Legislature(2013 - 2014)Eagle River
10/29/2013 12:00 PM House ADMINISTRATIVE REGULATION REVIEW
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Affordable Care Act | |
| Presentation: Regulations for Health Information Exchanges | |
| Presentation: Department of Health and Social Services Assisted Living Home Rate Changes | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
ADMINISTRATIVE REGULATION REVIEW COMMITTEE
Eagle River, Alaska
October 29, 2013
12:03 p.m.
MEMBERS PRESENT
Representative Lora Reinbold, Chair
Senator Cathy Giessel, Vice Chair
Representative Mike Hawker
Representative Geran Tarr
MEMBERS ABSENT
Senator Gary Stevens
Senator Hollis French
COMMITTEE CALENDAR
PRESENTATION: AFFORDABLE CARE ACT
- HEARD
PRESENTATION: REGULATIONS FOR HEALTH INFORMATION EXCHANGES
- HEARD
PRESENTATION: DEPARTMENT OF HEALTH AND SOCIAL SERVICES ASSISTED
LIVING HOME RATE CHANGES
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JYLL K. GREEN, Advanced Nurse Practitioner (ANP)
myHealth Clinic
Anchorage, Alaska
POSITION STATEMENT: Testified during discussion of the
Affordable Care Act.
TYANN BOLLING, Enroll Alaska
Northrim Benefits Group, LLC.
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on the
Affordable Care Act.
ROSS TANNER, M.D.
Diabetes & Lipid Clinic of Alaska
Anchorage, Alaska
POSITION STATEMENT: Stated his position on healthcare during
the discussion of the Affordable Care Act.
BRANDON CLARK, Health Care Policy Expert
FrogueClark LLC
Washington, D.C.
POSITION STATEMENT: Explained details of the Affordable Care
Act.
THOMAS HENDRIX, Ph.D., RN, Nurse, Educator
Anchorage, Alaska
POSITION STATEMENT: Testified about waivers during the
discussion of the Affordable Care Act.
EVAN FEINBERG, President
Generation Opportunity
Washington, D.C.
POSITION STATEMENT: Testified during the discussion of the
Affordable Care Act.
JOE RIGGS, Registered Agent
Alaska Healthcare Strategies, LLC
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of the
Affordable Care Act.
WILLIAM J. STREUR, Commissioner
Office of the Commissioner
Department of Health & Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of the
Affordable Care Act.
DR. RANCIN (ph), Dentist
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of the
Affordable Care Act.
JOSHUA DECKER, Interim Executive Director
American Civil Liberties Union of Alaska (ACLU of Alaska)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of the
Affordable Care Act.
SHERRY METTLER, Past President
Assisted Living Association of Alaska;
Past President
Assisted Living Professionals of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of the
proposed changes to the Assisted Living Home (ALC) rate changes.
AMY ONEY, President and Owner
Mama's Assisted Living Homes
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation during
the discussion of the proposed rate changes for assisted living
homes.
ROBERT NASH, Owner
Riverside Assisted Living, LLC
Soldotna, Alaska
POSITION STATEMENT: Testified during the discussion of the
proposed rate changes for assisted living homes.
LYNN VAZQUEZ
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion on the
proposed rate changes for assisted living homes.
JASON HOOLEY, Special Assistant
Office of the Commissioner
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion on the proposed rate changes for assisted living
homes.
JARED KOSIN, Executive Director
Rate Review
Division of Health Care Services
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion on the proposed rate changes for assisted living
homes.
ACTION NARRATIVE
12:03:01 PM
CHAIR LORA REINBOLD called the Administrative Regulation Review
Committee meeting to order at 12:03 p.m. Representatives Hawker
and Reinbold and Senator Giessel were present at the call to
order. Representative Tarr arrived as the meeting was in
progress.
^Presentation: Affordable Care Act
Presentation: Affordable Care Act
12:05:26 PM
CHAIR REINBOLD announced that the first order of business was
the discussion of the Affordable Care Act (ACA).
CHAIR REINBOLD related that the Administrative Regulation Review
Committee had been hearing people around the state talk about
the ACA and its impacts on Alaska and Alaskans. She said the
program is in its twenty-ninth day and problems have arisen,
such as Federal Exchange glitches within its reported 500
million lines of code. She remarked that according to The New
York Times, that is "more than Apple OSX, Windows XP, Facebook,
Linux, and Google Chrome web browsers combined." She offered
her understanding that millions of people potentially may not be
able to keep their current insurance. For example, she stated:
Already, Kaiser Health reports that Florida Blue is
terminating about 300 policies - about 80 percent of
its individual policies in the state; Kaiser
Permanente, in California, has sent notices to 160,000
people - about half its individual business in the
state; Highmark, in Pittsburgh, is dropping about 20
percent of its ... customers; ... Independent Blue
Cross, the major insurer in Philadelphia, is dropping
about 45 percent; Blue Shield of California sent
roughly 119,000 cancellation notices in mid-September
- about 60 percent of its individual businesses.
CHAIR REINBOLD said the new plan is "being proposed to offer
broader benefits," and that in many cases increased benefits
lead to higher costs. She emphasized the importance of nurses
and physicians' assistants (PAs) in providing patient care.
12:07:41 PM
[Due to technical difficulty, the sound was not recorded for
less than 30 seconds; however, no testimony was lost.]
12:08:28 PM
JYLL K. GREEN, Advanced Nurse Practitioner (ANP), myHealth
Clinic, stated that [the Affordable Care Act] is brought up by
her patients five or six times a day, and she opined that "the
education of the public in Alaska has been poor at best." She
indicated that [myHealth Clinic] printed out a one-page
reference to the healthcare.gov web site, and she expressed
amazement that so many of her uninsured or underinsured clients
are unaware of that source for information. She said she knows
other states have provided information for their residents, but
opined that Alaska as a whole has done a poor job of getting the
word out to Alaskans as to how to navigate the new law.
MS. GREEN said she wants to believe that the goal of the ACA is
to increase patient access to health care, improve health care
outcome, and restrain escalating health care costs; however, she
said she thinks there are underlying agenda threatening the
effectiveness of the law. She stated, "A lot of people want to
talk about insurance companies making money off of this, and
while that may be kind of off to the side and the stock prices
may or may not have risen, I don't think I should say more on
the positive side of what the law could do for us and what we
need to do to get the vision that it's trying to create." She
said she does not feel that the current plans in place are
helping to achieve the goals of the ACA. Further, she stated
that as a small business owner, she is unsure how she is
supposed to implement and afford all the changes effected
through the Act. She said that with 8,000 people under the care
of her practice, she does not think it is fiscally feasible to
implement a lot of the changes recommended to obtain a healthier
population.
MS. GREEN said the patient-centered medical home is one concept
that has been brought up repeatedly in the discussion of how to
help reach some of the goals of the ACA. She remarked, "But if
I move through those steps to achieve that certification, I just
don't know if could stay fiscally or mentally sane while I
implement those."
12:11:33 PM
MS. GREEN said myHealth Clinic and the hospital try to create a
meaningful relationship with a goal toward getting patients to
be involved in their own personal health care, thereby reducing
some of the testing that is done, and she questioned how
caregivers can continue in those efforts under the Act. She
further questioned how patients can afford the ACA. She related
a story about a patient who was upset that she had to go to a
web site to access a plan that could cost $5,000. When Ms.
Green told the patient that it could cost $12,000-$13,000 for
the plan, the patient asked how she could afford that when she
is retired and not yet eligible for Medicare. Ms. Green stated
her understanding that in order for the Act to work, everyone
has to be afforded the opportunity to have health insurance, and
to offset some of those costs, it will be necessary for healthy
people to enroll in the system. She said she thinks the goal is
to provide health care for all without doing so via a single
payer plan or massive taxation for everybody. She said her
patients who are healthy and have chosen to pay out of pocket
for years are upset. She said she provides health insurance to
her staff, at a cost $1,000 a month and with no tax benefit.
She said her staff can insure their families for only an
additional $50 a month, because "a lot of them kind of fall into
the other 40 percent of the tax bracket." She stated, "The
problem with that is ... when they look at it, they have to
spend $750 a month for this plan, if they qualify for the tax
credit, yes, they will probably get half of that back in tax
credits at the end of year, but none of them have the fiscal
ability to pay that $750 a month up front. They can afford the
$350 a month; they just can't afford the ... $750." She said
tax credits are great, but they do not help with immediate, out-
of-pocket costs.
MS. GREEN said she has patients who are uninsured and patients
who are underinsured; the latter have maximum deductibles, which
become her problem. She related that in a year's time, she has
written off nearly a quarter million dollars in bad debt. She
stated, "I don't know that getting their new silver plan with
this higher deductible ... is going to ... get that first $1,000
deductible ... paid." She indicated that medium to high
deductible plans will result in her having to cover the cost,
not the patient. She questioned how she could turn anyone away
because he/she was unable to pay a high deductible.
MS. GREEN stated that there is nothing in the federal plan that
is going to help her keep her doors open. She said now she is
facing markedly increased costs to provide quality care, with
the threat that major insurers will come back and give her the
highest reimbursement rate if she can get all her patients
healthy. She said that comes at a huge cost to her practice.
She said she has increased her support staff by one and a half
persons per provider, at huge cost, to take care of the extra
forms and other requirements.
12:16:04 PM
MS. GREEN expressed uncertainty that there is a lot of data
available to support all the primary care measures for
preventative health care. She stated, "I don't know that I can
stand around forever and say, 'You really need to eat healthy,'
and then have anybody buy into that if there's a donut in the
room. You know, I don't think that we have the ability to
really take care of ourselves and be personally accountable for
our health. It's a great concept; I don't know what it's going
to get people to do so." She gave an example of a patient whose
treatments have reached a cost far above his ability to pay.
She opined that the ACA will bankrupt the lower and middle
classes. It isn't sustainable. I am worried about nurse
practitioners in particular. She said there are two insurance
companies that have created some road blocks for nurse
practitioners. I need to see my patients as primary care
providers. She said United Health Care has sent letters to the
recipients saying that nurse practitioners fall into a gray area
and will now be listed as specialists and not listed under
primary care guide. She said the co-pay increased from $20 to
$30 for patients to see her, and all calls to rectify the
situation have "not come to fruition." She mentioned Section
27.06 of the Act and said in order to have a level playing
field, "these kinds of things need to be addressed." She said
Aetna sees her as specialized, so patients are "penalized for
coming to see us." She offered her understanding that health
economists repeatedly have proven nurse practitioners can help
patients achieve a health care goal in a more cost-effective
manner. She surmised that is probably because [nurse
practitioners] spend more time [with a patient] in one office
visit than a physician has time to spend. She said she has
taken Medicare and Medicaid patients and there is a
reimbursement disparity. She explained she has yet to see that
her Medicare wellness exams differ in any way from that of a
physician.
12:18:57 PM
SENATOR GIESSEL asked Ms. Green to talk more about her clinic's
certification.
12:19:05 PM
MS. GREEN responded as follows:
There is ... a whole group in the United States
focused on patient-centered medical homes. (indisc.)
They're very informative; they always leave me kind of
excited (indisc.) primary care. The goals of patients
in our medical home is to hopefully -- they've proven
thus far, Blue Cross is currently engaged with several
clinics in the Lower 48 to do studies to see if they
could reduce health care expenditure. And guess what?
The answer is absolutely it can. But within that
medical home concept, you really are asking the
patient to buy into the system. They have to accept a
certain level of accountability. A certain percentage
of the patients - actually 50 percent - needs to be
involved in your patient portal. If they want to
communicate with me, they're not clogging my phone
lines; they're having a direct conversation with me
via a secure messaging portal. It's ... just a way of
engaging them in their health care; having some
behavioral health specialists, services on site,
health coach on site, to hopeful -- and do some
meaningful use of directives, like tracking outcome,
tracking how often are you getting blood pressure
checked on your hypertensive patients. It's a way to
track health care, make it more meaningful, make it
more thorough, and make it high quality - hopefully to
reduce health disparities and make people healthier, I
think is the general goal. It's just the expense of
this application to institute the plan. While I
envision, as the altruistic health care provider in
me, economics aside, say that's actually a really
great idea. I think we could actually achieve some
great things in health care if we implement this plan.
We're moving forward to do that. I think I've had the
visions of a seven-year commitment business and we
started with DHR, we upgraded our EHR (indisc. -
coughing) to track our data better. These all come at
huge, huge expense, of course. So, we're working on
that, but there's no ... nothing in there that they
have to afford to implement this medical call. There
are some grants for nonprofit facilities, the for
profits. They're kind of (indisc. - voice trailing
off )
12:21:15 PM
CHAIR REINBOLD asked Ms. Green what the legislature could do to
support her.
MS. GREEN suggested leveling the playing field for both nurse
practitioners and physicians' assistants to allow them to be
more involved in "the front lines of primary care." She
mentioned Medicare patients, diabetics, and home health.
12:23:54 PM
TYANN BOLLING, Enroll Alaska, Northrim Benefits Group, LLC.,
echoed the previous testifier's statement that there has been
little done in terms of educating people on the impacts of the
ACA and explaining how individuals can get into a health care
policy with a government subsidy offsetting the cost of the
premium if they fall between 100-400 percent of the federal
poverty level. She said Alaska did not establish its own state-
run marketplace as other states have done; therefore, federal
money did not come to Alaska. She indicated that [Enroll
Alaska] took on the role of getting information out to Alaskans
across the state. Rural Alaska agents work in most major
hospitals, as well as in most Wal-Mart and Sam's Club stores in
the state, to provide individuals with the ability to understand
and enroll in a health insurance policy that is right for them
and their families.
MS. BOLLING reported that currently Enroll Alaska has had to
suspend enrollment, because the federal (indisc.) market place
has an inaccurate subsidy calculation for Alaska. Enroll Alaska
issued a press release and has worked with the media to get the
word out about the suspension, because Enroll Alaska does not
want people to enroll into a health insurance plan that is
calculating their subsidy incorrectly. She explained that
currently Alaska subsidy is calculated lower than it should be.
Enroll Alaska believes that the federal poverty levels voted
into the federal facilitated market place for the State of
Alaska are inaccurate. She said Alaska's cost of living is
higher than in the Lower 48. She said Enroll Alaska's worked
with Susan Johnson (ph), the Region 10 director of Health and
Human services, to get information up to Washington D.C. to
correct the error. She said once Enroll Alaska is satisfied
that that glitch, as well as other major glitches in the market
place, have been resolved, it can resume enrolling individuals
and providing outreach to Alaskans.
MS. BOLLING said Alaskans are confused as to what the ACA means
to them as individuals, what the tax (indisc.) penalty means,
why they are being forced to buy health insurance, what
insurance policy they need to have for their families and for
themselves, how much it all will cost, whether they qualify for
a tax subsidy, and what it means to their business and to their
family. Enroll Alaska was established to assist individuals
with those questions while enrolling them in the right plan.
She said many Alaskans are receiving notices from their current
insurance companies that their policies will be cancelled
starting December 31 [2013]. She said Alaskans are not happy
about that, because they were told by the Obama Administration
that if they liked their health care plan, they could keep it.
She said that is not true, because the current health care
policies do not meet the regulations and requirements of the
ACA. Individuals whose policies are being cancelled have to
purchase new ones that will begin on January 1. She said Enroll
Alaska believes that these people need help and need to be given
insurance information by a licensed health insurance agent - not
an abrogator or an assistor - on making the right choice for
them and their families.
MS. BOLLING said many people applying for insurance have never
had it before; therefore, they will not readily understand
topics such as premiums, deductibles, health savings accounts,
and catastrophic versus premium insurance policies or understand
the impact they would have. She emphasized the importance of
having licensed insurance agents enroll individuals into health
insurance and having a broker manage the policies. She stated
concern that people who are not health insurance agents are
being allowed to enroll people into health insurance plans. She
opined that that is a failure of the law that has not been
addressed.
12:31:11 PM
MS. BOLLING, in response to Senator Giessel, explained that
North Rim Benefits, LLC, is an insurance broker focused on group
health benefits across Alaska for businesses for over 30 years.
Enroll Alaska, she continued, is a division of North Rim
Benefits, LLC, and was established to focus on the individual
market place, which was not a necessity before passage of the
ACA. Enroll Alaska saw both the need to enroll people and to
educate them through presentations and educational outreach
events. She said Enroll Alaska also provides information to
organizations, health care facilitators, physicians, financial
administrators, and corporate heads of hospitals. She offered
her understanding that Alaskans are angry about the federal
mandate and the misconceptions surrounding it, and Enroll
Alaska, as an Alaska-based company, has an interest in helping
Alaskans through the process. In response to a follow-up
question, she said commissions are built into insurance
premiums; they have been for years. She said Enroll Alaska
receives a commission from the insurance carrier. She added
that there is no cost to the individual for going to Enroll
Alaska.
12:34:13 PM
CHAIR REINBOLD emphasized that the ACA is a federal law, not a
law passed in Alaska.
12:35:05 PM
MS. BOLLING, in response to the chair, said Enroll Alaska has a
health insurance portal that will "layer on top of the federally
facilitated market place to quote individuals and to pull
information based upon what's loaded in there." She said
individuals have to be enrolled into the healthcare.gov web
site. She indicated that the President misspoke; there is not a
process by which to enroll individuals over the phone. She
explained that when a person calls, the person helping him/her
over the phone still has to enter the information via the
healthcare.gov web site. She remarked that Enroll Alaska has
not "gone down the path of going through a paper process,"
because it does not "have confidence in what that would look
like." She opined that it is not right to ask an Alaskan to
send information off to "some place in Kentucky," just to be
sent more paperwork for selecting coverage, which then has to be
sent back to the Lower 48. She said Enroll Alaska does not know
all that happens in the process, and she said representatives at
healthcare.gov cannot give those answers.
MS. BOLLING, in response to a follow-up question, said Enroll
Alaska has enrolled three individuals, but must now go back and
work with those individuals to ensure that their subsidy gets
corrected, because the calculation was wrong. She said the
estimation was that at this point Enroll Alaska would have
enrolled about 4,000 people; it has a backlog of over 1,700
individuals that are wanting to be enrolled, but cannot do so
because healthcare.gov does not work. She explained that she
uses the terms "the market place" and "healthcare.gov"
interchangeably. She stated, "Whether you like the law or not,
there is a great benefit for many Alaskans who fall within the
federal poverty level to be able to afford health insurance.
They receive a subsidy; it offsets the cost of their premiums;
and therefore, they have health insurance at a reasonable rate
for them. However, they cannot enroll them, because the market
place doesn't function and the subsidy calculator's off."
12:39:06 PM
CHAIR REINBOLD encouraged people to send written testimony to
her office. She stated, "Basically, we're just going to be used
as a platform for Alaskans to speak their mind on any different
level."
MS. BOLLING said Enroll Alaska is doing everything it can to
explain the delay.
CHAIR REINBOLD said Congressman Young and U.S. Senators Begich
and Murkowski are the only ones who have the power to do
something and the committee will bring those concerns to them.
She opined that using antiquated technology is a disservice to
the people.
12:42:12 PM
ROSS TANNER, M.D., Diabetes & Lipid Clinic of Alaska, related
that he is the immediate past president of the State Medical
Association, has spent time talking with Alaska's constituents
in Washington, D.C., is currently on the faculty of three
different medical schools, and teaches medical students. He
mentioned a concern medical students have that they may not be
able to pay off their loans.
DR. TANNER opined that what the country really needs is the
reformation and delivery of health care in a fiscally
conservative manner. He added, "And I don't think that this
bill really has anything to do with that. It is about expanding
services to 37-50 million people, depending on the estimates
you're looking at." He said he thinks everyone should have
healthcare and access to physicians and providers. He remarked
upon the implications on the economy, such as military
preparedness and the workforce. He noted that the U.S. has many
health issues, including childhood obesity.
12:44:16 PM
DR. TANNER stated that his perspective on healthcare is
threefold: as a taxpayer, a patient, and a physician. He said
he suspects his taxes will be increased. He mentioned a $55,000
tax related to the ACA, which he said will be levied on him
because of his level of income. He said as a patient, he is
"almost sure" he is going to get less for his money. As a
physician, he said that in the last few years, he has seen a
metamorphosis of the bureaucracy of practicing medicine. He
stated that may not have been brought on specifically by the
ACA, but "if they can't get the web site down, then I'm sure
they're not going to get ... these other exchanges down, as
well." Dr. Tanner said 55 percent of healthcare in the U.S. is
some sort of state or federal subsidy, such as Medicare,
Medicaid, or Tricare, and he estimated that 25-35 million people
do not have healthcare coverage; therefore, he said he believes
that a smaller percentage of people are getting health care
either through their employer or on their own. Dr. Tanner said
that under the ACA, healthcare plans initiated after March 2010
- when the Act was signed into law - are extinguished. He
opined that this is a passive aggressive way to get people into
the exchange.
DR. TANNER said personally he thinks having tax waivers for
professionals, particularly congressmen and their staff, is
inappropriate. He said citizens were told that their taxes
would not increase, they would get more healthcare, they would
get it more efficiently, and the tax savings would come from a
reduction in healthcare fraud. He remarked upon the existence
of fraudulent behavior.
12:47:25 PM
DR TANNER asked, "Why would I take a Medicare patient?" He
continued as follows:
I'm going to get paid 30 cents on the dollar, and I
have a waiting list of people who are going to pay me
full ... benefit. Why would I do this? Because it's
my responsibility to take care of people, that's my
responsibility. So, my own personal way of doing
business is that if 6 to 8 percent of our population
in Anchorage is Medicare, that's what I'll do; I'll do
my part. But if you get into 10-15 percent of your
practice being Medicare, it's not going to be
sustainable over a long period of time. You're going
to lose money, and as overhead goes up and
reimbursements go down, that's going to be our
problem.
And I would say to this committee: I think there's
going to be an intent by insurance companies to change
the way usual and customary rates are calculated in
our state, and there's going to be an attempt to pay
doctors less, because as premiums go up -- and if you
talk to the ... insurance companies, there are the two
that are participating, the one I talked to is Blue
Cross, is that their actuarial data is flawed, because
they don't know how many people are going to actually
be in the exchanges. So, if we have a bunch of young,
healthy people getting in it, and they're going to pay
$600 a month for their premium, which is the average
price - $646 or whatever it is - ... if they're going
to fine me 1 percent of my income, and say you make
$50,000 a year, then that's going to $500, that's
going to be what I'm going to be fined or taxed -
whatever word you want to use - on their insurance,
it's going to be cheaper for them to still pay out of
pocket and still pay the fine, until next year, then
it's 2 percent; the year after that it's 2.5 percent.
So, I think ... the insurance companies, they're not
going to lose money. If they collect a million
dollars in premiums, and they pay out 2 million
dollars in services, guess what's going to happen?
They're going to go to the insurance commissioner, and
they're going to try to figure out how they're going
to be able to increase the premiums, because they're
not going to go broke. The oil companies aren't going
to go broke; the insurance companies [aren't] going to
go broke.
So, what are they going to do? They're going to try
to pay me less. Are they going to try to increase my
bureaucracy? Every prescription I write, if it's not
a generic drug, I've got to write a preauthorization;
I've got to get people to go to the facility they need
to go to, because ... if I send them to one facility
and they're ... not approved, now Blue Cross has made
that's my fault, ... and it's the patient's
responsibility to pay, because they did not go to the
facility that maybe they were uninformed and they
didn't know where they were supposed to go to or maybe
it changed or maybe they didn't read the fifteen-page
document of disclaimers that they were sent ... by the
insurance company.
DR. TANNER said he figures that because [the federal government]
has spent four years on a web site to accommodate the ACA and
implement federal exchanges and has not gotten it right, "it's
going to be really, really painful ... for the next twelve to
eighteen months." He suggested that the state, through the help
of the insurance commissioner, could protect how physicians and
mid-levels get reimbursed and look at how the usual and
customary amount is calculated and ensure it does not keep
getting reduced.
12:50:50 PM
DR. TANNER regarding mandating insurance said he has patients
who do not want to work until they are 65 and are concerned
about being able to pay their rising healthcare costs if they do
quit working. He said he thinks premiums will go up. He said
he does not think an increase in healthy people in the system
will drive the cost down, because "you're going to have to
manage the money that you have, and I don't think they do a very
good job at that, unless it's their money."
DR. TANNER said a couple years ago the Accountable Care
Organization (ACO) was started under the ACA. He explained that
the concept of the ACO is to have a group of physicians and
providers that group together to "take risks for that group."
He said he has an exclusive diabetic practice and has patients
who are compliant and those who are not. He said there is a
payment model that is "pay for performance," wherein a physician
gets paid when patient care meets certain criteria and the
patient meets certain demographics. He posited that this system
is problematic, because it questions his integrity. He
explained, "If I'm going to get paid more, [then] that suggests
that I'm going to take better care of you if you're my patient.
I should take better care of you no matter what, because you're
my patient and that's what you expect of me."
DR. TANNER continued as follows:
The other thing [about] the Affordable Care
Organization is that as you're taking risks in that
group - and let's say there's a million dollars goes
... in that pool and there's 15 doctors in it - and it
takes $500,000 to take care of those patients, then
that $500,000 can be disseminated equally based on
workload in those groups of physicians. This is the
same thing that happened in the '90s with capitation,
the same thing that happened [with] HMOs: the
businesses couldn't run it, so now they're going to
display that financial risk to the physicians.
So, what happens if it costs $2 million dollars to
take care of those patients and there's a million
dollars in the pool? Nobody knows what's going to
happen with that. But this is the ACO model, to me -
taking risks for patients that may not necessarily
want to quit smoking, ... exercise, do the things they
need to do - somehow it's going to come at my ...
cost.
DR. TANNER questioned why that should be the case when he is
doing what he should be doing to the best of his ability. He
said he has practiced for 23 years and is dedicated to his
profession. He said he tracks his own outcome data and can see
that his numbers are better than what is expected at the
national level, but risk pools mean screening of patients
depending on how they perform.
12:54:33 PM
DR. TANNER talked about the addition of more primary care
physicians. He said the government has come up with the idea of
patients having a medical home with primary care physicians and
nurse practitioners so they avoid going to the emergency room or
hospital, but he said that is the way it happens now for his
patients. He added, "But how many times are people told to go
some other place when they don't have a medical home? It
happens a lot, because they can't find a primary care
physician." He related that last year, for the first time in
the U.S., the number of medical graduates was bigger than the
number of residency "slots." So, now there are graduates with
$200-300,000 in school loan debt with no place to get trained in
residency. So, if federal money does not go into training
physicians, this imbalance will not be addressed. He said he
uses nurse practitioners and physicians' assistants, but stated
his belief that they do not replace physicians.
DR. TANNER stated that as a specialist, he should know more than
a primary care provider. He opined that it is inappropriate to
put a nurse practitioner, who is paid less, in a position to
handle "all the responsibility to handle all the complications."
He said his nurse practitioner and PA do not facilitate his
making more money; they facilitate his taking better care of his
patients. He emphasized that he could not practice without a
nurse practitioner or a PA. He talked about the differences
between people who have earned the title of doctor after 12
years of training as compared to two to three years. He
mentioned a pharmacist with a doctorate who may have been
mistaken for a physician by a customer. He reemphasized the
issue of funding sufficient residency slots to support the
numbers of medical students graduating, especially to
accommodate greater numbers of people insured who need to find a
medical home.
12:59:19 PM
DR. TANNER stated that he is okay with an insurance company
telling him what is not covered under a plan, but not telling
him how to practice medicine. He said he thinks this will be an
increasing burden on physicians. Insurance companies make
decisions that are not always in accordance with the standards
of care, and that is something that is a state-level problem, he
said.
1:00:54 PM
DR. TANNER, regarding the Cadillac tax, talked about a change in
2018 wherein a patient whose benefits supersede what is
considered the norm will be taxed 40 percent on the difference.
He said medication that costs the patient only $10 "costs
somebody something." He said in 2018, everybody is going to
have more taxes. He surmised the reason the ACA is being
staggered in its implementation from 2010 to 2020 is because
"the system couldn't take it all at one time." He predicted
that with the 2014 mandate being delayed for businesses to 2015,
premiums and taxes will rise and fragmentation of healthcare
will worsen. He said Alaska is still the best place in the
country to practice, but it has deteriorated over the last two
to four years because of federal impact.
1:02:36 PM
SENATOR GIESSEL referred to Dr. Tanner's comments about
insurance companies' involvement in his practice of medicine -
telling him what he can and cannot prescribe. She said she is
aware of the cost of the Medicare system, and she indicated the
reason to adhere to a list of prescription drugs is that they
tend to be generic; however, some diabetics and mental health
patients do not respond to generic drugs. She said, "It's a
careful balance."
1:03:16 PM
DR. TANNER concurred, but made the distinction between the art
and the science of medicine. He said Blue Cross recently
advocated a concept called "choosing wisely," which relates to
"10 areas of waste." For example, he said, Vitamin D levels
should not be ordered on every Alaskan. He said "we're"
spending lots of money, for example, for fiscal remuneration or
[in response to] litigation. He talked about the complexity of
memorizing phone menus for pharmacies, let alone a list of
preferred drugs. He said he has been prescribing long enough
that all the current generic drugs were brand name drugs when he
started his practice, and he questioned why, if they were good
enough then as brand names, they are not good enough now as
generic drugs. He emphasized the savings in using generic
drugs, but reiterated that he would not compromise care just to
save money. He questioned why he has to prove, when writing a
prescription, that the patient has failed three other drugs. He
continued:
Like with Medicaid, ... if they just write "medically
necessary" it's approved. Well doctors and nurse
practitioners have a way around it: just write
medically necessary on everything. Well, it's all
medically necessary; it's a prescription. If it
wasn't medically necessary, I wouldn't write a
prescription for it; I'd say, "Go buy Tylenol over the
counter." So, I think, where you create laws and
mandates and regulations, people are going to find a
way to circumvent that to where you have less work in
your office, because the last thing I want is two
nurses coming to me every day saying, "Do you know how
many authorizations I did today?" I think, "I know,
but I can't practice without being able to do that."
DR. TANNER said he gets reports from the insurance companies
showing how many generic drugs and brand name drugs he has
prescribed. He said unfortunately, patients who come to a
diabetes specialty clinic have already been on all the generic
drugs and are entrusting him to not only manage their disease
but also address complications. He said there are currently 28
million diabetics and 65 million pre-diabetics in the U.S., and
the cost of care will increase, because of the numbers of
children at abnormal weight, which he called "diabetic
wannabes." He said many smokers take their Lipitor to maintain
their cholesterol, but they will die early anyway because they
continue to smoke. He said it is his job to educate his
patients that "it's about how you're eating, how you're moving,
and the medications that complement that." It takes time to do
that. He said, "If I get paid less, I'm going to have less time
for patients." He posited that he can be more impactful by
teaching holistic health care, which he said he has been doing
long before the government told him to do it. He said his
practice manages about 4,000 diabetics and sees 6 to 10 people a
day. He said approximately 6 to 10 people a year go to the
cardiologist to have intervention done. He opined that that
speaks for itself and said, "I think we do a pretty good job at
what we're supposed to be doing." He said it is insulting to
question a physician who has gone through years of school,
training, and fellowship, and has taken licensing exams, on what
he/she is doing. He said he never imagined while going through
school that he would be spending more time addressing
bureaucracy than taking care of patients. He concluded, "The
overweight, smoking truck driver is easy compared to the federal
government."
1:08:17 PM
SENATOR GIESSEL said she would ask Commissioner Stuart to affirm
that simply writing medically necessary on a prescription is no
longer effective. She noted that she works in a homeless clinic
and writes very few prescriptions, because most of her clients
cannot afford the cost of filling one.
1:09:05 PM
CHAIR REINBOLD restated her willingness to listen and voice to
the federal government. She said she is sorry Dr. Tanner has a
$50,000 tax.
DR. TANNER remarked that that is in addition to his other tax.
He commented that everyone wants someone to take care of them
who genuinely cares about them. He urged, "I would recommend
everybody just ... vote for people that are helping us." He
said, "When I don't like coming to work anymore, I'm done."
CHAIR REINBOLD said that scares her.
DR. TANNER related that he knows 18 physicians in his city who
are quitting by the end of the year, and more than half of them
are primary care doctors.
1:10:40 PM
CHAIR REINBOLD said, "And these statistics were provided before
... the Obamacare vote, which our vote was the (indisc.) vote in
Alaska to make this law." She said the thought that "this is
affecting us at such a local level" is alarming.
1:12:14 PM
BRANDON CLARK, Health Care Policy Expert, FrogueClark LLC,
related his work history on Washington D.C.'s Capitol Hill,
including being in charge of the Republican efforts for about 85
percent of the jurisdiction of the Affordable Care Act
legislation, and "working the initial parts of the
implementation" once the Act was passed. He said he started a
consulting firm, which handled the [Patient Protection and
Affordable Care Act (PPACA)] implementation team for the State
of Georgia, using "level 1 HHS funds." He said he has testified
to the State of Kentucky and done significant work in the State
of Georgia, as well as a few other states, as well as doing work
in Washington D.C. on PPOC implementation. He noted that he
would give a PowerPoint presentation to the joint committee.
1:14:59 PM
MR. CLARK noted multiple names have been given to the
legislation, including PPACA, the Affordable Care Act, and
Obamacare. He said the legislation has implementation dates
through 2020. He said no Congress can restrict the action of
future Congress. He stated that federal and state elections
over the next decade will produce significant shifts in the
White House, Congress, the gubernatorial seats, and state
legislatures, and he predicted that all those institutions will
have significant impact on how this law is implemented, both by
statute and regulation. He explained that the amount of
discretion in the legislation could lead to significant
problems, because later generations would be able to change it
by regulation.
MR. CLARK said many people have concerns about the American
Health Benefit Exchange (AHBE), commonly called "the Exchange,"
and the enrollment through healthcare.gov and the toll-free
phone number; however, he stated that one of the more
significant changes is going to be in Medicaid. He said the
Congressional Budget Office predicts that at one particular
time, there will be 84 million individuals enrolled in the
Medicaid program. By 2022, there will be up to 134 million
individuals in the Medicaid program, well over one-third of the
U.S. population, for a 48-year welfare program which pays
doctors on average 66 percent of Medicare rates. He said the
shift toward Medicaid is of concern to providers. In contrast,
[the Congressional Office of Management & Budget] projects that
only 26 million will be enrolled in an exchange in 2022, whereas
four times more people will be enrolled in Medicaid than in an
exchange plan.
1:19:06 PM
MR. CLARK related that the ACA legislation was projected to
outlay $938 billion in federal-only funds for the purpose of
reducing the uninsured by 32 million Americans by the end of the
initial 10-year budget window, 2019, with an additional 16
million Medicaid enrollees, at a cost of $441 billion to the
federal government and significant cost to the states. Total
Medicaid enrollment under the initial projection was going to
exceed 93 million Americans by 2019. He said the actuary in the
Obama Administration projected closer to 25 million Medicaid
enrollees. Mr. Clark said it is important to keep in mind that
that is above the already unsustainable growth of the Medicaid
program. He said another projection was 29 million getting
private health insurance through state- or federally-run
exchanges and millions dropping or losing access to current
coverage in employer-sponsored or individual health insurance
markets. Mr. Clark said this goes against the President's
statement that people who like their health insurance plans will
be able to keep it. He said there are already millions who are
seeing their health insurance changing; they have received
notices that their coverage will not be available by next year.
Mr. Clark relayed that he has already received a letter telling
him to be prepared for a significant increase in the cost of his
health insurance premiums.
1:21:17 PM
MR. CLARK said moving into 2013, the Congressional budget
projection shows an increase from $938 billion to a ten-year
cost of $1.329 to $1.33 trillion - a $200 billion increase from
two years prior. As 2014 approaches, so do more years with an
outlay of a significant amount of funds to do premium
assistance, cover out of pocket maximums, and enroll more people
in Medicaid; therefore, a higher percentage of those years in
the ten-year window are actually where the outlays of
significant funds are occurring. He continued:
We are also seeing again 84 million people, at any
given time in the Medicaid program, and they're also
projecting $93 billion in outlays, less for Medicaid,
because of the [U.S.] Supreme Court decision in the
summer of 2012 that makes Medicaid expansion optional
to the states, and seeing a reduced number of
Americans receiving down to 26 million in the AHBEs.
1:22:47 PM
MR. CLARK provided information regarding the background of the
Congressional legislation relating to the ACA to illustrate the
complexity of blending legislation between the Senate and House.
He stated, "We've seen over 20,000 pages of regulations needed;
we've also seen over 1,500 waivers." He indicated that there is
no statutory authorization for the waivers that were given to
health insurance plans and organizations. He said, "There are
many provisions where the law says certain things need to happen
that were actually just delayed or ignored by the
Administration, including the one-year delay of the employer
mandates, which ... was pushed back ... on July 1, for a full
year."
MR. CLARK proffered that one of the interesting parts about
"this growth," and one of the things that leads to a significant
amount of uncertainty with the Obamacare legislation is that the
spending growth is significantly outpacing the revenue growth.
He said when the legislation was passed, there were almost four
full years of taxes in the legislation before major spending
started, which he said is what enabled it to be considered
"budget neutral." Nearing 2014, the spending is outpacing the
revenue growth. He said he knows several people who are
concerned about the medical device tax of 2.3 percent, which
will be passed on to the consumer. If that is delayed or
removed, the Congressional Budget Office thinks that will
"remove ... $30 billion more of revenue, over ten years, from
the legislation."
MR. CLARK stated that there have been significant problems with
healthcare.gov. He imparted that he has tried for the last 29
days to sign on and find out how much more the exchange would
cost. He said he has not been successful. Conversely, he
described having successfully signed up for ehealthinsurance.com
in 2010, in less than 2 hours, while watching television. He
said if individuals want to have a health plan by January 1,
2014, they have until December 15th, 2013, to select and enroll
in the plan and submit their first premium payment. He said the
likelihood of people being able to select a plan by that
deadline seems less and less likely. He reviewed that the
penalty in 2014 for an individual not having federally approved
health insurance will be to pay 1 percent of his/her income, as
a penalty tax to the Internal Revenue Service (IRS), up to the
full cost of a "bronze" health insurance plan. He said he
thinks some individuals will be paying the penalty, which will
have an adverse effect on them, and still they will not be able
to enroll in health insurance coverage. He said then Senator
Obama, when running against then Senator Clinton for [the
Democratic nomination] for Presidency, criticized Senator
Clinton's plan for having an individual mandate, because it
would be bad for individuals, and "then signed legislation into
law that would actually implement over $50 billion in ...
penalty taxes that would collected from individuals who ... fail
to enroll ... ."
1:30:22 PM
MR. CLARK stated that, in order to make the $938 million outlay
budget neutral, the ACA cut $575 billion from the Medicare
program - over a half trillion dollars - in the 2010-2019 budget
window. He quoted the Office of the Actuary as saying that
roughly 15 percent of all Medicare Part A providers would be
unprofitable within 10 years, as a result of the cuts. He said
he thinks this makes a lot of experts look at those [cuts] and
determine that they are unsustainable and increases the problem
of expenditures outpacing revenue.
MR. CLARK put forth another issue leading to considerable
concern, the use of modified adjusted gross income for
eligibility calculations. He said a state participating in the
Medicaid expansion has to increase its Medicaid eligibility
level to 138 percent of the federal poverty level. He
continued:
But that's measured using modified adjusted gross
income, ... which includes a significant number of
business deductions, farm deductions, so you can have
people making well above a state median household
income who ... go in thinking that they are going to
receive ... private health insurance coverage -
something similar to their existing ... plan - and
find themselves enrolled in ... the Medicaid program,
which, again, is a 48-year-old, highly inefficient
Welfare program that I myself would not want to be
enrolled in.
MR. CLARK said, "We offered numerous amendments on the
Republican side to put members of Congress ... into the Medicaid
program, since the vast majority of people gaining coverage
would be through Medicaid, and none of those amendments passed,
because it didn't seem like any of the members of Congress
wanted to see themselves or their families in the Medicaid
program," though millions of Americans will lose their private
health insurance coverage and end up in the Medicaid program,
which has significantly longer wait times to see a physicians
and lower reimbursements to providers in the vast majority of
the states. Mr. Clark reiterated that, on the national average,
Medicaid pays 66 percent of what Medicare pays, which is not
enough to cover a provider's costs.
MR. CLARK said the individual penalty will be problematic, and
he said he does not know if that will be implemented because of
its being so politically unpopular. He said some people - with
modified gross income and not receiving as many subsidies as
they would like - may choose to pay a penalty, because the
health insurance plans are guaranteed issue and use modified
community ratings, meaning there really is no penalty for not
signing up, and the cost of a family plan, according to IRS
regulations, may well exceed $20,000; therefore, paying a
penalty of less than 10 percent of that amount may seem like a
better option. He said the employer mandate option already has
been delayed one year and "seems to be unworkable." Regarding
the individual mandate penalty, he said the Department of Health
and Human Services has never worked or exchanged information
with the IRS, and he does not see that as something that is
workable. He suggested that employers may consider a $2,000 per
employee penalty as being less expensive than paying for the
bulk of a $16,000 health insurance plan; a lot of employers may
opt to drop coverage and put their employees into the exchange
or, more likely, onto the Medicaid program. He explained that
an employer that has a significant number of employees above 400
percent of the poverty level and a significant number of
employees in Medicaid does not pay that $2,000 penalty for those
employees. A large employer with many employees on Medicaid may
choose to drop coverage for those employees, because the
employer does not pay a penalty for those individuals.
1:36:11 PM
CHAIR REINBOLD said Senator Grassley, from Iowa, proposed an
amendment regarding an exemption for Congressmen and Senators.
She asked Mr. Clark to explain briefly why that amendment was
not adopted.
MR. CLARK responded:
There was a provision that was included in the mark-up
... of the Senate Finance Committee to put members of
Congress and their staff into Obamacare should it
pass. There were those regulations, even though the
statute ... is very clear in that they should go into
the exchanges, that the Obama Administration actually
is saying that members of ... Congress and their staff
no longer have to go in to the exchanges. Should that
actually be implemented that it would be -- I don't
... think that would actually happen, just because
members of Congress want to treat themselves
separately and special. ... It is a violation of the
statute to do ... that, and, you know, that was one of
the provisions that the Republicans in the House kept
putting forward is to actually implement that
provision as included in the legislation.
MR. CLARK, in response to the chair, continued:
To keep them subject to and go into the exchanges was
the intent of the ... legislation, and I actually
think it would be a lot of the lower level
Congressional staff ending up in -- it's quite
possible that if have a family, they could end up
actually in the D.C. Medicaid program.
CHAIR REINBOLD asked Mr. Clark to confirm he is saying that the
Republicans kept bringing forth amendments to ensure that
Congressional men and women were on the same plan as the rest of
America.
MR. CLARK answered that is correct.
CHAIR REINBOLD asked Mr. Clark if he would agree that it is an
accurate statement to say that the elderly should be concerned
about the impact of the $250 billion cut to part D and the $575
billion cut to Medicare.
MR. CLARK answered yes. He said most of the cuts are to part A
Medicare, and projections from the Office of the Actuary showed
that "you could see up to 50 percent of everyone enrolled in a
Medicare Part C or a Medicare advantage losing access to their
current plan."
CHAIR REINBOLD said, "So, this is going to have significant
impact on our elderly population?"
MR. CLARK said, "Absolutely."
CHAIR REINBOLD noted that many states are not doing Medicaid
expansion, and said Alaska is "still on the fence." She asked
what the total figure would be if the entire U.S. does Medicaid
expansion. Further, she asked Mr. Clark if, considering the $17
trillion debt and the $55 trillion liability, he thinks the
federal government can be counted on to keep up its end of the
Medicaid exchanges if Alaska accepts the exchanges.
MR. CLARK said both the original CBO projections and Centers for
Medicare and Medicaid Services [CMS] actuarial projections show
over 93 million Americans on Medicaid by 2019. He said he
thinks that number is low. He continued:
We took testimony from the director of the
Congressional Budget Office in a close-door hearing,
because the Democrats wouldn't let us have a public
hearing .... I think their numbers were significantly
lower than what the reality would be, because they
said there's a[n] "accepted social norm for employers
to provide coverage"; however, we've seen significant
evidence to the contrary, that a lot of employers are
going to be dropping coverage, especially employers
with a lot of low income employees, because they do
not have to pay a penalty at all if they drop an
employee who ... ends up enrolling in Medicaid. So,
... there's only cost providing health insurance for
these low-income employees, and there's no penalty, so
it's all gain and really no loss.
CHAIR REINBOLD questioned the motivation for employers to keep
their insurance, based on some of the data that Mr. Clark
provided.
MR. CLARK said when the legislation was changed with H.R. 4872,
the mandatory federal poverty floor for Medicaid was raised from
133 percent to 138 percent in order to get more Americans on the
Medicaid program, because it was $5,000 less expensive to get a
person on Medicaid than on a private health insurance plan. He
said, "The legislation is designed to enroll as many people as
possible into Medicaid." In response to a follow-up question,
he said he would not trust the federal government to be a
reliable partner. He surmised that "they will put it back down
to the regular FMAP rate of 50/50 instead of 90/10." He said
Alaska pays a 50/50 share for all its previously eligible
Medicaid enrollees. He said there will be millions of
previously eligible people going into Medicaid because their
employers dropped their coverage, and "the states won't receive
the 90/10 match for them either." He suggested the best
resource for all this information may be at the web site of the
Congressional Budget Office: cbo.gov.
1:47:16 PM
THOMAS HENDRIX, Ph.D., RN, Nurse, Educator, said he would talk
about waivers. He stated that in a nation of men, people choose
which laws to follow, while in a nation of laws, people follow
the laws. He defined a waiver as exempting a single person from
a law everyone else has to follow. He said it is normal for
waivers to be created to address unintended consequences in
laws; however, he stated that "these unintended consequences
were quite predictable." He said "you" must either think the
President and law makers are either "naïve or "something else,"
and he said he thinks it is the latter. He said the goal was to
"keep it under a trillion dollars," to save money, and to allow
people to keep their existing policies. He said the logical
consequences of the legislation could not be true; therefore,
waivers are given. Each waiver given takes away coverage from
someone else. He noted that Chair Reinbold had said there was a
[$55 trillion] and said it is actually about $80 trillion "if
you add everything, not just the health care patients." He
indicated that the finances of future generations are being
affected.
1:51:55 PM
DR. HENDRIX said one waiver is the "medical loss ratio." He
said this is when an insurance company sells a product, collects
premiums, pays part of that money out for health care, uses some
of the money to cover their costs, and ends up with the rest in
profit. He talked about people "churning" on and off of
policies as they come and go in the work force. He said it is
much easier to keep administrative costs low when an employee
stays with a company for 30 years. He said churning makes it
much more difficult to "keep that 80/20 rule." He questioned
what would have happened if the 80/20 rule had been enforced.
He asked, "Well, how many more uninsured people would there be
right now before the 2012 election and before the 2014
election?"
DR. HENDRIX opined that "people knew exactly what they wanted it
to be." He said, "They sold it one way, and then they gave the
waiver so that we wouldn't be confronted with who knows how many
tens of thousands of unemployed people who couldn't make the
80/20 rule." He said insurance companies' state what coverage
is listed, but have a lifetime maximum. The companies base
coverage on how much it costs to pay for the care and what the
likelihood of medical event happening. He indicated that the
cost of insurance will be less expensive when there is a maximum
set, because that maximum helps the actuary. Under the ACA,
insurance companies can no longer impose lifetime limits;
therefore, the premiums of the less expensive plans skyrocket.
He said that cannot happen, because then employers would drop
low-paid employees from coverage.
1:56:04 PM
DR. HENDRIX, regarding the employer mandate, posited that it is
predictable that setting a 30-hour and 50-employee exception
will result in employers looking for ways to get their employees
working under 30 hours and to hire less than 50 employees. He
indicated that the year waiver delayed that from happening. He
said an employer who signs up for insurance while under the
waiver can do so on December 20, 2013, and keep that insurance
until 12/20/2014. He noted that the employer mandate was July
21. Regarding the individual mandate, Dr. Hendrix indicated
that the following categories qualify: religious objectors,
health care sharers, illegal aliens, inmates, the impoverished,
members of an Indian tribe, or someone suffering a hardship. He
said he thinks "Indian tribe" is poorly worded and needs
amending, and he said he is not sure "suffering a hardship" has
yet been defined. He stated, "If Obamacare moves forward the
way it's going to ... move forward, we're going to end up with
hospital-run systems, huge health care systems with large
patient populations, and small practice is going to slowly
(indisc.) get insured; it won't be able to survive."
1:58:56 PM
CHAIR REINBOLD offered her understanding that there are 1,500
waivers.
DR. HENDRIX said he has heard there are 1,800 waivers to special
groups, individuals, firms, or unions. In response to a
question, he referred to a list, and he named the following 12
out of 20 largest companies in America that got "a break":
ConocoPhillips Alaska, Inc., GE, GM, Bank of America, Ford Motor
Company, Hewlett Packard, AT&T, JP Morgan, Citi Group, Horizon,
AIG, and IBM. He said they are all highly unionized. He
predicted that "the little guy," without a lot of waivers, will
be "crushed by this."
CHAIR REINBOLD observed that there were more exemptions,
including the USCW Allied Trust. She asked Dr. Hendrix if he
would share his perspective.
DR. HENDRIX responded that he found information on waivers for
unions, but clarified that he is not trying to say "that's all
there was." He mentioned generous compensation packages, which
included health benefits through retirement as part of their
compensation packages. He offered his understanding that
Congress realized that under the ACA, the mandate, and the
Cadillac plan, these policies would be in jeopardy. He stated
his assumption that the President knew that, as well. He said
[Congress] allocated $5 billion. He offered his understanding
that by March, $4.73 billion had been spent reimbursing these
companies. He mentioned the following unions that were given an
exemption: Allied Trade, Health and Welfare, IBEW, Asbestos
Workers, Local Welfare Plumbers, Pipefitters, Welfare (indisc.),
USCW, and Local 227. He stated that the pattern he saw was "big
businesses and big money." He said it is difficult to find out
this information without going "three, four, or five clicks into
these web sites." In response to a question, he said HHS.gov is
a source for information.
CHAIR REINBOLD offered her understanding that there are 729
companies and unions with ACA exemptions listed on
freepublic.com.
2:04:01 PM
DR. HENDRIX stated that he thinks "they" know exactly what they
are doing, and "this" is about the destruction of private
insurance. He said young, healthy individuals are being told to
buy a policy they do not think they need, for ten times what it
costs now, with a $5,000 deductible, and they are not going to
buy it. He said, "And then we're going to put a bunch of sick
people in, and in insurance theory it's called a Dutch fund;
it's going to start with you." He said insurance companies are
being told they have to cover everyone, even those who instead
of paying into the insurance system during their healthy years,
sit back and pay the fine and then get a catastrophic illness
and "just knock on the door." He compared that to waiting until
his house catches fire and then getting fire insurance at that
time. He reiterated that insurance companies will be put out of
business. He said he wants leaders to call politicians out for
telling them something they know is not true.
CHAIR REINBOLD talked about difficulty in getting through to
offices when looking for information.
DR. HENDRIX clarified that he does not want to hear future
politicians running for office and saying, "Oh, gee, I had no
idea that was going to happen."
2:07:13 PM
The committee took an at-ease from 2:07 p.m. to 2:22 p.m.
2:21:53 PM
CHAIR REINBOLD reviewed what the committee had heard thus far.
2:23:15 PM
EVAN FEINBERG, President, Generation Opportunity, stated,
"Generation Opportunity is an organization that empowers young
people to fight for their economic freedom and their future
prosperity." He said it is a grass roots organization that
represents millions. He related that he is 29 years of age and
worked on Capitol Hill during the ACA debate. He said he is a
former staffer of Senator Tom Coburn of Oklahoma, for whom he
handled health care policy. Subsequently, he was a staff
director for Senator Rand Paul's subcommittee on the Health,
Education, Labor, and Pensions Committee in the Senate, where he
said he continues to "fight the implementation of the law ... ."
MR. FEINBERG opined that the ACA is set up to steal from young
Americans in "a vain attempt to offer universal health
insurance." He stated that the ACA is predicated on notion that
young, healthy adults will sign up for the exchanges and pay
more than their fair share for health care in order to provide
health insurance for more people. He related that the
Congressional Budget Office projects that in order for the ACA
to work, 2.7 million of the 7 million that register must be
young, healthy individuals. Mr. Feinberg said 96 percent of the
uninsured youth in America do not have a chronic condition or
pre-existing disease or anything else that would drive up the
cost of their health care; therefore, they have options for
affordable health insurance already, without the ACA in place.
Under the ACA, premiums for young people are expected to
increase "by 260 percent - well over three times as much ... ."
He said when that happens, it makes it impossible for young
people to buy the insurance, and the money is being spent not on
the young, but on health insurance for older, sicker Americans.
MR. FEINBERG suggested looking at the cost for premiums in
Anchorage, Alaska, before and after the ACA. He said the
average premium for the lowest plan prior to the Act cost $79; a
similar plan under the Act, at the bronze level, with a $5,000
deductible, costs $254. He emphasized the significance of the
increase. He said a mandate forces young people to sign on to
an exchange that is not a good deal. He said celebrities, such
as Jennifer Hudson and Amy Poehler, are being used to "sell this
bad deal to young Americans." Mr. Feinberg stated that the new
spending over the next ten years is primarily money borrowed
from that of his and his son's generations. Further, he said
even after getting young people to sign up, there will still be
30 million uninsured Americans.
MR. FEINBERG said college students are losing coverage. He said
a "government accountability office" report showed that 600,000
young people currently receiving insurance through their college
or university - primarily low-income students - are going to be
kicked off of their insurance plans because of the mandates and
requirements of the ACA. He listed the following ways America's
youth are hurting under the current economy: the effective
youth unemployment rate is 16 percent; one-third of individuals
18-34 years of age have been "forced to move back in with their
parents"; and 43.6 percent of youth ages 18-29 are working
fulltime. He stated that the ACA makes it expensive for
employers to hire employees who work over 30 hours a week. He
concluded by positing that it is a difficult time to be paying
three to four times for health insurance.
2:29:03 PM
CHAIR REINBOLD mentioned an Internet article that states, "Even
President Obama is afraid of creepy Uncle Sam." She asked Mr.
Feinberg if he would like to expound on that subject.
MR. FEINBERG said Generation Opportunity has a campaign in
progress to encourage young people to make the best possible
health care decision during the open enrollment period, to opt
out of government insurance and choose private insurance. He
said people are referring to the Generation Opportunity's
campaign as "the creepy Uncle Sam campaign." He said the group
has generated three web videos, which have received a total of
3.1 million views on YouTube. The videos show Uncle Sam changed
from a symbol that protects freedom to one that "oversteps the
limitations on government and gets involved in young people's
health care." Mr. Feinberg expressed the group's privacy
concern that there will be a "massive federal data hub
collecting health care data and personal financial information
on young Americans for the purpose of trying to get them to sign
up for health care or make decisions the government wants them
to." He characterized the group's campaigns as "creative and
fun," and encouraged watching the newest video put out this week
for Halloween.
CHAIR REINBOLD relayed that Mr. Feinberg had given her a tour of
his office in Washington, D.C. She said she thinks the
aforementioned videos alarm viewers to the impacts of the ACA on
America's youth. She encouraged people to watch them on
generationopportunity.org. She stated, "You were on the front
line back there in Washington, D.C., and got to see this sausage
being made; and some sausage has a lot of fat in it." She
stated that this law is creating alarm across the nation. She
said she thinks that "if their web site is any indication of
what this law is going to become," then Americans have cause for
concern.
2:32:09 PM
REPRESENTATIVE TARR asked Mr. Feinberg to talk about the source
of Generation Opportunity's funding; in particular, she asked
what percentage of the organization's total funding was sourced
by the Koch Brothers. She explained she was asking in the
interest of "being fair about any organizational bias you might
have."
CHAIR REINBOLD told Mr. Feinberg he could choose not to answer
that question, which she opined was not pertinent to the
hearing.
MR. FEINBERG responded that Generation Opportunity has "a
variety of donors, both large and small," and a lot of the
donors request anonymity, which he said he can understand "in an
era where the IRS is going after political opponents of the
President." He said he encourages donors to disclose their
affiliation with the organization, but respects the
confidentiality of those donors who ask for it. He emphasized
that Generation Opportunity is focused on what is best for young
people, and those who support it care about the economic
prosperity of the next generation.
REPRESENTATIVE TARR stated, "Well, for the record, as an
official activity..."
CHAIR REINBOLD told Representative Tarr that she had not yet
recognized her to speak. She added, "I think that question has
been answered."
REPRESENTATIVE TARR said, "I have another comment. This is an
official business meeting of the Alaska State Legislature, and
there are materials that are passed here that are not factual,
and this organization has some..."
CHAIR REINBOLD interjected that she has an objection, and she
reminded Representative Tarr that she is the chair of the joint
committee.
REPRESENTATIVE TARR responded that as a member of the joint
committee, she is allowed to make a comment for the official
record.
CHAIR REINBOLD said, "When I recognize you."
REPRESENTATIVE TARR stated, "I would like it to be part of the
official record that this is an organization that is heavily
funded by the Koch Brothers, with a particular organizational
bias."
2:34:40 PM
SENATOR GIESSEL proffered that the information [Mr. Feinberg]
shared with the committee, regarding Generation Opportunity, has
been substantiated by the Institute of Social and Economic
Research (ISER) and "other organizations that do unbiased,
nonpartisan research."
2:36:13 PM
CHAIR REINBOLD reminded members that they are allowed to speak
only when recognized by the chair, and anyone speaking without
being recognized is out of order. She then thanked Mr. Feinberg
for taking time to testify and to care about and study that
which impacts youth. She emphasized that the ACA is "a living
document" comprised of 2,700 pages and 20,000 pages of
regulations thus far. She said there are many issues of which
the legislature should be aware.
2:36:49 PM
JOE RIGGS, Registered Agent, Alaska Healthcare Strategies, LLC,
said he has represented both large and small manufacturers of
medical devices for the past five years. He related that
because of his exposure to the medical field since the age of
13, he is familiar with how changes get adopted throughout the
system. He shared that his background is in economics and
finance. Mr. Riggs stated his purpose before the joint
committee is to talk about medical device tax, which he said
will affect Alaska, even though the state does not have major
medical device manufacturers. He said the 2.3 percent excise
tax that was originally placed on any medical device, from
artificial hearts to toothbrushes, was given a retail exemption
by regulators in 2012, so that anything that can be purchased by
a retail consumer in a store or pharmacy, for example, is now
exempt from the tax. However, he indicated there is now a cost
involved with proving a device's retail status.
MR. RIGGS said it is important to remember that the 2.3 percent
excise tax is on gross profit, which means for a company with a
10 percent profit margin, the 2.3 percent tax would drop the
company's profit margin down approximately 23 percent. He noted
most companies, after expenses, "follow the profits back to
research and development." He said there has already been a
"cross boards cut" in research and development and a 50 percent
cut in adventure capital for new start-ups and products. He
said "the big 10" have done quite a number of layoffs already,
and he mentioned some of the company names along with the number
of employees that have been let go from each - that number
ranging between 440 and 1,000. He said Alaska is not feeling
the pinch of the layoffs right now. He related that in 2011,
there were over 16,000 device manufacturers in the U.S., over
13,000 of which had 50 or fewer employees. He said, "This is
where the impact will be the worst." He opined that this issue
is not being sufficiently addressed.
MR. RIGGS said the first thing a firm will do to adapt to a tax
of this magnitude is cut [its own] costs through layoffs, reduce
research and development, and shift the cost of the extra tax to
the consumer. A number of companies are listing the 2.3 percent
excise tax on their customers' statements. He indicated that
companies doing with business with Alaska have, in general,
three-year contracts; therefore, the prices will likely go up
when the contracts end. Alaska will see that increase.
2:41:50 PM
MR. RIGGS said the smaller firms are the ones that take the
risks, as they might have a single product or idea. Like most
start-up businesses, they have a lot of costs put into research
and development and inventory. So, if a company makes a 2.3
percent profit on a product, the excise tax will take away any
profit that would have come from that. A rational business
person would consider that and "slow it down" or perhaps not put
out as innovative a product. The larger companies have
continued to do research and development, but have cut 20-30
percent of that budget. Big companies don't usually come out
with "the big game-changing products." It's the small
businesses that may be going out of business.
MR. RIGGS, regarding the lifestyle of a product, offered the
example of a company called Aridian, which produced a product
for a problem wherein pain killers slow down a patient's
breathing, and some patients are more sensitive to others. In
the past, a higher nurse to patient ratio made it more likely
that someone would discover a patient's breathing was slowing,
but automation and a decline in the nurse to patient ratio meant
that some people "started to slip through and have some bad
episodes." He said one man came up with an idea of monitoring a
person's breath by measuring the amount of carbon dioxide
expended, which gives a lot of information to a doctor. The
equipment used for this measurement can set off an alarm if a
patient quits breathing, therefore allowing help to arrive
before the situation becomes irreversible. In over five years,
this product has become the standard of care across the country
for any patient who is on a narcotic pump or pain killer in the
hospital. The federal government has made it mandatory in all
its institutions, as well. Mr. Riggs questioned whether that
product would have been made if the excise tax had been in
existence.
2:45:41 PM
SENATOR GIESSEL pointed out that the data regarding a patient's
breathing goes to the nurses in the hospital, not the doctor.
She said what Mr. Riggs is describing about "the tax suppressing
innovation, you know, that applies to independent practitioners
as well." She said when Ms. Green began her independent
practice, she "worked for two years for free." She said that is
what it takes to start and build up a practice, and adding taxes
will result in less and less community clinics. She questioned
what would happen during a big disaster without those clinics.
MR. RIGGS said his spouse is a physician, and he indicated that
it took nine years of his support in the medical field to help
her start her practice.
2:47:05 PM
MR. RIGGS, in response to the chair, reiterated that retail
devices, such as toothbrushes and bandages have been exempted.
Examples of that which is not exempted range from orthopedic
devices to tools to video monitors. Regarding the 2.3 percent
excise tax, he said, "One can imagine that a product that has
been around for ... a number of years probably doesn't have much
of a profit margin."
CHAIR REINBOLD said she is from Eagle River, which does not have
a big corporation; therefore, this issue concerns her. She
mentioned the importance of mom and pop businesses for teenagers
entering the workforce.
2:51:02 PM
WILLIAM J. STREUR, Commissioner, Department of Health & Social
Services (DHSS), stated that some prefer to call the law
"Obamacare," but he calls it the ACA, because this tends to
"depersonalize it," because "it's endemic of what happened on a
Congressional level." He said President Obama "couldn't have
done it alone" and "we need to be aware of that." He continued
as follows:
When the [U.S.] Supreme Court decision came down, it
became the law of the land, but the State of Alaska,
along with the other states, was offered the
opportunity to say "just say no" to Medicaid
expansion. Although it's been stated in any number of
national and state journals that the governor has said
no, he has not said no. He has said maybe/maybe not,
and he's given me the opportunity to do the deep dive
and try to show him the good, the bad, and the ugly.
And I say the good, the bad, and the ugly, because you
want all three sides.
So, I've been spending a fair amount of time reading,
looking at data that we have, internal and external,
to look at where the savings might be, to where the
costs might be, to where the liability might be, to
the what ifs. You know, what if Congress turns over?
And the 90 percent to 100 percent of funding goes to
the 50 percent in the traditional (indisc.) That's
where the rest of our Medicaid participation (indisc.)
is generally at. We get a little amount with Denali
Kid Care; we get a little higher amount for certain IT
projects, but straight Medicaid, as we know it, is
about 50 percent federal mandate and federally funded.
It's a big part of the budget; it's $1.6 billion with
a "b." "And yet when I came on, it was about $1.2
billion. with a "b", and ... over seven years we've
had some substantial increases. I'm happy to say over
the last two years we've been virtually flat. In
fact, 2013, I was able to return $25 million in
federal funds, which nicely paid for the governor's
supplemental of $24.7 million. So, we were able to
get some wins and we got those wins through being
innovative and working closely with our provider
community.
COMMISSIONER STREUR stated that one of the issues he addresses
is generic medication. He said [the state] saves a million
dollars for every percentage point it is able to increase
generic medication through the Medicaid program. He said
historically, the numbers were going in the wrong direction,
from 74 to 72 to 68 to 65 percent, but there has been a large
run of new "bling-bling drugs," which affects the numbers. He
said he approached the medical community for help, which he
indicated has been successful. He said there have been two
years of "flat spending," but said he thinks there will be
climbs in Medicaid spending. He said, "So, when we're looking
at Medicaid expansion, that's got to be factored into that." He
said he has been working in the last few days to put together
recommendations for the governor.
2:56:28 PM
COMMISSIONER STREUR identified one question as whether there is
enough bandwidth; that is whether there are providers who will
pick up the load since a Medicaid expansion would result in an
increase of 25 percent. Although there is no knowledge as to
what the health insurance exchange is going to receive in terms
of additional insureds, there are 137,000 uninsured people in
Alaska. If, say, 60 percent of the people avail themselves of
the health insurance exchange, that would amount to about 90,000
people. With regard to the study that discusses [the need for]
4,000 new providers, Commissioner Streur stressed that the state
can't obtain providers now and thus he questioned what will be
different under the health insurance exchange, particularly
since every other state in the nation will be facing similar
problems.
COMMISSIONER STREUR then expressed concern with placing more
bodies in the nation's already broken health care system. He
informed the committee that the U.S. is the highest cost nation
in the world for health care, no matter if it's per capita or
population basis. Alaska is one of the two highest cost states
for health care in the nation, which some argue is because of
the cost of living. Commissioner Streur expressed the need to
control back such that care is returned to primary care
practitioners, which include doctors, nurses, nurse
practitioners, or physicians' assistants. If Medicaid expansion
occurs and the ACA and health insurance exchange is embraced, he
questioned whether providers will step up. He related that a
study from the hospital association reports there are $200
million in write offs at hospitals each year. He doubted that
[hospitals] would be willing to reduce their rates by $200
million if insurance coverage is increased for individuals.
With regard to whether there would be better care, Commissioner
Streur opined that will only happen when care is returned to
primary care providers. He also expressed the need for better
managed care and questioned whether more/less prior
authorizations should be reviewed or whether rates should be
reevaluated. He highlighted that Brandon Clark's paper relates
the national average for Medicaid payments is 66 percent of
Medicare, while Alaska is 140 percent of Medicare. He noted
that Alaska can thank U.S. Senator Stevens for the bump in the
Medicare rates. Commissioner Streur acknowledged there's a lot
of room to talk about rates, but noted that [the department] has
been able to provide a robust health care plan to the needy in
Alaska. With regard to the notion that Medicaid should be
expanded to 130 percent of the poverty level in order to cover
the extra children, he pointed out that children are currently
covered up to 175 percent of Medicaid.
3:03:09 PM
COMMISSIONER STREUR then related that he and Representative
Hawker have struggled over the years with the amount of grant
money for behavioral health and senior disability services, [the
need] for which continues to grow exponentially. Under a
Medicaid expansion, he questioned how many individuals would not
be covered under Medicaid. He further questioned whether there
is an offset and if so, what it would be. About $60 million in
general funds (GF) is spent on behavioral health. These are
what he is considering when preparing the paper for the
governor, he said. He emphasized that he has to present a
balanced [approach] for Alaskans. He expressed concern that
there is donut hole, even with the Affordable Care Act, for
those below 100 percent of the poverty level who are not
eligible for the exchange and thus they cannot receive
reimbursement. He opined that the belief was that Medicaid
would be mandatory, and thus this group would not be of concern.
However, that is not the case. Although those between 100-138
percent can go on the exchange, file, and be covered, they have
to front the premiums for 12 months until they can claim it on
their taxes. Those slightly above 200 percent of the poverty
level will receive 100 percent reimbursement of their insurance
premiums. He clarified that without the expansion, those below
100 percent of the poverty level won't be eligible. He noted
that this group is largely made up of childless adults.
3:05:28 PM
COMMISSIONER STREUR, in conclusion, told the committee that he
hopes to meet with Governor Parnell and provide an overview in
the near future.
3:06:52 PM
CHAIR REINBOLD thanked the commissioner for keeping [the DHSS
budget] flat, particularly since the state's budget has been
growing on average at 6.5 percent a year for the last 10 years
or so, which is unsustainable. She then inquired as to how many
people are currently enrolled in Medicaid.
COMMISSIONER STREUR specified that about 151,000 people are
enrolled in Medicaid of which about 137,000 actually use the
benefit.
CHAIR REINBOLD opined that Denali Kid Care was a huge expansion
of Medicaid, and then related her understanding from those in
the room that Denali Kid Care was expanded in 1998 under the
Knowles Administration. She then inquired as to the annual cost
per patient.
COMMISSIONER STREUR answered that the annual cost per patient is
$11,000-$13,000.
CHAIR REINBOLD referred to a University of Virginia study that
found the outcomes of patients on Medicaid with restricted
formularies, restricted access to certain physicians, and
restrictions to certain procedures were not as good. She asked
whether that is the case in Alaska, where there is a good
program with a good reimbursement rate. She further asked
whether any research has been done regarding the outcomes of
patients compared to the private sector or in-house [services].
COMMISSIONER STREUR answered that there has been very little
research done on that. In terms of the Medicaid in Alaska,
Commissioner Streur didn't believe one could afford to buy a
policy as good as what Medicaid in Alaska offers, although it's
very costly for the state.
CHAIR REINBOLD questioned whether [Medicaid in Alaska] is
sustainable, particularly with declining state revenues. She
then asked whether Commissioner Streur could provide any
solutions in terms of the future in Alaska.
COMMISSIONER STREUR reiterated his belief that care should be
returned to primary care providers otherwise the trend will not
be reversed.
CHAIR REINBOLD asked whether Commissioner Streur believes the
ACA will help that.
COMMISSIONER STREUR responded that he didn't know because he
didn't believe the ACA is concerned about quality of care but
rather is concerned about access to insurance. He pointed out
that the ACA isn't bringing providers in the mix as good counsel
and [has an awkward funding structure]. Commissioner Streur
opined that the ACA, in its present form, isn't going to do much
to improve the quality of care, although it will improve access
to care. He reiterated the need to find balance. He then
highlighted the sticker shock that is occurring. For instance,
Oregon developed its own health care exchange for $240 million
and it's limping along.
3:13:45 PM
SENATOR GIESSEL agreed with Commissioner Streur that Alaska's
Medicaid program is great. In fact, she said she has known
patients to move to Alaska because of its generous Medicaid
program. She then recalled that Commissioner Streur said there
were 137,000 uninsured Alaskans. She also recalled reading a
report from Mark Foster, an economist with ISER, that said the
uninsured numbers may not be accurate because those who qualify
for Alaska Native health care are included as uninsured because
that's not considered insurance. Therefore, the uninsured
numbers are distorted, she opined.
COMMISSIONER STREUR explained that he uses that number because
it comes from ISER and others. However, he said that Senator
Giessel's concern about the numbers is "spot on." He then
informed the committee that the 137,000 uninsured also include
certain veterans who are eligible for Veterans' Affairs (VA)
benefits. Since the uninsured number includes covered people,
he said he used it mainly for illustration purposes. He noted
that the tribal health care organizations in Alaska will argue
that they don't have insurance while the federal government says
they do. Therefore, the number of [true uninsured] is
considerably lower than [137,000].
3:18:06 PM
DR. RANCIN (ph) informed the committee that in 2009 a group of
individuals in Anchorage formed the Municipal Taxpayers League
which involved itself with local Anchorage issues, but also
addressed some statewide issues such as Obamacare. The group
contacted the Dittman group who developed two surveys, one of
which went out to the public at-large, about 400 people
throughout the state, and another survey that went out to health
care providers. He noted that the questions on the surveys were
similar regarding health care reform and provided the
information as widely as possible, including the media,
legislators, and the congressional delegation. He specified
that the offices of U.S. Representative Don Young and U.S.
Senator Lisa Murkowski were anxious to obtain the information,
while the office of U.S. Senator Begich seemed to stonewall
attempts at receiving the information prior to the congressional
vote. Referring to the survey provided to the public at-large,
he related that the public was generally against the survey 55
percent to 42 percent. The healthcare providers were in
stronger opposition than the public at-large such that 80
percent opposed it and 10 percent supported it.
3:26:10 PM
CHAIR REINBOLD, referring to this Alaska statewide health
survey, pointed out that about 400 registered voters were asked
to participate in the survey. These registered voters were
opposed to a national health care system and the vast majority
of respondents expressed concern with the health care reform
plan being proposed [in 2009]. With regard to question 3 60
percent of respondents felt that the quality of health care was
going to become worse [under the proposed health care plan].
With the limited information at the time, 64 percent of
respondents felt that the cost of health care will increase.
The survey found that 82 percent of respondents felt that
government is spending too much. She opined that respondents
would be even more alarmed today in light of the true costs.
3:28:49 PM
SENATOR GIESSEL inquired as to what kind of provider Dr. Rancin
is.
DR. RANCIN answered that he is a dentist.
SENATOR GIESSEL pointed out that the two surveys are sponsored
by two different groups. The first survey says it's sponsored
by the Municipal Taxpayers League while the second survey
specifies that it is sponsored by Alaska Family Medical Care.
DR. RANCIN informed the committee that both surveys were funded
by the [Municipal Taxpayers League]. The survey of the 400
[public at-large respondents] was performed completely by
Dittman whereas the other survey utilized some medical people to
help get the survey out to medical practitioners.
SENATOR GIESSEL noted that Dittman is always very clear that it
tries to match the demographics of the sample to that of the
state, which is likely why the general [public at-large] survey
is more accurate as opposed to the more limited distribution of
the second survey.
DR. RANCIN informed the committee that the second survey was
distributed fairly widespread throughout the state, including
Wasilla, Fairbanks, Soldotna, Anchorage, and the Bush.
3:31:12 PM
CHAIR REINBOLD pointed out that the second survey was among
medical professions that included 114 physicians, 41 dentists, 9
pharmacies, 21 nurses. She then highlighted that the second
survey had some similar results to that of the first, including
that 84 percent opposed a nationalized health care system in the
U.S. Furthermore, 89 percent were in some opposition to the
proposed Obamacare.
3:32:59 PM
The committee took an at-ease from 3:32 p.m. to 3:42 p.m.
^Presentation: Regulations for Health Information Exchanges
Presentation: Regulations for Health Information Exchanges
3:42:19 PM
CHAIR REINBOLD announced the committee would next hear testimony
regarding a new regulation for the health information exchanges
that can be found in the Alaska Administrative Code (AAC) 7 AAC
166. She explained that in the aforementioned regulation a
public sector member will be nominated.
3:43:18 PM
JOSHUA DECKER, Interim Executive Director, American Civil
Liberties Union of Alaska (ACLU of Alaska), stated that the main
thrust of the health information exchange is a good idea as it's
an electronic database that allows patients to have their
medical records electronically stored and accessed. However,
there are some problems with the health information exchange,
which precipitated a meeting between the ACLU of Alaska and the
Department of Health and Social Services (DHSS). Although DHSS
listened to the concerns of ACLU of Alaska and was responsive,
three main concerns remain. The statute that governs the broad
strokes of the exchange, AS 18.23.310(c)(1) states that the
exchange should be opt-out instead of opt-in. Therefore, if
patients are silent, their records are automatically
incorporated into the exchange. The exchange is currently on-
line in the Fairbanks area and will soon be statewide.
Currently, in order for a patient to opt-out of the exchange
he/she has to go to their provider's office, fill out the
paperwork, and the paperwork has to be processed. Mr. Decker
offered what he considered a more simple solution, particularly
in light of the privacy concerns; the solution would be such
that the state would assume patients who are silent do not want
their records to be part of the exchange. Therefore, it would
be an opt-in as opposed to an opt-out exchange.
MR. DECKER moved on to the second concern of the ACLU of Alaska,
which is the gap between the statute and the proposed
regulations. The statute, AS 18.23.310, says the health
information exchange can only be used for treatment and billing.
The problem is the proposed regulations, 7 AAC
166.040(e)(1)(b)(5), would allow the use of individual medical
records for treatment and billing as well as for "any reporting
purpose under 45 CFR 164". He explained that 45 CFR 164 is the
Code of Federal Regulations regarding the Health Information
Privacy and Portability Act (HIPPA), which addresses medical
records. The concern, he related, is that 45 CFR 164.512 allows
medical records to be used in a number of concerning ways. For
instance, 45 CFR 164.512 allows medical records to be used by
any company or organization regulated by the Federal Drug
Administration (FDA), which could include drug companies, to
engage in "post market surveillance." Therefore, drug companies
would be allowed to call patients to follow-up on their
marketing. The ACLU of Alaska, he related, doesn't believe
that's a central way for Alaskan's private medical records to be
used. Under 45 CFR 164.512, Title 45, would allow health
records as part of the health information exchange to be used
for law enforcement purposes. Mr. Decker opined that in Alaska,
a state that values individual privacy, law enforcement should
not be able to simply write a letter to gain access to an
individual's private medical records. Under 45 CFR
164.512(k)(2), the private medical records of individuals would
be allowed to be used for national security and intelligence
gathering operations. As currently proposed, the DHSS
regulations would allow the aforementioned to happen.
MR. DECKER then informed the committee that the computers of the
contractor running the exchange, the Alaska eHealth Network
(AeHN), had its computers audited this year. The auditors'
concluded that "the controls around Internet access are likely
insufficient" and further stated that "some machines have been
observed sending traffic to a location in Russia that could be
indicators of compromise". The auditors' also said, "The anti-
virus engine deployed by AeHN may not be effective in the
technical (indisc.)." Mr. Decker opined that organizations that
are going to hold the personal and private health records of
Alaskans should have robust security.
3:50:48 PM
SENATOR GIESSEL inquired as to whether ACLU of Alaska will
testify before the DHSS regarding its concerns with the proposed
regulations.
MR. DECKER confirmed that the ACLU of Alaska will submit written
testimony to the department and would be happy to submit it to
DHSS.
SENATOR GIESSEL commented that Mr. Decker's concerns are similar
to those surrounding the prescription monitoring program for
controlled substances. She noted her appreciation for Mr.
Decker's concerns and expressed hope they would be presented to
DHSS.
CHAIR REINBOLD pointed out that many of Mr. Decker's concerns
seem to be with the CFR, which are federal regulations that are
adopted by the state by reference. She expressed the desire to
be informed with regard to the responsiveness of DHSS to ACLU of
Alaska's concerns.
MR. DECKER pointed out that adoption of the CFR is not mandatory
and the regulations could be structured to say that the records
will only be used for billing and treatment as narrowly defined
in the CFR.
3:53:51 PM
The committee took an at-ease from 3:53 p.m. to 3:56 p.m.
^Presentation: Department of Health and Social Services
Assisted Living Home Rate Changes
Presentation: Department of Health and Social Services Assisted
Living Home Rate Changes
3:56:03 PM
CHAIR REINBOLD announced that the last part of the hearing would
be a presentation regarding the proposed changes to the Assisted
Living Home (ALC) rate changes to the Alaska Administrative Code
(AAC) 7 AAC 145 and 7 AAC 160.
3:57:35 PM
SHERRY METTLER, Past President, Assisted Living Association of
Alaska; Past President, Assisted Living Professionals of Alaska,
related her prior experience with assisted living homes,
including that she currently serves as a consultant to various
assisted living homes, but she has also operated assisted living
homes for over ten years. She said she is testifying today with
respect to proposed regulations for assisted living homes.
AMY ONEY, President and Owner, Mama's Assisted Living Homes,
introduced herself. She stated that Mama's Assisted Living
Homes has been in business since 2002.
3:59:07 PM
MS. METTLER then began her presentation by providing a brief
history of assisted living home regulatory changes and rates.
When assisted living homes began sometime prior to 2002, a
regulatory structure rate was established at approximately $70-
78. In 2001, Senate Bill 73 was introduced, which became law in
April 2002 and increased the amount for assisted living homes by
an additional $70. However, the department retained 42 percent
of the $70, she said. In order to receive its portion, assisted
living homes were required to submit a cost-based reimbursement,
which became a negotiated rate, although the current term used
in the proposed regulations is a hold-harmless rate. At the
time the hold-harmless rate was higher for most of the assisted
living homes than the previous rate in 2011. In 2004, a freeze
was placed on the rate. She elaborated that in 2002, cost-based
reimbursements were supposed to be reviewed annually by the
department to ensure that the assisted living homes performed
according to their projected costs and to allow for renegotiated
rates. However, "That never happened," she said. Instead, in
2004, the rates were frozen and assisted living homes could no
longer renegotiate terms.
MS. METTLER advised the state also made changes which allowed
the [Division of] Alaska Pioneer Homes (Pioneer Homes) to serve
Medicaid waiver clients. In short, the changes pertained only
to Medicaid waiver rates since the private sector facilities
were not restricted, she said. Ms. Mettler reiterated that once
rates were frozen, the private sector could no longer negotiate
rates. In approximately 2006 or 2007, the Pioneer Homes raised
rates for its medical personnel, including the registered nurses
although the private sector was not allowed to do so. In 2005,
a policy shift also had occurred, shifting from an intermediate
model to a medical model. Instead of [assisted living homes]
using the social model they then fell under the medical model.
Subsequently, their clients shifted from intermediate care to
nursing home level of care. She pointed out hold harmless rates
have not increased since 2002.
4:03:29 PM
MS. METTLER briefly referred to handouts [previously distributed
to members] that she said provides additional background
information, including a reference to a 2008 letter [not
specifically identified]. In 2009, the assisted living home
owners worked with the department in an attempt to change the
rates. In 2011 the department adopted new rates by regulation.
Currently, assisted living homes are in danger of losing hold
harmless rates when new regulations become effective on January
1, 2014. She offered her belief that assisted living homes
wouldn't have had any issue with the regulatory changes except
that the new rates for assisted living care are based on the
financial statements of a small number - only 76 of the 680
assisted living homes in Alaska. She referred to a handout she
had just distributed. She explained that the rates are broken
out by the number of beds, "under 5," "6-16," and "17 and
above." Prior to this, Pioneer Homes fell under the "17 and
above" category; however, under the new regulations, the Pioneer
Homes are separate and distinct. She referred to the first
column in the handout that read, "5 or fewer beds" and to the
second column that read, "T2031," which includes a daily rate.
It appears the department randomly selected rates ranging from
$65.81 to over $205, based on the audited financial statements
supplied by the department, she stated. It also appears that
consideration was not given to the models or to the individuals
who work in homes and whose employers pay wages and insurance.
She then referred to another packet [no title provided]. She
expressed concern with respect to the methodology used to
calculate and interpret the rates that personnel costs and wages
were not considered in some instances, in particular, with
respect to the hold harmless rates. She indicated that she just
closed two assisted living homes [Soldotna Day Centers] - a 16-
bed facility and a 4-bed facility - because she felt she could
not operate under the new rates. As of 2002, the rate for her
assisted living homes was $216.64 [per day], but was scheduled
to be reduced to $130 [per day] under the proposed regulations.
Therefore, the hold harmless provision is especially important
to her, she said. She expressed her ongoing frustration over
the prospect of trying to care for people under low rates, such
as the $65 per day rate. She also felt it was unfair to lump
assisted living homes together by bed size. She preferred that
the department base its rates on business models to determine
more sustainable and accurate rates.
MS. METTLER turned to slide 4, which shows the proposed rates
effective July 1, 2013 and on July 1, 2014. Under the new
rates, private industry home rates are reduced by 7 to 19
percent while at the same time; the rates for the Pioneer Homes
will increase by 229 percent. She said, "Something's wrong with
this picture. It has to be." She said the crux of the issue is
that adopting the new rates, combined with eliminating hold
harmless rates, will put many assisted living homes out of
business. She urged the committee to provide assistance in
determining the true cost of providing assisted living care to
clients. She also urged members to prohibit dismantling the
hold harmless rates, which become effective date January 1, 2014
under the proposed regulatory changes.
4:12:09 PM
MS. ONEY informed the committee that she has four assisted
living homes with five residents in each. Under the proposed
regulation changes, the assisted living rates for her facility
will be set at $205 per day. Her assisted living homes are not
considered a single big facility since they are in four separate
locations, noting she had consolidated her four homes into one
at the recommendation of the department. Additionally, she did
so to reduce the overhead necessary to maintain four limited
liability companies (LLCs). Her total rate, based on four homes
with five residents in each at $205 per day, would equal
$1,496,500, which represents the cost of doing business, she
said. The proposed rate changes would decrease her rate to
$124.81 per day for a total annual income reduction of $911,000,
which would be approximately $500,000 less. She said, "I have
absolutely no way to cut that kind of expense and still care for
my residents." Furthermore, she said doesn't have a personal
slush fund to draw funds, although she has worked to streamline
her operation.
MS. ONEY compared rates for assisted living care using the
proposed rates, such that someone who isn't insolvent would be
charged $541 a day, but someone in a group home would be charged
$310.63 per day for the same care. At the same time, the
Pioneer Home rates for respite care costs are $350-$455 per day,
although temporary care charges would be $282.11 per day.
Still, her eligible rate would be set at $124.81 per day under
the new rates. She translated the "per minute rate" at $1.30,
which for 15 minutes totals $5.64. She compared these charges
to personal care attendant (PCA) care fees and concluded those
rates would be 434 percent higher than her assisted living care
facility rates. She added that respite care patients would be
charged 226 percent more than her group residential care rate.
4:17:11 PM
MS. ONEY turned to the [the Division of Alaska] Pioneer Homes.
She emphasized that the Pioneer Homes should provide [the
committee with] a great cost model since the state is in full
control over the type of care residents receive and the
legislature has total access to their costs. However, the
department has shifted the rates for Pioneer Homes outside the
ones for assisted living homes. She predicted that if the
Pioneer Homes had been left in the same category the effect
would be that her rates would have increased by an average daily
rate of $286. She detailed some of the onerous administrative
requirements [under the proposed regulations] that assisted
living homes must comply with, including additional training
requirements plus an increased standard of care. She
characterized it as being similar to walking into Wal-Mart and
asking for directions to Gucci designer items. Meanwhile, the
legislature's best tool for cost comparison, the Alaska Pioneer
Homes has been removed. She recalled previous testimony before
the House Finance Committee by the division indicated
residential care exceeds $12,000, but Pioneer Home residents are
only charged $6,000 per month. The overall effect has been that
people who can afford good private care have migrated to the
Pioneer Homes. After all, who wouldn't want to receive double
the benefit, she asked. She referred to detailed rates on the
next slide that indicate the Pioneer Homes have 169,317 units
multiplied by a $554.55 rate, for a total of $60,031,342.
Comparatively, if their rates were similar to hers, at $124.81
the total cost of care would be $21,332,000. According to the
department's figures, she concluded the state has overpaid $38
million for people who receive care in the Pioneer Homes.
4:21:06 PM
MS. ONEY argued that if the Pioneer Homes operated under her
current rate, the state would still save $25 million. She
contemplated the effect of her homes closing on January 1, 2014
or on July 1, 2014, if the hold harmless rates are maintained.
For one thing, her assisted living homes are duly licensed so
she is also qualified to care for older adults, adults with
disabilities, and those with mental health issues. Referring to
the next slide, she pointed out that Anchorage has 13 assisted
living homes, with a total of 17 assisted living homes in
Alaska. She predicted this will only increase as Alaskans age.
At the same time, the Pioneer Homes are not licensed and cannot
accommodate her assisted living home population, she said. Ms.
Oney turned to identify her staff person, Elizabeth, who has
been with her for the entire 11 years she has operated. She
identified other members of her staff, who also have served her
facilities from 8 to 10 years. She expressed concern for their
livelihood. She identified what she believes assisted living
homes need. First, the assisted living homes need the ability
to address and maintain the hold harmless rates, which are
scheduled to expire on January 1, 2014, prior to the new rates
being implemented.
4:24:00 PM
MS. ONEY expressed concern that she will lose $492 per day if
the hold harmless rates are abandoned. Meanwhile, the notice of
closure requirement is set at 90 days, but she has less than 30
days remaining before the proposed regulations go into effect.
However, at this point she hasn't obtained a clear answer with
respect to the department's intentions on the proposed
regulations for rate changes. She expressed her frustration at
being stuck in a difficult situation since she doesn't want to
give staff and residents notice when she is unsure of the
department's stance. She said, "I need some help and I need
some answers. I need someone to be willing to step up in the
department." She characterized the department's lack of
decision-making ability as putting assisted living homes in an
impossible situation.
4:26:20 PM
MS. ONEY recommended a task force be assigned to discuss ideas.
She anticipated assisted living homes will have to comply with
additional regulations for licensing and Medicaid. She would
like the state to identify benchmarks for quality of care
expectations and to identify what it can afford. She recalled
her prior committee service, which leads her to believe that
when all the parties sit at the table sustainable solutions can
be worked out by the end of session. She related that Vermont
has also conducted a feasibility study on assisted living care
facilities. She wondered whether the department had run
feasible economic models and if so, whether closed homes were
removed from the calculations. She also would like adequate
notice in order to have an appropriate wind-down for her
facilities. She concluded by saying she takes pride in the
quality of care she provides clients at her assisted living
homes. However, if that isn't what the state wants, she'd just
like the dialogue to happen in a "grown-up" way.
MS. METTLER asked the committee to give other people an
opportunity to testify.
4:30:26 PM
CHAIR REINBOLD thanked Ms. Oney for caring for the elder
Alaskans. She pointed out that Alaska has a growing aging
population and no one seems to understand the magnitude of the
expenses. She mentioned that she introduced HB 140, which did
not pass. Her bill would force the department to consider how
statutory and regulatory changes affect municipalities and the
private sector. She emphasized HB 140 remains one of her
priorities. She emphasized that some regulations adversely
affect our communities and should be addressed on a state,
federal, and local level.
4:33:04 PM
REPRESENTATIVE TARR related her understanding of the issue. She
understood the hold harmless provisions are working but will be
eliminated on December 31, 2013, followed by a lag period, with
new regulations becoming effective on July 1, 2014. However,
issues have arisen with the proposed rate reductions for
assisted living homes. She further understood that the Pioneer
Home rates are based on a level of care provided basis, so lower
needs clients can be charged less. She asked whether the rates
should be adjusted based on a tiered level of care.
MS. METTLER agreed that could be an option, which is one she has
suggested in prior years. She suggested that the department
seems to be trying to eliminate dual licensing, rather than to
create tiered licenses. She stressed this as one reason a task
force approach is important. She suggested the department
consider other factors, including patient acuity. She
recognized the benefits of having residents at different
abilities and ages since people help one another. She urged
members not to limit the Pioneer Homes strictly to the elderly
since that type of care tends to isolate people.
4:36:36 PM
SENATOR GIESSEL asked for the location of the other 17 licensed
homes.
MS. ONEY offered her belief the assisted living homes were
scattered throughout the state, with one in Kodiak or Fairbanks.
She clarified that the total includes the nine assisted living
homes in Anchorage.
MS. METTLER, in response to Senator Giessel, answered that one
assisted living home is in Kenai and Fairbanks. She pointed out
some homes are dual-licensed.
CHAIR REINBOLD reiterated the importance of putting the power
back into the hands of the legislature instead of the
bureaucracy since it isn't held as accountable.
4:38:51 PM
ROBERT NASH, Owner, Riverside Assisted Living, LLC, stated that
his 96-bed facilities were recently licensed and opened. In
2011, the rates were increased, but at the time the rates were
too low for facilities to break even, let alone achieve any
profits. He said when rates were increased he invested $7
million in Soldotna to build a beautiful assisted living home on
the Kenai River. Basically, the proposed rate reduction from
$155 to $122 per day represents reductions for facilities
ranging anywhere from $40,000 to $80-90,000 per month. He
predicted that if the proposal passes Alaska will have a mass
crisis without places for Ms. Oney's clients to go. "Alaska
will be in a crisis mode. One of the things we've already done
is to purchase property in Kenai, Alaska to build another large
facility. Kenai and Soldotna did not have one facility over 17
beds. Not one. And there's a tremendous need down there," he
said. In fact, the Pioneer Homes in Ketchikan, Sitka, Juneau,
and Palmer currently experience a three to five year waiting
list. Furthermore, seniors represent the fastest growing
population in Alaska so [the number of seniors] will be doubled
in five years. He cautioned that investors currently shy away
from Alaska since it lacks stability. He offered his belief
that the private sector must fill this need. He reiterated that
he did not believe he could open another facility in Kenai since
it won't be possible to stay in business [under the proposed
regulations].
MR. NASH said he is accountant by profession and reiterated the
department's methodology is flawed. He cautioned the grouping
used. In fact, his home is as large as the local Pioneer Home.
He characterized the situation as being similar to the state
being the referee and the rule maker. Under this model, the
state will lose $38 million per year. The Medicaid waiver
almost requires a nursing home degree of care. He stressed that
the state saves a lot of money by allowing the private sector to
provide more homes and fill the void. He emphasized that it
costs $14,000 to $16,000 [per month] to put people in nursing
homes. He compared that to costs in Boise, Idaho, as well. He
suggested the group hoped to talk to the governor during the
post-comment period. He suggested a long-term solution would be
to stabilize rates by having the Office of Rate Review work with
private people - using audited financial statements to identify
fair rates. He acknowledged that he did not like competing
against the Pioneer Homes - the rule maker. He offered his
belief that some solutions could be achieved. He expressed his
disappointment that the legislature did not have the power [to
negate the regulations], noting other firms don't have a desire
to compete in Alaska.
4:44:52 PM
MR. NASH also expressed his disappointment that the director has
not been listening. He predicted an imminent crisis related to
assisted living homes. He asked to go on record to provide
facts, especially if a lot of seniors are displaced [due to the
proposed changes.]
CHAIR REINBOLD stated the purpose of hearings so both sides can
be heard. She indicated the department has also been hearing
the testimony and the committee will follow up as this
regulation moves forward.
4:46:59 PM
LYNN VAZQUEZ stated she has a relative who has been receiving
[assisted living home] services. Consequently, she has visited
over 20 assisted living homes. She referred to page 2 of a
handout [not identified], noting a big discrepancy exists
between the proposed compensation for the Pioneer Homes and the
private sector assisted living homes. She did not think the
level of care has been considered. She has also visited Mama's
Assisted Living. In her estimation, some of the clients could
go into a nursing home due to their needs. However, the
proposed rates do not take level of care into consideration.
She contrasted the private home care with the care offered by
the Pioneer Homes since some of the Pioneer Home residents are
ambulatory, cognizant, and self-sufficient, although she
believed some clients also need a higher level of care. Again,
the proposed regulations do not recognize the difference. She
referred to [page] 11 of the handout, and suggested there isn't
any reason not to form a task force to examine the issues. She
cautioned that unintended consequences of the proposed
regulations may crush the private sector. She said it isn't
easy to find a good assisted living home. Members might not
realize how critical the services are to the people they serve
unless they have personally visited these facilities. She
reiterated the importance of reviewing the proposed regulations.
She pointed out the difference between services needed for
personal care assistant (PCA) to services in assisted living
homes. She stressed that [assisted living homes] may be the
most cost effective method of delivery. In her view, the
Pioneer Home should provide care for those who need nursing home
levels of care, but also provide care for those who can take
care of themselves, including those who walk around, go on
dates, and feed themselves. On the other hand, homes such as
Mama's Assisted Living homes provide care for the nearly
bedridden elderly. She pointed to her professional background,
expertise, and credentials. She said she has a Juris Doctorate
from Cornell University and a Master of Business Administration
(MBA) in health care services administration. She has worked
for the Division of Public Assistance for many years in the
Commissioner's office of DHSS. She added other supportive roles
she has served in the field. She characterized her status as
being "very well versed" on the subject of assisted living home
care. She emphasized that she, too, would like to see the
department form a task force to address the issues prior to
taking action that could render significant harm. She predicted
that the state could save money both from the financial
standpoint, and from the managerial perspective.
4:52:48 PM
JASON HOOLEY, Special Assistant, Office of the Commissioner,
Department of Health and Social Services (DHSS), said he
appreciated today's testimony. The department considers itself
accountable to the legislature, the governor, and most of all to
the people of Alaska regarding actions, decisions, and
regulations before the committee today. He offered to work with
Commissioner Streur on the issues as presented today.
4:54:33 PM
JARED KOSIN, Executive Director, Rate Review, Division of Health
Care Services, Department of Health and Social Services (DHSS),
stated the regulations at issue came from his office. First, he
said the department is listening, it will continue to do so, and
he also takes these issues very seriously. He advised members
he assumed his position in January of last year, and that he and
his wife are residents of Eagle River having relocated to Alaska
from Denver, Colorado. He stated he is an attorney, with an
MBA. He also said he has a tremendous respect for legislatures
and has spent time working for majority leaders and speakers in
two different states. He further stated that he takes his job
seriously when writing regulations and releasing bonds. He
noted the regulations at issue have a public comment period
until November 1. Thus the department is limited in its
response today, but he indicated he appreciated the comments.
He has specifically urged Ms. Mettler to submit her comments so
they can be considered as part of the public comment on the
proposed regulations. He acknowledged the decisions being made
are big ones. The proposed rate changes are not made "out of
the blue" but date back to 2011.
4:56:18 PM
MR. KOSIN said in 2011 [federal] regulations came into effect
that called for the new cost based rate to take effect on or
after January 1, 2014. The regulations also provided for the
expiration of the hold harmless rate. The decisions and
proposed changes in regulation really stem from those changes.
He related that he continues to meet with people on the proposed
regulations. For example, he met with about 50 providers at an
Association of Developmental Disabilities meeting today. He
acknowledged the process can be frustrating, but again, he is
restricted in what he can do today, although he assured members
he is listening to the comments.
4:57:39 PM
CHAIR REINBOLD said she appreciated having his comments on the
record. She said she will consider adding a provision requiring
disclosure in HB 130 so people can pinpoint the person
responsible for writing any regulations. She elaborated on
accountability and stressed the importance of knowing the
elderly will be cared for in the future.
4:59:43 PM
SENATOR GIESSEL asked for clarification on how long after the
November 1 public comment period that the department will need
to respond to the proposed regulation changes.
MR. KOSIN answered the deadline for the proposed regulations
will be on or after 1/1/2014; however, the department is very
sensitive to the hold harmless rate. Of the 332 entities that
provide waiver services subject to the rate, 38 relate to the
hold harmless rate, which he estimated is worth approximately
$10 million in the system of payment. He agreed the rates will
expire on 12/31/13 if the department does not take some
regulatory action. He indicated the department will try to be
very fast in responding after the November 1 public comment
date.
5:01:19 PM
SENATOR GIESSEL related her understanding of the department's
actions once the public comment period ends. She further
understood the department would re-write regulations, which
would then be subject to another 30-day public comment period.
She asked whether that would be the process.
MR. KOSIN answered no. He explained the process, such that the
department would make a decision based on the comments, which
would go forward to the Lt. Governor for filing without the
requirement for additional public notice.
SENATOR GIESSEL asked for further clarification. She asked for
further clarification on the process. She asked whether the
process is that the regulations will go into effect 60 days
after the Lt. Governor signs them.
MR. KOSIN answered that the department would want the hold
harmless provision to go to the Lt. Governor by December 31,
2013. He predicted that action could happen pretty quickly.
5:03:08 PM
CHAIR REINBOLD asked to place on record that AS 44.62.710-800 is
under negotiated rule making, in which discussions can occur
between the department and the stakeholders. She hoped that a
path would be available so Alaska's elderly can be cared for
appropriately.
5:03:40 PM
ADJOURNMENT
There being no further business before the committee, the
Administrative Regulation Review Committee meeting was adjourned
at 5:04 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AARC Agenda 10.29.13.pdf |
JARR 10/29/2013 12:00:00 PM |
|
| Title 7 Chpt 130, 145,160 Medicaid.pdf |
JARR 10/29/2013 12:00:00 PM |
|
| 7AAC 166 proposed.pdf |
JARR 10/29/2013 12:00:00 PM |
|
| Impact of Proposed Asissted Living Home Rates 2013.pdf |
JARR 10/29/2013 12:00:00 PM |
|
| ACA Waivers.pdf |
JARR 10/29/2013 12:00:00 PM |
|
| Generation Oppertunity.pdf |
JARR 10/29/2013 12:00:00 PM |
|
| Generation Oppertunity Forbes.pdf |
JARR 10/29/2013 12:00:00 PM |
|
| Testimony Brandon Clark ARRC Hearing Final 10 29 2013.ppsx |
JARR 10/29/2013 12:00:00 PM |