Legislature(2001 - 2002)
03/21/2002 08:08 AM House CRA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
March 21, 2002
8:08 a.m.
MEMBERS PRESENT
Representative Kevin Meyer, Co-Chair
Representative Carl Morgan, Co-Chair
Representative Andrew Halcro
Representative Drew Scalzi
Representative Lisa Murkowski
Representative Gretchen Guess
Representative Beth Kerttula
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 407
"An Act relating to the certificate of need program."
- MOVED HB 407 OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 407
SHORT TITLE:CERTIFICATE OF NEED PROGRAM
SPONSOR(S): REPRESENTATIVE(S)COGHILL
Jrn-Date Jrn-Page Action
02/13/02 2232 (H) READ THE FIRST TIME -
REFERRALS
02/13/02 2232 (H) CRA, HES
03/04/02 2469 (H) COSPONSOR(S): JAMES
03/13/02 2530 (H) COSPONSOR(S): SCALZI
03/14/02 (H) CRA AT 8:00 AM CAPITOL 124
03/14/02 (H) Scheduled But Not Heard
03/18/02 2593 (H) COSPONSOR(S): DYSON
03/19/02 (H) CRA AT 8:00 AM CAPITOL 124
03/19/02 (H) Heard & Held
MINUTE(CRA)
03/21/02 (H) CRA AT 8:00 AM CAPITOL 124
WITNESS REGISTER
RITA ROACH, Patient Liaison
Tanana Valley Clinic
1001 Noble St
Fairbanks, Alaska 99701
POSITION STATEMENT: Discussed the situation of the Tanana
Valley Clinic.
TERRY KIRKENDALL
Pre-Patient Certification
Tanana Valley Clinic
2332 Prague Circle
North Pole, Alaska 99705
POSITION STATEMENT: Testified in support of HB 407.
ELLEN SMITH
Business Office
Tanana Valley Clinic
1001 Noble St
Fairbanks, Alaska 99701
POSITION STATEMENT: Testified in support of HB 407.
SUSAN McLANE, RN
Fairbanks Memorial Hospital
PO Box 58054
Fairbanks, Alaska 99711
POSITION STATEMENT: Testified in opposition to HB 407.
SHELBY NELSON, Employee
Fairbanks Memorial Hospital
1245 Vixon Way
Fairbanks, Alaska 99712
POSITION STATEMENT: Expressed the need for a comprehensive
health system.
BRIAN SLOCUM, Administrator
Tanana Valley Clinic
1001 Noble St
Fairbanks, Alaska 99701
POSITION STATEMENT: Testified in support of HB 407.
JENNIFER HOUSE, Employee
Denali Center
1951 Gilmore Trail
Fairbanks, Alaska 99712
POSITION STATEMENT: Urged the committee to reconsider HB 407.
ROBERT GOULD, Chief Financial Officer
Fairbanks Memorial Hospital
4820 Drake St
Fairbanks, Alaska 99709
POSITION STATEMENT: Testified in opposition to HB 407.
KARL SANFORD, Director of Nursing
Fairbanks Memorial Hospital
384 Snowy Owl Lane
Fairbanks, Alaska 99712
POSITION STATEMENT: Testified in opposition to HB 407.
JON LIEBERMAN, General Surgeon
Fairbanks Memorial Hospital and Tanana Valley Clinic
1239 Lois Lane
Fairbanks, Alaska 99712
POSITION STATEMENT: Testified in support of HB 407.
DAN KELLY
581 Briar Drive
Wasilla, Alaska 99654
POSITION STATEMENT: Expressed concerns with HB 407.
RYNNIEVA MOSS, Staff
to Representative John Coghill
Alaska State Legislature
Capitol Building, Room 102
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of the sponsor of HB
474, Representative Coghill.
ELMER LINDSTROM, Deputy Commissioner
Department of Health & Social Services
PO Box 110601
Juneau, Alaska 99811-0601
POSITION STATEMENT: Testified on HB 407.
ACTION NARRATIVE
TAPE 02-17, SIDE A
Number 0001
CO-CHAIR KEVIN MEYER called the House Community and Regional
Affairs Standing Committee meeting to order at 8:08 a.m.
Representatives Morgan, Meyer, Scalzi, and Guess were present at
the call to order. Representatives Halcro, Murkowski, and
Kerttula arrived as the meeting was in progress.
HB 407-CERTIFICATE OF NEED PROGRAM
CO-CHAIR MEYER announced that the only order of business before
the committee would be HOUSE BILL NO. 407, "An Act relating to
the certificate of need program."
Number 0136
RITA ROACH, Patient Liaison, Tanana Valley Clinic, testified via
teleconference. Ms. Roach requested that the committee support
and pass HB 407. She said that for 43 years the Tanana Valley
Clinic has offered quality health care in the Fairbanks
community. Over the past three or so years, more and more
private practice physicians in our community have found
themselves in a position of no longer being able to treat
Medicare/Medicaid patients and thus have closed their doors to
those patients. This is primarily due to the reimbursement
rates from these payers. Therefore, the Tanana Valley Clinic, a
multi-specialty clinic, finds that it is absorbing the impact of
the aforementioned. In 2001 Medicare/Medicaid patients at
Tanana Valley Clinic accounted for 28 percent of its bill
charges. When that 28 percent is added to the 11 percent of
patients served with no insurance, it should be clear, she said,
that the Tanana Valley Clinic is committed to the community.
Therefore, there should be no question of cherry picking.
MS. ROACH mentioned that as a patient liaison she hears many
stories of financial grief. The clinic works hard to
accommodate its patients' financial needs. [Often,] long-term
payment plans that allow them to continue to meet their family
needs and other financial obligations are established. Ms.
Roach suggested that the committee would find [this approach]
unique to the Tanana Valley Clinic. "It seems we could better
serve and accommodate our patients if we were able to provide
more services for them on site. We have the expertise,
professional staff, and the desire to do this, except we find
ourselves today wrapped up in this tangled mess of paperwork
trying to obtain permission to better serve our community," she
explained.
Number 0325
TERRY KIRKENDALL, Patient Pre-Certification, Tanana Valley
Clinic, testified via teleconference in support of HB 407. She
related her belief in the importance of patients having the
options of health care whether through a provider or a facility.
In the past nine months 28 patients have canceled procedures
recommended by physicians of the Tanana Valley Clinic. She
attributed those cancelations to the financial burden. Ms.
Kirkendall related her view that if treatment could occur at the
clinic, long-term payment plans could be established in order to
facilitate the patient's budget problems.
ELLEN SMITH, Business Office, Tanana Valley Clinic, testified
via teleconference. Ms. Smith announced her support of HB 407.
The [Business Office] works one on one with patients and their
accounts. Many of the patients don't qualify for medical
assistance and can't afford medical coverage through commercial
insurance. Often these patients cancel procedures due to the
high cost of care. Although the clinic offers these patients
payment plans, the clinic can only offer payment plans for
services provided by the clinic's providers. This cancelation
of [procedures] occurs with commercial insurance patients when
their insurance doesn't cover a procedure. She informed the
committee that Medicaid doesn't allow screening for its clients.
Ms. Smith concluded by saying, "In today's society, health care
awareness is at an all-time high. And all the health care
recommendations and research are a moot point if we do not keep
the cost down and affordable for our patients."
Number 0541
SUSAN McLANE, RN, Fairbanks Memorial Hospital, testified via
teleconference in opposition to HB 407. Ms. McLane informed the
committee that she has been through the Certificate of Need
(CON) process twice. Although the CON process is frustrating
and obtaining information is difficult, it serves a purpose. If
the process is broken, fix it. In regard to the cost to the
patient, Ms. McLane related an instance in which some local
physicians inquired as to the cost of a procedure that they
thought cost $2,600 at the hospital; however, the procedure only
cost around $1,000. These physicians were being encouraged by a
colleague to contact the legislature in order to do something
about this problem. Ms. McLane recalled that at the last
hearing there was a gentleman who told the committee that the
hospital would perform a procedure for $5,600 that cost him $400
in his physician's office. She questioned why one would have a
procedure done in a hospital that could be done in an office;
this gentleman was in the wrong environment. She related her
belief that the CON process addresses having patients [obtain
procedures in the appropriate environment]. In regard to the
issue of cost, Ms. McLane expressed the need to hold
[facilities] accountable.
MS. McLANE mentioned the difficulty in attracting and retaining
qualified staff. Ms. McLane suggested that elimination of the
CON process could place Fairbanks in a position in which the
area will be living with the "fall out." Therefore, Ms. McLane
urged the committee to fix the CON process rather than eliminate
it.
Number 0765
SHELBY NELSON, Employee, Fairbanks Memorial Hospital, testified
via teleconference. She pointed out that she is also a parent
and a patient. She informed the committee that she takes her
children to the Tanana Valley Clinic, and when hospital services
are needed she takes them to Fairbanks Memorial Hospital. The
same physicians that treat her children at Tanana Valley Clinic
treat her children at the Fairbanks Memorial Hospital. Ms.
Nelson informed the committee that the [Fairbanks] community's
growth is stable and thus there is no need for additional
services for years to come. However, in such a rural health
care community, the partnerships in the health care system need
to be strengthened in order that the delivery system is strong
rather than fragmented. Furthermore, there is no need to have
duplicative services and increase the cost to the community.
Ms. Nelson turned to her perspective as a parent and patient.
She expressed her belief that there needs to be a comprehensive
health care delivery system in which all health care providers
work together in the joint effort to ensure that the current
quality is maintained in the future.
Number 0895
BRIAN SLOCUM, Administrator, Tanana Valley Clinic, testified via
teleconference in support of HB 407. Mr. Slocum related his
belief that the Tanana Valley Clinic is probably the largest
multi-specialty clinic in Alaska. The clinic's physicians
basically see anyone who walks in regardless of insurance or
not. In regard to cherry picking, Mr. Slocum acknowledged that
there may be physicians in this community and others who only
see patients with good insurance. However, he never [receives
documentation as to] who those physicians actually are. It
seems to be a dark rumor. Mr. Slocum said that he could provide
the committee with information on the other side of the cherry
picking issue. For example, between 1999 and 2001 doctors at
the Tanana Valley Clinic provided $17,770,000 worth of
unreimbursed charity care. Each of the clinic's individual
shareholder physicians provided about $800,000 worth of free
care to members of the community. "If that's cherry picking, I
think that's the kind of cherry picking we ought to see more of
in our community and throughout the state," he said. Mr. Slocum
pointed out that this free care isn't supported by tax donations
or exemptions. He also pointed out that [the aforementioned
figures] don't include the "no charge" [procedures]. Mr. Slocum
informed the committee that the clinic is the largest locally
owned property tax payer in the borough. He mentioned that he
wasn't aware that nonprofit hospitals pay property taxes.
Therefore, shifting business from a nonprofit organization to a
regular business increases the tax base and decreases the tax
burden on other people, which improves the economic quality of
people's lives. Furthermore, the clinic pays millions of
dollars in income taxes under doctor's compensation on corporate
income tax for any profits made. Again, nonprofit entities pay
nothing. However, to the extent business is shifted to a
competitive environment [there will be] more of a tax base for
the state and the federal government. He highlighted that all
the dollars earned [by the Tanana Valley Clinic] stay in the
community.
Number 1194
MR. SLOCUM turned to the concerns from hospitals that say they
must see anyone who comes in, which [they say] has a severe
impact on their profits. However, no one has mentioned that
nonprofit hospitals receive exemptions from state, local, and
federal taxes in order to cover the cost [of admitting everyone
regardless of insurance and ability to pay]. Mr. Slocum
reiterated that the Tanana Valley Clinic has to pay taxes and it
sees people who can't afford to pay; however, the clinic isn't
requesting special treatment. Mr. Slocum turned to testimony in
the second Senate Health, Education and Social Services Standing
Committee regarding an Anchorage hospital that made $55 million
of profits. Furthermore, in the [House Community and Regional
Affairs Standing Committee] it was noted that a hospital had
budgeted $189 million in profits between 1998 and 2004. "And I
got to wonder how much is enough? How one can say that ... with
those kinds of profits that having to provide charity care is at
risk. That's hard to say with a straight face," he said. Mr.
Slocum recalled testimony at the prior House Community and
Regional Affairs Standing Committee meeting in which there was
the suggestion that hospitals typically invest approximately 1
percent of their net profit back into the community. This
witness with [Valley Hospital] expressed pride that [Valley
Hospital] invested 10 percent back into the community. However,
Mr. Slocum questioned what happens to the other 90 or so percent
that accrues to the institution.
MR. SLOCUM turned to the impact of having competition in the
community. He recalled that about three years ago the health
department reviewed the multiple CONs and needed help to do so.
A firm, MSRG, was hired to provide a review of the CON
applications. The draft report stated, "It is reasonable to
assume a cost savings of at least 20 percent" with respect to
ambulatory surgery in Fairbanks. In 1999 the department also
reviewed 58 actual case histories of surgery performed at
Fairbanks' local hospital, and it determined that if those
surgeries had been performed at a free-standing ambulatory
surgery center, the payments that would've been made would have
amounted to about 45 percent of the payment that was actually
made to the hospital, which is a savings of more than half on
those cases. The total projected savings on those 58 ambulatory
surgery cases would've been just under $47,000, which would have
amounted to a savings of over $2 million at Medicaid rates.
MR. SLOCUM concluded by saying that 30 years of history and
research illustrate that the CON process doesn't work. It has
been proven that the CON process raises costs by erecting
barriers to more efficient providers, and its administrative
costs are in the millions. The process is easily circumvented
by institutions and there is no evidence that CONs increase the
level of charity care. Mr. Slocum characterized the CON process
as a failed experiment in centralized planning. Therefore, he
urged the committee to eliminate it and allow competition.
Number 1482
REPRESENTATIVE SCALZI turned to the fiscal note, which shows
general fund expenditures rising, although he indicated
agreement that there will be savings at the local level. He
asked Mr. Slocum to comment.
MR. SLOCUM informed the committee that [the Tanana Valley
Clinic] has hired a consulting firm to review that. The
preliminary report from the consulting firm is that
approximately $150,000 per annum at startup [will increase] to
some minimum amount. However, this is all dependent upon the
assumptions. Still, the impact wouldn't occur for several years
because of the timing required to plan and build a facility, as
well as the impact on the state's budget and the re-basing of
Medicare fees. Therefore, the consulting firm estimates that it
would be 2006 before there would be any fiscal impact.
Furthermore, [the report seems] to suggest that there may be the
need to review the state's reimbursement formula because the
state will be required to pay for empty beds and rooms using the
current formula. The federal government changed that formula
ten years ago in order to avoid the problem of paying for empty
beds.
Number 1612
JENNIFER HOUSE, Employee, Denali Center, testified via
teleconference. She said that she didn't believe that HB 407 is
in the best interest of her community, or Alaska's general
public. She said she imagined that the intent behind this
legislation is to increase competition among certain health care
services using the erroneous assumption that it will benefit
consumers. However, unlike retail industries, health care isn't
a consumer-driven market but rather is need-driven. "Consumers
don't control the amount of health care services they consume,
this is controlled by the physician," she explained. Therefore,
this legislation would benefit specialty providers that would
carve out profitable health care services providing redundant
[services] in urban areas of Alaska. The cost of this
redundancy will be borne by the consumer. Under current CON
laws, consumers have the ability to participate in and influence
the amount, variety, and quality of services provided within
their community. Alaska's CON laws have worked well to ensure
efficient use of health care resources. Ms. House stressed the
importance of this point when one considers the acute shortage
of health care professionals with which the providers contend.
Diluting the CON laws in order to allow for the redundant
provision of services simply aggravates this growing crisis.
Furthermore, Ms. House said that she didn't see the logic of
eliminating the CON process for communities with populations of
55,000 or greater. Actually, she found that to be
discriminatory. "Long-term health care planning through the CON
process is just as important and just as beneficial to urban
communities as it is to rural communities," she stated.
Therefore, she urged the committee to reconsider HB 407, which
she felt would only weaken the community health care system.
ROBERT GOULD, Chief Financial Officer, Fairbanks Memorial
Hospital, testified via teleconference in opposition to HB 407
because he didn't believe it's in the best interest of the
state. Mr. Gould informed the committee that his testimony
would be primarily in regard to the testimony heard on Tuesday.
In regard to the assertion that mental health beds and nursing
home beds are reimbursed when not in use, Mr. Gould emphasized,
"I can tell you for a fact that that is not correct."
"Fairbanks Memorial Hospital and Denali Center are not
reimbursed for beds that are not in use in inpatient, in mental
health, or in the nursing home setting," he specified.
MR. GOULD turned to Dr. McGuire's testimony in which he claimed
that reimbursement under the Medicaid system is lower for
ambulatory surgery centers and would reduce the cost to Medicaid
if an ambulatory surgery center was allowed. Again, this is
incorrect. Mr. Gould explained that reimbursement between
Fairbanks Memorial Hospital and the ambulatory surgical center
is almost identical. Therefore, there would be no cost savings
for Medicaid under such a reimbursement system. There was also
testimony that costs are lower in an ambulatory surgery center.
However, Fairbanks Memorial Hospital was the low cost provider
in the state three years ago and it continues be while the free-
standing ambulatory surgery center in Anchorage has increased
its costs 22 percent over the last three years. In regard to
[testimony] that patients travel to Anchorage for lower costs,
Mr. Gould said patients travel to Anchorage because specific
services, services for the head and heart, aren't available in
their community. Mr. Gould reiterated that of all service
providers, Fairbanks Memorial Hospital has the lowest prices in
the state.
MR. GOULD related his understanding that [HB 407] proposes to
eliminate the CON in communities with a population over 55,000.
As one of the communities that would be impacted, Mr. Gould was
concerned. He reemphasized that Fairbanks has the lowest cost
in the state, and it has been shown that there is no need.
Eliminating the CON will only increase costs, and for proof of
that one merely has to look at the Anchorage market where there
are three surgical providers and the costs are higher.
Therefore, the same situation will result in Fairbanks with the
elimination of the CON.
Number 1926
KARL SANFORD, Director of Nursing, Fairbanks Memorial Hospital,
testified via teleconference in opposition to HB 407. Mr.
Sanford said that he would speak to quality from the perspective
of nursing. He recalled the adage in health care that volume
equates to quality, which is supported by a study released by
the University of Iowa School of Medicine in January 2002. That
study reviewed all states. Several states had repealed the CON
laws and others kept the CON over the course of the study. The
predominant focus of the study was of coronary bypass patients.
Mr. Sanford informed the committee that the outcome of the study
was that when states removed their CON laws, those states saw a
proliferation of hospitals providing coronary bypass surgery.
"The point here is that when you open it up for all comers,
essentially the volume of patients being cared for in any one
setting is diluted among many," he explained. [Without a CON
process] many smaller facilities began doing these [coronary
bypass] procedures. The study reported an overall increase in
the mortality rate among patients because of [the absence of the
CON process]. Mr. Sanford related his belief that when the
volume is diluted so is the quality, which he didn't believe the
state was looking to do.
Number 2037
JON LIEBERMAN, General Surgeon, Fairbanks Memorial Hospital and
Tanana Valley Clinic, testified via teleconference in support of
HB 407. Mr. Lieberman remarked that health care is no exception
to capitalism in America because health care is a business that
should be cost accountable. He indicated that competition
provides a spark for perfection. In the last ten years, Mr.
Lieberman has noticed that the threat of a surgery center in
Fairbanks has sparked Fairbanks Memorial Hospital to improve.
Furthermore, the threat of a cancer radiation therapy center
pushed Fairbanks Memorial Hospital to build a cancer center.
Mr. Lieberman related his belief that there is reluctance, on
the part of Fairbanks Memorial Hospital, to completely disclose
the exact cost of health care to patients. He mentioned that
patients complain to him regarding the costs at Fairbanks
Memorial Hospital. Mr. Lieberman turned to the notion that the
mortality rate of ambulatory centers is higher. However, he
charged everyone to review these studies in regard to whether
they are based upon scientific [information]. There is no
logical reason to stand in the way of capitalism in Fairbanks.
Medicine should be treated as any other business would. Mr.
Lieberman concluded by relating his belief that the quality of
health care can be improved by the passage of HB 407.
Number 2275
DAN KELLY testified via teleconference that he can't really
support HB 407 until some modifications occur. Mr. Kelly
informed the committee that Senator Lyda Green is sponsoring a
bill that would increase the $1 million threshold to $10
million. He asked if the sponsor of HB 407 is against such a
raise in the threshold. The $1 million was [established] in
1983. Mr. Kelly expressed the need to provide clarification in
regard to "commencement of activities". The Matanuska-Susitna
(Mat-Su) Borough has over 60,000 population currently; however,
just five years ago the area had a population less than 55,000
when "we certainly were commenced at that time." Therefore, he
was unclear as to whether HB 407 applies to the Mat-Su Borough.
Moreover, the need for a CON isn't clear when one considers the
size of the borough. Mr. Kelly said that it isn't clear that
when an area exceeds a population of 55,000 that Section 1(a)
would apply to a borough. If these issues could be made clear,
Mr. Kelly said that he could possibly consider support for HB
407. In conclusion, Mr. Kelly requested an explanation as to
why the CON is necessary at all.
CO-CHAIR MEYER announced that public testimony would be closed.
Number 2484
RYNNIEVA MOSS, Staff to Representative John Coghill, Alaska
State Legislature, testified on behalf of the sponsor of HB 474,
Representative Coghill. Ms. Moss related that Representative
Coghill would encourage amendments to be made in the House
Health, Education and Social Services Standing Committee. She
also related that Representative Coghill feels that the
involvement of the House Community and Regional Affairs Standing
Committee is related to the population delimiter in HB 407. The
[House Community and Regional Affairs Standing Committee] needs
to decide whether the population figure is appropriate and
whether CONs for ambulatory facilities and equipment purchases
is good for communities. She said, "He feels that a bureaucracy
can't be measured by the number of bureaucrats that we're paying
for; it was mentioned that only one person is employed for CONs.
It should be measured by the burden placed on the businesses who
have to spend thousands of dollars and years to open up a
business in a free enterprise system, or expand that business."
MS. MOSS informed the committee that Representative Coghill
believes that federal subsidization of the medical industry has
created a false economy for medical services. Furthermore,
Medicaid has redefined poverty for those receiving public
assistance as well as for corporate welfare. In regard to
comments that Fairbanks Memorial Hospital is the lowest cost
provider in the state, Ms. Moss remarked that the hospital
shouldn't be concerned with competition. "CONs put the choice
of medical services in the hands of government and takes that
choice away from consumers," she charged.
CO-CHAIR MEYER inquired as to the amendments Representative
Coghill plans to make in the House Health, Education and Social
Services Standing Committee.
MS. MOSS answered that Representative Coghill has discussed the
exemption of psychiatric beds and nursing home [beds] with
Representative Dyson.
Number 2574
REPRESENTATIVE SCALZI turned to the fiscal note and noted that
he was suspect of the numbers because they seem to assume that
some of these facilities are already on line and will begin
business immediately.
MS. MOSS stated that the fiscal note is beyond her capabilities.
She trusted Tanana Valley Clinic's testimony that there would be
no fiscal impact to fiscal year 2006.
REPRESENTATIVE SCALZI expressed the need to flesh that out
through the process.
Number 2626
REPRESENTATIVE MURKOWSKI informed the committee that she spoke
with the department in regard to amending the legislation.
Representative Murkowski inquired as to what the sponsor feels
wouldn't work with the administration's proposal.
Representative Murkowski mentioned that she wouldn't make the
amendment if she understood the problems with it. The amendment
reads as follows:
Page 1, following line 13:
Insert new bill sections to read:
"*Sec.2. AS 18.07.031(b) is amended to read:
(b) Notwithstanding [THE EXPENDITURE THRESHOLD IN] (a)
of this section, a person may note alter the bed
capacity by adding new beds to, construct a building
for use as, or convert a building or part of a
building to, a nursing home or psychiatric hospital
that requires licensure under AS 18.20.020 unless
authorized under the terms of a certificate of need
issued by the department.
*Sec.3. The uncodified law of the State of Alaska is
amended by adding a new section to read:
TRANSITION. (a) For an expenditure that was less than
$1,000,000 for alteration of the bed capacity by
adding new beds to, or for new construction of a
building for use as, a nursing home or psychiatric
hospital that requires licensure under AS 18.20.020 or
for conversion of a building or part of a building to
a psychiatric hospital that requires licensure under
AS 18.20.020, and that was not required to have a
certificate of need before the effective date of this
Act, a person must comply with AS 18.07.031(b), as
amended by sec. 2 of this Act, if the person first
seeks licensure under AS 18.20.020 on or after the
effective date of this Act for the new beds, new
construction, or conversion.
(b)Pending applications to comply with AS 18.02.031,
as that statute appeared before the effective date of
this Act, shall be processed in accordance with AS
18.07.031, as amended by this Act."
MS. MOSS said that there are three basic concerns. First,
Representative Coghill has said that he will make amendments in
the House Health, Education and Social Services Standing
Committee where the discussion should occur. She related her
belief that the House Health, Education and Social Services
Standing Committee will question the fiscal note. Second,
Section 2 [of the amendment] would allow government to specify
who can be put in the beds, which includes existing and new
beds. [Third], Section 3(a) seems to be an example of ex post
facto; the rules are being changed mid-stream and a CON would be
required.
Number 2736
ELMER LINDSTROM, Deputy Commissioner, Department of Health &
Social Services, explained that were the amendment to be
adopted, the status quo would remain relative to nursing home
beds. Currently, nursing home beds can't be converted without a
CON. The sponsor's position of including psychiatric beds would
make the situation for psychiatric beds the same as what
currently exists for nursing home beds. Therefore, there isn't
a significant policy issue here. He indicated that the
[amendment] seemed to be on par with the sponsor's intentions;
however, now he wasn't certain. In closing, Mr. Lindstrom left
the decision as to whether to offer the amendment to the
committee.
CO-CHAIR MEYER remarked that this committee wants to pass the
best bill possible from the committee.
Number 2855
REPRESENTATIVE HALCRO commented that this isn't merely a debate
over the economics of free competition. He recalled the $25
million a year spent by Providence on free care. "I would
suggest that it's not just a pure matter of competition, it's
looking at communities and trying to define what services are
going to be effected if we allow this to go forward. And I
would hope the sponsor would take that into consideration," he
said.
REPRESENTATIVE KERTTULA inquired as to who drafted SSHB 316.
MR. LINDSTROM answered that the bill was drafted by Stacie
Kraly, Assistant Attorney General, Human Services Section, Civil
Division (Juneau), Department of Law, and was reviewed by
Deborah Behr, Assistant Attorney General, Legislation &
Regulations Section, Civil Division (Juneau), Department of Law.
In further response to Representative Kerttula, Mr. Lindstrom
explained that unamended HB 407 would exempt nursing homes from
a CON review in communities with a population larger than
55,000. Mr. Lindstrom agreed with Representative Kerttula that
the amendment would return the situation for nursing homes to
the status quo.
REPRESENTATIVE GUESS remarked that it is appropriate for the
discussion of the fixes for HB 407 to occur in the House Health,
Education and Social Services Standing Committee.
Number 2961
REPRESENTATIVE GUESS moved to report HB 407 out of committee
with individual recommendations and the accompanying fiscal
note.
REPRESENTATIVE KERTTULA related her understanding that the House
Health, Education and Social Services Standing Committee is
going to review the amendment.
MS. MOSS reiterated Representative Coghill's commitment to offer
amendments in the House Health, Education and Social Services
Standing Committee.
TAPE 02-17, SIDE B
[There being no objection, HB 407 was reported from the House
Community and Regional Affairs Standing Committee.]
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 8:57 a.m.
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