Legislature(2021 - 2022)ADAMS 519
03/17/2021 01:30 PM House FINANCE
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| Audio | Topic |
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| Start | |
| Fy 22 Budget Overview: Department of Health and Social Services | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 17, 2021
1:32 p.m.
1:32:14 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:32 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Bryce Edgmon
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
Representative DeLena Johnson
PRESENT VIA TELECONFERENCE
Sylvan Robb, Assistant Commissioner, Department of Health
and Social Services; Clinton Lasley, Deputy Commissioner,
Department of Health and Social Services; Albert Wall,
Deputy Commissioner, Department of Health and Social
Services.
SUMMARY
FY 22 BUDGET OVERVIEW: DEPARTMENT OF HEALTH AND SOCIAL
SERVICES
Co-Chair Foster reviewed the meeting agenda.
^FY 22 BUDGET OVERVIEW: DEPARTMENT OF HEALTH AND SOCIAL
SERVICES
1:33:23 PM
SYLVAN ROBB, ASSISTANT COMMISSIONER, DEPARTMENT OF HEALTH
AND SOCIAL SERVICES (via teleconference), provided a
PowerPoint presentation titled "Department of Health and
Social Services: House Finance Committee Budget Overview,"
dated March 17, 2021 (copy on file). She informed the
committee that all of the budget slides reflected the FY 21
management plan and the governor's FY 22 budget. She noted
that divisions with supplemental requests and items in the
governor's amended budget that were not part of the
reorganization had been noted on the relevant slides.
Ms. Robb began with a bar chart reflecting the Department
of Health and Social Services (DHSS) operating budget from
FY 19 to FY 22. She noted that [federal] COVID-19 related
funding was shown as a separate section of the bars
[reflected in yellow] to make it easier to see what was
happening with the department's regular budget from year-
to-year. She directed attention to a table in the lower
portion of the slide and highlighted the row titled
"Subtotal regular." The middle column showed the
department's proposed FY 22 budget at just over $3.4
billion, including $1.1 billion undesignated general funds
(UGF).
Ms. Robb reported there was a reduction of $40.5 million
from FY 21. She pointed out that $35 million of the
reduction was related to Medicaid. She explained that DHSS
had proposed carryforward language in the amount of $35
million for Medicaid, which would be addressed in detail on
subsequent slides. She stated that the department's true
reduction was about $5.5 million from FY 21. She pointed to
the top row of the table reflecting UGF and noted a
reduction of about $44 million, of which $35 million was
related to Medicaid. She planned to speak to the rest of
the reductions on individual slides. She noted there was
also a slide designated to COVID-19 funding received by the
department.
1:36:00 PM
Ms. Robb turned to slide 3 beginning with the Division of
Public Health. She communicated that federal COVID-19 money
had come into DHSS through the division. She remarked that
the division had very busy year and had been front and
center in the state's response to the pandemic. She
highlighted several areas in the division including
epidemiology, public health nursing, and the public health
labs. The slide showed a bar chart where COVID-19 funding
had been broken out. She added that the slide did not
reflect the full amount of federal COVID funding received
because the number was constantly changing as new bills
were passed and additional resources came into the
department.
Ms. Robb relayed that to date, DHSS had received $586
million in COVID mitigation funding through emergency
programs within the Division of Public Health. She
addressed the division's non-COVID related portion of the
FY 22 budget, which accounted for $122 million including
$43.3 million UGF. She noted the amount constituted an
increase of $3.7 million relative to FY 21. The UGF
increase of $1.1 million was primarily the result of a
nurse classification study and the majority of the federal
increase of $740,000 was also related to the study. She
reported that the other large change was a $1.6 million
increase in "other" funds. She elaborated that $900,000 was
related to the Ryan White AIDS Drug Assistance Program, -
federal funding that came into the department as statutory
designated program receipts because it was an insurance
reimbursement type of funding. The remainder of the
increase in other funds was the third year of funding on
the fiscal note for the SHARP-3 program focused on
increasing healthcare providers.
Ms. Robb pointed to the dark blue box on the right of slide
3 and explained that the budget transferred the chief
medical officer position, currently held by Dr. Anne Zink,
from the Division of Public Health to the DHSS
commissioner's office for better alignment.
1:38:47 PM
Ms. Robb moved to slide 4 and reported that DHSS had
received a total $585,732,657 in COVID funding. The slide
listed major funding sources in addition to the Coronavirus
Relief Fund (CRF) previously discussed by the Office of
Management and budget a couple of weeks earlier. The
department had received money from the Federal Emergency
Management Agency for testing, setting up temporary
overflow sites like the Carlson Center and Centennial Hall,
purchasing personal protective equipment (PPE), and hiring
nonpermanent staff to help with the increased workload
caused by the pandemic. The department had received funding
from the Centers for Disease Control and Prevention for
contact tracing, vaccines, and building up the state's
epidemiology and laboratory capacity in response to the
Coronavirus.
Ms. Robb continued reviewing major federal COVID funding
sources on slide 4. She reported that the Administration
for Children and Families had provided $6.5 million through
the Childcare Development Fund as capacity building to
reduce closures of childcare facilities. The Administration
for Community Living provided an additional $4 million in
funding for seniors for support services, meal programs,
caregiver support, and ombudsman programs. The department
had also received emergency grants funding from the
Substance Abuse and Mental Health Services Administration
to address the mental health and substance use disorders
that had occurred due to COVID-19.
Ms. Robb relayed that the total DHSS COVID funding on slide
4 did not include $94 million UGF the previous legislature
appropriated at the end of session in 2020. She reported
that to date, none of the $94 million had been spent. She
elaborated that DHSS had not used the funding to replace
any General Fund (GF) expenses within the department with
the exception of Medicaid. She explained that the CRF
guidelines did not allow funding to be used for items
already included in the budget with a few exceptions. The
funding had only been used for COVID mitigation efforts by
the department and by other entities including other state
agencies and community partners such as nonprofits and
hospitals.
Ms. Robb stated that the most significant impact on the
department's FY 22 budget from all of the incoming COVID
funding was through the enhanced Federal Medical Assistance
Percentage (FMAP) for Medicaid. She expounded that it had
enabled the department to have the funds available to ask
for the carryforward. Other impacts in the FY 22 budget
related to the COVID relief funds was the department's
request for carryforward of the UGF funding in order to
have funding available for emergencies. She remarked that
it had become evident over the past year that things could
change rapidly in unexpected ways. She reiterated that DHSS
had not spent any of the UGF [allocated by the legislature
in 2020] and it did not anticipate needing to; however, the
department wanted the ability to act quickly if something
changed quickly.
Ms. Robb understood there were many questions about the
American Rescue Plan Act (ARPA) that had passed at the
federal level the previous week. She shared that DHSS was
still in the information gathering stage on all elements of
the legislation. She explained that the Centers for
Medicare and Medicaid Services (CMS) had not yet published
any guidance on the bill, including what requirements may
be attached to each of the flexibilities included in the
bill.
1:42:35 PM
Ms. Robb explained that the state was in the process of
doing a full review of ARPA as it received [federal]
guidance, which would enable DHSS to determine which
options may be in the state's best interest to pursue. She
reminded committee members that after the Coronavirus Aid,
Relief, and Economic Security (CARES) Act had passed it had
taken over a month to receive guidance from the Treasury
Department on the appropriate uses. She added that the
Treasury had continued to send updated guidance up to six
months after the bill had passed. She remarked that DHSS
shared legislators' excitement about learning how the
additional resources may help the state and how they could
be used. The department looked forward to being able to
share the information when it became available.
Representative Josephson referenced the American Rescue
Plan. He saw that the plan would give a five-year state
plan option of health coverage for women and children for
five years instead of the customary 60 days. He referenced
provision for an 85 percent FMAP for mental health and
substance use disorders. He highlighted another provision
with a 5 percent temporary FMAP where a state had expanded
into Medicaid to help cover mandatory individuals. He
considered that there were numerous options the state could
select. He asked if the legislature should broadly assume
the administration wanted every resource the state was
entitled to. He asked if the administration intended to
accept the generosity afforded to it by Congress or whether
it was being more selective.
Ms. Robb asked Representative Josephson to repeat the
question.
1:45:22 PM
Representative Josephson stated that the legislature was
hearing there were numerous options for enhanced FMAP under
ARPA. He highlighted examples of FMAP for mental health or
substance use disorders and young mothers with newborn
children. Additionally, there was an FMAP of 5 percent for
states that had expanded Medicaid. Under the scenario he
presumed the percentage may increase from 56.2 to 61.2. He
stated there were many enhancements of FMAP rates. He asked
if the legislature should expect that the administration
would accept the funds or use a "wait and see" approach.
Ms. Robb replied that the department was interested in
obtaining the support it could use and it was in the
process of reviewing the enhancements. The department
wanted to ensure it did not obligate itself to something it
may not be interested in continuing in the future. She
highlighted that many of the programs came with maintenance
of effort and other similar requirements. She communicated
that DHSS wanted to ensure it had done its due diligence as
it took advantage of the available options. She reported
that the department was interested in getting as many
resources as possible to help vulnerable Alaskans and
people struggling with the pandemic.
Ms. Robb advanced to slide 5 titled "Medicaid Services
Operating Budget Comparison FY2019-FY2022." She relayed
that Medicaid accounted for the largest portion of the
department's budget. She noted that depending on the year
and the size of the Permanent Fund Dividend (PFD), Medicaid
could be the largest item in the entire state budget. She
discussed that Medicaid was an open entitlement program,
meaning anyone who met the eligibility criteria was
entitled to services. The proposed FY 22 Medicaid budget
was $2.4 billion, including $610 UGF. The slide showed the
governor's proposed reduction of $35 million UGF. She
explained that the budget bill included carryforward
language that would allow DHSS to carryforward up to $35
million, which would result in a flat budget for FY 22. She
detailed that having the grace year of time before needing
to implement the reduction would give DHSS time to work
with CMS and partners to find sustainable changes to
implement for FY 23.
Ms. Robb discussed that Medicaid was paid for jointly by
the state and federal government; the amount paid by the
federal government was determined by the FMAP rate. She
explained that the state had a number of FMAP rates
depending on the population being served and the type of
services. She elaborated that the blended rate across all
program recipients tended to hover between 72 and 73
percent federal. The reason DHSS had money to carry forward
into FY 22 was due to the enhanced FMAP rate it had been
receiving during the pandemic of an additional 6.2 percent.
She relayed that the rate would continue through FY 21 and
the department projected that after the carryforward of $35
million, the department would be able to lapse $65 million
in FY 22. She informed the committee that Medicaid
currently had about 262,000 enrollees. Part of the lapse
the department was projecting was due to decrease in
utilization, which was currently running at about 77
percent.
1:49:19 PM
Ms. Robb advanced to slide 6 pertaining to the Alaska
Psychiatric Institute (API). She noted that in FY 19 API
had been part of the Division of Behavioral Health and in
FY 20 it became its own appropriation. The governor's
proposed API budget was $55.6 million including $15 million
UGF. She reported that the division's budget was flat from
FY 21 to FY 22. She detailed that the largest fund source
change was a fund source shift from other funds, primarily
comprised of statutory designated program receipts (SDPR)
and interagency receipts, which had turned out to be
uncollectible for API. She expounded that the uncollectible
fund sources were shifted to mental health trust reserve
funding. She noted that the hollow receipt authority was
also an issue for API in FY 21; therefore, DHSS had
requested a $6 million supplemental for FY 21 (shown in the
navy box on the right of the slide).
1:50:55 PM
Representative Wool asked how many patients were currently
being served at API for $55 million per year.
Ms. Robb asked Representative Wool to repeat the question.
Representative Wool queried the current number of patients
at API.
Ms. Robb deferred the question to a colleague.
CLINTON LASLEY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH
AND SOCIAL SERVICES (via teleconference), responded that
API had a current bed capacity of 60. The facility
currently had 56 patients.
Representative Wool asked if $1 million per bed per year
was a standard or high cost for a publicly run psychiatric
facility.
Mr. Lasley responded that he did not have the numbers on
hand and would follow up in writing. He shared that
typically the facility had an 80 bed capacity and API had
been working toward returning to full capacity. He
explained that COVID had forced API to slow things down a
bit. His expectation was to reach full capacity by the end
of the calendar year.
Representative Wool recalled there had not been many more
than 50 patients for years. He understood that in the past
the facility had been limited in the number of patients it
could bring in due to staffing limitations. He wondered if
$1 million per bed per year was standard. He believed the
cost seemed high. He asked about the $6 million taken out
of the mental health trust reserve because the money had
been uncollectible from the SDPR fund source. He asked for
more detail on why the funds had been uncollectible.
Ms. Robb explained that SDPR funds came into the state from
nongovernment sources. She detailed that several years back
there had been an effort to try to use SDPR funding as
there had been anticipation that API patients would have
private insurance or other sources the state could bill for
treatment. She elaborated that it had not turned out to be
the case over the years. She relayed that the Office of
Management and Budget (OMB) had directed DHSS toward the
mental health trust reserve fund.
1:54:51 PM
Representative Rasmussen stated it would be interesting to
receive a comparison between API and some of the private
hospitals. She shared that when her daughter had been in
the NICU [Newborn Intensive Care Unit] at Providence
Hospital for ten days the bill had been over $150,000.
Ms. Robb addressed the Division of Behavioral Health budget
on slide 7. She reminded the committee that in FY 19 API
had been part of the Division of Behavioral Health
appropriation. She explained that API had become its own
appropriation in FY 20, but the figures shown on the chart
for FY 19 did not include the cost for API. The division's
proposed FY 22 budget was $89.2 million including $28.3
million UGF. She listed the biggest change as a reduction
of nearly $750,000 in other funding. She elaborated that
the increment had been one-time funding for a housing
assertive treatment institutional diversion program.
Additionally, there was a $208,000 reduction in authority
for sobering centers as they transitioned to support
through the 1115 Medicaid waiver.
Ms. Robb pointed to the dark blue box on the right of slide
7 indicating a supplemental request resulting from a court
settlement with the Disability Law Center. She reported
that the amount had not been included in the FY 21 budget
passed the previous spring because the settlement had not
been finalized when the budget was signed into law. She
briefly explained that the settlement related to how mental
health patients were being held prior to receiving
treatment from healthcare professionals.
1:57:19 PM
Representative Josephson referenced the behavioral health
grants that had been reduced. He relayed that he had
learned in the DHSS subcommittee that Medicaid was covering
most of the grants through the 1115 waiver and that
individuals who were not familiar with the specific billing
system had been assisted. He shared that earlier in the
week he had a Zoom meeting with the umbrella organization
for facilities housing troubled youth in Alaska. He had
learned on the call there were problems with rule making
and that an extension or help was needed with rule making
and coding. He understood that the state had assisted with
obtaining an extension, but another was needed. The
organization had told him there were behavioral health
recipients who performed valuable services that could not
be fit into the Medicaid square. He asked the department to
comment on the topic.
Ms. Robb deferred the question to a colleague.
ALBERT WALL, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES (via teleconference), replied that he was
having difficulty hearing due to poor weather. He
understood the question pertained to behavioral health
recipients who could not bill for services. He asked for
clarification on the question.
Representative Josephson complied. He relayed that he had
learned in the DHSS subcommittee that Medicaid was covering
most of the grants through the 1115 waiver; however, he was
hearing it was not always the case. He shared that earlier
in the week he had a remote meeting with the umbrella
organization for facilities housing troubled youth in
Alaska (e.g., the Johnson Youth Services facility in
Juneau). He stated that the organization was having real
concerns about meeting its budgets. He asked the department
to comment on the topic.
Mr. Wall replied that there had been some conversation with
the Alaska Association of Homes for Children. He relayed
the organization had expressed some concerns about the
rates under the 1115 waiver meeting its costs and allowing
the organization the flexibility to be creative with how it
was providing services. He reported that DHSS had just
finished meeting with the Alaska Association of Homes for
Children regarding the issue and DHSS was setting up a
series of meetings with the organization to walk through
the process. He believed the 1115 rates were sustainable.
He added that if an issue was discovered, DHSS would have
to consider what it would do with the rates.
2:01:21 PM
Ms. Robb reviewed the Division of Health Care Services
budget on slide 8. She explained that the division managed
healthcare coverage for Alaskans in need. The proposed FY
22 budget was $20.2 million including $7 million UGF. The
largest difference between FY 21 and FY 22 was a fund
source change from UGF to DGF related to licensing
activities. She detailed that the division was responsible
for licensing hospitals, clinics, and residential
facilities for healthcare. She reported that for the past
couple of years the division had been collecting more
licensing fees than it had the authority to use. She
elaborated that by increasing the authority, the division
would be able to use all of the fees and let the UGF go.
Additionally, the other UGF savings would result from the
reduction of some of the division's leased space in
Anchorage. She pointed to the dark blue box on the right
showing funding for the nurse salary study in the
governor's amended budget.
2:03:05 PM
Ms. Robb moved to slide 9 and addressed the budget for the
Division of Senior and Disabilities Services. The division
was responsible for ensuring seniors and other vulnerable
Alaskans had the long-term supports needed to live
independently with as much choice as possible. The
division's proposed FY 22 budget was $63.1 million
including $37 million UGF. She noted there was not
significant change in the division's budget from FY 21 to
FY 22. She highlighted a $334,000 increase. She explained
that the majority of the UGF decrease was due to a
reduction in general relief assisted living home support to
match the program usage. She expounded that the number of
applicants using the program had decreased.
2:04:09 PM
Ms. Robb looked at slide 10 pertaining to the Division of
Public Assistance. She noted that senior benefits were
administered by the division and was included in the budget
as its own appropriation. She elaborated that the division
administered about one dozen other assistance programs that
provided support to Alaskans. Additionally, the division
determined Medicaid eligibility. The division's proposed FY
22 budget was $287 million including $125.2 million UGF.
She added that $21 million of the total and the UGF was for
the senior benefits program, which was 100 percent UGF
funded. She highlighted that the FY 22 budget was about $10
million less than the FY 21 budget, which was evenly split
between UGF and federal; about $7 million of the reduction
was related to the reduction of 121 positions. She
expounded that 20 of the positions had been added in 2018
to allow the division to catch up on a processing backlog,
which had been accomplished. The remainder of the positions
would possibly be reduced through efficiencies implemented
by the division. She explained that the positions would be
reduced through attrition over time.
Ms. Robb continued to review the Division of Public
Assistance budget on slide 10. She shared that with the
pandemic, the division had instituted an electronic
document management system that had been very successful.
She detailed that the system moved toward having online
certification for people receiving benefits and to allow
beneficiaries to provide updated information as needed. In
FY 20, the division had served more than 3,000 individual
Alaskans and approximately 4 million pieces of mail. She
explained that transitioning the workload to a more
efficient electronic processing method had offered big
gains for the division in terms of personnel and savings in
office supplies such as postage and paper. She pointed to
the dark blue box on the right showing FY 21 supplementals
including $1.2 million UGF to support adult public
assistance benefit payments and $13.5 million to support
the governor's proposal to pay the remainder of the
statutory PFD in FY 21. The box also included an FY 22
amended item of $2 million to support adult public
assistance.
2:08:08 PM
Ms. Robb advanced to the Alaska Pioneer Homes budget on
slide 11. The proposed FY 22 budget was $104.8 million
including $40.9 million UGF. She highlighted that the
budget was relatively flat from FY 21 to FY 22 with an
increase of $305,000. She reminded the committee that in FY
20, the levels of care had increased from three to five.
Ms. Robb turned to the Office of Children's Services (OCS)
budget on slide 12. The proposed FY 22 budget was $177
million including $93 million UGF. She highlighted a budget
increase of $1.8 million from FY 21. She pointed to a
reduction of $963,000 UGF, of which, $528,000 was from a
reduction in the Circles of Support grant. She explained
that grantees had not been utilizing the grant as much as
the division had hoped. She reported that nearly one-third
of the funding had not been utilized; therefore, OCS was
seeking to provide the services through other avenues. The
division had also switched to a laptop focus when computers
were refreshed, which had resulted in savings in computer
purchases of $186,000 UGF.
Ms. Robb continued to review the OCS budget on slide 12.
She highlighted a federal increase of $2.8 million,
primarily comprised of $2.4 million increase in subsidized
adoptions and guardianships. She reported that cases had
increased by 20 percent since FY 15 to FY 20. Additionally,
the cases were more complex. She pointed to the dark blue
box to the right showing a $3 million supplemental request
of federal and GF match related to adoption and
guardianship. The blue box also showed a $415,000 UGF to
ensure the department met a maintenance of effort
requirement related to the adoption and guardianship money.
2:11:29 PM
Representative Wool asked if the number of foster kids in
OCS had continued to increase or leveled off. He understood
there had been a sharp increase for a while.
Ms. Robb deferred the question to Mr. Lasley.
Mr. Lasley answered there had been a slight increase year-
over-year with children in out-of-home placement and foster
care. He stated the pandemic had been some of the cause
during the past year, partially because the court system
had not always been open. He explained that youth had come
in and were not exiting on the other end to permanency. He
would follow up with the precise numbers in writing.
Ms. Robb turned to slide 13 and reviewed the budget for the
Division of Juvenile Justice. The proposed FY 22 budget was
$58.5 million including $55.7 million UGF. She reported
that overall, the division's budget was down $717,000 from
FY 21 to FY 22, nearly all of which was UGF. She detailed
that the reduction was achieved through the reduction of
eight positions (five probation services positions and
three positions related to the Step Up program in
Anchorage).
2:13:47 PM
Ms. Robb reviewed the Departmental Support Services budget
on slide 14. She noted that the slide included three
separate appropriations, one for Departmental Support
Services, one for Human Services Community matching grants,
and one for Human Services Community initiative matching
grants (both of the Human Services programs were
administered by Departmental Support Services). She
detailed that the two grant programs accounted for $2.5
million. The three appropriations had a proposed FY 22
budget of $48.5 million including $16.5 million UGF. She
elaborated that the budget was essentially flat with an
$83,000 increase from FY 21 to FY 22. She highlighted a
fund source shift from UGF to interagency receipts related
to the internal information technology chargebacks within
the department. The blue box on the right reflected the
incoming transfer of the chief medical officer position to
the commissioner's office from the Division of Public
Health.
2:15:45 PM
Vice-Chair Ortiz looked at slide 11 and asked for an
explanation of the significant increase from FY 19 to FY 20
and beyond in the "other" funding category.
Ms. Robb replied that the other category included
interagency receipts. She explained that the funding
category included incoming money to Pioneer Homes from
Medicare and Medicaid. She detailed that a Pioneer Home
payment assistance component had been created in FY 20 to
make it easier to see all of the support going to Pioneer
Home residents. All of the incoming Medicaid and Medicare
funds had been put into the component. She expounded that
some of the increase on slide 11 reflected the duplication
of funds. She explained that because the funds needed to
move from one component to another, the budget showed where
they originated in addition to where they were received.
She used the transfer of the chief medical officer position
from one division to another as an example.
Vice-Chair Ortiz asked where the budget reflected the fees
paid by residents.
Ms. Robb replied that the fees showed up as other funds.
2:18:01 PM
Representative LeBon looked at the $6 million DGF request
in mental health trust authority funds to achieve full
capacity at API (on slide 6). He asked how confident the
department was that the increment would achieve full
capacity. He asked if the administration would still fund
an additional $6 million from some source if the increment
did not materialize in the budget.
Ms. Robb deferred the question about when API expected to
achieve full capacity to Mr. Lasley. She would answer the
question on funding after Mr. Lasley's reply.
Mr. Lasley responded that API had to request a supplemental
in the past two years to cover the budget deficit. He
explained the $6 million request was to right-size the
facility. He discussed that there had been hope of
realizing additional revenue through other sources [SDPR
and interagency receipts], but it had not materialized. He
noted that the department was continuing to look at the
options. He reported that the previous spring API had been
at a 50-bed capacity with full intention of increasing near
full capacity. He detailed that about 14 rooms were double
occupancy (28 beds), but patients had been separated during
COVID. Additionally, it had been necessary to isolate newly
admitted patients for a given time period to ensure they
were COVID-negative. All of the things attributed to not
reaching full capacity [in the past year].
Mr. Lasley reported that API was currently working toward
opening its youth unit open in the second quarter of the
year (before July 1). He elaborated that full staffing was
in place and training was underway. He cautioned that once
the 10-bed unit was open, youths would be moved in slowly
over several months in order to ensure everything was done
right. He relayed that with the opening of the youth unit
capacity would increase to 70. He shared that the hospital
was confident API would be able to reach the full 80-bed
capacity (back to the 2018 level) by the end of the
calendar year.
Representative LeBon referenced the governor's $6 million
request from the Alaska Mental Health Trust Authority
(AMHTA) for API. He asked whether the administration
believed there was shared clientele between API and AMHTA
and whether the $6 million was anticipated to be part of
API's budget moving forward.
Ms. Robb replied that the funds were required by API to
operate on an ongoing basis. She stated that DHSS did not
have a position on whether the AMHTA funds were the
appropriate source. She explained that DHSS had requested
additional support from OMB, and it had directed the
department to the AMHTA fund source.
2:23:26 PM
Representative Josephson remarked that on April 7, 2020,
the governor had vetoed $31 million in Medicaid funds and a
good portion had been federal. He stated that in 2019 the
governor had wanted to spend hundreds of millions of
dollars less on Medicaid and had eventually vetoed about
$150 million in FY 20. He highlighted that the
administration had not been able to implement the state
plan amendment in the timeframe it wanted. He had concerns
with Medicaid funding and wanted to take advantage of
federal match. He asked if he should be comforted that
enough Coronavirus Aid, Relief, and Economic Security
(CARES) Act funding had come to the state to assuage any
anxiety he had about the cuts.
Ms. Robb answered that in FY 20 the department had lapsed
$59 million from Medicaid and was projecting to lapse $100
million in the current year. She reminded the committee
that DHSS hoped to carryforward $35 million of the $100
million.
2:25:14 PM
Representative Josephson modified the prior figures he had
provided with more precise information. He detailed that
the FY 21 veto had been $31 million including $17 million
in federal funds. He noted that the fact the administration
had elected to not fund $14 million to achieve the matching
federal funds gave him pause. He stated it sounded like so
much additional funding had come into the state system that
places like Alaska State Hospital and Nursing Home
Association (ASHNHA) should be comforted there was
sufficient revenue to pay claims and take care of patients.
Ms. Robb responded that she could not speak to who would be
comforted by what. She reiterated her previous statement
that DHSS had more support for Medicaid than it could use
as a result of the enhanced FMAP.
Representative Josephson stated that while ASHNHA was
pleased there was $35 million in federal backfill to give a
status quo budget, the association had grave concerns there
would be a $35 million cliff in FY 24. He explained that
there was an expectation the enhanced FMAP would continue
through the end of the current year. He remarked that
ASHNHA remained confused about long-term planning when
fiscal cliffs existed on the horizon. He noted there were
unconventional funding sources used in other parts of the
budget as well that were not sustainable. He asked if the
department had a comment about the concern.
Ms. Robb deferred the question to Mr. Wall.
Mr. Wall responded that the department had been
consistently working on the question with ASHNHA. He
reported that DHSS had faced larger Medicaid cuts and
cliffs in the past. He explained that the department was
attempting to contain costs while continuing to provide a
superior bandwidth of service. He elaborated that projects
the department had discussed were centered around changing
the way it provided reimbursement. For example, changing
bundled payments through DRGs [diagnosis-related groups].
He confirmed there was a cut coming in the future and the
current budget would give DHSS a year to work with its
partners on how to address the coming cut and how to
continue to provide services at less acuity.
2:28:34 PM
Representative Wool asked about the $6 million request to
bring API up to full capacity. He asked if it had been the
limiting factor over the past several years when the
facility had been at 50 beds. He wondered whether the $6
million was for extra staffing to bring in up to 80
patients.
Ms. Robb deferred the question to Mr. Lasley.
Mr. Lasley replied that due to high turnover, API had been
spending the money on overtime or locum tenens in order to
have qualified staff. He reported that over the past year,
the team at API had done amazing work and many of the
critical positions had been filled. He elaborated that
staff had been brought in early for training in order to be
prepared to take on patients. He believed the facility had
the needed staffing currently and turnover had gone down
substantially. He explained that instead of having to ask
for a supplemental year after year, the $6 million
increment would mean API would not have to request a $6
million supplemental. He stated that staffing was
sufficient to allow the opening of the 10-bed youth unit
and the additional 10 beds [in the broader facility] during
the current year.
2:31:06 PM
Representative Wool asked for verification that the $6
million was to prevent the department from having to ask
for another $6 million in the future. He noted the
committee had heard earlier in the day about $94 million
leftover from the previous year that had not yet been
tapped. He relayed that AMHTA had informed the committee
that a $6 million draw from its reserves exceeded the
sustainable draw of 4.25 or 4.75 percent. He stated that
AMHTA did not really want the draw - which was in violation
of its fund rules - to take place. He asked if API could
take the funds from the $94 million if it did not receive
the $6 million from AMHTA.
Ms. Robb answered that DHSS tried very hard to respect the
legislature's appropriation authority. She explained that
the $94 million the department had not tapped was directed
for COVID response whereas the $6 million for API was for
ongoing operations. She elaborated that getting the $6
million in the budget was part of truth in budgeting. She
detailed that the department had scrambled to cover API's
budget for the past couple of years and had transferred
money to help keep the institute afloat. She stated that
the increment would help be more upfront about the true
cost of running API.
Representative Wool noted there was $35 million due to the
Medicaid [FMAP] increase from 50 to 56.2 percent. He
imagined that many patients at API were Medicaid patients.
He referenced the department's testimony that the capacity
at API had been reduced due to COVID. He pointed out that
AMHTA had expressed concern about taking $6 million from
its reserves. He wondered whether there was a workaround
toward the goal, especially if the $6 million was to
preempt a supplemental request that may not happen.
Representative Carpenter looked at $415,000 GF match on
slide 12 [for post adoption and guardianship savings
maintenance of effort]. He asked what the federal match
was.
Ms. Robb responded that the federal government had started
to cover more children through the subsidized adoption and
guardianship program. She explained that as more of the
children had been funded through federal dollars, the
federal government still required DHSS to use the dollars
it would have spent on subsidized adoptions, in support of
the children. The $415,000 would allow DHSS to meet the
maintenance of effort.
2:35:25 PM
Representative Carpenter surmised it sounded like the
department did not know the federal dollar amount.
Ms. Robb answered that the federal funding was not a match
in the same way that Medicaid was matched at 50 percent.
She explained there was a requirement for the state to
spend a certain percentage of the money on the children
receiving subsidized adoptions and guardianships who were
covered through the expanded federal program. She offered
to follow up with the precise number.
Representative Carpenter requested the number. He remarked
that if the state funds were matching funds there needed to
be a corresponding federal match. He stated that otherwise,
the funding was UGF.
Representative LeBon referenced the $13.5 million request
to fully fund the PFD from FY 21 (on slide 10). He stated
that Alaska was set to receive over $1 billion in the near-
term and many Alaskans were receiving a federal stimulus of
$1,400. He asked if the department would look at the $13.5
million as available funds to offset the AMHTA draw to
support API if an additional PFD was not approved by the
legislature in FY 21.
Ms. Robb responded that if the legislature opted not to
approve the second dividend payment in FY 21, the
department would not require the $13.5 million for the hold
harmless program. She stated that it would not be
appropriate for the department to use the funds for API.
Representative LeBon asked if it would help if the
legislature included intent language allowing DHSS to use
the funds for API.
Ms. Robb responded it would be subject to legislative
appropriation.
Representative LeBon asked for verification that the action
would turn the funding source to UGF [as opposed to AMHTA
funds].
Ms. Robb replied affirmatively.
Co-Chair Foster thanked the presenters. He reviewed the
schedule for the following day.
ADJOURNMENT
2:39:49 PM
The meeting was adjourned at 2:39 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AK CRF Allocations and Expenditures as of 2.26.2021.pdf |
HFIN 3/17/2021 1:30:00 PM |
|
| DHSS - House Finance Committee 3.17.21.pdf |
HFIN 3/17/2021 1:30:00 PM |
|
| Fed COVID-19 Funding to Alaska 2.5.2021.pdf |
HFIN 3/17/2021 1:30:00 PM |
|
| DHSS Overview Response Q HFIN 032921.pdf |
HFIN 3/17/2021 1:30:00 PM |