Legislature(2015 - 2016)BUTROVICH 205
04/15/2015 08:00 AM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB89 | |
| SB1 | |
| HB142 | |
| SB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 1 | TELECONFERENCED | |
| = | SB 74 | ||
| = | SB 89 | ||
| + | HB 142 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 74-MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES
9:03:57 AM
CHAIR STOLTZE announced the consideration of SB 74.
9:04:07 AM
SENATOR COGHILL moved that the committee adopt the CS for SB 74,
[version 29-LS0692\F], as the working document.
CHAIR STOLTZE objected for discussion purposes.
9:04:28 AM
HEATHER SHADDUCK, Staff, Senator Pete Kelly, Alaska State
Legislature, Juneau, Alaska, reviewed the changes made to SB 74
as follows:
Section 1, page 1, line 10 through page 2, line 3:
· This sections allows DHSS to enter into a
contract through the competitive bidding process
under the State Procurement Code for durable
medical equipment or specific medical services
provided in the Medicaid program.
MS. SHADDUCK detailed that the new Section 1 has no impact on
the current used durable medical equipment bill that is running
through both bodies. She continued to address the changes as
follows:
Section 2, page 2, lines 4-16:
· Subsection (a) directs the department to
establish a computerized income, asset, and
identity eligibility verification system for the
purpose of verifying eligibility, eliminating
duplication of public assistance payments, and
deterring waste and fraud in the public
assistance programs.
· Subsection (b) directs the department to enter
into a competitively bid contract with a third-
party vendor for the eligibility verification
system. The department may also contract with a
third-party vendor to provide information to
facilitate reviews of recipient eligibility
conducted by the department.
Section 4 (Section 2 in Version S):
· Page 4, line 14-22, (8) redesigning the payment
process, changes specifically list payment
reforms that should be included:
ƒ(A) premium payments for centers of
excellence;
ƒ(B) penalties for hospital-acquired
infections, readmissions, and outcome
failures;
ƒ(C) bundled payments for specific episodes
of care; and
ƒ(D) global payments for contracted payer,
primary care managers, and case managers for
a recipient or for care related to a
specific diagnosis
· Page 6, lines 7-8, adds new (14) to the annual
report related to Medicaid reform. DHSS will also
report on the cost, in state and federal funds,
for providing options services under AS
47.07.030(b), the Medicaid program.
Section 5, page 6, lines 14-19:
· Requires the Legislature to approve any new
additional groups added to the Medicaid program
on or after March 23, 2010.
Section 12 - (Section 9 in Version S):
· At the request of Legislative Legal, made
technical fixes to the conditional effect
language in Subsections (a) through (e) by
replacing "that section" with the specific
provision reference of the bill.
Conforming changes were made to renumber sections and
references to specific sections.
9:08:17 AM
SENATOR WIELECHOWSKI asked what the rationale was behind the
date: March 23, 2010, in Section 5, page 6.
MS. SHADDUCK answered that the intent was to have the
Legislature approve additional groups prior to Medicaid
expansion. She noted that the date is an official reference to
when the Affordable Care Act (ACA) went into effect.
SENATOR WIELECHOWSKI asked if any legal opinions were sought out
as to whether the section potentially violates federal law.
MS. SHADDUCK answered no.
SENATOR WIELECHOWSKI noted that Legislative Legal Services
advised his office that the section potentially violates federal
law. He added that his office will seek out further
documentation.
MS. SHADDUCK related that the U.S. Supreme Court rule will cover
any groups that are optional under ACA. She said she will talk
to Legislative Legal Services to get some legal opinions.
SENATOR WIELECHOWSKI stated that he would like to hear from the
Department of Health and Social Services (DHSS).
9:10:56 AM
VALERIE DAVIDSON, Commissioner, Alaska Department of Health and
Social Services, Juneau, Alaska, stated that she will comment on
sections that the department has concerns over as follows:
Section 2, the department actually has a new
computerized public assistance system: Alaska's
Resource for Integrated Eligibility Services (ARIES).
ARIES pretty much meets all of the requirements except
the only feature it does not have is an income, asset
and identity eligibility verification system. We are
anticipating that this section would really require a
plug-in feature for the existing system and not
require us to go out and develop an entirely new
system which could cost millions, but a plug-in would
be a lot more affordable and efficient; if that is the
intent of the CS, then we are a lot more comfortable
with that, we anticipate a fiscal note for this and
that will be forthcoming from our vendor.
Page 4, Section 8, lines 14-21, we are fine with
these, the only question we had was on line 19,
whether we might consider changing "and" to "or"
because the bundle payments and global payments may
conflict; if on the other hand this was to develop a
payment process that includes these options, then that
is something certainly a little bit easier to live
with, but we want to make sure that by having "and,"
those don't present the opportunity to conflict with
each other.
Page 6, Section 5, this section appears to require the
department to seek the approval from the Legislature
for any mandatory coverage for Medicaid. The way that
Medicaid is administered, there are mandatory services
and there are optional services. Mandatory services
are exactly that, they are mandatory. The department's
position is it's highly unusual for the department to
be required to seek the advanced approval of the
Legislature to comply with federal law. Mandatory
groups do actually get added. We have a couple of
examples and quite frankly, we don't want to be in a
position of jeopardizing our entire Medicaid program
simply because we were not required with a mandatory
provision of federal law.
She stated that Deputy Commissioner Sherwood will provide
examples of where some mandatory groups have been added.
9:15:32 AM
JON SHERWOOD, Deputy Commissioner, Medicaid & Health Care
Policy, Alaska Department of Health and Social Services, Juneau,
Alaska, explained that mandatory groups do not get added often
and typically are part of larger structural changes to the
Medicaid program's barter healthcare system. He detailed that
examples include special Medicare beneficiaries which are
mandatory groups created to provide assistance to low income
Medicare recipients with their co-payments, premiums, or
deductible expenses. He said another example of a mandatory
group that was added by the ACA was for children who age-out of
state foster care, a mandatory coverage group that would be
impacted by the provision.
9:17:37 AM
CHAIR STOLTZE said the committee was not dealing with Medicare
expansion, but noted that there was a lot of intertwined
connectivity. He asked if Section 5 is a deal breaker.
COMMISSIONER DAVIDSON declared that the department opposes
Section 5.
CHAIR STOLTZE asked if the department vigorously opposes Section
5.
COMMISSIONER DAVIDSON answered yes.
SENATOR COGHILL opined that Section 5 appears to say if Congress
is going to unilaterally change the state's budget that the
Legislature should have a say.
9:19:09 AM
MR. SHERWOOD answered that the department typically has to
submit a new plan amendment for a new federal mandate in order
to assure implementation. He added that the Legislature would
become aware of the new mandate through the budget process if
increased expenditures are required. He revealed that there is
no direct approval for a federal mandate and state statutes
instruct compliance with the federal law, both for eligibility
categories and services.
SENATOR COGHILL commented that he is willing to take the chance
with the provision because Medicaid has always been called a
state-federal partnership. He remarked that unilateral action
can quickly overrule the state and create difficulties. He
remarked that he would want to find out prior to a bill being
sent to the Legislature and the mandate is already set into
motion. He opined that more Medicaid mandates will occur as
Medicare starts to wonder more frequently into the Medicaid
wrap-around services.
CHAIR STOLTZE remarked that he has the same concerns about the
state's appropriations and financial responsibilities where
Alaska is on the hook in its relationship with the federal
government.
9:21:54 AM
SENATOR HUGGINS asked if illegal aliens have access to Medicare
or Medicaid via presidential executive orders.
MR. SHERWOOD answered that the general rule for Medicaid is a
person must be a U.S. citizen or a legal permanent resident that
has been present in the U.S. for at least five years. He noted
that one exception applies to emergency services.
9:24:12 AM
CHAIR STOLTZE noted that his office received an e-mail prior to
the committee meeting from Mr. Tony Newman, Legislative Special
Assistant for DHSS. He asked if Mr. Newman's e-mail should be
included as the department's position.
COMMISSIONER DAVIDSON answered yes.
SENATOR WIELECHOWSKI asked if Commissioner Davidson supported SB
74.
COMMISSIONER DAVIDSON answered that DHSS has no position on the
bill, but opposes Section 5. She added that the department
believes that reform and expansion go hand-in-hand. She said the
department would like to see a Medicaid expansion provision in
the bill.
SENATOR HUGGINS asked to verify that the department has no
position on the bill.
COMMISSIONER DAVIDSON reiterated that the department has not
taken an overall position on the bill, but the department does
oppose Section 5.
SENATOR HUGGINS commented that he see reform as an avenue to
have a conversation about expansion. He remarked that expansion
is not part of the bill and he's a bit disappointed. He thanked
Commissioner Davidson for stating her position.
9:26:34 AM
SENATOR WIELECHOWSKI noted that the Governor has introduced his
own bill to reform and expand Medicaid. He asked that
Commissioner Davidson describe some of the reform efforts in the
Governor's bill and how much the state would save.
COMMISSIONER DAVIDSON answered that SB 74 and the Governor's
bill are closely aligned in terms of reform efforts. She noted
that some of the provisions in the Governor's bill includes
specific language on the following:
· Use an 1115 Waiver to negotiate with the Centers for
Medicare & Medicaid Services (CMS) that will allow the
state to take advantage of 100 percent federal match.
· Work with the tribal health system to enhance their
ability to provide care for beneficiaries.
· Engage with an independent third party to make
recommendations and report at the beginning of the
next session for a provider-tax.
She detailed that in order to implement the provider-tax,
separate legislation would be required. She disclosed that
Alaska is the only state without a provider-tax. She explained
that most states typically impose a provider-tax on hospitals
and nursing homes.
COMMISSIONER DAVIDSON set forth that Medicaid expansion and
reform is healthy for Alaskans and detailed as follows:
· Increases access to healthcare coverage.
· Saves the state $107 million over the first 6 years.
· Saves resources that the state is currently paying for with
100 percent from the General Fund.
· Good for the economy by infusing over $1 billion in new
resources into Alaska.
· Acts as a catalyst for reform.
She reiterated that reform and expansion go hand-in-hand. She
voiced that reform is a constant process that happens all of the
time. She asserted that DHSS has already undertaken reform
efforts based on current and prior administrations. She remarked
that since reform efforts have been undertaken, the state should
do expansion.
9:30:26 AM
CHAIR STOLTZE noted that he had asked at the previous committee
meeting that Commissioner Davidson provide a projection on
departmental letterhead, absent expansion, for the anticipated
growth in Medicaid up to 2030.
COMMISSIONER DAVIDSON answered that Medicaid's growth
projections are expected to range from $4.5 billion to over $6
billion by 2032. She disclosed that the projections do not take
into account the reform efforts that the department is
undertaking. She said DHSS recognizes that the Medicaid program
in its current form is not sustainable and there's no choice but
to reform.
9:32:30 AM
CHAIR STOLTZE asked if there is an aversion to providing the
committee with a projection document as part of the record. He
said a Medicaid growth projection from DHSS is an important part
of the record.
COMMISSIONER DAVIDSON replied that DHSS will provide the
document to the committee.
CHAIR STOLTZE noted that his request will give Commissioner
Davidson an opportunity to provide her own numbers in contrast
to the projections that she has challenged.
SENATOR WIELECHOWSKI asked how much uncompensated care there is
in Alaska, who pays for the uncompensated care, and how much
uncompensated care is expected to be covered by the federal
government if Medicaid was expanded.
CHAIR STOLTZE pointed out that the committee does not have an
expansion bill. He said the expansion bill was not referred to
the committee.
COMMISSIONER DAVIDSON answered that according to the Alaska
State Hospital and Nursing Home Association (ASHNHA), Alaska
hospitals provide over $100 million in uncompensated care
annually. She noted that Arizona saw a 30 percent reduction in
uncompensated care during its first 6 months of expansion and
added that ASHNHA has testified that they projected a 30 percent
drop in their uncompensated care. She said with regard to who
pays for uncompensated care, everyone does because a hospital
has to increase what they charge to recoup their loss.
9:34:36 AM
CHAIR STOLTZE noted that the Governor has said that expansion is
reform. He asked if there has been an evolution by the
administration that just spending more money is not reform.
COMMISSIONER DAVIDSON replied that she does not recall the
Governor making the statement that expansion is reform. She
reiterated that expansion and reform actually goes hand-in-hand.
She opined that if the Governor's position was that expansion is
reform, then he would probably have introduced a bill that was
just on expansion, but he instead chose to do a bill that is
both expansion and reform.
CHAIR STOLTZE commented that there may have been an evolution by
the Governor.
SENATOR HUGGINS said there are studies that indicate "ObamaCare"
has had little or no effect on uncompensated care or emergency
room usage.
9:36:46 AM
COMMISSIONER DAVIDSON replied that the states in the study may
have benefited from a bill similar to Governor Walker's that
requires identifying someone that over utilizes the emergency
room department.
SENATOR WIELECHOWSKI noted that Commissioner Davidson mentioned
the total savings on the Governor's reform bill of $107 million.
He said he thought the total savings over 6 years was $330
million.
9:38:27 AM
COMMISSIONER DAVIDSON specified that the savings for the state's
general fund would be $107.8 million in the first 6 years.
CHAIR STOLTZE pointed out that an expansion bill is in another
committee. He asked that questions be general and not too
involved in the expansion bill.
SENATOR WIELECHOWSKI asked why the state should expand now
versus waiting until reforms kick in.
9:40:05 AM
COMMISSIONER DAVIDSON asserted that reforms had already kicked
in. She detailed that the reforms began in the prior
administration in addition to the reforms that were undertaken
in December, including benefits from the super-utilizer program.
She revealed that the ACA's enhanced federal match of 100
percent for Medicaid expansion only lasts through 2016. She
detailed that the state has already missed $146 million or
$400,000 per day from the federal match opportunity. She
specified that federal match over the coming calendar years as
follows:
· 2017: 95 percent
· 2018: 94 percent
· 2019: 93 percent
· 2020 and beyond: 90 percent.
She noted that 93 percent federal match is the same for the
state's aviation or runway improvements and 90 percent is the
same match for transportation and road improvements. She
summarized that the state has an opportunity to make Alaskans as
healthy and productive as possible using 100 percent federal
funds in the first year.
9:42:28 AM
She addressed recent testimony from two different providers:
PeaceHealth Hospital from Ketchikan and Central Peninsula
Hospital from Soldotna. She detailed that PeaceHealth received
an innovation grant from the Centers for Medicare & Medicaid
Services (CMS) and spent $700,000 to be able to lose $1.5
million in order to improve health outcomes for their
population. Central Peninsula said they had interest in pursuing
a Medicaid demonstration project described in the Governor's
bill that would change the way Medicaid is reimbursed. She
specified that Central Peninsula preferred to use the resources
from Medicaid expansion because they would not realize the
savings and make much progress. She said similar to PeaceHealth,
Central Peninsula intends to spend money to lose money.
9:45:43 AM
BECKY HULTBERG, President/CEO, Alaska State Hospital and Nursing
Home Association (ASHNHA), Juneau, Alaska, provided general
comments on SB 74 as follows:
We've had a really good dialog this session about
reform and I think that is healthy and it's also step
one of what needs to be an ongoing dialog. We agree
with the sponsor and the department that Medicaid
costs are growing at an unsustainable rate.
In my past job I sat in this building and said
healthcare costs are growing at an unsustainable rate
and that is still the case; but, I think to understand
why healthcare costs are growing at an unsustainable
rate, we have to look at how we pay for healthcare and
what we pay for, I'm going to take a bit of a step
back and talk about that because it is essential to
reform and how reform can actually move forward and
make change. Our healthcare payment system right now
incentivizes the wrong things. We work within what is
called a fee-for-service system which basically means
providers get a fee for each service that they
provide. Providers are thus financially rewarded based
on the volume of care provided, not necessarily the
value of that care, value meaning that the quality and
cost of that care are both considered. So we know that
nationally the trend in healthcare is toward paying
for value, toward paying for quality outcomes, and
toward incentivizing providers for reduced cost in
getting those outcomes; but this is a really huge
shift in how care is delivered and how payment is
made, it is going to take time, it's going to be
disruptive, and systematic change will not happen
until those financial incentives change. Portions of
this bill do begin to address that question of payment
reform. Some payers are already making this
transformation, Medicare is moving toward value-based
purchasing, pretty aggressively; so this is coming,
the question for us is how we are going to respond in
this environment. Providers are working to make this
transition in a pretty challenging economic
environment and I just want to take a minute because
again, I think this is essential to reform.
9:48:12 AM
MS. HULTBERG continued her overview as follows:
Hospitals are a unique industry sector in many ways.
One of the most significant ways that our industry is
unique is that we are legally required to give our
services away for free, that's because the federal
Emergency Medical Treatment and Labor Act (EMTALA),
requires hospitals to take care of patients that are
present at the emergency room whether they can pay or
not; this uncompensated care amounts to over $100
million per year and that's a conservative estimate
for Alaska hospitals, some hospitals have testified
that it is between 10 and 20 percent of their charges.
Alaska hospitals' other area of financial pressure is
Alaska hospitals are facing very significant financial
pressures from the Medicare program. Alaska Hospitals
will see $600 million in Medicare reductions in a 15
year time horizon; that started in 2010, it goes out
to 2024. There are another $300 million of cuts under
consideration, which could bring the total cuts to
Alaska hospitals to almost $900 million, that's a lot
of money coming out of the system.
The cuts have come through a couple of ways and I want
to address that and I think part of this refers to
something Senator Huggins has spoken about regarding
Medicare crowd-out. Some of those cuts did come as a
result of ACA, between $250 million and $300 million
of those cuts came about because of the act. The
assumption was that if uncompensated care goes down,
which it should, if people have coverage through the
exchanges or through Medicaid expansion, the hospitals
could absorb Medicare cuts. In states that have not
expanded Medicaid, those uncompensated care reductions
have been much, much less. The concern for non-
Medicaid expansion-states is that the hospitals are
going to take those cuts regardless. Now I want to
point out that while some of the cuts originated in
ACA, they are now not really linked to it because
Republican budget proposals have kept the cuts, even
as they propose repealing the ACA, so we have to
assume those cuts are here to stay and they are an
economic reality that our industry is now learning to
deal with.
So in this economic environment it is kind of hard to
talk about reform because what do you want out of
reform? The goal of reform is bending the cost curve
and reducing the cost of healthcare. So in an
environment where we are taking money out of the
system, we are saying now we need to take more out of
the system, that's a really challenging conversation
to have with any industry.
9:50:42 AM
MS. HULTBERG continued her overview as follows:
But we are here supporting reform for a couple of
reasons. First, we know it's the right thing to do and
it's absolutely what we have to do as an industry to
survive. Secondly, because we have this opportunity
with the carrot of Medicaid expansion to put some
money back into the system to help us reform as we are
taking money out and so I think that's why
understanding that this bill is related to reform that
from a hospital perspective it's hard to have the
reform conversation without having the expansion
conversation. Couple quick reasons, Medicaid reform is
not a point in time event, it's an ongoing process and
again, I want to thank this committee and the
Legislature for really considering these issues this
year. We will be successful in reform and we are
having these conversations every year, so I think it
has been a good dialog, but we shouldn't necessarily
wait for reform because we will never arrive, the
industry is too dynamic, it is too complex, and it is
changing too fast to ever say that we have really
arrived at reform. Second, innovation and change
require capital. For any business to fundamentally
change its business model, and that's what is being
required in healthcare right now, that is not
something that can be done without an investment and
it is certainly not something that is easy to do when
you are taking money out of that system, which is what
is happening right now. So if we are going to succeed
at reform, we are going to have to find a way to
invest to change how care is delivered, and we're
going to have payers who are willing to have the
conversations about how do we pay for value instead of
paying for volume, those two things have to go hand-
in-hand.
As the commissioner mentioned, PeaceHealth-Ketchikan
talked about how they have been successful at reform,
they have been successful at coordinating care; they
received a $3 million innovation grant to fund their
project, the result of that project has been better
quality outcomes and reduced revenue at the hospital.
So you have to ask the question, under our current
system, if they are to reform without a grant, they
will be spending money to lose money to improve care;
there are not many businesses that choose that path.
So how do we as a state help to drive reform in that
economic environment? The answer is we have to help,
especially our smaller facilities that do not have
financial capacity, identify resources that they can
invest in reform and then we have to have the
conversation about how we pay for value so that we can
sustain that reform; that's really where Medicaid
expansion comes in because the reduction in
uncompensated care improves margins, which then allows
for the risk capital for innovation. From our
standpoint, this is an issue on many levels, it is
from a hospital perspective an important issue about
providing care for the vulnerable in our community,
it's an economic issue, and it's a fiscal issue; but,
it's also very much an issue about how we are going to
sustain the business model of the hospital that
provides care in the community and that's, I think,
for us a really important conversation. Our hospitals
cannot pick up their practices and move, they are
here, they are integral parts of the community and
often they are the backbone of a community. So the
question for us and why we are here saying we want to
reform is that we know we must reform to remain
viable, but the landscape looks really challenging.
According to the National Rural Health Association, 48
Critical Access Hospitals (CAH) have closed their
doors. CAH are hospitals below 25 beds, 48 have closed
their doors since 2010, and an estimated 300 more are
at risk. As we look at this era of disruptive change,
we have to figure out how we navigate it and navigate
it in an environment of reduced resources; we believe
reform is critical to that conversation but we also
believe that expansion is critical to that
conversation.
So Mr. Chairman, those are just my general comments
about the bill. I am happy to answer any specific
questions about the legislation. I think we believe,
again, reform and expansion should go hand-in-hand,
but we do appreciate the efforts of the bill's sponsor
to address this difficult question of reform.
9:55:23 AM
CHAIR STOLTZE pointed out that the President said ACA was going
to be established to cover people with better healthcare and
spend less money. He asked if Ms. Hultberg was actually shocked
that the things the President said are a little upside down.
MS. HULTBERG replied that the healthcare industry was going
through changes before ACA and noted that the economic
environment for healthcare was difficult before the ACA. She
disclosed that businesses were driving their own change. She
added that commercial payers are the best payers for hospitals.
She opined that ACA accelerated change, but it was not the
driving force necessarily for some of the changes that were
currently being seen. She disclosed that the American Hospital
Association supported ACA and was willing to work with the
administration because of the increased coverage covered by the
act. She summarized that the state has to figure out how to
navigate the current business landscape in order to maintain
hospitals, provide quality care, and ensure continuity of
services regardless of what an individual thinks might happen in
the future or what happened in the past.
CHAIR STOLTZE opined that "reform" is a broad and nebulous term.
He said the terms "cost control," "cost containment," and
"sustainability" narrows the discussion in making a sustainable
program. He remarked that the approximate $ 6 billion projection
by 2032 would be a pretty healthy chunk of the state's budget
with Permanent Fund earnings used well before federal mandates
are met. He reiterated that the term "reform" leaves a lot of
the other discussions off of the table because everybody is a
reformer.
9:58:41 AM
MS. HULTBERG affirmed Chair Stoltze's point and related that
Medicaid reform can be divided into three "buckets" as follows:
1. Programmatic Reform: making reforms in the existing
program.
2. Benefit Redesign: looking at what other states have done to
things like benefit plans and co-payments.
3. Payment Reform: making sure the state is paying for the
outcomes it wants.
CHAIR STOLTZE stated that he is a little concerned about the
sentiment, "Pass the bill and we'll work on it." He said he
wants to make sure the committee understands how the bill is
going to affect the state and the providers. He opined about
seeing an awakening of the providers realizing that expansion is
not just a free check.
SENATOR WIELECHOWSKI commented that ASHNHA has a lot of non-
profits who are providing care and not making a profit off of it
because the government requires that care be provided for anyone
that walks in the door. He said providers are losing $100
million per year in uncompensated care and asked if it is fair
to say that the Legislature has the ability to help ASHNHA
members recover a significant portion from uncompensated care by
expanding Medicaid.
MS. HULTBERG answered yes. She asserted that expansion will help
ASHNHA help the state invest in the kind of care redesign and
reform that assists in lowering the cost curve over the long
term which is a real win for everyone.
SENATOR WIELECHOWSKI stated that the current healthcare business
model is not good. He remarked that the healthcare system
continues to need significant improvement and he was glad to see
the committee addressing reform. He asked if any ASHNHA
organizations will go out of business if they continue to
provide $100 million-plus in uncompensated care.
10:01:42 AM
MS. HULTBERG revealed that hospital finances are a significant
spectrum where some facilities are very profitable and some are
on the margin. She remarked that she is concerned about ASHNHA's
Critical Access Hospitals as the economic environment becomes
increasingly difficult.
SENATOR WIELECHOWSKI commented that he would hate to see
hospitals shutdown and Alaskans lose access to medical care
because ASHNHA organizations are providing $100 million in
uncompensated care. He asserted that the Legislature not taking
the opportunity to fix the problem in the next week would be
extremely unfortunate for Alaskans.
10:02:30 AM
SENATOR COGHILL said a whole range of delivery services for
Medicaid must be looked at, not just hospitals. He asked if
ASHNHA organizations are using telemedicine.
MS. HULTBERG replied that telemedicine is really exploding in
the Lower 48 and has a lot of promise in Alaska. She said
Alaska's tribal system is very sophisticated in its use of
telemedicine. She admitted that Alaska is behind the rest of the
country in the adoption of telemedicine due to barriers that she
is not equipped to address.
SENATOR COGHILL stated that prior to adding more people, a
connection must be made between hospitals with expertise and
some of the needs in other communities. He noted that not just
the hospitals are feeling the weight of change, but people who
have delivered services that have not been paid because of
system changes, like elder care or child care. He asserted that
due to not changing behavior, profit and nonprofit deliverers
who do not get paid may not be capable of adding a new
population.
10:05:32 AM
CHAIR STOLTZE remarked that there are two bills, one that is the
Governor's bill and the other referred to as the "reform cost
containment" bill. He specified that the "reform cost
containment" bill was directed by the legislative process, a
deliberative consideration by three committees with public
testimony and multiple hearings. He said Governor Walker made a
pretty public demand that his bill have a less deliberative
process of only two committees. He asserted that the Legislature
put more due diligence on the "reform cost containment" bill
than on the Governor's bill. He remarked that the Governor made
a pretty public "request slash demand" and the Legislature
yielded to the invasion from another branch of government out of
respect and courtesy. He said the "reform cost containment" bill
process has been more deliberative on cost containment and
reform then on the expansion. He noted that several admissions
have been made to hurrying it up on expansion, but the committee
does not deal with expansion and only has one vehicle that has a
very deliberative legislative process.
SENATOR HUGGINS asked to verify that nonprofit hospitals have a
mechanism to distribute some of their revenue back into the
community.
10:07:15 AM
MS. HULTBERG answered that there are specific requirements to
maintain not-for-profit status that a facility provides a
certain amount of community benefit. She detailed that community
benefit can include uncompensated care and other subsidized
services where the facility knows that they are never going to
make break-even, but the services are considered a community
benefit.
SENATOR HUGGINS asked to establish that the dollars for
providing community benefits come out of the non-profit system.
MS. HULTBERG answered that the assumption is that the community
benefit dollars would have been paid in taxes so the benefit is
going back into the community in a different way, recognizing
that taxes also are a benefit to the community.
SENATOR HUGGINS asked how big the pot was for larger hospitals.
MS. HULTBERG answered that the pot was in the hundreds of
thousands of dollars.
CHAIR STOLTZE pointed out that the largest taxpayers in two of
the largest municipalities are private hospitals: Alaska
Regional of Anchorage and Mat-Su Regional in the Mat-Su Borough.
MS. HULTBERG agreed that the two noted hospitals are very large
taxpayers and there is a community benefit associated with being
a large taxpayer as well.
CHAIR STOLTZE disclosed that Mr. Price had comments from the
private sector.
10:09:42 AM
JEREMY PRICE, State Director, Americans for Prosperity-Alaska,
Anchorage, Alaska, explained that Americans for Prosperity is an
organization devoted to economic freedom. He detailed that
Americans for Prosperity define economic freedom as policies
that help small businesses and individuals be successful by
keeping the cost of government and taxes low. He said Americans
for Prosperity supports SB 74 and considers the bill as a great
piece of legislation that takes a valiant approach to reforming
the cost of Medicaid. He asserted that reform is the first part
of the equation that must be figured out first. He noted reports
that Medicaid spending will continue to increase even without
expansion. He asserted that should Alaska expand Medicaid, the
federal government may reduce their payment share after the
state is on the hook.
10:14:08 AM
CHAIR STOLTZE noted that Commissioner Davidson mentioned in a
previous committee meeting that she wanted to meet and hear from
all of the stakeholders' voices. He opined that Mr. Price's
testimony represents the interests in a lot of folks in the
legislators' districts. He said unfortunately there has not been
a willingness from some stakeholders to voice their opinion. He
stated that there are a lot voices in the Medicaid debate, not
just the recipients, but the folks that are paying the bills.
MR. PRICE pointed out that private practice physicians are
coming out in support of reform, but against expansion. He
opined that private practice physicians have said that ACA is
killing their businesses and Medicaid patients are treated as a
charitable contribution to their communities. He said private
practice physicians are out there, but they are afraid of
testifying against the bill because of intimidation,
retaliation, losing customers, and taking on the Governor.
CHAIR STOLTZE announced that he will recess to a call of the
chair to leave flexibility open to continue the discussion on a
major piece of legislation. He asked that Senator Kelly attend
the next committee meeting to address the bill's close out. He
inquired if Ms. Shadduck had any closing remarks.
10:17:20 AM
MS. SHADDUCK declared that she wanted to point out a few
provisions that are absolutely unique to Senator Kelly's bill.
She opined that SB 74 has a bigger focus on fraud, extensive
legislative reporting requirements, payment reform, and fiscal
notes that reflect costs that are not shown in the Governor's
bill. She pointed out that Commissioner Davidson and Ms.
Hultberg both said payment reform is absolutely something that
should be done by changing from a fee-for-service to an
incentive based service. She detailed that SB 74 has a fiscal
note that reflects incentive based service reform. She revealed
that the Medicaid managed care case management demonstration
program is unique to Senator Kelly's bill. She said extensive
studies have shown that doing managed care or case management in
the Medicaid program saves money and noted that SB 74 is
projected to show up to 20 percent in savings; however, DHSS has
shown no savings in their fiscal note and are not comfortable
with submitting an indeterminate fiscal note.
CHAIR STOLTZE pointed out that Senator Kelly will have a voice
on the fiscal note conversation in the Senate Finance Committee.
MS. SHADDUCK disclosed that DHSS was excited that SB 74 adds
some positions for fraud prevention and addresses cost
containment; however, the costs only show up on Senator Kelly's
bill.
CHAIR STOLTZE acknowledged the assistance of Senator Coghill,
Representative Vazquez, and legislative staff members for
providing ideas that made it into the bill. He noted that
Representative Vazquez has experience from the Department of Law
with fraud investigations and brought relevant issues to the
discussion. He stated that SB 74 was a collaborative effort, but
the substance of the bill was yielded to the sponsor.
10:20:37 AM
CHAIR STOLTZE announced that the committee will stand in recess
to the call of the chair. [The committee did not reconvene and
SB 74 was held in committee.]