Legislature(2015 - 2016)HOUSE FINANCE 519

03/21/2016 01:30 PM FINANCE

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Audio Topic
01:31:56 PM Start
01:32:44 PM SB74
03:32:11 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 74 MEDICAID REFORM;TELEMEDICINE;DRUG DATABAS TELECONFERENCED
Heard & Held
Introduction
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 21, 2016                                                                                            
                         1:31 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:31:56 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Thompson called the House Finance Committee                                                                            
meeting to order at 1:31 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Dan Saddler, Vice-Chair                                                                                          
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative Lynn Gattis                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Lance Pruitt                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Pet   Kelly,  Sponsor;  Heather   Shaddock,  Staff,                                                                    
Senator Pete  Kelly; Stacie Kraly, Chief  Assistant Attorney                                                                    
General,  Section Supervisor  Human Services,  Department of                                                                    
Law;   Representative  Liz   Vasquez,  Representative   Lora                                                                    
Reinbold.                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 74(FIN) am                                                                                                                 
       MEDICAID REFORM; TELEMEDICINE; DRUG DATABASE                                                                             
                                                                                                                                
          CSSB 74(FIN) am was HEARD and HELD in committee                                                                       
          for further consideration.                                                                                            
                                                                                                                                
Co-Chair Thompson  planned to have the  committee substitute                                                                    
ready  and  to   move  the  bill  from   the  House  Finance                                                                    
Committee.  His office  would be  providing  members with  a                                                                    
notebook  of presentations  and documents  relating to  each                                                                    
day's topic. He invited testifiers to the table.                                                                                
                                                                                                                                
Representative Kawasaki asked how questions would be                                                                            
handled from committee members.                                                                                                 
                                                                                                                                
Co-Chair Thompson indicated for members to hold their                                                                           
questions until the end.                                                                                                        
                                                                                                                                
1:32:44 PM                                                                                                                    
                                                                                                                                
CS FOR SENATE BILL NO. 74(FIN) am                                                                                             
                                                                                                                                
     "An   Act  relating   to   diagnosis,  treatment,   and                                                                    
     prescription  of drugs  without a  physical examination                                                                    
     by a  physician; relating to  the delivery  of services                                                                    
     by  a  licensed  professional counselor,  marriage  and                                                                    
     family    therapist,     psychologist,    psychological                                                                    
     associate, and  social worker by audio,  video, or data                                                                    
     communications;  relating to  the duties  of the  State                                                                    
     Medical  Board;  relating  to limitations  of  actions;                                                                    
     establishing the Alaska  Medical Assistance False Claim                                                                    
     and  Reporting  Act;  relating  to  medical  assistance                                                                    
     programs administered  by the Department of  Health and                                                                    
     Social Services;  relating to the  controlled substance                                                                    
     prescription database;  relating to  the duties  of the                                                                    
     Board  of  Pharmacy;  relating to  the  duties  of  the                                                                    
     Department   of  Commerce,   Community,  and   Economic                                                                    
     Development;   relating  to   accounting  for   program                                                                    
     receipts; relating  to public record status  of records                                                                    
     related to  the Alaska  Medical Assistance  False Claim                                                                    
     and   Reporting   Act;  establishing   a   telemedicine                                                                    
     business registry; relating  to competitive bidding for                                                                    
     medical assistance  products and services;  relating to                                                                    
     verification  of  eligibility   for  public  assistance                                                                    
     programs administered  by the Department of  Health and                                                                    
     Social  Services; relating  to annual  audits of  state                                                                    
     medical  assistance  providers; relating  to  reporting                                                                    
     overpayments    of    medical   assistance    payments;                                                                    
     establishing  authority to  assess civil  penalties for                                                                    
     violations of medical  assistance program requirements;                                                                    
     relating  to seizure  and  forfeiture  of property  for                                                                    
     medical  assistance fraud;  relating to  the duties  of                                                                    
     the   Department  of   Health   and  Social   Services;                                                                    
     establishing    medical     assistance    demonstration                                                                    
     projects;  relating  to   Alaska  Pioneers'  Homes  and                                                                    
     Alaska Veterans'  Homes; relating to the  duties of the                                                                    
     Department  of Administration;  relating to  the Alaska                                                                    
     Mental Health Trust  Authority; relating to feasibility                                                                    
     studies for the provision  of specified state services;                                                                    
     amending Rules  4, 5, 7,  12, 24,  26, 27, 41,  77, 79,                                                                    
     82, and 89,  Alaska Rules of Civil  Procedure, and Rule                                                                    
     37, Alaska  Rules of Criminal Procedure;  and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
1:32:44 PM                                                                                                                    
                                                                                                                                
SENATOR  PETE  KELLY,  SPONSOR,   introduced  the  bill  and                                                                    
indicated he would be leaving  the meeting early. There were                                                                    
several  people available  to  provide detailed  information                                                                    
about the bill.                                                                                                                 
                                                                                                                                
Co-Chair Thompson  acknowledged Representative Munoz  at the                                                                    
table.                                                                                                                          
                                                                                                                                
Representative  Kelly  spoke  of   questions  he  had  asked                                                                    
himself  as  the  co-chair of  finance  when  preparing  the                                                                    
budget. One  of his questions had  to do with the  growth of                                                                    
Medicaid.  He  believed  the program  would  eat  the  state                                                                    
budget  without making  some changes.  He  conveyed a  story                                                                    
from  the  90s  about  Medicaid  reform.  At  the  time  the                                                                    
legislature was dealing with an  increase of $130 million in                                                                    
Medicaid costs. Many people  had recommended doing something                                                                    
about the cost because of  its growth. Other Medicaid reform                                                                    
bills had been put forward  that were different than the one                                                                    
before the committee. He claimed  the difference was that in                                                                    
the  past   the  attempt  to  reform   Medicaid  equated  to                                                                    
restricting access rather than  reforming the system. Senate                                                                    
Bill 74  attempted to address  the system itself  as opposed                                                                    
to limiting  access. He suggested that  improving the system                                                                    
might  include  looking at  where  best  practices were  not                                                                    
being   used,  finding   out  about   the  availability   of                                                                    
technology  to assist  the system,  and reviewing  available                                                                    
models to operate more intelligently.  He reviewed a list of                                                                    
other  items  for  consideration  such  as  telemedicine,  a                                                                    
healthcare authority,  coordinated care, the use  of generic                                                                    
drugs, travel  efficiencies and coordination,  and emergency                                                                    
room misuse. He mentioned that  there were provisions in the                                                                    
bill  for behavioral  health, which  he believed  had become                                                                    
out of control.  He thought it was an  interesting time when                                                                    
the  state  administration  and the  majority  were  working                                                                    
together. He  thanked the administration  for the  amount of                                                                    
work that it had contributed.  Most of the items were agreed                                                                    
upon by  the Senate and  by the administration. He  would be                                                                    
turning the meeting over to his staff.                                                                                          
                                                                                                                                
Co-Chair  Thompson  thanked  the   Senator  for  making  his                                                                    
presentation.  He announced  that Representative  Edgmon and                                                                    
Representative Gara  had joined  the meeting.  All committee                                                                    
members were  present. He reminded members  that there would                                                                    
be multiple meetings  to address the many  topics within the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Vice-Chair Saddler asked about  areas the Senator considered                                                                    
but did not include in the bill.                                                                                                
                                                                                                                                
Representative  Kelly  would  differ  to  Ms.  Shaddock.  He                                                                    
relayed that he had to depart from the meeting.                                                                                 
                                                                                                                                
Co-Chair Neuman  asked Ms.  Shaddock to  differentiate which                                                                    
portions were  added by the  administration and  which parts                                                                    
were  originally  part  of  the  Senate's  discussions.  Ms.                                                                    
Shaddock replied that she would be happy to do so.                                                                              
                                                                                                                                
Co-Chair Thompson  asked members  to limit  their questions.                                                                    
There would be multiple  meetings and a committee substitute                                                                    
would be issued on April 4, 2016.                                                                                               
                                                                                                                                
Vice-Chair Saddler withdrew his question.                                                                                       
                                                                                                                                
HEATHER SHADDOCK, STAFF, SENATOR  PETE KELLY, responded that                                                                    
she would  be happy to answer  Vice-Chair Saddler's question                                                                    
at the end of the  meeting. She would begin the walk-through                                                                    
of the sectional.                                                                                                               
                                                                                                                                
1:41:28 PM                                                                                                                    
                                                                                                                                
Ms.  Shaddock  reported  that  Sections  1  through  7  were                                                                    
related to  telehealth and originated in  SB 98 [Legislation                                                                    
introduced  in  2015  - Short  Title:  Prescription  without                                                                    
Phys. Exam].  She explained that  when SB 98 came  to Senate                                                                    
Finance  the provisions  were incorporated  into SB  74. She                                                                    
mentioned  that some  of the  sections opened  up telehealth                                                                    
for the use of behavioral health:                                                                                               
                                                                                                                                
     Sections 1 - 7 - Telehealth                                                                                                
     Section  1  -   Telehealth  for  Licensed  Professional                                                                    
     Counselors (page 2, line 15)                                                                                               
                                                                                                                                
     Opens up  behavioral health access to  more individuals                                                                    
     by  broadening  the  provider pool.  Each  board  still                                                                    
     maintains  licensing of  their members  - whether  they                                                                    
     are using telehealth or not.                                                                                               
                                                                                                                                
Ms.  Shaddock spoke  for Fairbanks  that there  was a  great                                                                    
shortage   of   providers    including   behavioral   health                                                                    
practitioners.  It was  difficult  to  get psychiatrists  to                                                                    
move and  live in  Fairbanks, Alaska. Opening  up telehealth                                                                    
to behavioral  health providers was  one way to  address the                                                                    
state's shortages.                                                                                                              
                                                                                                                                
Ms. Shaddock continued:                                                                                                         
                                                                                                                                
     Section  2   -  Telehealth   for  Marital   and  Family                                                                    
     Therapists (page 3, line 5)                                                                                                
                                                                                                                                
     Section 3 - Telehealth for  Physicians (page 3, line 21                                                                    
     through page 4, line 9)                                                                                                    
     ·  Adds to the duties  of the State Medical  Board that                                                                    
        they   will   adopt   regulations   that   establish                                                                    
        guidelines for  a  physicians  who  is  rendering  a                                                                    
        diagnosis,  providing  treatment,   or  prescribing,                                                                    
        dispensing, or administering a  prescription drug to                                                                    
        a person without  conducting a physical  exam. These                                                                    
        guidelines  must  include  a  nationally  recognized                                                                    
        model policy for standards of care  of a patient who                                                                    
      is at a different location than the physician.                                                                            
                                                                                                                                
     Section 4  - Telehealth for Physicians  / State Medical                                                                    
     Board (page 4, lines 10 - 29)                                                                                              
     ·  Prohibits the  State  Medical  Board  from  imposing                                                                    
        disciplinary sanctions on a  physician for rendering                                                                    
        a diagnosis,  providing  treatment, or  prescribing,                                                                    
        dispensing, or  administering  a  prescription  drug                                                                    
        that is not  a controlled  substance without  an in-                                                                    
        person physical  exam, if  the physician  or another                                                                    
        licensed health care provider or a  physician in the                                                                    
        physician's group practice is  available for follow-                                                                    
        up care, and  the physician follows  patient consent                                                                    
        protocols  for  sending   medical  records   of  the                                                                    
        encounter to the person's primary  care provider and                                                                    
        removes  the  requirement  that   the  physician  is                                                                    
        located in the state.                                                                                                   
                                                                                                                                
Ms. Shaddock  added that  telehealth was  a tool  that would                                                                    
open up the provider pool.  It was an arbitrary barrier. The                                                                    
physicians would  continue to be  licensed and  regulated by                                                                    
the  State Medical  Board. She  relayed that  it could  also                                                                    
drive down the overall costs  of medical care in Alaska. The                                                                    
state had  the highest cost of  care in the country.  It was                                                                    
important to do everything possible to lower costs.                                                                             
                                                                                                                                
Ms. Shaddock continued:                                                                                                         
                                                                                                                                
     Section 5 - Telehealth for Physicians - Controlled                                                                         
     substances (page 4, line 30 - page 5, line 11)                                                                             
     · Amends by allowing a controlled substance or                                                                             
        botulinum  toxin  to  be   prescribed  dispended  or                                                                    
        administered  via   telemedicine  only   if  another                                                                    
        appropriate  licensed   health   care  provider   is                                                                    
       physically present with the patient to assist                                                                            
                                                                                                                                
     · Subsection d sets out that an abortion inducing drug                                                                     
        can  only  be   prescribed  in  according   with  AS                                                                    
        18.16.010 and it  sets out  extra patient  safety by                                                                    
        not allowing a physician to  prescribe, dispense, or                                                                    
        administer a  prescription drug  in  response to  an                                                                    
        Internet questionnaire or electronic mail message to                                                                    
        a person  with whom  the physician  does not  have a                                                                    
        prior physician-patient relationship                                                                                    
                                                                                                                                
Ms. Shaddock remarked that with  some controlled drugs added                                                                    
sideboards  were needed.  She explained  that the  state did                                                                    
not want  doctors from other  countries or  states operating                                                                    
in Alaska which was not the intent of the bill.                                                                                 
                                                                                                                                
Ms. Shaddock furthered:                                                                                                         
                                                                                                                                
     Section   6    -   Telehealth   for    Psychologist   &                                                                    
    Psychological Associate Examiners (page 5, line 12)                                                                         
                                                                                                                                
     Section 7 - Telehealth for Social Workers (page 5,                                                                         
     line 28 through page 6, line 12)                                                                                           
                                                                                                                                
Ms.  Shaddock  turned  to  Ms. Kraly  to  review  the  fraud                                                                    
provisions of the bill.                                                                                                         
                                                                                                                                
1:46:03 PM                                                                                                                    
                                                                                                                                
STACIE  KRALY,  CHIEF  ASSISTANT ATTORNEY  GENERAL,  SECTION                                                                    
SUPERVISOR  HUMAN  SERVICES,  DEPARTMENT OF  LAW,  would  be                                                                    
speaking  to Sections  8  through 12  which  related to  the                                                                    
creation  of a  new  cause  of action  within  the State  of                                                                    
Alaska. The  name of  the new cause  was the  Alaska Medical                                                                    
Assistance  False   Claims  Reporting  Act   (AMAFCRA).  She                                                                    
reviewed that Section 8 and  Section 9 dealt with statute of                                                                    
limitations provisions related to the new cause of action:                                                                      
                                                                                                                                
     Section 8 - Fraud Statute of Limitations                                                                                   
     Section 9 - Fraud time exemption                                                                                           
                                                                                                                                
Ms. Kraly  explained that Section  10 contained the  bulk of                                                                    
the provisions:                                                                                                                 
                                                                                                                                
     Section 10 - Alaska Medical Assistance False Claim and                                                                     
     Reporting Act                                                                                                              
                                                                                                                                
Ms. Kraly relayed  that the provision created  a state false                                                                    
claims  act  which mirrored  the  federal  False Claims  Act                                                                    
(FCA), a statute  that had been a part of  the United States                                                                    
code since right  after the Civil War. The  False Claims Act                                                                    
created a  mechanism whereby an individual  might pursue and                                                                    
identify fraud and waste  within government programs. States                                                                    
were not  required to have  a FCA,  although about 18  or 19                                                                    
states had  them relating to  Medicaid programs.  Section 10                                                                    
was  attempting to  create one  for Alaska.  She highlighted                                                                    
that the  provision would  allow for  an individual  to come                                                                    
forward  and  identify  fraud  or  abuse.  Anyone  filing  a                                                                    
lawsuit  had   to  have   it  filed   by  seal   and  served                                                                    
contemporaneously  on  the  Department  of  Law  (DOL).  The                                                                    
department would then have 60  days to investigate the merit                                                                    
of any claims. At the end of  60 days DOL had 3 options. The                                                                    
first was to  move to dismiss the case because  the case was                                                                    
found that  the claim  lacked merit.  The Department  of Law                                                                    
could take over the  litigation. Lastly the department could                                                                    
differ to  the individual who  had brought the  case forward                                                                    
to pursue  the claim on behalf  of the State of  Alaska. The                                                                    
premise of a FCA was  when the individuals participated they                                                                    
received  a   portion  of  the  recoveries.   An  individual                                                                    
bringing a claim forward would  be entitled to 35 percent of                                                                    
the recovery. If the state took  the claim but did not allow                                                                    
the  individual to  bring it  forward  the individual  would                                                                    
still receive a recovery of 15  percent to 25 percent of the                                                                    
total  award. If  the attorney  general deferred  they would                                                                    
receive a  greater recover  of 25 percent  to 30  percent of                                                                    
the award. Another  provision of the FCA was  that there was                                                                    
a  whistle  blower  protection  within  the  framework  that                                                                    
allowed an individual  working for a provider to  be able to                                                                    
report the  fraud or  abuse while  being assured  they would                                                                    
not be terminated from their employment.                                                                                        
                                                                                                                                
Ms. Kraly  spoke about  concerns from  the other  body about                                                                    
frivolous lawsuits  associated with lack of  merit claims by                                                                    
individuals. She  believed that the 3  provisions along with                                                                    
the ability of  the attorney general to  dismiss such claims                                                                    
was   a   robust    protection   against   trivial   claims.                                                                    
Additionally, the  other body decided to  sunset the whistle                                                                    
blower provision  within 3 years.  Should the bill  pass the                                                                    
department would  come back in  3 years to  present evidence                                                                    
to the legislature about whether  the claims were successful                                                                    
or frivolous  and whether the  provision should  go forward.                                                                    
Her  final  point  was  that   upon  the  bill  passing  and                                                                    
receiving  approval from  the federal  government, if  there                                                                    
was  a certified  FCA  then  the State  of  Alaska would  be                                                                    
entitled to an enhanced match  on the recoveries - between a                                                                    
5  percent  and  10  percent swing.  It  was  a  significant                                                                    
incentive to the  state to have a FCA. The  provision was in                                                                    
the hands of the Office  of the Inspector General for review                                                                    
to determine  if they would  certify it. The  department was                                                                    
comfortable  that  the  state  would  receive  certification                                                                    
because the provision followed federal guidelines.                                                                              
                                                                                                                                
Ms.  Kraly indicated  that the  Senate  identified a  sunset                                                                    
provision to  address the concerns  of some  providers about                                                                    
frivolous  lawsuits. Section  11  and  Section 12  contained                                                                    
related  provisions. The  two provisions  related to  the 60                                                                    
day investigation she had mentioned earlier.                                                                                    
                                                                                                                                
     Section 11 - Subpoenas after sunset                                                                                        
     Section 12 - Whistleblower after sunset                                                                                    
                                                                                                                                
Ms.  Kraly  continued  to  explain  that  Legislative  Legal                                                                    
Services took the 2 sections  and continued them despite the                                                                    
repeal or sunset to allow  the sections to continue forward.                                                                    
It   would  allow   DOL  to   have   the  tools   available.                                                                    
Essentially,  they  were  technical fixes  relating  to  the                                                                    
sunset provision.                                                                                                               
                                                                                                                                
1:52:24 PM                                                                                                                    
                                                                                                                                
Ms. Shadduck indicated  Sections 8 through 12  came from the                                                                    
governor's  bill, SB  78 [Legislation  introduced in  2015 -                                                                    
Short Title:  Medical Assistance Coverage; Reform]  and were                                                                    
incorporated into the CS for SB  74. Sections 11 and 12 were                                                                    
added by the Senate Finance Committee.                                                                                          
                                                                                                                                
Ms.  Shaddock indicated  that Sections  13  through 19  were                                                                    
related to the Prescription  Drug Monitoring Program (PDMP).                                                                    
It  was added  through the  Senate subcommittee  on Medicaid                                                                    
reform  and  then  adopted  by  the  entire  Senate  Finance                                                                    
Committee.                                                                                                                      
                                                                                                                                
Ms. Shaddock continued:                                                                                                         
                                                                                                                                
     Section 13 - Schedule of Drugs (page 15, line 23)                                                                          
     · Amends the section by only requiring data collection                                                                     
        for prescribing, administering or dispensing II,                                                                        
        III, and IV federal controlled substances for the                                                                       
        controlled substance prescription database.                                                                             
                                                                                                                                
Ms.  Shaddock elaborated  that they  were  currently in  the                                                                    
state  schedule  and  the   federal  schedule.  Through  the                                                                    
subcommittee  process  it  was  discovered  that  the  state                                                                    
schedules were not  needed. They were typically  used by law                                                                    
enforcement  rather  than  being   used  by  prescribers  or                                                                    
dispensers  that   had  a  federal  DEA   [Drug  Enforcement                                                                    
Administration]  number. They  were using  just the  federal                                                                    
schedule.  In  order to  clean  up  the PDMP  database,  the                                                                    
schedule was  reduced to  federal schedule  II, III,  and IV                                                                    
drugs.                                                                                                                          
                                                                                                                                
     Section 14 - Weekly basis (page 16, line 1)                                                                                
     · Amends by only requiring data collection for                                                                             
        prescribing, administering  or  dispensing II,  III,                                                                    
        and  IV  federal   controlled  substances   for  the                                                                    
        controlled  substance   prescription  database   and                                                                    
        amends by requiring that the database  be updated on                                                                    
        at least a weekly basis.                                                                                                
                                                                                                                                
Ms.  Shaddock  provided  some  background  information.  The                                                                    
highest  number  was the  most  potent.  Federal schedule  I                                                                    
drugs  only   included  drugs  that  had   no  medical  use,                                                                    
including Marijuana.  Per the ballot initiative  there could                                                                    
not  be a  database on  Marijuana which  was the  reason for                                                                    
excluding it. Federal schedule II,  III, and IV drugs, would                                                                    
be collected and schedule V  drugs had a very low likelihood                                                                    
of addiction or  bad interactions and were  not necessary to                                                                    
include.                                                                                                                        
                                                                                                                                
Ms. Shaddock moved to the next section:                                                                                         
                                                                                                                                
     Section 14 - Weekly basis (page 16, line 1)                                                                                
                                                                                                                                
     Amends   by   only   requiring  data   collection   for                                                                    
     prescribing, administering  or dispensing II,  III, and                                                                    
     IV  federal controlled  substances  for the  controlled                                                                    
     substance   prescription   database   and   amends   by                                                                    
     requiring that  the database be  updated on at  least a                                                                    
     weekly basis.                                                                                                              
                                                                                                                                
Ms. Shaddock  added that currently the  database was updated                                                                    
on a monthly  basis. Alaska was the only  state that updated                                                                    
it infrequently.  All of the recommendations  in Sections 13                                                                    
through  19  came  from the  Controlled  Substance  Advisory                                                                    
Council. She noted  that there was a white paper  in each of                                                                    
the  members' packets.  There would  be a  committee meeting                                                                    
exploring the topic further.                                                                                                    
                                                                                                                                
Ms. Shaddock continued to Section 15:                                                                                           
                                                                                                                                
     Section 15 - Access  to database/delegated access, page                                                                    
     16, line 27 through page 18, line 16)                                                                                      
                                                                                                                                
     (3)  Amends to  authorize  a  licensed practitioner  to                                                                    
     delegate  database access  to  supervised employees  or                                                                    
     clinical staff;                                                                                                            
     (4)  Amends to  authorize a  registered pharmacists  to                                                                    
     delegate  database access  to  supervised employees  or                                                                    
     clinical staff;                                                                                                            
     (7) Adds a new section  to authorize database access to                                                                    
     the State of Alaska Medicaid Pharmacy Program;                                                                             
     (8) Adds a new section  to authorize database access to                                                                    
     the State  of Alaska  Medicaid Drug  Utilization Review                                                                    
     Committee for utilization  review of prescription drugs                                                                    
     provided to Medicaid recipients;                                                                                           
     (9) Adds a new section  to authorize database access to                                                                    
     the State of Alaska Medical Examiner;                                                                                      
     (10)  Adds a  new  section  to authorize  de-identified                                                                    
     data  access  to  the State  of  Alaska  Department  of                                                                    
     Health and  Social Services Division of  Public Health.                                                                    
     The Division of Public Health  would not need access to                                                                    
     identifiable data  to fulfill public  health objectives                                                                    
     regarding controlled  substances including prescription                                                                    
     opiates.                                                                                                                   
                                                                                                                                
Ms.   Shaddock  spoke   of  hearing   from  prescribers   or                                                                    
dispensers that  would be interested in  using the database,                                                                    
but felt  it was  timely. They suggested  delegating access.                                                                    
She noted that  the state had a Medicaid  pharmacist who did                                                                    
not  have access  to the  database. She  mentioned that  the                                                                    
section  also authorized  database  access to  the State  of                                                                    
Alaska  Medical   Examiner  who  was  required   to  perform                                                                    
autopsies on suspicious  deaths. It would be a  tool to help                                                                    
shed light  as to  whether someone was  on opioids  or other                                                                    
controlled  substances potentially  leading to  a suspicious                                                                    
death. She  explained that access  provided to  the Division                                                                    
of  Public Health  would be  limited  such that  individuals                                                                    
would not  be able to  be identified. The provisions  in the                                                                    
bill  having   to  do  with   the  division   having  access                                                                    
specifically stated  that it  could only  be collected  on a                                                                    
regional  basis. The  commissioner had  assured her  that it                                                                    
would  include  looking at  an  entire  region such  as  the                                                                    
entire Bethel  Region or the  entire Nome  Region consistent                                                                    
with what the division was already doing.                                                                                       
                                                                                                                                
1:56:43 PM                                                                                                                    
                                                                                                                                
Representative Gattis asked  for clarification about Section                                                                    
5, number 8. She heard  the presenter use the term "Medicaid                                                                    
assistance", however, the  bill stated "medical assistance".                                                                    
Ms. Shaddock responded that in  the statutes it was referred                                                                    
to as a recipient of  medical assistance, which was known as                                                                    
the Medicaid program.                                                                                                           
                                                                                                                                
Representative   Gattis  thanked   Ms.   Shaddock  for   the                                                                    
clarification.                                                                                                                  
                                                                                                                                
Ms. Shadduck continued with Section 16:                                                                                         
                                                                                                                                
     Section 16 - Requires all to use PDMP (page 18, line                                                                       
     17)                                                                                                                        
     · Amends to require all prescribers and all                                                                                
        pharmacists  to   register   with   the   controlled                                                                    
        substance prescription database. Failure to register                                                                    
        is grounds for the board to take disciplinary action                                                                    
        against the license or registration  of the pharmacy                                                                    
        or pharmacist.                                                                                                          
                                                                                                                                
Ms. Shaddock discussed Section 17:                                                                                              
                                                                                                                                
     Section 17 - Civil Immunity (page 18, line 23)                                                                             
     · Immunity for using the PDMP remains even with the                                                                        
        change from optional to mandatory.                                                                                      
     ·  Removes the language from the statute  that kept use                                                                    
        of the PDMP optional                                                                                                    
                                                                                                                                
Ms. Shaddock moved to Section 18:                                                                                               
                                                                                                                                
     Section  18  -  Board  regulations/review  PDMP  before                                                                    
     prescribing (page 19, line 1)                                                                                              
     ·  Amends to  require the  Board of  Pharmacy to  adopt                                                                    
        regulations to:                                                                                                         
        (3) set a procedure and time frame for registration;                                                                    
        (4) require  prescribers and  pharmacists to  review                                                                    
        the controlled substance prescription  database when                                                                    
        before prescribing,  administering  or dispensing  a                                                                    
        federal II,  III  or IV  controlled  substance to  a                                                                    
        patient and allows for an exemption for:                                                                                
          1) in an inpatient setting                                                                                            
          2) at the scene of an emergency or in an                                                                              
            ambulance                                                                                                           
          3)        in       an        emergency       room,                                                                    
          4) immediately before, during, or within the                                                                          
          first 24 hours of surgery.                                                                                            
                                                                                                                                
                                                                                                                                
Ms.  Shadduck  relayed  that  she  had  heard  feedback  and                                                                    
testimony  from some  emergency room  doctors who  indicated                                                                    
there would be times when they  would not be able to look up                                                                    
a patient  before prescribing or dispensing.  For example if                                                                    
someone walked  into an emergency department  suffering with                                                                    
a gunshot  wound doctors  would need to  be able  to respond                                                                    
immediately  and prescribe  pain  medication. The  provision                                                                    
did not inhibit best practices.                                                                                                 
                                                                                                                                
Ms. Shadduck referred to Section 19:                                                                                            
                                                                                                                                
     Section 19 - New subsections  (page 19, line 22 through                                                                    
     page 20, line 4) - Adding new subsections to:                                                                              
                                                                                                                                
     (o) Require  prescribers and pharmacists to  review the                                                                    
     PDMP database when prescribing  or dispensing a federal                                                                    
     II, III or IV controlled substance to a patient.                                                                           
     (p) Require notification to  boards when a practitioner                                                                    
     registers with the database.                                                                                               
     (q)  Authorize   the  Board  of  Pharmacy   to  forward                                                                    
     unsolicited    notifications    to   prescribers    and                                                                    
     dispensers of  database information about  patients who                                                                    
     may  be  obtaining controlled  substances  inconsistent                                                                    
     with generally recognized standards of care.                                                                               
     (r) Collect dispensing data and update the PDMP                                                                            
     database on at least a weekly basis.                                                                                       
                                                                                                                                
2:00:04 PM                                                                                                                    
                                                                                                                                
Ms. Kraly explained  that Section 20 and  Section 21 related                                                                    
to  the  AMAFCRA. Section  20  was  a designation  that  the                                                                    
monetary recoveries  received under  the FCA would  be added                                                                    
to  AS 37.05.146c,  a designated  receipt fund  for Medicaid                                                                    
money. Due to  the federal match, the money did  not go into                                                                    
the GF but into a dedicated fund.                                                                                               
                                                                                                                                
     Section 20 - Program Receipts                                                                                              
                                                                                                                                
Ms. Kraly advanced to Section 21:                                                                                               
                                                                                                                                
     Section 21 - Medicaid False claims not public records                                                                      
                                                                                                                                
Ms. Kraly explained that Section  21 was an amendment to the                                                                    
Alaska  Public Records  Act. It  provided protection  of the                                                                    
information that  was provided  and served under  seal while                                                                    
DOL  was  reviewing  the  merits  of a  claim  to  keep  the                                                                    
information  from being  subject  to a  public records  act.                                                                    
Once a lawsuit  was filed or a claim was  brought forward in                                                                    
court the protections would be  lost. The actual information                                                                    
would be  limited to  a non-disclosure for  a period  of the                                                                    
investigation.                                                                                                                  
                                                                                                                                
Ms. Shadduck continued to Section 22:                                                                                           
                                                                                                                                
     Section 22 - Telemedicine Business Registry (page 20,                                                                      
     line 11)                                                                                                                   
     · Establishes within the Department of Commerce,                                                                           
        Community, and Economic Development a telemedicine                                                                      
        business   registry    of   businesses    performing                                                                    
        telemedicine services in the state.                                                                                     
                                                                                                                                
Ms. Shaddock  reported that  the registry  was added  by the                                                                    
Senate  Labor  and  Commerce Committee.  The  provision  was                                                                    
added  after  some feedback  from  doctors  and the  Medical                                                                    
Association  to  make sure  the  state  knew who  was  doing                                                                    
business in  the state.  It offered  comfort that,  if there                                                                    
was a telemedicine  provider who was a bad  actor, the state                                                                    
could contact their company to report the doctor.                                                                               
                                                                                                                                
Ms. Shaddock continued to Section 23:                                                                                           
                                                                                                                                
    Section 23 - Competitive bidding (page 20, line 26)                                                                         
     · Allows the Department of Health and Social Services                                                                      
        to enter  into a  contract  through the  competitive                                                                    
        bidding process under the State Procurement Code for                                                                    
        durable  medical   equipment  or   specific  medical                                                                    
       services in the Medicaid program like travel.                                                                            
                                                                                                                                
Ms.  Shaddock  reported that  the  section  was an  original                                                                    
section to SB  74. It was added in the  Senate State Affairs                                                                    
Committee.                                                                                                                      
                                                                                                                                
Ms. Shaddock moved to Section 24:                                                                                               
                                                                                                                                
     Section 24 - Computerized edibility verification                                                                           
     system                                                                                                                     
     · Subsection (a) directs the department to establish a                                                                     
        computerized income, asset, and identity eligibility                                                                    
        verification system  for the  purposed of  verifying                                                                    
        eligibility,  eliminating   duplication  of   public                                                                    
        assistance payments, and  deterring waste  and fraud                                                                    
        in public assistance programs. This program would be                                                                    
        separate from AIRES                                                                                                     
     · Subsection (b) directs the department to enter into                                                                      
        a competitively  bid  contract  with  a  third-party                                                                    
        vendor for the eligibility  verification system. The                                                                    
        department may  also  contract  with  a  third-party                                                                    
        vendor to provide information  to facilitate reviews                                                                    
        of   recipient   eligibility   conducted    by   the                                                                    
        department.                                                                                                             
                                                                                                                                
        · Subsection (c) requires the  annual savings to the                                                                    
          state resulting from the use of the system to                                                                         
          exceed the cost of implementing the system                                                                            
        · Subsection  (d)  requires  that  the  contract  be                                                                    
          awarded  to  a vendor  that  is  not awarding  the                                                                    
          contract   for  the   entire  eligibility   system                                                                    
          (currently AIRES) in order to  avoid a conflict of                                                                    
          interest                                                                                                              
                                                                                                                                
Ms. Shaddock relayed that the section  was part of SB 74 and                                                                    
was added in  Senate State Affairs then was  expanded on and                                                                    
improved  in  the  Senate  Finance   Committee.  It  was  an                                                                    
enhanced  computerized eligibility  verification system.  It                                                                    
was  a  system that  would  complement  the state's  current                                                                    
eligibility  system, AIRES,  which  was in  the Division  of                                                                    
Public  Assistance. The  system actually  scanned more  than                                                                    
the current eligibility system.  She noted that other states                                                                    
had  been  able  to  crack  down on  people  that  were  not                                                                    
eligible.                                                                                                                       
                                                                                                                                
2:04:37 PM                                                                                                                    
                                                                                                                                
Ms.  Kraly explained  that Section  25  amended the  current                                                                    
Alaska  statute, AS.47.05.200,  required  the department  to                                                                    
engage  in not  less than  75  audits per  year of  enrolled                                                                    
providers.  The amendment  to the  statute  was designed  to                                                                    
reduce that number from 75  to 50. The reason the department                                                                    
was seeking the  reduction was that at the  time the statute                                                                    
went into effect there were  not many audits being conducted                                                                    
by  Medicaid   providers.  Since  then  there   had  been  a                                                                    
proliferation of  audits by both the  federal government and                                                                    
private  insurance companies.  Providers had  several audits                                                                    
and requirements.  The department  felt the number  could be                                                                    
reduced  to  50.  The department  worked  with  the  federal                                                                    
government with  their audits to  avoid duplication  and the                                                                    
state gained  the benefit of the  federal government's audit                                                                    
findings vice-versa.  The idea was  to reduce the  burden on                                                                    
providers without losing the benefit of the reviews.                                                                            
                                                                                                                                
Ms. Kraly moved to Section 26:                                                                                                  
                                                                                                                                
    Section 26 - Interest and Penalties on overpayments                                                                         
                                                                                                                                
Ms. Kraly  mentioned that Section  26 also came from  SB 78.                                                                    
It was  an amendment to  the same statutory  provision which                                                                    
asked  the legislature  for the  ability to  assess interest                                                                    
and  penalties on  identified and  established overpayments.                                                                    
One  of the  things discovered  in the  other body  was that                                                                    
originally the amendment indicated  that the overpayment and                                                                    
interest and penalties would accrue  at the moment the final                                                                    
audit was issued.  The provision was amended  in the current                                                                    
version of the  bill to allow for interest  and penalties to                                                                    
begin  accruing  at  the  point  that  the  audit  would  be                                                                    
appealed.  If  it  was  not  appealed,  then  penalties  and                                                                    
interest would  accrue on that  date. If appealed  after the                                                                    
completion of  the administrative  hearing where  they might                                                                    
be challenging  the overpayment findings. The  imposition of                                                                    
interest and  penalties was akin  to what would happen  in a                                                                    
Superior Court  litigation. If  someone was  challenging the                                                                    
overpayments,  they would  not  be subject  to interest  and                                                                    
penalties. However,  once they challenged and  had lost then                                                                    
the penalties would begin accruing.                                                                                             
                                                                                                                                
Ms.  Kraly   explained  Section   27  which   would  require                                                                    
providers to  self-audit their claims. Providers  were being                                                                    
asked  to identify  a statistically  valid sample  of claims                                                                    
and  to  audit  those claims.  Secondarily,  providers  were                                                                    
being  asked to  conduct self-audits  on a  bi-annual basis.                                                                    
However, providers  would not be  required to  conduct self-                                                                    
audits  in the  same years  they were  being audited  by the                                                                    
state or  the federal  government. The department  felt that                                                                    
providers  should be  engaging  in due  diligence when  they                                                                    
were  not being  audited. Another  provision of  the section                                                                    
was  that   once  a  provider  identified   an  overpayment,                                                                    
reported  it, and  arranged a  payment  plan the  department                                                                    
would  not  assess  penalties  and  interest  on  the  self-                                                                    
identified overpayment.                                                                                                         
                                                                                                                                
Ms. Kraly continued  with a review of  Section 28 concerning                                                                    
civil penalties and seizure of  property. She explained that                                                                    
the  new  section  provided the  Department  of  Health  and                                                                    
Social  Services (DHSS)  another  tool in  the  tool box  in                                                                    
dealing  with  program  integrity and  provider  compliance.                                                                    
Under  the  current  regulatory scheme  the  department  had                                                                    
penalties  ranging  from  termination from  the  program  to                                                                    
provider  education.  There  was  really  no  middle  ground                                                                    
within the sanctions. The department  would like to have the                                                                    
authority  to   impose  fines  for   different  sanctionable                                                                    
offenses  which  Section  28  would  allow  as  a  means  to                                                                    
maintain program integrity and  to allow providers to remain                                                                    
open.                                                                                                                           
                                                                                                                                
2:09:46 PM                                                                                                                    
                                                                                                                                
Representative   Gara  asked   if   the  legislature   could                                                                    
constitutionally  give the  executive  branch  the power  to                                                                    
establish  penalties   in  a  bill.  He   reported  that  by                                                                    
regulation  they  would  be  established  between  $100  and                                                                    
$25,000.   He  had   never  seen   a  provision   where  the                                                                    
legislature  had  given that  power  away  to the  executive                                                                    
branch.                                                                                                                         
                                                                                                                                
Ms. Kraly responded that was  exactly why the department was                                                                    
asking for the provision  because absent the delegation from                                                                    
the legislature  to the department  to impose the  fines and                                                                    
penalties under  the sanction provisions the  department did                                                                    
not believe it  had the authority to do so.  In light of the                                                                    
fact that under the administrative  code there was a list of                                                                    
more than 60 different  sanctions that asked the legislature                                                                    
to walk through  and identify the fine.  The department felt                                                                    
that it  could do it  through regulation and provide  a very                                                                    
nominal  fine.  The   legislature  previously  provided  the                                                                    
ability for  the executive branch  to impose fines  in other                                                                    
regulatory arenas.                                                                                                              
                                                                                                                                
Representative  Gara  wondered   if  the  legislature  could                                                                    
constitutionally allow  the executive branch to  decide what                                                                    
conduct resulted in what penalty amount.                                                                                        
                                                                                                                                
Ms. Kraly  responded that the provisions  already existed as                                                                    
to what was sanctionable. The  department was asking for the                                                                    
ability to  have a potential  fine attached.  The department                                                                    
believed that  the legislature could  give the  authority to                                                                    
impose fines through a regulation.                                                                                              
                                                                                                                                
2:11:51 PM                                                                                                                    
                                                                                                                                
Ms.  Kraly continued  to explain  that further  provision of                                                                    
Section 26  was to  identify the  administrative view  of an                                                                    
assessed fine.  Certain fines  of a  dollar amount  would be                                                                    
reviewed internally.  A higher fine  amount would go  to the                                                                    
office   administrative  hearings.   If  there   were  still                                                                    
disputes with  the lower fines,  they would be  forwarded to                                                                    
the Office of Administrative Hearings.                                                                                          
                                                                                                                                
Ms. Kraly  moved to  discuss the  seizure and  forfeiture of                                                                    
real  or  personal  property  in  medical  assistance  fraud                                                                    
cases. The section created a  system of freezing and seizing                                                                    
of  real  or  personal  property   to  offset  the  cost  of                                                                    
identified fraud. Upon the discovery  of a fraud case by the                                                                    
Medicaid Fraud Control Unit they  could seek permission from                                                                    
the  court. The  court could  authorize the  state to  seize                                                                    
certain assets or  to place leans on certain  assets so they                                                                    
were not disposed  of while a Medicaid fraud  case was being                                                                    
investigated. Upon the  completion of such a  case DOL would                                                                    
have to make further  evidentiary findings. If authorized by                                                                    
the court,  the department  could dispose  of the  assets to                                                                    
offset  the cost  of  the fraud  that  had been  established                                                                    
through the criminal  case. The section only  related to the                                                                    
seizure and  forfeiture of claims  that were brought  by the                                                                    
Medicaid Fraud Control Unit and  were limited to those types                                                                    
of cases.                                                                                                                       
                                                                                                                                
Ms. Shaddock reviewed the remainder of Section 28:                                                                              
                                                                                                                                
     Section 28 - Medical assistance (Medicaid) reform                                                                          
     program (starts on page 25, line 16)                                                                                       
                                                                                                                                
     Subsection  (a) directs  the department  to design  and                                                                    
     implement a program for  reforming Medicaid. The reform                                                                    
     program must  include 11  items in  this version  of SB                                                                    
     74.                                                                                                                        
     1) Referrals to community and  social support services,                                                                    
        including career and education training services                                                                        
        available through the Dept. of Labor, the University                                                                    
        of Alaska, or others                                                                                                    
          a. The state has a lot of training opportunities                                                                      
             through our  current  network  of job  centers,                                                                    
             Vocational  rehabilitation  offices,  Workforce                                                                    
             Investment Act  programs,  vocational  training                                                                    
             programs, and  supports  through our  extensive                                                                    
             non-profits  that  provide  services  and  case                                                                    
             management                                                                                                         
          b. Jobs are the path to self-sustaining and                                                                           
             improved self-image                                                                                                
     2) Electronic  Distribution   of   an  explanation   of                                                                    
        benefits to recipients                                                                                                  
          a. It can be another tool to allow recipients of                                                                      
             Medicaid to  check  that  their  providers  are                                                                    
             billing  the  state  for  the  actual  services                                                                    
             rendered.                                                                                                          
     3) Expanding the use of telemedicine  for primary care,                                                                    
        behavioral health, and urgent care                                                                                      
     4) Enhancing   fraud    prevention,   detection,    and                                                                    
        enforcement                                                                                                             
          a. A lot has been done under Andrew Peterson's                                                                        
             lead at  the Medicaid  Fraud  Control Unit;  we                                                                    
             want to encourage as much  fraud prevention and                                                                    
             enforcement as possible                                                                                            
     5) Reducing the cost of behavioral  health, senior, and                                                                    
        disabilities  services  provided  to  recipients  of                                                                    
        medical  assistance  under  the   state's  home  and                                                                    
        community-based services  waivers  (Waivers  section                                                                    
        will point to some specific waivers  and options for                                                                    
        the department to apply for)                                                                                            
          a. 1915k option to serve individuals who would                                                                        
             otherwise require  an  institutional  level  of                                                                    
             care; enhances our FMAP from 50% to 56%                                                                            
              i. The department & their contractors are                                                                         
                  going  through   a  rigorous   process  to                                                                    
                  implement these. They  can also  start the                                                                    
                  1915k  with  just  those  individuals  who                                                                    
                  receiving Personal  Care Attendant  or PCA                                                                    
                  care.                                                                                                         
          b. 1915i option  move  folks  currently  receiving                                                                    
             care 100% covered  by the  General Fund  to 50%                                                                    
             FMAP. This would be for  individuals that don't                                                                    
             require an institutional level of care, but can                                                                    
             be independent  with  prompting  and queuing  -                                                                    
             like Alzheimer's,                                                                                                  
              i. Supportive employment and housing supports                                                                     
          c. Both      options      Could      also      use                                                                    
             telemedicine/assistive technology  to check  in                                                                    
             on folks at home to remind them to take meds                                                                       
     6) Pharmacy initiatives                                                                                                    
          a. Expanding on  what the  department has  already                                                                    
             done  including  using  generic   meds,  claims                                                                    
             pricing    and    payment     reforms,    prior                                                                    
             authorizations, etc.                                                                                               
     7) Enhanced care management                                                                                                
          a. This could be set  up in a couple  of different                                                                    
             ways; these are methods to teach the proper use                                                                    
             of  our  health  care  system,   which  can  be                                                                    
             overwhelming and  not  intuitive  to access  on                                                                    
             your own                                                                                                           
              i. Primary care case management with the use                                                                      
                  of a patient centered medical home. That                                                                      
                  is where a Medicaid user (often a super-                                                                      
                  utilizer)  is  assigned  a   primary  care                                                                    
                  provider to oversee their  care. They have                                                                    
                  access to preventative care, primary care,                                                                    
                  vaccines,  flu   shots,   and  all   other                                                                    
                  appropriate care.                                                                                             
             ii. Another example is special treatment for                                                                       
                  identified needs - ex - pregnancy,                                                                            
                  diabetes, asthma, and so on.                                                                                  
     8) Redesigning the payment process including free                                                                          
        agreements for performance measures that include:                                                                       
          a.  premium payments for centers of excellence                                                                        
          b. penalties  for  hospital  acquired  infections,                                                                    
             readmissions, and failures of outcomes                                                                             
          c. Bundled payments for specific episodes of care                                                                     
          d. Global payments  for  a  specific diagnosis  or                                                                    
             primary care managers                                                                                              
          e. For example, instead  of going into  a hospital                                                                    
             and getting line  item charged for  Advil, IVs,                                                                    
             anesthesia, etc., there  would be one  rate for                                                                    
             all things related to a knee replacement.                                                                          
     9) Stakeholder involvement in setting annual targets                                                                       
        for quality and cost-effectiveness                                                                                      
     10)  Reducing travel costs by  requiring a recipient to                                                                    
        obtain medical services in the recipient's home                                                                         
        community, to the extent appropriate services are                                                                       
        available in the recipient's home community                                                                             
          a. We need to reduce travel where we can - use                                                                        
             telemedicine,  apply   for  choice   waiver  to                                                                    
             restrict choice                                                                                                    
          b. Better coordination of travel overall - when                                                                       
             you  have  a  family  in   rural  Alaska,  with                                                                    
             multiple family members receiving  care through                                                                    
             Medicaid,  we  should  be  better  coordinating                                                                    
             trips. We should be  sending mom and son  in on                                                                    
             one trip for all pre-planned preventative care,                                                                    
             instead of  one  trip  for  mom  to go  to  the                                                                    
             dentist and another for the son to go where the                                                                    
            mom has to accompany the son anyway                                                                                 
     11)  Guidelines  for health  care providers  to develop                                                                    
        health care delivery models supported by evidence-                                                                      
        based practices that encourage wellness and disease                                                                     
        prevention                                                                                                              
                                                                                                                                
     Subsection (b)  starting on Page  26, line  18 requires                                                                    
     the  department to  efficiently manage  a comprehensive                                                                    
     and  integrated  behavioral  health  system  that  uses                                                                    
     evidence  based practices  that  are  data driven  with                                                                    
     measureable  outcomes. The  department  and the  Alaska                                                                    
     Mental Health  Trust Authority must provide  a plan for                                                                    
     a continuum  of community based services  that includes                                                                    
     housing, employment and criminal justice issues.                                                                           
                                                                                                                                
     Subsection  (c) starting  on Page  27, line  2 has  the                                                                    
     department  identity  the  areas  of  the  state  where                                                                    
     improvements in  access to  telemedicine would  be most                                                                    
     effective  in  reducing  the costs  of  Medicaid.  Also                                                                    
     allows  the department  to enter  into agreements  with                                                                    
     IHS  providers  if  necessary   to  improve  access  to                                                                    
     telemedicine facilities and equipment.                                                                                     
                                                                                                                                
     Subsection (d) starting on page  27, line 9 - Reports -                                                                    
     this  subsections require  the  department to  annually                                                                    
     report to the legislature on November 15                                                                                   
     1) Realized cost  savings related  to reforms  from the                                                                    
        reform program                                                                                                          
     2) Savings  from  reform  efforts   undertaken  by  the                                                                    
        department                                                                                                              
     3) A statement of whether  DHSS has met  annual targets                                                                    
        for quality and cost-effectiveness                                                                                      
     4) Other recommendations for the legislature including                                                                     
        legislative  changes,  budget  changes,  impacts  of                                                                    
        federal laws, results of demonstration projects                                                                         
     5) Legal and technological barriers to the expanded use                                                                    
        of telemedicine in  Alaska, and  recommendations for                                                                    
        changes that would allow cost-effective expansion of                                                                    
        telemedicine                                                                                                            
     6) Basically everything legislators want to know to                                                                        
        continue to monitor and reform the Medicaid program.                                                                    
        I suspect this will  be very useful for  our HSS and                                                                    
        Finance committees                                                                                                      
                                                                                                                                
2:22:29 PM                                                                                                                    
                                                                                                                                
     Subsection (e) starting on page 28, line 13 - provides                                                                     
     a definition for telehealth.                                                                                               
                                                                                                                                
Ms. Shadduck continued to Section 29:                                                                                           
                                                                                                                                
     Section 29 - Primary Care Case Management (page 28,                                                                        
     line 18, through Page 29, line 8)                                                                                          
     · Requires DHSS to implement the primary care case                                                                         
        management system. The purpose of this new system is                                                                    
        to increase Medicaid  enrollees' appropriate  use of                                                                    
        primary and  preventive care,  while decreasing  the                                                                    
        use  of  specialty   care  and   hospital  emergency                                                                    
        department  services.   An   exemption  applies   to                                                                    
        recipients with chronic, acute,  or terminal medical                                                                    
        conditions.                                                                                                             
                                                                                                                                
She  elaborated   that  the  section  was   taken  from  the                                                                    
governor's SB  78 and it  was amended in the  Senate Finance                                                                    
Committee.                                                                                                                      
                                                                                                                                
Representative Wilson asked if  primary care case management                                                                    
would be mandated for enrollees.                                                                                                
                                                                                                                                
Ms. Shadduck  responded that  on page 28,  line 19  the word                                                                    
"Shall" was  included. The intent  of the department  was to                                                                    
implement it as widespread as possible.                                                                                         
                                                                                                                                
2:24:01 PM                                                                                                                    
                                                                                                                                
Representative Wilson clarified that  her question was about                                                                    
the  recipient. She  wondered if  she would  be required  to                                                                    
participate if she were to enroll in Medicaid.                                                                                  
                                                                                                                                
Ms. Shaddock  responded that the  intent would be that  as a                                                                    
recipient of Medicaid  she would be assigned  a primary care                                                                    
provider.  However, she  would  confirm her  answer and  get                                                                    
back to the representative.                                                                                                     
                                                                                                                                
Ms. Shadduck continued to Section 30:                                                                                           
                                                                                                                                
     Section 30 - Waivers (page 29, line 9)                                                                                     
                                                                                                                                
     (d) allows the department to apply for:                                                                                    
          1) 1915 (i) option                                                                                                    
          2) 1915 (k) option                                                                                                    
          3) 1945 options for health homes for individuals                                                                      
     with chronic conditions                                                                                                    
     (e) directs the department to apply for an 1115 waiver                                                                     
     to establish one or more demonstration projects                                                                            
     focused on innovative payment models                                                                                       
     (f) directs the department to apply for an 1115 waiver                                                                     
     specific to behavioral health                                                                                              
                                                                                                                                
Ms.  Shaddock  explained  that  Section  30  came  from  the                                                                    
governor's SB  78. She highlighted that  the 1915(i) option,                                                                    
home and community-based services,  was currently funded 100                                                                    
percent GF  services for folks  receiving grants  and senior                                                                    
and disabilities  services for  things like  Alzheimer's. It                                                                    
would move it to a  50/50 state federal match. She explained                                                                    
that the  1915 (k) option  was a refinancing of  the state's                                                                    
senior and  disabilities services currently on  the 1915 (c)                                                                    
waiver. It would give the  state an enhanced Federal Medical                                                                    
Assistance Percentage  (FMAP). It would move  the state from                                                                    
a 50 percent to a 56  percent FMAP. She relayed that for the                                                                    
first 8  quarters the federal match  for services pertaining                                                                    
to the  1945 option  was 90 percent.  She conveyed  that the                                                                    
1115 waiver  asked the state to  bend the rules on  what was                                                                    
currently in the  state's plan. The state  asked Centers for                                                                    
Medicare  and  Medicaid  Services   (CMS)  if  it  could  do                                                                    
innovative things with the Alaska's  Medicaid program if the                                                                    
state showed budget neutrality.  She elaborated that some of                                                                    
the  items related  to behavioral  health  were specific  to                                                                    
address  the  barriers  that  came  up  over  the  years  by                                                                    
Alaska's  fragmented behavioral  health system.  One of  the                                                                    
things that was discussed  extensively in the Senate Finance                                                                    
Committee was a 30 percent  rule. A behavioral health clinic                                                                    
had  to  have psychiatric  oversight  by  a psychiatrist  30                                                                    
percent of  the time  which was a  large burden  for Alaska.                                                                    
Some of the items would open up regulations.                                                                                    
                                                                                                                                
2:27:37 PM                                                                                                                    
                                                                                                                                
Ms. Shadduck moved to Section 31:                                                                                               
                                                                                                                                
   Section 31 (page 30, line 18 through page  31, line 15) -                                                                    
   Collaborative, hospital-based project  to reduce  the use                                                                    
   of emergency department services.                                                                                            
   · This  would build  on what  the department  has already                                                                    
     done with their super-utilizer program,                                                                                    
   · This  program is  modeled on  a  successful project  in                                                                    
     Washington State.  It's about directing  individuals to                                                                    
     the right care, at the right time, in the right place.                                                                     
   · Number 4 on page 31, line 3  - sets how a process for a                                                                    
     referring  an ER  user to  a primary  care provider  or                                                                    
     behavioral health provider within  96 hours after an ER                                                                    
     visit                                                                                                                      
   · Number  5 on  line  6 requires  a collaborated  process                                                                    
     between the  department and the  statewide professional                                                                    
     hospital  association  to establish  uniform  statewide                                                                    
     guidelines  for prescribing  narcotics in  an emergency                                                                    
     department                                                                                                                 
                                                                                                                                
Ms.  Shaddock  spoke  to  number 4.  She  relayed  that  the                                                                    
project was original  to SB 74. It was  amended in committee                                                                    
and  was  a  recommendation   resulting  from  the  Medicaid                                                                    
redesign  process from  the  department's consultant,  Agnew                                                                    
Beck Consulting. The project would  be in partnership with a                                                                    
state  professional  hospital   association  that  would  be                                                                    
taking the lead  on the project. She  highlighted that there                                                                    
had  been  significant   testimony  and  conversation  about                                                                    
Alaska having  a large opioid  problem which was  the reason                                                                    
for the  provisions included  around the  PDMP. It  was also                                                                    
the reason that the number  was listed in the emergency room                                                                    
project.                                                                                                                        
                                                                                                                                
Ms. Shaddock continued with the rest of Section 31:                                                                             
                                                                                                                                
   Section 31  -  Coordinated  Care  Demonstration  Projects                                                                    
   (page 31, line 16)                                                                                                           
   · About  whole  person,   integrated  care  with  payment                                                                    
     models that move us away from fee-for-service Æ  paying                                                                    
     for value over volume                                                                                                      
                                                                                                                                
Ms. Shaddock noted that in  the Senate Finance Committee and                                                                    
in  the Medicaid  reform  subcommittee there  was  a lot  of                                                                    
discussion    about   options    including   managed    care                                                                    
organizations,  accountable care  organizations, coordinated                                                                    
care organizations,  etc. The  coordinated care  project was                                                                    
the  result of  those  conversations as  a  way of  bringing                                                                    
forward the  best projects  and proposals  for the  State of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
2:30:14 PM                                                                                                                    
                                                                                                                                
Ms. Shaddock continued with Section 32:                                                                                         
                                                                                                                                
     AS 47.07.039 (a) - Line 16, through page 32, line 16)                                                                      
     Requires DHSS to solicit and  contract with one or more                                                                    
     third-party     entities    for     coordinated    care                                                                    
     demonstration projects for  individuals who qualify for                                                                    
     Medicaid benefits on or before  December 31, 2016. DHSS                                                                    
     may use an innovative  procurement process as described                                                                    
     under AS  36.30.308. A proposal for  consideration must                                                                    
     include three or more of the following:                                                                                    
     1) Comprehensive     primary-care-based     management,                                                                    
        including    behavioral    health    services    and                                                                    
        coordination of long-term services and support;                                                                         
     2) Care coordination,  including  the  assignment of  a                                                                    
        primary care provider located in the local                                                                              
        geographic area of the recipient;                                                                                       
     3) Health promotion;                                                                                                       
     4) Comprehensive transitional  care and  follow-up care                                                                    
        after inpatient treatment;                                                                                              
     5) Referral to community  and social  support services,                                                                    
        including career and education training services;                                                                       
     6) Sustainability and the ability to replicate in other                                                                    
        regions of the state;                                                                                                   
     7) Integration and coordination of  benefits, services,                                                                    
        and utilization management;                                                                                             
     8) Local  accountability   for   health  and   resource                                                                    
        allocation.                                                                                                             
                                                                                                                                
     AS 47.07.039(b) (page 32, line 17)                                                                                         
     Establishes  a project  review committee  for proposals                                                                    
     submitted under  (a) of this section.  The committee is                                                                    
     comprised of:                                                                                                              
     1) The Commissioner of DHSS or their designee;                                                                             
     2) The  Commissioner   of   Administration   or   their                                                                    
        designee;                                                                                                               
     3) The CEO of the Alaska Mental  Health Trust Authority                                                                    
        or their designee;                                                                                                      
     4) Two representatives of stakeholder groups, appointed                                                                    
        by the Governor for staggered three-year terms;                                                                         
     5) A Non-voting member of  the Senate appointed  by the                                                                    
        Senate President; and                                                                                                   
     6) A Non-voting member of the  House of Representatives                                                                    
        appointed by the Speaker of the House of                                                                                
        Representatives.                                                                                                        
                                                                                                                                
     AS 47.07.039(c) (page 33, line 1)                                                                                          
     Grants  DHSS authority  to contract  with third-parties                                                                    
     to  implement the  demonstration projects  listed under                                                                    
     (a)  of   this  section   that  include   managed  care                                                                    
     organizations, primary care  case managers, accountable                                                                    
     care organizations, prepaid  ambulatory health plan, or                                                                    
     a  provider-led  entity.   Allows  for  fee  structures                                                                    
     including but  not limited to global  payments, bundled                                                                    
     payments,  capitated payments,  and shared  savings and                                                                    
     risk.  Requires  DHSS  to work  with  the  division  of                                                                    
     insurance, DCCED to  streamline the application process                                                                    
     for a company  to obtain a certificate  of authority as                                                                    
     needed to participate in a demonstration project.                                                                          
                                                                                                                                
2:32:57 PM                                                                                                                    
                                                                                                                                
     AS 47.07.039(d) (page 33, line 10)                                                                                         
     Requires any  project under (a) to  include cost-saving                                                                    
     measures including  the expanded use of  telehealth for                                                                    
     primary  care,  urgent   care,  and  behavioral  health                                                                    
     services.                                                                                                                  
                                                                                                                                
     AS 47.07.039(e) (page 33, line 17)                                                                                         
     Requires DHSS  to contract  with a  third-party actuary                                                                    
     to  review demonstration  projects  after  one year  of                                                                    
     implementation   and  make   recommendations  for   the                                                                    
     implementation  of a  similar  project  on a  statewide                                                                    
     basis. On  or before December  31, 2018, and  each year                                                                    
     thereafter, the actuary shall submit  a final report to                                                                    
     the DHSS  for any  project that  has been  in operation                                                                    
     for at least one year.                                                                                                     
                                                                                                                                
     AS 47.07.039(f) (page 33, line 26)                                                                                         
     Directs DHSS  to prepare a  plan regarding  regional or                                                                    
     statewide implementation of  a coordinated care project                                                                    
     based  on the  results  of  the demonstration  projects                                                                    
     under  this   section.  Requires  DHSS  on   or  before                                                                    
     November   15,  2019   to  submit   a  report   to  the                                                                    
     legislature  on  any  changes  or  recommendations  for                                                                    
     wider regional or statewide implementation.                                                                                
     AS 47.07.039(g) (page 34, line 4)                                                                                          
     Refers   to  the   definition  of   telehealth  in   AS                                                                    
     47.05.270(e)                                                                                                               
                                                                                                                                
Ms. Shaddock  indicated that the project  would continue on.                                                                    
If  CMS came  up with  a new  demonstration project  or some                                                                    
other innovative  method, the  department could  continue to                                                                    
run the  projects through the same  project review committee                                                                    
and use the same process.                                                                                                       
                                                                                                                                
Ms. Shaddock moved on to Section 32:                                                                                            
                                                                                                                                
     Section 32 (Page 34, line 5)                                                                                               
     ·  Requires the department and the  attorney general to                                                                    
        annually   prepare   a   report    regarding   fraud                                                                    
        prevention, abuse, prosecution, and vulnerabilities                                                                     
        in the Medicaid program.                                                                                                
                                                                                                                                
Ms. Shaddock reviewed Section 33 and Section 34:                                                                                
                                                                                                                                
     Section  33  (page  35,  line  2)  Removal  of  Grantee                                                                    
     Requirement                                                                                                                
                                                                                                                                
     AS   47.07.900(4)    Amends   Medicaid   Administration                                                                    
     definitions,   by    removing   the    grantee   status                                                                    
     requirement  for  outpatient  community  mental  health                                                                    
     clinics serving Medicaid patients.                                                                                         
                                                                                                                                
     Section  34  (page  35,  line  7)  Removal  of  Grantee                                                                    
     Requirement                                                                                                                
                                                                                                                                
     AS    47.07.900(17)    Amends     by    removing    the                                                                    
     grantee/contractor  status  requirement from  drug  and                                                                    
     alcohol  treatment  centers  and  outpatient  community                                                                    
     mental health clinics. This change,  and the one in the                                                                    
     previous  section,   allows  mental  health   and  drug                                                                    
     treatment service  providers who do not  receive grants                                                                    
     from  the   department  to  become   enrolled  Medicaid                                                                    
     providers and deliver services to Medicaid recipients.                                                                     
                                                                                                                                
Ms. Shaddock  conveyed that the  provisions would  align the                                                                    
state  with  requirements  by   the  federal  government  to                                                                    
provide  these  services.  The federal  government  required                                                                    
that  the  state remove  the  grantee  requirements or  they                                                                    
would  start withholding  behavioral health  Medicaid funds.                                                                    
It would help to address  the state's shortage of behavioral                                                                    
health providers across the state.                                                                                              
                                                                                                                                
2:35:38 PM                                                                                                                    
                                                                                                                                
Ms. Shadduck addressed Section 35:                                                                                              
                                                                                                                                
     Section 35 (page 35, line 15) Alaska Pioneer Home                                                                          
     Payment Assistance                                                                                                         
     · Requires individuals applying for Pioneer Home                                                                           
        payment assistance to  show proof of  having applied                                                                    
        to Medicaid.  HB 30  audits  - will  save around  $1                                                                    
        million a year                                                                                                          
                                                                                                                                
Ms. Kraly noted that Section  36 and Section 37 related back                                                                    
to  the  Medicaid  False  Claims   and  Reporting  Act.  She                                                                    
reported that  Section 36 contained the  repealer provisions                                                                    
of the  sunset provisions for the  private plaintiff relator                                                                    
individuals.                                                                                                                    
                                                                                                                                
Ms. Kraly indicated that Section  37 related to the indirect                                                                    
and direct court  rule amendments that needed  to take place                                                                    
as a result of the new  cause of action. She referenced page                                                                    
35, line 28 through page 37.                                                                                                    
                                                                                                                                
Ms. Shadduck spoke to Section 38:                                                                                               
                                                                                                                                
     Section 38 - Implement Federal Policy on Tribal                                                                            
     Medicaid Reimbursement (page 37, line 2)                                                                                   
     · Requires DHSS to collaborate with Alaska Tribal                                                                          
        health organizations and the U.S.  DHHS to implement                                                                    
        new federal  policy regarding  100% federal  funding                                                                    
        for services provided to  Medicaid-eligible American                                                                    
        Indian and  Alaska  Native  individuals  within  six                                                                    
        months of the rule change  being finalized. Requires                                                                    
        DHSS to  report  to  the  co-chairs of  Finance  the                                                                    
        estimated savings and calculations of savings to the                                                                    
        state general fund  within thirty  days of  the rule                                                                    
        being finalized.                                                                                                        
     · Savings have been reflected in both the House and                                                                        
        Senate budgets  as part  of the  overall package  of                                                                    
        Medicaid Reform                                                                                                         
                                                                                                                                
Ms. Shaddock  was aware that  finance committee  members had                                                                    
significant discussions  around the  rule change put  out by                                                                    
the  CMS  concerning  services  being  received  through  an                                                                    
Indian Health  Service (IHS), a  tribal facility,  and those                                                                    
being  reimbursed 100  percent. The  section asked  that the                                                                    
department fully implement the  provision within 6 months of                                                                    
the rule being  finalized and to submit a report  to the co-                                                                    
chairs of the House and Senate Finance Committees on the                                                                        
savings.                                                                                                                        
                                                                                                                                
Ms. Shaddock continued to Section 39:                                                                                           
                                                                                                                                
     Section  39 -  Health  Information Infrastructure  Plan                                                                    
     (page 39, line 20)                                                                                                         
     ·  One result  of  the  Medicaid Redesign  process  the                                                                    
        Dept. has taken                                                                                                         
     ·  Requires DHSS to  develop a  plan to  strengthen the                                                                    
        health information infrastructure,  including health                                                                    
        data analytics capability, to support transformation                                                                    
        of the health system in Alaska.                                                                                         
                                                                                                                                
Ms.  Shaddock  reported  that  the  section  came  from  the                                                                    
governor's SB  78. She  remarked that the  state had  a long                                                                    
way to go to improve  its data analytics. The department was                                                                    
determined   to    implement   the   plan    correctly   and                                                                    
aggressively.                                                                                                                   
                                                                                                                                
Ms. Shaddock moved to Section 40:                                                                                               
                                                                                                                                
     Section 40  - Feasibility Studies  (page 38, line  4) -                                                                    
    Required before any state service can be privatized                                                                         
                                                                                                                                
     (a) Alaska  Pioneer Homes and  Select DJJ  facilities -                                                                    
     procured by DHSS                                                                                                           
     · Wouldn't look the same for each facility                                                                                 
     ·  For DJJ Facilities - RPTC  - residential psychiatric                                                                    
        treatment centers that could  be run by  Tribes like                                                                    
        in Nome. They could provide culturally relevant care                                                                    
        close to home.                                                                                                          
     ·  All of these  24/7 facilities represent  1,192 state                                                                    
        employees                                                                                                               
                                                                                                                                
     (B) Alaska Psychiatric Institute  - DHSS in conjunction                                                                    
     with the Trust                                                                                                             
     · Private psychiatric hospitals in other states                                                                            
                                                                                                                                
     (c) Health Care Authority (line 22)                                                                                        
     ·  Requires  the   Department   of  Administration   in                                                                    
        collaboration with  the  House  and  Senate  Finance                                                                    
        Committees  to   conduct  a   study  analyzing   the                                                                    
        feasibility of creating  a health care  Authority to                                                                    
        coordinate  health   care   plans  and   consolidate                                                                    
        purchasing effectiveness  for  all state  employees,                                                                    
        retired state employees, retired  teachers, Medicaid                                                                    
        Assistance   recipients,   University    of   Alaska                                                                    
        employees,  employees  of  state  corporations,  and                                                                    
        school district employees.                                                                                              
     · Other states like Washington State and Oregon have                                                                       
        used these very effectively                                                                                             
                                                                                                                                
Ms. Shaddock conveyed that Section  40 was original to SB 74                                                                    
and it  had been expanded.  She noted that other  states had                                                                    
leveraged  all  of the  health  care  that their  state  was                                                                    
paying  for.   In  looking  at  the   contracts  with  state                                                                    
employees,  the  cost of  healthcare  continued  to rise  in                                                                    
Alaska.  Large changes  would need  to be  made. Section  40                                                                    
outlined  one  tool  to  study  how to  pool  all  of  them,                                                                    
leverage  the  state's purchasing  effectiveness,  hopefully                                                                    
bend the  curve, and maybe even  bend the curve of  the cost                                                                    
of healthcare in Alaska.                                                                                                        
                                                                                                                                
2:41:00 PM                                                                                                                    
                                                                                                                                
Ms. Shadduck spoke on Section 41:                                                                                               
                                                                                                                                
     Section 41 (page 39, line 17)                                                                                              
     · Requires the department to amend the state Medicaid                                                                      
        plan  and  apply   for  any  waivers   necessary  to                                                                    
        implement the projects and programs described in the                                                                    
        bill.                                                                                                                   
                                                                                                                                
Ms. Shaddock advanced to Section 42:                                                                                            
                                                                                                                                
     Section 42 - Transitions: Regulations (page 39, line                                                                       
     28)                                                                                                                        
     · Allows the department and the Board of Pharmacy to                                                                       
        adopt regulations necessary to implement the changes                                                                    
        made by the Act. The regulations may not take effect                                                                    
        before the dates the  relevant provision of  the Act                                                                    
        takes effect.                                                                                                           
                                                                                                                                
Ms. Shaddock continued to Section 43:                                                                                           
                                                                                                                                
    Section 43 - Conditional effects (Page 40, line 7)                                                                          
     · This protects the Department from having to follow a                                                                     
        law on  the books  if the  federal government  won't                                                                    
        approve state plan  amendments or waivers  needed to                                                                    
        implement the law.                                                                                                      
     · Subsection (e) on line 27 is specific to the                                                                             
        provisions of the false claims act that are amending                                                                    
        court rules and require a 2/3 vote.                                                                                     
                                                                                                                                
Ms. Shaddock reviewed Sections 44-47:                                                                                           
                                                                                                                                
     Sections 44-47 (page 41, starting on line 1)                                                                               
     · Provides for effective dates for provisions that                                                                         
        require waiver and state plan amendment approvals                                                                       
        from the United States Department of Health and                                                                         
        Human Services.                                                                                                         
                                                                                                                                
Ms. Shaddock reviewed Section 48:                                                                                               
                                                                                                                                
     Section 48 (line 13)                                                                                                       
     · Effective Dates - Provides an immediate effective                                                                        
        date for Sections 40, 41, 42(a), and 43.                                                                                
                                                                                                                                
     Section 49 (line 15)                                                                                                       
     · Effective Dates - Provides for a July 1, 2017                                                                            
        effective date for Sections 13-19 relating to the                                                                       
       Prescription Drug Monitoring Program (PDMP).                                                                             
                                                                                                                                
     Section 50 (line 16)                                                                                                       
     · Effective Dates - Provides an effective date of July                                                                     
        1, 2016 for Section 42(b).                                                                                              
                                                                                                                                
     Section 51 (line 17)                                                                                                       
     · Effective Dates - Provides a delayed effective date                                                                      
        of July 1, 2019 for Sections 11 and 12 to conform to                                                                    
        the sunset provisions in Section 36.                                                                                    
                                                                                                                                
2:43:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson acknowledged that there had been a                                                                            
significant amount of information to digest.                                                                                    
                                                                                                                                
Vice-Chair Saddler corrected Ms. Shadduck regarding the                                                                         
effective date of Section 49. Ms. Shaddock had indicated                                                                        
the date of July 1. The correct date was January 1, 2017.                                                                       
                                                                                                                                
Ms. Shaddock happily stood corrected.                                                                                           
                                                                                                                                
2:43:32 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  if the  state already  allowed                                                                    
telemedicine services within its own insurance.                                                                                 
                                                                                                                                
Ms.  Shadduck was  not sure  what state  insurance currently                                                                    
allowed. She  was aware of  health plans offered  by private                                                                    
companies in  the state  that wanted  to use  the telehealth                                                                    
option. However,  the in-state requirement had  limited that                                                                    
use.                                                                                                                            
                                                                                                                                
Representative  Wilson   was  in  support  of   the  use  of                                                                    
telehealth medicine.  She thought  it was  a great  idea for                                                                    
private insurance  as well as  for the whole state.  She did                                                                    
not understand why it would be limited to Medicaid.                                                                             
                                                                                                                                
Representative  Wilson mentioned  having discussions  in the                                                                    
House  Finance   Committee  about  optional   benefits.  She                                                                    
wondered if  they had been  discussed and, if so,  asked why                                                                    
they had not been part  of the presentation. She requested a                                                                    
written response.                                                                                                               
                                                                                                                                
Ms. Shadduck responded that  the provisions about telehealth                                                                    
and telemedicine were specific to  the use across the state.                                                                    
It was not  specific to the Medicaid  program. She responded                                                                    
to   Representative   Saddler's  question   about   optional                                                                    
benefits.  The   topic  was   discussed  in   committee  and                                                                    
privately.  It was  found that  the optional  benefits saved                                                                    
the state  money. She spoke  to having  Legislative Research                                                                    
update a report  about primary care attendants  and home and                                                                    
community-based services.  They saved the State  of Alaska a                                                                    
significant  amount of  money. All  of the  individuals that                                                                    
were receiving  care needed an institutional  level of care.                                                                    
If  they were  not receiving  care at  home the  state would                                                                    
have to care for them in  an institution. It meant the state                                                                    
would  have to  put money  in  the capital  budget to  build                                                                    
nursing  homes.  Some  of  the  optional  benefits  included                                                                    
pharmacy, hospital  ER use, and  others. They would  show up                                                                    
as costs  elsewhere if the  state did not provide  them. She                                                                    
would provide the research piece to Representative Wilson.                                                                      
                                                                                                                                
Representative Wilson appreciated Ms. Shadduck's response.                                                                      
                                                                                                                                
Co-Chair  Thompson  ran  through  a  list  of  other  people                                                                    
available to answer questions.                                                                                                  
                                                                                                                                
2:47:00 PM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman had  concerns  with  the prescription  drug                                                                    
database. He had asked the chair  for a few minutes to share                                                                    
his concerns  with the  committee on  the subject.  He first                                                                    
came across  the issue  when he became  the chairman  of the                                                                    
House Finance subcommittee for DHSS.  One of the things that                                                                    
got his  attention was  $40 million in  rebates to  DHSS. He                                                                    
had wondered  where the money  came from. The  Department of                                                                    
Administration  (DOA)  had  also  received  $20  million  in                                                                    
rebates from  pharmaceutical companies.  At the time  of his                                                                    
discovery he was  unclear about what was going  on. He found                                                                    
out  that  there  was  a  federal  regulation  that  allowed                                                                    
pharmaceutical  companies to  charge  more  than the  actual                                                                    
cost of prescription  drugs under the guise  of covering the                                                                    
costs for Medicaid patients (about  $1 million per week). He                                                                    
thought the practice  was very wrong. He  reported that when                                                                    
talking  to Alaskans  they  were  unaware and  uncomfortable                                                                    
that the State of Alaska  kept a database on controlled drug                                                                    
prescriptions. He was informed  that databases within Alaska                                                                    
have commonly been hacked. He  pondered what could happen if                                                                    
there  was   a  breech  allowing  for   access  to  personal                                                                    
information.  He suggested  that  the  information would  be                                                                    
appealing  to drug  gangs. He  explained  that when  someone                                                                    
brought in a  prescription that the pharmacy  staff felt was                                                                    
an inappropriate or illegal  prescription they were required                                                                    
to destroy  them or  not give them  back. He  continued that                                                                    
there was  no enforcement behind the  requirement except for                                                                    
a pharmacist or a pharmacy  technician like his wife. He was                                                                    
very concerned  about retribution from drug  addicts who had                                                                    
a  prescription that  could be  worth thousands  or tens  of                                                                    
thousands of dollars from not getting them back.                                                                                
                                                                                                                                
Co-Chair  Neuman  reported  that SB  74  allowed  additional                                                                    
access  to  the  database.  Some people  with  access  could                                                                    
dispense the  information to people who  were not upstanding                                                                    
Alaskans.  He told  of some  seniors  in Big  Lake who  were                                                                    
robbed of  their prescription drugs  and murdered.  He posed                                                                    
the question to other  legislators, "Do you feel comfortable                                                                    
knowing  that somebody  could give  access to  your personal                                                                    
information?"  He posed  a  hypothetical  scenario in  which                                                                    
someone broke  a leg  and the  doctor issued  a prescription                                                                    
for  100  Percocet to  manage  their  pain. The  information                                                                    
could  be  given  to  someone   including  an  address.  His                                                                    
constituents were not very comfortable.                                                                                         
                                                                                                                                
Co-Chair  Neuman furthered  that he  had worked  as hard  as                                                                    
anyone on drug  and alcohol abuse. Three years  prior he had                                                                    
placed intent language in the  operating budget that allowed                                                                    
for  the Recidivism  Reduction Group  to form.  Born out  of                                                                    
that group was  the Recidivism Reduction Plan  which was the                                                                    
basis for much of the  substance abuse treatments in Alaska.                                                                    
He  also noted  that the  House took  action in  the current                                                                    
year to address the substance abuse issue.                                                                                      
                                                                                                                                
Co-Chair  Neuman  continued  to  discuss the  issue  of  the                                                                    
prescription  drug   database.  He  found  that   the  state                                                                    
provided doctors  with a preferred  drug list.  He suspected                                                                    
that the state  received the largest rebates  from the drugs                                                                    
on the  list. He  thought there was  an opportunity  for the                                                                    
state  to stick  its nose  in between  a doctor  and patient                                                                    
based on  how much money  the state received in  rebates. He                                                                    
thought that if it was  not happening, it could. He admitted                                                                    
that  presently he  did not  have proof.  He understood  how                                                                    
hard  people were  trying  to  find money  in  the state  to                                                                    
support their budgets. He brought  the subject up because of                                                                    
his  great  concerns  for  opioid   overdose.  There  was  a                                                                    
movement  to try  to deal  with the  problem. He  had spoken                                                                    
with a  doctor from  Wasilla who had  issues because  he was                                                                    
losing  patients. He  mentioned doctor  requirements in  the                                                                    
states  of Washington  and  California.  He thought  primary                                                                    
care  providers  should talk  to  their  patients about  the                                                                    
effects  of opioids  or any  drugs they  took including  the                                                                    
benefits and the  risks to a person's health.  He noted that                                                                    
primary care doctors were no  longer allowed to talk to long                                                                    
established  patients   about  certain  drugs.   Instead,  a                                                                    
patient had  to go  to a specialty  doctor to  provide long-                                                                    
term  care and  to  dispense pain  medication or  classified                                                                    
drugs.  The  cost of  a  visit  to  a specialty  doctor  was                                                                    
upwards of  $550 per office  visit. He wondered how  many of                                                                    
the  Medicaid or  Medicare patient  visits were  causing the                                                                    
state's budget  to increase.  He believed  it would  only be                                                                    
about  $150 per  visit for  a patient  to see  their primary                                                                    
care provider, someone familiar with their medical history.                                                                     
                                                                                                                                
2:56:02 PM                                                                                                                    
                                                                                                                                
Co-Chair  Neuman wondered  about doctors  being required  to                                                                    
participate  [in  the  PDMP]  and, if  they  chose  not  to,                                                                    
potentially losing  their DEA license which  enabled them to                                                                    
prescribe  drugs. He  continued  that  most doctor's  visits                                                                    
were  15 minute  increments averaging  about 4  appointments                                                                    
per  hour.  He suggested  that  the  doctors would  have  to                                                                    
expand  their  visits  because  of having  to  look  at  the                                                                    
database. He  relayed that  most doctors did  not go  into a                                                                    
back  office to  look at  a prescription  drug database  and                                                                    
then meet  with their  patients. He  noted having  talked to                                                                    
several people  that worked in specialty  clinics dispensing                                                                    
prescription drugs who  have indicated they did  not use the                                                                    
database. He pondered  why. Although he did  not have access                                                                    
to the database, it was  his understanding that there were 7                                                                    
pages of  federal regulations. They  [doctors] had  to print                                                                    
the  pages   out  and  sign  each   one  acknowledging  they                                                                    
completely understood  the information.  The doctors  he had                                                                    
spoken with  did not comprehend how  anyone could understand                                                                    
7 pages of  federal regulations. If any doctor  did not sign                                                                    
each  page  they would  lose  their  DEA license  and  their                                                                    
ability  to write  prescriptions.  Rather  than signing  the                                                                    
form the  doctors just  did not use  the database.  He could                                                                    
understand why  a doctor might  want access to  the database                                                                    
in an  emergency situation. Generally, emergency  rooms were                                                                    
used for triage  - to get a patient through  the weekend, to                                                                    
get  a patient  to their  primary care  provider. He  opined                                                                    
that  in  the  emergency   room  doctors  were  not  writing                                                                    
prescriptions for large amounts.                                                                                                
                                                                                                                                
Co-Chair Neuman  reiterated that he had  huge concerns about                                                                    
the State of  Alaska keeping a database. He  had spoken with                                                                    
Alaska's  federal   delegation  about   federal  regulations                                                                    
allowing for about  $60 million in rebates to  the state. He                                                                    
was unclear  what the pharmaceutical companies  received for                                                                    
their administrative  fee but he suspected  they received as                                                                    
much as they could. I  suggested that Alaska was spending at                                                                    
least  $60 million  extra  for  Alaskan's prescription  drug                                                                    
that  came back  in  rebates  for the  State  of Alaska.  He                                                                    
opined that it  was the largest crime  in America currently.                                                                    
The State of Alaska voluntarily  entered into a program with                                                                    
the federal  government that allowed the  federal government                                                                    
to give the money back to  the State of Alaska. The State of                                                                    
Alaska would  rather have the  money as an increment  in its                                                                    
operating budget to cover its  costs. The federal government                                                                    
also had  access to  the records in  the database.  He would                                                                    
happy to further  discuss the issue with  members. He wanted                                                                    
to make sure the public was aware of the issue.                                                                                 
                                                                                                                                
3:00:13 PM                                                                                                                    
                                                                                                                                
Co-Chair  Thompson  indicated  that each  subject  would  be                                                                    
handled  separately  and  that  a  schedule  of  topics  and                                                                    
corresponding committee meeting times  would be given out to                                                                    
committee members.                                                                                                              
                                                                                                                                
3:00:39 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  about Sections  1 through  7                                                                    
related   to  telehealth.   He  noted   that  each   section                                                                    
specifically  prohibited   the  State  Medical   Board  from                                                                    
imposing sanctions  for rendering  a diagnosis.  He wondered                                                                    
about the  liability of  a physician  if they  did something                                                                    
wrong  and  whether the  board  would  have the  ability  to                                                                    
sanction them if they committed a criminal act.                                                                                 
                                                                                                                                
3:01:16 PM                                                                                                                    
                                                                                                                                
Ms.  Shadduck  clarified  that each  of  the  sections  were                                                                    
related to their  specific board and who  they oversaw. Only                                                                    
three of them were specific  to the State Medical Board. How                                                                    
it was  worded meant  that they  could not  impose sanctions                                                                    
purely  using  telehealth.  They could  still  regulate  bad                                                                    
medical behavior  and bad practice. However,  they could not                                                                    
go after a doctor for simply practicing via telehealth.                                                                         
                                                                                                                                
3:01:48 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki asked about  how to prevent having a                                                                    
"Doc-In-A-Box" or  from physicians out-of-state  that became                                                                    
licensed.  He wondered  about physicians,  psychologists, or                                                                    
social  workers being  out-of-state, licensed  within Alaska                                                                    
to practice, and able to practice via telehealth.                                                                               
                                                                                                                                
Ms. Shadduck stated that the  only board specifically called                                                                    
out the  in-state and out-of-state  provision was  the State                                                                    
Medical Board.  It was the  only board that had  not allowed                                                                    
individuals  to  perform  telehealth via  out-of-state.  She                                                                    
furthered that  the other boards  did not  currently outline                                                                    
in their  provisions whether  they allowed  telehealth. They                                                                    
would be  allowed to  have telehealth  but the  decision was                                                                    
left with the  decision as to whether  the individuals would                                                                    
be in-state or out-of-state to the boards.                                                                                      
                                                                                                                                
Representative Kawasaki asked  her to speak to  how it would                                                                    
become an issue if hiring a  provider at a cost savings that                                                                    
would  be   using  a  telehealth  bridge.   He  wanted  more                                                                    
information  concerning difficulties  in the  recruitment of                                                                    
providers. He  wondered if the  issue had been  discussed in                                                                    
the other body.                                                                                                                 
                                                                                                                                
Ms.  Shadduck  indicated  that  some  of  the  conversations                                                                    
around the  provisions were bringing  the rest of  the state                                                                    
in line with what was  already being done within IHS. Alaska                                                                    
Native  Tribal  Health  Consortium  (ANTHC)  and  other  IHS                                                                    
providers were extensively  using telehealth. They currently                                                                    
could have providers operating  from out-of-state. They were                                                                    
trying  to  true  up  to allow  the  same  availability  for                                                                    
everyone else. There were communities  that were unlikely to                                                                    
attract  a  fulltime  doctor.  Telehealth  was  a  means  to                                                                    
address  provider   issues.  She  did  not   see  telehealth                                                                    
completely  eliminating the  need  for  individuals to  have                                                                    
hands-on  primary care.  She supposed  that because  she was                                                                    
from a  younger generation she  would be more likely  to use                                                                    
the telehealth  option. She continued that  someone like her                                                                    
Mom who  was in her 50s  would not be comfortable  using it.                                                                    
She did  not see telehealth completely  taking away hands-on                                                                    
primary care.  She was uncertain  if there was  a discussion                                                                    
about whether the cost would  drive providers out. She would                                                                    
follow-up with  the initial bill  sponsor and have  them get                                                                    
back to his office.                                                                                                             
                                                                                                                                
Representative Kawasaki  referred to Section 28  which dealt                                                                    
with civil asset forfeiture. He  wondered if it was outlined                                                                    
in the  same way  non-medical fraud  cases were  handled. He                                                                    
pointed to page 23 of the bill.                                                                                                 
                                                                                                                                
Ms.  Kraly  asked  Representative  Kawasaki  to  repeat  his                                                                    
question.                                                                                                                       
                                                                                                                                
Representative Kawasaki wondered  if civil asset forfeitures                                                                    
were handled the same within the state.                                                                                         
                                                                                                                                
Ms.  Kraly asked  if he  was  referring to  the seizure  and                                                                    
forfeiture  of real  and  personal property.  Representative                                                                    
Kawasaki responded affirmatively.                                                                                               
                                                                                                                                
Ms.  Kraly responded  that the  answer to  his question  was                                                                    
both yes and  no. She explained that the state  did not have                                                                    
a  civil forfeiture  provision within  the  State of  Alaska                                                                    
besides  what was  currently used  with Fish  and Game.  She                                                                    
reported  having looked  at those  provisions when  drafting                                                                    
the section.  She indicated that the  specific sections came                                                                    
from other  states that had  a more robust  civil forfeiture                                                                    
provision for broader schemes. It  was a little bit of both.                                                                    
She did some civil forfeiture  for Fish and Game violations.                                                                    
The template from the provision  being discussed was broader                                                                    
than just Alaska.                                                                                                               
                                                                                                                                
Representative  Kawasaki  commented  that just  reading  the                                                                    
plain view  in the  sectional and  the bill  on page  23, it                                                                    
talked  about the  real property  that could  be subject  to                                                                    
seizure  including  bank   accounts  and  inventory  dealing                                                                    
specifically  with the  fraud.  It also  listed  a bunch  of                                                                    
other  things including  automobiles, boats,  airplanes, and                                                                    
stocks and bonds.                                                                                                               
                                                                                                                                
Ms. Kraly explained  that part of the reason  the section he                                                                    
read was as  broad as it was,  was that it was  borne out of                                                                    
experience. It  would be discussed further  in the following                                                                    
day  during  the  presentation on  fraud  and  false  claims                                                                    
provisions. She added  that the Medicaid Fraud  Unit has had                                                                    
some  difficulty in  recovering fines.  Some people  charged                                                                    
with crimes transferred their assets  to avoid state seizure                                                                    
of them.  The Medicaid  Fraud director  could speak  more to                                                                    
the subject in the following day.                                                                                               
                                                                                                                                
Co-Chair Thompson relayed  fraud would be the  topic for the                                                                    
following day.                                                                                                                  
                                                                                                                                
3:07:56 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Saddler   asked  if  a  report   that  had  been                                                                    
referenced earlier in the meeting  could be provided. He was                                                                    
unclear if  it was something  the department had done  or if                                                                    
it was an assessment of the Agnew Beck report.                                                                                  
                                                                                                                                
Ms. Shadduck  stated that the  report was about the  cost of                                                                    
optional  services for  Alaska's primary  care and  home and                                                                    
community-based  services. She  would submit  the report  to                                                                    
the chair for distribution.                                                                                                     
                                                                                                                                
Vice-Chair  Saddler  referred to  page  9  of the  sectional                                                                    
analysis  there was  reference  to  AS.47.05.270b where  the                                                                    
department  was  directed to  work  with  the Alaska  Mental                                                                    
Health Trust  Authority regarding  community-based services.                                                                    
In  subparagraph "c"  the department  was asked  to identify                                                                    
areas  where   telehealth  would  be  affective   to  reduce                                                                    
Medicaid  costs.  He recalled  a  comment  made about  ANTHC                                                                    
being  experts but  the  department did  not  work with  the                                                                    
entity. He wondered why.                                                                                                        
                                                                                                                                
Ms.  Shadduck  reported  that  Line  7 and  8  of  the  bill                                                                    
specifically   stated  the   department  could   enter  into                                                                    
agreements with IHS providers, the  more appropriate name in                                                                    
statute for a group like ANTHC.                                                                                                 
                                                                                                                                
Vice-Chair Saddler  asked Ms.  Shaddock to  characterize the                                                                    
involvement  the   Senate  Finance  subcommittee   had  with                                                                    
stakeholders in developing  the bill. He had  read the Agnew                                                                    
Beck report  and seen  their extensive  list of  people they                                                                    
consulted with.                                                                                                                 
                                                                                                                                
Ms. Shadduck responded that the  sponsor had heard from many                                                                    
different  people when  creating each  section of  the bill.                                                                    
There   had  been   testimony  from   Agnew   Beck  as   the                                                                    
department's contractors  as well  as the Menges  Group, the                                                                    
legislature's contractors. A  significant amount of feedback                                                                    
was  received  from Becky  Hultberg  with  the Alaska  State                                                                    
Hospital and  Nursing Home Association, Jeff  Jesse with the                                                                    
Alaska  Mental Health  Trust Authority,  Tom Chard  with the                                                                    
Alaska  Behavioral Health  Association,  Kate Burkhart  with                                                                    
the Alaska  Mental Health  Board and  the Advisory  Board on                                                                    
Alcoholism and  Drug Abuse, the  Dental Society,  the Alaska                                                                    
Primary  Care  Association, the  Psychological  Association,                                                                    
and the South  Central Foundation. She offered  to provide a                                                                    
complete list of organizations she  had heard from. The list                                                                    
was exhaustive and extensive. She  indicated that if someone                                                                    
had reached  out to the  bill sponsor, they offered  to hear                                                                    
from them. She mentioned that  she and Ms. Erin Shine, Staff                                                                    
to Senator  Anna MacKinnon, worked  one-on-one with  as many                                                                    
folks as possible.                                                                                                              
                                                                                                                                
3:11:32 PM                                                                                                                    
                                                                                                                                
Vice-Chair Saddler  asked Ms. Shadduck  to provide  the list                                                                    
as   well  as   contact  information.   He  mentioned   that                                                                    
throughout   the  bill   that   required   reports  to   the                                                                    
legislature  on  various dates.  He  wanted  a list  of  the                                                                    
reports, due dates, and the person that generated them.                                                                         
                                                                                                                                
Ms. Shaddock responded  that she had been asked  to create a                                                                    
master  table   that  listed  the   large  topics   and  the                                                                    
provisions  in the  bill. She  could  certainly include  the                                                                    
reports in the  document. She noted that all  of the reports                                                                    
were due on the same date.                                                                                                      
                                                                                                                                
Representative  Gattis had  presented a  bill on  telehealth                                                                    
medicine a couple  of years prior. The  current bill tweaked                                                                    
some of  the things  she did not  think was  possible before                                                                    
the  advancement of  technology. She  had become  aware that                                                                    
IHS  had  a federal  exemption  that  kept them  from  being                                                                    
sanctioned. She thought the bill  was allowing everyone else                                                                    
outside of that from being  sanctioned by the medical board.                                                                    
She wondered if she was accurate.                                                                                               
                                                                                                                                
Ms.  Shaddock  confirmed   that  Representative  Gattis  was                                                                    
correct.                                                                                                                        
                                                                                                                                
Representative Gattis stated that  telehealth was offered to                                                                    
state  employees   but  the   necessary  doctors   were  not                                                                    
available. She explained that the  legislature passed a bill                                                                    
that  required  doctors to  be  licensed  in Alaska  and  to                                                                    
reside in Alaska. The state  was currently unable to utilize                                                                    
its technology because although  providers from other places                                                                    
were licensed in  Alaska, they did not reside  in the state.                                                                    
The  state's  insurance  showed  that  telemedicine  was  an                                                                    
option but  could not  be used because  they were  unable to                                                                    
get people to Alaska. She  thought the opportunity was being                                                                    
opened up.                                                                                                                      
                                                                                                                                
Representative  Gara  was   impressed  with  Ms.  Shaddock's                                                                    
presentation of the  bill. He highlighted the  first line of                                                                    
the third paragraph of the  sponsor statement that indicated                                                                    
Alaska  had  some  of  the highest  Medicaid  rates  in  the                                                                    
nation. He  furthered that Alaska  had not executed  some of                                                                    
the  rate  innovations  implemented   by  other  states  and                                                                    
Medicare.  He had  not heard  anything that  touched on  the                                                                    
issue. He  was concerned  with Medicaid  reimbursement rates                                                                    
not being high enough  to attract physicians. Medicare rates                                                                    
had been particularly troubling  for physicians leading them                                                                    
to decide not  to take Medicare patients. He  asked if there                                                                    
was a provision  in the bill that lowered  Medicaid rates to                                                                    
those  of  Medicare. If  so,  he  would be  concerned  about                                                                    
patient access.                                                                                                                 
                                                                                                                                
Ms.  Shadduck  explained  that in  the  Medicaid  provisions                                                                    
where she discusses redesigning  the payment process, number                                                                    
8,  there  had been  a  significant  amount of  conversation                                                                    
about rates. Questions had been  sent back and forth between                                                                    
the  subcommittee to  the commissioner  inquiring about  the                                                                    
state's rates  being inadequate, not in  line with Medicare,                                                                    
and  provider's not  taking Medicaid  because of  rates. She                                                                    
furthered that rate setting was  an art form, trying to move                                                                    
the  entire system  away from  fee-for-service. In  order to                                                                    
make  this  change  the  committee  redesigned  the  payment                                                                    
process to include  some of the innovative  rates. She noted                                                                    
it  was  the  main  intention behind  the  coordinated  care                                                                    
projects,  starting  to see  what  kind  of innovative  rate                                                                    
structures  and pier  coordination  would work  on a  global                                                                    
basis.  There was  a fiscal  note  from the  Office of  Rate                                                                    
Review  to discuss  implementing the  two sections.  Setting                                                                    
rates required the  state to use an  actuarial analysis and,                                                                    
the  extensive  process  required  those to  go  before  the                                                                    
providers  for  public  comment.   She  added  that  it  was                                                                    
difficult to  mess with  the entire  process and,  they were                                                                    
trying to move the  entire system away from fee-for-service.                                                                    
She  explained that  copays were  not  addressed because  of                                                                    
hearing from providers  that they ended up  eating the cost.                                                                    
There  were   provisions  that  were  set   by  the  federal                                                                    
government  about  what could  be  charged  for copays.  She                                                                    
thought  Director Margret  Brodie  could provide  additional                                                                    
information.  She continued  that adding  in things  such as                                                                    
copays when trying to move  the structure away from fee-for-                                                                    
service could be counter intuitive.  She also noted that the                                                                    
state's  technology might  not work  or would  cost more  to                                                                    
collect a very nominal amount.                                                                                                  
                                                                                                                                
3:18:17 PM                                                                                                                    
                                                                                                                                
Representative  Gara  agreed  that copays  were  often  more                                                                    
costly than  trying to  collect them.  He continued  that he                                                                    
did  not want  to  do  what was  done  in  Medicare such  as                                                                    
doctors  receiving  only  $65  for  a  primary  care  visit.                                                                    
Physicians  had  reported  that the  amount  was  completely                                                                    
inadequate  for   them  to  want   to  serve   the  Medicare                                                                    
population.  If they  served Medicare  patients they  did it                                                                    
out of a  sense of obligation. He noted that  there had been                                                                    
discussion about  reducing the cost for  home and community-                                                                    
based  care. He  suggested that  those who  provided respite                                                                    
care and  personal care attendants  already received  a very                                                                    
low level of  pay. He wondered if, by reducing  the cost for                                                                    
home and community-based care, it  would put pressure on the                                                                    
state to lower the pay for attendants.                                                                                          
                                                                                                                                
Ms.  Shadduck  suggested  that  the  intention  was  to  use                                                                    
innovative  methods  such   as  telemedicine.  For  instance                                                                    
regarding  home  and  community-based services,  instead  of                                                                    
having to  send someone out  to a patient's home  every day,                                                                    
an iPad  could be  placed in a  patient's home  and Facetime                                                                    
could  be  used to  check  in  with  a patient  about  their                                                                    
medications and  to answer any questions.  She reported that                                                                    
Section 30,  referring to waivers,  was the location  in the                                                                    
bill where the  department was asked to  implement the 1915i                                                                    
and 1915k  options as  well as the  1945 health  homes. They                                                                    
did not reduce services but  helped shift what the state was                                                                    
receiving from the federal government.                                                                                          
                                                                                                                                
3:20:22 PM                                                                                                                    
                                                                                                                                
Representative  Gara  was  aware  that  the  department  was                                                                    
moving ahead  with a number  of waivers. He was  unclear why                                                                    
it was  included in  the bill.  He suggested  the department                                                                    
wanted the legislature's blessing that it was moving ahead.                                                                     
                                                                                                                                
Ms. Shaddock  responded that he was  correct. The department                                                                    
wanted to make sure there  was legislative approval in place                                                                    
before  applying  for the  waivers.  She  reported having  a                                                                    
conversation  with  Deputy   Commissioner  Sherwood  on  the                                                                    
matter.                                                                                                                         
                                                                                                                                
3:21:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Neuman referred to Section  23 which had to do with                                                                    
competitive  bidding  for  durable  medical  equipment.  The                                                                    
section discussed that a Medicaid  service provider could go                                                                    
through a  program that  could be  delivered on  a statewide                                                                    
basis.  He wondered  if it  meant that  only providers  that                                                                    
worked  on a  statewide basis  could enter  into a  contract                                                                    
with the state for the competitive bidding process.                                                                             
                                                                                                                                
Ms.  Shaddock responded  that it  could be  done regionally.                                                                    
The bill  was specific about  the type of things  that would                                                                    
be allowed  to be handled  in a competitive  bidding process                                                                    
such as durable medical  equipment, wheelchairs, travel, and                                                                    
other   items.   She   reported   being   approached   about                                                                    
considering other things that  the committee was comfortable                                                                    
with. She  stressed that it was  in no way to  mean that one                                                                    
provider needed to do it entirely statewide.                                                                                    
                                                                                                                                
3:22:16 PM                                                                                                                    
                                                                                                                                
He asked  about the number of  audits per year listed  at 50                                                                    
in Section  25. He  wondered why the  state would  specify a                                                                    
number without knowing costs.                                                                                                   
                                                                                                                                
Ms.  Kraly answered  that currently  in statute  it required                                                                    
the department  to conduct 75  audits. There was  a contract                                                                    
with Myers and  Stauffer to conduct the  state's audits. She                                                                    
could provide  Co-Chair Neuman  with a  copy of  the state's                                                                    
contract with them.  It outlined how it  was reimbursed. The                                                                    
department determined to  reduce the number of  audits to 50                                                                    
to  offset the  costs of  multiple audits.  Providers had  a                                                                    
significant  amount of  audits  at the  federal, local,  and                                                                    
state  levels.  The  department would  experience  the  same                                                                    
impact without doing as many audits.                                                                                            
                                                                                                                                
Co-Chair Neuman  referred to Section  30 which  talked about                                                                    
outlining cost  containment. He  wondered about  the current                                                                    
value  of the  waivers if  the state  accepted all  of those                                                                    
that were  available. He  saw that  there was  a limit  of 6                                                                    
months to apply.  He did not understand why  the state would                                                                    
want  to  put  a  time  limit on  applying.  He  wanted  the                                                                    
information  from the  department.  He also  wanted a  legal                                                                    
opinion  on  the  authority of  the  department  to  develop                                                                    
regulations and post fines.                                                                                                     
                                                                                                                                
Co-Chair  Thompson assured  Co-Chair Neuman  that a  request                                                                    
would be made.                                                                                                                  
                                                                                                                                
Representative  Edgmon would  ask  his question  at a  later                                                                    
time.                                                                                                                           
                                                                                                                                
3:24:25 PM                                                                                                                    
                                                                                                                                
Representative  Munoz,  commented  that  Board  of  Pharmacy                                                                    
oversaw the  PDMP. The focus  was really on the  patient and                                                                    
trying  to track  patients that  shopped around  or who  had                                                                    
sought  more than  one  prescription in  a  short period  of                                                                    
time. There was a provision  that the board would notify the                                                                    
pharmacist  or  practitioner.  She   wondered  if  the  bill                                                                    
committee had  contemplated how the  database might  be used                                                                    
to monitor the prescriptive  practices of certain physicians                                                                    
who tended to over prescribe narcotics.                                                                                         
                                                                                                                                
Ms. Shadduck responded  that since that had  been brought to                                                                    
her  attention in  a meeting  with Representative  Munoz she                                                                    
had  sent  a  question  to  the  Director  of  Corporations,                                                                    
Boards, and Licensing  to get some feedback.  She also noted                                                                    
that there  was a  PDMP technical  assistance center  in the                                                                    
US.  She sent  a feeler  out to  them and  they had  already                                                                    
responded.  She would  be happy  to share  more information.                                                                    
The other  question could  be addressed  by the  director on                                                                    
the day focusing on the PDMP.                                                                                                   
                                                                                                                                
Representative Munoz also  asked whether previous committees                                                                    
had contemplated the State Board  of Medicine being involved                                                                    
in the monitoring of prescriptive practices.                                                                                    
                                                                                                                                
Ms.  Shadduck  responded  that  as  a  board  if  they  were                                                                    
sanctioning someone  they could not use  the database. There                                                                    
were  protections  to  avoid   the  information  being  used                                                                    
incorrectly.  There  were  provisions   that  were  Class  A                                                                    
misdemeanors  and  Class  C  felonies.  She  continued  that                                                                    
through a legal action there could  be a subpoena to look up                                                                    
information but  was very restrictive  on who had  access to                                                                    
the  database. Currently,  the method  the Senate  chose was                                                                    
those  unsolicited notifications  to prescribers.  She added                                                                    
that  requiring  the use  of  the  database would  allow  an                                                                    
education  level  to  increase  about  how  much  controlled                                                                    
substances prescribers were prescribing.  It was more on the                                                                    
educational side than a complete aggressive hammer.                                                                             
                                                                                                                                
3:27:03 PM                                                                                                                    
                                                                                                                                
Representative  Munoz   asked  about  the  types   of  drugs                                                                    
included  on  Schedules II,  III,  and  IV. She  noted  that                                                                    
Schedule II and III drugs  was more addictive in nature than                                                                    
Schedule IV  drugs. Her  concern was  that the  inclusion of                                                                    
Schedule IV  drugs would create  a great amount  of workload                                                                    
on  the  part  of  practitioners. She  thought  it  was  the                                                                    
information about  the narcotics represented in  Schedule II                                                                    
and  III  that  was  most important.  She  wondered  if  the                                                                    
discussion had come up in previous committees.                                                                                  
                                                                                                                                
Ms.  Shadduck realyed  that there  had been  much discussion                                                                    
about  what  schedules  to  include.  Schedule  IV  included                                                                    
Benzodiazepines  which  potentially  interacted  badly  with                                                                    
Schedule  II and  III  drugs.  The group  felt  that it  was                                                                    
important to  include Schedule IV drugs.  She clarified that                                                                    
the only folks  that enter information in  the database were                                                                    
pharmacists   and  pharmacy   employees  at   the  time   of                                                                    
dispensing. The day  prior to the bill passing  on the floor                                                                    
the  US Senate  passed SB  524, the  Comprehensive Addiction                                                                    
and Drug  Recovery Act of  2016, which included  (in Section                                                                    
601)  a  use  of  the   PDMP  that  would  be  required  for                                                                    
prescribers and  dispensers to look up  federal schedule II,                                                                    
III, and  IV drugs.  The prescribers would  have to  look up                                                                    
all  three   schedules  before   they  prescribed.   It  was                                                                    
something  that was  co-sponsored  by  Senator Sullivan  and                                                                    
passed  by both  of Alaska's  Senators. If  the bill  became                                                                    
federal  law,  then  the federal  government  would  have  a                                                                    
higher  threshold  and,  they would  be  linked  to  federal                                                                    
grants and other things.                                                                                                        
                                                                                                                                
Representative Munoz asked if a  false claim could be placed                                                                    
against the  State of Alaska  or one of its  affiliates such                                                                    
as  the Pioneer  Home or  the Juvenile  Justice System.  She                                                                    
also wondered if  a false claim could be  applied in another                                                                    
way  such as  an underpayment  or overpayment  by the  state                                                                    
reimbursement of a payment.                                                                                                     
                                                                                                                                
Ms. Kraly  would have to  look more closely. She  noted that                                                                    
state agencies like  the Pioneer Home were  subject to audit                                                                    
requirements.  They did  identify  overpayments  and had  to                                                                    
reconcile those  issues. She believed there  was a provision                                                                    
regarding state employees  and state agents in  terms of the                                                                    
FCA. She would follow up with additional details.                                                                               
                                                                                                                                
Co-Chair  Thompson thanked  Ms. Shadduck  for the  amount of                                                                    
work she had put into the bill.                                                                                                 
                                                                                                                                
Ms.  Shadduck looked  forward to  the  committee making  the                                                                    
bill a better bill.                                                                                                             
                                                                                                                                
CSSB 74(FIN) am was HEARD  and HELD in committee for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Thompson reviewed  the  agenda  for the  following                                                                    
day.                                                                                                                            
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:32:11 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:32 p.m.                                                                                          

Document Name Date/Time Subjects
SB74 Sectional Analysis.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
SB 74 Sponsor Statement.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
SB 74 Testimony ADS.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
DHSS Medicaid Services - Optional vs Mandatory_Feb 2016.pdf HFIN 3/21/2016 1:30:00 PM
SB 74 HFIN
Leg Research - PCA and HCBS programs.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
SB74 Supporting Documents - Topic & Sections Overview.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
AADD letter re SB74 031816.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
SB 74 Testimony ADS.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
SB74 Supporting Documents - Letter of Support - AMHB_ABADA_ 3-21-16.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
SB 74 Response DHSS.pdf HFIN 3/21/2016 1:30:00 PM
SB 74
SB 74 Tanana Chiefs.PDF HFIN 3/21/2016 1:30:00 PM
SB 74