Legislature(2019 - 2020)ADAMS ROOM 519

02/03/2020 01:30 PM FINANCE

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Audio Topic
01:34:52 PM Start
01:36:02 PM HB205 || HB206
01:36:36 PM Fy 21 Budget Overview: Department of Health and Social Services and Medicaid
02:44:50 PM Medicaid Budget Update
03:32:59 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 205 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 206 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Dept. of Health & Social Services Overviews: TELECONFERENCED
- FY21 Dept. Budget
- Medicaid Budget Update
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 3, 2020                                                                                           
                         1:34 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:34:52 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:34 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Kelly Merrick                                                                                                    
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Adam  Crum, Commissioner,  Department of  Health and  Social                                                                    
Services; Sana Efird,  Assistant Commissioner, Department of                                                                    
Health   and   Social    Services;   Albert   Wall,   Deputy                                                                    
Commissioner,  Medicare and  Health Care  Policy, Department                                                                    
of  Health  and  Social Services;  Gennifer  Moreau-Johnson,                                                                    
Acting Director,  Division of Behavioral  Health, Department                                                                    
of Health  and Social  Services; Renee Gayhart,  Health Care                                                                    
Services   Director,  Department   of   Health  and   Social                                                                    
Services.                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 205    APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          HB 205 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 206    APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          HB 206 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
FY 21 BUDGET OVERVIEW: DEPARTMENT OF HEALTH AND SOCIAL                                                                          
SERVICES AND MEDICAID                                                                                                           
                                                                                                                                
PRESENTATION: MEDICAID BUDGET UPDATE                                                                                            
                                                                                                                                
Co-Chair Foster reviewed the agenda for the day.                                                                                
                                                                                                                                
HOUSE BILL NO. 205                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    capitalizing   funds;    making                                                                    
     appropriations under art.  IX, sec. 17(c), Constitution                                                                    
     of the State of  Alaska, from the constitutional budget                                                                    
    reserve fund; and providing for an effective date."                                                                         
                                                                                                                                
HOUSE BILL NO. 206                                                                                                            
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
1:36:02 PM                                                                                                                    
                                                                                                                                
^FY 21 BUDGET OVERVIEW: DEPARTMENT OF HEALTH AND SOCIAL                                                                       
SERVICES AND MEDICAID                                                                                                         
                                                                                                                                
Co-Chair Foster invited testifiers from the Department of                                                                       
Health and Social Services (DHSS).                                                                                              
                                                                                                                                
1:36:36 PM                                                                                                                    
                                                                                                                                
ADAM CRUM, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL                                                                        
SERVICES, (DHSS) introduced himself.                                                                                            
                                                                                                                                
1:37:03 PM                                                                                                                    
                                                                                                                                
SANA  EFIRD, ASSISTANT  COMMISSIONER,  DEPARTMENT OF  HEALTH                                                                    
AND   SOCIAL  SERVICES,   introduced  the   budget  overview                                                                    
presentation  for  the  Department   of  Health  and  Social                                                                    
Services and Medicaid  (copy on file). She  began with slide                                                                    
2 which depicted  the total budget comparison  between FY 19                                                                    
to  FY  21.  The  comparison  of  2  years  showed  a  small                                                                    
reduction in the budget across  the 2 years. She highlighted                                                                    
that  in looking  at the  bar graph  looking at  the federal                                                                    
authority equaled 60 percent.                                                                                                   
                                                                                                                                
Vice-Chair Ortiz wondered whether  the comparison between FY                                                                    
19 and FY 21 referred to the actuals and not the budget.                                                                        
                                                                                                                                
Ms.  Efird   responded  that  the  comparison   was  to  the                                                                    
management plan, which was the  passed FY 19 budget with the                                                                    
department's adjustments. She remarked  that there were some                                                                    
minor changes to the budget within the management plan.                                                                         
                                                                                                                                
Vice-Chair Ortiz  asked if supplementals were  included form                                                                    
FY 19.                                                                                                                          
                                                                                                                                
Ms. Efird responded that FY reflected supplemental numbers.                                                                     
                                                                                                                                
Ms. Efird continued to slide  3 showing a comparison between                                                                    
FY  20  to  FY  21  operating  budget.  She  highlighted  an                                                                    
increase of  $133.747 million, which  was a  13.8 difference                                                                    
in the UGF.                                                                                                                     
                                                                                                                                
Ms. Efird turned to slide 4  which showed a breakdown of the                                                                    
changes to the FY 21 operating budget.                                                                                          
                                                                                                                                
1:40:58 PM                                                                                                                    
                                                                                                                                
Ms. Efird turned  to slide 5 which reflected the  FY 21 fund                                                                    
source breakdown by funding source.  She indicated the slide                                                                    
also showed a breakdown  of formula programs and non-formula                                                                    
programs. The  department's formula driven programs  made up                                                                    
75 percent of the state's DHSS budget.                                                                                          
                                                                                                                                
Co-Chair  Foster  remarked that  the  grand  total was  $3.4                                                                    
billion,  and he  assumed that  the total  was prior  to the                                                                    
duplicate removal                                                                                                               
                                                                                                                                
Ms. Efird  responded in the affirmative.  She explained that                                                                    
it  was meant  to show  that  the Office  of Management  and                                                                    
Budget (OMB)  was attempting  to show  that some  funds were                                                                    
budgeted for  various aspects, agencies, and  departments in                                                                    
the state.                                                                                                                      
                                                                                                                                
Ms. Efird turned to slide 6  which showed the budget for the                                                                    
Alaska Pioneer Homes Program. She  explained the fund source                                                                    
changes and budget changes:                                                                                                     
                                                                                                                                
     ? Add Authority for Alaska Pioneer Homes Payment                                                                           
     Assistance $5,000.0 UGF.                                                                                                   
     ? Reduce Authority to Align with Anticipated Revenue                                                                       
    and Expenditures. ($2,592.2) DGF, ($7,407.8) Other.                                                                         
                                                                                                                                
1:44:38 PM                                                                                                                    
                                                                                                                                
Representative Wool noted the addition  of $5 million to the                                                                    
Pioneer Homes in  UGF. He wondered how there was  also a net                                                                    
reduction to the Pioneer homes of $4 million.                                                                                   
                                                                                                                                
Ms.  Efird replied  that the  previous year's  Pioneer Homes                                                                    
budget  had  a  different component  budget  structure.  She                                                                    
noted  that historically  there was  one component  budgeted                                                                    
with all the Pioneer Homes,  and a smaller component for the                                                                    
administrative  cost. She  remarked  that OMB,  in the  year                                                                    
prior, had  inserted a new  budget structure  that accounted                                                                    
for payment  assistance. Therefore,  all the money  that was                                                                    
collected  was  coming  into the  Pioneer  Homes  budget  as                                                                    
general  funds in  the "Payment  Assistance Component."  She                                                                    
stated that  the fund was  only used as residents  came into                                                                    
the  home with  their  income eligibility  portion met.  She                                                                    
stated that once that resident  was eligible for assistance,                                                                    
the  Payment Assistance  Component  was billed  to meet  the                                                                    
needs monthly for  each resident that needed  help in making                                                                    
their payments  to stay in the  home. She noted that  in the                                                                    
previous year there was some  duplication of how the funding                                                                    
source should  show up  in the  Pioneer Homes  component, so                                                                    
the current  budget was  meant to ensure  that there  was an                                                                    
exact  payment assistance  UGF  number as  it  is billed  as                                                                    
interagency receipts  or other funds. She  restated that the                                                                    
piece  was a  technical "shoring  up" of  how those  sources                                                                    
were coming in.  She stressed that it was a  true $5 million                                                                    
increase to meet the needs of the Pioneer Homes residents.                                                                      
                                                                                                                                
1:47:21 PM                                                                                                                    
                                                                                                                                
Representative Wool  asked if the resident  would experience                                                                    
the effects of an increase or a decrease in the budget.                                                                         
                                                                                                                                
Ms. Efird replied that the  budget was based on a projection                                                                    
provided  by the  Pioneer Homes  to  meet the  needs of  the                                                                    
residents.  She noted  that the  reduction in  "other funds"                                                                    
referred to payment assistance amount.  She noted that there                                                                    
was also  a request for  a decrement  in the DGF  funds, and                                                                    
those funds were private pay.  She stressed that the Pioneer                                                                    
Homes budget  was always  based on  a projection,  while not                                                                    
knowing  the  exact  number  of  patients  that  might  need                                                                    
payment assistance.                                                                                                             
                                                                                                                                
Representative  Wool felt  that there  could be  an accurate                                                                    
expectation of  additional fees  paid privately,  because of                                                                    
the rate increase.                                                                                                              
                                                                                                                                
Ms.  Efird would  follow up  with the  committee. She  noted                                                                    
that  the funding  sources  for  the FY  20  budget was  not                                                                    
accurate,   because  of   all  of   the  attempts   to  make                                                                    
adjustments  and  changes.  She   thought  there  were  some                                                                    
unintentionally double-counted items.                                                                                           
                                                                                                                                
Vice-Chair Ortiz requested to  see the information Ms. Efird                                                                    
was going  to provide.  He wondered  whether the  $5 million                                                                    
increase was  a recalculation  of how  much would  be needed                                                                    
after the increase went into effect.                                                                                            
                                                                                                                                
1:52:08 PM                                                                                                                    
                                                                                                                                
Commissioner  Crum believed  the  number  of residents  that                                                                    
left the  Pioneer Home as a  result of the fee  increase was                                                                    
about 16 people.  He remarked that there was  an increase of                                                                    
individual payments  of almost $7  million, which was  a new                                                                    
aspect  to the  budget.  He explained  that  the $5  million                                                                    
would  help  provide  the flexibility  during  the  resident                                                                    
turnover.                                                                                                                       
                                                                                                                                
Vice-Chair  Ortiz  remarked  that   the  year  prior  had  a                                                                    
presenter that made the projection  that while the impact of                                                                    
the proposed rate  increase might show that  the state would                                                                    
save  money,  there  would  really  cause  a  shift  of  the                                                                    
population  to see  a higher  percentage  of the  population                                                                    
being  unable to  have the  resources pay  on their  own, so                                                                    
they  would require  state  assistance to  make  up for  the                                                                    
change in population.                                                                                                           
                                                                                                                                
Commissioner  Crum  reported  that  the  number  of  dollars                                                                    
increased coming  through the  door in  the year  prior, but                                                                    
noted the uniqueness of the turnover rate.                                                                                      
                                                                                                                                
1:55:10 PM                                                                                                                    
                                                                                                                                
Vice-Chair Ortiz asked for clarification in wording.                                                                            
                                                                                                                                
Commissioner  Crum restated  that there  was a  state saving                                                                    
increase.                                                                                                                       
                                                                                                                                
Vice-Chair Ortiz queried the exact amount of state savings.                                                                     
                                                                                                                                
Ms.  Efird replied  that the  Pioneer Homes  was still  down                                                                    
approximately $2 million  in UGF, but agreed to  go over the                                                                    
specific numbers throughout the previous years.                                                                                 
                                                                                                                                
Representative  Josephson  asked  where   to  look  for  the                                                                    
additional fees.                                                                                                                
                                                                                                                                
Ms. Efird  clarified that  there was  a technical  issue the                                                                    
department was attempting to correct.                                                                                           
                                                                                                                                
Ms.  Efird  continued  to  slide  7  reflecting  the  Alaska                                                                    
Psychiatric  Institute  (API)  budget.  The  change  to  the                                                                    
budget was to attempt to fill all beds at API:                                                                                  
                                                                                                                                
     ? Add Authority to Achieve Full Capacity at the Alaska                                                                     
   Psychiatric Institute. $2,529.2 UGF, $6,837.2 Other.                                                                         
                                                                                                                                
Representative  Wool  wondered  whether the  department  was                                                                    
receiving Medicaid  payments prior  to the waiver.  He asked                                                                    
whether residents of API were eligible for Medicaid.                                                                            
                                                                                                                                
Ms. Efird  responded in the affirmative.  She furthered that                                                                    
it would now be covered under the 1115 waiver.                                                                                  
                                                                                                                                
Representative  Wool asked  about the  $2.6 million  was for                                                                    
expanding the  number of  beds. He  asked if  the department                                                                    
still  had the  resources  to increase  the  number of  beds                                                                    
without the 1115 waiver.                                                                                                        
                                                                                                                                
Ms.  Efird  replied  that  the  increment  was  intended  to                                                                    
provide  the resources  to  meet  the staffing  requirements                                                                    
needed for  the additional  80 beds.  She stressed  that the                                                                    
slide  reflected  how  the   department  would  capture  the                                                                    
funding for the increment.                                                                                                      
                                                                                                                                
1:59:46 PM                                                                                                                    
                                                                                                                                
Ms. Efird  advanced to  slide 8 showing  the budget  for the                                                                    
Division  of Behavioral  Health.  She pointed  out the  fund                                                                    
source change from UGF to the MET fund:                                                                                         
                                                                                                                                
     ? In FY2021 a Fund Change from UGF ($11,400.0) to MET                                                                      
     Fund (DGF) $11,400.0.                                                                                                      
                                                                                                                                
Co-Chair Johnston commented that  there had been discussions                                                                    
in  the  subcommittee  about  the  sustainability,  and  was                                                                    
interested in  what was "really sustainable"  year over year                                                                    
for the Marijuana Fund.                                                                                                         
                                                                                                                                
Ms. Efird  commented that the  department would  continue to                                                                    
monitor the  issue and would  look more closely at  the fund                                                                    
to make sure sustainable dollars were available.                                                                                
                                                                                                                                
2:02:06 PM                                                                                                                    
                                                                                                                                
Representative  Josephson commented  that  the reduction  in                                                                    
the Behavioral  Health portion of  the budget  still allowed                                                                    
for  providers  to  submit claims  through  the  agency.  He                                                                    
wondered  whether  the 1115  waiver  would  show up  in  the                                                                    
Supplemental Budget.                                                                                                            
                                                                                                                                
Ms.  Efird  did  not  completely  understand  Representative                                                                    
Josephson's question.                                                                                                           
                                                                                                                                
Representative Josephson  clarified that  the need  would be                                                                    
comparable   in  FY   19.  The   legislature  had   recently                                                                    
underfunded   in  anticipation   of   waiver  approval   for                                                                    
services.                                                                                                                       
                                                                                                                                
Ms.  Efird clarified  that the  waiver services  funding had                                                                    
been approved.                                                                                                                  
                                                                                                                                
Representative  Josephson  wondered   whether  have  of  the                                                                    
waiver program was still "pending."                                                                                             
                                                                                                                                
Ms. Efird responded, "That is  correct." She deferred to Mr.                                                                    
Wall.                                                                                                                           
                                                                                                                                
2:04:46 PM                                                                                                                    
                                                                                                                                
ALBERT WALL,  DEPUTY COMMISSIONER, MEDICARE AND  HEALTH CARE                                                                    
POLICY,  DEPARTMENT OF  HEALTH AND  SOCIAL SERVICES,  shared                                                                    
that the  services provided  under the  1115 waiver  for the                                                                    
substance use  disorder services were already  online. Those                                                                    
services were  being rolled out a  little bit at a  time. He                                                                    
explained that  the old  way of  billing under  Medicaid was                                                                    
still available, so  there were two different  forms to bill                                                                    
under Medicaid.  He explained that  the reduction  in grants                                                                    
was the  first phase, and  the second phase  was anticipated                                                                    
for the following fiscal year.                                                                                                  
                                                                                                                                
2:06:09 PM                                                                                                                    
                                                                                                                                
GENNIFER  MOREAU-JOHNSON,   ACTING  DIRECTOR,   DIVISION  OF                                                                    
BEHAVIORAL   HEALTH,  DEPARTMENT   OF   HEALTH  AND   SOCIAL                                                                    
SERVICES, explained  the sequence  of milestones to  help to                                                                    
clarify the intent and process.  She recalled that in FY 16,                                                                    
there was  a bill  that allowed for  the application  of the                                                                    
grant decrement. The decrement  was implemented ahead of the                                                                    
1115  waiver demonstration  project. She  furthered that  in                                                                    
November of 2018, the department  received approval from the                                                                    
federal   government   for   the  substance   use   disorder                                                                    
component, which added twelve new  services to be covered by                                                                    
Medicaid. She  remarked that it  was in addition  to regular                                                                    
Medicaid.                                                                                                                       
                                                                                                                                
Mr.  Wall  explained the  reason  why  the 1115  waiver  was                                                                    
divided into the two portions.                                                                                                  
                                                                                                                                
2:10:38 PM                                                                                                                    
                                                                                                                                
Representative  Wool  wondered  whether  the  API  residents                                                                    
would  be  double  billed  for  the  resident  fee  and  the                                                                    
substance abuse assistance fee.                                                                                                 
                                                                                                                                
Mr. Wall  responded that  API was  only doing  the inpatient                                                                    
psychiatric   component,  and   not   the  substance   abuse                                                                    
component.                                                                                                                      
                                                                                                                                
Representative Wool  referred to an increase  in the "other"                                                                    
portion of the budget.                                                                                                          
                                                                                                                                
Mr. Wall  further clarified  that there was  a shift  in the                                                                    
Medicaid expenditure in API in the coming years.                                                                                
                                                                                                                                
Commissioner Crum  added that there  was an  anticipation of                                                                    
receiving the  IMB exclusion to bill  against the behavioral                                                                    
health  portion,  which  would  allow for  the  increase  in                                                                    
revenue for the incoming dollars.                                                                                               
                                                                                                                                
Representative  Wool   asked  that  with  the   increase  in                                                                    
revenues, the  state would be  able to expand the  number of                                                                    
beds.                                                                                                                           
                                                                                                                                
Mr. Wall  noted that  the problem  did not  have to  do with                                                                    
additional  beds,   rather  it  had  to   do  with  staffing                                                                    
requirements.                                                                                                                   
                                                                                                                                
Ms. Efird reviewed  slide 9 having to do with  the Office of                                                                    
Children's Services:                                                                                                            
                                                                                                                                
     ? Staff Retention and Wellness Initiatives $1,500.0                                                                        
     Federal.                                                                                                                   
     ? Title IV-E Reimbursement for Legal Representation                                                                        
     for Parents $1,200.0 Federal.                                                                                              
                                                                                                                                
2:14:47 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Ortiz  noted  that   the  Office  of  Children's                                                                    
Services  Division generated  the  most  questions from  his                                                                    
constituents. There were complaints  that the division could                                                                    
not meet the demands of services properly.                                                                                      
                                                                                                                                
Commissioner Crum responded that  a GAP analysis study would                                                                    
be  release  in  the  following month.  He  hoped  community                                                                    
outreach  would increase  and allow  for  the department  to                                                                    
focus on the issue.                                                                                                             
                                                                                                                                
Ms. Efird advanced  to the Health Care  Services Division on                                                                    
slide  10.  The department  felt  the  position should  fall                                                                    
within the  Office of  the Governor  rather that  the Health                                                                    
Care Services Division:                                                                                                         
                                                                                                                                
     ? Transfer Office of Rate Review to Commissioner's                                                                         
     Office                                                                                                                     
                                                                                                                                
Ms.  Efird  advanced  to  slide 11  and  showed  the  budget                                                                    
breakdown for the Division of Juvenile Justice.                                                                                 
                                                                                                                                
Co-Chair Foster asked  about the $2 million cut  to the Nome                                                                    
Youth Facility. He  noted that the slide  showed an increase                                                                    
in  funding  for  juvenile justice,  and  aske  for  further                                                                    
information.                                                                                                                    
                                                                                                                                
Ms. Efird replied that the  reduction occurred from FY 19 to                                                                    
FY 20. She noted that  the major adjustments were salary and                                                                    
technical adjustments in the budget.                                                                                            
                                                                                                                                
Co-Chair  Foster noted  there had  been cuts  to travel.  He                                                                    
asked  her   to  speak  to  transportation   costs.  He  was                                                                    
concerned that the cuts offset increments.                                                                                      
                                                                                                                                
2:20:24 PM                                                                                                                    
                                                                                                                                
Commissioner  Crum   responded  that  the  staff   had  been                                                                    
maintained at the Nome Facility  for probation services, and                                                                    
maintaining a facility for other  kids until their transfer.                                                                    
He  stressed  that  many  items,  like  Zoom,  provided  the                                                                    
ability for distant  access to keep some of  the costs down.                                                                    
He stressed that there were  some discussions about the best                                                                    
use for that facility for public use.                                                                                           
                                                                                                                                
Co-Chair Foster asked if the  commissioner had kept track of                                                                    
the  process. He  wanted  to  know the  detail  on the  Nome                                                                    
Facility periodically.                                                                                                          
                                                                                                                                
Ms. Efird would provide the information to the committee.                                                                       
                                                                                                                                
Ms.  Efird turned  to  slide 12  regarding  the Division  of                                                                    
Public Assistance:                                                                                                              
                                                                                                                                
     ? Restore Adult Public Assistance Maintenance of                                                                           
     Effort Methodology $7,471.2 UGF.                                                                                           
     ? Transfer Parents as Teachers Program from the                                                                            
     Department of Education and Early Development for                                                                          
     Better Alignment $474.7 UGF.                                                                                               
                                                                                                                                
Representative  Knopp  asked for  a  brief  synopsis of  the                                                                    
Adult   Public  Assistance   maintenance  effort.   He  also                                                                    
requested  the  eligibility  requirements for  some  of  the                                                                    
public assistance programs.                                                                                                     
                                                                                                                                
Ms. Efird  replied that the Adult  Public Assistance Program                                                                    
was  required  as a  match  for  the Medicaid  program.  She                                                                    
explained that  the payments went to  age-blind and disabled                                                                    
people.   The  eligibility   requirements  included   income                                                                    
calculations  related  to  who received  the  payments.  She                                                                    
furthered  that there  was a  spending requirement  called a                                                                    
"maintenance of  effort" on the  program as a match  for the                                                                    
Medicaid program.  The two ways  the state  calculated their                                                                    
total maintenance  of effort: 1)  reverting to  the payments                                                                    
from 1983 with cost of  living increases, which was proposed                                                                    
in the  original FY  20 budget; and  2) to  maintain current                                                                    
total  expenditures   of  the   process  of   payments.  She                                                                    
explained  that  the  department estimated  that  the  state                                                                    
could save some funding in  the current fiscal year, but was                                                                    
more  than  the  governor  had  in  the  original  proposal,                                                                    
therefore there was a reverting to the current proposal.                                                                        
                                                                                                                                
Commissioner  Crum furthered  that  the  Division of  Public                                                                    
Assistance administered  eligibility and the intake  for all                                                                    
assistance programs.                                                                                                            
                                                                                                                                
Ms. Efird  continued to slide  13, which compared the  FY 20                                                                    
and FY 21 budgets:                                                                                                              
                                                                                                                                
       SB93 Increase SDPR for SHARP II                                                                                          
                                                                                                                                
Vice-Chair  Ortiz  asked  Ms.  Efird  to  elaborate  on  the                                                                    
motivation for the governor's particular change.                                                                                
                                                                                                                                
Commissioner   Crum   responded   that   the   program   had                                                                    
historically  been under  the  Department  of Education  and                                                                    
Early Development. In the last  couple of years the Division                                                                    
of Public Health had been assigned that program.                                                                                
                                                                                                                                
Vice-Chair   Ortiz  would   have  more   questions  at   the                                                                    
subcommittee meeting.                                                                                                           
                                                                                                                                
2:29:28 PM                                                                                                                    
                                                                                                                                
Ms.  Efird   discussed  the  Senior   Disabilities  Services                                                                    
Budget. She expressed disappointment  in the budget, because                                                                    
the department  had asked for  an increase in  the increment                                                                    
of federal funds for the  Preschool Development Grant, which                                                                    
was  phase  2.  she  stated  that  the  Senior  Disabilities                                                                    
Services  put  in the  application  of  the portion  of  the                                                                    
grant.                                                                                                                          
                                                                                                                                
Vice-Chair Ortiz  returned to  the topic  of the  $7 million                                                                    
the state would not be receiving.  He asked if the grant had                                                                    
been in existence but would no longer be available.                                                                             
                                                                                                                                
Ms.  Efird explained  that the  grant was  developed by  the                                                                    
federal  government to  address  preschool development.  She                                                                    
explained  that states  were asked  to apply,  so the  state                                                                    
applied  through  the  Department  of  Education  and  Early                                                                    
Development (DEED). The stated  received that portion of the                                                                    
grant.                                                                                                                          
                                                                                                                                
Vice-Chair Ortiz  interjected a  question. He  wondered what                                                                    
happened to that portion of the grant.                                                                                          
                                                                                                                                
Commissioner Crum  responded that  the grant  was identified                                                                    
by  the Alaska  Early Development  Coordinating Council.  He                                                                    
explained  that  the initial  phase  of  the grant  was  for                                                                    
strategy,   and  did   a  very   good  job   with  all   the                                                                    
stakeholders.                                                                                                                   
                                                                                                                                
Ms.  Efird added  that  only the  states  that received  the                                                                    
first piece were asked to request the second phase request.                                                                     
                                                                                                                                
Ms. Efird reviewed slide 14  showing the Senior Disabilities                                                                    
Services:                                                                                                                       
                                                                                                                                
     ? Children and Families Preschool Development Grant                                                                        
     (Grant was not awarded to division and authority will                                                                      
     be adjusted.) $7,000.0 Federal.                                                                                            
     ? Electronic Visit Verification System Maintenance and                                                                     
     Operation $412.5 Federal and $137.5 UGF.                                                                                   
                                                                                                                                
2:34:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair Ortiz  asked about slide  14, and  wondered about                                                                    
day  rehab   services  within  the  Senior   and  Disability                                                                    
Services.                                                                                                                       
                                                                                                                                
Commissioner Crum replied in the affirmative.                                                                                   
                                                                                                                                
Vice-Chair Ortiz  noted concern about the  adjustment to the                                                                    
program   over   several   years,  particularly   in   rural                                                                    
communities  that did  not have  alternatives. He  asked for                                                                    
more information on that issue.                                                                                                 
                                                                                                                                
Commissioner Crum admitted  it was an ongoing  issue. He was                                                                    
aware of a definition rewrite.  There had been a significant                                                                    
amount  of  input  from  the  community.  He  suggested  the                                                                    
conversation was constant.                                                                                                      
                                                                                                                                
Vice-Chair Ortiz asked  if it was safe to say  over the last                                                                    
several  years there  had been  a  significant reduction  in                                                                    
services.                                                                                                                       
                                                                                                                                
Commissioner Crum could follow-up with more information.                                                                        
                                                                                                                                
Vice-Chair Ortiz would  like to further address  the area of                                                                    
concern.                                                                                                                        
                                                                                                                                
Ms. Efird  continued to the last  budgeted appropriation was                                                                    
the  Medicaid   Services  Appropriation.  She   reported  an                                                                    
increased request.                                                                                                              
                                                                                                                                
Representative Josephson  commented in  the prior  March and                                                                    
April  he became  knowledgeable enough  to be  dangerous. He                                                                    
noted  a hearing  with Mr.  Teal at  which time  he declared                                                                    
that the governor  could put any plan forward  . He wondered                                                                    
about the  administration's reform,  and asked Ms.  Efird to                                                                    
provide a sense of the administration's position.                                                                               
                                                                                                                                
Commissioner   Crum  indicated   the   question  would   get                                                                    
addressed the following Medicaid presentation.                                                                                  
                                                                                                                                
Co-Chair Johnston asked the  commissioner to provide further                                                                    
detail about  the 4 additional  staff positions as  noted on                                                                    
slide 15.                                                                                                                       
                                                                                                                                
Commissioner Crum  explained that he had  asked for feedback                                                                    
from  division  directors  who all  provided  feedback  that                                                                    
Medicaid typically  overshadowed the  divisions. He  noted a                                                                    
new position included a tribal liaison.                                                                                         
                                                                                                                                
Co-Chair Johnston  noted the department was  adding a deputy                                                                    
commissioner  position, and  wondered  what other  positions                                                                    
would be added.                                                                                                                 
                                                                                                                                
Ms.  Efird  responded  that department  would  be  adding  a                                                                    
deputy commissioner,  a special  assistant, and  two project                                                                    
coordinators.                                                                                                                   
                                                                                                                                
Representative  Wool  wondered  whether the  four  positions                                                                    
would  require the  two records  of  funding be  a total  of                                                                    
$630,000.                                                                                                                       
                                                                                                                                
Ms. Efird replied in the  affirmative. She explained that it                                                                    
was  based on  the public  assistance cost  allocation plan,                                                                    
where there was a cost-out of the federal portion.                                                                              
                                                                                                                                
^MEDICAID BUDGET UPDATE                                                                                                       
                                                                                                                                
2:44:50 PM                                                                                                                    
                                                                                                                                
RENEE GAYHART, HEALTH CARE  SERVICES DIRECTOR, DEPARTMENT OF                                                                    
HEALTH AND SOCIAL SERVICES, introduced herself.                                                                                 
                                                                                                                                
                                                                                                                                
2:45:39 PM                                                                                                                    
                                                                                                                                
ADAM  CRUM, COMMISSIONER,  DEPARTMENT OF  HEALTH AND  SOCIAL                                                                    
SERVICES, began the Medicaid budget overview with slide 20:                                                                     
                                                                                                                                
     5 percent Provider Rate Reduction for Medicaid                                                                             
     services                                                                                                                   
                                                                                                                                
Representative Josephson  wondered whether  the commissioner                                                                    
was saying  that the cuts  from FY  20 was a  restoration of                                                                    
the cuts from FY 20.                                                                                                            
                                                                                                                                
Commissioner Crum  responded replied  that a portion  of the                                                                    
cuts had been restored from FY 20.                                                                                              
                                                                                                                                
Representative  Sullivan-Leonard referred  back to  slide 16                                                                    
and asked if  the supplemental funding was  included in that                                                                    
request. She also  asked for explanation of  the increase of                                                                    
the $127  million for  the difference between  FY 20  and FY                                                                    
21.                                                                                                                             
                                                                                                                                
Commissioner  Crum responded  that  the likely  supplemental                                                                    
request  of  the  $120  million  range  would  be  read  the                                                                    
following day.                                                                                                                  
                                                                                                                                
Co-Chair  Foster thought  the supplemental  would be  out in                                                                    
the current day.                                                                                                                
                                                                                                                                
2:49:01 PM                                                                                                                    
                                                                                                                                
Commissioner Crum  explained that the system  was shocked in                                                                    
the  year  prior. He  stated  that  there was  an  increment                                                                    
request to bring  stability to the system, so  there was not                                                                    
a large  supplemental request. He  explained that it  was an                                                                    
item was meant  to move forward with a  larger increment for                                                                    
stability to the Medicaid program.                                                                                              
                                                                                                                                
Representative Sullivan-Leonard clarified  that $127 million                                                                    
for the governor's  increase, and there would  be a separate                                                                    
increase for the supplemental.                                                                                                  
                                                                                                                                
Ms. Efird responded  that the FY 20 numbers  did not include                                                                    
a  supplemental, but  there would  be a  request coming  out                                                                    
soon.                                                                                                                           
                                                                                                                                
Co-Chair  Foster noted  that the  base would  increase after                                                                    
the supplemental was released.                                                                                                  
                                                                                                                                
Ms. Efird noted the supplemental amounts were not included.                                                                     
                                                                                                                                
2:51:46 PM                                                                                                                    
                                                                                                                                
Co-Chair  Johnston could  see the  confusion because  in the                                                                    
previous year there was a promise  that there would not be a                                                                    
supplemental.  She   also  asked   about  a  date   for  the                                                                    
supplemental.                                                                                                                   
                                                                                                                                
Ms. Efird responded  that the department was  working on the                                                                    
numbers and the timing for additional funds.                                                                                    
                                                                                                                                
Co-Chair  Johnston stressed  that there  were some  concerns                                                                    
because private sector businesses had incurred costs.                                                                           
                                                                                                                                
Commissioner  Crum   continued  to  discuss  slide   20.  He                                                                    
reported  that the  previous year  had drastic  measures and                                                                    
cuts, and some were successful and some were not.                                                                               
                                                                                                                                
Commissioner  Crum   moved  on   to  discuss   the  hospital                                                                    
diagnostic related groups as seen on slide 21:                                                                                  
                                                                                                                                
     Hospital Diagnostic Related Groups (DRGs)                                                                                  
                                                                                                                                
Commissioner Crum moved to slide  22 regarding the long-term                                                                    
care  rate reduction.  The department  could only  provide a                                                                    
rate reduction of 3 percent.                                                                                                    
                                                                                                                                
2:56:12 PM                                                                                                                    
                                                                                                                                
Representative  Josephson asked  how  the  flat rate  versus                                                                    
actual cost rate affected providers.                                                                                            
                                                                                                                                
Ms.  Gayhart responded  that no  providers had  disenrolled,                                                                    
but many years had a flat rate.                                                                                                 
                                                                                                                                
Representative Josephson  suggested the previous  system was                                                                    
generous.                                                                                                                       
                                                                                                                                
Commissioner Crum  agreed, and  explained that  the Medicare                                                                    
program also paid for the service.                                                                                              
                                                                                                                                
Representative Wool asked whether a  flat rate would be more                                                                    
in line with a fee per service.                                                                                                 
                                                                                                                                
Commissioner Crum replied that it was a flat rate basis.                                                                        
                                                                                                                                
Commissioner  Crum  spoke   about  the  pharmacy  adjustment                                                                    
listed on  slide 24.  He mentioned  that the  department was                                                                    
working closely  with the  Department of  Corrections (DOC).                                                                    
He indicated it was an internal alignment.                                                                                      
                                                                                                                                
Co-Chair Johnston asked  if there was an  alignment with the                                                                    
Department of Administration (DOA).                                                                                             
                                                                                                                                
Commissioner Crum  responded in  the affirmative,  and there                                                                    
were  discussions  with  the   Division  of  Retirement  and                                                                    
Benefits; and  discussions with  the Division  of Insurance.                                                                    
He explained  that Washington was  able to receive  a waiver                                                                    
for the  pharmaceutical purchasing,  which allowed  for some                                                                    
larger  purchasing  and bulk  power.  He  stressed that  the                                                                    
department  was able  to achieve  a  long list  of items  to                                                                    
pursue.                                                                                                                         
                                                                                                                                
Ms.  Gayhart spoke  to  slide 25  dealing  with the  limited                                                                    
physical therapy, occupational therapy, and speech therapy.                                                                     
                                                                                                                                
3:01:12 PM                                                                                                                    
                                                                                                                                
Ms.  Gayhart explained  that  the  Expanded Care  Management                                                                    
Program  was  the attempt  to  be  the "friendlier  face  of                                                                    
Medicaid." She explained  that there was a  desire to assist                                                                    
Medicaid recipients  by being more  thoughtful in  their use                                                                    
of  services.  She  explained  that  the  program  tied  the                                                                    
recipient to one primary care  provider and one pharmacy for                                                                    
all of their needs. She  stated that regulations took longer                                                                    
than anticipated for  the program, so they did  not meet the                                                                    
number of desired recipients.                                                                                                   
                                                                                                                                
Commissioner  Crum  moved to  slide  27  having to  do  with                                                                    
implementing a nurse hotline.                                                                                                   
                                                                                                                                
Commissioner   Crum  explained   that  the   timely  filling                                                                    
allowance  reduction,  shown on  slide  28,  would not  save                                                                    
money.                                                                                                                          
                                                                                                                                
Ms. Gayhart  continued to slide  29 to  discuss streamlining                                                                    
costs  of  care collections.  A  savings  would be  seen  in                                                                    
FY 21.                                                                                                                          
                                                                                                                                
Commissioner Crum moved  to slide 30. He stated  that it was                                                                    
more affordable  for the  department to  pay the  premium to                                                                    
keep a  person on Medicaid,  than it was for  the department                                                                    
to lose that person due to the high cost of the premium.                                                                        
                                                                                                                                
3:05:19 PM                                                                                                                    
                                                                                                                                
Ms.  Gayhart reported  that the  state was  on target  for a                                                                    
savings of  $20 million.  She scrolled through  slides 32-34                                                                    
and  noted that  after  FY 17  and  FY 18  there  was a  $20                                                                    
million savings. They were fairly aggressive targets.                                                                           
                                                                                                                                
Representative Josephson  asked about tribal  reclaiming. He                                                                    
wondered  if  the  issue was  simply  that  formerly  Alaska                                                                    
Natives were  having some of  their services  billed through                                                                    
Medicaid at  50 to 60  percent, but  were now billed  at 100                                                                    
percent and saving through the general fund.                                                                                    
                                                                                                                                
Ms.   Gayhart  responded   that  they   were  prior   period                                                                    
adjustments.  She explained  that  the claims  were paid  at                                                                    
whatever  percentage they  would  be paid.  She stated  that                                                                    
currently  a  Native  Alaskan who  received  services  at  a                                                                    
tribal health  organization would  receive 100  percent. She                                                                    
explained that if they received  the service at a non-tribal                                                                    
site, the  payment would  be a match  of the  eligibility of                                                                    
that individual.                                                                                                                
                                                                                                                                
Commissioner Crum  discussed transportation  efficiencies on                                                                    
slide 36.  She reported that  the dollars had  been absorbed                                                                    
in reclaiming efforts by tribal organizations.                                                                                  
                                                                                                                                
3:10:45 PM                                                                                                                    
                                                                                                                                
Co-Chair Johnston  warned of  the 'One-Liners."  She thought                                                                    
adjustments  had  been  made   to  the  transportation.  She                                                                    
thought the Tribal Health Organizations deserved kudos.                                                                         
                                                                                                                                
Commissioner   Crum   spoke    of   the   electronic   visit                                                                    
verification program as noted on slide 37.                                                                                      
                                                                                                                                
Commissioner  Crum moved  to slide  38  which discussed  the                                                                    
transitional services to 1915(k).                                                                                               
                                                                                                                                
Commissioner Crum  reviewed slide  39, to discuss  the Adult                                                                    
Preventative Dental costs.                                                                                                      
                                                                                                                                
Co-Chair  Johnston   had  concerns   about  how   the  Adult                                                                    
Preventative  Dental program  would roll  out. She  wondered                                                                    
whether  there  would  be  a  "bump"  in  the  supplemental,                                                                    
because of the removal of the program in the year prior.                                                                        
                                                                                                                                
Commissioner Crum responded in the affirmative.                                                                                 
                                                                                                                                
Co-Chair Johnston asked if it cost the state more money.                                                                        
                                                                                                                                
Commissioner Crum replied in the affirmative.                                                                                   
                                                                                                                                
Commissioner  Crum  turned  to  slide  40,  which  discussed                                                                    
Transitional Behavioral Health Grants.                                                                                          
                                                                                                                                
Commissioner Crum  looked at slide  41, which  discussed the                                                                    
1115 Behavioral Health Waiver:                                                                                                  
                                                                                                                                
     ? Substance Misuse Disorder Treatment Component                                                                            
          ? Approved in November 2018                                                                                           
          ? Became effective January 1, 2019                                                                                    
     ? Behavioral Health Component                                                                                              
            Approved September 2019                                                                                             
          ? Will be implemented by June 30, 2020                                                                                
     ? Administrative Services Organization                                                                                     
            ? Contracted with Optum Health in November 2019                                                                     
            ? Goes live on February 1, 2020                                                                                     
                                                                                                                                
Commissioner Crum  continued to  the bar  chart on  slide 42                                                                    
showing Medicaid enrollment and spending in Alaska.                                                                             
                                                                                                                                
3:16:23 PM                                                                                                                    
                                                                                                                                
Co-Chair Johnston  asked if she  was seeing that  Alaska was                                                                    
spending less for more people.                                                                                                  
                                                                                                                                
Commissioner  Crum  moved to  slide  43  to answer  Co-Chair                                                                    
Johnston's question.                                                                                                            
                                                                                                                                
Co-Chair  Johnston wondered  whether there  were projections                                                                    
noting the formula change.                                                                                                      
                                                                                                                                
Commissioner Crum  replied in  the affirmative.  He stressed                                                                    
that the  formula change provided  a long-term  forecast. He                                                                    
stressed  that the  curve was  bent slightly  from the  year                                                                    
prior.                                                                                                                          
                                                                                                                                
Co-Chair Johnston thought all  members had received the MESA                                                                    
Report.                                                                                                                         
                                                                                                                                
Representative  Josephson  asked  about the  growth  in  the                                                                    
green  bar. He  wondered  if it  represented the  increasing                                                                    
percent over 90 percent.                                                                                                        
                                                                                                                                
Commissioner  Crum   responded  that   it  was   the  actual                                                                    
expansion group.                                                                                                                
                                                                                                                                
Representative  Josephson  wondered  about  a  cost  to  the                                                                    
state.                                                                                                                          
                                                                                                                                
Ms. Efird  responded that she could  provide the information                                                                    
to the committee.                                                                                                               
                                                                                                                                
Representative Josephson asked for a dollar figure.                                                                             
                                                                                                                                
Ms. Efird replied that she would provide the exact numbers.                                                                     
                                                                                                                                
Representative   Josephson    asked   the   administration's                                                                    
position on the amendments.                                                                                                     
                                                                                                                                
3:20:15 PM                                                                                                                    
                                                                                                                                
Commissioner Crum responded that some  of the items were put                                                                    
forward due to regulation change.                                                                                               
                                                                                                                                
Representative  Wool  referred  to  the chart  on  slide  43                                                                    
regarding the Medicaid expansion numbers.                                                                                       
                                                                                                                                
Commissioner Crum  referred back to slide  42 that reflected                                                                    
population and dollar amounts.                                                                                                  
                                                                                                                                
Representative  Wool  surmised  that  the  two  graphs  were                                                                    
tracking  exactly   proportionately.  He  stated   that  the                                                                    
increase   in  the   total   Medicaid  spending,   including                                                                    
expansion,  was  many  times less  than  the  federal  total                                                                    
dollars.                                                                                                                        
                                                                                                                                
Commissioner Crum replied in the affirmative.                                                                                   
                                                                                                                                
3:23:55 PM                                                                                                                    
                                                                                                                                
Co-Chair Johnston wondered whether  the department was aware                                                                    
of the projected  dates in which the state would  run out of                                                                    
Medicaid funding.                                                                                                               
                                                                                                                                
Commissioner Crum turned to the final slide which address                                                                       
the 3-year vision of DHSS:                                                                                                      
                                                                                                                                
     DHSS Mission To promote and protect the health and                                                                         
     well-being of Alaskans.                                                                                                    
                                                                                                                                
     Health and Social Services                                                                                                 
     ? Systems Alignment and Change                                                                                             
     ? Focus on IT Systems                                                                                                      
     ? Emergency Readiness and Response                                                                                         
     ? Behavioral Health Continuum of Care                                                                                      
                                                                                                                                
HB 205 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
HB 206 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Foster reviewed the agenda for the following day.                                                                      
                                                                                                                                
ADJOURNMENT                                                                                                                   
3:32:59 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:32 p.m.                                                                                          

Document Name Date/Time Subjects
Handout of DHSS Organizational Charts - Current and Proposed 2-1-20.pdf HFIN 2/3/2020 1:30:00 PM
DHSS - HFIN
DHSS and Medicaid Overview HFIN 2-3-20.pdf HFIN 2/3/2020 1:30:00 PM
DHSS HFIN Response Rep Foster NYF Closure Savings.pdf HFIN 2/3/2020 1:30:00 PM
DHSS HFIN Response AKPH FY21 Decrement and Revenues.pdf HFIN 2/3/2020 1:30:00 PM
DPA Programs.pdf HFIN 2/3/2020 1:30:00 PM
DHSS HFIN Response
LegLog 8102 HFIN DHSS Dept Overview 2-3-2020.pdf HFIN 2/3/2020 1:30:00 PM
DHSS HFIN Response