Legislature(2007 - 2008)HOUSE FINANCE 519

02/06/2007 01:30 PM House FINANCE


Download Mp3. <- Right click and save file as

Audio Topic
01:36:30 PM Start
01:36:34 PM Medicaid Program Review
03:13:34 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Joint with House W&M and HES Committees TELECONFERENCED
Presentation by Pacific Health Policy
Group: Medicaid Program Review
-- Testimony <Invitation Only> --
                  HOUSE FINANCE COMMITTEE                                                                                       
                      February 6, 2007                                                                                          
                         1:36 p.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the joint  meeting of the House Finance                                                                   
Committee, the  House Health  and Social Services  Committee,                                                                   
and the  House Ways and Means  Committee to order  at 1:36:30                                                                 
PM.                                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
House Finance Committee                                                                                                       
                                                                                                                              
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Mary Nelson                                                                                                      
Representative Bill Thomas, Jr.                                                                                                 
                                                                                                                                
House Health and Social Services Committee                                                                                    
                                                                                                                              
Representative Peggy Wilson, Chair                                                                                              
Representative Bob Roses, Vice-Chair                                                                                            
Representative Anna Fairclough                                                                                                  
Representative Mark Neuman                                                                                                      
Representative Paul Seaton                                                                                                      
Representative Sharon Cissna                                                                                                    
Representative Berta Gardner                                                                                                    
                                                                                                                                
House Ways and Means Committee                                                                                                
                                                                                                                              
Representative Mike Hawker, Chair                                                                                               
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Peggy Wilson                                                                                                     
Representative Paul Seaton                                                                                                      
Representative Max Gruenberg                                                                                                    
Representative Sharon Cissna                                                                                                    
Representative Bob Roses                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Andy Cohen, Director, The Pacific  Health Policy Group; Scott                                                                   
Wittman, Director,  The Pacific  Health Policy Group;  Senate                                                                   
President Lyda Green                                                                                                            
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
None                                                                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
                     ^Medicaid Program Review                                                                                 
                                                                                                                              
1:36:34 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer introduced members of the three committees.                                                                      
                                                                                                                                
1:37:45 PM                                                                                                                    
                                                                                                                                
SENATE  PRESIDENT LYDA  GREEN  explained that  last year  the                                                                   
Senate  Finance  Committee  released  an RFP  for  a  program                                                                   
review consultant  to help the committee  understand Medicaid                                                                   
and to make  suggestions on how to improve  Alaska's program.                                                                   
A contract  was awarded  to the  Pacific Health Policy  Group                                                                   
RFP  for a  program  review for  the  study  of the  Medicaid                                                                   
Program.   Senator  Green recalled  a high  percent of  calls                                                                   
from Medicaid  clients who are  frustrated with  their health                                                                   
care, and from health care providers  who are frustrated with                                                                   
the growing  paperwork requirements and varied  reimbursement                                                                   
rates.   She pointed  out that  department staff are  working                                                                   
diligently  to run  the Medicaid  program  as efficiently  as                                                                   
possible  and   are  equally  frustrated  with   juggling  an                                                                   
overwhelming  amount of  details  that impact  every  client,                                                                   
provider,  the   agency's  internal  organization,   and  the                                                                   
legislature.                                                                                                                    
                                                                                                                                
Senator  Green  sympathized  with how  complex  the  Medicaid                                                                   
program is  for clients, health  care providers,  and program                                                                   
managers, as  well as for  the budget  staff.  She  noted the                                                                   
difficulty  of  finding  a  remedy  through  statute  if  all                                                                   
legislators  do  not  fully understand  the  implications  of                                                                   
their actions.                                                                                                                  
                                                                                                                                
Senator  Green   related  that  the  first  step   to  better                                                                   
understanding of Medicaid came  from the Department of Health                                                                   
and Social  Services' fiscal forecast  prepared by  the Lewin                                                                   
Group  and ECONorthwest.   The  key findings  of this  report                                                                   
were:                                                                                                                           
                                                                                                                                
   1. The Medicaid program will change fundamentally over the                                                                   
     next 20 years from one focused on children to a program                                                                    
     geared to caring for Alaska's growing senior and Alaska                                                                    
     Native populations.                                                                                                        
  2. State matching funds will increase from approximately                                                                      
    $500 million per year to more than $2 billion for a                                                                         
     total program cost of more than $5 billion.                                                                                
                                                                                                                                
Senator  Green   reported  that   ECONorthwest  developed   a                                                                   
computer  program by  which the  department  can continue  to                                                                   
update  data to develop  more accurate  program criteria  and                                                                   
generate funding  forecasts.   The establishment  of baseline                                                                   
data  and developing  the forecasting  model  is step-one  in                                                                   
implementing program change.                                                                                                    
                                                                                                                                
Senator Green  explained step two to better  understanding of                                                                   
Medicaid.    After  recovering  from  sticker  shock  of  the                                                                   
projected costs  for Medicaid,  the Senate Finance  Committee                                                                   
released  an RFP  for  a program  review  consultant to  help                                                                   
understand Medicaid and make suggestions  to improve Alaska's                                                                   
program.  In  April  2006,  a contract  was  awarded  to  the                                                                   
Pacific Health Policy Group based  out of Irvine, California.                                                                   
Their charge was to help establish  the programmatic baseline                                                                   
so that  the legislature  and the  administration could  make                                                                   
program changes to improve Alaska's Medicaid program.                                                                           
                                                                                                                                
Senator Green said she has heard  many opinions regarding the                                                                   
services provided  and the eligibility criteria  of Medicaid,                                                                   
but   it  is   very  difficult   to   fully  understand   the                                                                   
implications   of   change   because  the   program   is   so                                                                   
complicated.                                                                                                                    
                                                                                                                                
Senator Green asked several questions:                                                                                          
                                                                                                                                
     We are asked to make changes to Medicaid statutes, but                                                                     
     how do we, as legislators, make sound recommendations                                                                      
     when we may not fully understand the implications to                                                                       
     the client, health care providers, agency staff, or the                                                                    
    budget?  What program changes can be made to better                                                                         
     serve Alaska's needy population? How can we make the                                                                       
     changes based on sound research rather than assumptions                                                                    
     or emotions?                                                                                                               
                                                                                                                                
She explained that The Pacific  Health Policy Group evaluated                                                                   
Medicaid eligibility and service coverage policies and                                                                          
provided an overview that defines the populations that                                                                          
Alaska is required to serve and the services it is required                                                                     
to cover under federal law.                                                                                                     
                                                                                                                                
1:41:33 PM                                                                                                                    
                                                                                                                                
Senator Green related that legislators frequently want to                                                                       
know how Alaskan programs compare to those of other states.                                                                     
To help make this comparison, The Pacific Health Policy                                                                         
Group reviewed Alaska's service coverage policies and                                                                           
eligibility criteria and ranked Alaska with the other 49                                                                        
states and Washington, DC.  These rankings can be found                                                                         
under Appendix A in "Report to the State of Alaska Senate                                                                       
Finance Committee - Medicaid Program  Review" (copy on file.)                                                                   
                                                                                                                                
Senator Green  pointed out that Alaska's Medicaid  State Plan                                                                   
was approved  in 1974.   Since  that time,  all changes  have                                                                   
been made  by amendment  and create  a difficult sequence  of                                                                   
rules to follow.  She questioned:                                                                                               
                                                                                                                                
   If the Medicaid director or key staff positions turn                                                                         
   over, how much knowledge is lost during the transition                                                                       
  and, therefore, how much is dropped through the cracks?                                                                       
                                                                                                                                
   How can the legislature and agency program staff create a                                                                    
  tool to better understand the relationship of the State                                                                       
   Plan, statutes, and regulations?                                                                                             
                                                                                                                                
Senator Green reported that The Pacific Health Policy Group                                                                     
completed a crosswalk of Alaska's State Plan, statutes, and                                                                     
regulations to help identify where, if any, pieces did not                                                                      
relate well with its counterparts.  This information is                                                                         
provided in Appendix B of the final report.                                                                                     
                                                                                                                                
Senator  Green  addressed  the   issue  of  when  there  were                                                                   
optional services mandated to  constrain the Medicaid program                                                                   
to spend within  a limited budget, the restriction  could not                                                                   
hold up to  unanticipated growth in program  costs and client                                                                   
needs.     She  recalled  frustration   to  see   very  large                                                                   
supplemental requests  come before the Legislature  each year                                                                   
with relatively no option for  legislators, except to pay for                                                                   
the cost of  this important program.  To answer  the question                                                                   
of  how do  we create  a program  that  is more  predictable,                                                                   
Senator  Green  noted  program  reform  options  outlined  in                                                                   
Chapters 2  through 6 of the  report.  Many of  these options                                                                   
are tried and  true changes that have been  proved successful                                                                   
in other states.   Although Alaska has unique  obstacles when                                                                   
compared  to other states,  The Pacific  Health Policy  Group                                                                   
has identified  options that may create positive  changes for                                                                   
Alaska.                                                                                                                         
                                                                                                                                
Senator  Green  introduced  Andy  Cohen  and  Scott  Wittman.                                                                   
Scott  Wittman is  located in  the Mid-West  and worked  most                                                                   
specifically  on   the  review  of  program   compliance  and                                                                   
development  of reform  options.   Andy  Cohen  works out  of                                                                   
California  and  worked  specifically on  the  evaluation  of                                                                   
program policies  and the comparison of Alaska's  policies to                                                                   
those of other states.                                                                                                          
                                                                                                                                
1:44:05 PM                                                                                                                    
                                                                                                                                
ANDY  COHEN,  DIRECTOR,  THE  PACIFIC  HEALTH  POLICY  GROUP,                                                                   
introduced  the "Alaska  Medicaid  Program  Review" (copy  on                                                                   
file), which was  based on a 50-state analysis,  a regulatory                                                                   
review, and an  operational review.  Mr. Cohen  showed slides                                                                   
called "Presentation  of Findings" and provided  a handout by                                                                   
the  same  name  for  the  committee  (copy  on  file).    He                                                                   
addressed the  project objectives as  shown on Slide 3.   The                                                                   
purpose of the  review is to assist the legislature  with the                                                                   
evaluation of short and long term  program reform initiatives                                                                   
and identify  strategies that  enable the program  to operate                                                                   
with  the  flexibility  necessary  to  best  serve  Alaskans,                                                                   
recognizing  budgetary realities.   The  project should  also                                                                   
identify oversight priorities for the legislature.                                                                              
                                                                                                                                
1:46:51 PM                                                                                                                    
                                                                                                                                
Mr.  Cohen related  the information  on Slide  4 -  potential                                                                   
reforms defined in  the RFP.  He highlighted  the six reforms                                                                   
that were considered.                                                                                                           
                                                                                                                                
1:48:31 PM                                                                                                                    
                                                                                                                                
Mr.  Cohen  explained  Slide  5  -  work  steps  taken.    He                                                                   
explained the five steps of the process.                                                                                        
                                                                                                                                
1:49:22 PM                                                                                                                    
                                                                                                                                
Mr. Cohen  turned to Slide  6 - topics  to be covered  today.                                                                   
He  planned to  address  summary  finding from  the  50-state                                                                   
review, current  operations and  trends by service  type, and                                                                   
recommendations for reform and oversight.                                                                                       
                                                                                                                                
1:49:59 PM                                                                                                                    
                                                                                                                                
Mr. Cohen explained  the "Executive Summary"  as portrayed on                                                                   
Slide  7.   He  pointed  out  that Alaska  is  expensive  and                                                                   
mentioned  cost  pressures.    He  noted  the  state's  aging                                                                   
population and reforms that can be taken.                                                                                       
                                                                                                                                
1:51:18 PM                                                                                                                    
                                                                                                                                
Mr.  Cohen discussed  Slide  8  - demographics  and  Medicaid                                                                   
eligibility.  He  gave an overview of mandatory  and optional                                                                   
groups.    He explained  the  "medically  needy",  which  are                                                                   
termed Alaska's Chronic & Acute Medical Assistance (CAMA).                                                                      
                                                                                                                                
1:53:01 PM                                                                                                                    
                                                                                                                                
Mr. Cohen  explained the 50-State  Summary table as  shown on                                                                   
Slide 9 - Federally Defined Coverage  Groups.  He highlighted                                                                   
Slide 10  - Alaska  Optional Coverage Groups  (sfy '05).   He                                                                   
explained  how  the money  is  going  to  be spent  on  these                                                                   
beneficiaries.                                                                                                                  
                                                                                                                                
1:55:04 PM                                                                                                                    
                                                                                                                                
Mr.  Cohen  skipped  to  Slide  12  to  explain  Coverage  of                                                                   
Optional  Populations.   He further  clarified  that the  pie                                                                   
charts   compare   Alaska   to    national   enrollment   and                                                                   
expenditure.  The  chart on the lower right  is the direction                                                                   
Alaska is headed due to the aging  population and its impact.                                                                   
                                                                                                                                
1:56:17 PM                                                                                                                    
                                                                                                                                
Mr. Cohen  explained Slide 13  - Enrollment Growth.   He made                                                                   
some comparison points by explaining  Slide 14 - Medicaid and                                                                   
Uninsured Populations.   Medicaid  covers a large  percentage                                                                   
of Alaskans,  but the  percentage without  insurance  is also                                                                   
relatively high.   He discussed the tribal  health factor and                                                                   
the  way  the federal  government  counts  persons  with  and                                                                   
without insurance.                                                                                                              
                                                                                                                                
1:59:18 PM                                                                                                                    
                                                                                                                                
Mr. Cohen  highlighted Slide 16  - Medically Needy  and CAMA.                                                                   
Alaska  is  one  of  16  states  without  a  Medically  Needy                                                                   
program,  but it has  CAMA.   He explained  how other  states                                                                   
have  dealt  with  this  issue.     He  related  how  "waiver                                                                   
eligibles" draw down federal dollars  and allow for an agreed                                                                   
upon level  of spending.  He  used Mississippi as  an example                                                                   
of a state that has added a waiver program - Slide 17.                                                                          
                                                                                                                                
2:01:54 PM                                                                                                                    
                                                                                                                                
Mr. Cohen spoke  to optional and mandatory  covered services,                                                                   
as depicted on Slide 18.  Alaska  is comparable to most other                                                                   
states  in terms  of the  optional services  covered, but  is                                                                   
more expensive  and spends  more per  beneficiary than  other                                                                   
states do.                                                                                                                      
                                                                                                                                
2:02:48 PM                                                                                                                    
                                                                                                                                
Mr.  Cohen  compared  Alaska  to  the  national  average  per                                                                   
beneficiary - Slide  19.  The chart on Slide  20, Expenditure                                                                   
Growth,  shows that  Alaska's expenditures  grew faster  than                                                                   
the average annual  rate early in the decade,  but have since                                                                   
fallen  back   to  the   middle  range.     Slide   21  shows                                                                   
expenditures by  beneficiary type, where Alaska  is ranked in                                                                   
the top five in every category.                                                                                                 
                                                                                                                                
2:04:37 PM                                                                                                                    
                                                                                                                                
SCOTT  WITTMAN, DIRECTOR,  THE PACIFIC  HEALTH POLICY  GROUP,                                                                   
explained  Slide  22 -  Where  are  the  Dollars Spent?    He                                                                   
highlighted  each  of  the  five  major  service  categories.                                                                   
Hospital   services   are   depicted    in   Slide   23   and                                                                   
Physician/Clinic services are shown in Slide 24.                                                                                
                                                                                                                                
2:08:21 PM                                                                                                                    
                                                                                                                                
Mr. Wittman  discussed  Pharmacy services  seen on Slide  25.                                                                   
He related  that the  payment rates  and dispensing  fees are                                                                   
among the  highest in the  country.  He suggested  strategies                                                                   
for bringing these costs down.                                                                                                  
                                                                                                                                
2:09:37 PM                                                                                                                    
                                                                                                                                
Mr. Cohen discussed Long Term  Care - Nursing Facilities/HCBS                                                                   
projections  shown  in  Slide  26.    He  explained  the  low                                                                   
utilization  load and  high  rates.   He  discussed the  HCBS                                                                   
waiver programs shown  in Slide 27.  There has  been a growth                                                                   
outside of waiver  programs in personal care  attendant (PCA)                                                                   
programs.   Alaska spent  $80 million on  PCA, while  the two                                                                   
waivers amounted  to only $42  million.  PCA would  no longer                                                                   
be a state program if it was converted to a waiver service.                                                                     
                                                                                                                                
2:13:54 PM                                                                                                                    
                                                                                                                                
Mr.  Cohen  addressed  Slide  28  -  Nursing  Facilities/HCBS                                                                   
Recommendations - Long Term Care.                                                                                               
                                                                                                                                
2:15:03 PM                                                                                                                    
                                                                                                                                
Mr. Cohen  spoke to  the Developmentally  Disabled aspect  of                                                                   
Long Term  Care, as explained  on Slide  29.  He  stated that                                                                   
Alaska  serves  all DD  beneficiaries  through  waivers.   He                                                                   
explained the costs  of the waiver and how  they are managed.                                                                   
He  made suggestions  for how  to better  manage the  waivers                                                                   
with  a  cost  reporting  tool  for  providers,  audits,  and                                                                   
updating of rates.                                                                                                              
                                                                                                                                
Mr. Cohen noted that 12 percent  of the state's DD funding is                                                                   
from  grants, not  federal  dollars.   He  spoke  of ways  to                                                                   
create a second waiver and to seek federal matches.                                                                             
                                                                                                                                
2:18:43 PM                                                                                                                    
                                                                                                                                
Mr.  Wittman addressed  Behavioral  Health -  Slide  31.   He                                                                   
spoke  about   insufficient  community  based   services  and                                                                   
discussed  the   "Bring  the  Kids  Home"  initiative.     He                                                                   
suggested     ways     to    achieve     additional     early                                                                   
intervention/community based services.                                                                                          
                                                                                                                                
2:20:48 PM                                                                                                                    
                                                                                                                                
Mr.  Wittman  explained  Tribal  Health issues  -  Slide  32.                                                                   
American Indian/Alaska Natïves  (AI/AN) represents 40 percent                                                                   
of the state's  Medicaid population; tribal health  is a $740                                                                   
million delivery  system.  The  report suggests a  fresh look                                                                   
at this issue.                                                                                                                  
                                                                                                                                
2:22:34 PM                                                                                                                    
                                                                                                                                
Mr.  Wittman referred  to  a graph  on  Slide  33 to  further                                                                   
explain Tribal Health  - AI/AN Current Medicaid  Funding.  He                                                                   
explained  the state and  federal share  of Medicaid  funding                                                                   
for both tribal providers and non-tribal providers.                                                                             
                                                                                                                                
2:24:06 PM                                                                                                                    
                                                                                                                                
Mr. Wittman discussed Tribal Health  Recommendations on Slide                                                                   
34.   Alaska spends  about $19  million per  year on  nursing                                                                   
facility  costs  for  AI/AN beneficiaries  residing  in  non-                                                                   
tribal  facilities.    The report  suggests  that  the  state                                                                   
should consider investing in development  of tribal long term                                                                   
care.                                                                                                                           
                                                                                                                                
2:25:30 PM                                                                                                                    
                                                                                                                                
Mr.   Wittman   discussed   Slide    35   -   Tribal   Health                                                                   
Recommendation.     He  maintained  that  the   state  should                                                                   
consider  a Section  1115a  waiver  to designate  the  tribal                                                                   
system as  a managed care entity.   Mr. Cohen added  that the                                                                   
"capitation payment"  would move from a state line  item to a                                                                   
100 percent federally funded program.                                                                                           
                                                                                                                                
Mr. Wittman  opined that the  entity would be  well-received.                                                                   
Mr. Cohen noted that it would be unique to Alaska.                                                                              
                                                                                                                                
2:28:38 PM                                                                                                                    
                                                                                                                                
Mr. Wittman address Administration  - Slide 36.  He explained                                                                   
that DHSS was reorganized into  four major divisions in 2003.                                                                   
He addressed administrative costs and spending.                                                                                 
                                                                                                                                
2:29:38 PM                                                                                                                    
                                                                                                                                
Mr. Wittman explained Program  Integrity/Provider Payments as                                                                   
they relate to Administration  - Slide 37.  He explained that                                                                   
the federal  government is phasing-in  a new audit  structure                                                                   
for  states, known  as  the  Payment Error  Rate  Measurement                                                                   
(PERM).    He  discussed  the demands  on  the  new  Medicaid                                                                   
Management Information System (MMIS).                                                                                           
                                                                                                                                
2:31:12 PM                                                                                                                    
                                                                                                                                
Mr. Wittman  spoke of Regulations  - Administration,  as seen                                                                   
in Slide  38.  He  maintained that  the new regulations  were                                                                   
essential,  are   more  clearly  drafted,  and   are  already                                                                   
yielding results.                                                                                                               
                                                                                                                                
2:32:24 PM                                                                                                                    
                                                                                                                                
Mr. Wittman spoke  about Broad-Based Reform and  Planning for                                                                   
Reform  -  Slide  39.   Some  states  have  undertaken  major                                                                   
reforms.  The  state has more flexibility under  such reform,                                                                   
but must commit to a level of spending.                                                                                         
                                                                                                                                
2:34:04 PM                                                                                                                    
                                                                                                                                
Mr.  Wittman covered  the  Reform Objectives  of  Broad-Based                                                                   
Reform  -  Slide 40.    The  purpose  is to  ensure  improved                                                                   
quality of care.                                                                                                                
                                                                                                                                
2:35:20 PM                                                                                                                    
                                                                                                                                
Mr. Wittman  listed the steps  needed to achieve  Broad-Based                                                                   
Reform -  Slide 41.   There are  several strategies  that are                                                                   
needed  for  the  reform  to be  effective.    He  identified                                                                   
specific reforms to be undertaken.                                                                                              
                                                                                                                                
2:37:17 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  about  long term  care and  the                                                                   
developmentally disabled wait  list.  She wondered if many of                                                                   
those waitlisted  clients are already getting  some services.                                                                   
Mr. Cohen said they were.  He  suggested that the DD services                                                                   
could  be  addressed   with  waivers  and   federal  dollars.                                                                   
Representative Wilson  voiced a concern about  waning federal                                                                   
dollars and loss of services that  have already been offered.                                                                   
Mr.  Wittman   talked  about  the  adverse  results   of  the                                                                   
tightening up of services.                                                                                                      
                                                                                                                                
2:40:26 PM                                                                                                                    
                                                                                                                                
Mr.  Cohen thought  Representative  Wilson's  point is  well-                                                                   
taken.   He maintained  that it  is harder  to take  existing                                                                   
services away.                                                                                                                  
                                                                                                                                
2:41:03 PM                                                                                                                    
                                                                                                                                
Representative  Gardner   inquired  about   programs  needing                                                                   
federal approval.   Mr.  Wittman explained  the process  of a                                                                   
concept paper, a less formal waiver  application at the state                                                                   
level,  followed  by  a waiver  application  process.    When                                                                   
approval  is  received,  dependant  on  several  factors,  it                                                                   
usually takes about 12 to 18 months.                                                                                            
                                                                                                                                
2:42:54 PM                                                                                                                    
                                                                                                                                
Mr. Cohen  added that  it must  be demonstrated  that it  has                                                                   
been a public process.                                                                                                          
                                                                                                                                
2:43:28 PM                                                                                                                    
                                                                                                                                
Representative  Gara referred  to Slide 19.   He wondered  if                                                                   
the  cost adjustment  was based  on Anchorage  numbers.   Mr.                                                                   
Cohen replied that it based on  federal poverty levels, which                                                                   
are unique in Alaska and Hawaii.   He described how the ratio                                                                   
was attained.  He termed it a  crude adjustment and explained                                                                   
why it was done  that way.  Representative  Gara thought this                                                                   
comparison  was  important and  should  be adjusted  for  the                                                                   
reality of  medical care costs  around the state.   Mr. Cohen                                                                   
agreed,  and  added  that  there  are  unique  transportation                                                                   
costs.  Mr. Wittman added that  the providers in other states                                                                   
are  complaining about  rates.    In Alaska  there  is not  a                                                                   
program with  a dramatic  cost shift from  other payers  as a                                                                   
result of low pay rates on the Medicaid program.                                                                                
                                                                                                                                
2:47:07 PM                                                                                                                    
                                                                                                                                
Representative  Gara referred  to Denali  Kid Care,  known as                                                                   
the Childhood Health  Care program nationally.   He asked how                                                                   
the  Alaska program  ranks nationally  with  coverage at  175                                                                   
percent  of  poverty, and  if  other  states that  provide  a                                                                   
higher level  of coverage  charge a  co-pay to offset  costs.                                                                   
Mr.  Cohen  replied  that  co-pays  and  premiums  are  often                                                                   
charged.   Mr. Wittman  referred  to page 23  of the  report,                                                                   
which shows a  50-state comparison of federal  poverty limits                                                                   
(FPL)  and  State  Child  Health  Insurance  Program  (SCHIP)                                                                   
limits for children.  Mr. Cohen  clarified that the number is                                                                   
probably at  160 FPL today in  Alaska due to a change  in law                                                                   
to a fixed dollar amount.                                                                                                       
                                                                                                                                
2:49:19 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  referred   to  Denali  Kid  Care  and                                                                   
concluded that prevention  is the key.  Mr.  Cohen agreed and                                                                   
added that  employers can not always  take up the costs.   He                                                                   
spoke to  employer initiatives  to pull  in the market  place                                                                   
and the  private sector  into a  partnership. He referred  to                                                                   
Oklahoma's  experience   in  launching  OFA.     The  federal                                                                   
government   contributes  to   the  cost   of  the   program.                                                                   
Individuals under  200 percent  of poverty working  for small                                                                   
employers are covered at a fixed  level of approximately $100                                                                   
a month.  The employer covers  25 percent, the worker pays up                                                                   
to 5 percent of their income,  and the state covers the rest.                                                                   
                                                                                                                                
2:53:05 PM                                                                                                                    
                                                                                                                                
In  response to  a  question  by Representative  Wilson,  Mr.                                                                   
Wittman explained that the intent is to lower state costs.                                                                      
                                                                                                                                
2:53:43 PM                                                                                                                    
                                                                                                                                
Representative   Kelly  noticed   that   federal  funds   are                                                                   
shrinking.    He  questioned  why the  state  would  want  to                                                                   
support a race-based  health system.  Mr. Wittman  noted that                                                                   
there is  a $740  million health  care system, which  perhaps                                                                   
should  be expanded  to  cover everyone.    He observed  that                                                                   
there are federal dollars available,  but emphasized that the                                                                   
program could  be expanded.   Representative Kelly  concluded                                                                   
that the intent  is to utilize federal dollars.   Mr. Wittman                                                                   
agreed that the idea is to expand federal dollars.                                                                              
                                                                                                                                
2:56:57 PM                                                                                                                    
                                                                                                                                
Representative Stoltze referred  to certificate of need (CON)                                                                   
and how  it affects  cost.  Mr.  Wittman observed  that there                                                                   
are new regulations  for the CON process.  He  noted that the                                                                   
report  does  not  address the  appropriateness  of  the  CON                                                                   
approach.                                                                                                                       
                                                                                                                                
In  response to  a question  by  Representative Stoltze,  Mr.                                                                   
Cohen  observed  that  there   is  a  difference  in  opinion                                                                   
regarding the  matter and that  they did not  have sufficient                                                                   
resources to make a decision.                                                                                                   
                                                                                                                                
2:59:15 PM                                                                                                                    
                                                                                                                                
Representative  Thomas  asked  what would  happen  if  Alaska                                                                   
Native Health  Services were eliminated.  Mr.  Cohen observed                                                                   
that  if there  were  no  Native  health care,  eligible  for                                                                   
federal funds,  that the  state would  be responsible  for 40                                                                   
percent ($80 million)  for Medicaid.  Mr. Wittman  added that                                                                   
INHS  dollars would  also  add hundreds  of  millions to  the                                                                   
state's percentage.                                                                                                             
                                                                                                                                
3:00:57 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault referred  to the  uninsured population  of                                                                   
17.8 percent.   He  noted that the  Native population  is not                                                                   
considered insured  if they have no other coverage,  which is                                                                   
the same as in other states.                                                                                                    
                                                                                                                                
Mr. Cohen noted  that the numbers are from  a federal survey.                                                                   
Mr. Wittman  said that  many states  have moved forward  with                                                                   
additional coverage.  Alaska has  a high uninsured population                                                                   
due, in part, to the number of small employers.                                                                                 
                                                                                                                                
Representative Nelson pointed  out that there is a 42 percent                                                                   
cost  savings  for  Natives being  treated  by  a  recognized                                                                   
provider.  Mr.  Cohen  agreed  and explained  that,  in  many                                                                   
cases, the  bill is higher, but  the federal coverage  is 100                                                                   
percent.                                                                                                                        
                                                                                                                                
3:04:54 PM                                                                                                                    
                                                                                                                                
Representative  Nelson wondered if  Indian Health  Service is                                                                   
being threatened in any way.   Mr. Cohen referred to Oklahoma                                                                   
and  concluded  that  the  tribal system  would  need  to  be                                                                   
brought  to  the  table  with   INHS.  Representative  Nelson                                                                   
concluded that  it is a political  and financial move,  not a                                                                   
racially  motivated move.   Mr. Wittman  interjected  that it                                                                   
needs to be supported  on the state level before  it is taken                                                                   
to  the  federal  level.    It   is  more  than  a  financial                                                                   
motivation;  it is  a means to  bring service  to the  client                                                                   
groups.                                                                                                                         
                                                                                                                                
3:07:56 PM                                                                                                                    
                                                                                                                                
Representative Joule  questioned what the result  of Medicaid                                                                   
revision is,  in terms of  dollars to  the state.   Mr. Cohen                                                                   
stated  that there  is no  end total.   He  stressed that  it                                                                   
would be  impossible to  provide an  absolute dollar  amount.                                                                   
He could  put a dollar  amount on a  number of items  such as                                                                   
tribal change  and CAMA.  The  question is whether  the total                                                                   
investment  in the  system should  be  considered along  with                                                                   
savings.                                                                                                                        
                                                                                                                                
3:10:45 PM                                                                                                                    
                                                                                                                                
Representative Gara  referred to coverage by  other states of                                                                   
higher income  families with a  sliding scale fee.   He asked                                                                   
for other examples.  Mr. Wittman  explained that it is a cost                                                                   
effectiveness   test.      The   intent   is   to   encourage                                                                   
sustainability in  the employer market, if insurance  is less                                                                   
expansive for enrollment.   It is a combination  of programs,                                                                   
with sliding  scale premiums.   The  federal government  does                                                                   
not like  to see  premiums that  exceed 5  percent of  family                                                                   
income.  He offered to proved examples.                                                                                         
                                                                                                                                
3:13:34 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked if  any of  the plans provide  100                                                                   
percent  health  care coverage  for  children.   Mr.  Wittman                                                                   
responded  that Illinois  and Massachusetts  do.  Vermont  is                                                                   
going to  move forward to universal  coverage if it  does not                                                                   
achieve 96 percent.  Washington  is moving toward 300 percent                                                                   
of poverty  level and is trying  to make sure  that universal                                                                   
coverage is achieved.   Massachusetts is the  only state that                                                                   
has already moved to 300 percent for adults.                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:15 PM.                                                                                           

Document Name Date/Time Subjects