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
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 13 Out of Committee
Moved SB 87 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
              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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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.                                                               
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                                                               
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                                                               
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                                                               
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.                                                                                         

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