Legislature(2003 - 2004)
03/18/2003 03:02 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
March 18, 2003
3:02 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Carl Gatto, Vice Chair
Representative Paul Seaton
Representative Kelly Wolf
Representative Sharon Cissna
Representative Mary Kapsner
MEMBERS ABSENT
Representative Cheryll Heinze
COMMITTEE CALENDAR
HOUSE BILL NO. 152
"An Act relating to payment rates under the Medicaid program for
health facilities and to budgeting, accounting, and reporting
requirements for those facilities; abolishing the Medicaid Rate
Advisory Commission; and providing for an effective date."
- MOVED HB 152 OUT OF COMMITTEE
HOUSE BILL NO. 153
"An Act repealing the statute that sets priorities for the
Department of Health and Social Services to apply to
administration of the medical assistance program when there are
insufficient funds allocated in the state budget for that
program; authorizing the department to make cost containment
decisions that may include decisions about eligibility of
persons and availability of services under the medical
assistance program; and providing for an effective date."
- MOVED HB 153 OUT OF COMMITTEE
HOUSE BILL NO. 172
"An Act relating to eligibility requirements for medical
assistance for certain children, pregnant women, and persons in
a medical or intermediate care facility; and providing for an
effective date."
- MOVED HB 172 OUT OF COMMITTEE
HOUSE BILL NO. 167
"An Act relating to grants for alcoholism and drug abuse
programs; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 165
"An Act relating to community schools; and providing for an
effective date."
- BILL HEARING POSTPONED
HOUSE BILL NO. 154
"An Act relating to admission to and advancement in public
schools of children under school age; and providing for an
effective date."
- BILL HEARING POSTPONED
PREVIOUS ACTION
BILL: HB 152
SHORT TITLE: HEALTH FACILITY MEDICAID RATES/ADV. COM'N
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0418 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0418 (H) HES, FIN
03/05/03 0419 (H) FN1: (HSS)
03/05/03 0419 (H) GOVERNOR'S TRANSMITTAL LETTER
03/18/03 (H) HES AT 3:00 PM CAPITOL 106
BILL: HB 153
SHORT TITLE: MEDICAID COST CONTAINMENT & PRIORITY LIST
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0420 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0420 (H) HES, FIN
03/05/03 0420 (H) FN1: ZERO(HSS)
03/05/03 0420 (H) GOVERNOR'S TRANSMITTAL LETTER
03/18/03 (H) HES AT 3:00 PM CAPITOL 106
BILL: HB 172
SHORT TITLE: MEDICAID:CHILDREN/PREGNANT WOMEN/FACILITY
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0446 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0446 (H) HES, FIN
03/05/03 0446 (H) FN1: (HSS)
03/05/03 0446 (H) GOVERNOR'S TRANSMITTAL LETTER
03/18/03 (H) HES AT 3:00 PM CAPITOL 106
BILL: HB 167
SHORT TITLE: ALCOHOLISM AND DRUG ABUSE GRANTS
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/05/03 0439 (H) READ THE FIRST TIME -
REFERRALS
03/05/03 0439 (H) HES, FIN
03/05/03 0439 (H) FN1: (HSS); FN2: (HSS)
03/05/03 0439 (H) FN3: (HSS); FN4: (HSS)
03/05/03 0439 (H) GOVERNOR'S TRANSMITTAL LETTER
03/05/03 0439 (H) REFERRED TO HES
03/13/03 (H) HES AT 3:00 PM CAPITOL 106
03/13/03 (H) Scheduled But Not Heard
03/18/03 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
JOEL GILBERTSON, Commissioner
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Explained the purpose of HB 152, HB 153,
and HB 172, and answered questions from the committee.
JACK NIELSON, Executive Director
Medicaid Rate Advisory Commission
Division of Medical Assistance
Department of Health and Social Services
Anchorage, Alaska
POSITION STATEMENT: Answered questions from the committee on HB
152.
BOB LABBE, Deputy Commissioner
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 152, HB 153, and
HB 172, and answered questions from the committee.
DENNIS MURRAY, Administrator
Heritage Place Nursing Facility
Soldotna, Alaska
POSITION STATEMENT: Testified on HB 152 and HB 153.
ELMER LINDSTROM, Special Assistant
Office of the Commissioner
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 167 and answered
questions from the committee.
PAM WATTS, Executive Director
Governor's Advisory Board on Alcoholism and Drug Abuse
Office of the Commissioner
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Testified on HB 167 and answered questions
from the committee.
MATT FELIX
National Council on Alcoholism
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 167.
ACTION NARRATIVE
TAPE 03-26, SIDE A
Number 0001
CHAIR PEGGY WILSON called the House Health, Education and Social
Services Standing Committee meeting to order at 3:02 p.m.
Representatives Wilson, Gatto, Seaton, Cissna, and Kapsner were
present at the call to order. Representative Wolf arrived as
the meeting was in progress.
HB 152-HEALTH FACILITY MEDICAID RATES/ADV. COM'N
HB 153-MEDICAID COST CONTAINMENT & PRIORITY LIST
HB 172-MEDICAID:CHILDREN/PREGNANT WOMEN/FACILITY
CHAIR WILSON announced that the first order of business would be
HOUSE BILL NO. 152, "An Act relating to payment rates under the
Medicaid program for health facilities and to budgeting,
accounting, and reporting requirements for those facilities;
abolishing the Medicaid Rate Advisory Commission; and providing
for an effective date"; HOUSE BILL NO. 153, "An Act repealing
the statute that sets priorities for the Department of Health
and Social Services to apply to administration of the medical
assistance program when there are insufficient funds allocated
in the state budget for that program; authorizing the department
to make cost containment decisions that may include decisions
about eligibility of persons and availability of services under
the medical assistance program; and providing for an effective
date"; and HOUSE BILL NO. 172, "An Act relating to eligibility
requirements for medical assistance for certain children,
pregnant women, and persons in a medical or intermediate care
facility; and providing for an effective date."
CHAIR WILSON explained that the three bills would be looked at
as a group because each bill on its own does not demonstrate
what the administration is trying to achieve. She reminded the
committee of the reorganization overview the Department of
Health and Social Services presented to the committee [on
3/11/03] and said these bills will assist in implementation of
that reorganization.
Number 0211
JOEL GILBERTSON, Commissioner, Department of Health and Social
Services, explained that HB 152, HB 153 and HB 172 are part of a
larger effort by the governor to control the growth of the
Medicaid program while preserving services for those who are
currently eligible, stabilizing the program in the coming years,
and as end product having a health care safety-net system that
the state can rely on into the future.
Number 0377
COMMISSIONER GILBERTSON told the committee that a little over
two weeks ago the department [Department of Health and Social
Services] announced a major restructuring of its operations
going into fiscal year 2004 (FY 04). He said there are a number
of changes being done to improve customer service at points of
entry, as well as quality of care that is delivered by the
department to grantees, client beneficiaries, and provider
groups.
Number 0405
COMMISSIONER GILBERTSON referred to a chart ["FY 2004 Medicaid
Services Distribution of Funds"] provided to the committee and
asked the members to note one of the most significant aspects of
the restructuring in the department. He pointed out the
redistribution of funding of the Medicaid program from where it
is currently located, in the Division of Medical Assistance, to
the divisions that are actually administering Medicaid services.
He told the committee next year the department would have the
Division of Children's Services, Division of Health Care
Services, Division of Senior and Disability Services, and
Division of Behavioral Health, all of which will be delivering
aspects of the Medicaid program. Commissioner Gilbertson said
that the department will have directors in each of these
divisions making daily decisions on managing the Medicaid
program, designing the Medicaid services, issuing regulations on
Medicaid services that they provide, and, for the first time,
having actual budgetary responsibility for those decisions.
Number 0475
COMMISSIONER GILBERTSON explained that the first chart in the
packet shows how the FY 04 Medicaid budget will be broken up in
the department. Currently, all Medicaid funding is located in
the Division of Medical Assistance, which will no longer exist
under the restructuring plan. He said roughly $930 million will
be broken up, with the bulk of it, $630 million, going to the
Division of Health Care Services. This division will continue
on with most of the Division of Medical Assistance's previous
functions, but the department will also be adding in a number of
functions from the Division of Public Health. For example, the
EPSDT [Early and Periodic Screening, Diagnostic and Treatment]
for breast and cervical cancer, family planning, genetic
screening, and some infant services will be provided through the
Division of Health Care Services.
COMMISSIONER GILBERTSON said the next largest portion displayed
on the chart is the Division of Senior and Disability Services.
He said this will be a large portion of the restructuring and
integration as the department takes over the Division of Senior
Services from the Department of Administration. The department
will be combining that division with the developmental
disabilities services that currently are underserved through the
Division of Mental Health and Developmental Disabilities, to
create a new Division of Senior and Disability Services. He
told the committee that this change will allow the department to
unify all of the "waiver services" in one division. This will
also mean that there will be a single point of entry for all of
[the state's] senior services. He told the committee this is an
issue seniors have been pushing for a very long time and
something they deserve. Customer service and continuum of care
for seniors will be overseen by one division director. The
amount of $196 [$191.6] million will be budgeted for that
division and the department will have a division director who
will be appearing before the legislature and who will be
accountable for the waitlist, budget, and policy decisions
behind the waitlist, rather than having it fractured the way it
is right now.
Number 0540
COMMISSIONER GILBERTSON told the committee the third largest
portion of the budget, which is $108.7 million, will go to the
Division of Behavioral Health. He explained that this division
joins the current Division of Alcohol and Drug with the Division
of Mental Health and Development Disabilities, taking the mental
health component from that and merging it with the alcohol and
drug abuse component so there is one division focused on
behavioral health services. In many regions across the state,
particularly in Western Alaska, the mental health providers and
the substance abuse providers are the [same] individuals. He
said this will allow grant efforts and decisions to be made
recognizing the fact that there is a tremendous link between
alcohol and mental health services. This change really benefits
the system and benefits the quality of care the state delivers.
He reiterated that this [restructuring] plan will assure that
there will be an individual who will be administering and
managing Medicaid services and who will be accountable for the
financial condition of the division.
COMMISSIONER GILBERTSON said a small portion of the budget that
goes to the Division of Children's Services is $5.8 million,
which is associated with behavioral rehabilitation services
[residential child care] that are being administered through the
Division of Family and Youth Services.
Number 0645
REPRESENTATIVE SEATON asked Commissioner Gilbertson if the
portion allocated for the Division of Senior and Disability
Services incorporates estimates for increases that may result
from the elimination of the Longevity Bonus Program.
COMMISSIONER GILBERTSON responded that it does not. He said
this budgetary component is a redistribution of Medicaid
funding. He said if there is an assumption that there will be
additional costs based on the elimination of the Longevity Bonus
Program, it would certainly be less than the longevity bonus
payments themselves. That cost is not shown in the figures
before the committee.
Number 0716
COMMISSIONER GILBERTSON said that in conjunction with these
efforts, the governor has proposed a number of cost-containment
mechanisms within the Medicaid program to stabilize costs and
preserve services for beneficiaries, including services such as
a preferred drug list, a transportation brokerage for non-
emergency services, and a host of regulatory actions by the
department that will help maintain costs.
Number 0845
COMMISSIONER GILBERTSON told the committee the governor has
submitted three statutory items that are before the committee
today. The first one is HB 152, which would eliminate the
Medicaid Rate Advisory Commission (MRAC). He explained that the
commission was established in 1984 and was at that time
responsible for establishing the state's Medicaid payment rates
to facilities. In 1989, by executive order, the MRAC became
advisory only, and the department became responsible for setting
the rates. In 1997, federal law that called for certain
statutory requirements for how rates would be set in Medicaid
programs was changed and Alaska followed those requirements in
establishing fair and reasonable costs. However, Alaska's
statutory provision remained, even though the federal law had
changed.
COMMISSIONER GILBERTSON explained that the proposed changes to
these sections bring Alaska's statutes into alignment with
federal law and remove unnecessary provisions. Removing the
Medicaid Rate Advisory Commission also removes the duplicative
public process that is currently done, but not required in
federal statute. He said current Alaska statutory language
requires a standard. The department set rates for all
facilities from a 10-bed facility up to one that has over 200
beds using the exact same methodology. To promote adequate
payment rates as well as cost containment for the state, the
department would like the flexibility to use varying
methodologies for each facility because each facility has
different circumstances. The proposed legislation would also
simplify the statutes and provide the department and the
facilities with the necessary flexibility for rate setting. He
reiterated that current rate setting is being done by the
department, and the MRAC serves solely in an advisory capacity.
He pointed out that there is an administrative cost, even though
it serves in an advisory capacity and the elimination of the
commission will provide a nominal savings for the state.
Commissioner Gilbertson told the committee this bill is an
acknowledgement of current practice and should be done to
clarify current Medicaid rate setting functions.
Number 0866
REPRESENTATIVE KAPSNER asked who sits on the commission now and
if those members provide input that is beneficial to the
department.
COMMISSIONER GILBERTSON referred the question to Jack Nielsen,
the executive director of the Medicaid Rate Advisory Commission.
Number 0899
JACK NIELSON, Executive Director, Medicaid Rate Advisory
Commission, Division of Medical Assistance, Department of Health
and Social Services, testified via teleconference from
Anchorage. He told the members the MRAC has a CPA [certified
public accountant], a physician, a department representative, a
health facility administrator, and a consumer representative
that preside over the facility rate hearings and public hearings
on rates, and provide input and analysis based on "facility
comments" and staff comments.
Number 0937
REPRESENTATIVE KAPSNER asked Mr. Nielson if he believes the
department would get adequate information if the commission were
disbanded.
MR. NIELSON replied that he thinks the department could set
rates without the commission's assistance.
CHAIR WILSON commented that she received a call earlier in the
day from a member of the commission who told her that the
members support this legislation.
Number 0973
REPRESENTATIVE CISSNA asked, if the legislature abolishes the
commission and the method of gathering public input, where the
information will come from.
COMMISSIONER GILBERTSON responded that during the restructuring
of the department, an office of rate review will be established.
He said the department will bring individuals who have been
working on rate setting into one office. There will still be
data collection covering department activities and there will
still be information collected to provide good information for
rate setting. Currently, MRAC serves only in an advisory
capacity. The department's position is that it should be
aligned with federal law. He said MRAC is acting in a different
capacity than what it was originally intended by executive
order. He told the committee the department will have adequate
access to information through cost reports and other data to set
reasonable rates. Commissioner Gilbertson said there will still
be a public process; however, rather than two public processes
there will be one.
Number 1078
BOB LABBE, Deputy Commissioner, Department of Health and Social
Services, testified that the department does collect information
from facilities through Medicare cost reports. He said it also
gets requests for information from other planning efforts that
are ongoing with respect to the facility-costs issues and
patient days. Mr. Labbe told the committee that the new office
of rate review would actually broaden the scope of information
gathering and would work to find information on various types of
rate activities within the department. He said the commission
has been focused fairly narrowly on hospitals, nursing homes,
and rural health clinic services, and not as broadly on pharmacy
rates, physician rates, or childcare rates. The department is
looking at something more comprehensive.
Number 1142
REPRESENTATIVE GATTO asked Mr. Labbe how long he has worked in
the department.
MR. LABBE said he has served as the deputy commissioner since
January, but had previously worked in the department in another
role for seven and a half years.
REPRESENTATIVE GATTO asked why the MRAC was established and how
that need has been diminished.
MR. LABBE responded that both the need and federal law have
changed. He said Mr. Nielson would have some recollection of
the history of the commission.
Number 1199
MR. NIELSON said in 1984, federal law required states to pay for
facilities services through a retrospective cost-based system,
and costs were increasing so rapidly that Congress changed the
federal law to provide more flexibility to states to establish
rates. He said it was at that point when Alaska decided to go
from a retrospective cost to a more flexible process through the
commission. Then, in 1997, the law changed again to provide
more flexibility, and really all it does now is require a public
hearing on the rates and opportunities for people to comment.
There has been an evolution in federal law.
Number 1258
CHAIR WILSON asked if there will still be a place for public
input.
COMMISSIONER GILBERTSON responded that is correct. He said the
way it now stands, there are two public hearings, but through
this new public process there would be a hearing process through
[the department's] office of rate review. He said as Deputy
Commissioner Labbe mentioned, MRAC does the facilities-based
rate setting, but the department does a whole host of other
payments as well. It does reimbursement rates for physicians,
childcare services, and a whole host of other rate-setting
functions that go through the traditional public process. This
is a duplicative process, as it now exists. Commissioner
Gilbertson explained that this is a structural change in the
department so that it has one office of rate review and a
uniform rate-setting system across the state.
Number 1329
COMMISSIONER GILBERTSON told the committee the second bill he is
here to introduce on behalf of the governor is HB 153, which
would eliminate the options list under Medicare. He said under
current statute, a priority list for medical assistance has been
created; in which years when there have been insufficient funds
allocated to fully fund the Medicaid program, the department can
begin eliminating services along the options list as a way of
bring cost containments to the Medicaid program. The
administration's position and the department's position is that
the existing list is not an effective management tool. If used,
it needlessly results in the denial of services and does not
necessarily result in cost-effective management of Medicaid
services.
COMMISSIONER GILBERTSON told the members that the proposed bill
would replace the obsolete language with broad, general
authority for the department to undertake cost-containment
measures based on three key principles. First, the department
must pursue all other reasonable cost-containment measures
before eliminating any eligibility group or services. Second,
the department must aggressively pursue strategies to maximize
federal financial participation in the Medicaid program. For
example, the governor's current budget put a priority on
identifying areas in which the federal government is not fully
paying for its share of the Medicaid program, namely, close to
between $17 and $19 million that should have come to the state
for services that were eligible for a federal Medicaid match
through grant programs. Third, cost-containment decisions
should be made in a manner that best reflects the needs and
interests of eligible recipients.
Number 1396
COMMISSIONER GILBERTSON pointed out that the fiscal note
associated with this bill shows a zero savings. Assuming the
governor's budget and proposals are passed, the department does
not anticipate using any of this new authority to have
additional cost-containment measures. He said this is simply
replacing an obsolete options list that the administration
believes is unworkable and not an appropriate way of
administering the Medicaid program. He recommended that the
committee look at the options list provided and asked them to
note the services that would be eliminated in years in which
there would be insufficient funds allocated to the department
for its Medicaid program operations. First, would be clinical
social workers services, then psychologist services, then
chiropractic services, then advanced nurse practitioner
services, then adult dental [services], then emergency hospital
service and a host of other services.
COMMISSIONER GILBERTSON said it would be difficult for the
department to justify one before another. Some would result in
increased costs, some are preventative in nature, and some are
acute care. Commissioner Gilbertson said it is a list that the
department does not believe is effective for cost containment.
The administration does understand the reason behind the
legislation that created this. There is a need to prioritize
services at times when the state cannot fully fund all services;
however, he offered the belief that this can best be managed by
having flexibility retained by the executive branch and the
department that oversees the program to ensure that
beneficiaries are not being unnecessarily harmed by those
decisions.
Number 1546
CHAIR WILSON noted that emergency hospital services would be
eliminated before physical therapy. She said she does not
believe the options list is even close to being properly
prioritized.
Number 1545
MR. LABBE offered a point of clarification on emergency
services, saying the item listed on the options list refers to
emergency services to a facility that is not licensed as a
hospital. He said this does not mean the state would not pay
Bartlett Hospital for emergency services. That is mandatory.
This is an odd one, he remarked. There is a definitions section
to the bill. Mr. Labbe pointed out that in order to achieve
savings, since "we" have about 60 percent federal funding, and
the department is looking for general fund savings, there would
have to be pretty significant cuts down the list before the
department would get any savings. He told the committee in this
situation there would have to be a discussion and decision about
whether the state would cover all the people or not provide
prescription drug coverage for those it does cover. It is that
kind of a discussion the administration would be having. The
department cannot get there with the list.
Number 1612
COMMISSIONER GILBERTSON spoke to the final bill in the package,
HB 172, which would freeze income levels for eligibility for
Denali KidCare, Medicaid coverage for pregnant women, and the
special income limit for nursing homes and home- and community-
based waiver services. Under current law income standards are
adjusted annually based on cost of living. There is a desire by
the administration to not roll back coverage, not remove
individuals from programs such as Denali KidCare or insuring
pregnant women under Medicaid. However, the administration does
have to take steps at this point to contain the growth of the
program and strengthen and stabilize it to prevent what could
occur in future years. The administration sees that at some
point the state may have the inability to fully fund services,
and that would require the department to pull back core
emergency services and vital coverage options for low-income
populations.
Number 1660
COMMISSIONER GILBERTSON said the administration needs to take
steps to control growth and maintain the eligibility populations
at what the state has right now, which is what it can afford.
He reiterated that those that are being covered right now are
the ones [the state] can afford to cover; however, new ones will
be added and some will be removed in time. The general
structure of what is affordable and where to draw the line will
remain at the 200 percent threshold for Denali KidCare and not
go higher after 2003. This obviously will affect eligibility
levels, and the fiscal note shows nominal savings in the coming
years. He said the administration believes it is a prudent step
that should be taken at this time to ensure the stability of the
program and the ability of the state to fully fund all the
services it currently offers for the eligible population that it
currently covers.
Number 1695
REPRESENTATIVE WOLF asked if the income levels on page 4 are
based on gross income, not net income.
Number 1710
COMMISSIONER GILBERTSON responded that is correct. He said
those are the current eligibility standards for the three
population [Denali KidCare participants, pregnant women, and
individuals receiving care in nursing homes] groups. This is an
effort to lock the current eligibility levels, which are at the
maximum allowable level for the state.
Number 1720
REPRESENTATIVE KAPSNER asked what programs will be affected by
this bill.
COMMISSIONER GILBERTSON replied that they are Denali KidCare,
pregnant women, and individuals receiving nursing home care and
home-based waivers.
REPRESENTATIVE KAPSNER asked if the income eligibility levels
are based on federal poverty guidelines.
COMMISSIONER GILBERTSON responded that they are based on the
federal poverty guidelines for Alaska.
REPRESENTATIVE KAPSNER commented that the state could have kids
who are over the 300-percent-of-poverty guidelines who might not
be getting services in the future.
Number 1759
COMMISSIONER GILBERTSON responded that the current income
threshold for eligibility for Denali KidCare is 200 percent over
the poverty guidelines for FY 03. That is the amount the
administration wants to lock in. He said he believes
Representative Kapsner's concern is based on the effect
inflation will have on poverty levels. He said that inflation
will not be reflected in the poverty guidelines. That
assumption is correct. He told the committee that this is a
policy decision by the administration that the current
eligibility levels are what the state can afford.
COMMISSIONER GILBERTSON told the committee that it is essential
to have prudent cost containment and to ensure that the services
are strengthened so that cuts will not be necessary in other
areas. He commented that there are not equal distributions
along income guidelines. The number of individuals at 190
percent of poverty and 200 percent of poverty are not the same
as those below 100 percent of poverty. He said there really are
more individuals in the lower-income [category] than the higher.
The numbers get smaller as income rises. He told the committee
the number of individuals who will be affected even over the
next five years is small. As an example, a family of three
children on Denali KidCare right now can have an income of
$3,130 per month; however, the cost-of-living allowance, which
is about 1.4 percent inflation going into 2004, would increase
that amount to $3,179. So there are individuals who made $49
more per month who could see their services reduced. The
possibility of people still not availing themselves of that
service, knowing that it is a $49 income difference, shows that
there will not be individuals in bulk removed from the Medicaid
eligibility levels, he concluded.
Number 1856
REPRESENTATIVE WOLF asked if a family of four, on last year's
levels, could make $51,600 per year, and qualify for Denali
KidCare, including the PFD [permanent fund dividend] income.
COMMISSIONER GILBERTSON replied that is correct.
CHAIR WILSON responded that that is quite a high income to still
be qualified for the Denali KidCare program.
REPRESENTATIVE WOLF commented that when he was raising his two
children he did not make $51,000 per year.
COMMISSIONER GILBERTSON told the committee the governor's
position is that there currently are have fair standards for
eligibility for the state programs. He said in order for the
department to continue to provide the level of service currently
provided, it will be necessary to cap the eligibility income
guidelines. Commissioner Gilbertson reiterated that he believes
the guidelines are very fair. He said the department does not
see this as an arbitrary reduction in eligibility of the
Medicaid program, but as part of a collection of steps that will
allow [the department] to preserve the program for the future.
Number 1929
REPRESENTATIVE CISSNA prefaced her comments by saying that she
believes the number of children reduced from the rolls will not
be large; however, she is concerned that the administration may
not factor in the accelerating cost of health care and other
possible conditions that could occur in Alaska. She reminded
members that 20 years ago, when many of the members may have
been raising kids, the cost of health care was not very high.
She told the members that at that time she paid 100 percent of
medical expenses, so she can speak to that.
REPRESENTATIVE CISSNA asked the members to look at page 2 of the
fiscal note dated March 5, where there is a table that shows the
reduction of eligible recipients beginning in 2004 at 101; in
2005 it doubles, and the numbers keep going up to five years
out, for a reduction of 832 recipients. It is a definite
reduction, and this is money that is for kids, not for adults.
CHAIR WILSON commented that if the members look at page 4 of the
bill [HB 172] it shows how much a family can make and still be
eligible for Denali KidCare.
REPRESENTATIVE CISSNA said what she is concerned about is how
many children are affected, not how much [the family] makes.
COMMISSIONER GILBERTSON interjected that he believes he knows
Representative Cissna's concern. He asked the members look at
the FY 04 numbers [page 2 of the fiscal note dated March 5,
2003] where there are 61 fewer eligible children for the Title I
[Title XXI Children] Denali KidCare program. He told the
committee the state has about 26,000 children on Denali KidCare.
While the department shows a reduction in FY 04 because of the
new poverty standard for that year, new poverty figures will be
coming out in about one month. The 61 figure is actually
inflated up front because the bill was drafted a month ago, but
the new poverty figures will not come out until next month.
Commissioner Gilbertson said the state has 26,000 children
currently enrolled and will probably have far more in the
future.
Number 2073
REPRESENTATIVE SEATON asked if the PFD counts as income.
COMMISSIONER GILBERTSON responded that to the best of his
knowledge, the PFD income is held harmless.
REPRESENTATIVE WILSON commented that for a family of four, that
would be four PFDs and a significant income amount held
harmless.
REPRESENTATIVE KAPSNER said she knows $52,000 sounds like a lot
of money. However, for individuals living in a small village
with the price of electricity at 53 cents a kilowatt hour, $4
per gallon for gasoline for a snow machine, 4-wheeler, or
outboard motor to go hunting, and $6 or $7 per gallon for milk,
that income does not stretch as far, especially for a family of
four. Representative Kapsner asked when this issue will be
readdressed. She said poor people typically do not have the
capacity to hire a lobbyist to come to the legislature to
advocate for a change in the statute.
Number 2129
COMMISSIONER GILBERTSON told the committee this is statutorily
driven and revisiting it is up to the legislature. He said he
understands the concern of Representative Kapsner, but at this
particular point, the administration is trying to figure out how
it can afford the current Medicaid program as it is currently
structured.
Number 2165
COMMISSIONER GILBERTSON said there is tremendous pressure being
placed on the state's budget, and because of the rising cost in
the Medicaid program, without these changes there are likely to
be far more reductions to the Medicaid program, including the
inability to finance core services. The department is trying to
engage in a collection of activities that can bring about cost
containment on the margins so that it can continue to have a
strong Medicaid program, strong Denali KidCare program, and
insurance program for seniors who are receiving long-term care
services. Absent prudent cost containment, it will become
increasingly difficult for this state to ensure the individual
who is well below 200 percent of poverty will be able to access
emergency, dental, or other health care services.
COMMISSIONER GILBERTSON told the committee the governor and
department are committed to taking those steps in order to
strengthen those programs. There is incredible fiscal
instability in maintaining the Medicaid program at the status
quo. He reported that there was close to $72 million in general
fund program growth in the Department of Health and Social
Services, and over 80 percent of that is associated with the
Medicaid program. These are general fund increases that the
state does not have the capacity to absorb, absent steps taken
at this point, he told members.
Number 2203
CHAIR WILSON pointed out that any legislator could introduce a
bill to address this issue next year. She pointed out that last
year at this time there was a bill in the legislature to bring
the percentage down to 150 percent of the poverty level. She
told the committee she is pleased that the governor is looking
at maintaining the program at 200 percent of the poverty
guidelines.
REPRESENTATIVE SEATON said in reviewing charts provided by the
department, [he found] it looks as though Medicaid-eligible
children's costs have increased much faster than have adult-
eligible costs or Medicaid costs for the elderly. He asked if
there is a $40 million increase from the FY 03 supplemental
[budget] to the projection for FY 04 in the Denali KidCare
program.
Number 2274
COMMISSIONER GILBERTSON responded that that is correct. The FY
03 figures, including the supplemental, had $264 million, and
[the state] is projecting $306 million for coverage through FY
04.
REPRESENTATIVE SEATON said his concern is that the state is
allowing this program [Denali KidCare] to grow very fast, and
yet there are some pretty drastic cuts being proposed for
education for our children.
Number 2298
COMMISSIONER GILBERTSON responded that the chart Representative
Seaton is looking at is not a chart on the Denali KidCare
program, but rather a chart on Medicare services to children.
Denali KidCare's growth is much lower. He said he thinks the
difference between 200 percent of poverty and 150 percent of
poverty is about $3 million in general fund dollars. He told
the committee he believes Representative Seaton was referring to
a larger pool of services in the figures he mentioned.
Number 2336
COMMISSIONER GILBERTSON said Denali KidCare is a special
[insurance] program that allows the state to bring in children
in families that have income levels slightly higher than that
for Medicaid eligibility. This program has helped [the state]
address part of the problem for uninsured children and the
social costs. He said most of the care provided to children in
terms of costs is delivered outside of the Denali KidCare
program through the traditional Medicaid program.
CHAIR WILSON asked if children who live in Native villages, who
do not qualify for the Denali KidCare program, would be provided
health care through some kind of Native funding.
Number 2342
COMMISSIONER GILBERTSON replied that if the individual is an
Alaska Native, he/she would be able to receive services through
an Indian Health Service [IHS] facility. The state has actively
worked with Native health corporations towards having enrollment
in Medicaid programs. He told the committee it is a good deal
for the state because the department receives 100 percent
reimbursement from the federal government for Medicaid services
provided to Alaska Native Medicaid beneficiaries. That care
must be provided through Alaska Native health care facilities
that have compacted to provide IHS services previously. The
state tries to work with Native corporations to have their
populations become dual-eligible. They receive that care at the
facility and there is no cost to the state.
TAPE 03-26, SIDE B
Number 2378
REPRESENTATIVE KAPSNER said she is not necessarily concerned
with just Native kids in the state, but kids in small
communities like Tenakee Springs where the cost of living is
very high. There are a lot of non-Native villages in Southeast
Alaska. She said it is little or no comfort to her to think the
legislature can come back and readjust the figures next year.
She referred to last year's debate on the income tax versus
sales tax and said there was an implied message that people who
do not make a lot of money are not hard workers. Representative
Kapsner said there are not a lot of advocates in the building
for poor people. She said she does not see how the legislature
will come back and give away money to poor people or increase
the money it gives away to poor people in the future. She said
she is sensitive to poor people's issues and taking money away
from people who need it, especially with kids and pregnant
women. She said she does not see the will being there [in the
legislature] to change this at any time.
Number 2336
REPRESENTATIVE WOLF asked if there is any reimbursement from the
federal government for the Denali KidCare program.
COMMISSIONER GILBERTSON responded that the state does receive
funds for the Denali KidCare program. Recently, the state
received a redistribution of funds, as other states are not
fully implemented. He said the state received about $12 million
last year. Since the Denali KidCare program is the state's
children's health care program, it is able to access the
advanced federal medical assistance percentage, which is a
little over 58 percent. The enhanced federal medical
assistance, which is for the Denali KidCare program, Breast and
Cervical Cancer Programs, and other programs, the federal
government has provided incentives for states to participate and
[the State of Alaska] receives between 71 and 72 percent. He
commented that percentage changes each year.
Number 2288
REPRESENTATIVE CISSNA asked what percentage of enrollees in the
Denali KidCare program is Native Alaskans. If they get 100
percent reimbursement from the federal government, does that
means there is no cost to the state?
Number 2271
COMMISSIONER GILBERTSON replied that the state only receives 100
percent reimbursement when the services are provided through a
IHS-compacted facility. If a child is eligible for a state
insurance product, the Medicaid program for example, and
receives that service through the Yukon-Kuskokwim Health
Corporation, [the state] will receive 100 percent reimbursement.
However, if that same child goes to any outside medical
facility, the reimbursement reverts back to the traditional
formula and is not eligible for the 100 percent reimbursement.
He told the committee that statewide the Medicaid program
provides roughly $240 million in Medicaid services to Alaska
Native Medicaid beneficiaries. Of that $240 million, $170
million was provided outside of an IHS-compacted facility or
Native health care system, so the state currently pays $80
million in general funds to provide its 42 percent match for the
Native Medicaid beneficiaries who have chosen to receive
services outside the Native health care system. He summarized
by saying that being an Alaska Native does not mean there is 100
percent reimbursement from the federal government. It is only
when services are provide inside the Native health care system,
and currently most services are provided outside the Native
health care system.
Number 2212
REPRESENTATIVE CISSNA asked how many Native Alaskan children are
enrolled in the Denali KidCare program.
COMMISSIONER GILBERTSON replied that he would provide that
number to the committee.
Number 2205
REPRESENTATIVE GATTO asked if there are any costs to the state
when a Native Alaskan walks into the Alaska Native Medical
Center in Anchorage and receives care.
COMMISSIONER GILBERTSON replied that if the individual is Alaska
Medicaid-eligible, the state is able to charge that back to the
U.S. government at the 100 percent reimbursement rate.
REPRESENTATIVE GATTO asked what the cost would be to the state
if the same person with the same illness walked into Providence
Hospital and received the same service. If, for example, the
cost is $1,000, what is the expense to the state?
COMMISSIONER GILBERTSON responded that in that case the state
would pay 42 percent. He told the committee that the state is
currently working with the congressional delegation to clarify
some of the reimbursement language for IHS to ensure 100 percent
federal reimbursement for some services that are not provided
within the four walls of an IHS-compacted facility. This is to
ensure that when there are compacted relationships or referrals
made through the IHS facility, that care is still reimbursed at
100 percent. He said this administration's policy is to sign up
everyone who is eligible for Medicaid. He said that while the
department authorizes care, it does not authorize where that
care is provided. Individuals do have the right to choose where
they receive their services, and the administration is committed
to protecting that right. He said the department is working
with Native health care systems to ensure that it recaptures the
greatest number possible for federal reimbursement to Alaska
Native Medicaid beneficiaries. He said these are dollars that
can be invested into the tribal health care systems and Native
health care corporations to expand services in their regions.
Doing this will allow for additional general fund dollars that
will ensure the department can have fair, reasonable
reimbursement rates for non-Native facilities.
Number 2011
REPRESENTATIVE GATTO commented that there is no recourse for
patients who are eligible for 100 percent reimbursement at a
Native facility, but who go to a non-Native facility where there
is a cost to the state. He pointed out that it would be cheaper
to pay for a cab ride to the Native facility than to provide the
care at a non-Native facility.
COMMISSIONER GILBERTSON told the committee that the department,
as the state's administrator of the federal Medicare program,
must allow individuals the right to receive care at the facility
of their choice. He said the department does not differentiate
between populations based on heritage or any other
characteristics. The department will be working with the
providers to ensure that it designs its systems in a way that
maximizes federal revenues.
REPRESENTATIVE GATTO replied that a soldier's family could do
the same thing. While a soldier gets free medical care at the
air base, there is the option of getting medical care where it
is more convenient.
COMMISSIONER GILBERTSON responded that he is talking about
Medicaid-eligible individuals.
REPRESENTATIVE GATTO replied that is what he is talking about
too. A lot of soldier's families are Medicaid-eligible.
COMMISSIONER GILBERTSON told the committee that the department
administers the program in a fair manner. He said the
department is subject to myriad other federal laws including the
Emergency Medical Treatment and Active Labor Act [EMTA], which
ensures that hospitals have to treat individuals who come in
their doors regardless of insurance coverage. There are a host
of laws that require fair treatment of individuals, and he said
the department is managed in the spirit of those laws.
Number 1987
REPRESENTATIVE CISSNA asked if the expanded language that covers
more situations accommodates the "divert" system. For example,
if there is an emergency in Anchorage and the ambulance is
called, an individual might as likely show up at the Alaska
Native Medical Center as at Providence Hospital. That
individual might be headed for the Native hospital, but if the
facility is full, which is becoming more and more of a problem,
then that person would be taken to Providence Hospital.
Number 1948
COMMISSIONER GILBERTSON asked if Representative Cissna was
referring to the department's efforts to clarify federal law.
In reply to her affirmative response, Commissioner Gilbertson
said the department is working with the congressional delegation
on the Indian Health Care Improvement Act of 1976. He told the
committee that services provided through an IHS facility are
reimbursed at 100 percent. So the question is what is provided
through an IHS facility. That Act included language that said
this was not an effort to increase any new burden on states to
pay for care for individuals where the federal government
maintained trust responsibilities. The interpretation the
federal government has reverted to is that the care provided
includes services within the four walls of that facility. [The
state] contends that it has been historically interpreted to be
beyond that scope and that it should include services that are
provided through a referral. He said he does not believe that
the change will be so expansive that it will deal with where
individuals' intent was to receive services. Rather, it would
be where there is a clear contractual relationship whereby an
individual first receives his/her services through an IHS-
compacted facility and then is referred out. It is similar to a
gatekeeper in some health care systems.
Number 1887
REPRESENTATIVE CISSNA responded that if there is a gate keeping
agreement between those hospitals in Anchorage and the divert
system is very carefully planned, there is a contract between
the hospitals.
COMMISSIONER GILBERTSON questioned whether that would still
qualify, even if the congressional delegation were successful in
changing the federal law.
Number 1850
MR. LABBE commented that he does not know if that kind of
agreement would apply, but said he would look into it.
Number 1821
DENNIS MURRAY, Administrator, Heritage Place Nursing Facility,
testified via teleconference from Kenai on HB 152 and HB 153.
He urged caution on the part of the committee with respect to
eliminating the Medicaid Rate Advisory Commission [HB 152]. He
said he would not be as concerned as long as the state
prescribes a process for public hearings. He said the language
"fair and reasonable" is a problem because it creates a standard
for the state in terms of providing services to Medicaid
recipients and adequate reimbursement to providers. He said he
would not be in favor of elimination of that language.
MR. MURRAY commented that in HB 153 the current options
described by the commissioner do have flaws in them; however,
the legislature has looked at the various priorities and has
determined that some are higher than others. He said the
elimination of that language would certainly leave uncertainty
in terms of whether one service is more crucial to someone than
something else. He told the committee as a nursing facility
administrator, he knows that these clients are some of the most
vulnerable in the state and that the elimination of those
service would be devastating. He said it would be unfortunate
if passing this legislation would mean that those priorities
established by the legislature would be lost and the department
would have total discretion in what services it chose to fund.
The legislature would be left out of that equation in terms of
giving its sense of what those priorities are.
Number 1654
COMMISSIONER GILBERTSON responded that the purpose of this bill
is to align Alaska Statute with current federal law and current
practice. The Medicaid Rate Advisory Commission when it was
established did serve in a rate-setting function; however, it
now serves in an advisory capacity. The department maintains
the rate-setting functions. The Boren Amendment that was
referred to is the federal law that established the standard,
and the Alaska Statute was established to mirror that federal
statute. The Boren Amendment has been repealed; this bill would
repeal that state law. He told the committee that there will be
rate-setting at [the department's] new office of rate review.
There will still be a public process for rate setting. Facility
rate setting will have the same structure and design as
physician-based reimbursement and all other non-inpatient
reimbursement services. The department will have an office that
will reflect the varied rate-setting functions of the department
including childcare and subsidized adoption.
Number 1437
CHAIR WILSON asked the commissioner to respond to Mr. Murray's
comment concerning the options list.
COMMISSIONER GILBERTSON told the committee that the
administration's position is that the options list is not an
effective cost-containment mechanism. The options list has
rarely been utilized and is not an effective way to manage costs
in the Medicaid program. He said the options list will replace
the obsolete language with general authority for the department
to utilize cost-containment mechanisms. There are three clear
principles that have to be used by the department. First, the
department must pursue all other reasonable cost-containment
measures before eliminating any eligibility group or service.
Second, the department will actively pursue strategies that
maximize federal receipts. Third, decisions should be made in a
manner that best reflects the needs and interests of eligible
Medicare recipients. The department will still have cost-
containment reviews and make prudent decisions on where cost-
containment should be made, what services should be fully
funded, and if there needs to be a reduction in a type of
service. However, that would have to be done with the guiding
principles protecting the public interest. Long-term care
facilities and nursing home facilities certainly would not be
the first areas the department would be looking at for cost
containment. These facilities would be protected by more direct
and explicit authority by the department, rather than reverting
to an options list that is not constantly under review.
Number 1430
REPRESENTATIVE SEATON moved to report HB 152 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 152 was reported from the
Health, Education and Social Services Standing Committee.
Number 1420
REPRESENTATIVE GATTO moved to report HB 153 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 153 was reported from the
Health, Education and Social Services Standing Committee.
Number 1396
REPRESENTATIVE SEATON moved to report HB 172 out of committee
with individual recommendations and the accompanying fiscal
notes.
Number 1379
REPRESENTATIVE CISSNA objected to the motion, saying that she
has difficulty with cost containment in the areas addressed by
this bill. Representative Cissna said that she believes these
kinds of measures will cause more people to leave the state.
Number 1326
REPRESENTATIVE KAPSNER agreed with Representative Cissna's
objection. She said the cap being placed on poverty guidelines,
with no date set out for readdressing this issue, is
problematic. Representative Kapsner commented that there is
such a high turnover in the legislature, and limited
institutional memory, that by the time kids and pregnant women
are at 300 to 400 percent of the poverty guidelines, a lot of
the legislators will not be here. She said that more than half
of the House has been here two years or less, and more than 75
percent of the House has been here four years or less.
Representative Kapsner said that the climate in the building is
very unfriendly to people with hardships, and she cannot in good
conscience vote for the bill. She told the committee she does
understand what the governor is looking at with cost-containment
measures, but she does not think kids, elders, and pregnant
ladies are the people to target. There are a lot of other
avenues to look for money. She told the members she is totally
opposed to this bill.
Number 1257
REPRESENTATIVE SEATON asked Commissioner Gilbertson whether, as
the poverty level is adjusted, not including the Alaska cost-of-
living adjustment, those numbers will change.
Number 1234
COMMISSIONER GILBERTSON asked for the question to be clarified.
REPRESENTATIVE SEATON said that he understands that this bill
would revise statute from a percentage to a fixed number.
Number 1205
CHAIR WILSON called a brief at-ease at 4:19 p.m. The committee
was reconvened at 4:20 p.m.
Number 1142
A roll call vote was taken. Representatives Wilson, Gatto,
Wolf, and Seaton voted in favor of reporting HB 172 from
committee. Representatives Cissna and Kapsner voted against it.
Therefore, HB 172 was reported out of the House Health,
Education and Social Services Standing Committee by a vote of 4-
2.
Number 1120
CHAIR WILSON called a brief at-ease at 4:21 p.m. The committee
reconvened at 4:22 p.m.
HB 167-ALCOHOLISM AND DRUG ABUSE GRANTS
CHAIR WILSON announced that the next order of business would be
HOUSE BILL NO. 167, "An Act relating to grants for alcoholism
and drug abuse programs; and providing for an effective date."
Number 1103
ELMER LINDSTROM, Special Assistant, Office of the Commissioner,
Department of Health and Social Services, testified in support
of HB 167. He explained that the bill is very straightforward
in that it requires that the alcohol and drug abuse grantees
increase their local match to 25 percent from 10 percent.
MR. LINDSTROM pointed out that the fiscal note reflects the
reduction in state support for these programs, with a savings of
approximately $1.6 million. It is assumed that local
communities will be successful in providing for an additional
match and therefore [the department] would not expect there to
be a reduction in services at the community level. He offered
the belief that the grantees would be able to increase their
local contribution to the program. He said this proposal came
from the Division of Alcohol and Drug Abuse as a result of [the
department's] budget exercise earlier in the session. He said
the 25 percent local match requirement is the same as the
standard for the mental health grant program.
Number 1050
MR. LINDSTROM said the Division of Behavioral Health will be
constituted from the existing Division of Alcohol and Drug Abuse
and the existing Mental Health Program portion of the Division
of Mental Health and Developmental Disabilities. It is
reasonable that the substance-abuse grant program and the mental
health grant program would require the same 25 percent match
from grantees. He said he overstated the case in a previous
hearing on this bill in the other body. He told the committee
he did suggest that 25 percent was the standard across all of
the department's grant programs, and that is not the case.
There is wide variation in what the local match requirement is
from various programs funded through the department. The 25
percent is the standard for the mental health grant program,
which [the department] believes is the best comparison.
Number 0952
CHAIR WILSON commented that there is a spreadsheet in the bill
packet that shows the amount of reductions for each area in the
state. She said it is very difficult decision for all the
members in these days when there are limited funds and so many
needs.
Number 0908
REPRESENTATIVE CISSNA referred to the sponsor statement from
[U.S.] Senator Lisa Murkowski, who was then a state
Representative, for the alcohol tax bill that was put in last
year. In that statement, [then-Representative Murkowski] said
that she "introduced the bill to help offset the soaring costs
of alcohol-related expenses." Representative Cissna went on to
say Representative Murkowski ended her sponsor statement by
saying, "This legislation is an important part of the effort to
address the problem of alcohol and alcohol abuse in Alaska and
would help provide revenue needed for the expanded treatment,
therapeutic courts, diversion programs, and other initiatives
now under consideration in the legislature." Representative
Cissna commented that although that is not dedicated funding,
this is one of the few revenue-enhancement measures that came
about last year, and the purpose was to provide funds for
programs that would curb one of the most expensive habits in
this state.
CHAIR WILSON agreed with Representative Cissna on that point,
but noted that in the original bill, the tax was actually much
higher than the one that passed the legislature.
Number 0779
REPRESENTATIVE CISSNA commented that may be true, but the
problem has not decreased; if anything, it has increased.
CHAIR WILSON responded that unfortunately [the legislature]
cannot designate where the funds go. She commented that maybe
the legislature would have been able to prevent these reductions
if the higher tax had passed.
REPRESENTATIVE CISSNA said the tax is in place. She told the
committee she has an amendment she would like to introduce at
the appropriate time.
CHAIR WILSON told the committee she wants to be advised ahead of
time when a member has an amendment.
Number 0711
MR. LINDSTROM told the committee passing this bill is the
appropriate thing to do. It is the only statutory local match
requirement that exists. He said there is another area in the
governor's budget for FY 04 that he believes will address some
of Representative Cissna's concerns. There is approximately
$3.5 million in alcohol tax receipts for new programmatic
efforts, and there is an expectation that the program, under
[the administration's] emphasis on maximizing federal receipts,
ought to be able to generate a significant amount of additional
federal dollars for the Medicaid program by leveraging that $3.5
million. Mr. Lindstrom offered to get that information on
additional substance abuse treatment proposed in the governor's
budget.
Number 0599
CHAIR WILSON referred to page 1, lines 8-11, which says, "The
department may waive all or part of the requirement that state
money be matched by community money if the department finds that
community money is unavailable and waiver of the requirement is
in the best interests of the state." She asked Mr. Lindstrom to
explain that language.
Number 0544
MR. LINDSTROM referred to a spreadsheet in the bill packet that
was labeled "SB 124/HB 167 Increase in Local Match Requirements
for Substance Abuse Grants (Revised 3/12)." He told the
committee that exempted from community grant match are the
community-based suicide-prevention projects and those projects
that are less than $30,000. He said in these cases either the
communities do not have a local match at all or other programs
that are services for families would remain at the 10 percent
match. Community prevention services under $30,000 would also
remain at the 10 percent match. Mr. Lindstrom told the
committee the language provides for the department to waive
match requirements in full or in part under a hardship.
Number 0425
REPRESENTATIVE WOLF asked if the grantees are normally nonprofit
corporations.
MR. LINDSTROM answered in the affirmative.
REPRESENTATIVE WOLF pointed out that these organizations have
the ability to seek corporate or federal grants outside the
[state] government sector.
CHAIR WILSON asked Representative Wolf to expand on grants
obtained from sources other than state government.
Number 0381
REPRESENTATIVE WOLF referred to 501(c)(3) nonprofit funding,
which he said is virtually untapped nationwide. Representative
Wolf told the committee there was over $160 million in grant
funding that was not applied for last year. If the nonprofit
organizations in the state of Alaska were more enthusiastic
about trying to build partners, he said, it would be a lot
easier to accommodate these programs.
REPRESENTATIVE CISSNA asked if groups that this legislation
affects are existing nonprofits and if the new programs being
suggested by the governor's legislation are also nonprofits or
are government programs.
Number 0273
MR. LINDSTROM replied that virtually all support for the
substance abuse treatment programs are for "our grant in aid"
program to nonprofits. He said he believes the priorities for
the additional funding are for women and children's services,
particularly for families that may be involved in the child-in-
need-of-aid system. He said there is also emphasis on
adolescent treatment in rural areas.
Number 0221
REPRESENTATIVE KAPSNER asked why a 25 percent match was chosen.
MR. LINDSTROM replied that the suggestion at the first budget
meeting was that 25 percent was the standard in all of the
department's grant programs. However, he said he subsequently
learned that really is not true. It is the standard for the
most analogous grant program, which is for mental health grants.
He told the committee there is a wide variety of match rates.
Mr. Lindstrom said it was stated by the former director that
this is relatively low; in looking for budget savings, it was
something that rose to the top of the list as one of the most
feasible and least harmful things to propose.
REPRESENTATIVE KAPSNER asked Mr. Lindstrom if he has rates of
alcohol consumption versus crime. She asked if he could think
about that with respect to cost to the state.
MR. LINDSTROM replied that there is a wealth of information
about that subject and a recently published report by the
criminal justice assessment commission, which compiles a lot of
alcohol-related statistics. He said he has found in his
conversations with law enforcement and corrections staff that
there is a very high percentage of criminal behavior where there
is substance abuse involved.
Number 0003
REPRESENTATIVE KAPSNER asked if the department considered using
a sliding scale for the communities that could least afford to
pay for the services. For instance, municipal assistance and
revenue sharing is going to go down this year, and there have
been huge decreases in that program over the last ten years.
Many communities are not faring well with timber, mineral,
tourism, and oil markets such as they are. Would the department
consider a sliding scale for communities that can afford to pay
more?
TAPE 03-26A, SIDE A
Number 0013
MR. LINDSTROM said he did not believe that there was any
expectation that local governments would be stepping forward to
make up the shortfall. It was much more of an expectation that
through various types of fundraising, grants, and other sources
of funds, the nonprofits would generate the additional match.
Mr. Lindstrom said that there is an expectation that all of the
treatment providers in the system offer a sliding-fee scale for
the clients who come in to be served. This is the public
treatment system, so the patients tend to be very low-income
individuals.
REPRESENTATIVE KAPSNER replied that her understanding is that
communities would be asked to pay, and asked if she is
misreading the bill.
MR. LINDSTROM replied that the word "community" is in the broad
sense of the word, and not referring to local government. He
pointed out the exemptions for very small communities,
particularly those communities that only receive the suicide
prevention grant, which is approximately $12,000 to $17,000.
There is not the expectation of a match from those communities.
Number 0166
REPRESENTATIVE KAPSNER asked what the waitlist is for some of
these treatments programs.
Number 0177
MR. LINDSTROM responded that there is an updated waitlist report
that he has not yet seen. It was due in January or early
February. He said he would get a copy of that report to the
committee. Mr. Lindstrom said he heard discussions about the
report and believes the number is similar to the previous
waitlist, which is very significant in many areas of the state
at any given time. The waitlist report from a year ago was
about 300 individuals waiting for treatment.
REPRESENTATIVE WOLF said for the record that many state and
federal governments recognize nonprofit organizations as
community organizations. The 25 percent match for nonprofits is
a comparatively low number. Most government grants for
nonprofit, community-based organizations start at 33 percent and
go up from there. He told the committee he has seen a two-to-
one match, so a 25 percent match is a low number. By bringing
in the community, the organization has an opportunity to expand
understanding and knowledge of the care that organization
provides. He told the committee bonding and stewardship are
very tough to regulate, and a lot easier to educate [people
about].
Number 0340
REPRESENTATIVE GATTO said the state spends a lot of money on
substance abuse treatment and he is curious if the state is
getting anything out of it. Do [these programs] cure people,
and if they do, is it a percent or a serious number? He asked
Mr. Lindstrom what the success rate is over one, five, and ten
years, having people be drug-free for 24 and 48 hours before
they come back. Does [the state] have numbers to indicate
success in all the money the state spends?
MR. LINDSTROM pointed to the "New Standards Report of 1998,"
where a firm came in under contract and did a study on the
success rates of alcohol and substance abuse programs. The
conclusion was that programs are effective. He said the most
compelling discussion he has heard on this issue was from a
previous director of the division, Ernie Turner, who changed the
way Mr. Lindstrom thought about alcohol abuse. Mr. Lindstrom
said he and most of the folks in the health care community
believe that defining what success means is important because
alcoholism is a disease that is chronic, progressive, and if not
treated the outcome is death. In thinking about any other
chronic disease, one would not ask this kind of question. If a
person has diabetes or chronic diseases and is treated, gets
better, and then subsequently is required to be hospitalized
again, there would not be the suggestion that the first
treatment was a failure in some sense, Mr. Lindstrom commented.
Number 0511
MR. LINDSTROM went on to say that there is recognition that with
some chronic diseases there are some people who will be able to
go on and not have a relapse; however, it is not uncommon for
there to be a relapse. The short answer is that there is
success, but not 100 percent success, the first time; for the
rest of their lives, that answer is no.
Number 0603
REPRESENTATIVE GATTO told Mr. Lindstrom he understands what he
is saying, but diabetics are told that unless they take insulin
every day for the rest of their lives, they will get sick and
die. If a person does not take it and gets sick, that is a
problem with a person who is abusing himself or herself. He
said he is more concerned about a person who is a diabetic who
does the right thing, watches his/her diet, and occasionally
comes back. That is quite a different story. Representative
Gatto said he is not expecting 100 percent of anything, but he
said he is expecting a number that says this is not a waste of
state money. He said the legislature is spending a great deal
of money and that he gets a lot of input from the community
concerning repeat offenders.
REPRESENTATIVE GATTO shared that after 25 years on the streets
of Anchorage as a paramedic, he can tell the first names, second
names, and family names of people who come back over and over
again. He offered his belief that these individuals have no
interest in any kind of a cure. Their main interest is living
on the dole. That is their primary goal in life. He questioned
whether the state wants to support people whose primary goal is
to live on the dole.
Number 0661
MR. LINDSTROM apologize for overstating the case for alcohol
treatment, and he said he would get a copy of the report to the
committee. He said treatment does have good value and he is
well aware of the situations Representative Gatto described and
does not dispute for one second that they [exist].
Number 0709
PAM WATTS, Executive Director, Governor's Advisory Board on
Alcoholism and Drug Abuse, Office of the Commissioner,
Department of Health and Social Services, testified on HB 167.
She said that while she did not hear all of the previous
testimony, what she heard was very important. She told the
committee when looking at legislation that changes the match
rate from 10 percent to 25 percent, the committee needs to
acknowledge that the Division of Alcoholism and Drug Abuse
funding has been flat for approximately 10 years. There have
been a lot of discussions about inflation-proofing funding, and
that has not been done with this program. She said the grantees
have had cuts over the past 10 years, and this will increase the
burden on them.
MS. WATTS pointed out that the client population served by this
program is either very low-income or indigent, so while there is
a sliding-fee scale, the ability to collect from this population
is extremely limited. The Veterans' Administration used to pay
for some of this treatment; however, that is now impossible.
Providers used to be able to collect permanent fund dividends
from some of these folks, but child support enforcement and a
lot of other important entities are first on the list in that
regard. If current legislation being proposed to take the
permanent fund dividend away from individuals who are arrested
for driving under the influence [passes], providers will not
have that any longer either. Many of these people are not
employed. Ms. Watts said she understands what the committee
members have said, that there should be accountability for
treatment, and many times down the road once they have received
treatment, become productive, and can pay for treatment, "we do
receive it."
Number 0919
CHAIR WILSON asked Ms. Watts how often individuals who have been
through treatment come back and pay for that treatment.
MS. WATTS said when she worked as a treatment provider for eight
and a half years [both residential services and outpatient
prevention services], the big-ticket item was the residential
services. Unfortunately, those are the people who are most
severely impaired. That is why residential treatment sometimes
is not as successful as outpatient treatment, because these are
really late-stage people. Many of them were provided treatment
on a sliding-fee scale, and some of them were right out of
corrections; some of them had no cash. They were on a treatment
plan, and it would not be very much a month, but they were
paying something. If the individual did not pay anything, it
was turned over to collections.
MS. WATTS told of a provider in Seward that says if its match
rate goes up, it will be very difficult because it gets its
[matching funds] from clients.
Number 0930
MS. WATTS responded to Representative Gatto's question and Mr.
Lindstrom's comment on the New Standards Study, which does show
that Alaska is not only comparable in successful treatment
outcomes compared to the rest of the country, but showed that
Alaska was slightly above the national average. Right now the
Mental Health Trust Authority and the legislature are funding a
study through the University of Alaska to give more current
information about treatment outcomes. As soon as it is
available, she said, she will make it available to the
committee.
Number 1042
MS. WATTS strongly encouraged the committee to keep the language
intact that refers to the department's ability to waive the
match if the department determines that community money is
unavailable and a waiver is in the best interest of the state.
Number 1068
MATT FELIX, National Council on Alcoholism, testified in
opposition to HB 167. He gave a brief description of his long
career in the alcoholism treatment field. He told the committee
he believes this bill is not needed because the 25 percent match
is a goal that most community nonprofits cannot reach in public
programs. He pointed out that with this population, by the time
they need treatment, most of their resources are gone. The
grant-in-aid regulations under Governor Hickel found that this
is a very efficient way of providing services and that it is
probably done at a third of the cost of providing services by
state employees. The grant-in-aid regulations by the state
require a nonprofit to charge for those services. The provider
is required to use the federal regulations for poverty
guidelines on a sliding-fee scale. Some of these people can pay
and some do. He said when he was running the hospital in
Juneau, city government provided some of the funding. In
Anchorage, the city would receive the same grant and match
funding for programs or nonprofits, but it was difficult to
match because the funds were substantial. Since the late 1980s,
Anchorage has decided not to match funding, and since the late
1990s, the city of Juneau has decided not to either.
MR. FELIX said in rural Alaska there has been a hard time
reaching the 10 percent match. The people out there do not have
the ability to pay at all. He said he recalls that some
individuals paid in fish and handmade products.
Number 1313
CHAIR WILSON announced that she would end testimony at this
time. [HB 167 was held over.]
ADJOURNMENT
Number 1340
There being no further business before the committee, the House
Health, Education and Social Services Standing Committee meeting
was adjourned at 5:03 p.m.
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