Legislature(1995 - 1996)

04/12/1996 08:20 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                         April 12, 1996                                        
                            8:20 A.M.                                          
                                                                               
  TAPE HFC 96-115, Side 1, #000 - end.                                         
  TAPE HFC 96-115, Side 2, #000 - end.                                         
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the  House Finance  Committee                 
  meeting to order at 8:20 a.m.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Mulder                          
  Representative Brown          Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly          Representative Therriault                      
  Representative Kohring                                                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative   Norman   Rokeberg;  Tom   Anderson,  Staff,                 
  Representative Martin; Harlan  Knudson, Executive  Director,                 
  Alaska  Hospital  and Nursing  Home Association;  Bob Labbe,                 
  Director, Division of Medical Assistance.                                    
  SUMMARY                                                                      
                                                                               
  HB 436    An Act  relating to  purchase and  sale of  mobile                 
            homes by mobile home dealers  or agents; to mobile                 
            home titles; and providing for an effective date.                  
                                                                               
            CSHB 436 (TRA) was reported  out of Committee with                 
            "no recommendation" and with a fiscal  impact note                 
            by  the   Department  of  Commerce   and  Economic                 
            Development, dated  4/2/96 and with  a zero fiscal                 
            note  by the  Department of  Public Safety,  dated                 
            4/2/96.                                                            
                                                                               
  HB 393    An Act relating to managed  care for recipients of                 
            medical assistance; and providing for an effective                 
            date.                                                              
                                                                               
            CSHB 393 (FIN) was reported  out of Committee with                 
            a "do  pass"  recommendation  and  with  a  fiscal                 
            impact note by  the Department of Health  & Social                 
            Services, 3/27/97.                                                 
                                                                               
  HB 528    An Act relating  to applications for  certificates                 
                                                                               
                                1                                              
                                                                               
                                                                               
            of need and licensing  of nursing homes;  amending                 
            the  standard of review  for certificates  of need                 
            for   health  care   facilities   in  the   state;                 
            establishing  a  moratorium  with  respect to  new                 
            applications by  prohibiting  the  issuance  of  a                 
            certificate  of need  or a license  for additional                 
            nursing home capacity  in the state until  July 1,                 
            1998; and providing for an effective date.                         
                                                                               
            HB  528   was  HELD   in  Committee   for  further                 
            consideration.                                                     
  HB 543    An  Act  establishing a  preference  when entering                 
            into state airport land leases.                                    
                                                                               
            HB 543 was rescheduled to another time.                            
  HOUSE BILL NO. 436                                                           
                                                                               
       "An Act relating  to purchase and sale  of mobile homes                 
       by  mobile  home  dealers  or  agents; to  mobile  home                 
       titles; and providing for an effective date."                           
                                                                               
  TOM ANDERSON, STAFF, REPRESENTATIVE MARTIN noted that HB 436                 
  was introduced  at the  request of  the Alaska  Manufactured                 
  Housing Association.  He noted that current statutes  do not                 
  provide for titling  of mobile homes.   The bill will  title                 
  mobile homes under the Division of Motor Vehicles.  He noted                 
  that mobile home dealers are not currently licensed or under                 
  regulations.  The  legislation would also place  mobile home                 
  dealers under the  purview of  the Division of  Occupational                 
  Licensing, Department of Commerce and Economic  Development.                 
  A bond of $50.0 thousand dollars would be required of mobile                 
  home  dealers.     Representative  Martin  added   that  the                 
  legislation    will    place   dealers    under   disclosure                 
  requirements.                                                                
                                                                               
  Representative Brown  questioned if  mobile homes  should be                 
  sold by  licensed real  estate agents.   She  asked how  the                 
  legislation will protect the  public.  Representative Martin                 
  noted the bonding requirements.                                              
                                                                               
  Representative Mulder  stressed the  need for  bonding.   He                 
  noted that  mobile homes represent  substantial investments.                 
  In  response   to  a   question  by   Representative  Brown,                 
  Representative Mulder  noted that  the Legislature  repealed                 
  previous statutes  regarding title  requirements for  mobile                 
  homes.  He  observed that problems  occurred as a result  of                 
  that action.                                                                 
                                                                               
  In  response  to  a question  by  Representative  Kelly, Mr.                 
  Anderson noted that banks and lending institutions require a                 
                                                                               
                                2                                              
                                                                               
                                                                               
  certificate  of title  for financing.   He  noted  that long                 
  after a cash sale the buyer's unit and a seller's collateral                 
  can be claimed by an unknown lien holder.                                    
                                                                               
  Representative Kelly asked if title companies only deal with                 
  real property.   Representative Mulder stressed  that mobile                 
  homes  are on wheels.   He noted that  the Division of Motor                 
  Vehicles has  requested that  the fee  schedule reflect  the                 
  cost of administration.                                                      
                                                                               
  Representative Brown  noted that  the change  from "may"  to                 
  "shall"  will require titles  to be issued.   She questioned                 
  the affect on current owners.                                                
                                                                               
  Representative Mulder  stressed that  titles will be  issued                 
  during the transference of ownership.   Owners will not have                 
  to get titles immediately.   He noted that the  Division has                 
  the ability to charge for titling.                                           
                                                                               
  Representative Martin  noted that approximately  124 dealers                 
  would want to be  licensed.  Mr. Anderson estimated  that 20                 
  to 30 titles will be issued a year.                                          
                                                                               
  Representative Brown  expressed concern that owners  will be                 
  required to  obtain titles.   Representative Mulder  pointed                 
  out that the alternative  is to require a $500  dollar title                 
  search.                                                                      
                                                                               
  Representative Parnell MOVED to report CSHB 436 (TRA) out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.   Representative Kohring OBJECTED.                 
  He asserted that the legislation will help big operators and                 
  hurt small operators.  He expressed concern with the bonding                 
  requirement.    He asked  for  evidence of  consumer concern                 
  regarding current practices.                                                 
                                                                               
  Representative Mulder  disclosed that  he is  a mobile  home                 
  owner and real estate agent.                                                 
                                                                               
  Mr. Anderson  noted that a $50.0 thousand  dollar bond would                 
  cost   approximately   $1.5   thousand   dollars   a   year.                 
  Representative  Kohring noted  that the  bonding requirement                 
  assumes   that  the   individual  has   the   proper  credit                 
  credentials.                                                                 
                                                                               
  A roll call  vote was taken on  the MOTION to move  CSHB 436                 
  (TRA) out of Committee.                                                      
                                                                               
  IN FAVOR: Brown,   Grussendorf,   Navarre,   Kelly,  Martin,                 
  Mulder,        Parnell, Therriault, Foster, Hanley                           
  OPPOSED:  Kohring                                                            
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  The MOTION PASSED (10-1).                                                    
                                                                               
  CSHB  436  (TRA)  was  reported out  of  Committee  with "no                 
  recommendation"  and  with  a  fiscal  impact  note  by  the                 
  Department  of  Commerce  and  Economic  Development,  dated                 
  4/2/96 and  with a  zero fiscal  note by  the Department  of                 
  Public Safety, dated 4/2/96.                                                 
  HOUSE BILL NO. 393                                                           
                                                                               
       "An  Act  relating to  managed  care for  recipients of                 
       medical  assistance;  and  providing for  an  effective                 
       date."                                                                  
                                                                               
  REPRESENTATIVE NORMAN ROKEBERG, sponsor of  HB 393, spoke in                 
  support of the legislation.  He noted that the bill asks the                 
  Department to draft legislation establishing a pilot program                 
  for  Medicaid  recipients  in  the  state  of  Alaska.    He                 
  emphasized  that  the  legislation will  expedite  and  give                 
  direction to the  implementation of managed care.   He noted                 
  that Medicaid is the second largest component in the State's                 
  budget after education.   He observed that  Medicaid funding                 
  has escalated.   Over the past  five years it has  increased                 
  annually  by 13.9  percent.   He observed  that Congress  is                 
  focused on  replacing Medicaid with  MediGrants.  MediGrants                 
  would be issued as block grants  on a per capita basis.   He                 
  emphasized the importance of planning for the implementation                 
  of national Medicaid  and welfare  legislation.  He  pointed                 
  out  that  94  percent  of  all  states  have  managed  care                 
  principals.  Alaska does not have any.                                       
                                                                               
  Representative Rokeberg noted that the Department of  Health                 
  & Social Services has awarded a contract to develop a report                 
  and plan for the development of a  managed care program.  He                 
  observed that the state of  Oregon expanded services through                 
  savings realized by  a managed care program.   He emphasized                 
  that nationally 30  percent of the population  is uninsured.                 
  He maintained that  managed care  will work in  Alaska.   He                 
  observed that there are examples of managed care programs in                 
  other  small areas.   He noted interest in  rural areas.  He                 
  asserted that  managed care is  coming.  He  maintained that                 
  the Legislature should  be involved  in the development  and                 
  implementation of this major state policy.                                   
                                                                               
  Representative  Rokeberg provided  members  with a  proposed                 
  committee substitute, Work  Draft 9-LS1451\K, dated  4/10/96                 
  (copy on file).  He  explained that the committee substitute                 
  would  clarify  the  steps  needed  to implement  the  pilot                 
  program.  "Competition" was also deleted.                                    
                                                                               
  Representative Kelly noted  that the Department of  Health &                 
  Social Services intends to implement the program mandated by                 
                                                                               
                                4                                              
                                                                               
                                                                               
  HB 393 in June, 1996.  Representative Rokeberg stressed that                 
  the  Department intends to  incrementally implement  many of                 
  the procedures that are part of managed care.  He noted  the                 
  lack  of debate  regarding  the issues  surrounding  managed                 
  care.  He stated that the legislation would mandate that the                 
  process be hastened  and that  the legislature be  involved.                 
  He emphasized the need to review statutes to assure that the                 
  State  is  capable  of  implementing  a large  managed  care                 
  system.                                                                      
                                                                               
  In  response   to  a  question   by  Representative   Brown,                 
  Representative Rokeberg reiterated that Alaska does not have                 
  any managed care models.  He envisioned the establishment of                 
  at least two  population groups.   He stated that the  pilot                 
  could be set  in an urban area  with a rural component.   He                 
  stressed that the group  should contain single mothers.   He                 
  noted that  the program will  take many years  to implement.                 
  The  pilot  program  will  probably  not  incorporate mental                 
  health and developmentally disabled concerns.                                
                                                                               
  Representative Rokeberg discussed  programs in Montana.   He                 
  noted  that information  systems  were  installed  to  track                 
  information regarding the program.                                           
                                                                               
  In  response   to  a  question   by  Representative   Brown,                 
  Representative Rokeberg  pointed out  that the  Medicaid fee                 
  schedule does  not  reimburse  physicians  for  one  hundred                 
  percent of their services.                                                   
                                                                               
  Representative  Brown  asked how  the  single mother  in the                 
  pilot program  would be  affected.   Representative Rokeberg                 
  noted that the  primary care case management  system (PPCCM)                 
  assigns patients a specific physician to manage their entire                 
  care.  The  physician will be  the patients "gatekeeper"  in                 
  the utilization  of the  plan.   They would  be the  primary                 
  provider in addition to managing the patient's health care.                  
                                                                               
  Representative Brown asked if  the gatekeeper/doctor will be                 
  able to decide without restrictions  what the patient needs.                 
  She asked if the legislation would provide that the Governor                 
  or Department  introduce draft legislation as a result of HB
  393.  Representative Rokeberg noted that the amendment would                 
  require that the Department work  through the Governor (copy                 
  on file).   Amendment 1  would also  delete "authorize"  and                 
  insert "provide for" on page 2, line 17.                                     
                                                                               
  HARLAN KNUDSON,  EXECUTIVE  DIRECTOR,  ALASKA  HOSPITAL  AND                 
  NURSING HOME ASSOCIATION testified in support of HB 393.  He                 
  stressed that the cost of health care must be contained.  He                 
  noted that the strength of managed  care is that it provides                 
  an  incentive  for  maintaining the  patient's  health.   He                 
  asserted  that  managed  care  can  work   in  Alaska.    He                 
                                                                               
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  emphasized that  the legislation  directs the Department  to                 
  work with the provider community.                                            
                                                                               
  Representative  Therriault  MOVED  to  adopt  Work  Draft 9-                 
  LS1451\K, dated 4/10/96.   There being NO OBJECTION, it  was                 
  so ordered.                                                                  
                                                                               
  Representative  Therriault  referred  to a  letter  from the                 
  Tanana  Chiefs Conference, dated 2/16/96 (copy on file).  He                 
  noted  that  the  letter   raises  questions  regarding  the                 
  participation of  the Indian  Health Service.   Mr.  Knudson                 
  emphasized that no one should be excluded.                                   
                                                                               
  Representative Parnell asked if there is a compelling reason                 
  to keep the findings section in HB 393.                                      
                                                                               
  BOB LABBE,  DIRECTOR, DIVISION OF MEDICAL  ASSISTANCE stated                 
  that the  findings section directs  the Department regarding                 
  the  implementation  of the  pilot.    He  stated  that  the                 
  information  is helpful.   He  emphasized the  need to  make                 
  Alaska's program specific to Alaska.                                         
                                                                               
  (Tape Change, HFC 96-115, Side 2)                                            
                                                                               
  Mr. Labbe stressed  that HB 393  fits with the  Department's                 
  plan.                                                                        
                                                                               
  Representative Rokeberg stated that the  intent of section 1                 
  is to provide further direction to the Department.  He noted                 
  that HB 393  mandates that  the Governor bring  back to  the                 
  Legislature draft legislation.  He observed that HB 393 will                 
  essentially sunset after January 1, 1997.                                    
                                                                               
  Mr. Labbe pointed out  that CSHB 393 (FIN) could be  read to                 
  imply that  the Department does  not have authority  to move                 
  forward on its current planning if HB 393 is enacted.   This                 
  could  inhibit the Department's  attempts to manage Medicaid                 
  expenditures.                                                                
                                                                               
  Representative Parnell MOVED  to adopt  Amendment 1.   There                 
  being NO OBJECTION, it was so ordered.                                       
                                                                               
  Representative Parnell MOVED to report CSHB 393 (FIN) out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying  fiscal note.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CSHB 393  (FIN) was  reported out  of Committee  with a  "do                 
  pass" recommendation and  with a fiscal  impact note by  the                 
  Department of Health & Social Services, 3/27/97.                             
  HOUSE BILL NO. 528                                                           
                                                                               
                                6                                              
                                                                               
                                                                               
       "An  Act relating to  applications for  certificates of                 
       need  and  licensing  of nursing  homes;  amending  the                 
       standard of review for certificates  of need for health                 
       care facilities in the state; establishing a moratorium                 
       with respect  to new  applications  by prohibiting  the                 
       issuance  of  a certificate  of need  or a  license for                 
       additional  nursing home  capacity in  the  state until                 
       July 1, 1998; and providing for an effective date."                     
                                                                               
  HARLAN KNUDSON,  EXECUTIVE  DIRECTOR,  ALASKA  HOSPITAL  AND                 
  NURSING HOME ASSOCIATION testified on  HB 528.  He  provided                 
  members with  recommendations for  modifications  to HB  528                 
  (Attachment 1).  He maintained that HB 528 is an opportunity                 
  to create a plan to meet Alaska's long term care needs.                      
                                                                               
  Mr. Knudson  reviewed Attachment 1.   He  requested that  in                 
  section 1, subsections (1) and (2)  be deleted.  He observed                 
  that there were  764 licensed nursing  home beds in  January                 
  1992.   He  stressed that the  State pays  by the bed.   The                 
  occupancy  of nursing home  beds was  84 percent  in January                 
  1992.  Medicaid accounted  for 70 percent of occupancy.   He                 
  pointed out that  the pioneer home in  Ketchikan contributes                 
  to  the low occupancy rates.   There was 758 beds in January                 
  1, 1996.   He disagreed  that there is  an overabundance  of                 
  nursing home beds.  He noted  that occupancy of nursing home                 
  beds in Anchorage  and Fairbanks  is above 90  percent.   He                 
  maintained that the  moratorium requires rural residents  to                 
  send their elderly to urban areas.  He stressed the cultural                 
  difference between rural and urban areas.                                    
                                                                               
  Mr.  Knudson requested  that  section  2  be  deleted.    He                 
  maintained  that section  2  takes  responsibility from  the                 
  legislature.  Section  2 allows the  Department of Health  &                 
  Social Services to establish state policy on the  funding of                 
  new construction or  new services  for health facilities  in                 
  Alaska.  He  asserted that the  Department can deny  nursing                 
  home beds to protect its Medicaid budget.                                    
                                                                               
  Representative Martin maintained  that the executive  branch                 
  has  the  responsibility for  establishing  policy for  many                 
  state programs.   Representative Kelly pointed out  that the                 
  executive  branch  establishes  regulations   based  on  the                 
  statutes.   He maintained  that the  legislature establishes                 
  policy.                                                                      
                                                                               
  Mr. Knudson stated  that providers  and state agencies  have                 
  the responsibility  to  identify  the  needs  and  recommend                 
  policy  to  the   legislature  and   implement  the   policy                 
  directives of the legislature.   He emphasized that agencies                 
  should not  establish were  funding should  be provided  and                 
  overall policy.                                                              
                                                                               
                                7                                              
                                                                               
                                                                               
  Mr. Knudson noted that the  Alaska Hospital and Nursing Home                 
  Associations supports a one year  moratorium on nursing home                 
  beds.  He emphasized that this is the second year of a three                 
  year moratorium.  He  pointed out that a  study on the  long                 
  term care needs of Alaska was  contracted by the Division of                 
  Senior Services in  June 1995.   He stressed that the  study                 
  will  be  released  soon.    He  stated  that  if  the  next                 
  Legislature does not  agree with the recommendations  of the                 
  study the moratorium could be extended.                                      
                                                                               
  Mr. Knudson recommended that section 4 be amended to include                 
  a nursing  home administrator  and that  "working group"  be                 
  changed to  "planning group".   He stated that  the planning                 
  group should  propose a  plan identifying needs,  priorities                 
  and funding sources.                                                         
                                                                               
  Representative   Mulder   noted   that  proposed   committee                 
  substitute, Work  Draft 9-LS1731\F,  dated 4/11/96  reflects                 
  Mr. Knudson's request for deletion of  section 1 (1) and (2)                 
  (copy on file).  He added that the work draft provides a one                 
  year moratorium.                                                             
                                                                               
  HB 528 was HELD in Committee for further consideration.                      
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:00 a.m.                                          
                                                                               
                                                                               
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