Legislature(2015 - 2016)Fairbanks LIO

05/14/2015 10:00 AM LEGISLATIVE BUDGET & AUDIT

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as
Download Video part 2. <- Right click and save file as

Audio Topic
10:04:27 AM Start
10:04:46 AM Public Testimony: Department of Health and Social Services Performance Review
12:19:36 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Dept. of Health & Social Services Performance TELECONFERENCED
Review - Public Input
-- Fairbanks Testimony --
Public comment on the performance of the Dept.
of Health & Social Services in the delivery of
its behavioral health & long-term care services
& on the department's overall organizational &
administrative structure
-- Testimony <Time Limited to 3 min.> --
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                       Fairbanks, Alaska                                                                                        
                          May 14, 2015                                                                                          
                           10:04 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Chair                                                                                               
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Sam Kito                                                                                                         
                                                                                                                                
Senator Cathy Giessel                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Anna MacKinnon, Vice Chair                                                                                              
Senator Lyman Hoffman                                                                                                           
Senator Bert Stedman                                                                                                            
Senator Click Bishop                                                                                                            
Senator Pete Kelly (alternate)                                                                                                  
                                                                                                                                
Representative Kurt Olson                                                                                                       
Representative Mark Neuman (alternate)                                                                                          
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Tammie Wilson                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PUBLIC TESTIMONY:  DEPARTMENT OF HEALTH AND SOCIAL SERVICES                                                                     
PERFORMANCE REVIEW                                                                                                              
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JIM WALDINGER                                                                                                                   
Public Consulting Group                                                                                                         
Boston, Massachusetts                                                                                                           
POSITION STATEMENT:  Shared background information explaining                                                                 
their involvement with the Department of Health and Social                                                                      
Services performance review.                                                                                                    
                                                                                                                                
SHARI HOLLAND                                                                                                                   
Public Works                                                                                                                    
Austin, Texas                                                                                                                   
POSITION  STATEMENT:   Shared  background information  explaining                                                             
their  involvement  with  the Department  of  Health  and  Social                                                               
Services performance review.                                                                                                    
                                                                                                                                
JEANETTE GRASTO, President                                                                                                      
NAMI (National Alliance on Mental Illness) of Fairbanks                                                                         
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
Department of Health and Social Services (DHSS).                                                                                
                                                                                                                                
REPRESENTATIVE TAMMIE WILSON                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Spoke  during  the  performance review  of                                                             
DHSS.                                                                                                                           
                                                                                                                                
SANTA CLAUS                                                                                                                     
North Pole, Alaska                                                                                                              
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
RICK SIKMA, Pastor                                                                                                              
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
ALLISON LEE, Executive Director                                                                                                 
ResCare Alaska                                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
ROGER HUGHES                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
MARIA RENSEL                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
GERALD BROWN, Pharmacist                                                                                                        
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
KAREN VAN REINAN                                                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
REBECCA DAVIES                                                                                                                  
Savannah, Georgia                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
JOLENE SUTTON                                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
DEBORAH BROLLINI                                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
CRIS TYREE                                                                                                                      
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
PAUL NELSON                                                                                                                     
Haines, Alaska                                                                                                                  
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
KIMBERLY BOOKEY                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the  performance review of                                                             
DHSS.                                                                                                                           
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:04:27 AM                                                                                                                   
                                                                                                                                
CHAIR  MIKE  HAWKER  called  the  Legislative  Budget  and  Audit                                                             
Committee  meeting  to  order  at  10:04  a.m.    Representatives                                                               
Hawker, Thompson,  and Kito and  Senator Giessel were  present at                                                               
the call to order.   Representative Pruitt arrived as the meeting                                                               
was in progress.  Also in attendance was Representative Wilson.                                                                 
                                                                                                                                
^Public  Testimony:   Department  of Health  and Social  Services                                                             
performance review                                                                                                            
  Public Testimony:  Department of Health and Social Services                                                               
                       performance review                                                                                   
                                                                                                                                
10:04:46 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced  that the only order of  business would be                                                               
public testimony on  the performance review of  the Department of                                                               
Health and  Social Services.   He offered some background  of the                                                               
performance  review  process,  detailing  that  this  performance                                                               
review was of the Behavioral  Health Services, the Long Term Care                                                               
Services,   and   the   overall   organizational   administrative                                                               
infrastructure  of  the  department.    He  clarified  that  this                                                               
meeting did  not require  a quorum to  conduct business,  as this                                                               
was only a "listening post activity."   He shared that the Alaska                                                               
State Legislature  had passed House  Bill 30 which  required that                                                               
the  Legislative Audit  Division would  conduct a  review of  the                                                               
performance  of each  of the  State of  Alaska's major  operating                                                               
agencies on  a ten year cycle.   He emphasized that  this was not                                                               
an audit,  a budget hearing, or  a budget review but  was focused                                                               
on  the performance  of the  agency in  meeting its  missions and                                                               
goals  in its  service  to  the public.    He  reported that  the                                                               
current performance review  was for the Department  of Health and                                                               
Social Services, and that the  final report would be available at                                                               
a  later date.    He explained  that,  as a  part  of the  review                                                               
process, the Legislative Audit Division  would engage the service                                                               
of professional outside contractors  with specific experience and                                                               
skills relative  to the  agency being  evaluated.   He introduced                                                               
the two consulting contractors,  the Public Consulting Group, who                                                               
were reviewing the  Divisions of Behavioral Health  and Long Term                                                               
Care,  and Public  Works, who  were reviewing  the organizational                                                               
and administrative structure of the department.                                                                                 
                                                                                                                                
CHAIR HAWKER explained that this  was an opportunity specifically                                                               
for  the public  to  speak  to the  contractors  to allow  better                                                               
understanding for  the public's  perspective of  the relationship                                                               
between  the  public  and  the  department  and  its  operational                                                               
performance.  He  shared that these comments would  be taken into                                                               
serious consideration.  He reiterated  that the comments would be                                                               
directed toward  review of  the behavioral  health and  long term                                                               
care  services, and  with especial  emphasis  toward the  overall                                                               
organizational  structure of  the department  and its  ability to                                                               
enable  or inhibit  an  efficient and  effective  operation.   He                                                               
noted  that written  testimony  would also  be  forwarded to  the                                                               
contractors.                                                                                                                    
                                                                                                                                
10:10:12 AM                                                                                                                   
                                                                                                                                
JIM WALDINGER,  Public Consulting Group, introduced  his company,                                                               
reporting that  they had been  founded in 1986 and  worked almost                                                               
exclusively in  the public sector  with health and  human service                                                               
agencies  nationwide,  focusing  on  policy,  reimbursement,  and                                                               
general  system   assessments.    He  acknowledged   that  Public                                                               
Consulting  Group   had  been  contracted  by   the  Division  of                                                               
Legislative  Audit for  a performance  review  on the  behavioral                                                               
health and long term care systems,  and, for the past two months,                                                               
they had  two teams collecting  data, meeting with  Department of                                                               
Health  and Social  Services staff,  and engaging  with providers                                                               
around  Alaska to  better understand  these systems.   He  shared                                                               
that  all  the  state  staff and  providers  had  been  extremely                                                               
accommodating  and  open  in  discussions with  his  staff.    He                                                               
reported  that  his  group  was   currently  in  the  process  of                                                               
synthesizing this information and data.                                                                                         
                                                                                                                                
10:12:12 AM                                                                                                                   
                                                                                                                                
SHARI HOLLAND,  Public Works, explained  that Public Works  was a                                                               
consulting group  which worked with  state and  local governments                                                               
and  that  they had  done  several  performance reviews  of  this                                                               
magnitude  over the  last few  years.   She reported  that Public                                                               
Works  was   reviewing  the  organizational   and  administrative                                                               
structure of  the Department  of Health  and Social  Services for                                                               
the performance  review.  She  noted that they were  finishing up                                                               
the  field  work, which  had  included  extensive interviews  and                                                               
focus groups with  state employees statewide.   She reported that                                                               
her  group  was  also  conducting  research  nationwide  on  best                                                               
practices.   She  lauded the  interactions Public  Works had  had                                                               
with department staff.                                                                                                          
                                                                                                                                
10:13:40 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER opened public testimony.                                                                                           
                                                                                                                                
10:14:13 AM                                                                                                                   
                                                                                                                                
JEANETTE  GRASTO, President,  NAMI (National  Alliance on  Mental                                                               
Illness) of  Fairbanks, explained  that the  NAMI mission  was to                                                               
support  education and  advocacy for  people with  serious mental                                                               
illness and their families.   She declared that the mental health                                                               
system in Fairbanks had broken about  one and a half years prior,                                                               
and, for about three weeks, there  had not been any public mental                                                               
health  service  until  the  Anchorage  Community  Mental  Health                                                               
Services, Inc. (ACMHS)  came to their aid.  ACMHS  was helping to                                                               
re-build the  program, although  fiscal constraints  were slowing                                                               
it.  She stated that ACMHS did  not have the capacity to meet the                                                               
current  needs,  even  as  the   more  serious  mentally  ill  in                                                               
Fairbanks  were being  moved  to  Anchorage.   She  asked if  the                                                               
review team had spoken with  consumers, as they were an essential                                                               
component  for  information to  the  success  of the  [behavioral                                                               
health] division.   She relayed  that people with  serious mental                                                               
illness needed  a continuum  of care for  recovery, and  this did                                                               
not exist  in Fairbanks.   She relayed that the  people currently                                                               
being  accepted  into  the   Fairbanks  community  mental  health                                                               
services were  those coming  out of  institutional care,  such as                                                               
hospitals  or jail.   She  pointed out  that private  individuals                                                               
were  "way down  on the  list for  being admitted  into services,                                                               
which  isn't  right."    She described  that  continuum  of  care                                                               
included a doctor  available all of the time, and  she offered an                                                               
anecdote  for  a   medication  issue.    She   spoke  about  case                                                               
management,  access to  counseling  and  therapy, and  vocational                                                               
support, noting that recovery for  many individuals was marked by                                                               
a  return to  work.    She pointed  out  that  people needed  day                                                               
treatment  with a  place  to  go and  rebuild  their skills,  and                                                               
housing.  She  declared that there was not  any supported housing                                                               
or assisted living  for people with mental  illness in Fairbanks,                                                               
reporting  that it  was really  hard to  manage a  mental illness                                                               
without housing.  She relayed  that, although the State of Alaska                                                               
had requested  that Fairbanks do  an assessment of  housing needs                                                               
before there  was funding  and building,  there was  an immediate                                                               
need  for medical  stability for  many people.   She  stated that                                                               
family   and  peer   support   was   essential,  especially   for                                                               
information of  where to get  help.  Although NAMI  could provide                                                               
this support,  they had no  funding other than  through donations                                                               
and  fund   raisers.    She   acknowledged  that   [Division  of]                                                               
Behavioral  Health wanted  to serve  the seriously  mentally ill,                                                               
but  she questioned  where support  for the  medium mentally  ill                                                               
would be  delivered.   She stated  that it  had been  proven that                                                               
these  people were  fine with  treatment,  but without  treatment                                                               
they would "end  up in the hospital."  She  declared that another                                                               
serious  issue  in  Fairbanks was  for  limited  availability  to                                                               
Medicaid  paid counseling  or therapy,  as  current capacity  was                                                               
filled,  and  expanded  access  would  keep  people  out  of  the                                                               
hospital.   She  emphasized that  without services  at the  local                                                               
community  level   of  care,  there  would   be  services  needed                                                               
institutionally, which was so much more expensive.                                                                              
                                                                                                                                
10:22:04 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE TAMMIE WILSON, Alaska  State Legislature, asked if                                                               
the review for  behavioral health included the  grantees, as well                                                               
as the clients.                                                                                                                 
                                                                                                                                
10:23:03 AM                                                                                                                   
                                                                                                                                
SANTA  CLAUS  referenced  his  background  as  a  former  special                                                               
assistant to the deputy police  commissioner of New York City, as                                                               
well  as  a former  emergency  response  chaplain and  child  and                                                               
victim  advocate.   He expressed  his  concern with  the way  the                                                               
Office  of  Children's  Services   (OCS)  was  working,  and  his                                                               
displeasure with  the current  director.   He offered  his belief                                                               
that  none of  the recommendations  for  change to  OCS from  the                                                               
Office  of the  Ombudsman had  been  adopted.   He referenced  an                                                               
example of  an alleged incident as  an example of the  need for a                                                               
change.  He offered his belief  that OCS should be put on notice,                                                               
suggesting  that  the  listed job  description,  experience,  and                                                               
qualifications  should   be  examined.    He   suggested  that  a                                                               
grievance process be implemented.                                                                                               
                                                                                                                                
10:32:34 AM                                                                                                                   
                                                                                                                                
RICK SIKMA, Pastor, shared his  background in family and marriage                                                               
counseling, noting  that he had been  a pastor for 40  years.  He                                                               
shared  an anecdote  regarding  a prior  meeting  with OCS  which                                                               
resulted  in  his questioning  the  "rules  of  the state."    He                                                               
recognized  that there  were occasions  for  removal of  children                                                               
from homes, but he suggested  that there were organizations other                                                               
than  OCS  that could  have  dealt  with  these situations.    He                                                               
reflected on earlier  meetings he and other  pastors had attended                                                               
with OCS,  and he recollected  his understanding for some  of the                                                               
agreements.                                                                                                                     
                                                                                                                                
MR.  SIKMA, in  response  to Representative  Wilson, offered  his                                                               
belief that  the aforementioned meetings had  occurred about five                                                               
years prior.                                                                                                                    
                                                                                                                                
10:37:56 AM                                                                                                                   
                                                                                                                                
ALLISON LEE,  Executive Director, ResCare Alaska,  explained that                                                               
this was  a statewide agency  serving more than 800  Alaskans for                                                               
home  and  community based  services.    She  said that  she  was                                                               
testifying as  a citizen, as  she was currently on  medical leave                                                               
from her position.   She reported that she began  her career as a                                                               
nurse  assessor in  home and  community based  services in  rural                                                               
Alaska more than 10 years prior.   She shared that she had worked                                                               
in  "some  capacity with  the  Department  of Health  and  Social                                                               
Services,  particularly senior  and  disability  services."   She                                                               
noted that  the current leadership  at DHSS had  genuinely sought                                                               
public  comment, participation  from  stakeholders, and  provider                                                               
input, especially  as they were  now faced with  some complicated                                                               
issues from both  state and federal mandates.   She reported that                                                               
the provider community  had concerns with the  Division of Senior                                                               
and  Disabilities   Services  staff  interpretations   of  waiver                                                               
regulations  which denied  eligibility  to older  Alaskans.   She                                                               
suggested  that  there had  been  issues  with the  fair  hearing                                                               
process, and,  although she stated  that it had  vastly improved,                                                               
she encouraged the [performance  review] contractors to look into                                                               
this  process to  ensure the  effective  use of  resources.   She                                                               
offered three  suggestions for  consideration, which  included an                                                               
opportunity  for comprehensive  person  centered care  management                                                               
and care coordination,  though not limited to  home and community                                                               
based services,  but across  the spectrum of  care.   She relayed                                                               
that an individual receiving waiver  services could have multiple                                                               
case managers,  and that this  was an opportunity for  a holistic                                                               
approach  to case  management and  care coordination,  especially                                                               
with the federal mandate for  conflict free case management.  She                                                               
suggested  to  look at  the  provider  certification and  quality                                                               
assurance unit within the division, as  it had gone through a lot                                                               
of change and shifted a lot of  resources to meet its needs.  She                                                               
encouraged more  mutual understanding  between the  providers and                                                               
the division  on the  requirements and  realities in  delivery of                                                               
services,  although she  questioned  the best  use of  resources.                                                               
She  reported that  biannual on-site  reviews were  now required,                                                               
and,  as she  had eight  locations across  Alaska, this  would be                                                               
better and more effectively served  with a review in Anchorage as                                                               
all of  her programs  were the  same throughout  the state.   She                                                               
listed the  multiple audits  she conducted  and pointed  out that                                                               
this  did lead  to  "a certain  degree of  audit  fatigue."   She                                                               
offered  her   belief  that  an  on-site   review  shortly  after                                                               
certification would  be excellent for establishing  a partnership                                                               
and   on-going  relationship,   offering   an   example  of   the                                                               
educational  audits  in Montana.    She  expressed her  hope  and                                                               
concern  that the  Division of  Senior and  Disabilities Services                                                               
had the internal and external  resources and support necessary to                                                               
do the heavy lifting to realize  the very real dream of achieving                                                               
substantial  reform in  home and  community based  services, with                                                               
conflict free  case management, the 1915(i)  and 1915(k) options.                                                               
She explained that these options  provided real opportunities for                                                               
savings  in  the  Medicaid  home  and  community  based  services                                                               
programs, and offered the ability  to increase access to services                                                               
to the underserved populations which  were currently being served                                                               
in more costly  care environments.  In response  to Chair Hawker,                                                               
she explained  that the  1915(k) option  was the  community first                                                               
choice option,  introduced a few years  prior, and that a  lot of                                                               
the current Medicaid  services could be moved to  this option, as                                                               
it had  some enhanced  case management and  a 6  percent enhanced                                                               
FMAP (Federal Medical Assistance  Percentages).  She acknowledged                                                               
that this was a specialized  area within the waiver services, and                                                               
that  the  1915(i) option  would  allow  individuals with  severe                                                               
mental  illness,  Alzheimer's  and related  dementia,  and  other                                                               
currently  underserved  populations  to be  served  outside  more                                                               
costly  environments.   She encouraged  that  the review  process                                                               
speak with the provider agencies.                                                                                               
                                                                                                                                
CHAIR HAWKER lauded  the success by providers  for developing the                                                               
home  and community  based  service  alternatives to  traditional                                                               
institutional  services,  noting  that Alaska  was  the  national                                                               
leader in development of this approach.                                                                                         
                                                                                                                                
MS. LEE pointed  out that most people would prefer  to be at home                                                               
at the end of their lives.                                                                                                      
                                                                                                                                
10:48:37 AM                                                                                                                   
                                                                                                                                
ROGER HUGHES offered further testimony  to an earlier anecdote by                                                               
Mr. Sikma.                                                                                                                      
                                                                                                                                
CHAIR HAWKER suggested  that Mr. Hughes speak with  the Office of                                                               
the Ombudsman, which  could often provide a venue  for pursuit of                                                               
concerns with state agencies.                                                                                                   
                                                                                                                                
10:54:52 AM                                                                                                                   
                                                                                                                                
MARIA RENSEL reported that she  had recently been asked to attend                                                               
a  TDM (team  decision meeting)  by  the mother  of two  children                                                               
involved in  a case with  OCS.   She related her  experience with                                                               
OCS, noting  that it  was "a  bad experience."   She  offered her                                                               
belief that this was the "tip  of the iceberg" and was indicative                                                               
of OCS's daily  operation.  She described her role  at the TDM as                                                               
a  "watchdog," a  representative  of the  family  to ensure  that                                                               
things were  conducted correctly,  and shared  that she  had only                                                               
listened during the meeting.   She offered her comments regarding                                                               
the meeting.                                                                                                                    
                                                                                                                                
11:01:58 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER  noted that Patrice  Lee would be  submitting public                                                               
testimony.                                                                                                                      
                                                                                                                                
11:02:40 AM                                                                                                                   
                                                                                                                                
GERALD  BROWN,   Pharmacist,  asked   for  support   to  Medicaid                                                               
Expansion.                                                                                                                      
                                                                                                                                
CHAIR HAWKER clarified that this  was not a Medicaid hearing, and                                                               
was a performance  review of the Department of  Health and Social                                                               
Services.                                                                                                                       
                                                                                                                                
MR.   BROWN  spoke   about   the   reimbursement  schedules   for                                                               
prescriptions,  noting  that  they were  sub-adequate,  based  on                                                               
rates  and costs  determined  by CMS  (Centers  for Medicare  and                                                               
Medicaid Services)  that were below  the cost of  acquisition, as                                                               
these rates did  not include shipping to Alaska.   He stated that                                                               
the dispensing  fees had also  been reduced and that  the maximum                                                               
allowable cost,  arbitrarily set  by CMS, was  not adequate.   He                                                               
reported that there had been  increases in prices, but a decrease                                                               
in  the reimbursement.   He  stated that  often the  margins were                                                               
dropping by more  than 50 percent, sometimes to between  5 and 10                                                               
percent  below  the  acquisition  costs.    He  pointed  out  the                                                               
difficulty  for local  pharmacies to  maintain their  businesses.                                                               
He  mentioned his  concern for  the University  of Alaska  system                                                               
mandate for  mail order pharmacy, a  requirement for prescription                                                               
service  outside of  the State  of Alaska.   He  spoke about  the                                                               
rebates  to Medicaid  and other  insurance companies,  suggesting                                                               
that a drug business was placed  into the second or third tier if                                                               
they did  not offer a  rebate.  He  opined that the  rebates were                                                               
paid by increasing  the prices to the local  pharmacies, and that                                                               
it was the  insurance companies processing the  claims which made                                                               
the money.   He said  that the  Medicaid system was  still making                                                               
money  on  rebates,   and  that  the  net  cost   was  not  fully                                                               
transparent.  He  remarked that this had to be  dealt with on the                                                               
national level, as well.                                                                                                        
                                                                                                                                
CHAIR HAWKER asked  if the pharmacy provider could  choose not to                                                               
fill prescriptions in which they  did not have any profit margin,                                                               
but still remain a registered provider on other products.                                                                       
                                                                                                                                
MR.  BROWN replied  that, as  they were  under contract  for both                                                               
commercial   and   Medicaid,   when   they   were   presented   a                                                               
prescription, they  were obligated to fill  that prescription, as                                                               
a provider.  He pointed out  that 95 percent of their revenue was                                                               
determined  by   someone  else,  noting  that   the  prices  were                                                               
determined by the third party  insurance, even though they had no                                                               
idea  of   the  cost.     He  said  that  the   dispensing  fees,                                                               
transmission  fees,  labels, and  vials  were  not covered  under                                                               
this.   He said that  the costs  were now an  unrealistic amount,                                                               
and  that  the   pharmacies  were  asking  to   either  have  the                                                               
dispensing fees increased,  or have a more realistic  rate with a                                                               
bigger  buffer percentage  included  for Alaska.    He said  that                                                               
ultimately, the  pharmacies were subsidizing these  programs.  He                                                               
reported  that  Medicaid  was  considering  mail  order  for  its                                                               
recipients, and  he strongly  suggested not to  do this,  as this                                                               
was not good  health care.  He offered an  anecdote defining some                                                               
of these problems.                                                                                                              
                                                                                                                                
CHAIR HAWKER referenced providers who  had elected not to take on                                                               
Medicaid  because  of  the inadequate  reimbursement  rates,  and                                                               
asked if pharmacists would go this same route.                                                                                  
                                                                                                                                
MR. BROWN replied that small  pharmacies were very close to this,                                                               
especially  with the  inverse reimbursement  rates  and a  recent                                                               
change to dispense policies for small pharmacies.                                                                               
                                                                                                                                
11:18:44 AM                                                                                                                   
                                                                                                                                
KAREN  VAN REINAN  referenced an  article about  the increase  in                                                               
children taken  into custody  by the state,  and spoke  about the                                                               
Indian  Child Welfare  Act  (ICWA), abuses  by  OCS, and  attacks                                                               
against families.                                                                                                               
                                                                                                                                
11:35:49 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WILSON  expressed  her   hope  that  the  funding                                                               
sources for OCS  would be reviewed, as well as  the processes for                                                               
ICWA and OCS.                                                                                                                   
                                                                                                                                
11:39:09 AM                                                                                                                   
                                                                                                                                
REBECCA DAVIES offered a story  of a current interaction with OCS                                                               
at the apartment of her niece, Jolene Sutton.                                                                                   
                                                                                                                                
JOLENE SUTTON  interjected and explained  the background  for the                                                               
interaction.                                                                                                                    
                                                                                                                                
CHAIR HAWKER  acknowledged the  concerns and  stated that  it was                                                               
inappropriate  for the  legislature  to be  interfering with  the                                                               
actions of the case worker.                                                                                                     
                                                                                                                                
11:49:28 AM                                                                                                                   
                                                                                                                                
DEBORAH BROLLINI  shared her  personal experiences  about working                                                               
with  the  commissioner's office  at  DHSS,  reflecting that  the                                                               
office  mandate had  been  to treat  every  Alaskan entering  the                                                               
office as  if they  were the governor.  She offered  her thoughts                                                               
about OCS, and the trauma and  long term impact for breaking up a                                                               
family.   She  shared that  she had  worked in  research for  the                                                               
Alaska  Native  Tribal Health  Consortium  (ANTHC).   She  opined                                                               
that, although  prevention was  the means  to reduce  health care                                                               
costs, the model  could not be broadly applied  as each community                                                               
was different.   She  asked that  communities participate  in the                                                               
policy  making.   She offered  an anecdote  about the  release of                                                               
health  data.    She  opined that  complaints  about  OCS  should                                                               
receive due process.                                                                                                            
                                                                                                                                
11:54:11 AM                                                                                                                   
                                                                                                                                
CRIS TYREE offered her personal  anecdote about interactions with                                                               
OCS.                                                                                                                            
                                                                                                                                
12:04:09 PM                                                                                                                   
                                                                                                                                
PAUL  NELSON offered  his  personal  opinions about  interactions                                                               
with OCS.                                                                                                                       
                                                                                                                                
12:06:21 PM                                                                                                                   
                                                                                                                                
CHAIR HAWKER closed the online public testimony.                                                                                
                                                                                                                                
12:06:42 PM                                                                                                                   
                                                                                                                                
KIMBERLY BOOKEY offered her opinion about interactions with OCS.                                                                
                                                                                                                                
12:11:22 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WILSON  offered her belief that  the Department of                                                               
Labor  & Workforce  Development  had reviewed  OCS and  suggested                                                               
that the job descriptions be  clarified.  She declared her desire                                                               
that social  work activity  be clearly  defined.   She questioned                                                               
the amount  of money being  spent in  the court room  process for                                                               
OCS hearings.   She expressed her desire that  the OCS procedures                                                               
be reviewed.                                                                                                                    
                                                                                                                                
12:19:12 PM                                                                                                                   
                                                                                                                                
CHAIR HAWKER  closed public testimony  on the  performance review                                                               
of Department of Health and Social Services.                                                                                    
                                                                                                                                
12:19:36 PM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the                                                                       
Legislative Budget and Audit Committee meeting was adjourned at                                                                 
12:19 p.m.                                                                                                                      

Document Name Date/Time Subjects
Agenda_LBA_14May15_FAI DHSS Testimony.pdf JBUD 5/14/2015 10:00:00 AM