Legislature(2005 - 2006)SENATE FINANCE 532
02/23/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB98 | |
| SB97 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 97 | TELECONFERENCED | |
| += | SB 98 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 98
"An Act making supplemental appropriations, capital
appropriations, other appropriations, and reappropriations;
amending appropriations; making appropriations to capitalize
funds; and providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
The Committee concluded hearing presentations from State agencies
outlining the appropriation requests.
Department of Health and Social Services
Item: 34
Section: 9(a)
RDU: Alaskan Pioneer Homes: Pioneer Homes
Supplemental Need: replacing unrealizable federal Medicaid
funds with receipt supported services. Lower receipts is due
to the voluntary nature of residents signing up for Medicaid.
-$1,200,000 federal funds
$1,200,000 receipt supported services
$0 Total Funds
JANET CLARKE, Director, Division of Administrative Services,
Department of Health and Social Services, noted this item was
addressed at the previous hearing. This request would allow
services to be continued to residents of the Pioneers' Homes. The
residents have paid these monies and the legislature has
continually reappropriated the funds to the Homes.
Item: 35
Section: 9(b)
RDU: Behavioral Health: Behavioral Health Medicaid Svc
Supplemental Need: Medicaid caseload growth above FY 05 budget
projections. At current expenditure rate, the existing
appropriation will be gone in April or May.
$2,653,700 general funds
$3,517,700 federal funds
$6,171,400 Total Funds
Ms. Clarke explained this increased need is the result of
expenditure growth of the behavioral health program, particularly
the out of state placements of children. This program is the
fastest growing segment of the Department's budget. This request is
for those costs over the amount projected would be required.
Co-Chair Green asked if the increased costs of the out of state
placement program are the result of additional patients served or
longer stays by patients.
Ms. Clarke replied that the Department is reviewing all causes of
the increases, which includes the number of children in out of
state placement and the longer stays.
Co-Chair Green asked if the daily rate has stayed consistent.
Ms. Clarke answered that the rates have changed some, but the
amount is insignificant and not the cause of the large cost
increases to operate the program.
Item: 36
Section: 9(c)
RDU: Health Care Services: Women's and Adolescents Services
Supplemental Need: Feds reduced FFY05 funding in the Breast
and Cervical Cancer screening program. The fund source change
will allow services to 1600 enrolled women that otherwise
would not be served due to federal funding reductions. Funds
will be required by late March or early April to continue the
program.
$500,000 general funds
-500,000 federal funds
$0 Total Funds
Ms. Clarke informed that when the FY 05 operating budget was
adopted, the Department was not aware that the federal funding for
this program would be reduced. Reducing the program would have
resulted in fewer women being screened for the cancers. A chart
included in the back-up material for this request [copy on file]
shows the increased number of women served through this program.
This request would restore funds to the program to prevent any
women from being eliminated from the program.
Co-Chair Green asked what services besides cancer screening are
paid through this program.
Ms. Clarke indicated she would provide this information, noting
that mammograms and the diagnostic analysis of those mammograms are
included.
Co-Chair Green was unaware that the screening program was separate
from the free health care program.
Ms. Clarke affirmed it is a separate program and has been fully
funded by the federal government for many years. This program
serves as the "gate" to receive Medicaid-paid treatment for those
eligible to receive it.
Co-Chair Green asked where the shortfall is listed in this
legislation.
Ms. Clarke replied the next item reflects the growth in health care
services.
Ms. Clarke reported that the program includes a clinical breast
examination, a mammogram and a pap smear. If abnormalities in a
patient's screening appear, that patient is provided care within
that Medicaid enrollment year.
Co-Chair Green asked why the federal funding was reduced.
Ms. Clarke replied that the federal grant award was reduced, but
did not know the reason.
Senator Olson asked the plan for the following fiscal year if the
federal funding were not reinstated.
Ms. Clarke replied that the Governor's proposed FY 06 budget has
requested reinstatement of federal funds. Otherwise, the program
would restrict the screening procedures to women over the age of
55, the mandatory age. Currently, any qualified woman over the age
of 18 is eligible for the screening.
Senator Olson asked about women under the age of 55 with signs of
potential cancer, such as a suspicious breast lump.
Ms. Clarke was unsure how the program would address these women.
She would research the matter.
Item: 37
Section: 9(d)
RDU: Health Care Services: Medicaid Services
Supplemental Need: Unable to implement cost containment
measures as quickly or to the extent planned: e.g.,
Prescription Drug List delay, Transportation, Rate Setting,
Cost Avoidance of Medicare Covered Drugs. At current
expenditure rate, the existing appropriation will be gone in
April or May.
$13,821,400 general funds
$16,888,300 federal funds
$30,709,700 Total Funds
Ms. Clarke stated this funding request is due to the Department's
inability to accomplish its budget goals of the previous year. In
FY 05, the Department proposed a total of approximately $45 million
of cost containment items, but has been able to implement only
approximately $11 million. The backup documentation details those
areas where the reductions were unrealized [copy on file].
Ms. Clarke highlighted two components, which demonstrate the
majority of the unrealized savings. The first involves anticipated
reduced transportation costs of the Medicaid program through the
use of the newly created State travel office. The Medicaid program
did not get enrolled in the travel office to enable the Department
to purchase bulk tickets until later in the fiscal year and thus
the Department was unable to realize the full amount of anticipated
cost reductions. The Department had also projected changes to the
preferred drug list would save $20 million; however the adjusted
projection is $8.4 million. This is due to the decision to exempt
behavior drugs from the preferred drug list restrictions. Inclusion
of the behavior drugs proved to be controversial.
Ms. Clarke noted savings for several other components were less
than the amounts projected.
Senator Hoffman recalled that during discussions on the FY 05
budget during the previous session he asserted the cost
containments were aggressive and recommended revising the amounts.
Of the projected $45 million, $30 million was not achieved. This is
less than 25 percent and reflects a "Far cry from good management."
Senator Hoffman asked the current status of the Medicaid travel
component in securing cost containment.
Ms. Clarke replied that the Department joined the State travel
office as of January 1, 2005, although the savings of this
collaboration were less than anticipated.
Senator Hoffman asked if savings from the travel office over the
next four months would reduce the $30 million of unrealized cost
containment.
Ms. Clarke answered it would. She noted that at the time the
Governor's supplemental appropriation request was drafted, the
Department had realized no savings from participation with the
travel office. This supplemental request would be updated to
reflect savings realized since participation began as well as
anticipated savings through the end of the fiscal year.
Senator Hoffman had expected the Department would achieve at least
50 percent of the projected cost containment efforts proposed to
the legislature. He reminded that he sponsored amendments to reduce
the funding reductions, as he had predicted they were unrealistic
Senator Olson asked the percentage of Medicaid funds spent for
behavioral drugs.
Ms. Clarke estimated the cost of behavioral drugs comprise one-
third of the Medicaid funds expended for prescription medication.
DWAYNE PEEPLES, Director, Division of Health Care Services,
Department of Health and Social Services, testified via
teleconference from Anchorage that the expense of behavioral drugs
is between 25 and 30 percent of the total prescription drug cost.
Item: 38
Section: 9(e)
RDU: Senior/Disabilities Svcs: Senior/Disabilities Medicaid
Svc
Supplemental Need: Unable to implement cost containment
measures as quickly or to the extent planned: e.g., Contract
Waiver Assessments, Medicaid Waivers, Reducing Respite
Utilization, Nursing Homes Preadmission Care Plans, $7,084,400
general funds and $7,606,300 federal = $16,690,700. Formula
growth over budgeted amount will cost $15,487,800 general
funds and $20,930,200 federal = $36,418,100. Primary growth is
in Personal Care Attendant Services. At current expenditure
rate, the existing appropriation will be gone in March.
$22,572,200 general funds
$30,536,600 federal funds
$53,108,800 Total Funds
Ms. Clarke stated this request includes two items. She noted cost
containment efforts were more successful for these. The Department
had projected $48.5 million of cost containment and refinancing
savings for the Senior and Disability Services Medicaid program and
expects would realize approximately two-thirds, or $32 million of
the initial projected savings.
Ms. Clarke informed that the second portion of this request is for
funding to cover continued formula growth above projections,
particularly for the Personal Care Attendant program. This program
continues to expand above the Department's estimate, despite the
audits conducted. January incurred the highest costs to date of
$7.4 million. She anticipated extensive discussions would be held
in the budget subcommittee to reevaluate policy choices for this
program. Other states have addressed the issue in various ways,
which would be reviewed.
Senator Dyson recalled that Commissioner Gilbertson expressed
concerns a year ago about the growth of this program. Those
discussions established the significant advantage for senior
citizens to remain in their homes rather than be institutionalized.
Senator Dyson understood that criteria was implemented to require
that patients must be qualified to enter a care facility in order
to qualify for this program.
Ms. Clarke learned that one section of the Department's regulations
stipulate that clients must require an institutional level of care
to qualify for this program. However, other regulations stipulate
that patients demonstrate one deficiency.
STEVE ASHMAN, Director, Division of Senior and Disabilities
Services, Department of Health and Social Services, reiterated that
two regulations apply. One requires that an eligible recipient have
one or more deficiencies in an activity required for daily living,
such as meal preparation.
Senator Dyson pointed out that regulations could be changed without
legislative approval, and asked why the Department had not taken
steps to control the costs of this program.
Mr. Ashman replied that regulations adopted the previous year
resulted in substantial outcry from patients, their families and
service providers. The Department has also conducted audits of the
program to determine what changes should be implemented to contain
costs.
Senator Dyson clarified the Department is gathering information
necessary to make decisions regarding the program, but requires
additional data before decisions could be made.
Mr. Ashman answered this was correct.
Senator Dyson remarked that this program should not be abused.
Families have a duty to provide some services; however, some
subsidy is necessary in situations where family members must take
time away from paying jobs to provide care. He asked the timeframe
for making decisions regarding the future guidelines of the
program.
Mr. Ashman replied that the audits should be completed by mid-March
and that some preliminary data is already available.
Ms. Clarke stressed the Department's intent that changes made to
the program are acceptable to the legislature. This should be
determined before any changes are implemented to avoid complaints.
Therefore, the matter would be discussed in the budget subcommittee
meetings.
Senator Dyson commented that the chair of that budget subcommittee
is experienced on this issue. He requested that a copy of the audit
be forwarded to the chair of the Senate Health, Education and
Social Services Committee upon completion to allow a hearing on the
topic to be scheduled in that committee. The only manner to specify
legislative intent is through statutory changes, resolutions or
direction given through appropriations. He asked the Department to
relay direction to the legislature on how the legislature should
proceed.
Co-Chair Green asked if a change of statute would be appropriate.
Mr. Ashman responded that the language in statute only provides
that the service is an option.
Co-Chair Green surmised that the qualification requirements could
be changed without legislation.
Senator Bunde sympathized that complaints are made when difficult
decisions are made.
Senator Hoffman reiterated that the appropriations requested for
items #36 and #37 total almost $95 million, which demonstrate that
the Department "missed its target" for cost containment. The
documentation for these requests indicates the reductions were not
achieved because changes were not implemented in a timely manner.
He asked if the proposed enabling changes would be implemented by
the start of FY 06 and subsequently reflected in the FY 06
operating budget.
Ms. Clarke replied that some of the enabling changes would be
implemented before the start of FY 06 although others would not.
She exampled that the projected $4 million savings through a
nursing homes preadmission care plan would not be realized. This
plan was envisioned to prevent Medicaid expenditure related to
patients entering expensive nursing home facilities unnecessarily.
However, the plan failed to consider that other Medicaid eligible
patients would be admitted to those beds and that the only way to
eliminate that expense would be to eliminate those bed spaces.
Senator Hoffman asked the percentage of the targeted cost
containment would be realized for FY 06.
Ms. Clarke responded that the Department has achieved approximately
$41 million in savings.
Senator Hoffman remarked that the total projected cost containment
was $93 million.
Ms. Clarke clarified that a significant portion of the funding
requested for the Senior/Disabilities Services BRU is not related
to anticipated cost containment, but rather reflects the rate of
growth in the cost of the program.
Co-Chair Green ordered the bill HELD in Committee.
AT EASE 9:34:01 AM / 9:35:45 AM
Co-Chair Wilken chaired the remainder of the meeting.
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