Legislature(2009 - 2010)BUTROVICH 205
02/09/2009 01:30 PM HEALTH & SOCIAL SERVICES
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* first hearing in first committee of referral
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SB 87-MEDICAL ASSISTANCE ELIGIBILITY CHAIR DAVIS announced consideration of SB 87. 2:02:48 PM SENATOR BILL WIELECHOWSKI, sponsor of SB 87, explained that this is a bill he first introduced two years ago, which was not passed. He decided to introduce it again this year due in part to the opportunity represented by the increase in federal funds to Alaska from about $10 million to over $22 million. This bill increases the base eligibility for Denali Kid Care to 200 percent of the federal poverty level and allows people to buy in up to the level of 300 percent of FPL. What he thinks this will do is to make health insurance available to every child in the state of Alaska. People at or under 200 percent of FPL will get it [for free] and the federal government will pick up 65 to 66 percent of the cost; people over 300 percent should probably be able to afford health care; so it is the people between 200 and 300 percent of FPL whom this expansion is intended to help. SENATOR WIELECHOWSKI added that the fiscal note they received is very questionable. When he filed this bill two years ago, the fiscal note said it would require the addition of another 7 [DHSS] staff members; now for some strange reason, the number has increased to 17. In addition, SB 13, which adds about 1300 people [to Denali Kid Care], requires the addition of 2 staff members; this bill, which adds 2000 to 2500 people, requires another 15 staff. A fiscal note like this greatly undermines the credibility of the department. 2:06:11 PM SENATOR ELLIS asked how this legislation would comport with the bill just signed by President Obama. SENATOR WIELECHOWSKI turned the question over to Michelle Sydeman. 2:06:40 PM MICHELLE SYDEMAN, legislative aid to Senator Wielechowski said the current federal bill would provide funding to get Alaska easily up to 200 percent of FPL; they have also heard assurances from Speaker of the House Nancy Pelosi and others that it is the intent of Congress to provide sufficient funding to cover all states' efforts to ensure that children are insured. The funding Alaska has received so far gets them up to 200 percent, but there are indications that they can go higher. Alaska simply needs to revise its plan and its allotment should increase as well. 2:07:27 PM CHAIR DAVIS advised that there is someone in the audience who can speak to Senator Wielechowski's concerns about the fiscal note. SENATOR WIELECHOWSKI said he would be curious to find out why the number of employees they think the department needs has increased by ten in the past year, when the bill has remained the same and why they think they need 15 more employees than they need for SB 13. 2:08:17 PM JERRY FULLER, Project Director, Medical Assistance Administration, Department of Health and Social Services, Anchorage, AK, said Ellie Fitjarrald might have more information on that. 2:08:32 PM ELLIE FITJARRALD, Director, Division of Public Assistance, Department of Health and Social Services, said they are treading new ground. The workload that goes into calculating costs and premiums for families up to 300 percent of FPL is something the department has not done before. The states that have done it have found that it is very labor intensive. She asked Chair Davis if she would like to go through the fiscal note today or wait until the bill gets to Finance. CHAIR DAVIS answered that not all of the committee members serve on Finance, so it would be helpful if she would walk them through it today. MS. FITZJARRALD said she can cover the Division of Public Assistance and Jon Sherwood can cover the other divisions, because Medicaid touches most divisions of the Department of Health and Social Services. She continued; the Division of Public Assistance estimated a need for 13 positions working with an assumption of what is adequate to serve the nearly 3000 eligible children and the increase in pregnant women. That number represents children who will be eligible and not the entire number who will apply for services. At any given time, about 30 percent of applications are denied; so they see an average of 4000 kids applying for services. With the higher income groups, they will have to verify the families' incomes to be sure they qualify, calculate their premiums per child and monitor their premiums as their incomes change. This represents a lot of accounting, not just during the determination of eligibility but on an ongoing basis. She accepted that the previous fiscal note showed a need for fewer staff; but as they become more familiar with what this work will entail, they think more staff will be needed than previously estimated. She also noted that on page two of the fiscal note, where there is a breakdown of the 13 positions required in the eligibility field, they have included four lead- worker positions that would provide statewide outreach. They would contact health providers and clinics in the communities to make sure they know about the program and how it works: how to apply; how premiums are calculated; and as there are interruptions in coverage when people are unable to pay their premiums and benefits are suspended, how to get them reinstated. MS. FITJARRALD asserted that it is like running another insurance program and this is the department's best estimation of the work it will take. They have requested: · 2 Administrative Support Staff · 5 Eligibility Technicians · 4 Lead Eligibility Technicians to provide community outreach and quality assurance · 1 Eligibility Supervisor · 1 Public Assistance Analyst to oversee interpretation of the rules, develop policy, make system changes and provide technical support These 13 positions represent about $350,000 from the General Fund and $350,000 from the federal government. 2:12:29 PM CHAIR DAVIS asked if the four lead-eligibility worker positions were included in the fiscal note last year. MS. FITJARRALD did not believe they were but was not sure. She said she would check and get back to the committee with that information. 2:13:01 PM SENATOR THOMAS asked if the amount of $15,000 per telephone shown under contractual services is typical of what the state is now paying across the board. MS. FITJARRALD said that is the cost associated with the phones and some of the IT usage for their computer systems now that the phones are integrated. 2:13:47 PM CHAIR DAVIS invited Senator Wielechowski to follow up. SENATOR ELLIS asked Ms. Fitzjarrald if she had actually checked with other states that have a track record with this type of program, to find out what their experience has been. MS. FITJARRALD admitted that they have not checked with other states; it is what they have heard nationally on state-to-state call chats. Their analysis is really based on the work as they know it here in Alaska. SENATOR ELLIS concluded there is not any particular experience elsewhere informing their fiscal note. MS. FITJARRALD answered "No, not specifically." 2:15:12 PM MR. SHERWOOD asked if the committee would like him to discuss the Medical Assistance Administration fiscal note. CHAIR DAVIS asked the committee if that is a concern at this time. 2:15:33 PM SENATOR WIELECHOWSKI answered that his biggest concern is the fact that, to go from [eligibility of] 175 to 200 adds roughly 1,400 people and the department is adding only two additional staff. To go from 200 to 300, adds another roughly 2,000 people to the roles... MR. SHERWOOD corrected that it adds approximately 1,700 people. SENATOR WIELECHOWSKI continued; so to go from 200 to 300 adds roughly the same number of people and yet the department needs 15 additional staff. "Is that what you're trying to tell this committee?" he asked. MR. SHERWOOD agreed that is what their fiscal notes say. He thinks a big part of that is around the issue of premiums; both premium collection and, because people's incomes change, modification of premiums. With the increase from 175 to 200 percent of FPL and with continuous eligibility for children, the department works the case once until the next review period and does not have to make additional adjustments; therefore the workload per case is significantly different. 2:17:13 PM SENATOR WIELECHOWSKI asked if the administration supports SB 87. MR. SHERWOOD answered that several proposals are under discussion and the Governor has supported expansion to 200 percent of FPL. In looking at the proposals, the administration has a preference for cost-sharing through premiums and an asset test, but does not have a position on the bill to share with him. SENATOR WIELECHOWSKI opined that they do support the fundamental philosophy of what SB 87 is attempting to do with the cost sharing component. MR. SHERWOOD agreed. SENATOR WIELECHOWSKI asked if the administration worked on any amendments at the congressional level to stop the federal increase above 200 percent. MR. SHERWOOD could not answer Senator Wielechowski's question. He said he knows the department responded to questions from their congressional delegation about different proposals, but that he did not have as much communication with them as did Mr. Fuller. MR. FULLER answered that he responded to questions and comments from the senatorial delegation as they were working through the SCHIP reauthorization; so the answer to Senator Wielechowski's question is "yes." CHAIR DAVIS advised Senator Wielechowski that there are two people from NCSL online for questions. 2:19:47 PM SENATOR WIELECHOWSKI said his understanding was that requiring premiums or enrollment fees as a cost-sharing provision is fairly common and asked the NCSL representatives if that is correct. MARTHA KING, Group Director, National Conference of State Legislatures (NCSL), Denver, CO, referred the question to Jennifer Saunders. JENNIFER SAUNDERS, National Conference of State Legislatures, Denver, CO, said 24 states charge co-payments and 35 states have premiums or enrollment fees. CHAIR DAVIS asked if that includes asset tests. MS. SAUNDERS answered that 46 states and the District of Columbia do not require an asset test. 2:21:12 PM SENATOR PASKVAN asked at what level the other states require co- payments or premiums. MS. SAUNDERS said that nine states impose premiums on children and families with incomes below 150 percent of the federal poverty guidelines; 26 states charge premiums at an income level over 150 percent; 24 states charge premiums at 200 percent; 18 states charge at 250 percent of the federal poverty guidelines. MS. KING added that there is a difference in the states' ability to charge co-pays depending on whether the state has a Medicaid expansion for its SCHIP program as Alaska does, or has a stand- alone insurance-like SCHIP program. CHAIR DAVIS thanked Ms. King for that information and asked if that means Alaska cannot go down to 150 percent. MS. SAUNDERS answered that below 150 percent, cost-sharing requirements are very restrictive under Medicaid rules; but she does not have the exact requirements. CHAIR DAVIS requested that she provide further information on that at a later time. 2:23:14 PM SENATOR THOMAS asked if, in NCSL's experience, some states have developed a particular formula to use when calculating the change in the amount of reimbursement of the federal poverty level. MS. SAUNDERS told Senator Thomas that she is not aware of any but will try to find out. 2:23:53 PM SENATOR ELLIS asked Ms. Fitzjarrald and Mr. Sherwood if they are saying that, of the 15 new employees and related equipment reflected in the fiscal note, 100 percent of their activity will be dedicated to this program. MS. FITJARRALD said that is correct; determining eligibility for the higher income groups is the work they would be doing. She added that, because Medicaid is so large, if applicants do not qualify for this program, the eligibility workers would look to see if they qualify for other types of coverage; but their work will be related primarily to Denali Kid Care. 2:25:13 PM SENATOR WIELECHOWSKI stated that Alaska can go to 300 percent eligibility and provide insurance for most of the children in the state for an additional $1.3 million according to the department's estimate, which he believes to be over generous. He added that, to say it will require 2 additional staff to handle an increase of 1,500 to 1,600 kids and pregnant mothers, but adding 1,500 more with the increase from 200 to 300 percent (a position they know the administration fought against at the congressional level) will require another 15 staff, stretches the imagination. However, he continued, even if that is accurate the amount is more than reasonable for the outcome. He urged the committee's support. CHAIR DAVIS thanked the sponsor and announced that the committee would take public testimony for SB 87. 2:26:47 PM JORDEN NIGRO, President* Alaska Association of Homes for Children* Anchorage, AK* said she supports this bill and urged the committee to pass it out. 2:27:44 PM LAVERNE DEMIENTIEFF, President, National Association of Social Workers (NASW), Alaska Chapter, Fairbanks, AK, said her Association also supports SB 87. 2:28:06 PM ROD BETIT, President, Alaska State Hospital and Nursing Home Association (ASHNHA), Juneau, AK, said he also supports SB 87. Having been a state health worker, he understands the difficulties of going forward with this proposal, but ASHNHA's membership really wants to see the state get [eligibility] to 200 percent and he believes this is a well-constructed piece of legislation. First, there is no cost sharing below 200 percent, which he believes is important. Second, there is significant cost sharing above 200 percent. It isn't a "give away," so there is a real attempt to promote individual responsibility in this program; above 250 percent, co-payments of 20 percent are required. Third, it contains a strong anti-crowd out measure, which is a very important component of the bill. He explained that "crowd out" refers to public programs shifting patients away from the private programs, which shifts who pays for care rather than who is covered. Finally, he said if there are federal and state dollars available, this is a good next step after going to 200 percent and he would really urge the committee to consider it. 2:30:44 PM SENATOR ELLIS thanked Mr. Betit for his testimony. Coming from someone who watches the bottom line, he said, it is great testimony to carry through the process. 2:31:11 PM SENATOR PASKVAN thanked him again and asked if the administration would be more efficient for the hospitals with a flat fee charge rather than a percentage of income. MR. BETIT answered that typically those fees would be predetermined during the eligibility process and would be provided to the providers when the patient comes in for service; the hospitals and physicians would not have to do the calculation. 2:32:04 PM SENATOR THOMAS asked if, as a humanitarian gesture, the hospitals would be interested in support of an incremental discount for every $50 increment in the federal poverty level increase as it is applied. MR. BETIT asked if Senator Thomas means an incremental discount in what the family is charged. SENATOR THOMAS replied yes. MR. BETIT explained that the hospitals are giving significant discounts already, because Medicaid and other federal programs are well below the going rate. They would come under the protection of the Medicaid rules, which say that once a person has been billed as a Medicaid patient, that is all the provider can charge. 2:33:22 PM DONNA GRAHAM, representing herself, Anchorage, AK, agrees that SB 13 is very important; the state must get to 200 percent of FPL. But SB 87 is a wonderful bill and very fiscally responsible, as she reads it. Wellness and prevention make much more sense than waiting to treat problems. 2:34:23 PM JODYNE BUTTO MD, American Academy of Pediatrics (AAP), Anchorage, AK, asked if anyone has considered thinking a little outside the box and to find solutions that would not require 15 positions. She said it seems as if there ought to be a better way to quantify eligibility for a longer period of time to reduce the amount of work required by the patient and the department. She encouraged some "brainstorming" to find ways to streamline the process. CHAIR DAVIS thanked her for her suggestion and commented that a lot of the work Dr. Butto referred to will take place in Finance rather than in the Health and Social Services Committee. She also pointed out that there are other bills in the works this session that don't come up to this mark and, if Alaska is going to have health care for all of the children, this is the piece of legislation she would like to see passed. TOM OBERMEYER, aid to Senator Davis, pointed out that the packet that was handed out to members of the committee includes a report from the Kaiser Commission on Medicaid and the Uninsured. Page 10 of that report indicates that 11 states have taken steps to reduce procedural barriers to coverage for children; this is a cost-saving arrangement he thinks the state should look at. These states were able to eliminate the requirement for families to participate in face-to-face interviews to obtain health coverage for children. Colorado adopted administrative verification and renewal, meaning that the state no longer requires families to provide paper documentation of their income and eligibility workers obtain that information from existing databases. So things have been done in other states that could help to reduce the numbers that were presented for SB 87. CHAIR DAVIS thanked Mr. Obermeyer for bringing that forward and mentioned that the administration is working on some regulations to extend the time between personal interviews. She admitted that there is a lot of work to be done but repeated that it won't all be done in this committee. She expressed her desire to move both bills out today and asked the will of the committee. 2:38:40 PM SENATOR PASKVAN moved to report SB 87 from committee with individual recommendations and attached fiscal note(s). There being no objection, the motion carried.