Legislature(2009 - 2010)BUTROVICH 205
02/04/2009 01:30 PM Senate HEALTH & SOCIAL SERVICES
| Audio | Topic |
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| Start | |
| SB32 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 32 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 32-MEDICAID:HOME/COMMUNITY BASED SERVICES
CHAIR DAVIS announced consideration of SB 32.
SENATOR ELLIS thanked the committee for hearing this bill so
promptly and for the co-sponsorship of several members of the
committee. He said this bill provides for regular rate review
for home and community-based services. These are the home and
community-based services that help Alaska seniors and Alaskans
with developmental disabilities; he was pleased to report that
letters of support have been coming into his offices from
providers across the state. This is a topic of keen interest
because it affects the quality of life for Alaskan seniors and
those with developmental disabilities and because for many
community-based services it is a matter of staying in business
or going out of business.
He said that when he was approached last fall about sponsoring
this legislation, he researched the statutes and realized it is
absolutely appropriate that statute calls for regular rate
reviews for hospitals and nursing homes, which do a terrific job
caring for Alaskans. The state has also made a policy and budget
decision to license and encourage home and community-based
services offering a lower level of care to keep Alaskans out of
those more expensive and restrictive settings. There is a place
for all of the for-profit and non-profit businesses in the
continuum of care across Alaska; so when people asked him why
hospitals and nursing homes have regular rate review and
consideration for covering the true cost of care, while home and
community services do not, he could not give a rational
response. The time has come for this legislature to consider
regular, if not annual, rate review for the home and community-
based services.
SENATOR ELLIS met with Commissioner Bill Hogan, Department of
Health and Social Services (DHSS) and members of his team
yesterday; they have decided to work collaboratively to find
common ground on this issue. He added that he would like to
offer some recommendations and refined language that were
developed through that collaboration at a future meeting in the
form of a proposed committee substitute, but wanted the
committee to hear some important testimony today.
1:37:52 PM
MAX HENSLEY, staff to Senator Ellis, said that because they
anticipate some technical changes to the bill going forward, he
would speak broadly to the intent of the bill at this time.
CHAIR DAVIS interjected that she would like Mr. Hensley to
present the sponsor's statement for people in the audience who
are not familiar with the bill.
MR. HENSLEY explained that SB 32 creates a mechanism for
providers of home and community-based services to receive
regular rate reviews. Providers of home and community-based
services do so through four Medicaid waivers that the state of
Alaska currently holds, which allow them to seek reimbursement
on a 50/50 state/federal match. Those four waivers cover the
categories of older Alaskans, the developmentally disabled,
children with complex medical conditions and adults with
physical disabilities. There are approximately 350 providers
serving 6400 people across state under these waivers. This does
not include the 845 people who were on the developmental
disabilities wait list at the close of fiscal year 2008.
The rates these providers receive were frozen for years, until
the legislature gave them a four percent rate boost across the
board in 2008. Many of them have not received a comprehensive
rate review since 2004 and some have not had a review in more
than a decade, which means their reimbursement rates are based
on an antiquated methodology that does not reflect modern prices
and practices. These services are key to allowing people to
continue to live their lives in their communities among family
and friends, holding jobs as productive members of society.
He highlighted a few of the many associations around the state
that have provided letters in support of this legislation,
including: AARP, The Commission on Aging, The Mental Health
Board, The Advisory Board on Alcohol and Drug Abuse, The Mental
Health Trust Authority, the AgeNet coalition of health providers
and Alaska Behavioral Health Association.
1:41:02 PM
MR. HENSLEY added that there are three sections in the bill; all
three add the words "home and community based services as
defined in the Medicaid waivers section of statutes" to the
current rate review section, which applies to the institutional
services.
CHAIR DAVIS announced that she will take public testimony before
entertaining questions.
1:41:41 PM
MARIE DARLIN, AARP Capital City Task Force, Juneau, AK, said
AARP strongly supports this bill. These community services are
very important to all the members of AARP; with an aging
population, it is important that these providers be properly
paid so they can continue to provide the services needed to keep
people out of more costly facilities. She reminded the members
that this also affects younger people who have disabilities and
who, with these services, may be given the opportunity to be
part of their communities.
It makes sense, she concluded, to review these rates yearly as
they do for hospitals; it might actually result in more home and
community-based services, which are desperately needed and
represent a less-costly way to do business.
1:44:20 PM
LYNN KENNEY, Alaska Association on Developmental Disabilities
(AADD), Wasilla, AK, said AADD is an organization of over 30
disabilities service providers statewide including Bethel,
Kotzebue, Nome, Seward, Homer, Soldotna, Valdez, Sitka,
Ketchikan, Anchorage, Juneau and Fairbanks. It was formed
approximately 28 years ago to create a united provider voice for
best practices, advocacy, partnership and networking and was
spearheaded by the Fairbanks Resource Agency, Hope Cottages and
ARCA [American Rehabilitation Counseling Association]; that idea
evolved into AADD. AADD member organizations share similar
concerns, experience similar problems and have a unique
perspective as providers of services. Today AADD remains a
united body that volunteers time, effort, expertise and a belief
in what people working together can accomplish. AADD strongly
supports SB 32 and appreciates this legislation being introduced
by Senator Ellis and co-sponsored by the Chair.
AADD Member organizations have been struggling to continue to
provide the same level of services with rates that were frozen
in 2004. Last year the legislature did grant a modest increase
in rates, but there is no increment in this year's budget, nor
is there a mechanism in place for rates to keep up with
inflation and cost of living increases. Providers are deeply
concerned about how they can continue to offer the best care
possible. How, she asked, can they keep quality personnel with
no pay increases, shrinking benefits and extended work days?
They are losing many good employees who aren't leaving to work
for another provider but are leaving the field all together.
MS. KENNEY urged the committee to support SB 32.
1:47:55 PM
JOHN CANNON, Executive Director, Matsu Services for Children and
Adults, Wasilla, AK, said he agrees with the previous testimony.
He thanked the committee for their consideration of the bill and
expressed his strong support. His agency serves over 300 MatSu
residents with disabilities and this would make a tremendous
difference in their lives; it will give the agency the stability
it needs, with rates they can rely on and a more dependable
pricing structure.
1:49:12 PM
MIKE RACE, past president of Pioneers of Alaska and head of
their legislative committee, Juneau, AK, expressed his
appreciation for the opportunity to speak before the committee.
Pioneers of Alaska is very supportive of this legislation; the
quality of care that people can bring into their homes for
themselves and their families is critical to their members, he
said, and the intent of this legislation is superb. He thanked
the committee again and said the Pioneers of Alaska will be
looking forward to further action.
1:50:39 PM
JOHN SHERWOOD, [Medical Assistant Administrator] Department of
Health and Social Services (DHSS), Juneau, AK, agreed that this
is a very important subject. He said the department has been
working with a contractor for about a year to develop new rate
methodologies for paying providers and appreciates Senator Ellis
addressing it in this legislation. The department also
appreciates the increase they were able to give providers
through the budget last year. They do have some concerns about
specific provisions of the bill and look forward to working with
both Senator Ellis and the committee to come up with language
that will be acceptable to all.
1:52:08 PM
SENATOR DYSON asked if he understood correctly that the
department has been looking at the adequacy of these rates for
about a year.
MR. SHERWOOD confirmed that the department has been looking at
the rates; they surveyed providers during the late summer and
fall of 2008 to get cost information and see how it compares
with current rates. One of the things they discovered is that
the kind of cost accounting the department uses for rates isn't
the same as the accounting many of these providers do.
Consequently they could not get as much information as they
wanted, but to the extent they could find it, it appeared that
costs were about equal to rates with variations among different
types of services. Of course, he said, to some extent that
reflects the fact that the State is the primary payer for most
of these services; people can only spend the amount of money the
state pays them to provide a service, so there is a circular
nature to the calculation.
SENATOR DYSON asked if he is correct in assuming that the
department does not need this bill to perform a study or to
adjust rates.
MR. SHERWOOD agreed that they do have the regulatory authority
to set rates or establish a rate methodology.
SENATOR DYSON asked what the department wants to see adjusted in
this legislation; what is the department uncomfortable about in
it or in the direction that Senator Ellis is headed with it.
1:54:40 PM
MR. SHERWOOD responded that the department has a couple of
concerns with it; one is placing the rate-setting provision for
these providers in the same statute they use for the health
facilities. There is a history to that health facility statute
that goes back to a period of time when the federal government
dictated a very specific way the state had to establish rates
for those facilities and the statute was intended to bring the
state into compliance with the federal statute. For the most
part, the explicit methodologies for setting provider rates are
not set in statute as it deprives the state of one possible
option when it needs to look at cost-containment strategies. The
department is willing to look at language that establishes some
parameters about how they will develop rates and how frequently
they will be reviewed.
SENATOR DYSON asked Mr. Sherwood if he is correct in saying that
the department believes methodology is better set in regulation
rather than in statute.
MR. SHERWOOD confirmed that is the long-standing preference of
the department.
SENATOR DYSON agreed with Senator Ellis that it is the
legislature's responsibility to make sure there are sufficient
resources available to protect the well-being of the state's
vulnerable population. Before this process is over, he said, he
would like someone from the department to tell the committee
whether or not there are sufficient funds in the rate to provide
this vulnerable population the quality of help they need.
1:57:33 PM
MR. SHERWOOD said he thinks they can come to a decision about
whether a methodology is adequate to provide good rate-setting.
They still have a lot to learn about provider costs however, so
he cannot make a definitive statement that where they will be
tomorrow is exactly where they should be.
1:58:35 PM
SENATOR DYSON asked Mr. Sherwood if it is true that the state
does not have an ombudsman monitoring the care of these folks
and that no audit has been performed. He said he thinks he
understands Mr. Sherwood's and the department's position; they
are worried that the legislature will put into statute a
mechanism that is going to drive costs at a time when the state
is facing a $1.6 billion deficit and he appreciates their
concern. If indeed these clients are not getting the level of
care they need however, that would indicate that the methodology
the state uses for setting the costs is missing something; or
the methodology isn't being applied; or if it is being applied,
the state is not appropriating the money.
MR. SHERWOOD agreed that cost and rate of payment are certainly
important considerations in the quality of care, but not the
only considerations that might affect quality. He believes
Alaska is fortunate to have many dedicated providers who strive
to provide quality services in difficult circumstances. He also
mentioned that there is a long-term care ombudsman who oversees
the quality of some, but not all of the providers that would be
affected by this bill.
SENATOR DYSON said he appreciates that the department is working
with Senator Ellis to improve the bill. He encouraged Mr.
Sherwood to fight for what he believes is the right methodology
and hoped be would soon be able to state definitively that the
administration either recommends this to go forward or it
doesn't.
2:01:19 PM
CHAIR DAVIS pointed out that this is the Health and Social
Services Committee and they won't be dealing with the financial
issues; Finance will take that up.
She advised Mr. Sherwood that while she appreciates the fact
that he has been working with Senator Ellis's office, this bill
is now in her possession because she chairs the HSS committee
and she expects to hear about anything the department is doing
and any concerns they have before he comes before the committee
to testify. She said it sounds as if the department is working
with Senator Ellis to reach a compromise and draft another bill,
but it is up to the legislature to decide if it should be in
policy, regulation or statute. She asserted that she isn't
trying to pin him down, but she does not want to be left out of
the loop.
2:03:11 PM
SENATOR DYSON responded to Chair Davis's comments, saying that
one of the limitations the Alaska legislature has to deal with
is that they are not able to change regulation by resolution, as
they are in many states. That often leaves the legislature in
the position of using the heavy hammer of statute in order to
force changes in regulations they believe are inadequate. He
agreed with Senator Davis that it is the job of the Health and
Social Services Committee to look after the care that Alaska's
citizens are getting and said he hopes the two of them will go
to battle with Finance if necessary to get the funding to do
what is needed.
CHAIR DAVIS said she has no problem with that; she just wants to
point out that their focus now is not on the finances but on the
bill before them. The Finance Committee will have the chance to
figure out where the money is coming from. Meanwhile, she wants
to keep her focus on the mission of this committee.
SENATOR ELLIS thanked Mr. Sherwood for his communication and
collaboration. He asked if it is fair to say that the number of
times over the last 20 years that the department has reviewed
and increased rates through the regulatory process has been
infrequent.
MR. SHERWOOD answered that some of these rates have been changed
infrequently; prior to 2004, some of the rates were reviewed and
adjusted annually based on budgeted cost information but since
that time very little analysis has been done.
2:05:37 PM
SENATOR ELLIS asked if he could speak briefly to some of the
shortcomings of the questionnaire that was created by the
department's contractor and what they might do to improve upon
that. It was described to him by many of the service providers
as a complicated questionnaire and he understands that it
received a rather poor response.
MR. SHERWOOD said their contractor put out a survey in line with
common cost accounting surveys used to set rates for different
sorts of providers in other states. The department discovered
that most of Alaska's providers, having never done that kind of
cost accounting, did not have accounting systems that made it
easy to accurately determine what information they needed to
enter. Even some of the providers whose systems could provide
the information said they didn't feel they could verify its
accuracy; so they chose not to include it. In subsequent
meetings with providers, many of them said that if the
department could give them a standard for reporting in advance,
they would be willing to amend their accounting systems in order
to respond.
SENATOR DYSON left the meeting at 2:07 p.m.
SENATOR ELLIS affirmed that there is more work to be done.
Finally, he said, it is not his intent to materially affect the
annual rate review for hospitals and nursing homes. He believes
it should be relatively easy for the drafter to compartmentalize
what he is trying to do with this legislation in a portion of
the statute that will have no affect on the long legal history
of hospital and nursing home rate setting. He is just trying to
ensure the same less restrictive, more cost-effective
consideration for home and community-based services.
2:08:48 PM
CHAIR DAVIS thanked Mr. Sherwood for his testimony and agreed
that there is more work to be done on this bill. She then
announced that she would open the floor to public testimony.
2:09:04 PM
STEVE LESKO, President, State Board of Directors, Key Coalition
of Alaska, Anchorage, AK, stated that in terms of historical
significance and importance, this is the most critical testimony
he's given in over 30 years. Decades ago, a reporter named
Geraldo Rivera exposed the horrors, atrocities, segregation and
brutalization of those who lived in a now infamous institution
called "Willowbrook." This past December, he asserted that the
wait list is, in essence, the new institution, calling it
"imprisoning," producing tremendous stress and strain. Alaska by
and through the fiscal accountability and programmatic
compassion of this legislature and administration has instituted
a concerted plan to eradicate its wait list by implementing a
draw of over 50 eligible individuals each quarter; only
yesterday that list held captive over 1300 of Alaska's families.
Today that number has been reduced to 845. There is just one
significant problem; Alaska's community programs and the lack of
a rate-review process. Due to this systematic operation to
eradicate the waiting, the "patient," the community programs and
all the Alaskan families they support, is dying. Many of the
symptoms have been reported: a significant inability to recruit
and retain qualified staff; cuts in benefits that include health
insurance; dramatic increases in co-pay and deductibles; a
sporadic inability to consistently and effectively train many
staff that results in a chronic lack of service and a revolving
door of staff turn over and the reality that many staff need to
maintain two jobs, to come to work when sick to fill vacancies
or to work unhealthy double shifts ... 16 or more hours on the
job per day. Programs have cut, reduced and eliminated, begged,
borrowed, maintained lines of credit and have stretched
themselves so precariously thin that they are now in a danger
zone where something must and something will have to give.
MR. LESKO continued, stressing that everyone should be aware of
the escalating list of expenses they face every day from
gasoline prices, to heating costs, goods and products, rentals,
transportation and insurance. Last year [home and community-
based services] saw a four percent increase after a four-plus
year rate freeze; factored over a period of six years, community
programs will have received 2/3 of one percent annually! The
commercial sector would increase the price of products,
institute layoffs or simply shut their doors; these home and
community-based service providers can do neither, nor would they
choose to do so. Theirs is a labor-intensive profession and the
challenges to secure an adequate workforce are growing
astronomically. The health and safety of Alaska's most
vulnerable citizens is their paramount concern; this is why the
Key Coalition of Alaska embraces and unequivocally supports SB
32 as a desperately needed solution to the rapid deterioration
of the community support network.
He urged the committee to begin forging a legacy built on
equity, parity and a true sense of community preservation.
2:13:43 PM
CHAIR DAVIS advised the committee that Jack Nielson, Executive
Director, Department of Health and Social Services, Anchorage,
AK, and Emily Ennis, Fairbanks Resource Agency, Fairbanks, AK,
are on line and available for questions if needed.
CHAIR DAVIS closed public testimony and announced that SB 32
will not be moved today; she asked the sponsor if he would like
to make a closing statement.
2:14:52 PM
SENATOR ELLIS said there is more work to be done; he intends to
bring a set of choices before the committee for discussion and
perhaps a committee substitute for their consideration. Out of
respect for the committee's time he said, he did not encourage
everyone to testify, although there were people all over the
state "chomping at the bit" to do so. His office has been
soliciting letters of support and resolutions from all over the
state and those continue to pour in.
Many of Alaska's home and community-based services have reached
a breaking point. As Steve Lesko said so eloquently, they can't
lay off workers; they can't close their doors or people would be
out in the streets; the time has come to have some regular rate
review so they can keep up with reality and the cost of doing
business. These providers, the vulnerable children and adults,
are looking to the legislature to make the right decision.
2:16:49 PM
JIM BECK, Executive Director, Access Alaska, Anchorage, AK,
spoke as an advocate for the rights of persons with disabilities
and elder Alaskans and as a provider of Medicaid personal care
assistance. He said much of his testimony has been covered by
others, but he wants to make two points. He wants to make sure
that personal care assistant services are included in the final
version this bill. Personal care assistant services are a
foundational set of services that aren't part of the four
Medicaid waivers Mr. Hensley talked about. These services save
the state a lot of money and currently serve thousands of
Alaskans in their homes. He also emphasized the importance of
statutory rate review. It is clear, he said, that regulatory
authority is not enough or personal care would not have gone
over 10 years without a rate increase. Starving providers on the
most cost-effective end of the long-term care system is terribly
ineffective public policy; home and community-based services
must be on an equal footing with expensive institutional care.
He pointed out that he has not once seen the state threaten
Providence Hospital or any of the institutional care providers
with rates as a means of cost-containment, yet that is exactly
the strategy that has been foisted on home and community-based
service agencies for years. It is Access Alaska's hope that SB
32 will solve that problem and put them on a statutory footing
and not a regulatory one. With that, he thanked the committee
for hearing this bill and said he would provide further
testimony in writing.
2:19:43 PM
SENATOR THOMAS said that Mr. Beck's testimony is along the lines
of his own concerns. He is not intimately familiar with
47.07.070 or with the definition of "home and community-based
services" under the Act; so he is curious as to how
comprehensive this is and what other services they might they be
missing. He said they should be looking to make sure those
ancillary services are at least considered.
SENATOR ELLIS said his office can get that information.
2:20:42 PM
CHAIR DAVIS reiterated that many people have provided written
testimony; they couldn't possibly have accommodated all of the
people who wanted to speak. She repeated that this bill will be
coming back at a later time. [SB 32 was held in committee.]
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