Legislature(2015 - 2016)
04/09/2016 02:11 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| SB74 | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 9, 2016
2:11 p.m.
2:11:16 PM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 2:11 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
Rex Shattuck, Staff, Representative Mark Neuman; Jane
Pierson, Staff, Representative Steve Thompson; Heather
Shadduck, Staff, Senator Pete Kelly; Stacie Kraly,
Assistant Attorney General, Department of Law; Jay Butler,
Chief Medical Officer, Department of Health and Social
Services; Jon Sherwood, Deputy Commissioner, Medicaid and
Health Care Policy, Department of Health and Social
Services; Representative Liz Vasquez.
PRESENT VIA TELECONFERENCE
Kate Glover, Legislative Legal Services, Legislative
Affairs Agency; Erin Narus, State Medicaid Pharmacist,
Department of Health and Social Services; Andrew Peterson,
Assistant Attorney General, Office of Special Prosecution,
Medicaid Fraud Control Unit, Department of Law.
SUMMARY
CSSB 74(FIN) am
MEDICAID REFORM;TELEMEDICINE;DRUG DATABASE
HCS CSSB 74(FIN) was REPORTED out of committee
with an "amend" recommendation and with 13 new
fiscal impact notes from the Department of Health
and Social Services; 1 new fiscal impact note
from the Department of Commerce, Community and
Economic Development; 1 new fiscal impact note
from the Department of Law; 1 new fiscal impact
note from the Department of Corrections; and one
previously published fiscal note: FN29 (ADM).
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."
2:11:58 PM
Co-Chair Thompson discussed that the committee would hear
amendments on SB 74.
^AMENDMENTS
2:13:07 PM
Co-Chair Neuman MOVED to ADOPT Amendment 1, 29-LS0692\T.1
(Glover, 4/7/16) (copy on file). [Note: due to amendment
length it has not been included in the minutes. See copy on
file.]
Co-Chair Thompson OBJECTED for discussion.
Co-Chair Neuman explained that the amendment addressed a
major concern by adding a sunset provision to the
Prescription Drug Monitoring Database (PDMP). He elaborated
that he had received a couple of letters on the issue. He
detailed that the amendment would sunset the PDMP provision
in three years; the topic would come before the legislature
at that time to determine whether it had worked as intended
or if there were areas of concern. He elaborated that
because the bill would allow additional individuals to
access the PDMP (including non-licensed individuals) he was
concerned that information may be leaked. He stated that
information had been found that social security numbers and
other personal information had been leaked from the
database in other states.
Co-Chair Neuman relayed that individuals had expressed
surprise when he had asked his constituents whether they
were aware the state and federal government kept track of
the prescription drugs people took in a database. He
believed the provision increased government in people's
lives; he was opposed to the database adding more
government into people's private lives. He referred to
testimony from physicians about the time the database took.
He shared that he had spent the past few years talking to
many doctors about the issue. He understood the PDMP was an
important tool for doctors. He stated that in three years
the legislature could look at portions that were expanded
to allow access to others. He stressed that the legislators
were the voice of the people. He believed it was respectful
to take a look to determine whether there had been issues
during the first three years. He hoped it would require the
department [the Department of Commerce, Community and
Economic Development (DCCED)] or medical board to determine
if there were issues over the three-year period. He opined
the database was very intrusive into people's personal
lives.
2:17:20 PM
Co-Chair Thompson noted that there would be an expense to
put the bill's PDMP provision in place. He wondered if
there would be another expense in the future if the
provision sunset and was reenacted at a later time.
Alternatively, he asked if the amendment would merely look
at the provision to determine if it should be continued in
three years.
Co-Chair Neuman replied that there would be no expense to
have the legislature look at the program in three years.
His intent was to review the program in three years to
determine if it was something the state should continue.
Representative Gattis referred to constituents who had
challenges with the database, while others supported it.
She struggled with having a database that included people's
medicine, but she recognized there was a huge problem
facing the state. She also understood there were databases
in hospitals and many other places. She asked how the topic
would be reported back to the legislature in three years
and who would make the report.
Co-Chair Neuman answered that annually the legislature
received a report from the department on the PDMP. He
talked including the information in a report to the
legislature, but he believed it would not be broadly read.
Therefore, the amendment would bring the issue before the
legislature.
REX SHATTUCK, STAFF, REPRESENTATIVE MARK NEUMAN, elaborated
that there was a provision in statute for an annual report
back to the legislature. He continued that several other
reports came out and requirements that would indicate what
a legislator may be looking at. For example, if the
database was breached, protocols were in place that were
required to be acted upon. He detailed that instead of a
full-fledged audit, the reports would give an indication on
the program's effectiveness. The report would also include
information on the successfulness of many of the provisions
in the bill.
Co-Chair Neuman added that he did not want to go through
Legislative Budget and Audit due to the expense. The
amendment would bring the provision back to the legislature
for review just like every other sunset.
2:21:41 PM
Representative Gara was trying to determine the intent of
the amendment. He asked whether the amendment intended a
review of how the database provision had worked during the
three-year period or whether it would be eliminated in
three years, which could mean the legislature would have to
pass a new bill.
Mr. Shattuck answered that Amendment 1 would repeal the
provision. He continued that a legislator would need to
offer legislation to leave the statute as is.
Representative Gara asked for verification that the
amendment would repeal the PDMP provision in three years
unless another legislator picked it up and introduced
another bill to extend it.
Mr. Shattuck answered in the affirmative.
Representative Gara observed that page 5, lines 19 through
21 of the amendment returned to current law and would make
the PDMP voluntary. He read from the amendment: "Nothing in
this section requires or obligates a dispenser or
practitioner to access or check the database before
dispensing, prescribing, or administering a medication..."
He asked how it differed from current law.
Mr. Shattuck replied that he had gone through the bill and
had been surprised at the complexity of redoing an action.
In three years the amendment would return statutes to their
current existing language. The language "insert a new bill
section to read..." returned the statute to its current
language. The amendment would conform to the original bill
and reset statutory language to its language at present.
2:24:42 PM
Representative Gara stated that whether to require
physicians to look up Class II and III controlled
substances was a policy call. He shared that opioids fell
under the Class II category. He detailed in 2012 Alaska had
more than twice the national rate of opioid prescription
drug overdose deaths. Alaska was one of the states that did
not currently require physicians to check the database. He
referred to testimony that Class II and III drugs would not
be a huge burden and were the most important drugs to
check. He noted the original bill had included Class IV,
which he did not believe was in the current version. He
elaborated that Class III drugs included things like
steroids (a person could have a heart attack if they took
too many). He characterized Class II and III prescriptions
as death drugs if over prescribed. He could be more
supportive of an amendment requiring a report to the
legislature in three years about whether the program was
working. He did not support repealing the section. He had
been convinced by testimony of the need to check the
database for Class II and III prescriptions. He reasoned
the state's heroin problem was worsening, not improving. He
specified that one of the ways a person ended up on heroin
was starting out on opioid drugs. He did not support the
amendment.
Vice-Chair Saddler echoed comments made by Representative
Gara. He stated that there was a challenge to balance the
right to privacy with the need for public protection and
health. The committee had heard substantial testimony about
the difficulties with heroin and opioid addiction and had
seen evidence that mandating the PDMP consultation and
record keeping had an effect in reducing over-prescribing
and overdoses. He also believed it was fair to review how
the program would work in Alaska's unique circumstances. He
thought allowing a three-year "pilot program" was good, but
he wondered about the amendment's provision to report. He
supported requiring someone to assess the effectiveness of
the PDMP and report to the legislature in advance to
determine whether the PDMP mandate should be extended. He
supported an amendment to require a report to guide the
legislature in two years on whether the mandate should be
continued.
2:28:41 PM
Representative Kawasaki surmised that the language
repealing the PDMP provision after three years was located
on page 7, line 3. He asked about the effect of the
repealer on page 12, line 14 related to section effective
dates. He asked if the language pertained to new or old
sections.
Mr. Shattuck replied that page 7 was a repealer and page
12, line 14 included the sunset of sections 22, 24, 26, 28,
30, and 32 of the bill, which covered the adjustments
proposed in the existing committee substitute (CS).
Representative Kawasaki stated that one of the things the
committee had heard during public testimony related to
Schedule I (e.g. experimental drugs and marijuana) or
Schedule V (e.g. drugs that could be purchased off-the-
shelf in Canada). He surmised the drugs in those categories
appeared to be things the state could not regulate and
there was not substantial risk of addiction. He believed
the current CS limited the PDMP requirement to Schedule II
and III prescriptions (opioids and drugs with an addictive
property) and Schedule IV, which he believed was on the far
end of having an addictive property. He stated it appeared
that by adding Schedule I through V drugs it would result
in extra paperwork for individuals working in pharmacies.
He did not know if it was good policy or the intent.
Mr. Shattuck responded that the amendment did not intend to
address the policies the committee was currently
discussing. The amendment would require a review or repeal
in 2020. He explained the amendment contained many things
related to policy calls the legislature would have to make.
He elaborated that the policy calls would be made at
present and the PDMP portion would come back before the
committee in three years for review.
Representative Kawasaki observed that under the amendment
pharmacists would have to use the database for all of the
schedule drugs instead of limiting the requirement to
addictive drugs. He asked if his understanding was
accurate.
Mr. Shattuck answered that if the statutes were reset to
the current law, he believed it was fair to say that the
policy calls made by the committee at present would be
undone, but only if the legislature chose not to extend the
program in its review.
Representative Kawasaki needed further clarification.
2:32:57 PM
Co-Chair Neuman clarified that the intent of the amendment
was to maintain the original PDMP program. The amendment
would review the PDMP expansion in three years. He stated
that the language on page 5 of the amendment was not
related to the intent of the amendment.
Representative Kawasaki stated that under the current
version of the bill the state would not be collecting data
for pharmacy transactions for Schedules I and V drugs. He
stressed the amendment included those categories as well.
He observed the amendment would expand the amount of data
collected within the PDMP. He did not know he would support
that expansion.
Co-Chair Neuman clarified that the amendment did not intend
to change anything currently in SB 74. He detailed that
different drug classifications and pharmacist database
requirements would remain in law. The amendment would
require the legislature to determine whether the action
under SB 74 had been appropriate in three years.
Representative Kawasaki addressed a requirement for
physicians and pharmacists to use the PDMP. He believed
testimony had reported that currently only 30 to 35 percent
of those individuals used the database. He recognized it
took extra work and time to input data into the database.
He noted he had also received calls from constituents about
the issue. He believed either the provision should be
implemented and looked at in three years or not done at
all. He opined it made sense to look at the provision in
three years to determine if it was harmful to physicians'
offices or to ramp up the database requirement over time
versus making the program optional.
Co-Chair Neuman answered that the intent of the amendment
was to implement all of the changes that were currently
included in SB 74 for a period of three years. After three
years, the legislature would review the statute to
determine if it should be continued.
Vice-Chair Saddler MOVED to ADOPT conceptual amendment 1 to
Amendment 1. He supported the intended goals of the PDMP.
Additionally, he respected Co-Chair Neuman's concerns
related to privacy and public safety. The amendment would
direct the Department of Health and Social Services (DHSS)
to prepare and deliver to the presiding officers of the
legislature, a report evaluating the effectiveness of the
mandated use of the PDMP in reducing over prescription and
addiction of opioid drugs and other effects. The intent
would be for the report to guide the legislature on whether
to extend the mandate.
Representative Wilson OBJECTED. She asked when the
committee became "the enforcement of everything." She was
unsure what the report was supposed to be and do. She
wanted to see the conceptual amendment in writing if it was
to be considered.
Vice-Chair Saddler replied he would be glad to draft the
amendment in writing. The intent was to have the mandate
exist for three years and to evaluate its effectiveness. He
remarked that a previous speaker had asked for information
to base a decision on in three years. He believed requiring
the department to report on how well the database was
achieving its intended purposes would be useful.
2:38:43 PM
Co-Chair Neuman thought it may be better for Vice-Chair
Saddler to offer a separate amendment.
Vice-Chair Saddler WITHDREW conceptual amendment 1 to
Amendment 1.
Representative Edgmon asked the amendment sponsor to
retrace some of the earlier comments. He believed the
amendment made material changes to the entire section. He
pointed to the reinsertion of language in Section 25 and
the removal of language in Section 26 of the bill. He asked
about the impact of the changes.
Mr. Shattuck replied that he did not classify himself as an
expert on the database. He detailed that the amendment
addressed the CS currently before the committee. He pointed
to page 1 of the amendment to bring clarity to the
following sections. Page 1, line 2 would insert a new bill
section. There were a number of actions that took place in
the corresponding section in the bill. He referred to the
complex process of reverting statutes back to their former
state. He elaborated the process included inserting a new
bill section, which would revert statute to its existing
language. He continued that the committee may make policy
decisions during the current meeting, which would alter the
CS. All of the changes would be in place until the review
occurred in 2020. He communicated the same explanation
pertained to Section 24, page 1, line 17 and page 2, line
27.
Representative Munoz asked if the amendment took the law
back to the present law, which included a voluntary PDMP
program instead of a mandatory program. Mr. Shattuck
answered in the affirmative.
Representative Munoz asked for verification the amendment
would repeal the mandatory reporting requirement in three
years. Mr. Shattuck answered in the affirmative.
Representative Edgmon believed the amendment seemed to
materially weaken the section of the bill, which was
integral to the whole PDMP change.
Co-Chair Neuman reasoned that the legislation expanded the
PDMP reporting requirement and made reporting mandatory for
certain drugs. He remarked the topic had originally been
implemented in 2008. He explained the issue had been
debated at that time, which was the reason the program was
not mandatory. The statute would revert back to the
original language if it sunset.
Representative Edgmon asked to be directed to the
prevailing language, which would override the language
being removed in Section 25. He cited the language:
"Nothing in this section requires or obligates a dispenser
or practitioner to access or check the database before
dispensing, prescribing, or administering a medication, or
providing medical care to a person." He noted the language
would be removed with the amendment, but he believed it was
being replaced elsewhere.
2:44:49 PM
Co-Chair Neuman explained the amendment would not take
effect until 2020. He specified the amendment would revert
the law back to its original state if an extension was not
approved by the legislature. The intent of the amendment
was to return to the current law, which allowed optional
reporting and review of the PDMP. He believed a doctor
should review the PDMP if they believed a patient was
doctor shopping for prescriptions.
Mr. Shattuck pointed to Section 22, page 22, line 5 of the
CS; if the current CS was passed, Section 22 would look
exactly the same. If in 2020 the legislature did not choose
to extend, the section would revert to current statute. He
specified there was currently an annual report from the
department, which covered some of the performance measures
a legislator may be concerned about.
2:48:01 PM
Co-Chair Thompson stated that the statute would revert back
to the current statute in 2020. He asked for verification
that in order to continue the mandatory requirement related
to the PDMP it would require new legislation at that time.
Mr. Shattuck replied that the legislature could pass a bill
removing the section with the repealing language. A
legislator could chose to remove or extend the repealing
language and make any adjustments.
Representative Wilson stated that if the public thought
that the database applied to all citizens they would have
been concerned. She remarked that SB 74 was a Medicaid
reform bill. She initially thought the provision only
pertained to individuals on Medicaid. She was fine with the
amendment. She noted that someone paid the Medicaid bills;
therefore, someone knew about prescribed medications and
whether medications were overprescribed. She reasoned that
her insurance company knew the medication she was taking.
She surmised the issue only pertained to the underinsured
population, which she believed had been reduced
substantially under Medicaid expansion. She was trying to
determine what would happen to a person if the database
alerted a misuse. She wondered if a patient would be
arrested, if a doctor would be sanctioned, or other.
Co-Chair Neuman replied that it was one of his primary
concerns. He provided a scenario in which a person
attempted to shop doctors for pain medication. He noted the
database would be updated weekly in the current CS. He
remarked that there was no enforcement if "it gets out
there to the week." He shared that his wife was currently a
pharmacy technician and was required to destroy illegal
prescription scripts. He suspected the technicians would be
responsible for telling a drug addict or gang member they
were required to destroy the prescription. He emphasized it
was incredibly scary. He wondered why the state was putting
Alaskan citizens in that position. He continued that the
technician could call the troopers; however, he remarked
that when a person reported a home break-in troopers
responded they would email a form.
2:52:10 PM
Representative Wilson stated that she had received a letter
from the Alaska Dental Society, which specified requiring a
person to be licensed to access the database would waste
valuable and expensive practitioners' time for
administrative task. She remarked that the change in law
would cost providers time and money. She was concerned that
if a study needed to be done, she believed it should be
done before implementing the mandatory requirement in the
CS in order to know the cost ahead of time. She wondered
why the requirement would be put on doctors' backs if those
paying the Medicaid insurance or private insurance bills
were not looking close enough at the issue. She also
wondered if negative repercussions would take place against
a doctor if they were the unlucky fourth prescriber a
person went to for a prescription. She reasoned Alaskans
had a hard enough time getting doctors. She believed it
would have a negative effect.
Representative Gattis asked for verification that the
amendment would make the PDMP effective for three years and
would require checking of the database for Schedule II and
III drugs. She asked for verification the provision would
sunset after the three-year period, at which point the
legislature would review the program.
Mr. Shattuck answered in the affirmative.
Representative Gattis stated that should the amendment pass
it would require Schedule II and III drug prescriptions to
be input in the database. She wanted to be clear that it
was mandatory for three years and that the legislature
would receive feedback after that time period.
Co-Chair Neuman answered that the amendment did not address
the different schedule drugs. He believed there may be some
other amendments addressing some of the least dangerous
drugs. He noted SB 74 included the mandatory reporting
requirement. The amendment left the PDMP as it would be and
asked the legislature to review whether the changes had
been appropriate in three years.
Representative Munoz believed that the amendment would make
the program voluntary [after three years]. She remarked
that currently only 13 percent of doctors were
participating in the program. She believed 100 percent
participation was needed to be effective. She wondered how
the legislature could come back in three years to determine
the effectiveness if only 13 percent of the doctors were
utilizing the system.
Co-Chair Thompson explained that SB 74 required mandatory
reporting. The amendment would remove the mandatory
requirement in three years.
Representative Munoz stated that the amendment removed the
mandatory requirement.
Co-Chair Neuman clarified that the amendment would remove
the mandatory requirement in 2020 unless the legislature
extended the requirement. The amendment would maintain all
of the requirements in SB 74 and would require any doctor
writing a prescription to enter the information into the
database for three years. His goal was to have the issue
come before the legislature [in 2020].
2:58:50 PM
Representative Munoz asked for verification that page 5 of
amendment (page 25 of the bill) would add back language
that had been deleted in the CS.
JANE PIERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
explained that the amendment kept the mandatory reporting
requirements currently in the CS; it would create a sunset
date of January 1, 2020, which would repeal what was
currently in the bill. The program would revert back to the
optional program currently in statute. The one problem with
the amendment was it would be necessary to remove Schedule
I drugs off of the amendment, because Schedule I included
marijuana and would be contradictive to the passed voter
initiative. She explained the amendment looked complex, but
really was not.
3:00:20 PM
AT EASE
3:11:33 PM
RECONVENED
Co-Chair Neuman clarified the intent of the amendment. He
addressed the amendment drafter and relayed there had been
confusion about the effects of Amendment 1. He detailed
there had been questions about whether the amendment
removed Schedule I or II drugs. His intent was to maintain
the original PDMP implemented in 2008. The only thing the
amendment would do was sunset the mandatory requirements
included in SB 74 related to the PDMP. He explained the
department or another legislator would need to an amendment
to implement the programs as they originally were. The
intent of the amendment was for the legislature to review
the issue in three years.
KATE GLOVER, LEGISLATIVE LEGAL SERVICES, LEGISLATIVE
AFFAIRS AGENCY (via teleconference), replied in the
affirmative. She explained the impact of the amendment. She
detailed that following each section in the bill that
changed the PDMP requirement a new section was added that
would remove the changes and return statutes to their
current state. Sections 22, 24, 26, 28 would take effect
and in three years' time they would revert back to the
current statute. There were a couple of other sections
added by the bill; therefore, the new sections of the PDMP
would be repealed in three years. She summarized that in
three years the law would look just as it did at present.
Co-Chair Thompson remarked that SB 74 was changing numerous
aspects of current statute. He asked how it would reflect
on the current bill the committee was addressing.
Ms. Glover replied that the items added in SB 74 would be
repealed in three years. There was already a PDMP; AS
17.30.200 was the existing statute, but SB 74 would change
the requirements related to the database. Amendment 1
removed all of the changes made by SB 74 [pertaining to the
PDMP] in three years to revert back to current statute.
Representative Edgmon pointed to page 3, line 26 of
Amendment 1. He noted that the word subpoena had been
added. He thought a subpoena was a lower threshold than a
search warrant.
Ms. Glover answered that existing statute included the word
subpoena, but it was removed in SB 74. The word would be
added back into statute in three years to reflect the
current statutory language.
Representative Gara understood that the requirement for
physicians to look at the PDMP for Schedule II and III
drugs would last for three years and become voluntary again
under the amendment. He pointed to page 1 of the amendment
and noted there were numerous drugs added into the
database. He remarked on privacy concerns that had been
raised. He observed that it appeared a pharmacist had to
enter Schedule II, III, and IV drugs into the PDMP. He
asked if the amendment also required pharmacists to enter
Schedule IA, IIA, IIIA, IVA, VA, I, and V.
Ms. Glover answered that currently use of the PDMP was
optional, but if a pharmacist chose to use the database
items that were supposed to be entered were Schedule IA,
IIA, IIIA, IVA, VA, as well as drugs under federal law.
The language in SB 74 removed the state schedules and
included only the federal Schedule II, III, and IV drugs
for entry into the database. She continued that in three
years' time statute would return to the current language,
which would include the state and federal schedule drugs.
The program would also revert to being optional.
3:17:34 PM
Representative Gara asked if the amendment would require
the entry of the additional drugs and the bill only
required the entry of federal Schedule II, III and IV.
Ms. Glover responded that the bill only required entering
federal Schedule II, III, and IV drugs. Current law
required all of the schedule drugs listed; the amendment
would revert back to current law [in three years].
Representative Gara asked if the change would take place
now or at a later effective date. Ms. Glover replied that
none of the items in the amendment would take place for
three years.
Representative Pruitt explained that the amendment
represented current statute. For example, he referred to AS
17.30.200(a) in the amendment and explained current statute
included identical language. Currently all of the schedule
drugs listed on page 1 of the amendment were listed in
statute. Section 21 showed how the statute would be
amended. The two key pieces of the amendment were in
Section 52, page 7 that removed anything new added in SB 74
related to the PDMP and in the last part of the bill that
"took the new stuff in the statute and replaced it with the
stuff that's currently in." He stated if there was concern
about current statute - he pointed to Schedule I as a
concern that had been vocalized - the item would be amended
one way or another. He suggested amending the amendment to
deal with the committee's desired outcome if it moved
forward with a sunset period of three years.
3:20:26 PM
Representative Guttenberg stated that after training
pharmacies and doctors to abide by a mandatory prescription
drug database the law would be repealed after January 1,
2020. He continued that theoretically a legislator would
spend four months trying to implement a new law to replace
it and start over. He noted there would be a gap. He
countered that it was not three years and may not even be
two years. He furthered that the law would be repealed on
January 1, 2020, which was approximately 20 days before
session started - a time the legislature could not take
action on legislation. He elaborated that if someone wanted
to continue the database they would have to pass the law in
the 2019 legislature. He reasoned that in order to pass the
law in the 2019 legislature it would require a report on
the program's viability and successes, which meant the work
would need to begin in 2018. He explained that if the law
did not pass in 2019, every doctor and pharmacist in the
state would be out and not reporting any longer. He
continued that the individuals could then be required to
start reporting again three or four months later. He was
not sure the amendment was workable. He believed the
concept in place would help the legislature to know if the
requirement was working. He reiterated that a repeal date
of January 1, 2020 meant something would have to pass in
2019. He believed the timeline was too short.
Co-Chair Neuman replied that it was a good point. He
believed another noted legislator had suggested a report to
the legislature in two years. He would be fine with
changing the effective date to 2021 or to April 1, 2020. He
reasoned the legislature would have a year to take a look
at the issue. The intent was to implement the requirements
for a few years to see whether they worked.
3:25:09 PM
Co-Chair Thompson asked the bill sponsor's staff to address
the amendment.
HEATHER SHADDUCK, STAFF, SENATOR PETE KELLY, wanted to be
careful in her response because the sponsor understood the
committee would make some policy decisions. She relayed the
sponsor had tried to fix some of the things that had been
brought to the legislature through various reports. She
referred to the report from the Controlled Substance
Advisory Council asking to strengthen or fix some things
related to the PDMP, which were separate from whether the
database should be mandatory or not. One of the items had
been to allow for a delegated access to the database. The
version from the Senate had allowed for any delegated
access by a doctor or pharmacist. She detailed that based
on public testimony the CS limited the access to
individuals licensed or registered by the state's boards
and corporations, which increased accountability. The bill
had placed the mandatory lookup requirement on the
prescriber in order to remove the pressure from the
pharmacist. The change also prevented the pharmacists from
being faced with awkward conversations; the conversations
would happen more appropriately on the frontend with the
prescriber. Additionally the schedule drugs had been
cleaned up. She specified that state schedule drugs had
been removed because they were only used by law
enforcement. She noted that if the amendment passed the
state schedule drugs would be added back into statute
[after the three-year period]. She furthered that Schedule
I had been removed because the drugs had no medical use;
the classification also included marijuana, which per the
marijuana initiative, the state could not collect any data
on users. Schedule V had been removed based on the low
threshold or likelihood of addiction. She explained the
bill included a limited Schedule II, III, and IV to be
monitored under the PDMP. The sunset would automatically
put the schedules back into statute.
Ms. Shadduck believed there would be a separate amendment
to talk about a report or audit, which Amendment 1 did not
include. She referred to page 3 of the amendment where the
word "subpoena" was removed; the amendment would add the
word back into statute. She explained the word had been
removed based on feedback in working with the Department of
Law (DOL) to further comply with the Health Insurance
Portability and Accountability Act (HIPAA) and to further
protect individuals' medical records. The current CS
included a search warrant or an order issued by a court.
She explained that both items required appearing before a
judge. She detailed that a subpoena was a lesser threshold
and could be issued by a staff member in a courthouse. She
explained removing the mandatory lookup removed the benefit
of the provision. She furthered it was the committee's
policy call to make on whether a sunset was the wise choice
or not. She believed the sponsor would be very supportive
of a more comprehensive audit after the three-year period.
She relayed that one of the later amendments proposed to
change the PDMP effective date sections to July 1, 2017
based on conversations with the Division of Corporations
Boards and Professional Licensing [within DCCED] to account
for the time needed by the agency. She furthered if the
repealer remained at [January 1] 2020 it would require a
bill to be passed in 2019, which would only mean 1.5 years
of data. She reasoned it may not be possible to tell what
was going on based on the limited data at that time.
3:29:23 PM
Representative Gattis asked why the amendment sponsor had
proposed rolling the statute back to current statute at the
time of sunset versus reverting back to the bill language.
Co-Chair Neuman answered that he was trying to keep things
simple. His intent was to revert the statute back to the
current statute [in three years]. He understood and could
probably accept a change to an effective date of 2021. He
suspected future legislators would change the Schedule I
and V and other. He believed the major and most objective
portion of the provision was the mandatory requirements for
all doctors and the intervention into people's lives. He
believed future legislators would have the same concerns.
He remarked that marijuana will have been legal for a
couple of years and would be addressed. He agreed with the
changes that were made. He mentioned pharmacists that had
to follow the mandatory requirements, which he believed
would be looked at as well. He would accept a friendly
amendment to change the effective date to 2021.
Representative Wilson wondered why there was such a low
number of doctors (17 percent) using the PDMP currently.
She wondered if it was too cumbersome or expensive.
Ms. Shadduck clarified 13.5 percent of current prescribers
and 40 percent of pharmacies used the PDMP based on a white
paper provided to the committee ["State of Alaska
Controlled Substances Advisory Committee White Paper:
Increasing the Effectiveness of Alaska's Prescription Drug
Monitoring Program (Alaska's PDMP)" (copy on file)]. She
shared that some doctors had been unaware the PDMP existed;
therefore, part of the issue was education. She relayed
that Dr. Zink had provided testimony to the committee that
a couple of years ago the emergency room she worked for had
gone to the Board of Pharmacy and other stakeholders with
the request for a PDMP, only to discover that the database
already existed. Additionally, some doctors had experienced
problems with using the database, which had been worked on
extensively and improved by the Board of Pharmacy and the
Division of Corporations Boards and Professional Licensing.
3:32:58 PM
Vice-Chair Saddler MOVED to ADOPT an amendment to Amendment
1. He directed attention to page 7, line 5 and explained
the amendment would change the date 2020 to 2021. Likewise,
the date would be changed from 2020 to 2021 on page 12,
line 14.
Representative Gara OBJECTED. He did not support a sunset
date on the PDMP provision. He WITHDREW his OBJECTION.
Representative Gattis OBJECTED. She asked if the date could
be changed to sometime after session started such as April
or June.
3:35:03 PM
AT EASE
3:36:03 PM
RECONVENED
Vice-Chair Saddler WITHDREW conceptual amendment 1 to
Amendment 1. He MOVED to ADOPT conceptual amendment 2 to
Amendment 1. He directed attention to page 7, line 5 and
explained the amendment would change the date of January 1,
2020 to July 1, 2021. Likewise, the date would be changed
from date of January 1, 2020 to July 1, 2021 on page 12,
line 14. There being NO OBJECTION, it was so ordered.
Representative Wilson supported Amendment 1. She thought
there would be problems discovered in the future. She
remarked the Dental Society had already submitted a concern
that she did not see addressed by any of the amendments.
She remarked a huge number of people had never used the
PDMP. She thought it would be about the providers and
whether or not the program was working for them to make
sure everything kept on track. She reasoned that if
everything was working well the amendment would merely
bring the issue back before the legislature to make sure it
was addressing anything the providers had issue with. She
was frustrated the fiscal notes only reflected costs or
savings to the state. She was interested in the costs and
savings to the state's communities and providers. She
believed there would be unintended consequences and the
amendment would force the legislature to review the issues.
Representative Gattis spoke in favor of the amendment. She
relayed that the sponsor knew that some of the committee
members had been struggling with the data collection issue.
Representative Edgmon viewed the changes to the database as
one of the central benefits of the bill. He spoke to
significant opioid abuse in his district in Southwest
Alaska. He believed the database provisions in the bill
seemed to provide a way to help combat the problem. He
noted there was significant support for the database. He
also respected the issues of privacy and believed they were
well established, but he believed the support outweighed
the consequences. He pointed out that it would cost about
$25,000 to run another bill according to the Legislative
Affairs Agency from several years earlier. He wondered why
an audit could not be conducted as opposed to running
another bill. He remarked on time and resources running
another bill required. He would support the amendment,
albeit somewhat reluctantly.
Representative Pruitt stated there would need to be a bill
either way. He elaborated that a bill would be required to
extend or make the PDMP provisions permanent. Additionally,
a bill would be required to fix the Schedule I drugs that
would be included [when the statute reverted back to its
current state]. He thought it would be possible to fix one
of the problems with a conceptual amendment by eliminating
Schedule I from the statute to prevent it from being
included when the law reverted back. He explained that if
the legislature chose to let the new PDMP provisions
sunset, the provisions would sunset without the Schedule I
drugs being required in the database, which would fit with
the [marijuana voter] initiative.
3:41:23 PM
Co-Chair Neuman replied that Representative Pruitt made a
good point. He supported maintaining the original amendment
as is, but would ask staff to work with Legislative Legal
Services on the issue as a separate amendment.
Representative Gara spoke in opposition to the amendment.
He discussed that Alaska was currently dealing with an
opioid epidemic, which also related to a heroin epidemic.
He agreed with the bill sponsor that physicians should look
up a patient's prescription history related to the limited
class of drugs (i.e. steroids, opioids, and other drugs
that could kill a person). Additionally, in three years a
huge amount of extra work would be created for pharmacists.
He pointed to page 1, lines 6 and 7 and detailed
pharmacists would have to begin entering a list of
additional drugs into the PDMP. He reasoned that if privacy
was a concern, adding additional drugs back in would mean
thousands more people would be entered into the database.
The bill limited the work of the pharmacists and limited
the information going into the database to Schedule II,
III, and IV drugs.
Representative Guttenberg testified against the amendment.
He spoke to the amendment sponsor's concern about
pharmacist technicians having to deal with false
prescription scripts. He pointed out that retail clerks
were routinely faced with tearing up people's credit cards.
He had not heard about negative repercussions resulting
from those instances. He thought it was a legitimate
concern, but he did not think it existed in similar
situations in cities in Alaska and the broader U.S. He
considered that drug addicts did not have rational
behavior, but neither did people using other people's
credit cards. He surmised it did not appear to be a
substantial problem. He did not believe it was
justification for undoing a huge reform. He spoke to the
need to get a handle on the drug problem in Alaska and to
get control of rising pharmaceutical costs. He believed the
concern was a small piece of the overall picture. He spoke
to the importance of reform. He believed the amendment went
in the wrong direction for the PDMP.
Co-Chair Neuman provided wrap up on the amendment. He
understood the opioid problem in the state. He referred to
his work on the issue over the past few years. He stated
that doctors were being more and more careful about not
overprescribing prescriptions. He remarked that the bill
sponsor's staff had testified that many doctors did not
know the PDMP existed. He remarked that they would know
now; he believed the legislature needed to listen to the
doctors. He thought that scripts that were being over
written would be addressed. He believed doctors needed to
start reporting their peers who overwrite prescriptions. He
stated there was already a system in place - doctors could
make reports to the Board of Medicine. He referred to prior
testimony that some doctors felt it was not their business
what another doctor was doing. He opined that may be the
problem.
3:47:22 PM
Co-Chair Thompson WITHDREW his OBJECTION.
Representative Guttenberg OBJECTED.
A roll call vote was taken on the motion to Adopt Amendment
1 as amended.
IN FAVOR: Edgmon, Gattis, Kawasaki, Munoz, Pruitt, Saddler,
Wilson, Neuman, Thompson
OPPOSED: Gara, Guttenberg
The MOTION to Adopt Amendment 1 as amended PASSED (9/2).
There being NO further OBJECTION, it was so ordered.
3:48:23 PM
Representative Edgmon MOVED to ADOPT Amendment 2, 29-
LS0692\T.13 (Glover, 4/8/16) (copy on file):
Page 24, lines 26 - 27:
Delete all material and insert:
"(11) a practitioner, pharmacist, or clinical staff
employed by an Alaska tribal health organization,
including commissioned corps officers of the United
States Public Health Service employed under a
memorandum of agreement; in this paragraph, "Alaska
tribal health organization" has the meaning given to
"tribal health program" in 25 U.S.C. 1603."
Co-Chair Thompson OBJECTED for discussion.
Representative Edgmon explained that Amendment 2 was
technical. He pointed to page 24, lines 26 and 27 of the
bill. The amendment replaced language in the bill with the
above amendment language as proposed by the Alaska Native
Tribal Health Consortium (ANTHC). He detailed the language
in the amendment would do a cleaner job of referencing the
federal definition. He noted that it was the provision that
laid out the parties who would have access to the PDMP.
Co-Chair Thompson WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 2 was ADOPTED.
Representative Gattis MOVED to ADOPT Amendment 3, 29-
LS0692\T.16 (Glover, 4/9/16) (copy on file). [Note: due to
amendment length it has not been included in the minutes.
See copy on file.]
Co-Chair Thompson OBJECTED for discussion.
Representative Gattis explained the amendment would delete
Section 31. She read a statement explaining the amendment:
On the surface requiring competitive bids sounds like
the best way to ensure the best price, unfortunately
this is not always the case. That's why I'm proposing
to eliminate Section 31 calling for competitive bids.
This section wasn't requested by the Department of
Health and Social Services or conceptualized by
somebody wanting to cut the budget. Rather, was
advocated by a durable medical good sales
representative. This section ties the hands of DHSS.
It would require the department to strictly utilize
competitive bidding. By supporting my amendment you do
not negate the department's ability to utilize
competitive bidding, rather you allow the department
to make the best business decisions related to the
care and costs of healthcare delivery system.
Representative Gattis referred to a bill she had offered on
durable medical goods that had been voted on by the
committee. She realized the State of Alaska was very
different. She referred to not including hand-me-down
durable medical goods in her past bill, because sometimes
it was not the least expensive way. She remarked that it
could potentially be cheaper to fly goods from Seattle than
to drive them up a road from somewhere else. She did not
want to tie the department's hands. She continued DHSS
already had the ability to go out for a request for
proposal (RFP) and could use competitive bidding. As the
state crunched its budget she did not want to limit the
department to a specific way of doing things. She continued
to read from a statement:
Also, it's a tough market with lots of paperwork
requirements, low margins, and high service demands.
Low dollar bidding requirements, without considering
the other needs and service demands of an area also
greatly diminish the quality of service and care that
our Medicaid patients receive. In my area, we have a
company that delivers products door-to-door. They
assemble them and provide other products and services.
They also come back and provide and repair services.
Competitive bidding Section 31 that needs to be
repealed - there is no promise it will save the state
money. In fact, strong arguments can be made that this
section is penny-wise and pound-foolish. So I'm asking
your vote to eliminate that particular section to be
able to give the department the opportunity to go
what's least expensive and what works best for Alaska.
3:53:29 PM
Representative Gara stated that Section 31 did not include
language specifying DHSS "shall" engage in competitive
bidding. He wanted the department to utilize the option
when it could bring a cost savings to the state. He
observed the amendment would delete page 28, lines 6
through 11 of the bill. He explained page 28, line 7
specified the department "may" enter into a contract for
competitive bidding. He believed the department should use
the competitive bidding option when it saved money. Based
on that he did not support the amendment. He did not see a
directive to the department in the legislation.
Representative Gattis answered that the department already
may [enter into competitive bidding]. She explained the
redundancy of the section. She relayed she had received an
email specifying the issue.
Co-Chair Thompson WITHDREW his OBJECTION.
Representative Gara OBJECTED. He would have to read AS
47.07.030. He stated the amendment included language
"notwithstanding c of this section." He surmised it must
create a concern the department was not allowed to engage
in competitive bidding.
Co-Chair Thompson asked the bill sponsor's staff to address
the committee.
Ms. Shadduck deferred the question to the department.
Representative Gara restated his question. He stated the
bill included language "notwithstanding c of this section
the department may enter into a contract for competitive
bidding." He wondered if the department would have the
ability to enter into competitive bidding without Section
31 of the bill.
ERIN NARUS, STATE MEDICAID PHARMACIST, DEPARTMENT OF HEALTH
AND SOCIAL SERVICES (via teleconference), replied that
currently the durable medical equipment program was able to
enter into contracts for service delivery. She read from
the statute under discussion AS 47.05.015(c): A contract
authorized under this section is exempt from the
competitive bid requirements of AS 36.30." She explained AS
36.30 was the state procurement code. She detailed that
when awarding a contract under the section, the department
shall request proposals in accordance with regulations of
the Department of Administration (DOA). Under the
department's current regulations it had the authority to
enter into contracts for service delivery. She furthered
that within the language in the current CS the department
would have the ability to enter into competitive bidding
contracts and its ability to do so would not be restricted.
Representative Gara asked if the department would have the
ability to engage in competitive bidding without Section 31
of the bill.
Ms. Narus replied that the section related to durable
medical equipment was not a requirement. She could not
speak to the other specific medical services outlined in
the section.
Representative Gara believed the bill should remain as is.
He reasoned the section specified the department may engage
in competitive bidding. He furthered there was a part of
current statute specifying the department was exempt from
the competitive bidding part of the procurement process. He
explained that the term "may" did not require the
department to do anything. He felt safer with the current
bill language.
Ms. Shadduck replied that it was the committee's policy
call. She stated the department could use the authority if
it was granted or it would continue with the contracts it
could currently do.
Representative Gattis relayed that she had seen red flags
that a particular sales person had been looking
specifically for the bill language. She had asked people
providing durable medical goods about the issue and had
been told there were high profit margins in some of the
durable medical equipment. The low profit margins included
items such as diapers, gloves, and other. She stated
grocery stores knew the items as "loss leaders" but they
brought people in for other items. She had been told that
the currently under a competitive bid an entity could get
the lowest price for high profit margins, but they would
not backfill the other low profit margin items they were
currently providing. She stressed that on a bigger scale
the state lost money that way. The department had indicated
it could submit RFPs to keep expenses down. She furthered
the department knew it had to be able to purchase all
items. In her perfect world she would like to see the
department have the ability to shop at Costco for
inexpensive items. She did not want to see unintended
consequences from the section.
4:02:13 PM
Vice-Chair Saddler asked for clarification. He asked for
verification that while it could appear to be advantageous
for the state to have competitive bidding on all products,
vendors did not participate in the competition for some
items, which would be to the state's detriment.
Representative Gattis clarified that the state wanted
competitive bidding on all items. She provided an expensive
electronic wheelchair with a high profit margin as an
example. She explained there were companies selling the
whole gamut. She specified that if a company only took a
high profit margin there were people left with trying to
fill the bill with the low profit margins and the state
still had to buy the products. She did not want to enable a
company from outside or inside Alaska to cherry pick.
Representative Gara MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Gattis, Guttenberg, Pruitt, Saddler, Wilson,
Edgmon, Thompson, Neuman
OPPOSED: Gara, Kawasaki
Representative Munoz was absent from the vote.
The MOTION to Adopt Amendment 3 PASSED (2/8). There being
NO further OBJECTION, Amendment 3 was ADOPTED.
4:04:25 PM
AT EASE
4:19:18 PM
RECONVENED
Representative Gara MOVED to ADOPT Amendment 4, 29-
LS0692\T.15 (Glover, 4/9/16) (copy on file):
Page 37, line 12:
Delete the first occurrence of "The"
Insert "Subject to (b) of this section, the"
Page 37, following line 29:
Insert a new subsection to read:
"(b) After January 1, 2022, the department may not
compensate hospital emergency departments, through
shared savings, for a reduction in hospital fees
resulting from the project."
Reletter the following subsection accordingly.
Representative Wilson OBJECTED.
Representative Gara wanted committee members to be present
to vote.
4:19:59 PM
AT EASE
4:20:59 PM
RECONVENED
Representative Gara explained the amendment related to page
37 of the bill and was intended to be a cost savings to the
state, while being fair to the state's hospitals as well.
He stated people had heard for years that too many people
were using the emergency room who should not be. He pointed
to the expense to hospitals and individuals with insurance
who had to pay for uncompensated medical care. Part of the
bill's goal was to reduce the number of people going to the
emergency room when they did not need to. He stressed the
emergency room was a very expensive way to deal with a
cold, flu, and other. Hospitals had been concerned about
significant uncompensated medical care, but Medicaid reform
had enabled them to receive much more compensation for
emergency room medical care. The bill included a provision
specifying now that fewer people would be utilizing the
emergency room for inappropriate care, the state would
share its savings with hospitals. He stressed that the
individuals should not be going to the emergency room for
care. Hospitals argued they were making significant money
off people who should not be going to the emergency room.
He did not think the state needed to pay for everything. He
had spoken to the Alaska State Hospital and Nursing Home
Association (ASHNHA) and the bill sponsor's staff to
determine a compromise. He believed the solution he had
selected was one the groups could work around, but was not
one they were thrilled with. He pointed to page 37 line 12.
The amendment would maintain shared savings for five years
[until January 1, 2022] and would allow the hospitals time
to adjust to the reduced number of patients. He referred to
the state's $4.4 billion deficit. He did not support
compensating medical providers in perpetuity because they
were not treating patients they should not have been
treating in the first place.
4:24:43 PM
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 4 was ADOPTED.
Representative Guttenberg MOVED to ADOPT Amendment 5 29-
LS0692\U.A.39 (Mischel/Glover, 3/31/16) (copy on file).
[Note: due to amendment length it has not been included in
the minutes. See copy on file.] He OBJECTED.
Co-Chair Thompson OBJECTED for discussion.
Representative Guttenberg explained he believed there was a
loophole, but the issue was challengeable. He stated the
bill removed Schedule III from the database. He referred to
the bill's dealing with rural Alaska and how people were
able to call in for prescription without dealing with a
doctor with only a nurse or nurse's aide. He wanted to
ensure the issue was fixed. He wanted to ensure rural
Alaskans had the opportunity to utilize telemedicine like
others in the state. He wanted to make sure telemedicine
was available across the state, but he wanted to ensure the
amendment did what he intended. Therefore he WITHDREW his
OBJECTION and the Amendment. He expressed his intent to
offer the amendment on the House floor at a later date.
Co-Chair Thompson noted Amendment 5 had been WITHDRAWN.
4:26:25 PM
Co-Chair Thompson MOVED to ADOPT Amendment 6, 29-LS0692\T.8
(Glover, 4/8/16) (copy on file):
Page 12, lines 10 - 11:
Delete "the earlier of'
Page 12, line 13, following "Services,":
Insert "whichever is later,"
Representative Gara OBJECTED for discussion.
Ms. Pierson explained the amendment was located in Section
16, page 12 of the bill. The amendment included cleanup
language on the statute of limitations for actions related
to claims based on medical payment fraud. She read the
updated sentence proposed by the amendment:
...a person may not bring an action under AS 09.58.010
- AS 09.58.060, unless the action is commenced six
years after the act or omission was committed, or (2)
three years after the date when facts material to the
action were known, or reasonably should have been
known, by the attorney general or the Department of
Health and Social Services, whichever is later, but in
no event more than 10 years after the date the
violation under AS 09.58.010 occurred.
Representative Gara WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 6 was ADOPTED.
4:28:27 PM
Co-Chair Thompson MOVED to ADOPT Amendment 7, 29-
LS0692\T.17 (Bruce/Glover, 4/9/16) (copy on file):
Delete "that uses remote identity proofing through
multiple layers of authentication"
Representative Wilson OBJECTED for discussion.
Ms. Pierson explained the amendment was located in Section
32 of the bill and related to the enhanced computerized
eligibility verification system. The bill had included the
following language: "that uses remote identity proofing
through multiple layers of authentication." She detailed
the language would result in a larger fiscal note;
therefore, the amendment sponsor wanted the language
removed. She furthered the department would ensure
security.
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 7 was ADOPTED.
4:29:19 PM
Co-Chair Thompson MOVED to ADOPT Amendment 8, 29-LS0692\T.5
(Glover, 4/8/16) (copy on file):
Page 37, line 2:
Delete "support for and"
Representative Wilson OBJECTED for discussion.
Ms. Pierson explained the amendment was located in Section
38, page 37, line 2 of the bill; it would delete the words
"support for and." She detailed the department thought the
language could mean an open-ended payment due; therefore,
the amendment would delete the language.
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 8 was ADOPTED.
4:30:03 PM
Co-Chair Thompson MOVED to ADOPT Amendment 9, 29-LS0692\T.4
(Glover, 4/7/16) (copy on file):
Page 46, following line 30:
Insert a new subsection to read:
"(c) The Department of Health and Social Services
shall procure a study analyzing the feasibility of
privatizing select facilities of the division of
juvenile justice and privatizing pharmacy services
delivered at Alaska Pioneers' Homes. The Department of
Health and Social Services shall deliver a report
summarizing the conclusions of the Department of
Health and Social Services to the senate secretary and
the chief clerk of the house of representatives and
notify the legislature that the report is available
within 10 days after the convening of the First
Regular Session of the Thirtieth Alaska State
Legislature."
Reletter the following subsection accordingly.
Representative Wilson OBJECTED for discussion.
Ms. Pierson explained the amendment applied to Section 47,
page 46, line 30 of the legislation. The amendment would
insert a new subsection, which would provide for a study
analyzing the feasibility of privatization on select
juvenile justice homes and privatizing pharmacy services
delivered to Alaska Pioneer Homes. She specified the
language had been included in the original bill.
Representative Gara objected to spending money on another
study on privatization. He believed the study would result
in the same response as a previous study showing that the
private sector was not willing to provide the services at
the current cost unless there was a substantial reduction
in some of the protections and services for the people
living at the Pioneer Homes. He knew that Representative
Munoz had expressed concern about the study in the past. He
noted she was not currently present in the room. He
believed the study would be throwing good money after bad.
He continued that every time "we do this to the folks at
the Pioneer Home they get nervous," which he knew because
he visited. He stated the issue came up often. He recalled
the issue [of privatization] coming up for the first time
in 2007 when the former Palin Administration had proposed
it. He stated that seniors living in the Pioneer Homes were
just trying to live with dignity and often did not have
substantial assets and feared they would have no place to
live.
Representative Wilson believed the amendment did not
address a question of privatizing the Pioneer Home
facilities. She believed the amendment only pertained to
the privatization of pharmacy services.
Co-Chair Thompson replied in the affirmative.
Co-Chair Neuman testified in support of the amendment. He
spoke to the point on juvenile justice centers. He relayed
he had brought the issue up with DHSS when he had overseen
its budget in the past. He noted that there were juvenile
justice centers in Nome and possibly Kotzebue or Bethel. He
believed the centers would be much better served by moving
more civil law to tribal courts. He believed the programs
would fit well under their oversight. He had spoken with
the Alaska Native Tribal Health Consortium (ANTHC) and the
consortium had believed it was a good idea. He noted the
consortium had spoken with rural legislators about the
issue. He thought additional funding would be available
from the federal government if the centers were under
tribal law. He believed it would be better to remove the
oversight by state government, which would provide better
local control. The problem had been getting the department
and tribal organizations together to take care of the
issue. He believed a study showing whether savings existed
would be beneficial to help the legislature and tribal
organizations decide whether the idea was beneficial. He
believed it would save the state a considerable amount of
money. He observed the discussions would not start on the
topic until the facts had been obtained. He stressed that
to get the facts it was necessary to do the research.
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 9 was ADOPTED.
Representative Gattis, Vice-Chair Saddler, and Co-Chair
Neuman asked to be added as cosponsors to the amendment.
4:35:19 PM
Co-Chair Thompson MOVED to ADOPT Amendment 10, 29-
LS0692\T.6 (Glover, 4/8/16) (copy on file):
Page 50, line 7:
Delete "January l"
Insert "July 17''
Representative Wilson OBJECTED for discussion.
Ms. Pierson explained the amendment applied to page 50,
line 7; it would delete "January 1" and insert "July 17" -
the effective date for the Department of Commerce,
Community and Economic Development (DCCED) to get its
regulations for the PDMP. The date also corresponded with
the department's licensure date. She explained the later
date would give the department the time it needed to get
regulations in place.
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 10 was ADOPTED.
4:36:12 PM
Co-Chair Thompson MOVED to ADOPT Amendment 11, 29-
LS0692\T.9 (Mischel, 4/8/16) (copy on file):
Page 14, lines 11 - 12:
Delete "unless the evidence shows that the agent or
apparent agent acted with intent to deceive the
principal"
Representative Wilson OBJECTED for discussion.
Ms. Pierson explained the amendment applied to page 14,
lines 11 and 12 of the legislation. The language had been
brought to the committee by the Alaska Medical Association
(AMA) due to their concern that if an agent acted with
intent to deceive the principal they could be held liable.
The language had been included in the bill because the AMA
thought it would help protect the AMA, but she believed the
department had some issues with the removal of the
language.
STACIE KRALY, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, explained the Department of Law (DOL) believed
language added to the CS on page 14, lines 11 and 12 would
lead to difficulty in getting the Office of Inspector
General (OIG) federal certification for the False Claims
Act (found in Section 18 of the legislation). The
department was concerned the language appeared to create a
hold-harmless or savings clause for organizations to
present affirmative defenses if an employee acted or
created a false claim that would lead to a filing of a
false claim. She furthered the concern was it would allow
the individual to avoid liability in a situation where they
should have specific and certain corporate integrity
oversight to ensure the issues did not happen. The
department was concerned the language would make OIG
certification difficult, which would prevent the department
from receiving its 10 percent federal match recoveries.
Representative Wilson asked for further clarification on
how the state would be jeopardized.
Ms. Kraly replied that the Office of Inspector General
(OIG) had issued guidelines for false claims certification.
She believed the information had been presented to the
committee ["OIG Guidelines for Evaluating State False
Claims Acts" dated March 15, 2013 (copy on file)]. She
referred to the rules and tests set forth by the OIG for
determining whether or not the federal government would
certify a state's False Claims Act. When the department had
reviewed the language in the guideline and had looked at
the bill's proposed language it had determined the proposal
would create difficulty for certification.
Representative Wilson asked for a copy of the document
referred to by Ms. Kraly. She was assuming the department
was opposed to Amendment 11.
Ms. Kraly clarified that DOL supported the amendment - the
department supported the removal of language from the CS.
She detailed the amendment would correct the issue.
4:40:07 PM
Representative Wilson wanted to see the document. Ms. Kraly
replied that she had a copy of the guidelines.
Representative Gara remarked that he did not know what OIG
was and what the potential monetary loss to the state would
be if the amendment did not pass. He referred to the
suggestion that without the amendment the state may not
receive authority or funding.
Ms. Kraly replied DOL was concerned that if the language
was maintained in the CS there was a potential the OIG
federal oversight agency would determine the language did
not meet its terms and therefore, it would not certify the
False Claims Act, which would mean the state would not
receive its enhanced federal match. She explained it was
the interpretation of DOL. The department believed the
language was too prescriptive and protective of corporate
entities in the context of a False Claims Act. As a result,
the language would put the act at risk.
Representative Gara referred to Ms. Kraly's testimony that
the language would put the act and federal match at risk.
He asked for verification that if the department's
interpretation was accurate, the state would not be able to
use the False Claims Act and the federal funds to help with
cases under the False Claims Act may be in jeopardy. He
asked for clarification which federal funds may be
jeopardized.
Ms. Kraly answered that without federal certification the
False Claims Act would still be on the books and available
for the department to utilize. She detailed that
certification provided enhanced match for recoveries. She
was uncertain whether the enhanced federal funding for the
Medicaid Fraud Control Unit could be used to prosecute the
claims if the state's False Claims Act was uncertified. She
specified the Medicaid Fraud Control Unit would manage the
caseload; it received a 75 percent match from the federal
government (the state paid the remaining 25 percent). She
elaborated that she was uncertain how the funding for the
services would be impacted if the federal government had
not approved funding for Medicaid recovery purposes.
4:43:32 PM
Representative Pruitt asked if all nine pages of the new
act would potentially be in jeopardy if the amendment
language was not included. Mr. Kraly answered in the
negative. She detailed that the act would remain in place.
She clarified the department supported the amendment
because it believed the change would help DOL receive
federal certification. She detailed that without federal
certification the False Claims Act would remain in effect,
but the department would not receive the enhanced federal
match for recoveries.
Representative Pruitt asked about the financial amount. Ms.
Kraly replied that the enhanced federal match was a 10
point swing. She explained that instead of receiving 50/50,
the department would receive 55 percent of any recovery and
the federal government would receive 45 percent. The
reduction would be percentage split from the formula.
Representative Pruitt surmised it sounded like the state
would be placing additional weight on the organization
based on a bad actor who may be working for them. He
observed they were trying to help someone with an employee
that was intentionally deceiving them. He asked how to
account for the fact that there were people who may not act
in appropriate ways and the employer may not have been a
part of the problem. He wondered how to handle the issue.
Ms. Kraly replied that the state's best partners were the
organizations (providing the services) in the goal of
avoiding fraud, abuse, and waste in the Medicaid program.
The department believed the organizations should have
sufficient internal control standards to identify those
sorts of activities that were happening and to take
sufficient action to avoid those sorts of events. The
current bill language basically gave the provider a hold-
harmless or defense to say it did not ratify the activity
or know it was happening. The department believed an
organization should have the ability to identify the
information, avoid that sort of construct, and should be
held liable for failure to have those internal controls.
Representative Pruitt remarked that some of the
organizations were very small and may not be watching
everything taking place underneath the organization. He
surmised the organizations may have to hire additional
people if the state was putting an additional burden on
them, which would elevate the company's cost, the cost to
the consumer, and the cost to the state as the Medicaid
payee. He wondered if there was a certain point the state
needed to recognize that all organizations were not giant
and could afford to continue to pay numerous employees to
provide a service. He reiterated that the organizations
were small in some cases.
Ms. Kraly deferred the question to a colleague.
ANDREW PETERSON, ASSISTANT ATTORNEY GENERAL, OFFICE OF
SPECIAL PROSECUTION, MEDICAID FRAUD CONTROL UNIT,
DEPARTMENT OF LAW (via teleconference), answered that due
to the cost of filing the False Claims Act and the
associated litigation it was not the type of litigation
that would focus on small providers and low-dollar claims.
The claims would generally be significant, amounting to
hundreds of thousands of dollars or more in loss to the
State of Alaska. The concern was the bill language gave an
out for corporations (that were in the best position to
police their employees to be on the lookout for fraud) to
have a financial interest in not looking for or ferreting
out fraud that may be occurring within their own industry.
He referred to a committee member's question about the
amount of money the state may lose. He detailed it was a
difficult number to place - it would have been around
$300,000 or more in the past 3 to 4 years; in prior years
the amount would have been higher. He noted the state did
not have the False Claims Act at that time; however, for
example, financial loss had occurred when a pharmaceutical
company had off-labeling or was using a pharmaceutical
product for a service it should not be used for. In that
instance there could be a nation-wide class action, which
Alaska would join. The state also received an enhanced
recovery on any suit to which the state was a victim of,
for civil suits filed within or outside Alaska. He
concluded that it could be a fairly substantial amount of
money over time, but the ultimate figure depended on the
number of suits and the end result. He did recognize
Representative Pruitt's concern with respect to additional
burdens placed on smaller employers.
4:50:30 PM
Representative Wilson asked whether the language [the
amendment proposed to delete] could be left in the bill and
the committee could insert additional language noting it
would only be effective if determined to be consistent with
the False Claims Act.
Mr. Peterson deferred the question to Ms. Kraly. He noted
that in reviewing the OIG document, the language added did
appear to include an additional safeguard for corporations
that was not consistent with the OIG guidelines. When DOL
had drafted the False Claims Act language it had aimed to
design it as close to the federal guidelines as possible in
order to avoid any surprises or questions about whether it
would meet federal guidance.
Representative Wilson expressed confusion about the
testimony. She addressed testimony about the False Claims
Act and trying to avoid the loss of federal money. She
stated the department's testimony was that the language was
also being tightened for other purposes.
Ms. Kraly answered that DOL had drafted the False Claims
Act as closely and as narrowly as possible to follow the
OIG guidelines. The department believed that the language
added in the CS created a potential problem for federal
certification. The department would prefer to have the
language removed from the CS because it would be the
cleanest outcome. She did not know whether or not the
language Representative Wilson suggested would be
sufficient to meet federal approval. She was not certain
how a savings clause would be drafted or evaluated. She did
not know how to specify that a portion of the language was
good except for the one narrow provision if inconsistent
with False Claims Act.
Representative Wilson was not convinced there were no other
reasons for the proposed deletion of the language. She
thought there could be other impacts of the language
deletion apart from the False Claims Act. She thought the
deletion of the language may cause more problems for people
who were not guilty. She preferred to maintain the language
and to deal with it another way if it did not fit into the
False Claims Act.
Representative Gara provided a scenario where the state was
improperly billed $1 million under the False Claims Act. He
asked if the state would still have a way to get the money
back if the amendment did not pass.
Mr. Peterson replied that the state would still have the
ability to go after the provider in one of two ways. He
detailed the state could proceed if the hold harmless
provision in the bill was maintained the state could
proceed, but it would not be eligible for the 10 percent
bump in recovery. Second, if the state was unable to prove
the elements of a false claim, the state could seek a
recovery of the money through the provider, but no portions
of the False Claims Act would be applicable.
Vice-Chair Saddler wanted to ensure the language (page 14,
lines 7 through 12) simply said a corporation was liable,
but if a rouge employee was determined to be deceiving the
principal the corporation was not liable. He surmised it
seemed to be a reasonable protection. He had missed part of
the conversation about why it was essential for a portion
of the language to be removed, such that it would be
consistent with a federal act.
Ms. Kraly replied when reviewing the OIG guidelines, DOL
became concerned the language gave an additional protection
to a corporate organization that would limit the state's
ability to recover false claims. The department believed
the additional language created a difficulty in obtaining
federal certification.
Vice-Chair Saddler reasoned the provision was like a get-
out-of-jail-free card. He surmised a corporation could be
engaged in bad faith, but if it was able to blame the
employee for acting with intent to deceive, the language
could exculpate the corporation.
Ms. Kraly replied in the affirmative.
Representative Wilson stated she was hearing two sides. She
remarked she had first heard the amendment was all about
the False Claims Act. She was also hearing the amendment
was related to corporations and who the state may or may
not be able to go after. She did not know if the people
being held harmless were actually guilty of something. She
questioned whether the amendment would broaden the spectrum
of entities it could charge even though they may not be
guilty.
Representative Gattis stated another representative had
communicated the amendment was a good idea. She supported
the amendment.
4:58:57 PM
AT EASE
4:59:27 PM
RECONVENED
Ms. Kraly believed one of the committee's concerns was that
there was no protections for a corporate entity when an
individual acted outside the scope of their authority. She
explained there were protections for that circumstance. She
furthered that when looking at the False Claims Act and OIG
guidelines what constituted knowing behavior and how there
had to be a reckless disregard for the truth or falsity of
the claim all played into the situation and a corporation
would not be in trouble for certain activities. However,
under certain circumstances identified in the bill the
corporations should be responsible for the actions of
employees. There were circumstances when an organization
would not be subject to a false claims because of the
activities of an employee, but there should be
circumstances when they should be responsible. The language
currently in the CS gave companies almost an automatic out
- in most circumstances companies would have the ability to
say they were unaware of what had taken place, the employee
had been acting outside the authority of the company, and
the company should not be held liable. The department was
trying to avoid the situation.
Representative Wilson asked how the issue would impact
Pioneer Home. She asked if it would add another liability
to the Pioneer Home if the language was deleted.
Ms. Kraly believed that as an enrolled Medicaid provider
the Pioneer Home would be subject to a potential False
Claims Act. She explained enrolled providers would be
subject to the provision under the CS. She detailed in the
context of a state action or entity like the Pioneer Home
was if an issue occurred it would be remedied at the level
of the commissioner's office; a corporate provider did not
have the same corrective measure imposed.
Representative Wilson MAINTAINED her OBJECTION. She thought
the deletion could cause more issues than were known.
Representative Pruitt opposed the amendment. He thought the
issue had been simple at first. He was concerned about
placing strict liability on providers and believed the
amendment would place an additional liability. He remarked
on the balancing act of making sure there was liability
placed on providers, but that protections were provided in
certain cases where an individual [employee] may have acted
inappropriately. He furthered it was not as difficult to
try someone for an affirmative defense, but it was
something that could be overcome.
A roll call vote was taken on the motion.
IN FAVOR: Guttenberg, Kawasaki, Munoz, Saddler, Edgmon,
Thompson, Neuman
OPPOSED: Pruitt, Wilson, Gattis, Gara
The MOTION to Adopt Amendment 11 PASSED (7/4). There being
NO further OBJECTION, it was so ordered.
5:06:14 PM
Co-Chair Thompson MOVED to ADOPT Amendment 12, 29-
LS0692\T.12 (Glover, 4/8/16) (copy on file). [Note: due to
amendment length it has not been included in the minutes.
See copy on file.]
Co-Chair Neuman OBJECTED for discussion.
Ms. Pierson explained the amendment applied to page 27,
line 18 of the legislation. She detailed the amendment
would insert a new bill section that had been in the
original bill. The section would create a new account for
monetary recoveries under the Alaska Medical Assistance
False Claim and Reporting Act. The amendment sponsor had
worked with the Legislative Finance Division (LFD) and Ms.
Kraly with DOL on the amendment. She believed it was a good
provision to include in the bill. She specified that LFD
had created a new account in order for the money to be
accounted for, which would give the state a better
perspective on what the act was doing.
Co-Chair Neuman WITHDREW his OBJECTION.
Representative Wilson OBJECTED. She asked why the language
had been removed.
Ms. Pierson answered that during the drafting of the
committee substitute LFD had been uncertain about the
issue. She had wanted to look further into the idea prior
to including it in the legislation. The division had
recommended putting the language back into the bill because
it believed establishing the account would be a cleaner way
to track the money.
Representative Wilson asked for verification that the
provision had been in the bill when it had come over from
the Senate. Ms. Pierson answered in the affirmative.
Representative Wilson remarked on the inability to have
dedicated funds. She understood that for tracking purposes
money could sometimes be put into a certain fund. She asked
whether the funding could be utilized for anything once it
had been deposited into the fund.
Ms. Pierson answered that the new fund would be the 88th
account under AS 37.05.146(c). The funds would not be
designated and would still have to be appropriated by the
legislature. The funds would merely be directed into the
account in order for tracking.
Representative Wilson asked if there were other funds going
into the account or if it was being created to track only
the recovered funds [resulting from the Alaska Medical
Assistance False Claim and Reporting Act].
Ms. Pierson answered the account would be brand new with
the sole purpose of tracking the funds.
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 12 was ADOPTED.
Co-Chair Thompson MOVED to ADOPT Amendment 13, 29-
LS0692\T.11 (Mischel/Glover, 4/8/16) (copy on file). [Note:
due to amendment length it has not been included in the
minutes. See copy on file.]
Co-Chair Neuman OBJECTED for discussion.
Ms. Pierson explained the amendment applied to page 42,
lines 19 through 22 of the bill. The amendment would delete
Section 42. She asked Ms. Kraly to speak to the amendment.
Co-Chair Thompson clarified the section was on page 42,
lines 23 through 30.
Ms. Pierson clarified that it was on page 43 of the bill.
Ms. Kraly relayed that the amendment had been more of a
communication issue. She explained that DOL had spoken with
Co-Chair Thompson's office about a potential amendment to
address the added authority for the Department of
Corrections (DOC) to apply for inmates in need of inpatient
hospitalization to be covered by Medicaid. She detailed the
language [to be deleted by Amendment 13] had been part of
that potential amendment. Upon further review and
consideration DOL had determined the provision [in
Amendment 13] was not required because the statute being
amended under AS 47 related to the general relief program
and not the medical assistance program; therefore, it was
unnecessary. The department believed it would be cleaner to
remove the unnecessary provision.
Co-Chair Neuman WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 13 was ADOPTED.
5:10:57 PM
Co-Chair Neuman MOVED to ADOPT a conceptual amendment to
Amendment 1 as adopted [conceptual amendment 1.A].
5:11:32 PM
AT EASE
5:25:06 PM
RECONVENED
Co-Chair Neuman MOVED to ADOPT conceptual amendment 1.A to
previously adopted Amendment 1.
Co-Chair Thompson OBJECTED for discussion.
Mr. Shattuck explained the conceptual amendment. The
amendment would remove language from adopted Amendment 1
(page 1, line 6; and page 1, lines 19, 20, 22, and 23 of
Amendment 1). The amendment would remove Schedule IA, IIA,
IIIA, IVA, and VA along with federal Schedule I and V from
Sections 22 and 24 of Amendment 1. He referred to Section
21, page 21, lines 29 through 31 of the bill where the
language would be removed. The amendment would remove the
list of drugs from the specific section, which would be
maintained in 2021 when the provision was repealed. [Note:
see Amendment 1 discussion related to the PDMP.]
Co-Chair Thompson WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 1.A was ADOPTED.
5:28:27 PM
Vice-Chair Saddler MOVED to ADOPT Amendment 15, 29-
LS0692\T.2 (Glover, 4/6/16) (copy on file). [Note: due to
amendment length it has not been included in the minutes.
See copy on file.]
Co-Chair Thompson OBJECTED for discussion.
Vice-Chair Saddler explained the amendment. He discussed
committee members had expressed desire to have a report to
the legislature with information about the effectiveness of
making the PDMP participation mandatory. The amendment
would add a small addition to the existing PDMP annual
report requirement in AS 17.32.00(m) referenced on line 3
of the amendment. The goal was to receive information
regarding database security. He believed everyone should be
concerned about the security of the database (referenced on
page 1, line 16 of the amendment). The report would also
include information on the effectiveness of mandating PDMP
participation (line 17) and the effect on the reduction of
any inappropriate use or prescription of controlled
substances. He referred to earlier committee dialogue about
receiving a report with sufficient time in advance of the
repealer [passed in Amendment 1] in order to determine
whether the PDMP provision was working as planned. Current
statute required an annual report from the Board of
Pharmacy to the department about the PDMP. The amendment
would require a bit more information to be included in the
report. He believed the amendment would require extra
information the legislature would want to know about the
effectiveness and impact of the mandatory PDMP reporting
when it considered whether or not to extend the mandate.
Representative Gara thought studies were always good, but
he believed it was necessary to pause for a moment. He
stated that the committee did not know the cost of the
study. He reasoned it would not be a difficult amendment to
add the following year when the cost could be determined.
There was no fiscal note associated with the report, but he
believed it would cost money. He continued it would require
determining reductions in the number of individuals using
and getting addicted to controlled substances; it was not
information that could be looked up in a book. He explained
it would require a field study. He did not know how
evidence would be compiled without some associated cost.
First, it was necessary to determine whether the
legislature wanted to spend the money. Second, it was
necessary to determine the fiscal note instead of asking
the department (that had received $142 million in cuts over
the past couple of years) to absorb the cost of the study.
He believed at a minimum there needed to be a fiscal note
for work associated with discovering "reductions, if any,
in inappropriate use or prescription of controlled
substances resulting from the use of the database."
Vice-Chair Saddler disagreed. He had consulted with the
state's chief medical officer Dr. Jay Butler (the state's
leading authority for epidemiology) who had communicated
the state already collected data on the number of injuries
and deaths attributable to overdose. The cause of death was
determined and reported to the department. Additionally,
DCCED issued the report on overdoses or inappropriate
prescriptions - it established a threshold and measured how
many times an individual obtained prescriptions at a rate
exceeding the threshold. He concluded the information was
already gathered, simple to collate, and should be fairly
simple to append the information about any possible
breeches of the database. He added there was not an
additional cost and he did not believe there was a need for
a fiscal note.
Ms. Shadduck agreed with Vice-Chair Saddler. She had
previously spoken with Janey Hovenden the DCCEC director of
the Division of Corporations, Business and Professional
Licensing about adding to the DCCED report. She explained
the report did not come from DHSS. The current 4-page
report had been added to the committee's backup for the
bill ["2016 Alaska Prescription Drug Monitoring Program
Report" dated February 11, 2016 (copy on file)]. She agreed
the amendment should not add an additional cost to the
existing annual reporting.
5:34:39 PM
Co-Chair Thompson asked for verification that the report
already existed. Ms. Shadduck answered in the affirmative.
Amendment 15 would amended part of the current PDMP statute
that required an annual report to the legislature. The
amendment added more prescriptive language about what the
report should include, including security information and
the reductions discussed by Vice-Chair Saddler.
Representative Gara requested to hear from Dr. Butler. He
wondered if it was a simple "yes" that the additional
information required by Amendment 15 was already compiled
and would not result in any additional cost.
JAY BUTLER, CHIEF MEDICAL OFFICER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, replied "yes."
Representative Kawasaki believed the amendment was
important because of the passage of Amendment 1. He
detailed the legislature wanted to hear more information
about how the PDMP would be utilized. He noted that
currently 40 percent of the state's pharmacies and 13 to 14
percent of the state's prescribers utilized the database.
The bill would require 100 percent of the prescribers and
pharmacies to utilize the PDMP. He wanted to ensure items C
and D [of the amendment] would give the legislature enough
information so it could understand the new pharmacists and
prescribers and how they felt the PDMP was working.
Representative Wilson asked about the federal prescription
drug monitoring program. She asked if the state's
monitoring program went into the federal database. She
wondered why the amendment mentioned the federal program.
Vice-Chair Saddler answered the language referencing the
federal program was current statute. He deferred to Ms.
Shadduck for further information.
Ms. Shadduck answered that the state's PDMP was a state
database, not a federal database. The amendment related to
the report required by current state statute.
Representative Wilson asked if the federal prescription
drug monitoring program would provide the same data as the
state's PDMP was intended to provide. Ms. Shadduck answered
the state was only collecting and monitoring data from the
state database. She explained the language had been put
into statute in 2008 and she did not know why it included
the federal database.
Representative Wilson asked if the federal government was
already collecting the data. If so, she wondered how it
differed from the state PDMP.
Ms. Shadduck answered that the language on line 6 of the
amendment referred to a federal prescription drug
monitoring program grant. She explained that since the
start of the program in 2008 the cost had been covered by a
grant instead of being charged to the Board of Pharmacy.
She furthered there had been grant programs. She assured
the committee the state did not share any information with
the federal government unless there was a search warrant or
court order.
5:39:28 PM
Representative Guttenberg was cynical about the amendment
and was unsure whether he supported or opposed it. He
referenced subsection A of the amendment: "reduce the rate
of inappropriate use of prescription drugs by reporting
education efforts..." He read subsection B: "reduce the
quantity of pharmaceutical controlled substances obtained
by individuals attempting to engage in fraud and deceit."
He countered that the state was only informed about the
individuals who were caught. He read subsection C:
"increase coordination among prescription drug monitoring
program partners," which he believed the state should be
doing. He addressed involving stakeholders in the planning
process (subsection D). He discussed that unfortunately the
stakeholders the state wanted to talk to were the ones
acting illegally. He was concerned about the validity and
productiveness of the subsections, with the exception of
subsection C. He reasoned "if we're doing all of these
already, we're just repeating ourselves." He observed that
the subsections were performance measures. He detailed the
database was aimed at reducing the inappropriate se or
prescription of controlled substances. He wondered what
exactly the items specified in the amendment would
accomplish.
Ms. Shadduck replied that subsections A through D were
already in current statute and were required to be included
in the annual report on the PDMP. She did not know how the
items had been decided in 2008. She knew the reports had
been helpful for the legislature to determine whether the
PDMP was doing what it was designated to do.
Representative Guttenberg looked at item 2 in Amendment 15
related to security of the database. He agreed security was
important. He read subsection B under item 2: "reductions,
if any, in the inappropriate use or prescription of
controlled substances resulting from the use of the
database." He did not believe the information should be
difficult. He stated the problem with the process was about
what the state did not know. He wanted the database to work
and target things that were currently unknown with data the
state had never collected. He stated at the end of the day
the legislature was looking for answers to questions it did
not yet have. He was not sure the amendment accomplished
the goal, but he hoped it would.
5:43:11 PM
Co-Chair Neuman spoke in support of the amendment. He
remarked on the controversial nature of the PDMP provision.
He stated that more information would not hurt. He noted
that the committee had been told there would be no
additional cost.
Vice-Chair Saddler responded to Representative Guttenberg's
questions. He reasoned it was appropriate to package
additional information with information the legislature was
already receiving in existing annual reports required by
law in order to get better information about work being
accomplished with the federal grants. He noted there was no
additional cost to receive the information about the
security of the database and about the reductions in over
prescription that may be achieved by the bill's PDMP
mandate. The intent of the report was to evaluate the 4-
year temporary PDMP mandate. He believed putting all of the
information in one place made it easier for future
legislatures to evaluate whether to continue the mandate in
the future.
Co-Chair Thompson WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 15 was ADOPTED.
Vice-Chair Saddler addressed the bill's 17 fiscal notes.
The first fiscal note was from DHSS related to the Pioneer
Homes (OMB Component Number 2671). The second fiscal note
was from DHSS for the Division of Behavioral Health (OMB
Component Number 2665).
Representative Wilson asked about the costs associated with
the fiscal notes.
Vice-Chair Saddler asked if Representative Wilson was
requesting the annual costs.
Representative Wilson explained she was interested in the
cost or savings reported on the fiscal notes. For example,
the first fiscal note included $1,660,700 in General Fund
(GF) savings that would be interagency receipts. She
thought the information was supposed to be put on the
record. She was fine with whatever the chair preferred.
Co-Chair Thompson asked Vice-Chair Saddler to report the
full detail to the committee.
5:47:04 PM
Vice-Chair Saddler addressed fiscal note OMB Component
Number 2671 from DHSS for the Alaska Pioneer Homes. The
note contained zero operating expenditures in FY 17 through
FY 21, with a reduction in GF of $1,660,700 and an increase
in interagency receipts in the same amount. He addressed
the DHSS fiscal impact note OMB Component Number 2665 for
the Division of Behavioral Health. There was no fiscal
impact in FY 17 and FY 18. There were decrements of
$226,700 in FY 19, $453,400 in FY 20 through FY 22. He
moved to the DHSS fiscal impact note OMB Component Number
242 for the Division of Health Care Services. The note
included a cost of $697,600 in FY 17 through FY 19 and
$316,200 in FY 20 through FY 22.
5:50:55 PM
Vice-Chair Saddler addressed the DHSS fiscal impact note
OMB Component Number 2696 for the Division of Health Care
Services. The note included a cost of $500,000 in FY 17 and
$200,000 in FY 18 through FY 22. He moved to the DHSS
fiscal impact note OMB Component Number 237 for the
Division of Public Assistance. The total cost in FY 17 was
$980,000 and zero in FY 18 through FY 22. He turned to the
DHSS fiscal impact note OMB Component Number 2663 for the
Division of Senior and Disabilities Services.
Co-Chair Thompson asked Vice-Chair Saddler to read only the
OMB Component Numbers and departments for the sake of
brevity.
Vice-Chair Saddler reviewed the DHSS fiscal impact note OMB
Component Number 2875 for the Division of Senior and
Disabilities Services. Additional notes included OMB
Component Number 2787 from DHSS for the Division of Senior
and Disabilities Services; OMB Component Number 309 from
DHSS for the Division of Senior and Disabilities Services;
OMB Component Number 317 from DHSS for departmental support
services; OMB Component Number 2660 from DHSS for the
Division of Medicaid Services; OMB Component Number 2077
from DHSS for the Division of Medicaid Services; OMB
Component Number 2662 from DHSS for the Division of
Medicaid Services; OMB Component Number 2203 from DOL for
the Criminal Division; and OMB Component Number 45 from DOA
for centralized administrative services.
5:56:02 PM
AT EASE
5:56:29 PM
RECONVENED
Vice-Chair Saddler reread OMB Component Number 45 from DOA
for centralized administrative services. Additional fiscal
notes included OMB Component Number 2360 from DCCED for the
Division of Corporations, Business and Professional
Licensing; OMB Component Number 2203 from DOL for the
Criminal Division; and OMB Component Number 2952 from DOC
for the Division of Health and Rehabilitation Services.
5:58:09 PM
AT EASE
5:58:22 PM
RECONVENED
Vice-Chair Saddler MOVED to REPORT HCS CSSB 74(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. Legislative Legal Services was
directed to make any appropriate conforming or technical
changes.
Representative Wilson OBJECTED. She explained she was
trying to add up the fiscal notes related to General Funds
and did not see $31 million in savings in FY 17. She
observed costs going out and possible savings in out-years.
She relayed she would continue to add the savings while
others comments on the bill.
Representative Kawasaki could not recall if the committee
had an opportunity to ask the bill sponsor [or staff]
questions about the CS. He pointed to page 23 of the bill
that dealt with new licensing. He detailed that under the
legislation there would be agents or employees licensed
under statute. He asked how the individuals would be
licensed.
Ms. Shadduck answered that the changes had been made based
on public testimony in the House Finance Committee. She
explained that previously the bill had not included the
language "licensed or registered under AS 08" and there had
been a concern there would be no oversight related to who a
practitioner was delegating access to. The specific statute
AS 08 included all of the boards and commissions under
DCCED - it would include individuals who fell under the
department's licensing or registration requirements, which
would ensure some accountability to boards.
Representative Kawasaki pointed to page 26 related to the
establishment of registration fees for pharmacists and
practitioners. He asked if every pharmacist and
practitioner would have to pay a fee established by the
department given the bill's requirement for all pharmacists
and practitioners to review the PDMP prior to
administration of medication in many cases.
Ms. Shadduck answered that it was a stopgap measure. She
detailed if there was a need for fees, there had been some
concerns about placing fees only on pharmacists. The
Division of Corporations, Boards and Professional Licensing
had asked for the authority to spread the fees among all
registered users out of fairness. She pointed to the
language "minus all federal funds acquired for the
operational costs of the database" on page 26, lines 26
through 30. She specified the federal funds would come off
first. She furthered if there were federal grants to cover
the costs, as in the past and through 2020, the licensing
fees would not increase. In the event federal money ended,
it had been determined it would not be fair to place all
potential increases on the Board of Pharmacy.
Representative Kawasaki discussed that a large bill section
dealing with civil asset forfeiture had been removed. He
referred to earlier testimony from Mr. Peterson and another
staff from a state fraud unit had addressed the necessity
of the ability to do civil asset forfeiture in the cases of
physician offices and fraud cases. He asked Ms. Shadduck to
speak to the removal of the provision.
Ms. Shadduck agreed that the language had been brought
forward by the governor and had been included in the Senate
Finance Committee CS. She discussed it had been a policy
decision in the House Finance Committee based on public
testimony and concerns by the committee that civil
forfeiture could be problematic.
Representative Kawasaki relayed his appreciation of the
work by the sponsor and his staff. He appreciated the
process that had gone into building the legislation.
6:05:57 PM
Representative Guttenberg asked who would be responsible
for entering the data into the PDMP. Ms. Shadduck answered
that the issue had been cleaned up in the CS. She pointed
to Section 22, which listed how pharmacists put data into
the PDMP. She explained that only pharmacists would enter
data; the prescribers only looked up data.
Representative Gara thanked Ms. Shadduck for her work. He
spoke to a document showing the bill would bring over $100
million in savings by 2021. He asked to go over a couple of
the fiscal notes. He referenced OMB Component Number 2077
that included a savings in General Fund match of $58
million in 2021. The note indicated an additional $30
million in federal receipts in 2021. He did not see how the
number went down to $27 million in net savings shown on the
bottom line of the note. He had the same question with the
subsequent fiscal note.
Ms. Shadduck deferred the question to DHSS.
6:08:55 PM
JON SHERWOOD, DEPUTY COMMISSIONER, MEDICAID AND HEALTH CARE
POLICY, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, spoke to
the DHSS fiscal note OMB Component Number 2077 related to
Medicaid Services. The GF savings for FY 22 would be
$60,224,600; the note there were also expenditures of
federal receipts. He spoke to a new fund source related to
recovery of money under the False Claims Act. He detailed
the total change in funding would be $31,829,400 in FY 22
when considering all of the items. He reiterated there
would be a GF savings of over $61 million, but there would
also be an expenditure of federal and recovered funds.
Representative Gara remarked if the concern was only about
state money, it appeared there was $60 million in savings
in FY 22, but he did not know if it included the $32
million in [federal] grant money. He reasoned they did not
usually subtract additional federal funds from savings. He
asked for clarity.
Mr. Sherwood answered that the fiscal note convention
totaled the expenditures and fund source. He explained it
may not make logical sense to combine all of the fund
sources when some went up and others went down. For the
previous version of the fiscal notes the department had
submitted a consolidated page showing all GF savings
without other fund source changes. He apologized, but the
department had not had time to use the same method on the
current fiscal note.
Representative Gara understood they did not subtract
getting additional federal funds and spending them. He
referred to $60.2 million in GF savings. He asked if the
state was also receiving $32 million in additional grants.
Mr. Sherwood answered that the $32 million represented
expenditures and the $60 million on the note related to a
fund source change. He explained that total expenditures
needed to balance total fund source changes. The first
block of numbers on the note was an expenditure and the
second block showed where the money was coming from.
6:13:04 PM
Representative Wilson pointed to DHSS fiscal note OMB
Component Number 2077. She referred to the $20 million in
GF match in FY 17 that would be replaced by the federal
receipts fund source. She asked if the state would receive
the federal receipts without the bill; if not, she wondered
what action the bill took that would enable the state to
bring in the $20,548,400.
Mr. Sherwood answered that primarily the reduction in GF
and increase in federal funds in FY 17 came from the change
in the federal matching funds claiming policy for services
provided through the tribal health system. There were a
couple of other small pieces that would take time to delve
into.
Representative Wilson understood that the majority was
related to the tribal health system. She asked if the
savings could be achieved without the bill. Mr. Sherwood
believed the state would still have the latitude to pursue
the change in federal policy without the legislation.
Representative Wilson pointed to DHSS fiscal note OMB
Component Number 2662. She detailed the note included $2.9
million GF matching funds that would be replaced with
federal receipts [in FY 17]. She asked if the federal
receipts would be available to the state without the
legislation.
Mr. Sherwood replied in the affirmative related to FY 17
and noted that fell under tribal. In subsequent years
savings were attached to provisions in the bill.
Representative Wilson understood the provisions were in the
bill, but she believed there were many things the
department could do without the legislation. She asked if
the department could apply for the 1915(i) waiver without
the bill.
Mr. Sherwood answered that he believed waiver 1915(i)
required legislation.
Representative Wilson pointed to OMB Component Number 2952
was from DOC showed $6 million in savings in the governor's
bill but not in any other areas. She assumed the $6 million
in savings had to do with individuals placed in the
hospital for over 24 hours.
Ms. Shadduck answered in the affirmative.
Representative Wilson asked for verification the $6 million
in savings to the state could be achieved without the bill.
Ms. Shadduck replied in the negative. She pointed to the
second page of the fiscal note and explained some
individuals had refused to allow DOC to apply for Medicaid
on their behalf. The bill provision ensured the $6 million
in savings to the state would occur.
Representative Wilson provided a hypothetical scenario
about a prisoner. She asked if there was a mechanism to
force a prisoner to sign over.
6:17:55 PM
AT EASE
6:18:20 PM
RECONVENED
Ms. Shadduck answered that when DOC had a prisoner in its
custody who had to leave the facility for 24 hours or
longer, the care could qualify for Medicaid, but only if
the prisoner agreed for the application to be submitted.
The provisions in the bill allowed DOC, only in the case
for hospitalizations, to apply for Medicaid. Otherwise, the
state paid 100 percent GF.
Representative Wilson wondered what the state could do if
the prisoner would not agree to sign for Medicaid. Ms.
Shadduck pointed to Section 28, page 27 of the bill.
Representative Wilson asked for further detail.
Ms. Shadduck read from Section 28, subsection (c) of the
bill:
The commissioner shall apply for medical assistance
under AS 47.07 and for general relief assistance under
AS 47.25.120 - 47.25.300 on behalf of a prisoner
incarcerated in a correctional facility to establish
medical assistance coverage or general relief
assistance for the prisoner during a period of
hospitalization outside of the correctional facility.
Ms. Shadduck elaborated that subsection (d) addressed how
the commissioner may obtain the necessary information.
Representative Wilson would not stop the bill from going
forward, but she observed only one fiscal note accounted
for the majority of the savings. She remarked substantial
expenditures would result from the legislation. She noted
the legislation called for approximately 23 new positions,
which she believed was substantial. She believed most of
the things in the bill could already be done by the
department. She wondered what made the legislature think
the department would do something because it was put in
statute. Additionally, she wondered if all of the choices
were right. She recalled testimony that putting out a
request for information would be a better strategy because
so many states had already gone through the process. She
continued the state could then possibly issue an RFP for
much of the work.
Representative Wilson was also concerned about the
database. She believed the legislature would hear from
numerous physicians when they realized what the legislature
had done in the bill. She stated the database was a very
expensive program. She referred to the time it would take
to use the program and who may or may not qualify under the
certification section. She detailed the committee had heard
from the dental community that most of their staff did not
qualify under the certification requirement. She continued
it would mean a higher-tier employee would have to sit at a
computer to input the detail. She guaranteed that many
constituents did not know the specific provisions were
about everyone and not just about Medicaid. She understood
that there was a drug problem, but she was concerned about
privacy. She opined it was possible to find the individuals
with drug problems already. She stated bills were being
brought in and red flags should be going up if doctors were
not doing the right thing. She was still concerned about
Amendment 11. She would follow up with an amendment on the
House floor.
Representative Wilson understood that significant work had
gone into the bill. Her biggest concern was she thought "we
could have already done this" and the bill would increase
the size of government. She furthered the state was hoping
for savings. She referred to $20 million in proposed
savings she thought the state would have received without
the bill. She believed it had only been included in the
bill to show the savings. She stressed the bill would
increase the size of government at a time when the state
did not have any money.
Representative Wilson WITHDREW her OBJECTION, but
reiterated her concerns. She thought the biggest concern
was how to get the department to access savings without
legislation.
6:23:13 PM
Representative Gara thanked DHSS for its work. He gave
credit to the department. He discussed that a number of the
federal funds the department was leveraging had been
available for many years; the department was replacing
state expenditures with federal money. He continued that
some of the federal money had been available for years and
some of it was new. The department was taking advantage of
as many areas as possible to find replacement federal funds
(roughly $100 million after the years three and four). He
believed DHSS deserved credit for the work. He noted that
the bill sponsor [Senator Pete Kelly] and the department
had not seen eye-to-eye on some issues in the past and had
been able to come together with a bill that would help the
state.
Co-Chair Neuman had serious concerns with the bill. He
believed it started numerous pilot programs and spent a
significant amount of money. He was uncertain of the net-
back. He had huge concerns about the PDMP that he did not
think was part of the original Medicaid reform bill. He
thought it "gets glossed over that the Prescription Drug
Database was added into it and making it mandatory for all
doctors to use." The committee had also heard that numerous
organizations thought it was a great deal and no complaints
had been heard. However, the committee also heard there
were probably many doctors who were not aware of the
changes. He noted that the Alaska Dental Society did not
like the change related to the PDMP. The committee had also
heard from the Family Medicine Department at the Alaska
Regional Hospital, the American Osteopathic Association,
and Alaska Osteopathic Medical Association that opposed the
PDMP change.
Co-Chair Neuman referred to a retired dentist in his
district who wanted to start a practice in Alaska. He
detailed the individual did not have a licensed staff to
access the database, which would mean more work and cost
for him. He used his personal doctor's office as another
example. He stressed the busy nature of doctor offices and
believed the PDMP provision added an additional burden. He
emphasized that the bill imposed increased government in
people's lives. He noted many of his constituents did not
know about the PDMP and were in shock when they heard about
it. He was glad the issue would be reviewed in several
years. He thought the legislature would hear about the
issue once it had become law. He referred to the high
medical costs in Alaska and believed the bill increased the
costs. He stated the bill invaded some of the most personal
privacies of Alaskans.
There being NO further OBJECTION, it was so ordered.
HCS CSSB 74(FIN) was REPORTED out of committee with an
"amend" recommendation and with 13 new fiscal impact notes
from the Department of Health and Social Services; 1 new
fiscal impact note from the Department of Commerce,
Community and Economic Development; 1 new fiscal impact
note from the Department of Law; 1 new fiscal impact note
from the Department of Corrections; and one previously
published fiscal note: FN29 (ADM).
Co-Chair Thompson discussed the schedule for the following
Monday.
ADJOURNMENT
6:30:13 PM
The meeting was adjourned at 6:30 p.m.
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