                                                               
Commissioner, Department of Health  and Social Services, reviewed                                                               
the  changes made  by  Amendment  1.   He  explained  that 7  AAC                                                               
43.1058(k)(1)(B) is  the provision  and regulation  that requires                                                               
individuals living  in assisted living homes,  receiving Medicaid                                                               
waiver services,  and who  have incomes in  excess of  the [Adult                                                               
Public Assistance]  APA payment levels  to use the  excess income                                                               
toward  their Medicaid  expenses.   He said,  "These are  the 300                                                               
'percenters'   -  the   people   who  ...,   under  the   current                                                               
regulations, can no  longer pay as much in rent,  room and board,                                                               
as they used  to."  Section 2 replaces that  provision with a new                                                               
one, setting the limit $260 less than it was before.                                                                            
MR. SHERWOOD drew  attention to two pages  following the amending                                                               
language,  which  show  how  things work  before  and  after  the                                                               
regulation changes, as  well as the cost impact  of the reversing                                                               
change to 300 percenters.                                                                                                       
MR.  BITNEY,  in  response  to  a  question  from  Representative                                                               
Anderson, pointed out that [Amendment  1] "assists," but does not                                                               
include a "cap" that was included in HB 193.                                                                                    
CHAIR  WILSON  suggested,  "That's  part  of  the  proposed,  new                                                               
regulations that  haven't gone into  effect, and that's  still an                                                               
open area."                                                                                                                     
MR. SHERWOOD said that in regard  to the comments heard about new                                                               
proposed licensing  regulations, the department is  extending the                                                               
regulation  comment period,  will plan  on holding  at least  one                                                               
more hearing, and will notify  the assisted living providers.  He                                                               
offered  his understanding  that the  extension would  be through                                                               
June, which is 45 days longer.                                                                                                  
CHAIR WILSON said she thinks that's reasonable.                                                                                 
9:32:30 AM                                                                                                                    
REPRESENTATIVE MCGUIRE  said she  believes the  cap already  is a                                                               
part of regulation.  She said:                                                                                                  
     There are two components:   There's the first part that                                                                    
     says that  we're going  to lower the  rate to  $18.64 a                                                                    
     day ..., and  that was part of the  refinancing, and we                                                                    
     all understand  and have agreed  that that's  the right                                                                    
     thing to  do from  a financial  perspective.   But then                                                                    
     the second  part of it  was the  part that said  $564 a                                                                    
     month, no matter what, as a  cap.  And that was part of                                                                    
     the [regulations] that already are in place.                                                                               
AMY ONEY, Owner/Operator, Mama's  Assisted Living Home, mentioned                                                               
[the committee  substitute (CS) for HB  193, Version 24-GH1016\F,                                                               
Mischel, 4/19/05].  She stated:                                                                                                 
     This  is  a  regulation  that  went  into  effect  last                                                                    
     summer,   but  they   have  not   enforced  it.     The                                                                    
     enforcement date is  set for July 1 of this  year.  And                                                                    
     what that  does is:   our daily reimbursement  rates on                                                                    
     the Medicaid  waiver side  are calculated  according to                                                                    
     what's  a  direct  care  cost   and  what's  called  an                                                                    
     administrative and  general cost.  Once  you figure out                                                                    
     your direct  care rate per  person, per day,  then they                                                                    
     allow an  administrative general rate to  be calculated                                                                    
     as a percentage of the rate.   What this cap does is it                                                                    
     puts it in at 25 percent.   But [due to] the allocation                                                                    
     that the  department has done -  putting whatever costs                                                                    
     into direct care or administrative  and general costs -                                                                    
     some  homes are  ... looking  at losing  a net  between                                                                    
     $30,000-$50,000,  with this  cap, just  because of  how                                                                    
     the  department allocated  ... [its]  costs on  ... our                                                                    
     cost-based negotiation statements.                                                                                         
     ... It  may not  have been what  we ...  walked through                                                                    
     the door and applied for, but  ... they kind of tell us                                                                    
     what categories  things are going  to be  allocated to,                                                                    
     and  they've allocated,  in some  homes, a  much higher                                                                    
     rate than  25 percent.  So,  this cap will come  in and                                                                    
     they  will  lose  their   reimbursement  rates  on  the                                                                    
     Medicaid side  - quite a  significant amount.   And so,                                                                    
     we're saying  it's not a  realized deal at  the moment;                                                                    
     just back  it off  and don't  implement.   Because it's                                                                    
     already passed, but it's due to go into effect July 1.                                                                     
CHAIR WILSON said she would like to know if the proposed                                                                        
regulations being worked on by the department will "affect this                                                                 
in any way."                                                                                                                    
9:35:27 AM                                                                                                                    
STACIE KRALY,  Senior Assistant Attorney General,  Human Services                                                               
Section, Office of the Attorney  General, Department of Law, said                                                               
she  would like  to  compartmentalize the  subjects  at hand  "so                                                               
we're all talking about the same thing."  She continued:                                                                        
     There's a  regulation that deals  with the  rate issue,                                                                    
     and what Representative McGuire  talked about is a cap.                                                                    
     ... That is what  we're talking about repealing through                                                                    
     this amendment.   And as you will see  in the proposal,                                                                    
     we've figured out a way,  legislatively, to ... do this                                                                    
     through  emergency regulations,  which is  an expedited                                                                    
     basis, so  that financial  fix for  what ...  we talked                                                                    
     about previously  as the APA  refinance will  be fixed.                                                                    
     What Ms. Oney  was just talking about, which  is the 25                                                                    
     percent  administrative  cost-based   rate  cap,  is  a                                                                    
     different regulatory  provision under  7 AAC  43, which                                                                    
     deals  with administrative  costs  related to  Medicaid                                                                    
     waiver clients.   That is not  a part of this  mix, and                                                                    
     it had ...  - from my understanding  in sitting through                                                                    
     all  of  these committee  meetings  -  not really  been                                                                    
     talked  about  in  the  grand scheme  of  things.    We                                                                    
     adopted those  regulations last year  and put a  cap on                                                                    
     this administrative  cost rate,  so there will  be some                                                                    
     adjustments there, with respect  to what people provide                                                                    
     us information ... [from  which] we'll calculate what's                                                                    
     called administrative cost rate base at 25 percent.                                                                        
     At  this  point  that's  not on  the  table,  but  it's                                                                    
     certainly something that could be  looked at - may need                                                                    
     to be  looked at - but  it hasn't' been a  part of this                                                                    
     mix.   ... So,  that's what we  passed last  June [and]                                                                    
     went into  effect [on] ...  May 16 of last  year, which                                                                    
     is effective  this coming year.   We gave them  a whole                                                                    
     year  to  ...  ease   into  this  new,  ...  structured                                                                    
CHAIR WILSON remarked  that Ms. Kraly is talking  about an amount                                                               
of 25 percent, but "we've heard  testimony that it's more than 25                                                               
percent."  She asked for clarification.                                                                                         
MR.  SHERWOOD  stated  that  when   the  department  changed  the                                                               
regulation,  it considered  the  existing  providers and  imposed                                                               
caps  not  just on  assisted  living  homes,  but on  all  waiver                                                               
providers.   He indicated  that the smaller  providers have  a 25                                                               
percent cap,  while "everyone else  has an  18 percent cap."   He                                                               
said the  department was looking  to establish  reasonableness of                                                               
administrative  and general  costs.   He said  it's a  compromise                                                               
made to ensure that the right amount is paid for a service.                                                                     
9:39:41 AM                                                                                                                    
CHAIR WILSON asked if there is an appeals process.                                                                              
MS.  KRALY   offered  her  understanding   that  the   rates  are                                                               
calculated,  and  if  there  is   a  dispute  over  the  rate,  a                                                               
"director-level review"  is provided within the  department.  She                                                               
said the cap  is firm, but there may have  to be some adjustments                                                               
made.  She said out of  the whole range of assisted living homes,                                                               
25  percent was  "within  the  ball park  of  what most  assisted                                                               
living homes operate under."                                                                                                    
CHAIR  WILSON declared,  "Since that  has  not been  part of  our                                                               
deliberations, I'm not going to touch that."                                                                                    
9:40:35 AM                                                                                                                    
REPRESENTATIVE  MCGUIRE  asked  Chair Wilson  to  reconsider  her                                                               
stand.  She explained that the  regulation process is one that is                                                               
supposed  to involve  the public  and the  stakeholders, and  she                                                               
said   she   believes  [the   department]   does   a  good   job.                                                               
Nevertheless, she  said it  is an  extremely complex  system, and                                                               
the  legislature   bears  the  responsibility  of   changing  the                                                               
Administrative Procedures Act  so that "real notice  gets out and                                                               
real input  gets in."   She stated  concern that  the regulations                                                               
are already  firm and will  be put in  action July 1,  [2005] and                                                               
the  legislature is  done with  session,  mid-May.   She said  if                                                               
there  is a  concern,  "there's  no way,  other  than through  an                                                               
emergency [regulation] process,  for you to come  back and adjust                                                               
that percentage."  She offered an example.                                                                                      
REPRESENTATIVE McGUIRE stated,  "An idea would be  to include the                                                               
repeal of  that [regulation] in  at least the initial  draft, and                                                               
let it  work through the process  and have some of  the testimony                                                               
at  least,  elicited, either  in  [the  House Judiciary  Standing                                                               
Committee]  or in  [the House  Finance Committee].   She  said at                                                               
that point  if the  repeal is too  controversial or  doesn't make                                                               
sense, it can be pulled out.                                                                                                    
CHAIR  WILSON stated  that she  would  keep her  decision as  is,                                                               
knowing that the bill would next  be heard in the House Judiciary                                                               
Standing Committee,  where Representative McGuire, as  the chair,                                                               
could do as she wishes.  She emphasized the need for speed.                                                                     
CHAIR  WILSON  reminded  committee  members  that  there  was  an                                                               
amendment before them and asked if there were any more concerns.                                                                
9:44:30 AM                                                                                                                    
REPRESENTATIVE CISSNA  said everyone is struggling  to understand                                                               
the math  involved and who  will and will  not be affected.   She                                                               
said her office is working on  creating a task force to meet with                                                               
the industry and  stakeholders, because "this is  pivotal for the                                                               
future of Alaska in a lot of  ways that we're just not looking at                                                               
9:46:33 AM                                                                                                                    
REPRESENTATIVE MCGUIRE thanked Chair Wilson.                                                                                    
CHAIR WILSON  said she  is hoping that  "the process  works," and                                                               
she indicated that she would like to continue to get feedback.                                                                  
REPRESENTATIVE CISSNA  stated her assumption that  "we're talking                                                               
about the  amendment and  that does not  include the  home health                                                               
CHAIR WILSON answered, "Not right now."                                                                                         
REPRESENTATIVE CISSNA stated her  understanding that [home health                                                               
care] was  part of [HB  193] and was  separated out, but  was not                                                               
disbanded.   She stated that  it is an  extraordinarily important                                                               
part of  the bill  because "it's the  preventative part"  and can                                                               
keep costs down.                                                                                                                
9:49:15 AM                                                                                                                    
CHAIR WILSON  said she is  concerned about  that.  She  said, "We                                                               
have seen  what happened to  the personal care  attendant program                                                               
that was supposed to save money, so  I would like to work on that                                                               
a little  bit more."   She added, "I  will address that,  but not                                                               
REPRESENTATIVE  CISSNA said,  "It actually  fits in  [HB] 193,  I                                                               
think, better.   And  it's got  to be addressed.   Because  it is                                                               
actually affecting  ... the  people that  are at  home.   I truly                                                               
believe that  we're forcing  people out of  their homes  and into                                                               
assisted living,  because they're qualified  for it; they  can go                                                               
there."  She offered further details.                                                                                           
CHAIR  WILSON removed  her objection  to Amendment  1 to  HB 114.                                                               
There being no further objections, Amendment 1 was adopted.                                                                     
9:50:32 AM                                                                                                                    
REPRESENTATIVE ANDERSON moved to report  HB 114, as amended, with                                                               
individual  recommendations, an  indeterminate  fiscal note,  and                                                               
proposed  intent  language.    There  being  no  objection,  CSHB
114(HES)  was  reported  from the  House  Health,  Education  and                                                               
Social Services Standing Committee.                                                                                             

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