Legislature(2017 - 2018)BELTZ 105 (TSBldg)

03/15/2018 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved CSSB 62(L&C) Out of Committee
Heard & Held
           SB  62-REPEAL CERTIFICATE OF NEED PROGRAM                                                                        
1:41:17 PM                                                                                                                    
CHAIR COSTELLO  announced the  consideration of  SB 62  and noted                                                               
the proposed committee substitute (CS).                                                                                         
1:41:59 PM                                                                                                                    
At ease                                                                                                                         
1:42:21 PM                                                                                                                    
CHAIR COSTELLO reconvened the meeting.                                                                                          
SENATOR  MEYER moved  to  adopt the  CS for  SB  62, version  30-                                                               
LS0502\O, as the working document.                                                                                              
CHAIR COSTELLO objected for an explanation of the changes.                                                                      
1:42:54 PM                                                                                                                    
NATASHA  MCCLANAHAN, Staff,  Senator Mia  Costello, Alaska  State                                                               
Legislature,   Juneau,   Alaska,    paraphrased   the   following                                                               
explanation of changes between versions D and O of SB 62:                                                                       
     Version O allows for an  exemption from the certificate                                                                    
     of  need   program  if  the   new  construction   of  a                                                                    
     healthcare  facility, alteration  of  bed capacity,  or                                                                    
     addition  of a  category  of health  services  is in  a                                                                    
     location that is over 75  miles from another healthcare                                                                    
     facility. This is a change from  100 miles in Ver. D to                                                                    
     75   miles  in   Ver.  O.   The  change   assists  more                                                                    
     communities  that are  currently struggling  to attract                                                                    
     and retain healthcare services  to better provide equal                                                                    
     access to care for all Alaskans.                                                                                           
CHAIR  COSTELLO removed  her  objection and  asked  if there  was                                                               
further objection.                                                                                                              
1:44:04 PM                                                                                                                    
SENATOR GARDNER  asked the rational  for selecting 75  miles from                                                               
another health care facility.                                                                                                   
CHAIR COSTELLO said individuals,  especially from Delta Junction,                                                               
testified that the community had  been unsuccessful going through                                                               
the CON process even though  the closest health care facility was                                                               
100 miles away. The reason for  selecting 75 miles was that it is                                                               
about an  hour away  under good driving  conditions. She  noted a                                                               
map in the packets that  shows which Alaskan communities would be                                                               
1:46:29 PM                                                                                                                    
SENATOR GARDNER removed her objection.                                                                                          
CHAIR COSTELLO  stated that without further  objection, version O                                                               
was adopted.                                                                                                                    
SENATOR MEYER observed that the  fiscal notes would probably need                                                               
to be updated.                                                                                                                  
CHAIR COSTELLO asked if he  would like Margaret Brodie to comment                                                               
on the department's response to the committee substitute.                                                                       
SENATOR MEYER said yes.                                                                                                         
CHAIR COSTELLO  asked Ms.  Brodie to speak  to the  fiscal impact                                                               
and the department's response to the committee substitute.                                                                      
1:47:21 PM                                                                                                                    
MARGARET  BRODIE, Director,  Division  of  Health Care  Services,                                                               
Department  of  Health  and Social  Services  (DHSS),  Anchorage,                                                               
Alaska, explained that  the CS will result in a  zero fiscal note                                                               
because  the department  already  does this  work.  She said  the                                                               
department was "fine" with the CS.                                                                                              
SENATOR GARDNER  asked if  the department had  a position  on the                                                               
current draft of the bill.                                                                                                      
MS.  BRODIE  clarified that  the  department  would support  this                                                               
change and the bill.                                                                                                            
1:48:55 PM                                                                                                                    
SENATOR  MICCICHE asked  how the  CS changes  the Certificate  of                                                               
Need Program  other than  exempting a facility  that is  75 miles                                                               
from another health care facility from the CON statutes.                                                                        
MS. BRODIE deferred the question to Donna Stewart.                                                                              
1:49:38 PM                                                                                                                    
DONNA STEWART,  Executive Director, Office of  Rate Review (ORR),                                                               
Department of  Health and Social Services  (DHSS), explained that                                                               
ORR currently reviews  all applications that fit  the criteria of                                                               
the statute.  The current draft  of the bill allows  an exemption                                                               
for  facilities that  are built  75 miles  away from  an existing                                                               
[CON]  facility. Theoretically,  the department  would see  fewer                                                               
applications. Over  the last  eight to ten  years, the  few small                                                               
communities  that  applied for  a  certificate  of need  all  had                                                               
additional circumstances  attached so they would  have still gone                                                               
through  the  CON process.  Delta  Junction  would be  the  first                                                               
community that would  fall under the new requirement  of 75 miles                                                               
from another CON facility.                                                                                                      
SENATOR  MICCICHE  posed the  hypothetical  situation  of a  for-                                                               
profit  facility  opening in  Delta  Junction  next door  to  the                                                               
nonprofit facility  that opened under the  proposed exemption. He                                                               
asked if  the second  health care facility  would be  required to                                                               
obtain a certificate of need.                                                                                                   
MS.  STEWART  said it  would  depend  on  the timing.  Until  the                                                               
nonprofit receives certification that it  is an active and viable                                                               
hospital, it  could be  in jeopardy of  having a  competitor open                                                               
next door.                                                                                                                      
1:53:16 PM                                                                                                                    
SENATOR  STEVENS said  he was  uncomfortable  with the  amendment                                                               
because he  wasn't sure  whether the  hospitals that  objected to                                                               
the original version would be placated by the current draft.                                                                    
1:54:09 PM                                                                                                                    
CHAIR  COSTELLO   asked  Jean  Mischel  to   comment  on  Senator                                                               
Micciche's question.                                                                                                            
1:54:17 PM                                                                                                                    
JEAN  MISCHEL, Legislative  Counsel, Legislative  Legal Services,                                                               
Legislative  Affairs Agency,  Alaska  State Legislature,  Juneau,                                                               
Alaska, said the statute is  drafted to mean that the expenditure                                                               
of $1  million plus  the inflation  adjustment would  trigger the                                                               
need for the  certificate of need. Once the  nonprofit spent what                                                               
is now equivalent to $1.4 million,  it would have a good argument                                                               
that  it had  vested its  interest  in the  health care  facility                                                               
enough  to  meet the  exception  standard  before the  for-profit                                                               
hospital comes  in. However, if  the nonprofit came in  under the                                                               
exception and later  decided to expand services, it  would need a                                                               
certificate of need.  Also, if the nonprofit  beat the for-profit                                                               
facility  within  the  75-mile radius,  the  for-profit  facility                                                               
would be  required to  meet the standard  for the  certificate of                                                               
need for that area.                                                                                                             
CHAIR  COSTELLO said  that was  her understanding;  page 2  talks                                                               
about where  the health care  facility is initiated.  She thanked                                                               
Senator Micciche for the question.                                                                                              
SENATOR  MICCICHE  expressed  a  little  confusion  about  how  a                                                               
facility  that  was exempted  from  the  CON process  could  ever                                                               
qualify  for  CON protection.  "It  keeps  pointing back  to  [AS                                                               
18.07.031] and we just changed .031"                                                                                            
MS. MISCHEL said  .031(a) doesn't just provide  the exception for                                                               
the 75-mile radius. It also  prohibits a person from expending $1                                                               
million or more for the three  types of facilities and that would                                                               
still apply to facilities that have initiated construction.                                                                     
1:58:04 PM                                                                                                                    
At ease                                                                                                                         
1:59:45 PM                                                                                                                    
CHAIR  COSTELLO  reconvened the  meeting.  She  found no  further                                                               
questions and solicited a motion.                                                                                               
1:59:57 PM                                                                                                                    
SENATOR  MEYER moved  to report  the CS  for SB  62, version  30-                                                               
LS0502\O,  from  committee  with individual  recommendations  and                                                               
forthcoming revised fiscal note(s).                                                                                             
CHAIR  COSTELLO  found  no  objection  and  announced  that  CSSB                                                               
62(L&C) moved from Senate Labor and Commerce Standing Committee.                                                                

Document Name Date/Time Subjects
CSSB 62 Ver. J.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB62 Explanation of Changes Ver. D to J.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB 62 - 03.14.18 Legislative Research Request - Alaska Communities Without Nearby Health Care Facilities.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB 62 Ver. O.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB62 Explanation of Changes Ver. J to O.pdf SL&C 3/15/2018 1:30:00 PM
SB 62