Legislature(1999 - 2000)
04/13/1999 03:04 PM House HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL
SERVICES STANDING COMMITTEE
April 13, 1999
3:04 p.m.
MEMBERS PRESENT
Representative Fred Dyson, Co-Chair
Representative John Coghill, Co-Chair
Representative Jim Whitaker
Representative Joe Green
Representative Carl Morgan
Representative Tom Brice
Representative Allen Kemplen
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
* HOUSE BILL NO. 113
"An Act relating to a program of postsecondary education for high
school students."
- HEARD AND HELD
* HOUSE BILL NO. 168
"An Act relating to actions of the Department of Health and Social
Services regarding certain health facility payments."
- HEARD AND HELD
HOUSE BILL NO. 152
"An Act relating to access to criminal history records and to
revocation of or failure to renew certain licenses based on
criminal conduct or alleged criminal conduct; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 113
SHORT TITLE: POSTSECONDARY EDUC FOR HIGH SCHOOL STUDENTS
SPONSOR(S): REPRESENTATIVES(S) MASEK, Dyson
Jrn-Date Jrn-Page Action
2/24/99 301 (H) READ THE FIRST TIME - REFERRAL(S)
2/24/99 301 (H) HES, FIN
4/08/99 694 (H) COSPONSOR(S): DYSON
4/13/99 (H) HES AT 3:00 PM CAPITOL 106
BILL: HB 168
SHORT TITLE: HEALTH FACILITY PAYMENT DECISIONS
SPONSOR(S): REPRESENTATIVES(S) GREEN
Jrn-Date Jrn-Page Action
3/31/99 625 (H) READ THE FIRST TIME - REFERRAL(S)
3/31/99 625 (H) HES, JUD
4/13/99 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
EDDIE GRASSER, Legislative Assistant
for Representative Beverly Masek
Alaska State Legislature
Capitol Building, Room 432
Juneau, Alaska 99801
Telephone: (907) 465-3306
POSITION STATEMENT: Presented sponsor statement on HB 113.
ROBERT SEWELL, Student Resources Coordinator
University of Alaska Southeast
11120 Glacier Highway
Juneau, Alaska 99801
Telephone: (907) 465-6359
POSITION STATEMENT: Testified on HB 113.
BETH LAPE, Special Assistant
Office of the Commissioner
Department of Education
801 West Tenth Street, Suite 200
Juneau, Alaska 99801
Telephone: (907) 465-2803
POSITION STATEMENT: Provided information on HB 70.
JEFF LOGAN, Legislative Assistant
for Representative Green
Alaska State Legislature
Capitol Building, Room 214
Juneau, Alaska 99801
Telephone: (907) 465-3727
POSITION STATEMENT: Presented sponsor statement for HB 168.
DAN HOUGHTON, Chief Financial Officer
Alaska Regional Hospital
18753 May Court Circle
Eagle River, Alaska 99577
Telephone: (907) 264-1713
POSITION STATEMENT: Testified in support of HB 168.
JAY LIVEY, Deputy Commissioner
Department of Health and Social Services
P.O. Box 110601
Juneau, Alaska 99811
Telephone: (907) 465-3030
POSITION STATEMENT: Testified on HB 168.
ACTION NARRATIVE
TAPE 99-35, SIDE A
Number 0001
CO-CHAIRMAN COGHILL called the House Health, Education and Social
Services Standing Committee meeting to order at 3:04 p.m. Members
present at the call to order were Representatives Dyson, Coghill,
Morgan, Brice and Kemplen. Representatives Whitaker and Green
joined the meeting at 3:05 p.m. and 3:16 p.m. respectively.
HB 113 - POSTSECONDARY EDUC FOR HIGH SCHOOL STUDENTS
Number 0076
CO-CHAIRMAN COGHILL announced the first order of business as House
Bill No. 113, "An Act relating to a program of postsecondary
education for high school students."
Number 0096
EDDIE GRASSER, Legislative Assistant for Representative Beverly
Masek, came forward to present the sponsor statement:
House Bill 113 will provide eleventh and twelfth grade
students in secondary schools in the state of Alaska an
option for taking postsecondary classes at a nearby
college campus.
It is modeled after a program already in effect in 21
other states. House Bill 113 gives high school students
the opportunity to take more advanced classes within the
university system and count them toward their
requirements for graduation from high school or for
college credit. The bill further recognizes that
secondary students are part of the public education
foundation formula and provides for tuition assistance
whenever the secondary student chooses to count college
courses toward his or her high school graduation
requirements.
House Bill 113 will give our public school students more
options in planning their curriculum. Instead of being
limited to those classes offered by the local high
school, this bill, if enacted, would give our public
school students a wider variety of options by including
courses available at the local college campus.
Such an option will provide for an inexpensive method for
high school students to take advanced education classes
that wouldn't otherwise be available.
We are all looking for ways to improve our educational
system. Expanding opportunities for our young people is
one way we can accomplish that. House Bill 113 takes a
step in that direction.
CO-CHAIRMAN DYSON commented that in many communities the "nearby"
college courses are offered right in the high school. He desires
that the line between secondary and postsecondary education get
really blurry. High school students and adults could be taking
courses intermingled during the day in the same facility.
Number 0312
CO-CHAIRMAN COGHILL asked if it was true that Mark Hamilton,
President of the University of Alaska, had asked for a seamless
transition between high school and college, and he asked if this is
what he was talking about.
MR. GRASSER replied that this bill is the result of requests from
several constituents in their area. He believes it is true in
regard to what President Hamilton said, but that wasn't the reason
for the bill. Representative Masek's office has been working with
Co-Chairman Dyson's office on this bill, and there is a proposed
committee substitute.
Number 0419
CO-CHAIRMAN DYSON made a motion to adopt the proposed committee
substitute (CS) for HB 113, version 1-LSO461\G, Ford, 3/31/99, as
a work draft. There being no objection, that proposed CS was
before the committee.
REPRESENTATIVE BRICE asked whether they are just asking the school
district to pay the tuition for those high school students who are
already taking college course. He asked how the system works now.
Number 0464
MR. GRASSER agreed that there are several places in the state where
students are taking college classes. There are a variety of
systems out there dealing with this. Nome-Beltz pays a flat fee
per class rather than the normal tuition fee; other places charge
whatever any college student would pay, and the students get
college credit. This bill is looking for a way to fund the tuition
for those students who would like to take the advanced classes but
are not financially capable.
REPRESENTATIVE BRICE asked why a student couldn't get college
credit as well as high school credit.
MR. GRASSER explained the bill says they can choose either one; but
they will also get college credit if they choose to enroll in the
University of Alaska system after high school. They can get dual
credit after they have graduated from high school.
REPRESENTATIVE BRICE noted that the University of Alaska Fairbanks
(UAF) has high school students taking college courses and getting
credit for both, and he doesn't want this bill to undermine that
ability.
MR. GRASSER indicated that their goal is to come up with a workable
solution for students in high school to take advanced classes at
the college.
CO-CHAIRMAN DYSON pointed out that in Section 1 in the CS, it is
his intention to remove the age of 20 as the cap for which a child
can attend a secondary school, and allow the school to get
reimbursement under the foundation formula. This bill allows
students to finish high school who were not able to finish before
they were 20 for whatever reason. Some districts have been
allowing those students to attend, even when the foundation formula
didn't follow; this allows the foundation formula to follow the
students. Some very enlightened districts in this state are
allowing people who are older than 20, who are not a problem or
threat to the school, to finish their studies with the high school
students. There have been good results from that. One of the
districts has a 58-year-old grandmother and a 28-year-old ex-drunk.
When the high school students see these older people come back
because they believe education is important and valuable, perhaps
the high school students will appreciate the value of their own
education.
CO-CHAIRMAN DYSON pointed out that schools are capable of excluding
those people over 20 who are going to be a threat to the students
or a problem to the school.
REPRESENTATIVE BRICE commented that he is glad to see the
protection for the school in there. He wonders if they will run
afoul of the Americans with Disabilities Act (ADA) on line 12 where
a governing body is allowed to not include someone based on a
physical ability.
MR. GRASSER explained if the school didn't have an ability to make
some assertion as to the progress of students above the age of 20,
they could end up with people who would be there for a long time,
and the state would have to pay under the foundation formula. This
is the language the bill drafter came up with.
CO-CHAIRMAN COGHILL asked if a student gets credit for a college
course but doesn't complete his high school diploma, what happens
to the college credit.
Number 1146
CO-CHAIRMAN DYSON said if he got the college credit, he got the
college credit. It won't do him any good if he doesn't meet the
standards to get into the university. If he takes another route to
get into the university, once he is there the credits ought to be
there for him.
Number 1208
ROBERT SEWELL, Student Resources Coordinator, University of Alaska
Southeast (UAS), came forward to testify. He was asked by
Representative Masek's office to speak to some of his concerns and
considerations. He speaks as a representative of the university,
as a parent and as a child advocate. He spoke briefly of three
efforts that relate to this bill, although to this point, they have
all been independent. The first is the College Connection at UAS,
the "Ahead Program" at UAF, and another through the Anchorage
school district called "Credit by Choice." To some extent this is
an idea whose time has come. A number of the states already
offering this program, offer dual credit, where the student can get
simultaneous credit at the high school and college, and he
advocates that. This is not a dangerous nor new concept. There
are Juneau-Douglas High School students enrolled at UAS now. There
is a fiduciary issue. Today most of the students who take the
college students have parents who can afford to pay the tuition.
This should be a concern to them. The haves are getting it, and
the have-nots aren't.
DR. SEWELL said there is a way to get dual enrollment. There is a
form to fill out at the local school, but he is concerned that the
students who take the university classes are not aware of that
process. This is not a systematic program. The College Connection
at UAS is still conceptual and has gone through committee work
involving the school district, the university and an advocacy voice
called the Extended-Learning (EL) Pact. The EL Pact is a group of
parents of students who are identified as extended learning or
gifted and talented, of which there are over 400 in the Juneau
school district. Those parents are very concerned, and he is one
of them, that their children are not getting the degree of
acceleration and enrichment as befits their intellectual acumen.
This is the second issue.
DR. SEWELL has a 13-year-old daughter. When she was 12 she took a
English 110 at UAS. She did fine, and she was well received. He
suggested that there are many students still waiting to be
challenged in the high school classes, and often students whose
needs are not met tend to drift. The cost in those cases is an
opportunity cost. He recommended that HB 113 allow students
younger than eleventh grade be considered eligible. The College
Connection at UAS allows juniors and seniors to take two courses
per semester and freshmen and sophomores to take one; there are
some rare middle school students, who can and are, taking classes
that they can benefit from.
DR. SEWELL mentioned the third issue as a child advocate where this
is one of those steps towards individualizing the educational
process. It is a relatively cost-effective step.
Number 1512
REPRESENTATIVE GREEN asked if the high schools students who wanted
to take college courses would displace college students.
DR. SEWELL said the general answer is no. A lot of courses are
offered whether or not they have the maximum number of students.
There are almost always a few seats available. Some states give
priority to the college students, and the high school students have
to wait until there is a spot. He doesn't see overdemand as a big
problem.
Number 1574
REPRESENTATIVE GREEN asked if there is an affect from the maturity
level of the high schools students.
DR. SEWELL believes that there is parental responsibility to be
sure their child is not getting in over his head. He suggested
that the student and his parents would have to meet with the high
school counselor and the college counselor where three things would
be emphasized: This starts your college transcript; this is
different than high school, they are not going to follow the
students around; and college is a place where they talk about all
things, and some of those are necessarily adult content.
Number 1768
MR. GRASSER noted that the bill on page 2 answered Representative
Green's question. Students who have graduated from high school
have priority over those still enrolled in high school. The bill
also protects the high school from students leaving en masse to
take a college course, if the same course is available at the high
school.
REPRESENTATIVE BRICE asked if they were acknowledging the receipt
of the GED [general equivalency diploma] as the same as having a
high school diploma in Section (d).
MR. GRASSER wasn't sure but would get back to him on that question.
REPRESENTATIVE KEMPLEN asked if there was anyone present from the
school district to testify.
Number 1866
BETH LAPE, Special Assistant, Office of the Commissioner,
Department of Education (DOE), spoke up and said they weren't
prepared to testify on the bill yet. They were still working on
the fiscal note and the CS.
MR. GRASSER said the sponsor's intent is that the HES Committee
work on several of the issues brought up today before it is moved
out. He believes they still need to discuss the funding mechanisms
with both the school districts and the DOE and address the issue of
how the students make it from the high school to the college
classroom.
Number 1968
REPRESENTATIVE KEMPLEN asked about the implications of adults
finishing their high school education on the adult basic education
(ABE) programs. He wondered if one impact of this legislation
would be to move the people currently in ABE programs into the high
schools.
CO-CHAIRMAN DYSON explained that in many communities there is not
a good basic adult education program. A good model for delivering
high school equivalence is in a local high school. In some areas,
it may make more sense logistically or for childcare, for the
adults to go to the local high school. He guesses that there will
be an interesting nexus between the university, adult basic
education and secondary schools about who gets the money, and who
can deliver the services. His major interest is what is best for
the student. Hopefully, there will be a marketplace out there
where students can pick the option that works best for them.
CO-CHAIRMAN COGHILL understood that the university was offering
free tuition to students with good grades, and if they reach into
the high school for certain college courses, and there are
exceptional students, it may be that the university could be a part
of the funding picture.
Number 2215
REPRESENTATIVE GREEN noticed that the bill says a student "shall"
be admitted.
CO-CHAIRMAN DYSON noted that in the original draft the "shall" was
modified to "may," and he didn't realize in this version the
"shall" is still in. He will amend that. He wants the school
districts to want the students and to take advantage of this but
not be forced to do it.
Number 2270
CO-CHAIRMAN DYSON made a motion to amend HB 113, page 1, line 10 to
replace the word "shall" with "may."
CO-CHAIRMAN COGHILL asked whether there was any objection to
Amendment 1. There being none, Amendment 1 was adopted.
CO-CHAIRMAN DYSON mentioned he has had extensive talks about this
bill with Shirley Holloway [former Commissioner of DOE] before she
retired, and she was really enthusiastic about the blurring of the
lines between college and high school and allowing adults who chose
to and were qualified to come back and finish their high school
diploma.
TAPE 99-35, SIDE B
Number 2327
CO-CHAIRMAN DYSON asked if the DOE knows when they will have the
numbers for them.
Number 2322
MS. LAPE answered they are working on it right now. She thought
she could have the numbers by next Thursday.
CO-CHAIRMAN DYSON suggested that the sponsor look at page 2, line
3 and consider lowering the age requirement of eleventh grade in
light of the testimony they heard. He also suggested adding
something about the process of the student meeting with both high
school and college counselors.
MR. GRASSER offered to work with the committee and the suggestions
they heard to try to make this an Alaskan bill. They are open to
suggestions, and they are trying to offer an opportunity to
students to better their educational format.
Number 2195
CO-CHAIRMAN DYSON made a motion to continue the hearing on HB 113
until Tuesday of next week. There were no objections.
The Committee took an at-ease from 3:54 p.m. to 4:01 p.m.
HB 168 - HEALTH FACILITY PAYMENT DECISIONS
Number 2176
CO-CHAIRMAN COGHILL announced the next order of business as House
Bill No. 168, "An Act relating to actions of the Department of
Health and Social Services regarding certain health facility
payments."
Number 2164
JEFF LOGAN, Legislative Assistant for Representative Green,
presented the sponsor statement for HB 168. He explained that the
legislature has issued expressions of support for small and large
businesses in the state. One way they did that a few years ago,
was to provide a clear time line in which the state was supposed to
pay businesses for services and goods that were rendered to the
state. There was much discussion then that paying the state's
bills on time was important. This bill is about paying the state's
bills to health care providers, who are reimbursed for services
covered under Medicaid. The issue is the reimbursement and the
reimbursement rate, and specifically how to appeal that rate, if
the business doesn't think it covers their expenses.
MR. LOGAN explained that HB 168 accelerates the process through
which providers appeal those reimbursement rates. This issue has
been around for ten years. In March 1989 then-Governor Cowper
issued Executive Order 72, which moved the rate setting and appeals
process into the Department of Health and Social Services (DHSS).
There was a bill in the legislature which tried to clarify what the
governor had said and further specify what some of the timeliness
were. The legislation was SB 431 in 1990. This has been a topic
of discussion since then.
MR. LOGAN told them that currently the process is that rate is
appealed to a hearing officer, and the hearing officer renders a
decision to the commissioner. He directed their attention to page
2, line 5 of the bill which is capitalized and says: THE
COMMISSIONER MUST, WITHIN 30 DAYS AFTER RECEIVING THE
RECOMMENDATION OF THE HEARING OFFICER, EITHER RENDER A DECISION IN
THE CASE OR REFER THE CASE BACK TO A HEARING OFFICER FOR ADDITIONAL
FINDINGS. The crux of HB 168 is found on page 2 on line 16 at (c)
where it changes the capitalized language to: "The commissioner
shall, within 30 days after receiving the recommendation of the
hearing officer, render a final administrative decision in the
case. If after 30 days the commissioner does not render a final
administrative decision, the hearing officer's recommendation
becomes the final administrative decision." There is no provision
for the commissioner to send it back to the hearing officer. The
commissioner has to make a decision in 30 days or the hearing
officer's decision stands. That decision can then be further
appealed to the superior court. The people who are providing these
services came to the sponsor and said they needed some help. They
are not getting their money back for the services they provide. It
was agreed that providing some finality might be the way to take
care of this.
Number 1999
REPRESENTATIVE WHITAKER wondered if the rather large fiscal note
attached to this bill was reasonable.
REPRESENTATIVE GREEN explained that a couple of years ago he had a
bill to adjust the procedure by which tax appeals were rendered.
To set up two Administrative Law Judges, an office manager and a
new office, the total would be $284,000 a year, as opposed to these
people looking at $367,000. He submits it does seem
disproportionate.
REPRESENTATIVE WHITAKER concurred and said this isn't the first
time in this committee that they have seen this sort of fiscal
note. He commented that when he sees this sort of thing, it
certainly jades his decision making process. In the future, those
that do this should be aware of that.
REPRESENTATIVE BRICE asked if the changes reflect strictly back on
the Medicaid rate establishment.
MR. LOGAN answered that is correct. It is the administrative
procedure under AS 47.07.075 which deals with the reimbursement
rates for those Medicaid procedures the state covers.
Number 1879
DAN HOUGHTON, Chief Financial Officer, Alaska Regional Hospital,
testified via teleconference from Anchorage in support of HB 168.
They need a timely appeals process in place that allows them to
bring to the table issues that have either not been resolved or
disputed in the informal rate hearing process. In the appeals
process, when the hearing officer renders a decision that the
commissioner still does not feel comfortable with, the facility
will have legal judicial review in place that they can appeal to a
body outside the [DHSS]. He urged the committee to support HB 168.
CO-CHAIRMAN DYSON asked what the time lag is between when they
submit a bill to the time they get paid.
Number 1808
MR. HOUGHTON answered that an interim payment on a current year
bill is averaging 70 to 75 days per payment. In the appeals
process, they are most concerned about when they do not agree with
the rate that has been given, and they do not feel that their costs
are being covered, they need to have a timely process in place to
resolve the issues.
CO-CHAIRMAN DYSON asked if they get paid during an appeal or are
the rates suspended.
MR. HOUGHTON replied if the hearing officer rules in their favor
and the commissioner agrees, the rate will be adjusted per that
decision back to whatever year they are actually appealing, and
there is an incremental payment given to the facility. Or vice
versa, there would be a money withheld from future payments to that
facility.
Number 1688
LARRAINE DERR, President, Alaska State Hospital and Nursing Home
Association (ASHNHA), came forward to testify. The association
supports this legislation. There are appeals outstanding from
1994, and there is any where from $10 to $25 million dollars in the
pipeline. It has been a problem for some time. She had a letter
dated October 3, 1994 that Representative Gary Davis sent to the
DHSS from which she quoted:
It is my understanding that imposing a deadline on the
hearing officer's proposed decision was the legislature's
intent when it passed Senate Bill 431 in 1990. It seems
one of the concerns addressed by SB 431 was the backlog
of medicaid appeals. In several cases, health facilities
have waited, or are waiting, for more than two years for
a decision to be proposed. Again, this does not seem to
be fulfilling the legislation's intent.
I hope the department will consider the inclusion of a
deadline for a proposed decision within these proposed
regulations.
MS. DERR noted five years ago they were talking about some sort of
a deadline to give some finality to the process.
Number 1598
GARTH HAMMOND, Chief Financial Officer, Bartlett Regional Hospital
(BRH), shared their experience related to a current appeal. In
December 1993, BRH installed a magnetic resonance imager (MRI).
Eighteen months later in June 1995, the department conducted an
audit and concluded, among other things, to disallow costs
associated with the MRI; there were other issues in that audit.
Twelve months later, the hearing officer of the department issued
a decision that was partly in their favor relating to the MRI.
They had not, in fact, exceeded the cost up to the threshold to be
allowed. In December of 1997, the commissioner sent the appeal
back to the hearing officer with instructions to require more
information about this Certificate of Need. Eight months later in
August 1998, a decision was issued by the hearing officer on the
Certificate of Need issue; and they still don't have a resolution
to that question. The MRI was installed in December 1993. Now it
is 1999, and there has been no decision on that issue. The
department takes a long time. The fact that the decisions take too
long costs money, as they have consultants and attorneys involved.
Since they have an open appeal rated to their fiscal year 1994
audit, their 1996 rate; then it has become necessary for them to
appeal subsequent rates, and they pile up.
MR. HAMMOND noted that in July 1998, they made their final payment
on the MRI. Now they are considering whether they need to upgrade
or replace that equipment since technology changes so quickly.
They are still waiting for a decision from the state as to whether
they will pay them for the services provided to all patients,
including Medicaid patients, which they pay for since the time the
equipment was installed. There will be times when they will
disagree, but there is no way to get resolution and move on in the
process. The hearing is hung up waiting for whatever is next.
REPRESENTATIVE BRICE asked what the level of complexity is involved
in the issues at Bartlett.
Number 1440
MR. HAMMOND replied that the Medicaid rate system is a complex
system, but the hearing officer moved along in making
recommendations on it. They went through a two week hearing, and
he has a box of paper; attorneys and consultants were involved on
both sides. The hearing officer has made a recommended decision a
couple of different times on the issues. The issues are complex,
but five or six years is a long time.
REPRESENTATIVE GREEN asked if there would have been a quicker
resolve had there been some impartial way or fact that could say
the MRI charges are valid or not, and then allow them to get on
with the process. Since they are in limbo, they have no recourse,
except to try and get it rendered before they can go beyond that.
Number 1381
MR. HAMMOND commented that it could look like the hearing officer
is not impartial since she works for the department, but she has
ruled in their favor, and they still cannot get a decision out of
the department.
REPRESENTATIVE GREEN noted that Ms. Derr was commissioner of the
Department of Revenue at one time and asked her if, at that time,
there was an intermediary in tax appeal cases.
MS. DERR concurred there was a mediation step.
REPRESENTATIVE GREEN asked her if she thought something like that
would be helpful in this case.
Number 1325
MS. DERR agreed there has got to be something better.
CO-CHAIRMAN DYSON asked Mr. Hammond if they borrow against their
accounts receivable.
MR. HAMMOND answered no they do not.
CO-CHAIRMAN DYSON asked what it costs them to have outstanding
money due them.
Number 1291
MR. HAMMOND said BRH is in reasonable financial shape. They
borrowed on the MRI at about 5 percent; they earn 5 to 6 percent on
their investments. There are hundreds of thousands of dollars for
them each year these appeals are outstanding. Each year there is
the opportunity cost of not having that money for operations. The
back interest is not paid so they don't have the money, and there
is no interest coming when there is a settlement.
CO-CHAIRMAN COGHILL asked for clarification on the process of
appeal.
MR. HAMMOND explained that a rate is established, which in the
hospital's case is a percent of charges. When there is a dispute
or disagreement about that rate being too low, they appeal that
rate. If the department sets a rate at 65 percent of charges, they
are paid at that rate, and what is in dispute is the other 10
percent the hospital thinks it should be. The hospital is paid at
the lower rate; that is the cash they receive. They appeal and,
pending a settlement, then the additional 10 percent will be
computed and forwarded on.
CO-CHAIRMAN COGHILL asked about the nature of the disputes and the
reason they are declined.
Number 1164
MR. HAMMOND explained it is a complex issue. The kinds of appeals
are varied. In their case, the appeal on the MRI was that they had
signed a contract for the unit to be installed for less than $1
million, which is the ceiling threshold on a Certificate of Need.
There were some unforeseen costs, and the bill was over $1 million,
so then the department disallowed all costs for that, saying BRH
should have obtained a Certificate of Need. There is a complicated
year-end conformance calculation; there are allowances or
disallowances disputes over whether certain kinds of costs should
be allowed or not.
MR. HAMMOND cited an example in the Medicare program. They make an
adjustment each time that disallows the cost of a telephone or
television in a patient's room. Most people take those things for
granted, but the Medicare program doesn't allow those costs. It is
disputes over what kinds of costs are allowable and the kinds of
adjustments that are made to allowable costs to compute the payment
rate in the facility.
Number 1001
JAY LIVEY, Deputy Commissioner, Department of Health and Social
Services, came forward to testify. He explained that DHSS is
concerned about this bill because they believe it directly affects
their ability to control the Medicaid budget. The facility's
portion of the Medicaid budget is about 40 percent of total
expenditures. The primary method they have to control facility
costs is how they set the reimbursement rate. In hospitals, they
set up a percentage of charges, and in nursing homes they set a per
day rate. That rate is set once a year for each facility. That
rate is challengeable by the facilities, and that becomes the
nature of the appeals.
MR. LIVEY explained that every bill they get from BRH, they pay at
65 percent (or whatever the rate is), and that rate applies for the
rest of that year. The nursing homes are paid a per day rate, and
hospitals are paid a per procedure rate, which includes supplies,
drugs, lab tests, x-rays, and so on.
CO-CHAIRMAN DYSON asked Mr. Livey what the hospital would be
contesting.
Number 0754
MR. LIVEY explained the way the rate system works is: The
department pays the facilities based on their cost of providing
service to Medicaid patients. The facilities fill out a cost
report, which tells the department what all their costs are, and
the department audits the cost report. Then they will say there is
a misallocation of square footage to Medicaid. When the hospital
submits the bill to the department, they don't take the cost of
televisions for Medicaid patients out of their bill, but the
department takes them out. Once those costs are taken out, then
the cost basis left becomes what the rate is calculated on. They
are arguing about the costs that the department has taken out of
the bill, but the department pays the facilities the rate
percentage of each bill throughout the year. They set up the rate
at the beginning of the year; every time the hospital submits a
bill on behalf of a Medicaid patient, they pay that rate.
CO-CHAIRMAN COGHILL asked if it is true during the appeals process
that the department pays in the 70 to 80 day period.
Number 0485
MR. LIVEY replied that that is what the gentleman from Alaska
Regional Hospital testified, and he was actually surprised; he
thought they paid the bills faster. In the Medicaid program, they
pay bills electronically, and he believes they pay almost all of
their bills within ten days. Hospital bills must be treated
differently, he is not questioning Mr. Houghton, but they pay on a
regular schedule. The percentage that BRH gets goes into the
computer when the bill comes in, and the bill is cleared, then they
just pay it. They don't have to argue over every bill that comes
in.
CO-CHAIRMAN COGHILL asked if their auditing process happens after
the fact.
MR. LIVEY answered yes. When they are ready to set a rate for a
facility, and if the facility has a July 1 fiscal year, they will
set a rate that starts their new fiscal year on July 1, 1999. They
will have taken a look at all of their expenditures in their fiscal
year 1996. The facility does a cost report for the DHSS; they tell
the department all their expenditures related to Medicaid for the
year 1996. The DHSS then audits those 1996 costs; they inflate
those costs by two years, because there are two years in between,
and that becomes their 1999 rate. They are arguing over the cost
that is located in the cost report. If the DHSS doesn't take those
costs out, then they will roll into 1999 and into future years.
Being able to audit those cost reports is critical.
CO-CHAIRMAN COGHILL asked if the time frame on those might require
a history search of two years.
MR. LIVEY answered any appeal that is filed, for example, if they
set a facility rate in July 1999, that rate will be appealing the
1996 audit. There is a history then of going back and reviewing
the costs, and the cost report that went into setting that 1999
rate.
Number 0295
CO-CHAIRMAN COGHILL asked how long the hearing officer has to
review that before forwarding it on, and if there is a time frame
for the hearing officer.
Number 0285
MR. LIVEY answered there is language in AS 47.070.075 that the
hearing officer has to schedule a hearing within 120 days, unless
there is good cause for her not to do that. In the past, they have
assumed that good cause meant that they couldn't get hearings
scheduled. They have one hearing officer and limited attorneys on
the state side to do this work. There are a couple of attorneys on
the facility's side that do most of this work, and so the reality
is, it takes a year and a half to even schedule a hearing. In one
proposed decision from the hearing officer for the DHSS to review,
the decision itself was 200 pages. The transcripts that they were
sent to review in that case had 1,500 pages, and that didn't
include all the depositions. These are very complicated cases.
CO-CHAIRMAN COGHILL agreed all that paperwork would take a long
time to go over, but also there should be some finality. He
wondered if they put more than a 30-day limit would that give the
department more latitude.
Number 0074
MR. LIVEY agreed a longer period of time would make them feel
comfortable. He agrees that it takes too long to do appeals. He
thought Ms. Derr's suggestion of setting up a mediation process is
a good idea. Once they get in to the appeal, and they are under
the Administrative Procedures Act, then they are into depositions
and evidence and formal hearings, post hearing briefs, and so
forth, which takes a lot of time and costs money. They need to set
up a process to short circuit the appeals, or reduce the number of
issues that go forward.
TAPE 99-36, SIDE A
[Due to recording malfunction, the following testimony was
reconstructed from log notes.]
CO-CHAIRMAN DYSON asked Mr. Livey why the department hasn't done
anything about this problem sooner.
MR. LIVEY answered that they have had other things take priority
for their time and money. It hasn't been at the top of their list,
but now it is.
CO-CHAIRMAN DYSON asked if it was because they don't have enough
people.
MR. LIVEY answered that they only have one hearing officer.
CO-CHAIRMAN DYSON asked if there has been any discussion on paying
interest.
MR. LIVEY would have to check on that; it may be a legal issue.
CO-CHAIRMAN DYSON asked how long would it take them to improve the
process.
MR. LIVEY answered it will take time to find the resources, but he
believes it will take at least a year to see a reduction in time.
CO-CHAIRMAN DYSON asked him if they could work out the mediation
aspect.
MR. LIVEY agreed they could work on that.
REPRESENTATIVE GREEN hopes they can find a real workable solution
and he is amenable to that by next Thursday. Time is of the
essence for the businesses, and he hopes they can move toward a
resolution that represents both sides.
CO-CHAIRMAN COGHILL announced they will take this up again a week
from Thursday. [HB 168 is held over.]
ADJOURNMENT
There being no further business before the committee, the House
Health, Education and Social Services Committee meeting was
adjourned at 4:50 p.m.
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