Legislature(2001 - 2002)
05/06/2002 02:01 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 06, 2002
2:01 P.M.
TAPE HFC 02 - 103, Side A
TAPE HFC 02 - 103, Side B
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 2:01 P.M.
MEMBERS PRESENT
Representative Bill Williams, Co-Chair
Representative Eldon Mulder, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Davies
Representative Richard Foster
Representative John Harris
Representative Bill Hudson
Representative Ken Lancaster
Representative Jim Whitaker
MEMBERS ABSENT
Representative Carl Moses
ALSO PRESENT
Senator Pete Kelly; Jerry Burnett, Staff, Senator Lyda
Green; Darwin Peterson, Staff, Senator John Torgerson;
Deborah Grundmann, Staff, Senator Ben Stevens; Paul Grossi,
Director, Division of Workers' Compensation, Department of
Labor & Workforce Development; Cathy Giessel, Alaska Nurse
Practioner Association (ANPA), Anchorage; Marie Darlin,
Alaska Association of Retired People (AARP), Juneau; Michael
Haugen, Executive Director, Alaska Physicians & Surgeons,
Inc., Anchorage; Jon Sherwood, Division of Medical
Assistance, Department of Health & Social Services
PRESENT VIA TELECONFERENCE
Jim Jordan, Executive Director, Alaska State Medical
Association, Anchorage; Mike Wiggen, Vice President,
National Accounts, Aetna; Jack McCrae, Senior Vice
President, Blue Cross, Blue Shield of Alaska; Marybeth
Gardner, Family Nurse Practioner, Nurse Midwife, Tok; Ed
Sniffen, Assistant Attorney General, Department of Law,
Anchorage; Pat Senner, President, Alaska Nurses Association,
Anchorage; Bob Lohr, Director, Division of Insurance,
Department of Community & Economic Development, Anchorage
SUMMARY
SB 37 An Act relating to collective negotiation by
physicians with health benefit plans; and to
health benefit plan contracts with individual
competing physicians.
HCS CS SB 37 (JUD) was reported out of Committee
with a "do pass" recommendation and with fiscal
notes #6 by the Department of Administration, #8
by the Department of Law and #9 by the Department
of Community & Economic Development.
SB 299 An Act relating to the establishment of an
additional south-central panel to the Alaska
Workers' Compensation Board and to appointments to
that panel; and providing for an effective date.
CS SB 299 (FIN) was reported out of Committee with
a "do pass" recommendation and with fiscal note #1
by the Department of Law.
SB 319 An Act relating to shallow natural gas leasing;
and providing for an effective date.
HCS CS SB 319 (RES) was reported out of Committee
with a "do pass" recommendation and with fiscal
note #1 by the Department of Natural Resources.
SB 345 An Act relating to medical assistance for
rehabilitative services for certain children with
disabilities; relating to agreements to pay
medical assistance for covered services paid for
or furnished to eligible children with
disabilities by a school district; and providing
for an effective date.
SB 345 was reported out of Committee with a "no
recommendation" and with fiscal note #1 and #2 by
the Department of Health & Social Services.
CS FOR SENATE BILL NO. 319(FIN)
An Act relating to shallow natural gas; and providing
for an effective date.
Co-Chair Mulder MOVED to report HCS CS SB 319 (RES) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HCS CS SB 319 (RES) was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by the
Department of Natural Resources.
#SB37
CS FOR SENATE BILL NO. 37(FIN)
An Act relating to collective negotiation by competing
physicians with health benefit plans, to health benefit
plan contracts, to the application of antitrust laws to
agreements involving providers and groups of providers
affected by collective negotiations, and to the effect
of the collective negotiation provisions on health care
providers.
SENATOR PETE KELLY stated that SB 37 attempts to level the
playing field for Alaska's patients and the physicians who
care for them.
Over the past eight years, the health insurance market has
continued to consolidate at a rapid pace. There were once
18 national health insurance companies that physicians could
choose to contract with. Those companies have since merged
into 6. It is even more severe for Alaskan physicians who
have only 2 choices of insurers. Physicians are given
little opportunity to advocate for the best care of the
patients.
Senator Kelly pointed out that independent physicians are
prevented from collective action by federal antitrust laws
and are subject to aggressive antitrust enforcement actions.
Large corporations, however, can adopt a "take it or leave
it" position without any antitrust ramifications, which
creates a damaging imbalance in bargaining power. The
inequity between health insurers and medical care providers
dictates physician contracts. The resulting contracts favor
the insurance companies over the health care that patients
receive and can result in such policies where physicians are
required to use a low cost treatment when a higher cost
treatment might be medically necessary.
Senator Kelly stated that SB 37 would enable independent,
competing physicians to become effective advocates for their
patients through collective negotiations with health
insurers. The negotiations would fall into a narrow scope
of topics with regard to the provisions of physician service
contracts and would be under the scrutiny of the Department
of Law. SB 37 would prohibit a group of independent
competing physicians from striking or otherwise engaging in
activities that could result in a boycott.
Representative Davies asked about the "voluntary" aspect of
the legislation. He understood that concerns regarding the
legislation were that the process would begin and then
communication would close.
Senator Kelly did not know if that was true. He thought the
issue addressed the need to have that type of discussion,
since the nature of the health care industry has changed so
much. Communication would have the best interest of the
patients in mind. That type of dialogue in the contracts
would help physicians protect their patients. He
acknowledged that concerns regarding the "price" were a more
valid argument, noting the condition of payment and quality
of care.
Vice-Chair Bunde thought that the logic of allowing doctors
to discuss patient care and working for what is best for
them was obvious; however, he pointed out that the committee
substitute does not allow that type of communication to
happen among other health practioners.
Senator Kelly interjected that nurse practioners wanted to
be exempt from the bill.
Vice-Chair Bunde noted that was not his impression.
MICHAEL HAUGEN, EXECUTIVE DIRECTOR, ALASKA PHYSICIANS &
SURGEONS, INC., ANCHORAGE, commented that the bill was
tailored for physicians only. He noted that legal counsel
for the American Medical Association (AMA), under the State
action doctrine, advised that each particular provider group
does need to petition the State for their own version of the
bill.
Vice-Chair Bunde did not understand the difference between
having two separate bills or two groups included in the same
one. He asked if that was a good medical practice, why did
it not include all medical practioners.
Mr. Haugen claimed that the AMA had approached the nurse
practioners with an offer, noting that they could borrow the
language of the proposed bill verbatim. Mr. Haugen pointed
out that the AMA received no answer at that time.
Representative Croft asked if under current Federal Trade
Commission (FTC) rules, do the doctors negotiate for the
medical necessity term insurance coverage. He asked if by
excluding the price provision, could "medical necessity" be
negotiated within the bill.
Mr. Haugen explained that without the bill, one could not
unless a statutory definition of "necessity" was passed.
Through the legislation, one issue could be medical
necessity and then defining in the contract what that is.
It is very common in the provider contracts to include a
definition of medical necessity. Physicians are currently
given no input on what the conditions are.
Representative Croft commented on the "idea" of State
action, and understood that something more would be required
to get a State exemption in federal law. He realized that
the State would need to be actively involved. He asked if
the bid could fall under the State action exception.
Mr. Haugen replied that it would. The current requirements
are clearly articulated and include active State oversight.
The attorney general would be involved in every stage of the
process. The Department of Law has veto power over the
contract and if it was found that it would not be in the
best interest of Alaskan citizens, the office could "pull
the plug". The bill would be entirely voluntary on the part
of the carriers, physicians and the State.
Mr. Haugen noted that it has come to AMA's attention that
the Alaska Nurses Association (ANA), the Alaska Nurse
Practitioners Association (ANPA), and nurse midwives oppose
SB 37. Mr. Haugen stated that it is important to refute
some of the claims made in their letters:
· The nurses claim that the bill would authorize
price fixing by physicians. Mr. Haugen clarified
that the fact is that price fixing would remain
illegal even if the bill were law. Nothing in the
bill authorizes price fixing.
· The nurses claim the bill would allow physicians
and insurers to discriminatorily exclude nurses
from contracts. Mr. Haugen commented that passage
of the bill would in no way protect physicians or
insurers from State or federal anti-trust laws if
either party conspired to shut out a different
provider group from a contract. In addition, at
the nurse's request, the bill incorporates
specific language in Section 23.50.020(p),
reiterating the points that the bill does not
protect physicians from exclusionary conduct.
· The nurses claim that the bill would increase
costs and reduce services, when in fact, the bill
requires final approval of a contract, including
the fee schedule by the Attorney General.
Mr. Haugen commented that one of the purposes of the bill
was to foster open communication between physicians and
payers so to address known inefficiencies in the healthcare
delivery system, thus potentially lowering the overall cost
of healthcare while increasing the level of service.
CATHY GIESSEL, ALASKA NURSE PRACTIONERS ASSOCIATION (ANPA),
ANCHORAGE, stated that nurse practioners and midwifes
ardently oppose SB 37. The original bill provided only for
physicians and ignored the fact that nurse practioners,
midwives and physical therapists exist and are valuable
health care providers. Those providers were excluded from
the competitive market place. Specifically of concern is
the exclusion from reimbursement. The House Labor and
Commerce Committee heard that concern and removed the "cost"
piece from the bill. The bill would jeopardize the nurse
practioner's practice. The House Judiciary Committee heard
that concern and placed protective language on Page 2, Line
13.
Ms. Giessel stressed that the ANP fundamentally dislikes SB
37 because it lays the foundation for future amendments that
could be detrimental to all providers outside of the
physicians. She reiterated that the ANP strongly opposes
the legislation and that it would negatively impact
healthcare in Alaska.
Vice-Chair Bunde interjected that statement did not "mesh"
with previous testimony claiming that nurse practioners had
been consulted and declined to be included.
Ms. Giessel responded that their lobbyist had never heard
that they had been approached regarding the issue or on the
bill.
Vice-Chair Bunde asked if they were aware of federal level
problems if more than one health care provider was contained
within a single bill.
Ms. Giessel was not aware that had been considered. She
noted that would not address the fundamental concern
regarding a non-competitive workplace. She added that
including more providers might be able to address those
concerns and admitted that she had not explored that idea.
Representative Whitaker inquired how nurse practioners would
be excluded from the competitive market place with the
passage of SB 37.
Ms. Giessel explained that the bill as amended in its
current form, they would not be excluded; however, the
original bill read quite differently. There have been long-
term contentions between the medical community and the nurse
practioners as health care needs are addressed with quality
of care. Physicians have the potential to exclude nurse
practioners from reimbursement.
Representative Whitaker asked if nurse practioners were
still concerned with that eventual evolvement.
Ms. Giessel remarked that there still remains a possibility
with amendments pending.
ED SNIFFEN, (TESTIFIED VIA TELECONFERENCE), ASSISTANT
ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE, spoke in
opposition to the proposed legislation. The primary concern
rests with the State action doctrine and whether or not it
rises to the standard to provide any kind of immunity to
doctors that could take advantage of the legislation to
engage in those negotiations. In the House Labor and
Commerce Committee, the federal trade commission testified
that the body of the bill does not rise to that level.
Granted, without the price provisions in the bill, the anti-
competitive concerns have been somewhat alleviated; however,
if the doctors engage in any activity that they think might
cross the line between quality of care and price, and rely
on the provisions of the bill to protect them from that, it
would be a mistake. The FTC has made it clear that they
would retain jurisdiction to take action if necessary. Mr.
Sniffen suggested that the bill would not provide the level
of protection that the doctors think it will.
Mr. Sniffen added that SB 37 does not rise to provide the
level of protection that the FTC contemplates. He pointed
out the January 18, 2002 letter from the FTC to
Representative Lisa Murkowski in the House Labor and
Commerce Committee, which addresses the State action
doctrine aspects of the bill.
Mr. Sniffen noted the Department of Law's $114 thousand
dollar fiscal note. He asked if the State wanted to spend
that amount of money to oversee a process that should
require no oversight.
Mr. Sniffen mentioned that this is a voluntary act, however,
it is "voluntary" only on the part of the providers and
health care. The Department would not be able to "cut the
process" when determined needed. He referenced language on
Page 5, Line 14 of the legislation, which outlines what the
Attorney General must do as a result of reviewing the
negotiations. He stated that the language is not
discretionary and that it would be difficult for the
Attorney General to stop the process.
Representative Croft asked if physicians could negotiate
medical necessity under SB 37.
Mr. Sniffen replied that if they can discuss it now under
FTC guidelines, then they would continue to be able to
whether SB 37 was passed or not.
Representative Davies asked what structure the State would
need to have in place to provide for that.
Mr. Sniffen responded that the structure, which meets the
immunity, would look something like the Regulatory
Commission of Alaska (RCA), an agency responsible for
handling and reviewing those matters. He added that the
process would be subject to an appeal by the court system
and would provide a good level of protection. SB 37
requires a third party negotiator to provide documents to
the attorney general for review. Previous Supreme Court
decisions have made it clear that the act of supervision is
very rigorous to insure that anti-competitive conduct is
shielded from antitrust liability.
PAT SENNER, (TESTIFIED VIA TELECONFERENCE), PRESIDENT,
ALASKA NURSES ASSOCIATION (ANA), ANCHORAGE, echoed comments
made by Ms. Giessel. She added that ANA had not been
approached about being included in the legislation. She
listed concerns regarding the bill:
· The impact on the cost of health care in Alaska.
The economy cannot sustain the dramatic increases
in health care costs. The committee substitute
that moved out of the House Judiciary Committee
includes price and adds protective language for
the non-physicians health care providers. She
urged that those provisions remain in the bill.
Ms. Senner voiced concern that the version that
passed from the Senate last year includes price.
She recommended that the Committee be "vigilant"
with the final version of the bill.
BOB LOHR, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, DIVISION
OF INSURANCE, DEPARTMENT OF COMMUNITY & ECONOMIC
DEVELOPMENT, ANCHORAGE, offered to answer questions
regarding the cost of care and/or the effect of SB 37.
Representative Davies asked if the bill were enacted if it
would impact the number of people in Alaska that are not
insured.
Mr. Lohr responded that the bill would not have as much of a
devastating effect that it previously had without the price
provisions. He added, it is extremely difficult to separate
price and non-price from quality of care issues. The FTC
has observed that they have never seen a negotiation with
all the non-priced items at the heart of it. It is clear
that a bill that does focus on non-price elements would be
far less harmful than a bill focused on the other. Mr. Lohr
emphasized that the bill could impact the person's ability
to receive coverage.
MARYBETH GARDNER, (TESTIFIED VIA TELECONFERENCE), FAMILY
NURSE PRACTIONER, MIDWIFE, TOK, spoke in opposition to SB
37. The bill could limit practice for nurse practioners in
rural Alaska. She stressed that SB 37 was a cumbersome
piece of legislation and would limit choices for Alaskans.
MARIE DARLIN, ALASKA ASSOCIATION OF RETIRED PERSONS (AARP),
JUNEAU, spoke in opposition of the legislation.
Ms. Darlin agreed that some of the worst aspects of SB 37
had been amended. The bill remains a piece of legislation
that will not help any Alaskans, except for the physicians.
The Department of Law and the Division of Insurance,
Department of Community & Economic Development, have both
spoke against the bill. Additionally, the Federal Trade
Commission (FTC) has indicated that the bill is
inappropriate.
Ms. Darlin stated that AARP considers itself a consumer
organization. As consumers, AARP is well aware of the cost
of medical services. SB 37 would increase the cost of
health care to everyone who pays for it, including the State
of Alaska, employees with health benefits, retirees, the
self-employed, and the growing number of uninsured.
Ms. Darlin pointed out that AARP members live throughout the
State. AARP believes that SB 37 would be harmful to rural
members who rely on nurse practitioners for their primary
care. Alaska currently has a Patient's Bill of Rights. If
the quality of care issues needs to be addressed, it should
be determined what is already included in that Patient's
Bill of Rights and if additional measures were needed that
would be an appropriate venue. At present time, AARP does
not identify any issues included in SB 37 that are not
already in law.
AARP members, possibly more than any other segment of the
population, are consumers of health care. Members have
indicated that fewer physicians are willing to accept
Medicare, fewer physicians are willing to see Medicare
patients, and more and more physicians are telling 64 year
olds that they will not see them once they turn 65 and are
eligible for Medicare. AARP would prefer to see legislation
that addresses improved care rather than improved "profits".
SB 37 does not offer opportunity for consumer input
regarding this concern. AARP believes that SB 37 will have
to increase health care costs without any increase in the
quality of care.
JIM JORDAN, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, ALASKA STATE MEDICAL ASSOCIATION, ANCHORAGE, spoke
in support for the legislation. He asked to respond to
comments of previous speakers.
He addressed the circumstances regarding nurse practioners
and that the bill would restrain trade to the healthcare
market place. AMA believes that legal counsel has reviewed
the bill and that such activities would currently be illegal
and would continue to be if the bill were adopted. He
referenced comments made that a recommendation had been
attempted with physicians to the nurse practioners and that
th
a work session had been organized on December 5, 2001, with
Representative Murkowski. He claimed that the nurse's
lobbyist was there as well as a representative from the
insurance company.
Mr. Jordan addressed the State oversight of the program.
The AMA has testified in previous committees that there is
sufficient oversight. He added that the bill does provide
an outline for the elements that the Attorney General's
office must take into consideration. He added that the bill
provides that the attorney general's office can adopt
regulations.
Mr. Jordan pointed out that the title insurance companies
had filed an agreed upon rate for several states. A
separate question in that case was whether there was a
sufficient oversight provided by the State insurance
department. The Supreme Court decided there was. In
viewing that case, there would be no surprises. He noted
that the difference was that the bill addresses a group of
independent insurance companies coming together to arrive at
a title insurance rate. There would be no other involvement
in that process. The result is only what goes to the
attorney general for extensive oversight. He read an
excerpt from a letter from Mr. Charles James.
MIKE WIGGEN, (TESTIFIED VIA TELECONFERENCE), VICE PRESIDENT,
NATIONAL ACCOUNTS, AETNA, spoke in opposition to SB 37. He
commented that the arguments that AETNA has against the
legislation are similar to those voiced by the Division of
Insurance.
He identified untrue information that has been made public.
That information stipulates that:
· It would force Alaska into sub contractual terms
called "gag orders". Mr. Wiggen stressed that was
not true. Those issues are prohibited under
current statute including the Patient Protection
Act to deal with contractual protection.
TAPE HFC 02 - 103, Side B
Mr. Wiggen continued.
· The quality of care issues. The FTC currently
allows that to take place as issued guidelines.
According to the FTC, SB 37 is inconsistent with
the federal statutes and is attempting to expand
the circumstances under which it could take place.
· Physicians have no choice but to accept the terms
and conditions of the contract. If that were
true, the cost of health care would be the highest
in the nation.
Mr. Wiggen urged members to discuss the market issues. He
stated that it is ironic that the issues are still alive in
a state where there is no health maintenance organization
(HMO). Mr. Wiggen's offered to answer questions of the
Committee.
Representative Croft asked if the bill would satisfy the
State action doctrine and if physicians could negotiate
medical necessity now or under SB 37.
Mr. Wiggen replied that the bill would not allow people to
address the State action doctrine. He added, there is a
misconception regarding medical necessity. People with non-
medical knowledge cannot discuss medical necessity. Such an
analysis is based upon medical study and information
regarding that concern. If another physician appeals that
information, then another doctor would scrutinize the
information. Insurance companies will use outside agencies
to determine the medical necessity in certain cases. As
written, medical necessity is not encompassed in SB 37.
Representative Croft questioned if a group of physicians
could negotiate their own definition of "medical necessity"
within the quality of care exception to the FTC prohibition.
Mr. Wiggen did not know.
JACK MCCRAE, (TESTIFIED VIA TELECONFERENCE), SENIOR VICE
PRESIDENT, BLUE CROSS, BLUE SHIELD OF ALASKA, stated that
his agency does oppose the legislation because of the cost
"driver". There could be double digit rate increases in
Alaska with the legislation enacted. With the rate and fees
removed, the legislation is not necessary. The FTC does
allow negotiation. He pointed out that Director Lohr had
mentioned that it is difficult to separate any rate and fees
when considering negotiations.
Mr. McCrae addressed other concerns with the legislation.
Pieces of legislation like SB 37 will keep competition out
of the State, which will increase rates and that would not
be good for the consumer. In 2000, Blue Cross negotiated
with the medical association, the Patient's Bill of Rights.
That document was agreed upon and was signed by the
Governor.
Mr. McCrae commented that they would be willing to negotiate
with the medical association regarding the concerns of SB
37. He stressed that the bill is not necessary. There is
concern that rates and fees could be reinserted into the
legislation at the end of session, which would be a large
cost driver for Alaskans.
Vice-Chair Bunde commented that the bill has been around for
two or three years. He questioned why there have been no
negotiations to date with the medical community.
Mr. McCrae responded that he had spoke with the head of the
Alaska Medical Association last summer in Anchorage. The
purpose of that trip was to undertake negotiations and that
there had not been a response to those discussions.
Representative Foster MOVED to report HCS CS SB 37 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
HCS CS SB 37 (JUD) was reported out of Committee with a "do
pass" recommendation and with fiscal notes #6 by the
Department of Administration, #8 by the Department of Law
and #9 by the Department of Community & Economic
Development.
CS FOR SENATE BILL NO. 299(FIN)
An Act relating to the establishment of an additional
south-central panel to the Alaska Workers' Compensation
Board and to appointments to that panel; and providing
for an effective date.
DEBORAH GRUNDMANN, STAFF, SENATOR BEN STEVENS, stated that
CSSB 299 (FIN) would amend the Workers' Compensation Act to
provide for an additional panel for the Alaska Workers'
Compensation Board in the South-central venue. She
indicated that was needed to help provide more hearings in
the area and would address the need to reduce lag time
between when a worker files a claim and obtains a hearing.
The bill would relieve growing caseloads.
Ms. Grundmann added that the Alaska Workers' Compensation
Act requires hearings to be conducted by panels of the
Workers' Compensation Board. A panel consists of a labor
member and an industry member, with a designee of the
commissioner of the Department of Labor and Workforce
Development. The commissioner's designee is an employee of
the State of Alaska; the other two members are lay
volunteers who receive a $50 per day stipend.
Ms. Grundmann pointed out that the industry seat members of
the panels usually work in some management position, while
the labor members are usually officers of labor unions,
which makes for a "good mix" in deciding the types of cases.
Panel members also have full time jobs outside of the
division, and have limited time to devote to hearings.
Consequently, there are only so many hearings that can be
conducted with the current component of panel members. With
the adoption of the committee substitute in the Senate
Finance Committee, the effective date of the bill was
changed to January 1, 2003. Enactment of SB 299 would
provide much needed relief to the Worker's Compensation
Board.
Representative Foster MOVED to report CS SB 299 (FIN) out of
Committee with individual recommendations and with the
attached fiscal note. There being NO OBJECTION, it was so
ordered.
CS SB 299 (FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by Department
of Law.
#SB345
SENATE BILL NO. 345
An Act relating to medical assistance for
rehabilitative services for certain children with
disabilities; relating to agreements to pay medical
assistance for covered services paid for or furnished
to eligible children with disabilities by a school
district; and providing for an effective date.
JERRY BURNETT, STAFF, SENATOR LYDA GREEN, commented that
under the federal Individuals Disabilities Education Act
(IDEA), school districts are required to provide
rehabilitative services to qualifying students. Currently,
the federal government pays approximately 16% of the cost
for services required by IDEA. The balance is paid out of
the foundation formula with a mix of State and local
funding. To the extent that the students qualify for
Medicaid, federal law allows for schools to bill the State
Medicaid program for many of the services. However, Alaska
State law does not authorize school districts to be Medicaid
providers.
Senate Bill 345 authorizes the Alaska Department of Health
and Social Services to promulgate the necessary regulations
and to contract with school districts to reimburse for
rehabilitative services for students who qualify under the
Medicaid program. Currently, forty-two other states fund
school-based services through the Medicaid program.
Mr. Burnett stated that under the provisions of SB 345, the
school district would pay the State match for the Medicaid
services it receives. The only State cost under the bill,
would be the cost of promulgating the regulations and some
small administrative costs.
Mr. Burnett added that school districts would benefit by
receiving federal matching dollars under the Medicaid
program for services that they must provide, regardless of
how they are funded. For each school district dollar
expended for the services, the school district would receive
approximately $1.50 in additional federal dollars. Mr.
Burnett claimed that money could help defray the costs of
providing special education services.
JON SHERWOOD, DIVISION OF MEDICAL ASSISTANCE, DEPARTEMNT OF
HEALTH AND SOCIAL SERVICES, noted that the Department
supports the bill. He stated that it was a cooperative
effort between Department of Health & Social Services and
Department of Education & Early Development. Mr. Sherwood
offered to answer questions of the Committee.
Mr. Sherwood pointed out that there are two fiscal notes.
One of the notes is for Medicaid services. The bill would
enable the school districts to bill Medicaid for services
provided to Medicaid-eligible children in special education
programs. Districts would reimburse the Department of
Health & Social Services for the State match required.
There would be no net increase in State general fund match
for Medicaid.
The other fiscal note would cover the small administrative
fees for expenses associated with making the claim payments.
Claim payments for the new service and a small amount of on-
going staff support would be needed to policy development.
Vice-Chair Bunde asked if the Medicaid reimbursement would
be "trading dollars".
Mr. Sherwood acknowledged that was correct, noting that
currently, the federal government pays 60% of the cost for
Medicaid services.
Vice-Chair Bunde pointed out that schools claim that the
State would be responsible for paying for a portion of those
costs.
Mr. Sherwood agreed that was correct, noting that those
State dollars would already have been spent.
Representative Foster MOVED to report SB 345 out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
SB 345 was reported out of Committee with a "no
recommendation" and with fiscal note #1 and #2 by the
Department of Health & Social Services.
ADJOURNMENT
The meeting was adjourned at 3:05 P.M.
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