Legislature(2015 - 2016)SENATE FINANCE 532
01/27/2016 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB78 | |
| SB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 78 | TELECONFERENCED | |
| SB 74 | |||
| + | TELECONFERENCED |
SENATE BILL NO. 74
"An Act relating to permanent fund dividends; relating
to a medical assistance reform program; establishing a
personal health savings account program for medical
assistance recipients; relating to the duties of the
Department of Health and Social Services; establishing
medical assistance demonstration projects; and
relating to a study by the Department of Health and
Social Services."
10:01:41 AM
Co-Chair Kelly stated that Medicaid had become
unsustainable in its current form and needed to be
reformed. He noted that his office had hired a private
contractor to draft a Medicaid reform bill over the
interim, the result of which was SB 74. He relayed that the
heart of the bill was the case management system, otherwise
called managed care, and added that Alaska was one of only
12 systems that did not have a case management system. He
relayed that through a case management system the state
could regulate emergency facility use, make sure that
people were using cheaper, generic prescription drugs as
much as possible, restrict travel for care, and to keep
recipients from engaging in self-referral to specialists
when primary care physicians were sufficient. He said that
the bill contained a feasibility study that would direct
the administration toward privatization. He added that the
bill contained language on fraud prevention and recovery.
10:06:38 AM
Co-Chair MacKinnon pointed out to the committee that there
were individuals available online for questions.
10:07:22 AM
HEATHER SHADDUCK, STAFF, SENATOR PETE KELLY, began the
sectional analysis.
10:08:20 AM
AT EASE
10:11:55 AM
RECONVENED
Ms. Shadduck continued discussing the Sectional Analysis
for CSSB 74:
Section 1: Allows the Department of Health and
Social Services (DHSS) to enter into a contract
through the competitive bidding process under the
State Procurement Code for durable medical
equipment or specific medical services provided
in the Medicaid program.
Section 2: Requires the department to establish a
computerized eligibility verification system to
verify eligibility and to deter waste and fraud.
It also requires DHSS enter into a competitively
bid contract with a third-party vendor for the
eligibility verification system.
Section 3: Adds new sections establishing civil
penalties for false claims for medical assistance
and authorizing the Department of Health and
Social Services (the department) to assess civil
penalties against medical assistance providers.
Section 4: Requires DHSS to design, adopt, and
implement a medical assistance (Medicaid) reform
program. Requires the department to prepare and
submit a report about reforms, savings, and costs
related to the Medicaid program. Provides for a
definition of "telemedicine."
Ms. Shadduck discussed the sub-sections related
to Section 4:
(1) referrals to community and social support
services, including career and education
training services available through the
Department of Labor and
Workforce Development under AS 23.15, the
University of Alaska, or other sources;
(2) distribution of an explanation of medical
assistance benefits to recipients for health
care services received under the program;
(3) expanding the use of telemedicine for primary
care, behavioral health, and urgent care;
(4) enhancing fraud prevention, detection, and
enforcement;
(5) reducing the cost of behavioral health,
senior, and disabilities services provided to
recipients of medical assistance under the
state's home and community-based services waiver
under AS 47.07.045;
(6) pharmacy initiatives;
(7) enhanced care management;
(8) redesigning the payment process by
implementing fee agreements that include
(A) premium payments for centers of
excellence;
(B) penalties for hospital-acquired
infections, readmissions, and outcome
failures;
(C) bundled payments for specific episodes
of care; and
(D) global payments for contracted payers,
primary care managers, and case managers
for a recipient or for care related to a
specific diagnosis;
(9) stakeholder involvement in setting annual
targets for quality and cost-effectiveness;
(10) to the extent consistent with federal law,
reducing travel costs by requiring a recipient
to obtain medical services in the recipient's
home community, to the extent appropriate
services are available in the recipient's home
community.
(b) The department shall identify the areas
of the state where improvements in access to
telemedicine would be most effective in
reducing the costs of medical assistance and
improving access to health care services for
medical assistance recipients. The
department shall make efforts to improve
access to telemedicine for recipients in
those locations. The department may enter
into agreements with Indian
Health Service providers, if necessary, to
improve access by medical assistance
recipients to telemedicine facilities and
equipment.
(c) On or before October 15 of each year,
the Department of Health and Social Services
shall prepare a report and submit the report
to the senate secretary and the chief clerk
of the House of Representatives and notify
the legislature that the report is
available. The report must include
(1) realized cost savings related to
reform efforts under this section;
(2) realized cost savings related to
medical assistance reform efforts
undertaken by the department other than
the reform efforts described in this
Act;
(3) a statement of whether the
Department of Health and Social
Services has met annual targets for
quality and cost-effectiveness;
(4) recommendations for legislative or
budgetary changes related to medical
assistance reforms during the next
fiscal year;
(5) changes in federal laws that the
department expects will result in a
cost or savings to the state of more
than $1,000,000;
(6) a description of any medical
assistance grants, options, or waivers
the department applied for in the
previous fiscal year;
(7) the results of demonstration
projects the department has
implemented;
(8) legal and technological barriers to
the expanded use of telemedicine,
improvements in the use of telemedicine
in the state, and recommendations for
changes or investments that would allow
cost-effective expansion of
telemedicine;
(9) the percentage decrease in costs of
travel for medical assistance
recipients compared to the previous
fiscal year;
(10) the percentage decrease in the
number of medical assistance recipients
identified as frequent users of
emergency departments compared to the
previous fiscal year;
(11) the percentage increase or
decrease in the number of hospital
readmissions within 30 days after a
hospital stay for medical assistance
recipients compared to the previous
fiscal year;
(12) the percentage increase or
decrease in average state general fund
spending for each medical assistance
recipient compared to the previous
fiscal year;
(13) the percentage increase or
decrease in uncompensated care costs
incurred by medical assistance
providers compared to the percentage
change in private health insurance
premiums for individual and small group
health insurance;
(14) the cost, in state and federal
funds, for providing optional services
under AS 47.07.030(b).
(d) In this section, "telemedicine" means
the practice of health care delivery,
evaluation, diagnosis, consultation, or
treatment, using the transfer of medical
data through audio, visual, or data
communications that are performed over two
or more locations between providers who are
physically separated from the recipient or
from each other.
Section 5: Requires the legislature to approve
any new additional groups added to the Medicaid
program on or after March 23, 2010.
Section 6: Requires the department to design and
implement a demonstration project to reduce
nonurgent use of emergency departments by
Medicaid recipients.
Ms. Shadduck spoke to subsection 5 of Section 6:
(5) a process for assisting frequent users with plans
of care and for assisting patients in making
appointments with primary care providers within 96
hours after an emergency department visit;
10:20:49 AM
Ms. Shadduck continued with the sectional analysis:
Section 7: Requires the department and the attorney general
to annually prepare a report regarding fraud prevention,
abuse, prosecution, and vulnerabilities in the Medicaid
program.
Section 8: Requires the department to develop one or more
managed care or case management demonstration projects
through a contract with a third party. The managed care
program would be for individuals enrolled in all Medicaid
programs.
Ms. Shadduck spoke to the subsections in Section 8:
(b) The department shall enter into contracts with one
or more third-party primary care case managers,
managed care organizations, prepaid ambulatory health
plans, or prepaid inpatient health plans to implement
the project established under this section. The
contract must provide for a fee based on a per capita
expense that is fair and economical. The department or
administrator shall develop a comprehensive system of
prior authorizations for payment of services under the
project. However, prior authorization may not be
required for mental health or primary care services.
(c) The department or a third-party administrator
shall designate health care providers or one or more
teams of health care providers to provide services
that are primary care and patient centered as
described by the department for purposes of a project
under this section. The department or a third-party
administrator shall enter into necessary provider and
fee agreements. For primary care case managers, the
fee agreement must include an incentive-based
management fee system. The fee agreements may not be
based on a fee for service but must be based on
performance measures, as determined by the department.
(d) A project under this section must include
additional cost-saving measures that include
innovations to
(1) reduce travel through the expanded use of
telemedicine for primary care, urgent care, and
behavioral health services; to the extent legal
barriers prevent the expanded use of
telemedicine, the department shall identify those
barriers;
(2) simplify administrative procedures for
providers, including streamlined audit, payment,
and stakeholder engagement procedures.
(e) In this section, "department" means the Department
of
Health and Social Services.
10:23:20 AM
Section 9: Requires the department to conduct a study
analyzing the feasibility of privatizing certain
services.
Ms. Shadduck explained that the studies would vary from
item to item; exploration into privatizing the Alaska
Psychiatric Institute was one plan, another was be to
privatize certain divisions of juvenile justice facilities,
and certain pioneer homes.
Section 10: Requires the department to amend the state
Medicaid plan and apply for any waivers necessary to
implement the projects and programs described in the
bill. Requires the Commissioner of Health and Social
Services to certify to the revisor of statutes federal
approval of specified measures.
Section 11: Allows the department to adopt regulations
necessary to implement the changes made by the Act.
The regulations may not take effect before the dates
the relevant provision of the Act takes effect.
Section 12: Conditional effects.
Sections 13 - 17: Provides for effective dates for
provisions that require waiver and state plan
amendment approvals from the United States Department
of Health and Human Services.
Section 18: Provides an immediate effective date for
sections 9 - 12.
10:25:29 AM
Senator Olson asked about Section 8. He asked whether any
private entities had expressed interest in taking over
healthcare facilities in the state.
Ms. Shadduck answered in the affirmative. She said that
there was a lot of interest and excitement from the private
sector.
Senator Olson wondered whether the interest was coming from
national corporations, as opposed to an Alaska based
private company.
Ms. Shadduck replied that the process was legally
prescribed. The study would simply reveal feasibility on
the matter. She assumed that privatization would follow
state procurement code.
10:27:19 AM
Vice-Chair Micciche observed the fiscal notes attached to
the bill reflected savings beginning in FY18.
Ms. Shadduck responded that the fiscal notes had been
prepared by the administration in 2015 and could not speak
to why savings would not begin until FY18.
10:28:15 AM
Co-Chair Kelly encouraged the scrutinizing of the bill in
subcommittee. He said that there had been recent
developments that would result in serious savings in 2017,
that would impact the FY18 budget process. He furthered
that the finance committee would move quickly and reserve
substantive policy debates for subcommittee. He asserted
that Medicaid was a huge cost driver for the state, which
suggested that the state was doing a poor job in providing
the service. He concluded that the legislation would
deliver savings and better care.
10:31:07 AM
Vice-Chair Micciche felt that the effort would take
teamwork.
10:31:59 AM
Senator Olson asked about Section 6. He wondered how the
bill addressed the problem of the prescription of narcotics
in the emergency room.
Ms. Shadduck replied that there was currently a
prescription drug database, which would continue to receive
funding under the bill.
10:33:36 AM
Co-Chair MacKinnon assigned SB 74 a subcommittee comprised
of:
Co-Chair MacKinnon
Co-Chair Kelly
Vice-Chair Micciche
Senator Olson
Senator Geissel
Co-Chair MacKinnon clarified that both SB 78 and SB 74 were
being referred to the same subcommittee. She asserted that
the subcommittee would examine valuable pieces and
components of each in order to come up with a single
recommendation for the committee to consider. She offered
that the timeline was expected to be one month.
SB 74 was HEARD and HELD in committee for further
consideration.
Co-Chair MacKinnon discussed housekeeping.