Legislature(2015 - 2016)HOUSE FINANCE 519
03/21/2016 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 74 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 21, 2016
1:31 p.m.
1:31:56 PM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 1:31 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Pet Kelly, Sponsor; Heather Shaddock, Staff,
Senator Pete Kelly; Stacie Kraly, Chief Assistant Attorney
General, Section Supervisor Human Services, Department of
Law; Representative Liz Vasquez, Representative Lora
Reinbold.
SUMMARY
CSSB 74(FIN) am
MEDICAID REFORM; TELEMEDICINE; DRUG DATABASE
CSSB 74(FIN) am was HEARD and HELD in committee
for further consideration.
Co-Chair Thompson planned to have the committee substitute
ready and to move the bill from the House Finance
Committee. His office would be providing members with a
notebook of presentations and documents relating to each
day's topic. He invited testifiers to the table.
Representative Kawasaki asked how questions would be
handled from committee members.
Co-Chair Thompson indicated for members to hold their
questions until the end.
1:32:44 PM
CS FOR SENATE BILL NO. 74(FIN) am
"An Act relating to diagnosis, treatment, and
prescription of drugs without a physical examination
by a physician; relating to the delivery of services
by a licensed professional counselor, marriage and
family therapist, psychologist, psychological
associate, and social worker by audio, video, or data
communications; relating to the duties of the State
Medical Board; relating to limitations of actions;
establishing the Alaska Medical Assistance False Claim
and Reporting Act; relating to medical assistance
programs administered by the Department of Health and
Social Services; relating to the controlled substance
prescription database; relating to the duties of the
Board of Pharmacy; relating to the duties of the
Department of Commerce, Community, and Economic
Development; relating to accounting for program
receipts; relating to public record status of records
related to the Alaska Medical Assistance False Claim
and Reporting Act; establishing a telemedicine
business registry; relating to competitive bidding for
medical assistance products and services; relating to
verification of eligibility for public assistance
programs administered by the Department of Health and
Social Services; relating to annual audits of state
medical assistance providers; relating to reporting
overpayments of medical assistance payments;
establishing authority to assess civil penalties for
violations of medical assistance program requirements;
relating to seizure and forfeiture of property for
medical assistance fraud; relating to the duties of
the Department of Health and Social Services;
establishing medical assistance demonstration
projects; relating to Alaska Pioneers' Homes and
Alaska Veterans' Homes; relating to the duties of the
Department of Administration; relating to the Alaska
Mental Health Trust Authority; relating to feasibility
studies for the provision of specified state services;
amending Rules 4, 5, 7, 12, 24, 26, 27, 41, 77, 79,
82, and 89, Alaska Rules of Civil Procedure, and Rule
37, Alaska Rules of Criminal Procedure; and providing
for an effective date."
1:32:44 PM
SENATOR PETE KELLY, SPONSOR, introduced the bill and
indicated he would be leaving the meeting early. There were
several people available to provide detailed information
about the bill.
Co-Chair Thompson acknowledged Representative Munoz at the
table.
Representative Kelly spoke of questions he had asked
himself as the co-chair of finance when preparing the
budget. One of his questions had to do with the growth of
Medicaid. He believed the program would eat the state
budget without making some changes. He conveyed a story
from the 90s about Medicaid reform. At the time the
legislature was dealing with an increase of $130 million in
Medicaid costs. Many people had recommended doing something
about the cost because of its growth. Other Medicaid reform
bills had been put forward that were different than the one
before the committee. He claimed the difference was that in
the past the attempt to reform Medicaid equated to
restricting access rather than reforming the system. Senate
Bill 74 attempted to address the system itself as opposed
to limiting access. He suggested that improving the system
might include looking at where best practices were not
being used, finding out about the availability of
technology to assist the system, and reviewing available
models to operate more intelligently. He reviewed a list of
other items for consideration such as telemedicine, a
healthcare authority, coordinated care, the use of generic
drugs, travel efficiencies and coordination, and emergency
room misuse. He mentioned that there were provisions in the
bill for behavioral health, which he believed had become
out of control. He thought it was an interesting time when
the state administration and the majority were working
together. He thanked the administration for the amount of
work that it had contributed. Most of the items were agreed
upon by the Senate and by the administration. He would be
turning the meeting over to his staff.
Co-Chair Thompson thanked the Senator for making his
presentation. He announced that Representative Edgmon and
Representative Gara had joined the meeting. All committee
members were present. He reminded members that there would
be multiple meetings to address the many topics within the
legislation.
Vice-Chair Saddler asked about areas the Senator considered
but did not include in the bill.
Representative Kelly would differ to Ms. Shaddock. He
relayed that he had to depart from the meeting.
Co-Chair Neuman asked Ms. Shaddock to differentiate which
portions were added by the administration and which parts
were originally part of the Senate's discussions. Ms.
Shaddock replied that she would be happy to do so.
Co-Chair Thompson asked members to limit their questions.
There would be multiple meetings and a committee substitute
would be issued on April 4, 2016.
Vice-Chair Saddler withdrew his question.
HEATHER SHADDOCK, STAFF, SENATOR PETE KELLY, responded that
she would be happy to answer Vice-Chair Saddler's question
at the end of the meeting. She would begin the walk-through
of the sectional.
1:41:28 PM
Ms. Shaddock reported that Sections 1 through 7 were
related to telehealth and originated in SB 98 [Legislation
introduced in 2015 - Short Title: Prescription without
Phys. Exam]. She explained that when SB 98 came to Senate
Finance the provisions were incorporated into SB 74. She
mentioned that some of the sections opened up telehealth
for the use of behavioral health:
Sections 1 - 7 - Telehealth
Section 1 - Telehealth for Licensed Professional
Counselors (page 2, line 15)
Opens up behavioral health access to more individuals
by broadening the provider pool. Each board still
maintains licensing of their members - whether they
are using telehealth or not.
Ms. Shaddock spoke for Fairbanks that there was a great
shortage of providers including behavioral health
practitioners. It was difficult to get psychiatrists to
move and live in Fairbanks, Alaska. Opening up telehealth
to behavioral health providers was one way to address the
state's shortages.
Ms. Shaddock continued:
Section 2 - Telehealth for Marital and Family
Therapists (page 3, line 5)
Section 3 - Telehealth for Physicians (page 3, line 21
through page 4, line 9)
· Adds to the duties of the State Medical Board that
they will adopt regulations that establish
guidelines for a physicians who is rendering a
diagnosis, providing treatment, or prescribing,
dispensing, or administering a prescription drug to
a person without conducting a physical exam. These
guidelines must include a nationally recognized
model policy for standards of care of a patient who
is at a different location than the physician.
Section 4 - Telehealth for Physicians / State Medical
Board (page 4, lines 10 - 29)
· Prohibits the State Medical Board from imposing
disciplinary sanctions on a physician for rendering
a diagnosis, providing treatment, or prescribing,
dispensing, or administering a prescription drug
that is not a controlled substance without an in-
person physical exam, if the physician or another
licensed health care provider or a physician in the
physician's group practice is available for follow-
up care, and the physician follows patient consent
protocols for sending medical records of the
encounter to the person's primary care provider and
removes the requirement that the physician is
located in the state.
Ms. Shaddock added that telehealth was a tool that would
open up the provider pool. It was an arbitrary barrier. The
physicians would continue to be licensed and regulated by
the State Medical Board. She relayed that it could also
drive down the overall costs of medical care in Alaska. The
state had the highest cost of care in the country. It was
important to do everything possible to lower costs.
Ms. Shaddock continued:
Section 5 - Telehealth for Physicians - Controlled
substances (page 4, line 30 - page 5, line 11)
· Amends by allowing a controlled substance or
botulinum toxin to be prescribed dispended or
administered via telemedicine only if another
appropriate licensed health care provider is
physically present with the patient to assist
· Subsection d sets out that an abortion inducing drug
can only be prescribed in according with AS
18.16.010 and it sets out extra patient safety by
not allowing a physician to prescribe, dispense, or
administer a prescription drug in response to an
Internet questionnaire or electronic mail message to
a person with whom the physician does not have a
prior physician-patient relationship
Ms. Shaddock remarked that with some controlled drugs added
sideboards were needed. She explained that the state did
not want doctors from other countries or states operating
in Alaska which was not the intent of the bill.
Ms. Shaddock furthered:
Section 6 - Telehealth for Psychologist &
Psychological Associate Examiners (page 5, line 12)
Section 7 - Telehealth for Social Workers (page 5,
line 28 through page 6, line 12)
Ms. Shaddock turned to Ms. Kraly to review the fraud
provisions of the bill.
1:46:03 PM
STACIE KRALY, CHIEF ASSISTANT ATTORNEY GENERAL, SECTION
SUPERVISOR HUMAN SERVICES, DEPARTMENT OF LAW, would be
speaking to Sections 8 through 12 which related to the
creation of a new cause of action within the State of
Alaska. The name of the new cause was the Alaska Medical
Assistance False Claims Reporting Act (AMAFCRA). She
reviewed that Section 8 and Section 9 dealt with statute of
limitations provisions related to the new cause of action:
Section 8 - Fraud Statute of Limitations
Section 9 - Fraud time exemption
Ms. Kraly explained that Section 10 contained the bulk of
the provisions:
Section 10 - Alaska Medical Assistance False Claim and
Reporting Act
Ms. Kraly relayed that the provision created a state false
claims act which mirrored the federal False Claims Act
(FCA), a statute that had been a part of the United States
code since right after the Civil War. The False Claims Act
created a mechanism whereby an individual might pursue and
identify fraud and waste within government programs. States
were not required to have a FCA, although about 18 or 19
states had them relating to Medicaid programs. Section 10
was attempting to create one for Alaska. She highlighted
that the provision would allow for an individual to come
forward and identify fraud or abuse. Anyone filing a
lawsuit had to have it filed by seal and served
contemporaneously on the Department of Law (DOL). The
department would then have 60 days to investigate the merit
of any claims. At the end of 60 days DOL had 3 options. The
first was to move to dismiss the case because the case was
found that the claim lacked merit. The Department of Law
could take over the litigation. Lastly the department could
differ to the individual who had brought the case forward
to pursue the claim on behalf of the State of Alaska. The
premise of a FCA was when the individuals participated they
received a portion of the recoveries. An individual
bringing a claim forward would be entitled to 35 percent of
the recovery. If the state took the claim but did not allow
the individual to bring it forward the individual would
still receive a recovery of 15 percent to 25 percent of the
total award. If the attorney general deferred they would
receive a greater recover of 25 percent to 30 percent of
the award. Another provision of the FCA was that there was
a whistle blower protection within the framework that
allowed an individual working for a provider to be able to
report the fraud or abuse while being assured they would
not be terminated from their employment.
Ms. Kraly spoke about concerns from the other body about
frivolous lawsuits associated with lack of merit claims by
individuals. She believed that the 3 provisions along with
the ability of the attorney general to dismiss such claims
was a robust protection against trivial claims.
Additionally, the other body decided to sunset the whistle
blower provision within 3 years. Should the bill pass the
department would come back in 3 years to present evidence
to the legislature about whether the claims were successful
or frivolous and whether the provision should go forward.
Her final point was that upon the bill passing and
receiving approval from the federal government, if there
was a certified FCA then the State of Alaska would be
entitled to an enhanced match on the recoveries - between a
5 percent and 10 percent swing. It was a significant
incentive to the state to have a FCA. The provision was in
the hands of the Office of the Inspector General for review
to determine if they would certify it. The department was
comfortable that the state would receive certification
because the provision followed federal guidelines.
Ms. Kraly indicated that the Senate identified a sunset
provision to address the concerns of some providers about
frivolous lawsuits. Section 11 and Section 12 contained
related provisions. The two provisions related to the 60
day investigation she had mentioned earlier.
Section 11 - Subpoenas after sunset
Section 12 - Whistleblower after sunset
Ms. Kraly continued to explain that Legislative Legal
Services took the 2 sections and continued them despite the
repeal or sunset to allow the sections to continue forward.
It would allow DOL to have the tools available.
Essentially, they were technical fixes relating to the
sunset provision.
1:52:24 PM
Ms. Shadduck indicated Sections 8 through 12 came from the
governor's bill, SB 78 [Legislation introduced in 2015 -
Short Title: Medical Assistance Coverage; Reform] and were
incorporated into the CS for SB 74. Sections 11 and 12 were
added by the Senate Finance Committee.
Ms. Shaddock indicated that Sections 13 through 19 were
related to the Prescription Drug Monitoring Program (PDMP).
It was added through the Senate subcommittee on Medicaid
reform and then adopted by the entire Senate Finance
Committee.
Ms. Shaddock continued:
Section 13 - Schedule of Drugs (page 15, line 23)
· Amends the section by only requiring data collection
for prescribing, administering or dispensing II,
III, and IV federal controlled substances for the
controlled substance prescription database.
Ms. Shaddock elaborated that they were currently in the
state schedule and the federal schedule. Through the
subcommittee process it was discovered that the state
schedules were not needed. They were typically used by law
enforcement rather than being used by prescribers or
dispensers that had a federal DEA [Drug Enforcement
Administration] number. They were using just the federal
schedule. In order to clean up the PDMP database, the
schedule was reduced to federal schedule II, III, and IV
drugs.
Section 14 - Weekly basis (page 16, line 1)
· Amends by only requiring data collection for
prescribing, administering or dispensing II, III,
and IV federal controlled substances for the
controlled substance prescription database and
amends by requiring that the database be updated on
at least a weekly basis.
Ms. Shaddock provided some background information. The
highest number was the most potent. Federal schedule I
drugs only included drugs that had no medical use,
including Marijuana. Per the ballot initiative there could
not be a database on Marijuana which was the reason for
excluding it. Federal schedule II, III, and IV drugs, would
be collected and schedule V drugs had a very low likelihood
of addiction or bad interactions and were not necessary to
include.
Ms. Shaddock moved to the next section:
Section 14 - Weekly basis (page 16, line 1)
Amends by only requiring data collection for
prescribing, administering or dispensing II, III, and
IV federal controlled substances for the controlled
substance prescription database and amends by
requiring that the database be updated on at least a
weekly basis.
Ms. Shaddock added that currently the database was updated
on a monthly basis. Alaska was the only state that updated
it infrequently. All of the recommendations in Sections 13
through 19 came from the Controlled Substance Advisory
Council. She noted that there was a white paper in each of
the members' packets. There would be a committee meeting
exploring the topic further.
Ms. Shaddock continued to Section 15:
Section 15 - Access to database/delegated access, page
16, line 27 through page 18, line 16)
(3) Amends to authorize a licensed practitioner to
delegate database access to supervised employees or
clinical staff;
(4) Amends to authorize a registered pharmacists to
delegate database access to supervised employees or
clinical staff;
(7) Adds a new section to authorize database access to
the State of Alaska Medicaid Pharmacy Program;
(8) Adds a new section to authorize database access to
the State of Alaska Medicaid Drug Utilization Review
Committee for utilization review of prescription drugs
provided to Medicaid recipients;
(9) Adds a new section to authorize database access to
the State of Alaska Medical Examiner;
(10) Adds a new section to authorize de-identified
data access to the State of Alaska Department of
Health and Social Services Division of Public Health.
The Division of Public Health would not need access to
identifiable data to fulfill public health objectives
regarding controlled substances including prescription
opiates.
Ms. Shaddock spoke of hearing from prescribers or
dispensers that would be interested in using the database,
but felt it was timely. They suggested delegating access.
She noted that the state had a Medicaid pharmacist who did
not have access to the database. She mentioned that the
section also authorized database access to the State of
Alaska Medical Examiner who was required to perform
autopsies on suspicious deaths. It would be a tool to help
shed light as to whether someone was on opioids or other
controlled substances potentially leading to a suspicious
death. She explained that access provided to the Division
of Public Health would be limited such that individuals
would not be able to be identified. The provisions in the
bill having to do with the division having access
specifically stated that it could only be collected on a
regional basis. The commissioner had assured her that it
would include looking at an entire region such as the
entire Bethel Region or the entire Nome Region consistent
with what the division was already doing.
1:56:43 PM
Representative Gattis asked for clarification about Section
5, number 8. She heard the presenter use the term "Medicaid
assistance", however, the bill stated "medical assistance".
Ms. Shaddock responded that in the statutes it was referred
to as a recipient of medical assistance, which was known as
the Medicaid program.
Representative Gattis thanked Ms. Shaddock for the
clarification.
Ms. Shadduck continued with Section 16:
Section 16 - Requires all to use PDMP (page 18, line
17)
· Amends to require all prescribers and all
pharmacists to register with the controlled
substance prescription database. Failure to register
is grounds for the board to take disciplinary action
against the license or registration of the pharmacy
or pharmacist.
Ms. Shaddock discussed Section 17:
Section 17 - Civil Immunity (page 18, line 23)
· Immunity for using the PDMP remains even with the
change from optional to mandatory.
· Removes the language from the statute that kept use
of the PDMP optional
Ms. Shaddock moved to Section 18:
Section 18 - Board regulations/review PDMP before
prescribing (page 19, line 1)
· Amends to require the Board of Pharmacy to adopt
regulations to:
(3) set a procedure and time frame for registration;
(4) require prescribers and pharmacists to review
the controlled substance prescription database when
before prescribing, administering or dispensing a
federal II, III or IV controlled substance to a
patient and allows for an exemption for:
1) in an inpatient setting
2) at the scene of an emergency or in an
ambulance
3) in an emergency room,
4) immediately before, during, or within the
first 24 hours of surgery.
Ms. Shadduck relayed that she had heard feedback and
testimony from some emergency room doctors who indicated
there would be times when they would not be able to look up
a patient before prescribing or dispensing. For example if
someone walked into an emergency department suffering with
a gunshot wound doctors would need to be able to respond
immediately and prescribe pain medication. The provision
did not inhibit best practices.
Ms. Shadduck referred to Section 19:
Section 19 - New subsections (page 19, line 22 through
page 20, line 4) - Adding new subsections to:
(o) Require prescribers and pharmacists to review the
PDMP database when prescribing or dispensing a federal
II, III or IV controlled substance to a patient.
(p) Require notification to boards when a practitioner
registers with the database.
(q) Authorize the Board of Pharmacy to forward
unsolicited notifications to prescribers and
dispensers of database information about patients who
may be obtaining controlled substances inconsistent
with generally recognized standards of care.
(r) Collect dispensing data and update the PDMP
database on at least a weekly basis.
2:00:04 PM
Ms. Kraly explained that Section 20 and Section 21 related
to the AMAFCRA. Section 20 was a designation that the
monetary recoveries received under the FCA would be added
to AS 37.05.146c, a designated receipt fund for Medicaid
money. Due to the federal match, the money did not go into
the GF but into a dedicated fund.
Section 20 - Program Receipts
Ms. Kraly advanced to Section 21:
Section 21 - Medicaid False claims not public records
Ms. Kraly explained that Section 21 was an amendment to the
Alaska Public Records Act. It provided protection of the
information that was provided and served under seal while
DOL was reviewing the merits of a claim to keep the
information from being subject to a public records act.
Once a lawsuit was filed or a claim was brought forward in
court the protections would be lost. The actual information
would be limited to a non-disclosure for a period of the
investigation.
Ms. Shadduck continued to Section 22:
Section 22 - Telemedicine Business Registry (page 20,
line 11)
· Establishes within the Department of Commerce,
Community, and Economic Development a telemedicine
business registry of businesses performing
telemedicine services in the state.
Ms. Shaddock reported that the registry was added by the
Senate Labor and Commerce Committee. The provision was
added after some feedback from doctors and the Medical
Association to make sure the state knew who was doing
business in the state. It offered comfort that, if there
was a telemedicine provider who was a bad actor, the state
could contact their company to report the doctor.
Ms. Shaddock continued to Section 23:
Section 23 - Competitive bidding (page 20, line 26)
· Allows the Department of Health and Social Services
to enter into a contract through the competitive
bidding process under the State Procurement Code for
durable medical equipment or specific medical
services in the Medicaid program like travel.
Ms. Shaddock reported that the section was an original
section to SB 74. It was added in the Senate State Affairs
Committee.
Ms. Shaddock moved to Section 24:
Section 24 - Computerized edibility verification
system
· Subsection (a) directs the department to establish a
computerized income, asset, and identity eligibility
verification system for the purposed of verifying
eligibility, eliminating duplication of public
assistance payments, and deterring waste and fraud
in public assistance programs. This program would be
separate from AIRES
· Subsection (b) directs the department to enter into
a competitively bid contract with a third-party
vendor for the eligibility verification system. The
department may also contract with a third-party
vendor to provide information to facilitate reviews
of recipient eligibility conducted by the
department.
· Subsection (c) requires the annual savings to the
state resulting from the use of the system to
exceed the cost of implementing the system
· Subsection (d) requires that the contract be
awarded to a vendor that is not awarding the
contract for the entire eligibility system
(currently AIRES) in order to avoid a conflict of
interest
Ms. Shaddock relayed that the section was part of SB 74 and
was added in Senate State Affairs then was expanded on and
improved in the Senate Finance Committee. It was an
enhanced computerized eligibility verification system. It
was a system that would complement the state's current
eligibility system, AIRES, which was in the Division of
Public Assistance. The system actually scanned more than
the current eligibility system. She noted that other states
had been able to crack down on people that were not
eligible.
2:04:37 PM
Ms. Kraly explained that Section 25 amended the current
Alaska statute, AS.47.05.200, required the department to
engage in not less than 75 audits per year of enrolled
providers. The amendment to the statute was designed to
reduce that number from 75 to 50. The reason the department
was seeking the reduction was that at the time the statute
went into effect there were not many audits being conducted
by Medicaid providers. Since then there had been a
proliferation of audits by both the federal government and
private insurance companies. Providers had several audits
and requirements. The department felt the number could be
reduced to 50. The department worked with the federal
government with their audits to avoid duplication and the
state gained the benefit of the federal government's audit
findings vice-versa. The idea was to reduce the burden on
providers without losing the benefit of the reviews.
Ms. Kraly moved to Section 26:
Section 26 - Interest and Penalties on overpayments
Ms. Kraly mentioned that Section 26 also came from SB 78.
It was an amendment to the same statutory provision which
asked the legislature for the ability to assess interest
and penalties on identified and established overpayments.
One of the things discovered in the other body was that
originally the amendment indicated that the overpayment and
interest and penalties would accrue at the moment the final
audit was issued. The provision was amended in the current
version of the bill to allow for interest and penalties to
begin accruing at the point that the audit would be
appealed. If it was not appealed, then penalties and
interest would accrue on that date. If appealed after the
completion of the administrative hearing where they might
be challenging the overpayment findings. The imposition of
interest and penalties was akin to what would happen in a
Superior Court litigation. If someone was challenging the
overpayments, they would not be subject to interest and
penalties. However, once they challenged and had lost then
the penalties would begin accruing.
Ms. Kraly explained Section 27 which would require
providers to self-audit their claims. Providers were being
asked to identify a statistically valid sample of claims
and to audit those claims. Secondarily, providers were
being asked to conduct self-audits on a bi-annual basis.
However, providers would not be required to conduct self-
audits in the same years they were being audited by the
state or the federal government. The department felt that
providers should be engaging in due diligence when they
were not being audited. Another provision of the section
was that once a provider identified an overpayment,
reported it, and arranged a payment plan the department
would not assess penalties and interest on the self-
identified overpayment.
Ms. Kraly continued with a review of Section 28 concerning
civil penalties and seizure of property. She explained that
the new section provided the Department of Health and
Social Services (DHSS) another tool in the tool box in
dealing with program integrity and provider compliance.
Under the current regulatory scheme the department had
penalties ranging from termination from the program to
provider education. There was really no middle ground
within the sanctions. The department would like to have the
authority to impose fines for different sanctionable
offenses which Section 28 would allow as a means to
maintain program integrity and to allow providers to remain
open.
2:09:46 PM
Representative Gara asked if the legislature could
constitutionally give the executive branch the power to
establish penalties in a bill. He reported that by
regulation they would be established between $100 and
$25,000. He had never seen a provision where the
legislature had given that power away to the executive
branch.
Ms. Kraly responded that was exactly why the department was
asking for the provision because absent the delegation from
the legislature to the department to impose the fines and
penalties under the sanction provisions the department did
not believe it had the authority to do so. In light of the
fact that under the administrative code there was a list of
more than 60 different sanctions that asked the legislature
to walk through and identify the fine. The department felt
that it could do it through regulation and provide a very
nominal fine. The legislature previously provided the
ability for the executive branch to impose fines in other
regulatory arenas.
Representative Gara wondered if the legislature could
constitutionally allow the executive branch to decide what
conduct resulted in what penalty amount.
Ms. Kraly responded that the provisions already existed as
to what was sanctionable. The department was asking for the
ability to have a potential fine attached. The department
believed that the legislature could give the authority to
impose fines through a regulation.
2:11:51 PM
Ms. Kraly continued to explain that further provision of
Section 26 was to identify the administrative view of an
assessed fine. Certain fines of a dollar amount would be
reviewed internally. A higher fine amount would go to the
office administrative hearings. If there were still
disputes with the lower fines, they would be forwarded to
the Office of Administrative Hearings.
Ms. Kraly moved to discuss the seizure and forfeiture of
real or personal property in medical assistance fraud
cases. The section created a system of freezing and seizing
of real or personal property to offset the cost of
identified fraud. Upon the discovery of a fraud case by the
Medicaid Fraud Control Unit they could seek permission from
the court. The court could authorize the state to seize
certain assets or to place leans on certain assets so they
were not disposed of while a Medicaid fraud case was being
investigated. Upon the completion of such a case DOL would
have to make further evidentiary findings. If authorized by
the court, the department could dispose of the assets to
offset the cost of the fraud that had been established
through the criminal case. The section only related to the
seizure and forfeiture of claims that were brought by the
Medicaid Fraud Control Unit and were limited to those types
of cases.
Ms. Shaddock reviewed the remainder of Section 28:
Section 28 - Medical assistance (Medicaid) reform
program (starts on page 25, line 16)
Subsection (a) directs the department to design and
implement a program for reforming Medicaid. The reform
program must include 11 items in this version of SB
74.
1) Referrals to community and social support services,
including career and education training services
available through the Dept. of Labor, the University
of Alaska, or others
a. The state has a lot of training opportunities
through our current network of job centers,
Vocational rehabilitation offices, Workforce
Investment Act programs, vocational training
programs, and supports through our extensive
non-profits that provide services and case
management
b. Jobs are the path to self-sustaining and
improved self-image
2) Electronic Distribution of an explanation of
benefits to recipients
a. It can be another tool to allow recipients of
Medicaid to check that their providers are
billing the state for the actual services
rendered.
3) Expanding the use of telemedicine for primary care,
behavioral health, and urgent care
4) Enhancing fraud prevention, detection, and
enforcement
a. A lot has been done under Andrew Peterson's
lead at the Medicaid Fraud Control Unit; we
want to encourage as much fraud prevention and
enforcement as possible
5) Reducing the cost of behavioral health, senior, and
disabilities services provided to recipients of
medical assistance under the state's home and
community-based services waivers (Waivers section
will point to some specific waivers and options for
the department to apply for)
a. 1915k option to serve individuals who would
otherwise require an institutional level of
care; enhances our FMAP from 50% to 56%
i. The department & their contractors are
going through a rigorous process to
implement these. They can also start the
1915k with just those individuals who
receiving Personal Care Attendant or PCA
care.
b. 1915i option move folks currently receiving
care 100% covered by the General Fund to 50%
FMAP. This would be for individuals that don't
require an institutional level of care, but can
be independent with prompting and queuing -
like Alzheimer's,
i. Supportive employment and housing supports
c. Both options Could also use
telemedicine/assistive technology to check in
on folks at home to remind them to take meds
6) Pharmacy initiatives
a. Expanding on what the department has already
done including using generic meds, claims
pricing and payment reforms, prior
authorizations, etc.
7) Enhanced care management
a. This could be set up in a couple of different
ways; these are methods to teach the proper use
of our health care system, which can be
overwhelming and not intuitive to access on
your own
i. Primary care case management with the use
of a patient centered medical home. That
is where a Medicaid user (often a super-
utilizer) is assigned a primary care
provider to oversee their care. They have
access to preventative care, primary care,
vaccines, flu shots, and all other
appropriate care.
ii. Another example is special treatment for
identified needs - ex - pregnancy,
diabetes, asthma, and so on.
8) Redesigning the payment process including free
agreements for performance measures that include:
a. premium payments for centers of excellence
b. penalties for hospital acquired infections,
readmissions, and failures of outcomes
c. Bundled payments for specific episodes of care
d. Global payments for a specific diagnosis or
primary care managers
e. For example, instead of going into a hospital
and getting line item charged for Advil, IVs,
anesthesia, etc., there would be one rate for
all things related to a knee replacement.
9) Stakeholder involvement in setting annual targets
for quality and cost-effectiveness
10) Reducing travel costs by requiring a recipient to
obtain medical services in the recipient's home
community, to the extent appropriate services are
available in the recipient's home community
a. We need to reduce travel where we can - use
telemedicine, apply for choice waiver to
restrict choice
b. Better coordination of travel overall - when
you have a family in rural Alaska, with
multiple family members receiving care through
Medicaid, we should be better coordinating
trips. We should be sending mom and son in on
one trip for all pre-planned preventative care,
instead of one trip for mom to go to the
dentist and another for the son to go where the
mom has to accompany the son anyway
11) Guidelines for health care providers to develop
health care delivery models supported by evidence-
based practices that encourage wellness and disease
prevention
Subsection (b) starting on Page 26, line 18 requires
the department to efficiently manage a comprehensive
and integrated behavioral health system that uses
evidence based practices that are data driven with
measureable outcomes. The department and the Alaska
Mental Health Trust Authority must provide a plan for
a continuum of community based services that includes
housing, employment and criminal justice issues.
Subsection (c) starting on Page 27, line 2 has the
department identity the areas of the state where
improvements in access to telemedicine would be most
effective in reducing the costs of Medicaid. Also
allows the department to enter into agreements with
IHS providers if necessary to improve access to
telemedicine facilities and equipment.
Subsection (d) starting on page 27, line 9 - Reports -
this subsections require the department to annually
report to the legislature on November 15
1) Realized cost savings related to reforms from the
reform program
2) Savings from reform efforts undertaken by the
department
3) A statement of whether DHSS has met annual targets
for quality and cost-effectiveness
4) Other recommendations for the legislature including
legislative changes, budget changes, impacts of
federal laws, results of demonstration projects
5) Legal and technological barriers to the expanded use
of telemedicine in Alaska, and recommendations for
changes that would allow cost-effective expansion of
telemedicine
6) Basically everything legislators want to know to
continue to monitor and reform the Medicaid program.
I suspect this will be very useful for our HSS and
Finance committees
2:22:29 PM
Subsection (e) starting on page 28, line 13 - provides
a definition for telehealth.
Ms. Shadduck continued to Section 29:
Section 29 - Primary Care Case Management (page 28,
line 18, through Page 29, line 8)
· Requires DHSS to implement the primary care case
management system. The purpose of this new system is
to increase Medicaid enrollees' appropriate use of
primary and preventive care, while decreasing the
use of specialty care and hospital emergency
department services. An exemption applies to
recipients with chronic, acute, or terminal medical
conditions.
She elaborated that the section was taken from the
governor's SB 78 and it was amended in the Senate Finance
Committee.
Representative Wilson asked if primary care case management
would be mandated for enrollees.
Ms. Shadduck responded that on page 28, line 19 the word
"Shall" was included. The intent of the department was to
implement it as widespread as possible.
2:24:01 PM
Representative Wilson clarified that her question was about
the recipient. She wondered if she would be required to
participate if she were to enroll in Medicaid.
Ms. Shaddock responded that the intent would be that as a
recipient of Medicaid she would be assigned a primary care
provider. However, she would confirm her answer and get
back to the representative.
Ms. Shadduck continued to Section 30:
Section 30 - Waivers (page 29, line 9)
(d) allows the department to apply for:
1) 1915 (i) option
2) 1915 (k) option
3) 1945 options for health homes for individuals
with chronic conditions
(e) directs the department to apply for an 1115 waiver
to establish one or more demonstration projects
focused on innovative payment models
(f) directs the department to apply for an 1115 waiver
specific to behavioral health
Ms. Shaddock explained that Section 30 came from the
governor's SB 78. She highlighted that the 1915(i) option,
home and community-based services, was currently funded 100
percent GF services for folks receiving grants and senior
and disabilities services for things like Alzheimer's. It
would move it to a 50/50 state federal match. She explained
that the 1915 (k) option was a refinancing of the state's
senior and disabilities services currently on the 1915 (c)
waiver. It would give the state an enhanced Federal Medical
Assistance Percentage (FMAP). It would move the state from
a 50 percent to a 56 percent FMAP. She relayed that for the
first 8 quarters the federal match for services pertaining
to the 1945 option was 90 percent. She conveyed that the
1115 waiver asked the state to bend the rules on what was
currently in the state's plan. The state asked Centers for
Medicare and Medicaid Services (CMS) if it could do
innovative things with the Alaska's Medicaid program if the
state showed budget neutrality. She elaborated that some of
the items related to behavioral health were specific to
address the barriers that came up over the years by
Alaska's fragmented behavioral health system. One of the
things that was discussed extensively in the Senate Finance
Committee was a 30 percent rule. A behavioral health clinic
had to have psychiatric oversight by a psychiatrist 30
percent of the time which was a large burden for Alaska.
Some of the items would open up regulations.
2:27:37 PM
Ms. Shadduck moved to Section 31:
Section 31 (page 30, line 18 through page 31, line 15) -
Collaborative, hospital-based project to reduce the use
of emergency department services.
· This would build on what the department has already
done with their super-utilizer program,
· This program is modeled on a successful project in
Washington State. It's about directing individuals to
the right care, at the right time, in the right place.
· Number 4 on page 31, line 3 - sets how a process for a
referring an ER user to a primary care provider or
behavioral health provider within 96 hours after an ER
visit
· Number 5 on line 6 requires a collaborated process
between the department and the statewide professional
hospital association to establish uniform statewide
guidelines for prescribing narcotics in an emergency
department
Ms. Shaddock spoke to number 4. She relayed that the
project was original to SB 74. It was amended in committee
and was a recommendation resulting from the Medicaid
redesign process from the department's consultant, Agnew
Beck Consulting. The project would be in partnership with a
state professional hospital association that would be
taking the lead on the project. She highlighted that there
had been significant testimony and conversation about
Alaska having a large opioid problem which was the reason
for the provisions included around the PDMP. It was also
the reason that the number was listed in the emergency room
project.
Ms. Shaddock continued with the rest of Section 31:
Section 31 - Coordinated Care Demonstration Projects
(page 31, line 16)
· About whole person, integrated care with payment
models that move us away from fee-for-service Æ paying
for value over volume
Ms. Shaddock noted that in the Senate Finance Committee and
in the Medicaid reform subcommittee there was a lot of
discussion about options including managed care
organizations, accountable care organizations, coordinated
care organizations, etc. The coordinated care project was
the result of those conversations as a way of bringing
forward the best projects and proposals for the State of
Alaska.
2:30:14 PM
Ms. Shaddock continued with Section 32:
AS 47.07.039 (a) - Line 16, through page 32, line 16)
Requires DHSS to solicit and contract with one or more
third-party entities for coordinated care
demonstration projects for individuals who qualify for
Medicaid benefits on or before December 31, 2016. DHSS
may use an innovative procurement process as described
under AS 36.30.308. A proposal for consideration must
include three or more of the following:
1) Comprehensive primary-care-based management,
including behavioral health services and
coordination of long-term services and support;
2) Care coordination, including the assignment of a
primary care provider located in the local
geographic area of the recipient;
3) Health promotion;
4) Comprehensive transitional care and follow-up care
after inpatient treatment;
5) Referral to community and social support services,
including career and education training services;
6) Sustainability and the ability to replicate in other
regions of the state;
7) Integration and coordination of benefits, services,
and utilization management;
8) Local accountability for health and resource
allocation.
AS 47.07.039(b) (page 32, line 17)
Establishes a project review committee for proposals
submitted under (a) of this section. The committee is
comprised of:
1) The Commissioner of DHSS or their designee;
2) The Commissioner of Administration or their
designee;
3) The CEO of the Alaska Mental Health Trust Authority
or their designee;
4) Two representatives of stakeholder groups, appointed
by the Governor for staggered three-year terms;
5) A Non-voting member of the Senate appointed by the
Senate President; and
6) A Non-voting member of the House of Representatives
appointed by the Speaker of the House of
Representatives.
AS 47.07.039(c) (page 33, line 1)
Grants DHSS authority to contract with third-parties
to implement the demonstration projects listed under
(a) of this section that include managed care
organizations, primary care case managers, accountable
care organizations, prepaid ambulatory health plan, or
a provider-led entity. Allows for fee structures
including but not limited to global payments, bundled
payments, capitated payments, and shared savings and
risk. Requires DHSS to work with the division of
insurance, DCCED to streamline the application process
for a company to obtain a certificate of authority as
needed to participate in a demonstration project.
2:32:57 PM
AS 47.07.039(d) (page 33, line 10)
Requires any project under (a) to include cost-saving
measures including the expanded use of telehealth for
primary care, urgent care, and behavioral health
services.
AS 47.07.039(e) (page 33, line 17)
Requires DHSS to contract with a third-party actuary
to review demonstration projects after one year of
implementation and make recommendations for the
implementation of a similar project on a statewide
basis. On or before December 31, 2018, and each year
thereafter, the actuary shall submit a final report to
the DHSS for any project that has been in operation
for at least one year.
AS 47.07.039(f) (page 33, line 26)
Directs DHSS to prepare a plan regarding regional or
statewide implementation of a coordinated care project
based on the results of the demonstration projects
under this section. Requires DHSS on or before
November 15, 2019 to submit a report to the
legislature on any changes or recommendations for
wider regional or statewide implementation.
AS 47.07.039(g) (page 34, line 4)
Refers to the definition of telehealth in AS
47.05.270(e)
Ms. Shaddock indicated that the project would continue on.
If CMS came up with a new demonstration project or some
other innovative method, the department could continue to
run the projects through the same project review committee
and use the same process.
Ms. Shaddock moved on to Section 32:
Section 32 (Page 34, line 5)
· Requires the department and the attorney general to
annually prepare a report regarding fraud
prevention, abuse, prosecution, and vulnerabilities
in the Medicaid program.
Ms. Shaddock reviewed Section 33 and Section 34:
Section 33 (page 35, line 2) Removal of Grantee
Requirement
AS 47.07.900(4) Amends Medicaid Administration
definitions, by removing the grantee status
requirement for outpatient community mental health
clinics serving Medicaid patients.
Section 34 (page 35, line 7) Removal of Grantee
Requirement
AS 47.07.900(17) Amends by removing the
grantee/contractor status requirement from drug and
alcohol treatment centers and outpatient community
mental health clinics. This change, and the one in the
previous section, allows mental health and drug
treatment service providers who do not receive grants
from the department to become enrolled Medicaid
providers and deliver services to Medicaid recipients.
Ms. Shaddock conveyed that the provisions would align the
state with requirements by the federal government to
provide these services. The federal government required
that the state remove the grantee requirements or they
would start withholding behavioral health Medicaid funds.
It would help to address the state's shortage of behavioral
health providers across the state.
2:35:38 PM
Ms. Shadduck addressed Section 35:
Section 35 (page 35, line 15) Alaska Pioneer Home
Payment Assistance
· Requires individuals applying for Pioneer Home
payment assistance to show proof of having applied
to Medicaid. HB 30 audits - will save around $1
million a year
Ms. Kraly noted that Section 36 and Section 37 related back
to the Medicaid False Claims and Reporting Act. She
reported that Section 36 contained the repealer provisions
of the sunset provisions for the private plaintiff relator
individuals.
Ms. Kraly indicated that Section 37 related to the indirect
and direct court rule amendments that needed to take place
as a result of the new cause of action. She referenced page
35, line 28 through page 37.
Ms. Shadduck spoke to Section 38:
Section 38 - Implement Federal Policy on Tribal
Medicaid Reimbursement (page 37, line 2)
· Requires DHSS to collaborate with Alaska Tribal
health organizations and the U.S. DHHS to implement
new federal policy regarding 100% federal funding
for services provided to Medicaid-eligible American
Indian and Alaska Native individuals within six
months of the rule change being finalized. Requires
DHSS to report to the co-chairs of Finance the
estimated savings and calculations of savings to the
state general fund within thirty days of the rule
being finalized.
· Savings have been reflected in both the House and
Senate budgets as part of the overall package of
Medicaid Reform
Ms. Shaddock was aware that finance committee members had
significant discussions around the rule change put out by
the CMS concerning services being received through an
Indian Health Service (IHS), a tribal facility, and those
being reimbursed 100 percent. The section asked that the
department fully implement the provision within 6 months of
the rule being finalized and to submit a report to the co-
chairs of the House and Senate Finance Committees on the
savings.
Ms. Shaddock continued to Section 39:
Section 39 - Health Information Infrastructure Plan
(page 39, line 20)
· One result of the Medicaid Redesign process the
Dept. has taken
· Requires DHSS to develop a plan to strengthen the
health information infrastructure, including health
data analytics capability, to support transformation
of the health system in Alaska.
Ms. Shaddock reported that the section came from the
governor's SB 78. She remarked that the state had a long
way to go to improve its data analytics. The department was
determined to implement the plan correctly and
aggressively.
Ms. Shaddock moved to Section 40:
Section 40 - Feasibility Studies (page 38, line 4) -
Required before any state service can be privatized
(a) Alaska Pioneer Homes and Select DJJ facilities -
procured by DHSS
· Wouldn't look the same for each facility
· For DJJ Facilities - RPTC - residential psychiatric
treatment centers that could be run by Tribes like
in Nome. They could provide culturally relevant care
close to home.
· All of these 24/7 facilities represent 1,192 state
employees
(B) Alaska Psychiatric Institute - DHSS in conjunction
with the Trust
· Private psychiatric hospitals in other states
(c) Health Care Authority (line 22)
· Requires the Department of Administration in
collaboration with the House and Senate Finance
Committees to conduct a study analyzing the
feasibility of creating a health care Authority to
coordinate health care plans and consolidate
purchasing effectiveness for all state employees,
retired state employees, retired teachers, Medicaid
Assistance recipients, University of Alaska
employees, employees of state corporations, and
school district employees.
· Other states like Washington State and Oregon have
used these very effectively
Ms. Shaddock conveyed that Section 40 was original to SB 74
and it had been expanded. She noted that other states had
leveraged all of the health care that their state was
paying for. In looking at the contracts with state
employees, the cost of healthcare continued to rise in
Alaska. Large changes would need to be made. Section 40
outlined one tool to study how to pool all of them,
leverage the state's purchasing effectiveness, hopefully
bend the curve, and maybe even bend the curve of the cost
of healthcare in Alaska.
2:41:00 PM
Ms. Shadduck spoke on Section 41:
Section 41 (page 39, line 17)
· Requires the department to amend the state Medicaid
plan and apply for any waivers necessary to
implement the projects and programs described in the
bill.
Ms. Shaddock advanced to Section 42:
Section 42 - Transitions: Regulations (page 39, line
28)
· Allows the department and the Board of Pharmacy to
adopt regulations necessary to implement the changes
made by the Act. The regulations may not take effect
before the dates the relevant provision of the Act
takes effect.
Ms. Shaddock continued to Section 43:
Section 43 - Conditional effects (Page 40, line 7)
· This protects the Department from having to follow a
law on the books if the federal government won't
approve state plan amendments or waivers needed to
implement the law.
· Subsection (e) on line 27 is specific to the
provisions of the false claims act that are amending
court rules and require a 2/3 vote.
Ms. Shaddock reviewed Sections 44-47:
Sections 44-47 (page 41, starting on line 1)
· Provides for effective dates for provisions that
require waiver and state plan amendment approvals
from the United States Department of Health and
Human Services.
Ms. Shaddock reviewed Section 48:
Section 48 (line 13)
· Effective Dates - Provides an immediate effective
date for Sections 40, 41, 42(a), and 43.
Section 49 (line 15)
· Effective Dates - Provides for a July 1, 2017
effective date for Sections 13-19 relating to the
Prescription Drug Monitoring Program (PDMP).
Section 50 (line 16)
· Effective Dates - Provides an effective date of July
1, 2016 for Section 42(b).
Section 51 (line 17)
· Effective Dates - Provides a delayed effective date
of July 1, 2019 for Sections 11 and 12 to conform to
the sunset provisions in Section 36.
2:43:02 PM
Co-Chair Thompson acknowledged that there had been a
significant amount of information to digest.
Vice-Chair Saddler corrected Ms. Shadduck regarding the
effective date of Section 49. Ms. Shaddock had indicated
the date of July 1. The correct date was January 1, 2017.
Ms. Shaddock happily stood corrected.
2:43:32 PM
Representative Wilson asked if the state already allowed
telemedicine services within its own insurance.
Ms. Shadduck was not sure what state insurance currently
allowed. She was aware of health plans offered by private
companies in the state that wanted to use the telehealth
option. However, the in-state requirement had limited that
use.
Representative Wilson was in support of the use of
telehealth medicine. She thought it was a great idea for
private insurance as well as for the whole state. She did
not understand why it would be limited to Medicaid.
Representative Wilson mentioned having discussions in the
House Finance Committee about optional benefits. She
wondered if they had been discussed and, if so, asked why
they had not been part of the presentation. She requested a
written response.
Ms. Shadduck responded that the provisions about telehealth
and telemedicine were specific to the use across the state.
It was not specific to the Medicaid program. She responded
to Representative Saddler's question about optional
benefits. The topic was discussed in committee and
privately. It was found that the optional benefits saved
the state money. She spoke to having Legislative Research
update a report about primary care attendants and home and
community-based services. They saved the State of Alaska a
significant amount of money. All of the individuals that
were receiving care needed an institutional level of care.
If they were not receiving care at home the state would
have to care for them in an institution. It meant the state
would have to put money in the capital budget to build
nursing homes. Some of the optional benefits included
pharmacy, hospital ER use, and others. They would show up
as costs elsewhere if the state did not provide them. She
would provide the research piece to Representative Wilson.
Representative Wilson appreciated Ms. Shadduck's response.
Co-Chair Thompson ran through a list of other people
available to answer questions.
2:47:00 PM
Co-Chair Neuman had concerns with the prescription drug
database. He had asked the chair for a few minutes to share
his concerns with the committee on the subject. He first
came across the issue when he became the chairman of the
House Finance subcommittee for DHSS. One of the things that
got his attention was $40 million in rebates to DHSS. He
had wondered where the money came from. The Department of
Administration (DOA) had also received $20 million in
rebates from pharmaceutical companies. At the time of his
discovery he was unclear about what was going on. He found
out that there was a federal regulation that allowed
pharmaceutical companies to charge more than the actual
cost of prescription drugs under the guise of covering the
costs for Medicaid patients (about $1 million per week). He
thought the practice was very wrong. He reported that when
talking to Alaskans they were unaware and uncomfortable
that the State of Alaska kept a database on controlled drug
prescriptions. He was informed that databases within Alaska
have commonly been hacked. He pondered what could happen if
there was a breech allowing for access to personal
information. He suggested that the information would be
appealing to drug gangs. He explained that when someone
brought in a prescription that the pharmacy staff felt was
an inappropriate or illegal prescription they were required
to destroy them or not give them back. He continued that
there was no enforcement behind the requirement except for
a pharmacist or a pharmacy technician like his wife. He was
very concerned about retribution from drug addicts who had
a prescription that could be worth thousands or tens of
thousands of dollars from not getting them back.
Co-Chair Neuman reported that SB 74 allowed additional
access to the database. Some people with access could
dispense the information to people who were not upstanding
Alaskans. He told of some seniors in Big Lake who were
robbed of their prescription drugs and murdered. He posed
the question to other legislators, "Do you feel comfortable
knowing that somebody could give access to your personal
information?" He posed a hypothetical scenario in which
someone broke a leg and the doctor issued a prescription
for 100 Percocet to manage their pain. The information
could be given to someone including an address. His
constituents were not very comfortable.
Co-Chair Neuman furthered that he had worked as hard as
anyone on drug and alcohol abuse. Three years prior he had
placed intent language in the operating budget that allowed
for the Recidivism Reduction Group to form. Born out of
that group was the Recidivism Reduction Plan which was the
basis for much of the substance abuse treatments in Alaska.
He also noted that the House took action in the current
year to address the substance abuse issue.
Co-Chair Neuman continued to discuss the issue of the
prescription drug database. He found that the state
provided doctors with a preferred drug list. He suspected
that the state received the largest rebates from the drugs
on the list. He thought there was an opportunity for the
state to stick its nose in between a doctor and patient
based on how much money the state received in rebates. He
thought that if it was not happening, it could. He admitted
that presently he did not have proof. He understood how
hard people were trying to find money in the state to
support their budgets. He brought the subject up because of
his great concerns for opioid overdose. There was a
movement to try to deal with the problem. He had spoken
with a doctor from Wasilla who had issues because he was
losing patients. He mentioned doctor requirements in the
states of Washington and California. He thought primary
care providers should talk to their patients about the
effects of opioids or any drugs they took including the
benefits and the risks to a person's health. He noted that
primary care doctors were no longer allowed to talk to long
established patients about certain drugs. Instead, a
patient had to go to a specialty doctor to provide long-
term care and to dispense pain medication or classified
drugs. The cost of a visit to a specialty doctor was
upwards of $550 per office visit. He wondered how many of
the Medicaid or Medicare patient visits were causing the
state's budget to increase. He believed it would only be
about $150 per visit for a patient to see their primary
care provider, someone familiar with their medical history.
2:56:02 PM
Co-Chair Neuman wondered about doctors being required to
participate [in the PDMP] and, if they chose not to,
potentially losing their DEA license which enabled them to
prescribe drugs. He continued that most doctor's visits
were 15 minute increments averaging about 4 appointments
per hour. He suggested that the doctors would have to
expand their visits because of having to look at the
database. He relayed that most doctors did not go into a
back office to look at a prescription drug database and
then meet with their patients. He noted having talked to
several people that worked in specialty clinics dispensing
prescription drugs who have indicated they did not use the
database. He pondered why. Although he did not have access
to the database, it was his understanding that there were 7
pages of federal regulations. They [doctors] had to print
the pages out and sign each one acknowledging they
completely understood the information. The doctors he had
spoken with did not comprehend how anyone could understand
7 pages of federal regulations. If any doctor did not sign
each page they would lose their DEA license and their
ability to write prescriptions. Rather than signing the
form the doctors just did not use the database. He could
understand why a doctor might want access to the database
in an emergency situation. Generally, emergency rooms were
used for triage - to get a patient through the weekend, to
get a patient to their primary care provider. He opined
that in the emergency room doctors were not writing
prescriptions for large amounts.
Co-Chair Neuman reiterated that he had huge concerns about
the State of Alaska keeping a database. He had spoken with
Alaska's federal delegation about federal regulations
allowing for about $60 million in rebates to the state. He
was unclear what the pharmaceutical companies received for
their administrative fee but he suspected they received as
much as they could. I suggested that Alaska was spending at
least $60 million extra for Alaskan's prescription drug
that came back in rebates for the State of Alaska. He
opined that it was the largest crime in America currently.
The State of Alaska voluntarily entered into a program with
the federal government that allowed the federal government
to give the money back to the State of Alaska. The State of
Alaska would rather have the money as an increment in its
operating budget to cover its costs. The federal government
also had access to the records in the database. He would
happy to further discuss the issue with members. He wanted
to make sure the public was aware of the issue.
3:00:13 PM
Co-Chair Thompson indicated that each subject would be
handled separately and that a schedule of topics and
corresponding committee meeting times would be given out to
committee members.
3:00:39 PM
Representative Kawasaki asked about Sections 1 through 7
related to telehealth. He noted that each section
specifically prohibited the State Medical Board from
imposing sanctions for rendering a diagnosis. He wondered
about the liability of a physician if they did something
wrong and whether the board would have the ability to
sanction them if they committed a criminal act.
3:01:16 PM
Ms. Shadduck clarified that each of the sections were
related to their specific board and who they oversaw. Only
three of them were specific to the State Medical Board. How
it was worded meant that they could not impose sanctions
purely using telehealth. They could still regulate bad
medical behavior and bad practice. However, they could not
go after a doctor for simply practicing via telehealth.
3:01:48 PM
Representative Kawasaki asked about how to prevent having a
"Doc-In-A-Box" or from physicians out-of-state that became
licensed. He wondered about physicians, psychologists, or
social workers being out-of-state, licensed within Alaska
to practice, and able to practice via telehealth.
Ms. Shadduck stated that the only board specifically called
out the in-state and out-of-state provision was the State
Medical Board. It was the only board that had not allowed
individuals to perform telehealth via out-of-state. She
furthered that the other boards did not currently outline
in their provisions whether they allowed telehealth. They
would be allowed to have telehealth but the decision was
left with the decision as to whether the individuals would
be in-state or out-of-state to the boards.
Representative Kawasaki asked her to speak to how it would
become an issue if hiring a provider at a cost savings that
would be using a telehealth bridge. He wanted more
information concerning difficulties in the recruitment of
providers. He wondered if the issue had been discussed in
the other body.
Ms. Shadduck indicated that some of the conversations
around the provisions were bringing the rest of the state
in line with what was already being done within IHS. Alaska
Native Tribal Health Consortium (ANTHC) and other IHS
providers were extensively using telehealth. They currently
could have providers operating from out-of-state. They were
trying to true up to allow the same availability for
everyone else. There were communities that were unlikely to
attract a fulltime doctor. Telehealth was a means to
address provider issues. She did not see telehealth
completely eliminating the need for individuals to have
hands-on primary care. She supposed that because she was
from a younger generation she would be more likely to use
the telehealth option. She continued that someone like her
Mom who was in her 50s would not be comfortable using it.
She did not see telehealth completely taking away hands-on
primary care. She was uncertain if there was a discussion
about whether the cost would drive providers out. She would
follow-up with the initial bill sponsor and have them get
back to his office.
Representative Kawasaki referred to Section 28 which dealt
with civil asset forfeiture. He wondered if it was outlined
in the same way non-medical fraud cases were handled. He
pointed to page 23 of the bill.
Ms. Kraly asked Representative Kawasaki to repeat his
question.
Representative Kawasaki wondered if civil asset forfeitures
were handled the same within the state.
Ms. Kraly asked if he was referring to the seizure and
forfeiture of real and personal property. Representative
Kawasaki responded affirmatively.
Ms. Kraly responded that the answer to his question was
both yes and no. She explained that the state did not have
a civil forfeiture provision within the State of Alaska
besides what was currently used with Fish and Game. She
reported having looked at those provisions when drafting
the section. She indicated that the specific sections came
from other states that had a more robust civil forfeiture
provision for broader schemes. It was a little bit of both.
She did some civil forfeiture for Fish and Game violations.
The template from the provision being discussed was broader
than just Alaska.
Representative Kawasaki commented that just reading the
plain view in the sectional and the bill on page 23, it
talked about the real property that could be subject to
seizure including bank accounts and inventory dealing
specifically with the fraud. It also listed a bunch of
other things including automobiles, boats, airplanes, and
stocks and bonds.
Ms. Kraly explained that part of the reason the section he
read was as broad as it was, was that it was borne out of
experience. It would be discussed further in the following
day during the presentation on fraud and false claims
provisions. She added that the Medicaid Fraud Unit has had
some difficulty in recovering fines. Some people charged
with crimes transferred their assets to avoid state seizure
of them. The Medicaid Fraud director could speak more to
the subject in the following day.
Co-Chair Thompson relayed fraud would be the topic for the
following day.
3:07:56 PM
Vice-Chair Saddler asked if a report that had been
referenced earlier in the meeting could be provided. He was
unclear if it was something the department had done or if
it was an assessment of the Agnew Beck report.
Ms. Shadduck stated that the report was about the cost of
optional services for Alaska's primary care and home and
community-based services. She would submit the report to
the chair for distribution.
Vice-Chair Saddler referred to page 9 of the sectional
analysis there was reference to AS.47.05.270b where the
department was directed to work with the Alaska Mental
Health Trust Authority regarding community-based services.
In subparagraph "c" the department was asked to identify
areas where telehealth would be affective to reduce
Medicaid costs. He recalled a comment made about ANTHC
being experts but the department did not work with the
entity. He wondered why.
Ms. Shadduck reported that Line 7 and 8 of the bill
specifically stated the department could enter into
agreements with IHS providers, the more appropriate name in
statute for a group like ANTHC.
Vice-Chair Saddler asked Ms. Shaddock to characterize the
involvement the Senate Finance subcommittee had with
stakeholders in developing the bill. He had read the Agnew
Beck report and seen their extensive list of people they
consulted with.
Ms. Shadduck responded that the sponsor had heard from many
different people when creating each section of the bill.
There had been testimony from Agnew Beck as the
department's contractors as well as the Menges Group, the
legislature's contractors. A significant amount of feedback
was received from Becky Hultberg with the Alaska State
Hospital and Nursing Home Association, Jeff Jesse with the
Alaska Mental Health Trust Authority, Tom Chard with the
Alaska Behavioral Health Association, Kate Burkhart with
the Alaska Mental Health Board and the Advisory Board on
Alcoholism and Drug Abuse, the Dental Society, the Alaska
Primary Care Association, the Psychological Association,
and the South Central Foundation. She offered to provide a
complete list of organizations she had heard from. The list
was exhaustive and extensive. She indicated that if someone
had reached out to the bill sponsor, they offered to hear
from them. She mentioned that she and Ms. Erin Shine, Staff
to Senator Anna MacKinnon, worked one-on-one with as many
folks as possible.
3:11:32 PM
Vice-Chair Saddler asked Ms. Shadduck to provide the list
as well as contact information. He mentioned that
throughout the bill that required reports to the
legislature on various dates. He wanted a list of the
reports, due dates, and the person that generated them.
Ms. Shaddock responded that she had been asked to create a
master table that listed the large topics and the
provisions in the bill. She could certainly include the
reports in the document. She noted that all of the reports
were due on the same date.
Representative Gattis had presented a bill on telehealth
medicine a couple of years prior. The current bill tweaked
some of the things she did not think was possible before
the advancement of technology. She had become aware that
IHS had a federal exemption that kept them from being
sanctioned. She thought the bill was allowing everyone else
outside of that from being sanctioned by the medical board.
She wondered if she was accurate.
Ms. Shaddock confirmed that Representative Gattis was
correct.
Representative Gattis stated that telehealth was offered to
state employees but the necessary doctors were not
available. She explained that the legislature passed a bill
that required doctors to be licensed in Alaska and to
reside in Alaska. The state was currently unable to utilize
its technology because although providers from other places
were licensed in Alaska, they did not reside in the state.
The state's insurance showed that telemedicine was an
option but could not be used because they were unable to
get people to Alaska. She thought the opportunity was being
opened up.
Representative Gara was impressed with Ms. Shaddock's
presentation of the bill. He highlighted the first line of
the third paragraph of the sponsor statement that indicated
Alaska had some of the highest Medicaid rates in the
nation. He furthered that Alaska had not executed some of
the rate innovations implemented by other states and
Medicare. He had not heard anything that touched on the
issue. He was concerned with Medicaid reimbursement rates
not being high enough to attract physicians. Medicare rates
had been particularly troubling for physicians leading them
to decide not to take Medicare patients. He asked if there
was a provision in the bill that lowered Medicaid rates to
those of Medicare. If so, he would be concerned about
patient access.
Ms. Shadduck explained that in the Medicaid provisions
where she discusses redesigning the payment process, number
8, there had been a significant amount of conversation
about rates. Questions had been sent back and forth between
the subcommittee to the commissioner inquiring about the
state's rates being inadequate, not in line with Medicare,
and provider's not taking Medicaid because of rates. She
furthered that rate setting was an art form, trying to move
the entire system away from fee-for-service. In order to
make this change the committee redesigned the payment
process to include some of the innovative rates. She noted
it was the main intention behind the coordinated care
projects, starting to see what kind of innovative rate
structures and pier coordination would work on a global
basis. There was a fiscal note from the Office of Rate
Review to discuss implementing the two sections. Setting
rates required the state to use an actuarial analysis and,
the extensive process required those to go before the
providers for public comment. She added that it was
difficult to mess with the entire process and, they were
trying to move the entire system away from fee-for-service.
She explained that copays were not addressed because of
hearing from providers that they ended up eating the cost.
There were provisions that were set by the federal
government about what could be charged for copays. She
thought Director Margret Brodie could provide additional
information. She continued that adding in things such as
copays when trying to move the structure away from fee-for-
service could be counter intuitive. She also noted that the
state's technology might not work or would cost more to
collect a very nominal amount.
3:18:17 PM
Representative Gara agreed that copays were often more
costly than trying to collect them. He continued that he
did not want to do what was done in Medicare such as
doctors receiving only $65 for a primary care visit.
Physicians had reported that the amount was completely
inadequate for them to want to serve the Medicare
population. If they served Medicare patients they did it
out of a sense of obligation. He noted that there had been
discussion about reducing the cost for home and community-
based care. He suggested that those who provided respite
care and personal care attendants already received a very
low level of pay. He wondered if, by reducing the cost for
home and community-based care, it would put pressure on the
state to lower the pay for attendants.
Ms. Shadduck suggested that the intention was to use
innovative methods such as telemedicine. For instance
regarding home and community-based services, instead of
having to send someone out to a patient's home every day,
an iPad could be placed in a patient's home and Facetime
could be used to check in with a patient about their
medications and to answer any questions. She reported that
Section 30, referring to waivers, was the location in the
bill where the department was asked to implement the 1915i
and 1915k options as well as the 1945 health homes. They
did not reduce services but helped shift what the state was
receiving from the federal government.
3:20:22 PM
Representative Gara was aware that the department was
moving ahead with a number of waivers. He was unclear why
it was included in the bill. He suggested the department
wanted the legislature's blessing that it was moving ahead.
Ms. Shaddock responded that he was correct. The department
wanted to make sure there was legislative approval in place
before applying for the waivers. She reported having a
conversation with Deputy Commissioner Sherwood on the
matter.
3:21:03 PM
Co-Chair Neuman referred to Section 23 which had to do with
competitive bidding for durable medical equipment. The
section discussed that a Medicaid service provider could go
through a program that could be delivered on a statewide
basis. He wondered if it meant that only providers that
worked on a statewide basis could enter into a contract
with the state for the competitive bidding process.
Ms. Shaddock responded that it could be done regionally.
The bill was specific about the type of things that would
be allowed to be handled in a competitive bidding process
such as durable medical equipment, wheelchairs, travel, and
other items. She reported being approached about
considering other things that the committee was comfortable
with. She stressed that it was in no way to mean that one
provider needed to do it entirely statewide.
3:22:16 PM
He asked about the number of audits per year listed at 50
in Section 25. He wondered why the state would specify a
number without knowing costs.
Ms. Kraly answered that currently in statute it required
the department to conduct 75 audits. There was a contract
with Myers and Stauffer to conduct the state's audits. She
could provide Co-Chair Neuman with a copy of the state's
contract with them. It outlined how it was reimbursed. The
department determined to reduce the number of audits to 50
to offset the costs of multiple audits. Providers had a
significant amount of audits at the federal, local, and
state levels. The department would experience the same
impact without doing as many audits.
Co-Chair Neuman referred to Section 30 which talked about
outlining cost containment. He wondered about the current
value of the waivers if the state accepted all of those
that were available. He saw that there was a limit of 6
months to apply. He did not understand why the state would
want to put a time limit on applying. He wanted the
information from the department. He also wanted a legal
opinion on the authority of the department to develop
regulations and post fines.
Co-Chair Thompson assured Co-Chair Neuman that a request
would be made.
Representative Edgmon would ask his question at a later
time.
3:24:25 PM
Representative Munoz, commented that Board of Pharmacy
oversaw the PDMP. The focus was really on the patient and
trying to track patients that shopped around or who had
sought more than one prescription in a short period of
time. There was a provision that the board would notify the
pharmacist or practitioner. She wondered if the bill
committee had contemplated how the database might be used
to monitor the prescriptive practices of certain physicians
who tended to over prescribe narcotics.
Ms. Shadduck responded that since that had been brought to
her attention in a meeting with Representative Munoz she
had sent a question to the Director of Corporations,
Boards, and Licensing to get some feedback. She also noted
that there was a PDMP technical assistance center in the
US. She sent a feeler out to them and they had already
responded. She would be happy to share more information.
The other question could be addressed by the director on
the day focusing on the PDMP.
Representative Munoz also asked whether previous committees
had contemplated the State Board of Medicine being involved
in the monitoring of prescriptive practices.
Ms. Shadduck responded that as a board if they were
sanctioning someone they could not use the database. There
were protections to avoid the information being used
incorrectly. There were provisions that were Class A
misdemeanors and Class C felonies. She continued that
through a legal action there could be a subpoena to look up
information but was very restrictive on who had access to
the database. Currently, the method the Senate chose was
those unsolicited notifications to prescribers. She added
that requiring the use of the database would allow an
education level to increase about how much controlled
substances prescribers were prescribing. It was more on the
educational side than a complete aggressive hammer.
3:27:03 PM
Representative Munoz asked about the types of drugs
included on Schedules II, III, and IV. She noted that
Schedule II and III drugs was more addictive in nature than
Schedule IV drugs. Her concern was that the inclusion of
Schedule IV drugs would create a great amount of workload
on the part of practitioners. She thought it was the
information about the narcotics represented in Schedule II
and III that was most important. She wondered if the
discussion had come up in previous committees.
Ms. Shadduck realyed that there had been much discussion
about what schedules to include. Schedule IV included
Benzodiazepines which potentially interacted badly with
Schedule II and III drugs. The group felt that it was
important to include Schedule IV drugs. She clarified that
the only folks that enter information in the database were
pharmacists and pharmacy employees at the time of
dispensing. The day prior to the bill passing on the floor
the US Senate passed SB 524, the Comprehensive Addiction
and Drug Recovery Act of 2016, which included (in Section
601) a use of the PDMP that would be required for
prescribers and dispensers to look up federal schedule II,
III, and IV drugs. The prescribers would have to look up
all three schedules before they prescribed. It was
something that was co-sponsored by Senator Sullivan and
passed by both of Alaska's Senators. If the bill became
federal law, then the federal government would have a
higher threshold and, they would be linked to federal
grants and other things.
Representative Munoz asked if a false claim could be placed
against the State of Alaska or one of its affiliates such
as the Pioneer Home or the Juvenile Justice System. She
also wondered if a false claim could be applied in another
way such as an underpayment or overpayment by the state
reimbursement of a payment.
Ms. Kraly would have to look more closely. She noted that
state agencies like the Pioneer Home were subject to audit
requirements. They did identify overpayments and had to
reconcile those issues. She believed there was a provision
regarding state employees and state agents in terms of the
FCA. She would follow up with additional details.
Co-Chair Thompson thanked Ms. Shadduck for the amount of
work she had put into the bill.
Ms. Shadduck looked forward to the committee making the
bill a better bill.
CSSB 74(FIN) am was HEARD and HELD in committee for further
consideration.
Co-Chair Thompson reviewed the agenda for the following
day.
ADJOURNMENT
3:32:11 PM
The meeting was adjourned at 3:32 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB74 Sectional Analysis.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| SB 74 Sponsor Statement.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| SB 74 Testimony ADS.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| DHSS Medicaid Services - Optional vs Mandatory_Feb 2016.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 HFIN |
| Leg Research - PCA and HCBS programs.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| SB74 Supporting Documents - Topic & Sections Overview.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| AADD letter re SB74 031816.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| SB 74 Testimony ADS.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| SB74 Supporting Documents - Letter of Support - AMHB_ABADA_ 3-21-16.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| SB 74 Response DHSS.pdf |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |
| SB 74 Tanana Chiefs.PDF |
HFIN 3/21/2016 1:30:00 PM |
SB 74 |