Legislature(2005 - 2006)CAPITOL 120
04/22/2005 09:00 AM HEALTH, EDUCATION & SOCIAL SERVICES
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* first hearing in first committee of referral
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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 $181,000." 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 date]. CHAIR WILSON objected for discussion purposes. REPRESENTATIVE ANDERSON moved Amendment 1, which read as follows: 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. *Sec.2. 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 44.62.250. *Sec.3. Section 1 of the Act takes effect July 1, 2005. *Sec.4. Section 2 of this Act takes effect July 2, 2005. 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 setting. 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,  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 here." 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 care." 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 today." 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.