Legislature(2011 - 2012)HOUSE FINANCE 519
02/08/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB21 | |
| Overview: Medicaid 101 and Fmap Discussion | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 21 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 8, 2011
1:37 p.m.
1:37:20 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:37 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
Representative David Guttenberg
ALSO PRESENT
Kate Burkhart, Executive Director, Alaska Suicide
Prevention Council; William J. Streur, Commissioner,
Department of Health and Social Services; Representative
Wes Keller; Kimberli Poppe-Smart, Director, Division of
Healthcare Services, Department of Health and Social
Services.
SUMMARY
HB 21 SUICIDE PREVENTION COUNCIL MEMBERS
CSHB 21(FIN) was REPORTED out of committee with a
"do pass" recommendation and with previously
published fiscal note: FN1 (DHSS).
OVERVIEW: MEDICAID 101 AND FMAP DISCUSSION
HOUSE BILL NO. 21
"An Act relating to the membership of the Statewide
Suicide Prevention Council."
1:38:33 PM
VICE-CHAIR FAIRCLOUGH, SPONSOR, introduced the workdraft
CSHB 21(FIN). She and Representative Berta Gardner
currently served on the Alaska Suicide Prevention Council
and with the support of the council they had been asked to
move forward with two changes to the existing state statute
regarding suicide prevention in Alaska. She pointed to page
2, line 15 of the work draft and explained that the
previous version had read "when appointed is at least 16,
but not more than 20 years of age." The change modified the
language to read "...not more than 24 years of age."
Vice-chair Fairclough discussed that the change moved the
age limit from 20 to 24, which would permit college
students to participate on the council. The bill expanded
the eligibility age to begin at age 16 in order to allow
high school students to participate. The council discovered
that participation usually began in the 11th or 12th grades
versus the 9th and 10th grades. The council decided that it
would be more appropriate to include younger teenagers
given the sensitivity of the subject and the importance of
the ability to talk about death. She explained that the
other modification to the statute increased the number of
members who served on the council from 16 to 17. The
request was made due to an increased number of suicides in
the military population and the council's desire to ensure
that there was a military influence as they moved forward
with prevention strategies for the state.
Representative Wilson asked why the new position could not
have been included within the original 16 council members.
Vice-Chair Fairclough directed attention to the Statewide
Suicide Prevention Council FY 10 Annual Report titled
"Mending the Net: Suicide Prevention in Alaska" (copy on
file). She discussed that page 5 listed the different
council participants. She clarified that she, along with
Representative Gardner and the council, believed that the
military personnel should be an addition to the participant
list and not a replacement. She communicated that their
contribution would be valuable. She listed the current
participating members:
· one person representing the Department of Health and
Social Services;
· one person representing the Department of Education
and Early Development;
· one person from the Advisory Board on Alcoholism and
Drug Abuse;
· one person from the Alaska Mental Health Board;
· one person recommended by the Alaska Federation of
Natives;
· one person who works for a high school;
· one person who is active in a youth organization;
· one person who has experienced the death by suicide
of a member of their family;
· one person who resides in a rural Alaska community
not on the road system;
· one person who is a member of the clergy;
· one person who is enrolled in grades 9 through 12 of
a secondary school in Alaska; and,
· one public member.
Vice-chair Fairclough remarked that in deference to the
committee, it could choose to replace a person on the
council. She illuminated that the council typically worked
as a consensus group as opposed to a voting group, however,
the addition of a seventeenth position would help eliminate
an occurrence of a tie in the event of a vote.
Co-Chair Stoltze asked a question regarding the intent of
language added to page 2, subsection J, that read "one
person who, when appointed, is at least 16 years of age but
not more than 24 years of age." He wanted to make certain
that the language did not restrict the council to only one
participant in the age category. He also asked for
verification that the bill did not restrict the number of
veterans allowed to participate on the council. He queried
whether the intent was "at least one person."
Vice-Chair Fairclough responded that the intent was "at
least one person." She explained that each of the
categories represented a cross-section of the state and
that many members on the board represented a variety of
areas that were important for the education and engagement
of the population regarding suicide prevention.
Co-Chair Stoltze wanted the commentary of the committee to
reflect that the language did not restrict the council from
having more than one member who fell within a certain
category.
Representative Gara asked whether there was a way to reduce
the number of members needed for a quorum in order to
address low meeting attendance.
Vice-Chair Fairclough responded that legislation passed in
the previous session had solved the issue related to
reaching a quorum. She clarified that the council had not
experienced a problem reaching a quorum subsequent to the
change.
Representative Gara wondered about the obligation to report
a person who confided that they were contemplating suicide.
He wondered whether a person was deterred from seeking help
when they believed a confidant would report them. He
contemplated whether there was an answer to the problem and
remarked that people might not seek help because of a fear
of institutionalization.
1:46:17 PM
Vice-Chair Fairclough responded that the council had
discussed two different philosophies at a previous meeting.
Some people believed that many times a person on the verge
of committing suicide was irrational and it was not
possible to change their mind. Other members of the council
preferred the alternative view that engaging youths in
discussion about hope and the future would help them to
think first, reach out for help, and realize that suicide
was not the only answer.
Co-Chair Thomas MOVED Work Draft CSHB 21(FIN) (27-LS0154\D,
Bullard, 2/2/11) as a working document before the
committee.
Co-Chair Stoltze OBJECTED for discussion.
Vice-Chair Fairclough discussed her opening remarks. She
emphasized that suicides in Alaska were twice the national
rate. She explained that 15 to 24 year olds had the highest
rate of suicide. Alaska Natives had the highest rate of
suicide out of all other ethnic groups within the United
States and Native men were particularly susceptible. She
reported that page 11 of the Statewide Suicide Prevention
Council FY 10 Annual Report cited suicide as one of the top
ten causes of death in Alaska. Page 20 of the report
discussed the role of the public health model as a means to
address the crisis facing Alaska. The report discussed the
importance of a community readiness and willingness to take
personal responsibility for events that occurred in their
communities and for the development of a path forward. She
thanked staff and the new Executive Director Kate Burkhart.
She explained that the council had been without assistance
from the administration for a two-year period and that it
was back on the right path. She directed attention to page
6 of the report and stressed that 140 Alaskans committed
suicide in 2009; the average age was 20 years old.
Vice-chair Fairclough pointed to page 7 and specified that
between 2000 and 2009, there were 1,369 confirmed suicides
in Alaska. The deaths occurred in 176 communities, where
school districts, local community councils, and villages
discussed the tragedy that occurred and the difficulty that
each family faced in the loss of a loved one. Page 8
specified that "Alaska Native individuals are twice as
likely to commit suicide as individuals of other
ethnicities." She discussed that 15 to 24 year olds tended
to have the highest rate of suicide in Alaska. She
referenced a bar graph on page 9 that showed suicide rates
declined as age increased; however, the suicide rate began
to increase again in the 65 to 74 age group. She relayed
that many reasons could contribute to the increase later in
life, such as cancer or loss of hope. She shared that 44
percent of people who committed suicide tested positive for
alcohol, and 48 percent had one or more drugs present in
their body (page 10). She emphasized the extent of the
impact that the loss of a loved one had on families. She
explained that the Suicide Prevention Council of Alaska was
working quickly and hard to bring the legislature a
strategic plan with the hope of preventing suicide in the
state.
1:51:49 PM
Representative Neuman asked whether there was a correlation
between unemployment and suicide. He believed that there
were other factors related to suicide in addition to drugs
and alcohol. He wondered whether there was a list that
identified other reasons that influenced a person's
decision to commit suicide.
Vice-Chair Fairclough responded that page 12 in the report
addressed the impact that unemployment could have on
suicide rates. When there was a lack of hope within a
community and a person had an inability to provide for
themselves or their family, high suicide rates existed.
Representative Neuman asked about the range of different
reasons that might impact a person's decision to commit
suicide.
Vice-Chair Fairclough answered that specific to the age
group of 15 to 24, hormones were present and life
experiences were more limited than those of an adult. She
explained that some youths did not have the resiliency or
coping skills to deal with the loss of a close friend,
relative, or a romantic relationship. She detailed that the
youth could believe that nothing could ever make them feel
better. The presence of people within a community that made
others feel a sense of value and contribution was a
significant factor in fighting suicide. She discussed that
rural Alaska experienced a higher number of per ratio
suicides, but that Anchorage had the highest number of
deaths. Suicide was a social issue and not just a rural
versus urban issue. The prevalence of drugs and alcohol
could be a person's way of attempting to numb painful
feelings and may not mean a person had a substance abuse
problem. She listed that there were many reasons a person
could feel hopeless, including child abuse and violence in
the home. The council believed that ultimately it was about
hope and the ability for a young person to feel connected
to a community that cared about them.
Representative Neuman asked about indicators such as self
mutilation that might be prevalent in a person who
contemplated suicide.
KATE BURKHART, EXECUTIVE DIRECTOR, ALASKA SUICIDE
PREVENTION COUNCIL, discussed that the council worked hard
to educate people about the many warning signs. Sometimes
indicators involved self harm and sometimes extreme changes
in mood were present. She explained that an extreme change
of mood did not necessarily mean that a person would appear
severely depressed or down. She pointed to the public
comment from a father in Bethel who had been very surprised
that his son had been much happier right before committing
suicide. Other indicators could be: a sudden disinterest in
activities that a person had previous interest in, such as
sports, or church; increased attention to lethal means,
such as knowing the location of a fire arm or about the
contents of a medicine cabinet; and, overt or covert
disclosures such as, "I just don't want to be here anymore"
or "life doesn't have meaning." Education, prevention, and
intervention models, including Gatekeeper and Applied
Suicide Intervention Skills Training, helped people to pick
up on less extreme warning signs and to ensure that people
were connected to services long before they developed a
suicide plan.
1:57:25 PM
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft CSHB 21(FIN) was ADOPTED.
Vice-Chair Fairclough discussed Fiscal Note 1; the $4,000
fiscal note was for travel expenses associated with the
council.
1:58:37 PM
AT EASE
1:58:50 PM
RECONVENED
Co-Chair Stoltze CLOSED public testimony.
Vice-Chair Fairclough MOVED to report CSHB 21(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 21(FIN) was REPORTED out of Committee with a "do pass"
recommendation and with previously published fiscal note:
FN1 (DHSS).
2:00:00 PM
AT EASE
2:01:36 PM
RECONVENED
2:02:33 PM
^OVERVIEW: MEDICAID 101 AND FMAP DISCUSSION
WILLIAM J. STREUR, COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, presented a PowerPoint titled "Overview of
National and State Medicaid" (copy on file). He introduced
Kimberli Poppe-Smart, Director, Division of Health Care
Services. He explained that an addition to the presentation
had been inserted after slide 28. He highlighted topics
including, Alaska's status compared to the national level,
issues that faced Alaska, actions that had been taken by
the Medicaid Task Force, and others. He explained the
importance of "bending the curve" and moving forward with
Medicaid reform for Alaska.
Commissioner Streur discussed slide 2: "U.S. Medicaid
Enrollment Increases in Economic Downturns: FY 1992 - FY
2010." He explained that Medicaid moved in four-year up and
down cycles. The reason for the cycles was not known, but
was most likely linked to economic upturns and downturns.
He moved on to discuss slide 3: "Medicaid Spending Growth,
U.S. and State of Alaska, 1996-2010." He relayed that the
national annual growth in Medicaid in 2010 was 6.6 percent;
whereas, Medicaid spending in Alaska grew from -2.8 percent
in 2008 to 14.2 percent in 2010. He cited concerns
associated with the spending growth that included an
increase in Medicaid enrollment, cost for services, and the
overall budget.
Commissioner Streur addressed slide 3: "Total Medicaid
Spending Growth, U.S. FY 2000 - FY 2010." He reported that
Alaska had been comparable to other states from FY 00 to FY
08, and in FY 09 and FY 10 Alaska benefited from the
Federal Medicaid Assistance Percentage (FMAP) enhancement.
With FMAP contributions the state went from 51.9 percent to
approximately 62 percent. As a result, the state was able
to reduce its general fund contribution by $74 million in
2009, $102 million in 2010, and approximately $114 million
in 2011. He pointed to slide 5 titled "Total Medicaid
Spending Growth, State of Alaska FY 2000 - FY 2010." He
discussed the overall spending growth trend for Alaska;
increased state spending on Medicaid occurred (primarily in
enrollment), despite the $102 million FMAP funding.
2:08:30 PM
Commissioner Streur turned to slide 6: "End of ARRA FMAP in
July 2011." He relayed that in July 2011, the American
Recovery and Reinvestment Act (ARRA) and FMAP funding would
end. He stated that on the average, states would see an
increase in the non-federal share by over 30 percent due to
the loss of FMAP inflation and enrollment growth.
California had a 50 percent FMAP and the loss of the funds
would result in a 30 percent growth of its non-federal
share, with a projection of approximately 37 percent.
Arkansas had a 71.37 percent FMAP and could see a 44
percent growth due to the economic downturn. Florida had a
55 percent FMAP and could see a 36 percent growth in its
non-federal share. Alaska would see a 38 percent growth in
its non-federal share due to the loss of FMAP funds,
inflation, and enrollment growth; this was the genesis for
the $123 million funding request for Medicaid.
Commissioner Streur had met with the Medicaid Task Force
and they had compiled a list of options in response to the
upcoming loss of federal Medicaid funding. The challenge
was how to determine what to focus on. He discussed various
possibilities on slide 7 titled "Options." The first option
related to eligibility. He explained that one of the basic
tenets of the federal stimulus money was "maintenance of
efforts", which instructed that services could not be
changed for the people who were currently receiving them;
therefore, eligibility had to be taken off the table until
2014. The second option related to provider rates; many
states were currently looking at the option as a solution
to the loss of federal funding.
Commissioner Streur discussed that the third option was to
take a look at the benefits packages that were provided by
the state (slide 7). Option four was to increase
utilization controls; however, there were issues related to
"maintenance of efforts." The fifth option focused on
improved purchasing. He stated that improved purchasing
worked for other states. For example, a state could choose
a single durable medical equipment provider for the entire
state; however, Alaska did not have a large enough durable
medical vendor that was equipped for such a large demand.
The geographic separation was a challenge for Alaska's
ability to provide durable medical equipment on a timely
basis. Option six focused on cost sharing, which people
frequently expressed interest in exploring. The seventh
option related to anti-fraud, but he did not know what the
solution was regarding the specific option. He explained
that some people believed there was significant money in
anti-fraud in Alaska and some people disagreed. The state
would continue to increase its anti-fraud efforts. He
detailed that recipient anti-fraud would bring in a small
amount of money and that provider anti-fraud would bring in
more. Funds from anti-fraud in Alaska would not compare to
the billions of dollars that had been recovered from
fraudulent activity perpetrated by mafia rings in Florida
and New York. He added that states would be required to
mimic Medicare efforts.
2:12:18 PM
Representative Doogan asked whether the term "non-federal
share" on slide 6 was synonymous with the state's share.
Commissioner Streur answered in the affirmative. The 38
percent increase listed on slide 6 included a small
percentage of other funding, but was primarily the state's
share.
Representative Doogan asked for a breakdown of the 38
percent increase related to the loss of FMAP, inflation,
and enrollment growth. Commissioner Streur responded that
he would get back to the committee with the requested
information.
Representative Joule referred to earlier discussion
regarding State of Alaska cost savings in the amount of
$104 million or $114 million. He wondered how the savings
worked with the 38 percent cost increase that Alaska would
experience in the absence of FMAP funding. Commissioner
Streur answered that the FMAP funding would go through July
1, 2011; the 38 percent increase would begin at that time.
Representative Gara referenced earlier comments regarding
fraud cases that negatively impacted providers. He asked
the department to be sensitive and to recognize that
innocent mistakes could also occur.
Commissioner Streur replied that the department was working
to differentiate between administerial errors and
intentional fraud. He explained administerial errors could
include a person's failure to provide adequate
documentation in a chart or the accidental transposition of
a number.
2:15:22 PM
Commissioner Streur provided an in-depth report on each of
the options he had previously outlined, beginning with
"Eligibility" on slide 8. Eligibility was normally an
option states used to control budget. He relayed that the
State of Alaska had not provided additional services to a
population beyond the basic Medicaid levels other than
Denali KidCare. Similar to most states, Alaska was
currently at the 175 percent level for Denali KidCare. He
explained that the eligibility option was prevented by
maintenance of effort restrictions including ARRA and PPACA
[Patient Protection and Affordable Care Act] until 2014. He
detailed that beginning in 2014 Medicaid would increase
from 100 percent of poverty level to 138 percent of poverty
level and maintenance of effort restrictions would end. He
relayed that more restrictive standards, methodologies, or
procedures could not be adopted regarding eligibility or
enrollment in the Medicaid program.
Representative Wilson wondered whether there was a
particular age bracket that was influencing the Medicaid
growth. Commissioner Streur responded that growth was
occurring across the board. He furthered that enrollment
growth primarily resulted from children and families and
not the senior population.
Representative Wilson asked what portion of the growth was
related to new cases. She wondered whether it was possible
to tell how many new families had enrolled due to hardship.
Commissioner Streur responded that he would get back to the
committee with the requested information.
Commissioner Streur discussed that "Provider Rates" (slide
9) represented the most common reduction by states. He
detailed states that currently utilized the provider rate
option, which included Kentucky, Arizona, California, and
Washington. He relayed that the State of Washington had
recently imposed a 15 percent rate reduction. He read from
slide 9:
· Many rate reduction options
· Considerations
o Reducing rates in one area may cause cost
increases in another
o Potential litigation
o CMS [Centers for Medicare and Medicaid
Services] approval of State Plan Amendment
(SPA)
o Impact on access and quality of care
o Provider taxes affect state's ability to reduce
rates
Commissioner Streur reported that he wasn't very concerned
about potential litigation in Alaska. He discussed that CMS
was involved in everything that the state did and that
everything required the SPA approval. He mentioned that
some states were interested in receiving federal "block
grants" in order to continue providing Medicaid benefits.
He explained that changes to provider reimbursement would
need to be included in the SPA.
Vice-Chair Fairclough asked for clarification on the
meaning of the acronym CMS. Commissioner Streur responded
that CMS stood for Centers for Medicare and Medicaid
Services.
Representative Joule wondered whether the reference to
"impacting" provider rates on slide 9 essentially meant
lowering rates. Commissioner Streur answered in the
affirmative.
Representative Joule asked whether providers could choose
to take their business elsewhere in response to lowered
rates. Commissioner Streur acknowledged that it was a
possibility. He thought that Medicare provided a good
example of a place that the state had experienced the
problem; however, he opined that the state was currently in
a good position. He communicated that he would speak more
about the issue later in the presentation.
2:20:25 PM
REPRESENTATIVE WES KELLER joined the committee table and
asked what the process would be in the event of a rate
reduction. He wondered whether the reduction would be a
flat percentage and who would be designated to determine
what would get cut. He was concerned that the significant
difference in the size and influence of the various
providers could present a problem.
Commissioner Streur answered that the responsibility would
continue to reside with the department. He thought that
reductions would most likely impact certain provider groups
and types that would be determined by a study conducted by
the department.
Representative Keller thought the question was important
because the issue would be relevant for the department and
legislature.
Representative Gara referenced that the presentation
indicated Alaska as one of the higher paying Medicaid
states. He had heard that in most states insurance
companies were required to reimburse medical providers at
an average rate; however, Alaska reimbursed at the 70th
percentile, which may have been an explanation for higher
medical rates in Alaska. He wondered whether the
information was accurate.
Commissioner Streur replied that the issue was more closely
related to the commercial sector than to Medicaid.
Representative Gara wondered whether providers would take
issue with a reduced Medicare reimbursement rate that would
result in much lower pay than the insurance reimbursement
they were able to receive in the commercial sector.
Commissioner Streur replied in the affirmative. He
explained that the situation was currently more relevant to
Medicare. He would discuss a Medicaid fee comparison on
slide 11. He remarked that the situation was more difficult
to justify than it should have been.
Commissioner Streur directed attention to Medicaid
physician fees for the 25 highest paying states (slide 10).
Alaska was shown as second, given that the chart was cost
adjusted based on the cost of living in each state;
however, fees in the state were actually significantly
higher than those in all other states. He believed there
were four other states where Medicare rates were higher
than those in Alaska.
Representative Wilson asked how many states had implemented
a co-pay. She had heard that a $5.00 co-pay could make a
difference for a patient. Commissioner Streur responded
that he would speak about co-pays later on in the
presentation.
Commissioner Streur moved on to discuss 2009 payment levels
for the highest level primary care office visit (level 5)
on slide 11, titled "Payment Comparisons." He relayed that
Alaska Medicaid paid $209.11 compared to Alaska Medicare,
which paid $164.32. Medicaid paid $76.00 in Washington and
$129.21 in Montana. The department had conducted a
comparison of approximately 12 states, which had all shown
similar results as those on slide 11.
2:25:50 PM
Commissioner Streur discussed slide 12 titled "Benefits:"
· States that provide optional benefits can eliminate
them for adults
o EPSDT (Early Periodic Screening, Diagnosis, and
Treatment) and nursing facility services are
not optional
· States can establish limits on benefits for certain
adults
o Can be soft or hard limits
Commissioner Streur continued to discuss benefits on slide
13. He explained that a reduction of benefits in one area
may result in cost increases in another. He noted that it
was possible to reduce an optional benefit in one of the
state's waiver or personal care attendant programs;
however, most of the eligible individuals met the nursing
home level of care requirements; therefore, the elimination
of one of the programs introduced the possibility that an
individual would be forced into a nursing home and would be
a considerable "push on the balloon." He pointed to the
second bullet point: "Federal Litigation-Medicare Rules and
Olmstead." He relayed that the Olmstead Act required the
state to provide services in the least restrictive setting
possible. To ensure an individual continued to receive
services in other areas, it may be necessary to address
transition issues if a service was eliminated. He
reiterated his earlier remark regarding CMS approval of a
SPA. He discussed the impact on access and quality of care;
many of the state's optional programs were built into the
continued care of services.
Representative Joule understood that the term "push on the
balloon" meant that cost cuts in one area could lead to
increased hospital or homecare costs. He believed the
additional costs were significant and noted that members of
the public may not know what the term meant.
Commissioner Streur replied that the costs were
significant. He expounded that the average annual cost for
an individual in the waiver program was $30,000 compared to
a much higher amount for nursing home level of care.
KIMBERLI POPPE-SMART, DIRECTOR, DIVISION OF HEALTHCARE
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, added
that the nursing home level of care for an individual was
$202,000 on an annual basis.
2:28:39 PM
Co-Chair Thomas thought that high assisted care living
facility costs should incentivize the state to help fund
personal care attendants who would reduce costs for the
state. He had heard from a constituent who had taken a
brother out of an assisted care living facility that had
cost the state $17,000 per month. The individual had hoped
to become a personal care attendant; however, the costs
were too high and they were currently faced with putting
the brother back in the assisted living facility. He noted
that he would follow up with Commissioner Streur at a later
time.
Commissioner Streur moved on to slide 14: "Mandatory vs.
Optional Benefits." He relayed that it would not be easy to
just remove the optional Medicaid benefits in order to save
costs. The mandatory benefits utilized by individuals
without chronic complex medical conditions included items
such as inpatient and outpatient hospital, nurses,
physicians, nurse midwives, lab and X-ray, advanced nurse
practitioners, early periodic screening, diagnosis, and
treatment, family planning, pregnancy, and other. Optional
Medicaid benefits included items such as mental health
rehabilitation and stabilization; diagnostic, screening,
and preventative therapies; inpatient psychiatry; drugs,
which cost $65 million per year, would be a significant
challenge to cut; Intermediate Care Facility and Mental
Retardation (ICF/MR) residential facilities; personal care
attendants; dental services, which served approximately
10,000 adults and had helped people with various issues
that included returning to work and eating different foods;
other home health services, other licensed practitioners;
and transportation, which cost approximately $70 million
per year and was necessary for the rural villages
throughout the state. He emphasized that it was a very
difficult challenge to determine areas to cut that would
reduce costs.
2:32:21 PM
Representative Joule pointed out that mandatory and
optional benefits were different for adults than they were
for children. He expounded that many typical adult services
fell under the optional category; however, most children
services were mandatory. He had been surprised to learn
about the differences and the costs associated with items
in each category.
Commissioner Streur responded that Medicaid SCHIP [State
Children's Health Insurance Program] was very oriented
towards children first and families second. He informed the
committee that beginning in 2014 every person who met the
138 percent poverty level would be eligible under Medicaid.
He thought that the optional and mandatory categories for
children would still exist, but they would see an increased
melding together.
Commissioner Streur addressed slide 15 titled "Utilization
Controls." He stressed that it was challenging to determine
whether the $1.5 billion annual Medicaid expenditure was
directed at the right care, at the right time, in the right
place, and for the right amount of money. He emphasized the
importance of making improvements to a range of controls
and screens to ensure the state was providing individuals
with the appropriate care. A new Medicaid Management
Information System (MMIS), which paid claims for the state,
would be active in the spring of 2012. He was looking into
the possibility of moving data from the old system into the
new system that would allow the department to implement
some utilization controls at an earlier date. The current
25 year old MMIS system paid claims efficiently; however,
it was not possible to determine how it paid claims unless
a report was built. The data warehouse would help the
Divisions of Healthcare Services, Behavioral Health, and
Senior Disability Services; he was hopeful that it would be
activated in the fall of 2011.
Representative Gara wondered whether it was possible to
prevent Medicaid recipients from going to the emergency
room for non-emergency related health problems. He asked
whether a system could be implemented that would pay in-
full for Medicaid patients to go to physicians for non-
emergency health issues, but would cover much less of an
emergency room visit for the same issues.
Commissioner Streur responded in the affirmative. The
department was looking into options that would deal with
people it termed "frequent fliers," who tended to use
higher cost services. He thought that putting people in
medical homes and ensuring access to services was a better
option than co-pays and deductibles. He referred to a
former client who had visited the emergency room 300 times
in one year, which had cost between $600 hundred and $800
hundred per visit. He added that there was a downside to
the option; therefore, it was important to figure out the
best way to handle the issue and to let patients know they
had "skin in the game."
2:38:49 PM
Vice-Chair Fairclough asked whether certain items (related
to individual families) that could not be tracked with the
current MMIS, would be accessible under the new data
tracking system.
Commissioner Streur replied that it was currently possible
to retrieve the information; however, a time consuming
report had to be built each time the information was
needed.
Vice-Chair Fairclough queried whether the state knew if
there were duplicate services being accessed. She referred
to the $1.5 billion annual Medicaid cost in Alaska and
wondered whether the state was working to look at care for
individuals and families in a more holistic way instead of
only looking at crisis intervention. She asked whether
there were any controls on the annual spending limit for
available Medicaid services and if there was a trigger in
the system to indicate whether a patient's needs had
changed or increased.
Commissioner Streur answered that DHSS was currently
looking only at individuals because each Medicaid recipient
had a personal identification number that was not linked to
other family members. He detailed that a data warehouse
would help as it would allow the department to enter
groupings. The department was currently working on the
ability to look at families and was doing the best it could
with the information that was available. He relayed that
the annual Medicaid cost was approximately $9,300 per
person; the cost for a family of four was $36,000; the 15
percent overhead on a monthly premium would cost a family
approximately $3,000. He stressed that the costs were very
expensive and that the state needed to bend the curve; he
was more concerned about the overall spin and the need to
get a grip on costs. He talked about the importance of
utilization controls and eliminating duplicative services.
He noted that funding for the data warehouse had previously
been acquired.
2:43:09 PM
Commissioner Streur discussed a wide range of controls and
screens on slide 15: (1) the department was moving to an
electronic prior authorization and care management system
through its current vendor at a considerable savings. The
Division of Health Care Services was focused on getting
more out of the services that were provided by the vendor.
Currently the majority of prior authorization was hospital
based and the department wanted to expand it to other areas
as well, including outpatient hospitals; (2) post payment
reviews were necessary to determine whether duplicate
services were conducted; (3) hard or soft edits would take
a look at whether specific services were appropriate for
the given health problem; (4) bundling, unbundling, and
order of billing were tools the department used with
hospitals and physician offices to group services into a
single billing; and, (5) the department was interested in
new edits and audits of fee-for-service and in the
possibility of movement away from the area.
Commissioner Streur addressed slide 16 titled "Improved
Purchasing:" (1) Medicaid had significant market share at
an annual cost to the State of Alaska of $1.5 billion; (2)
the department was working to determine whether
improvements could be made to purchasing; durable medical
equipment continued to be a challenge. He was proud of the
generous pharmacy benefit that provided a wide range of
drugs to recipients; returns on the program, satisfaction,
and management worked well on the provider and recipient
sides. There was a Pharmacy and Therapeutics Committee that
consisted of providers and pharmacists that conducted a
quarterly review of how drugs were handled; (3) pharmacy
provider and manufacturer contracting; and, (4) the
department worked to recognize centers for excellence when
possible.
2:46:56 PM
Commissioner Streur discussed slide 17 titled "Cost
Sharing:"
· Recipient pays a portion of the cost services
· Personal responsibility-reduction in inappropriate
utilization
· Recipient assumes a portion of responsibility for
services
· Considerations
o May cause care to be delayed resulting in
higher cost care later
o Medicaid rules complex and prescriptive
o May result in a reduction in provider revenues
Commissioner Streur explained that individuals with a co-
pay may decide to delay a visit to the doctor, which could
result in a higher cost at a later time; therefore, it was
important to be careful about where cost sharing was
utilized and how it was conducted. He discussed that
according to Medicaid rules an individual could only be
charged on a limited percentage of their income on an
annual basis; however, the department did not currently
have the necessary tracking tools available. He thought
that it was important to begin cost-sharing in areas where
people who could make decisions were forced to do so. He
had talked with multiple provider groups about the
possibility that cost sharing could result in a reduction
in provider revenues and had solicited input regarding
potential solutions.
Commissioner Streur moved on to discuss slide 18 titled
"Existing Cost Sharing in Alaska:"
· $50 per day, up to a maximum $200 per discharge, for
inpatient hospital services
· 5 percent of charges for outpatient hospital
services
· $3 per day for physician services
· $2 for each prescription filled/refilled
Commissioner Streur estimated that the provider collected
less than 50 percent of the cost sharing fees that it was
owed.
Representative Gara asked whether individuals that went to
the emergency room for non-emergency related services
represented a significant cost in the Medicaid system.
Commissioner Streur responded in the negative.
Co-Chair Stoltze had been told multiple times that Medicaid
patients represented the most frequent number of no-shows
at dental and medical appointments. He expressed concern
that the medical providers already took a cut in pay for
Medicaid patients. He did not want patients in need of
treatment to be denied; however, he did not want people to
have such a cavalier attitude towards the services. He
wanted the situation to improve so providers would not
decide to discontinue service to Medicaid patients.
2:51:06 PM
Commissioner Streur answered that dental providers provided
a good example of the situation. The single greatest
frustration with Medicaid recipient treatment was the high
frequency of no-shows. There were several dental offices
that were currently tracking the Medicaid versus non-
Medicaid no-show rates for the state. Dental offices could
implement a charge for no-shows across the board; however,
they could not implement the charge for Medicaid patients
only. The issue was significant and he had heard the
frustration most frequently from dental providers.
Co-Chair Stoltze emphasized that the state should try
harder to solve the no-show problem. Commissioner Streur
replied that Medicaid was an entitlement program and the
challenge was significant. He had enlisted support and
input from providers to help find a solution.
Co-Chair Stoltze replied that there were people that were
not as sympathetic to the entitlement aspect of the
program. He encouraged medical providers to continue
stressing the importance of the problem to the department.
Vice-Chair Fairclough appreciated the value of a no-show
survey that included all patients. She discussed that one
of the no-show issues in Anchorage was due to problems with
transportation, specifically with Share-A-Ride and other
services that provided transportation to groups of
individuals. She pointed to the Alaska Native Medical
Center that had implemented some successful strategies,
including a no-show fee. She agreed that it was important
to convey the value of medical providers' time.
Representative Gara had discussed the issue previously with
the commissioner. He believed that the administrative
burden often times cost more than the savings. He relayed
that he had missed a handful of dental appointments the
past summer due to injury and he appreciated that he had
not been charged a fee. He pointed out that it could be
challenging for offices to determine when a person had a
valid reason for missing an appointment. He opined that
sometimes it could cost more to enforce a rule. He agreed
that a solution was important, but did not believe there
was an easy answer.
Representative Wilson noted that there were dentists in
Fairbanks who no longer took Medicaid patients due to the
cancelation problem. She stressed that the state could not
continue to lose more Medicaid providers, given the
negative impact it would have on the program.
2:56:41 PM
Commissioner Streur reiterated his earlier remarks
regarding slide 18: "Existing Cost Sharing." He directed
attention to slides 19 through 20 related to services that
were exempt from cost sharing requirements:
· Services provided to a recipient under age 18
· Services provided to a recipient in a long term care
facility
· Services provided to a pregnant woman, including
postpartum services
· Family planning services and supplies
· Emergency services
· Hospice care services
· Tribal health services provided to an American
Indian or an Alaska Native
· Services provided to an individual who is eligible
for both Medicare and Medicaid when Medicare is the
primary payer of the service
Commissioner Streur remarked that Medicaid could not
mandate the exemption of services from cost sharing
requirements for Alaska Natives; internal cost sharing was
an available option. He addressed slide 21 related to the
inability to pay cost share:
· 42 CFR 447.15
The provider may not deny services to any eligible
individual on account of the individual's inability
to pay the cost sharing amount
Commissioner Streur noted that Alaska did not have
complaints about denial of access to care due to the
inability to pay cost share. Providers had worked to ensure
that care was available. He discussed slide 22: "Anti-
Fraud:" (1) some states may be an untapped area for
savings; (2) fraud in Medicaid was a reality and
departmental and attorney general efforts would be
increased to help determine its extent in the system; and,
(3) numerous anti-fraud methods and vendors included a
Medicaid Integrity Program, Payment Error Rate Measurement,
and other.
Co-Chair Stoltze wondered whether fraud typically involved
a patient or provider. He remembered legislative work that
had been done in the past related to Medicaid anti-fraud.
Commissioner Streur answered that fraud related to
recoveries was typically committed by providers; whereas,
recipient fraud was related to prescription drugs.
Co-Chair Stoltze requested an example related to the
typical magnitude of provider fraud.
3:00:30 PM
Commissioner Streur replied that the majority of fraud
settlements ranged from $25,000 to $125,000 up to $150,000.
There had been one fraud case related to on-call nursing
that cost somewhere in the millions of dollars.
Co-Chair Thomas queried whether a provider would lose their
license for committing fraud against the state.
Commissioner Streur responded that it depended on the
extent of the fraud. The department was provided a weekly
list of people who were no longer allowed to participate in
Medicare and in many cases it pulled the people from
Medicaid as well; the department was occasionally mandated
by CMS to pull the person's participation. He would follow
up with more detail.
Co-Chair Thomas discussed that stealing was a felony. He
thought that those who committed fraud should be treated
equally in their punishment.
Co-Chair Stoltze commented that not every fraud
investigation was born with malice. He opined that the
regulations and laws were complex and it was possible for a
person to find themselves in the midst of an investigation
accidentally.
Commissioner Streur agreed.
Co-Chair Thomas thought that in the case of a settlement a
document could be signed that stated no further penalties
or charges would be filed against the offender.
Co-Chair Stoltze referenced complicated federal regulations
imposed on the state that were difficult for medical
professionals to keep up with. He had heard of cases where
people had been accused of Medicaid fraud because they were
charging too little. He added that there were people who
egregiously abused programs and those who made innocent
mistakes due to the complexity of the regulations and laws.
Co-Chair Thomas noted that drivers and commercial fishermen
would lose their license for certain offences; he
reiterated that fraud offenders should also receive an
appropriate penalty.
3:04:00 PM
Commissioner Streur believed it was necessary to be
judicious in the handling of fraudulent cases and that
intentional fraud should be penalized; whereas, the state
should collect money owed from those who committed
mistakes, but should not apply an additional penalty.
Commissioner Streur discussed slide 23 titled "Anti-Fraud
Efforts, Audits, and Other Activities in Alaska:" (1) the
Surveillance Utilization Review (SUR) looked at payment
patterns, diagnosis, recipients who saw multiple doctors
and received multiple prescriptions, billing comparison
between physicians, and other; (2) the department conducted
70 annual audits required by AS 47.05.200, which were
moderately effective; (3) credit balance audits; (4)
focused reviews identified particular patterns, groups, and
outlying providers; (5) CMS Medicaid Integrity Program was
new and would conduct provider audits; (6) Alaska's payment
error rate the prior year had been the lowest in the nation
at under 1 percent. Through the Payment Error Rate
Measurement system CMS vendors worked to verify that
services had been paid appropriately; (7) Cluster Audits;
(8) the Medicaid Recovery Audit was a federal program that
the department hoped would replace the current audits
required by AS 47.05.200; and, (9) Medicaid Fraud Control
Unit.
3:08:17 PM
Commissioner Streur addressed slide 24 titled "Provider
Taxes." He explained that provider taxes offered a means to
generate revenue specifically to fund Medicaid. The
department used the taxes generated to supplant general
fund money and to fund providers at a higher rate in order
to offset the taxes. The state was able to charge a tax and
leverage the 50 percent federal participation. He discussed
that between 14 and 15 states had implemented provider tax
in the past 18 months. He read additional bullet points
from slide 24:
· Can provide needed provider rate increases/avoid
decreases
· Can provide money for the state
· Some provider types work better than others
· Federal rules complex but taxes can work
Commissioner Streur elaborated that the tax worked better
for non-specialty physician offices, primary care offices,
and other, given that the majority of income in specialty
offices was not Medicaid related.
Representative Wilson wondered why the federal government
was creating an incentive for states to tax providers. She
could not imagine taxing providers who were already not
paid what they were worth.
Commissioner Streur answered that individual states had
introduced the provider tax and that it was not related to
the federal government. He communicated that states needed
to meet the 50 percent match rate; general fund sources in
some states were not available and Medicaid costs continued
to increase. States were looking for ways to provide
matching funds that were not painful to recipients and the
state.
Co-Chair Stoltze wondered why the provider tax option was
listed in the presentation if the state did not intend to
utilize it. Commissioner Streur replied that the option had
been included in order to fully disclose all available
possibilities for Medicaid funding.
3:11:53 PM
Commissioner Streur addressed slides 25 and 26 titled
"Provider Tax Considerations." He read from the
presentation:
· Unlikely in a state with an aversion to any kind of
taxes
· Taxes are levied against all providers of a certain
type or group
· Taxation will affect current payment methodologies.
Tax payments could be accounted for in cost-based
payment methodologies for hospitals and nursing
homes
· Where used, the industry is more than not in support
· If Alaska Medicaid cuts funding, industry support
may develop
· If implemented in Alaska, there will be a high
degree of CMS oversight
Commissioner Streur continued on slide 27: "Revenue
Maximization:"
· While most states have focused on this, still may be
opportunities
· Allowable federal funding can replace state funding
· States should make sure their reviews are current
· Opportunities with state and local programs and
certain inmate care
Commissioner Streur believed that Alaska had an opportunity
for revenue maximization with its tribal partners in
particular. He read additional points related to revenue
maximization on slide 28:
· When Medicaid-eligible IHS [Indian Health Services]
beneficiaries receive services at IHS facilities,
the State receives 100 percent FMAP (Federal Medical
Assistance Percentage)
· In FY 10, if all Alaska Native Medicaid recipients
had received services exclusively from IHS
facilities, it would have saved Alaska Medicaid
about $108 million general fund
Co-Chair Thomas asked whether the figure was in addition to
what had been provided. Commissioner Streur responded in
the affirmative.
Co-Chair Stoltze asked how many Denali KidCare participants
could be utilizing the revenue maximization. Commissioner
Streur did not have the number on hand.
Co-Chair Stoltze asked for an estimate and wondered whether
the number represented tens of millions out of the $108
million.
Commissioner Streur responded that the $108 million was
Medicaid only. He did not believe there would be any
savings in the areas of cardiac care, cancer care, and
complex children's conditions.
Co-Chair Stoltze expressed frustration that savings were
discussed that may not have been possible. Commissioner
Streur believed that approximately half of the money could
be realized through a more effective partnership with
tribal partners in areas such as nursing care and other. He
opined that it was necessary to take a look at savings of
$15 million to $30 million whenever possible; however, the
$108 million in savings was not available.
3:15:04 PM
Representative Joule referred to testimony from a recent
meeting that had pertained to the Division of Behavioral
Health, Medicaid, and opportunities that were available. He
wondered whether IHS facilities were associated with the
opportunities.
Commissioner Streur believed the discussion had been
related to the behavioral health encounter rate. The
department had started retroactively reimbursing at an
encounter rate for all behavioral health services. The
money would go a long way towards funding behavioral health
services within the IHS community. The transportation rate
would be reduced because services had been increased in
communities.
Representative Wilson asked for a breakdown of the $108
million. Commissioner Streur replied that DHSS would
provide the information to the committee.
Commissioner Streur moved on to slide 29 titled "Proposed
Strategies." [Note: slide 29 was an addition to the
presentation and appears as a separate document on BASIS;
therefore, slides in the original presentation labeled 29
through 30 are referred to as slides 30 through 31 below.]
He referred to Ms. Poppe-Smart's role in home and
community-based services.
Ms. Poppe-Smart discussed her past position as acting
director of the Division of Senior and Disability Services
and her work related to cost control strategies (e.g.
provider tax, etc.) for the long-term care arena that had
been proposed by the Medicaid Task Force. She communicated
that based on multiple studies the long-term care
population in Alaska that included senior and disabled
individuals, was increasing and had outpaced other states;
growth was most notable in the senior population.
Ms. Poppe-Smart explained that home and community based
services had been instrumental in the state's success in
keeping individuals out of institutions. She explained that
unlike other states, Alaska did not have the opportunity to
control its spending, given that institutional care was
significantly more expensive than home and community based
care. There were approximately 708 nursing home beds in the
state and no more than 10 or 20 of the beds were available
at any given time. Additionally, there were approximately
3,500 individuals in home and community based services
through the department's four waiver programs and roughly
3,500 individuals who received personal care attendant
services (half of whom were waiver recipients). The average
cost of nursing home care was approximately $202,000 per
year in Alaska. She relayed that the Medicaid cost was much
less: the average cost for elderly Alaskans who received
waivered services at home was about $30,000 and cost an
additional $33,000 for personal care attendant services.
Approximately 3,000 of the 3,500 in the personal care
program were in need of an institutional level of care.
Ms. Poppe-Smart highlighted that other long-term care
service options included: the few individuals in out-of-
state ICF/MR institutes that provided care for
developmental disabilities and administrative wait days and
swing beds in critical access hospitals, which acted as
nursing home beds in acute care facilities.
Ms. Poppe-Smart communicated that subsequent to the
implementation of maintenance of effort requirements, the
state was not able to increase eligibility restrictions for
its waiver programs through 2014. She reiterated that the
state had few options to reduce or restrict current
services; therefore, it was necessary to be creative and to
look at successes in other states. One option was long-term
managed care; other states had developed a demonstration
project or SPA to manage individuals who required long-term
care services in a holistic manner, similar to the medical
home model. It was important to consider that Medicaid was
the primary payer for long-term care services and that very
few private insurance companies would pay for any of the
long-term care services. Long-term care insurance did not
pay for home and community based services and Medicare
would only pay a maximum of 100 institutional days.
Ms. Poppe-Smart continued to discuss proposed strategies on
slide 29. The state could look at its current personal care
attendant program and develop a new program under a
demonstration project. She informed the committee that
there was currently a 6 percent federal matching program
through the Affordable Care Act, which would require the
state to build in oversight quality monitors. Another
option was to put a "safe independent" in the home, where a
home would be evaluated for safety and items such as grab
bars would be installed; the option was available for homes
that did not meet the institutional level of care and were
not eligible for waiver services.
Ms. Poppe-Smart pointed to a strategy (slide 29) related to
quality, utilization, and compliance management. She
discussed Medicaid fraud and noted that in Alaska a person
could be convicted due to reckless disregard and it was not
required for a person to have the intention to commit
fraud; many other states required proof of intent.
3:24:00 PM
Ms. Poppe-Smart moved on to discuss the last proposed
strategy on slide 29 that related to the examination of
options to refinance current general fund programs through
demonstration project. She delineated that the long-term
care arena included "general relief," which paid for
assisted living homes for individuals who were not waiver
eligible and the CAMA [Chronic and Acute Medical
Assistance] program paid for ongoing medication services
for individuals who had specific limited medical
conditions. She detailed that many studies in the past had
recommended that the state should refinance the populations
through the development of a demonstration project and
obtain a federal match. She elaborated that eligibility
criteria would be defined in order for the populations to
fall within the Medicaid eligible categories; therefore, a
portion of the general fund financing would be diverted to
the federal government.
Commissioner Streur discussed slide 30 titled "Third Party
Liability." He explained that third party liability
provided the opportunity to shift costs or collect money
from third party entities including insurance companies,
Medicare, estates, and other. He read from slide 30:
· Wide range of programs and activities
· Electronic matches can improve effectiveness
· Contingent fee contracts are matchable
Commissioner Streur noted that the state had contingent fee
contracts, but did not use them all. He pointed to slide
31: "Alaska Medicaid TPL Activity," and was proud of the
state's efforts in third party liability that had netted a
considerable return. The state's net recovery in post-
payment reviews was $9.1 million in the prior year. The
state had collected $2.5 million for accident, estate, and
trust recovery (accidents included situations in which the
state funded patient care and was reimbursed by insurance
settlements). He discussed cost avoidance that included:
state assisted Health Insurance Premium Payments and
coverage; the department had experienced success in data
matches with insurance carriers to identify primary
insurance carriers that may not have been reported by an
individual; and, Medicare buy-in where the state paid
Medicare Part A and B premiums, which had saved $35.4
million the prior year. He noted that the cost avoidance
programs had been successful.
Representative Joule asked what the state's Medicaid
related general fund expenditures had been three years
earlier compared to future expenditures through 2012.
Commissioner Streur answered that costs were approximately
$1.1 billion in 2008, $1.2 billion in 2009, and $1.3
billion in the current year.
Representative Joule asked whether the numbers provided
were only related to general fund expenditures.
Commissioner Streur responded in the negative.
Representative Joule wondered specifically about general
fund expenditures. He thought that general fund costs had
been approximately $300 million to $400 million in the
past, were approaching approximately $700 million in FY 11,
and depending on FMAP funding the costs could potentially
be $850 million or so looking out to 2012.
Commissioner Streur responded that the figures were a good
approximation. He added that they were a little light in
2007, in 2008 and 2009 the state's general fund share was
slightly reduced, in 2010 there was a small increase, in
2001 there was an increase, and there was an increase of
roughly $180 million in 2012.
Representative Doogan congratulated Commissioner Streur on
his new appointment at DHSS.
ADJOURNMENT
3:30:00 PM
The meeting was adjourned at 3:30 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB21 Sponsor Statement Final.PDF |
HFIN 2/8/2011 1:30:00 PM |
HB 21 |
| FINAL version of FY2010 Annual Report Mending the Net 1-26-11.pdf |
HFIN 2/8/2011 1:30:00 PM |
|
| CS WORKDRAFT HB 21 (FIN).pdf |
HFIN 2/8/2011 1:30:00 PM |
HB 21 |
| DHSS Medicaid 020811 PDF.pdf |
HFIN 2/8/2011 1:30:00 PM |
|
| Medicaid PP slide 29.pdf |
HFIN 2/8/2011 1:30:00 PM |