Legislature(2013 - 2014)SENATE FINANCE 532

04/04/2013 02:30 PM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ HB 22 BOARD OF MARINE PILOTS TELECONFERENCED
+ HB 26 EXTEND BOARD OF PUBLIC ACCOUNTANCY TELECONFERENCED
+= SB 88 ALASKA NATIVE MEDICAL CENTER HOUSING TELECONFERENCED
+= SB 18 BUDGET: CAPITAL TELECONFERENCED
Moved Out of Committee 4/4/13 9:00 a.m. Meeting
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 88                                                                                                            
                                                                                                                                
     "An Act  authorizing the state bond  committee to issue                                                                    
     certificates   of   participation    to   finance   the                                                                    
     construction  and equipping  of residential  housing to                                                                    
     serve  the  Anchorage  campus   of  the  Alaska  Native                                                                    
     Medical  Center;  and  authorizing  the  Department  of                                                                    
     Administration   to   enter   into   a   lease-purchase                                                                    
     agreement for  the benefit of the  Alaska Native Tribal                                                                    
     Health Consortium."                                                                                                        
                                                                                                                                
2:44:46 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  noted that  the  bill  had been  previously                                                                    
discussed in  committee. He believed that  the question that                                                                    
remained  before  the  committee  was  whether  the  project                                                                    
should be paid for up  front with capital dollars, or should                                                                    
it be bonded  for, with interest being paid on  the bond. He                                                                    
admitted  that  the  state  was   short  funds  for  capital                                                                    
projects, but  that the project proposed  in the legislation                                                                    
was financially feasible because of solid revenue sources.                                                                      
                                                                                                                                
2:46:37 PM                                                                                                                    
Co-Chair Meyer  queried whether  the department  assigned to                                                                    
fiscal note number  1, for $35 million  in estimated capital                                                                    
costs, should  be the Department of  Administration (DOA) or                                                                    
the Department of Revenue (DOR).                                                                                                
                                                                                                                                
2:47:25 PM                                                                                                                    
                                                                                                                                
ANGELA  RODELL,  DEPUTY   COMMISSIONER,  TREASURY  DIVISION,                                                                    
DEPARTMENT  OF REVENUE,  replied that  the state  would sell                                                                    
certificates of participation by  DOR through the State Bond                                                                    
Committee. She relayed that  the certificate represented the                                                                    
sale of  participation in a  lease agreement.  She furthered                                                                    
that DOA  would then  take the  proceeds of  the transaction                                                                    
and hold them; the department  would receive invoices as the                                                                    
project was under construction and  would be in contact with                                                                    
the Department of Health and  Social Services to ensure that                                                                    
the expenses  were what  had been agreed  upon in  the lease                                                                    
agreement. She  stated that once  the facility was  open DOR                                                                    
would lease  the building from  DOA for 15 years;  the lease                                                                    
payments made  would be  used to  repay the  certificates of                                                                    
participation.  She stressed  that  the  amount of  Medicaid                                                                    
savings generated through use  of the facility would reflect                                                                    
positively on the state's general fund.                                                                                         
                                                                                                                                
2:49:20 PM                                                                                                                    
                                                                                                                                
WILLIAM  STREUR,  COMMISSIONER,  DEPARTMENT  OF  HEALTH  AND                                                                    
SOCIAL SERVICES, commented that  approximately 40 percent of                                                                    
the services currently provided  to Alaska Natives were done                                                                    
through a  native run system,  which left 60 percent  on the                                                                    
table. He  said that assuming  that 20 percent  of specialty                                                                    
services were not available within  the tribal system, or in                                                                    
Alaska, a 40 percent doubling  of services could be provided                                                                    
by  the tribal  system. He  thought that  by moving  as many                                                                    
services as  possible over to  the tribal system,  the state                                                                    
would  receive   a  100  percent  match   from  the  federal                                                                    
government,  resulting  in  less spending  of  general  fund                                                                    
dollars.  He noted  that that  the bill  was a  step towards                                                                    
getting  tribal  members  medical  help  within  the  tribal                                                                    
system.  He  shared  that  receiving  services  consistently                                                                    
within the tribal system would  result in continuity of care                                                                    
for  recipients.  He  pointed  out that  there  was  a  $1.1                                                                    
million  projected  savings  for general  child  health.  He                                                                    
relayed that many surgeries  currently being performed could                                                                    
be  done through  the  tribal system,  and  would allow  for                                                                    
better  care  prior to  and  immediately  after surgery.  He                                                                    
noted that ear, nose, and  throat problems were prevalent in                                                                    
rural  communities. He  thought that  the expanded  capacity                                                                    
could  result  in  a  savings   of  $650,000.  He  spoke  to                                                                    
telemedicine, which  he believed was underutilized.  He said                                                                    
that travel expenses  were ever increasing in  the state and                                                                    
that  the memorandum  of understanding  had  to include  the                                                                    
continued development of telemedicine capabilities.                                                                             
                                                                                                                                
2:54:51 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  queried what was included  in the memorandum                                                                    
of understanding.                                                                                                               
                                                                                                                                
Commissioner  Streur listed  the  items  in the  memorandum:                                                                    
cost based  reimbursement for Medicaid recipient's  room and                                                                    
board,  preferential  status   for  Medicaid  recipients  to                                                                    
assure priority  access, required necessary  transport, pre-                                                                    
maternal  Medicaid  services.  He  believed  that  the  best                                                                    
Benefit  to the  state  would  be to  ensure  that the  next                                                                    
generation received the best possible care.                                                                                     
                                                                                                                                
2:55:31 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer inquired  if the committee had a  copy of the                                                                    
memorandum of understanding.                                                                                                    
                                                                                                                                
Commissioner  Streur  replied  that  he  could  provide  the                                                                    
document to the committee.                                                                                                      
                                                                                                                                
2:55:43 PM                                                                                                                    
                                                                                                                                
Commissioner Streur  continued to discuss the  memorandum of                                                                    
understanding.  He  said  that  the designated  use  of  the                                                                    
facility must  be maintained  for the term  of the  bond. He                                                                    
stated  that access  and utilization  of  the services  must                                                                    
continue to be developed under the terms of the bond.                                                                           
                                                                                                                                
2:57:39 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer reiterated  his  desire for  a  copy of  the                                                                    
memorandum   of   understanding.    He   requested   further                                                                    
clarification concerning  the $35  million in  capital funds                                                                    
under  DOA, rather  than  DOR, as  reflected  in the  fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
2:57:54 PM                                                                                                                    
                                                                                                                                
Ms. Rodell replied that once  the bonds were sold, DOR would                                                                    
not administer  the proceeds; the  proceeds would  be turned                                                                    
over to  DOA because  DOA would be  entering into  the lease                                                                    
agreements on the state's behalf.                                                                                               
                                                                                                                                
2:59:05 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  welcomed   Senator  Bishop  and  Vice-Chair                                                                    
Fairclough to the committee table.                                                                                              
                                                                                                                                
2:59:33 PM                                                                                                                    
                                                                                                                                
Co-Chair Kelly inquired whether  Alaska Native Tribal Health                                                                    
Consortium  (ANTHC)  would be  able  to  pay for  additional                                                                    
costs if the project ran over budget.                                                                                           
                                                                                                                                
Ms.  Rodell referred  the  question  to representation  from                                                                    
ANTHC.                                                                                                                          
                                                                                                                                
3:00:03 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough queried  how the  state would  ensure                                                                    
that contractors received their payments.                                                                                       
                                                                                                                                
Ms. Rodell replied  that the invoices of  payment would come                                                                    
to  DOA,  which  she  expected  would  coordinate  with  the                                                                    
Department of Health and Social Services (DHSS).                                                                                
                                                                                                                                
3:01:14 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  wondered how  the cost  estimation of                                                                    
the  project   had  been   determined  before   the  project                                                                    
contractor had been selected.                                                                                                   
                                                                                                                                
Commissioner Streur referred the question to ANTHC.                                                                             
                                                                                                                                
3:01:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair   Fairclough  asked   if  the   commissioner  had                                                                    
reviewed  the cost  estimate documents  associated with  the                                                                    
project.                                                                                                                        
                                                                                                                                
Commissioner  Streur   replied  yes.   He  added   that  the                                                                    
department  would continue  to  review  blueprints and  cost                                                                    
estimates along with DOR and DOA.                                                                                               
                                                                                                                                
3:02:37 PM                                                                                                                    
VALERIE  DAVIDSON, ALASKA  NATIVE  TRIBAL HEALTH  CONSORTIUM                                                                    
(ANTHC), testified  that the ANTHC would  be responsible for                                                                    
operation and maintenance of  the facility once construction                                                                    
was complete.  She shared that the  facility design included                                                                    
six floors; 5 of the floors  would be financed by the state,                                                                    
but ANTHC would finance the  6th floor for patient education                                                                    
with  a particular  emphasis  on  well-baby and  well-mother                                                                    
care. She  relayed that tele-medical services  would be made                                                                    
available in  order to help homesick  patients during longer                                                                    
hospital  stays  far  from  home.   She  stated  that  ANTHC                                                                    
recognized the  need for a  meaningful partnership  with the                                                                    
state and was currently financing  part of the facility. She                                                                    
highlighted  that  ANTHC  had a  positive  track  record  of                                                                    
building  facilities on-time  and under  budget. She  shared                                                                    
that she had negotiated a  number of agreements for services                                                                    
that had  been clear  and effective. She  noted Commissioner                                                                    
Streur  had  been  a  diligent advocate  for  the  state  in                                                                    
negotiations. She  stated that the  issue of access  to care                                                                    
came up at every board meeting;  the key to better access to                                                                    
healthcare  for  people  living  outside  of  Anchorage  was                                                                    
housing.                                                                                                                        
                                                                                                                                
3:08:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  restated the  question raised  by Vice-Chair                                                                    
Fairclough concerning  the fiscal noted for  $35 million. He                                                                    
asked how the contracts would be awarded.                                                                                       
                                                                                                                                
Ms.  Davidson replied  that in  addition to  co-managing the                                                                    
Alaska  Native Medical  Center, the  consortium had  a large                                                                    
construction sector  of its organization. She  said that the                                                                    
consortium had  a short  list of  contractors that  would be                                                                    
meeting in  the future  to examine opportunities  and review                                                                    
proposals.                                                                                                                      
                                                                                                                                
3:09:49 PM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly  queried  if  ANTHC  would  cover  any  cost                                                                    
overruns.                                                                                                                       
                                                                                                                                
Ms.   Davidson  replied   that   cost   overruns  were   not                                                                    
anticipated; however,  if additional funds  became necessary                                                                    
to finish  the project,  ANTHC would  not request  the funds                                                                    
from the state.                                                                                                                 
                                                                                                                                
3:10:24 PM                                                                                                                    
Co-Chair  Meyer  inquired  if language  pertaining  to  cost                                                                    
overruns   had   been   included  in   the   memorandum   of                                                                    
understanding.                                                                                                                  
                                                                                                                                
Ms. Davidson replied in the affirmative.                                                                                        
                                                                                                                                
3:10:34 PM                                                                                                                    
                                                                                                                                
Senator Bishop directed  the committee to Page 2,  line 8 of                                                                    
the bill. He requested assurances  on the record that Alaska                                                                    
hire would be at the forefront of the hiring process.                                                                           
                                                                                                                                
Ms. Davidson  responded that  hiring Alaskans  was important                                                                    
on all ANTHC  projects throughout the state.  She added that                                                                    
the consortium had  a tribal preference policy  as well. She                                                                    
stated  Alaskans  took pride  in  working  on projects  that                                                                    
would directly benefit Alaskans.                                                                                                
                                                                                                                                
3:12:49 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy inquired  if there had been  survey done to                                                                    
highlight  why patients  would use  the new  facility rather                                                                    
than  receive   services  at  already   established  medical                                                                    
centers.                                                                                                                        
                                                                                                                                
Ms.    Davidson    responded   that    conversations    with                                                                    
beneficiaries that had chosen  to receive care elsewhere had                                                                    
revealed several things: By  law, Medicaid required patients                                                                    
to be offered a choice as  to where they received care; many                                                                    
patients had  requested ANTHC centers  in order to  be close                                                                    
to  family.  She  added  that   ANTHC  centers  allowed  for                                                                    
patients to be  connected to their communities  in ways that                                                                    
other  places  could  not  provide.  She  pointed  out  that                                                                    
transportation issues  were one  of the  greatest challenges                                                                    
for people  traveling to Anchorage for  health services. She                                                                    
stressed that  ANTHC would  provide transportation  from the                                                                    
airport  to  the  housing  facility, and  that  all  of  the                                                                    
services the patient would need  could be provided under one                                                                    
roof.                                                                                                                           
                                                                                                                                
3:16:09 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy  queried if  there had  ever been  a formal                                                                    
survey  conducted that  compared  the  services provided  in                                                                    
ANTHC facilities with services provided by other hospitals.                                                                     
                                                                                                                                
Ms.  Davidson stated  that  she  did not  know  of a  formal                                                                    
survey.  She  said  that the  consortium  conducted  regular                                                                    
customer  experience surveys,  which were  then compared  to                                                                    
surveys conducted by other facilities.                                                                                          
                                                                                                                                
3:16:46 PM                                                                                                                    
                                                                                                                                
Senator  Dunleavy appreciated  that  the federal  government                                                                    
required  that  a choice  be  given  to patients  concerning                                                                    
where they would receive their  medical care. He wondered if                                                                    
the people  would still chose  to go to  Providence Hospital                                                                    
if they were given the choice of the new facility.                                                                              
                                                                                                                                
Ms.  Davidson replied  that there  were services  that ANTHC                                                                    
was not  yet at capacity  to provide. She stated  that, even                                                                    
with all of the expansion  described in their business plan,                                                                    
the  ANTHC facility's  ability to  accommodate patients  was                                                                    
finite.  She noted  that there  was $30  million in  general                                                                    
funds  that went  to non-tribal  facilities in  Anchorage in                                                                    
order   to  provide   care   for   Alaska  Native   Medicaid                                                                    
beneficiaries.  She  estimated  that building  the  facility                                                                    
would  result in  an  annual savings  of  $8.8 million.  She                                                                    
pointed  out that  ANTHC operated  the only  level 2  trauma                                                                    
center in  Alaska and  was a "magnet  hospital" with  a high                                                                    
level of quality care provided by nursing staff.                                                                                
                                                                                                                                
3:20:05 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy wondered  if the facility would  be able to                                                                    
accommodate  patients   at  the  same  rate   as  Providence                                                                    
Hospital.                                                                                                                       
                                                                                                                                
Ms. Davidson replied yes.                                                                                                       
                                                                                                                                
3:20:37 PM                                                                                                                    
                                                                                                                                
Senator  Hoffman queried  how  long it  had  been since  Ms.                                                                    
Davidson had  been staff  to a  previous Senate  Finance Co-                                                                    
Chair.                                                                                                                          
                                                                                                                                
Ms. Davidson replied that it had been 27 years.                                                                                 
                                                                                                                                
3:21:23 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough opined that  more general fund dollars                                                                    
would expedite the process.                                                                                                     
                                                                                                                                
3:21:46 PM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly MOVED  to REPORT  SB 88  28-LS0629\N out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
3:22:06 PM                                                                                                                    
                                                                                                                                
SB  88  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation  and  with  a fiscal  impact  note  from  the                                                                    
Department  of Administration,  a  fiscal  impact note  from                                                                    
Department  of  Health and  Social  Services,  and a  fiscal                                                                    
impact note from the Department of Revenue.                                                                                     
                                                                                                                                
3:22:14 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:26:21 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

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