Legislature(2001 - 2002)

05/10/2002 10:19 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     CS FOR SENATE BILL NO. 55(STA)                                                                                             
     "An Act  relating to the Alaska  Pioneers' Home and  the Alaska                                                            
     Pioneers'  Homes  Advisory Board;  relating  to admissions  to,                                                            
     payment assistance  for, and transfers from the  home; relating                                                            
     to  housing and  services for  veterans; and  providing for  an                                                            
     effective date."                                                                                                           
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
MAJOR GENERAL PHIL OATES,  Adjutant General/Commissioner, Department                                                            
of Military  and Veterans  Affairs stated  that the State's  current                                                            
budget  situation  requires  more efficiency  in  State government,                                                             
particularly  in addressing  the needs of  veterans. He stated  that                                                            
Alaska,  while  having the  second  highest  per capital  number  of                                                            
veterans in the  Union; is the only state that does  not have, or is                                                            
not in the process  of building, a Veterans' Home.  He stressed that                                                            
the  relationship  between  the  State  and  the  military  deserves                                                            
attention because the military is a "huge economic engine."                                                                     
Major General  Oates informed the Committee that this  bill provides                                                            
a  method of  efficiency  in addressing  the  needs  of the  State's                                                            
veterans by proposing  to provide Veterans Home services  within the                                                            
Pioneers' Homes'  structure. He stated this would  be "cheaper" than                                                            
building  and operating  a separate  facility, and  that having  six                                                            
homes  located throughout  the  State  provides an  opportunity  for                                                            
veterans to be cared for closer to home.                                                                                        
COMMISSIONER    JIM    DUNCAN,    Commissioner,     Department    of                                                            
Administration,  informed  the  Committee that  the  intent of  this                                                            
legislation is to recognize  the service that veterans have provided                                                            
to both the State  and the country by including veterans  within the                                                            
Pioneers'  Home system. He  continued that  in addition to  changing                                                            
the name  of the  Pioneers'  Homes to  the Pioneers'  and  Veterans'                                                            
Homes, the  Department recommends  providing a veteran's  preference                                                            
for a certain  number of the system's  600 beds. He reiterated  that                                                            
using existing  infrastructure in this manner would  be an efficient                                                            
way to provide care to Alaska's veterans.                                                                                       
Commissioner  Duncan  stated  that  as  part  of  this arrangement,                                                             
veterans  within the  system  would be  entitled  to access  federal                                                            
veterans benefits. He specified  that no more than 30 percent of the                                                            
beds in any one facility  and no more than 21 percent, which equates                                                            
to 126  beds, of  the total  number of  the system's  beds would  be                                                            
designated  as veterans'  preference. He elaborated  that there  are                                                            
currently  95  veterans  in  the  Pioneers'  Home  System;  however,                                                            
system-wide, the Pioneers' Home currently has 100 vacant beds.                                                                  
Commissioner Duncan  informed the Committee that this  bill does not                                                            
address the  need to change the name  of the Pioneers' Home  system;                                                            
however,  the name  change  is "critical  if  we are  going to  move                                                            
forward"  as the  federal  Veterans  of Administration  (VA)  system                                                            
requires  the  facility's  name  to  reflect  that  the  State  home                                                            
provides  benefits to veterans.  He stated  that the name change  is                                                            
crucial  in  allowing  veterans  in the  Pioneers'  Home  system  to                                                            
receive the federal benefits  they are entitled to, and he urged the                                                            
Committee to  include the word "veterans"  in the facility's  title.                                                            
Commissioner Duncan  stated that negotiations are  underway with the                                                            
VA to develop a memorandum  of understanding that would maintain the                                                            
integrity of the  Pioneers' Home system while allowing  the veterans                                                            
to receive their federal  benefits. He noted that with the exception                                                            
of  the  name  of the  facility,  the  bill  is  acceptable  to  the                                                            
Commissioner  Duncan explained  that the  Department's fiscal  note,                                                            
dated May 1, 2002  includes a study, projected to  cost $250,000, to                                                            
determine how  to meet the needs of  those veterans who do  not meet                                                            
the requirements  for admittance  to the  Pioneers' Home system.  He                                                            
stated that  the fiscal note additionally  projects that  if the 100                                                            
beds currently vacant in  the Pioneers' Homes are occupied in FY 03,                                                            
the facility would require  $2.9 million in general funds as well as                                                            
$2.6 million  generated from  Pioneers' Home  resident receipts,  in                                                            
order to operate.  He stressed that  when the veterans in  the Homes                                                            
begin to receive  their federal VA  benefits, the amount  of general                                                            
funds required  would decrease  as the federal  VA money is  used to                                                            
supplement the  cost of the veterans' care. He stated  that by FY08,                                                            
resident receipts would  increase sufficiently to allow general fund                                                            
requests to decrease to $1.1 million.                                                                                           
Senator Hoffman  asked what  the $4 million  listed in the  personal                                                            
services category of the fiscal note, includes.                                                                                 
Commissioner Duncan  responded that the majority of  that expense is                                                            
to  provide  the  necessary  staffing   to  properly  care  for  the                                                            
residents  of the Homes, most  of whom, due  to age, require  a high                                                            
level of care.                                                                                                                  
Senator  Hoffman   asked  for  further  information   regarding  the                                                            
$250,000 contractual services  expense reflected in the fiscal note.                                                            
JAMES  L.KOHN,  Director, Division  of  Alaska  Longevity  Programs,                                                            
Department  of  Administration,  specified  that  personal  services                                                            
include  the  cost  of  providing  direct  patient   care;  whereas,                                                            
contractual services  include such things as increased  food service                                                            
costs, physical therapy,  cleaning supplies, and personal items like                                                            
adult diapers that the Homes provide.                                                                                           
Senator  Hoffman  asked the  Department  to provide  a  list of  the                                                            
communities in which eligible veterans reside.                                                                                  
Commissioner Duncan stated  that approximately 30 percent of the 180                                                            
people on the  waiting list for the Pioneers' Home  are veterans. He                                                            
stated  that  the   Department  would  provide  the   names  of  the                                                            
communities where these people reside.                                                                                          
Senator  Leman  voiced   support  for  this  legislation;   however,                                                            
questioned whether 128  new positions would be required to service a                                                            
fully occupied  system. He asked whether  alternative methods  might                                                            
be  available  to lessen  the  expense of  providing  personal  care                                                            
service without lowering  the quality of care the residents deserve.                                                            
Commissioner Duncan  elaborated that the average age  of individuals                                                            
on the  Homes'  waiting list  is approximately  83  years, and  that                                                            
people this  age require a  high level of  direct care on a  twenty-                                                            
four hour basis. He stated  that medical standards such as licensing                                                            
must be maintained  and that the figures in the fiscal  note are not                                                            
inflated.  He stressed  that the  Department supports  the level  of                                                            
funding detailed  in the  fiscal note in order  to provide  the care                                                            
required to operate a fully  occupied system; however, he stated the                                                            
Department would entertain  lowering their occupancy expectations in                                                            
order "to get this program moving forward."                                                                                     
Commissioner  Duncan  shared with  the  Committee that  a  "separate                                                            
problem"  exists  in the  Pioneers'  Home operating  budget  funding                                                            
which is  currently being  addressed in a  House of Representatives                                                             
and  Senate  Budget Conference  Committee.  He  disclosed  that  the                                                            
conference  committee   is  considering  a  "direct   reduction"  of                                                            
approximately  $204,000  in the  Pioneers' Homes'  operating  budget                                                            
from  FY02 to  FY03 and  an additional  shortage  of  $126,000 as  a                                                            
result  of   an  anticipated  $300,000   reduction  of  unallocated                                                             
Department  of Administration   general funds.  He  stated that  the                                                            
total anticipated FY03  Pioneers' Home operating budget shortfall of                                                            
$330,000  "translates  to about  ten  less beds  than  we have  this                                                            
Commissioner Duncan  stated that with an operating  budget shortfall                                                            
of  $330,000, it  would  be "a  struggle"  to maintain  the  current                                                            
number of beds  in the Pioneers' Homes. He stated  that if no fiscal                                                            
note is  attached to this  bill, "you would  have the commitment  to                                                            
the veterans, we'd have  the preference, we wouldn't have more beds,                                                            
we wouldn't be  serving more veterans, we'd be serving  less because                                                            
we have  an operating  budget that  is down."  He exampled how  many                                                            
beds would be  available at different levels of funding,  and stated                                                            
that  "there  are  variations"  of  the  number  of  beds  that  the                                                            
Department and the Legislature could discuss.                                                                                   
General  Oates  informed  the  Committee  that the  State  would  be                                                            
required to  provide land and to spend  four to six million  dollars                                                            
"up-front" before any federal  funds could be leveraged to construct                                                            
a stand-alone  100-bed  Veterans' Home.  He stated  that instead  of                                                            
having  a Veterans'  Home  in conjunction  with  existing  Pioneers'                                                            
Homes  operating   in  various  locations  around   the  State,  the                                                            
operating costs  of a single stand-alone  facility would  exceed the                                                            
fiscal note  amounts detailed in this  bill. He urged the  Committee                                                            
to  leverage existing  the  Pioneers'  Home infrastructure  to  more                                                            
efficiently and better serve the needs of the State's veterans.                                                                 
Senator  Leman  asked  for confirmation   that "the  unit  cost"  to                                                            
support  a stand-alone  Veterans' Home  is higher  than combining  a                                                            
Veterans' Home with the existing Pioneers' Homes system.                                                                        
General   Oates   affirmed   that  operating   costs   and   federal                                                            
requirements would "drive the costs higher."                                                                                    
Senator Leman commented  that operating the Pioneers' Home system is                                                            
"very expensive."                                                                                                               
Commissioner  Duncan clarified  that using  existing infrastructure                                                             
and  staff  lessens the  expense  because  the  State would  not  be                                                            
required to  "build more beds," or  "add more central structure"  as                                                            
facilities  are  in  place.  He  explained  that  this  legislation                                                             
proposes  to use existing  structure  and to provide  more staff  to                                                            
adequately serve  the increased number of residents  who would "fill                                                            
the beds that are sitting  vacant." He stated this is why it is less                                                            
expensive than building a stand-alone facility.                                                                                 
Senator Wilken commented  that, "we always hear that we are the only                                                            
state  without a  Veterans' Home,  but we  are the  only one with  a                                                            
Pioneers' Home."  He stated that on  "face-value it makes  sense" to                                                            
combine the two facilities;  however, "while the cost of maintaining                                                            
the  Pioneers'  Homes is  expensive,"  it  serves a  very  important                                                            
service to Alaskans and  he expressed he does not "want to hurt" the                                                            
Pioneers' Home by doing "too much too soon."                                                                                    
Senator  Wilken stated,  "there is  no question  that the  Pioneers'                                                            
Homes over  the last two  decades" have undergone  pressures  by the                                                            
fact that people  are "physically living longer, but  mentally we're                                                            
not" causing  the Homes to adapt to  changing needs. He voiced  that                                                            
this  transition   would  change   the  Homes'  mode  of   operation                                                            
"dramatically in the next ten years."                                                                                           
Senator  Wilken reiterated,  that, "we  are not  ready to make  this                                                            
decision."  He referenced  a Deputy  Chief of  Staff, Department  of                                                            
Veterans Affairs  Fact Sheet, faxed  date of April 2, 2002  [copy on                                                            
file] that specifies  that in order to receive federal  "grant funds                                                            
for  either construction   or per  diem payment  for  nursing  home,                                                            
domiciliary, or adult day  health care, the State must apply for the                                                            
grant and meet  VA standards." He asked the testifiers  if the State                                                            
meets those standards.                                                                                                          
Commissioner Duncan responded  that the State's discussions with the                                                            
VA are  "outside  the box"  in that  the discussion  involves a  new                                                            
approach  to establishing  a  Veterans'  facility.  He referred  the                                                            
Committee to a  Memorandum For the Record, fax dated  April 11, 2002                                                            
[copy on file] that addresses  these concerns by stating that "it is                                                            
agreed that  the VA and  the State will  work cooperatively  to seek                                                            
solutions  to the issues  that exist including,  if needed,  federal                                                            
legislation  which would  allow for  VA support  of veterans  in the                                                            
Alaska Pioneers'  & Veterans'  Home while  preserving the  ownership                                                            
and authority  of the State to operate  and manage this unique  long                                                            
term  care  program."  He  stated  that  difficulties   might  arise                                                            
regarding  VA regulations  because  of such  things  as the  State's                                                            
Pioneers' Home residency  requirement; however, he noted that the VA                                                            
is committed  to working with the  State and adjustments  to some of                                                            
the requirements is a possibility.                                                                                              
Senator Wilken  acknowledged that the project is in  the negotiation                                                            
process;  however,  asked how  the VA  requirement  of not  allowing                                                            
"veterans  to mingle  with other  residents  of the  home" would  be                                                            
Mr. Kohn  responded that  this segregation  is being discussed  with                                                            
the VA and a waiver  might be required to "work around"  this issue.                                                            
He stated  that  the VA  understands the  State's  position and  has                                                            
determined  that segregation  might not be  in the best interest  of                                                            
the veterans in the Homes.  He informed the Committee that the State                                                            
and  the VA  meet to  discuss  this project  on a  regular  two-week                                                            
Senator  Wilken  commented,  "we  are  under  negotiations  on  that                                                            
issue." He  referenced language on  the Fact Sheet that states,  "In                                                            
other words,  when Senior Veterans  Home (SVH) nursing home  care is                                                            
provided in only  a portion of an existing facility,  other types of                                                            
care  or  programs   cannot  be  conducted  in  areas  specifically                                                             
designated  for  the  SVH."  He asked  if  this  "very restrictive"                                                             
language is also under negotiation.                                                                                             
The Department concurred it is under negotiation.                                                                               
Senator  Wilken referenced  other  Fact Sheet  language that  reads,                                                            
"The  State is  encouraged  to  continue  to meet  with  VA to  seek                                                            
alternatives,  even thought  the option of  dedicating a portion  of                                                            
the Pioneer  Homes for veterans may  not yet be available."  Senator                                                            
Wilken stated  that this language implies that the  State and VA are                                                            
continuing to talk about segregation.                                                                                           
Senator Wilken offered  another example that the project is still in                                                            
"a  state of  flux"  by referencing  the  six  goals listed  on  the                                                            
State's "Facts  & Estimates Regarding VA Participation  in Pioneers'                                                            
& Veterans' Homes"  [copy on file]. He asserted that  all six of the                                                            
goals "are under negotiation."                                                                                                  
Senator Wilken  asserted that VA payments  may improve revenue,  and                                                            
the State needs  "to grab some federal money" to make  this work for                                                            
both the veterans and the pioneers.                                                                                             
Commissioner  Duncan stated  that the revised  fiscal note  includes                                                            
revenues that  would be generated once an agreement  is reached with                                                            
the VA to allow  veterans to receive VA benefits toward  the expense                                                            
of their care.  He affirmed that negotiations are  underway and once                                                            
agreements are reached, the VA benefits should be available.                                                                    
Major  General Oates  asserted  "that the  dilemma" is  that the  VA                                                            
requires the State  "to make the first step forward."  He encouraged                                                            
the Committee to make that  first step in order to start the process                                                            
so that the various concerns could be addressed.                                                                                
Senator  Wilken asked  if the  VA has age  criteria  as part of  its                                                            
eligibility requirements.                                                                                                       
Mr.  Kohn  verified  that  there  is no  age  criterion  in  the  VA                                                            
eligibility  requirements;  however,  because  the  State  owns  and                                                            
operates  the facility,  the State  has the right  to establish  the                                                            
admission  policy. He  continued that  regardless  of the  admission                                                            
policy,  the VA has  the right to  approve or  deny VA benefits  for                                                            
Senator Wilken  asked if this issue  is still in a "state  of flux."                                                            
Mr. Kohn responded it is not.                                                                                                   
Senator  Wilken  clarified  that if  the  State's  admission  policy                                                            
requires  an individual  to be  65 years  of age, the  VA would  not                                                            
Mr. Kohn responded that  is correct as that issue has been resolved.                                                            
Senator Wilken asked the  Committee to familiarize themselves with a                                                            
letter from  Robert L.  Hufman, addressed  to Senator Wilken,  dated                                                            
April 30, 2002, [copy on  file] which urges the Committee to "do the                                                            
right thing"  for both the pioneers  and the veterans in  the State,                                                            
and  to  base  their   decision  on  practically  practicality   not                                                            
Senator   Wilken   voiced   support   for  moving   ahead   with   a                                                            
Pioneers/Veterans effort,  although he questioned whether the stand-                                                            
alone facility might be  a better alternative. He voiced support for                                                            
funding a study to determine  the "best way" to proceed; support for                                                            
continuing  negotiations with  the federal  government; and  support                                                            
for furthering  discussions  regarding  the development  of a  pilot                                                            
MIKE RACE identified himself  as: Member, Pioneers of Alaska; Second                                                            
Vice President,  Grand Igloo; Member,  Juneau Legislative  Committee                                                            
and informed  the Committee that he  is familiar with the  Pioneers'                                                            
Home  system  and that  his  mother  is  a resident  of  the  Juneau                                                            
facility. He  voiced support for Senator  Wilken's approach  to this                                                            
Mr. Race stated  that this is a "divisive situation  with two groups                                                            
that are of  the same thought" as  many pioneers are also  veterans.                                                            
He referenced  the section  of Mr. Hufman's  letter that suggests  a                                                            
pilot program  be considered,  and voiced his  own preference  for a                                                            
voucher program  that would enable a person to reside  in a facility                                                            
in or near their  hometown instead of being cared  for in one of the                                                            
six existing Pioneers'  Homes. He stressed that this legislation has                                                            
the potential  to  allow the  VA system  to "rollover"  the  current                                                            
Pioneers' Home system.                                                                                                          
Senator  Olson asked Mr.  Race if he  is in favor  of bill as  it is                                                            
Mr. Race responded  he is not as it would be a "disservice"  to both                                                            
veterans and  pioneers. Mr. Race commented  that his mother,  who is                                                            
"head of  the Juneau  Pioneers' Home  Resident Council,"  is  not in                                                            
favor of this legislation, either.                                                                                              
Senator Austerman voiced  agreement with Senator Wilken that "we are                                                            
moving too  fast" and should  first conduct  a study on the  options                                                            
available to  the State in accommodating  the needs of veterans  and                                                            
pioneers. He asserted that  this issue denotes the need for a policy                                                            
discussion  regarding whether  the State supports  a Pioneers'  Home                                                            
system,  and  if  so,  then the  system  should  be  funded  at  the                                                            
appropriate level.  He stated that if the State decides  to pursue a                                                            
veterans'  home, discussions  should ensue  to determine if  the two                                                            
systems   should  be   separate  or   combined   as  determined   by                                                            
efficiencies and economics.                                                                                                     
Senator Austerman opined  that if the Legislature's "only goal is to                                                            
cut  the  budget"  then  these  issues  should  receive  no  further                                                            
consideration;  however, he reminded the Committee  that the care of                                                            
Alaska's aging  population should  be addressed, and the  first step                                                            
should be to conduct a study on how to proceed.                                                                                 
Senator  Wilken  commented that  if  a study  is conducted  and  the                                                            
findings reveal that combining  the veterans and pioneers facilities                                                            
is the "best  way to treat  our veterans and  the best way  to treat                                                            
our pioneers,  you'll have a bill that will have 61  people on it as                                                            
Co-Chair  Kelly informed the  Committee that  a Veterans Home  study                                                            
was fully funded in the FY 03 Capital Budget.                                                                                   
SFC 02 # 93, Side B 11:06 AM                                                                                                    
Senator  Wilken proposed  that  the State  should:  conduct a  study                                                            
regarding the options for  the pioneers and veterans homes; continue                                                            
negotiations  with  the  VA;  and  consider   establishing  a  pilot                                                            
program.  He stated  that  these three  things  should  be in  place                                                            
before this legislation is passed.                                                                                              
Senator Wilken  stated that if those three things  were in place, he                                                            
could support this bill.                                                                                                        
Commissioner  Duncan reminded  the Committee  that 1992 legislation                                                             
allowed for the establishment  of a stand-alone veterans home in the                                                            
State; however,  since that time, only one study has  been completed                                                            
regarding  the cost  of  establishing  and operating  a stand-alone                                                             
veterans'  home.  He  opined  it is  incorrectly  assumed  that  the                                                            
federal  government would  pay for  the construction  of a  veterans                                                            
home; however,  federal statute requires that land  for the facility                                                            
and 35  percent of the  construction cost  be provided by the  State                                                            
with  the federal  government  paying the  remaining  65 percent  of                                                            
construction  expenses. He  continued that  the operating costs  for                                                            
the facility  would be the responsibility  of the State.  He stated,                                                            
"the operating  costs would be offset somewhat by  the payments that                                                            
the  veterans receive  for  their per  diem/veterans  benefits."  He                                                            
qualified that an eighty-bed  home would generate operating costs of                                                            
approximately $8 million a year.                                                                                                
Commissioner  Duncan clarified  that  the study  referenced in  this                                                            
legislation is  to determine the needs of veterans  in the State who                                                            
would  not be  served by  a veterans  home facility;  therefore,  he                                                            
stated the nature  of the study defined in this legislation  differs                                                            
from the study proposed by Senator Wilken.                                                                                      
Commissioner Duncan voiced  support for continuing negotiations with                                                            
the federal government  regarding this "demonstration  project" that                                                            
differs  from the standard  VA approach  to veterans'  homes  in the                                                            
Commissioner   Duncan   concurred  that   this   is  an   "expensive                                                            
proposition;" however,  reiterated that the Department is willing to                                                            
discuss  a  lower level  of  funding  in order  to  demonstrate  the                                                            
viability of this proposal.                                                                                                     
Commissioner Duncan qualified  that the Department of Administration                                                            
would prefer  that the  study funded  in the capital  budget,  "be a                                                            
responsibility  of the Executive branch,"  with assistance  from the                                                            
Department  of Administration  and  the Department  of Military  and                                                            
Veterans Affairs  and other veterans  and pioneers groups  to ensure                                                            
that  the study  would be  conducted correctly.  He  noted that  the                                                            
Department  of  Administration  "is  charged  by  law to  operate  a                                                            
veterans' home."  He asked that the money for the  study be properly                                                            
appropriated to  the Department of Administration  instead of to the                                                            
Legislative Budget and Audit Committee.                                                                                         
Senator  Ward agreed  that  this is  an  important issue  for  every                                                            
legislator. He  asked whether the 90 veterans currently  residing in                                                            
the Pioneers' Homes could be part of a pilot project.                                                                           
Commissioner  Duncan responded this  is possible; however,  in order                                                            
to proceed,  the State must  demonstrate a  commitment to the  VA by                                                            
such  measures  as  changing  the  name  of  the  facility  and  the                                                            
establishment  of a  veterans' preference  for a  percentage of  the                                                            
beds.  He contended  that  if these  things  were in  place, the  VA                                                            
benefits would be forthcoming.                                                                                                  
Senator Ward asserted  that a pilot program would  be a first of its                                                            
kind in the nation.                                                                                                             
Commissioner   Duncan  clarified  that  to  begin   the  process,  a                                                            
commitment  must be  made which  would entail  a name  change and  a                                                            
veterans' preference "for a certain number of beds.                                                                             
Senator Ward concurred,  stating the process could be established in                                                            
Co-Chair Kelly ordered the bill HELD in Committee.                                                                              
RECESS to Call of Chair 11:12 AM / 5:38 PM                                                                                      

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