Legislature(1999 - 2000)

02/24/2000 03:06 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE HEALTH, EDUCATION AND SOCIAL                                                                               
                   SERVICES STANDING COMMITTEE                                                                                  
                        February 24, 2000                                                                                       
                            3:06 p.m.                                                                                           
MEMBERS PRESENT                                                                                                                 
Representative Fred Dyson, Chairman                                                                                             
Representative Jim Whitaker                                                                                                     
Representative Joe Green                                                                                                        
Representative Carl Morgan                                                                                                      
Representative Tom Brice                                                                                                        
Representative Allen Kemplen                                                                                                    
Representative John Coghill                                                                                                     
MEMBERS ABSENT                                                                                                                  
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                              
HOUSE BILL NO. 321                                                                                                              
"An Act relating  to the confidentiality of  investigations, court                                                              
hearings,  and court  and public  agency information  in child  in                                                              
need of aid matters; relating to  immunity regarding disclosure of                                                              
information in child in need of aid  matters; amending Rules 3 and                                                              
22, Alaska  Rules of Child  in Need of  Aid; and providing  for an                                                              
effective date."                                                                                                                
     - HEARD AND HELD                                                                                                           
HOUSE BILL NO. 300                                                                                                              
"An Act relating  to the establishment and enforcement  of medical                                                              
support  orders  for  children; and  providing  for  an  effective                                                              
     - HEARD AND HELD                                                                                                           
HOUSE BILL NO. 257                                                                                                              
"An  Act  relating  to  funding  for  school  districts  operating                                                              
secondary  school   boarding  programs;   and  providing   for  an                                                              
effective date."                                                                                                                
     - MOVED CSHB 257(HES) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 325                                                                                                              
"An Act relating to priorities, claims, and liens for payment for                                                               
certain medical services provided to medical assistance                                                                         
recipients; and providing for an effective date."                                                                               
     - MOVED CSHB 325(HES) OUT OF COMMITTEE                                                                                     
PREVIOUS ACTION                                                                                                                 
BILL: HB 321                                                                                                                  
SHORT TITLE: CONFIDENTIALITY OF CINA HEARINGS & RECORD                                                                          
Jrn-Date    Jrn-Page           Action                                                                                           
 1/26/00      2009     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 1/26/00      2009     (H)  HES, JUD, FIN                                                                                       
 1/26/00      2009     (H)  3 FISCAL NOTES (2 DHSS, LAW)                                                                        
 1/26/00      2009     (H)  3 ZERO FISCAL NOTES (2 ADM, DPS)                                                                    
 1/26/00      2009     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 1/26/00      2009     (H)  REFERRED TO HES                                                                                     
 2/17/00               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
 2/17/00               (H)  Heard & Held                                                                                        
 2/24/00               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
BILL: HB 300                                                                                                                  
SHORT TITLE: MEDICAL SUPPORT ORDERS FOR CHILDREN                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/21/00      1962     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 1/21/00      1962     (H)  HES, JUD, FIN                                                                                       
 1/21/00      1962     (H)  ZERO FISCAL NOTE (REV)                                                                              
 1/21/00      1962     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 1/21/00      1962     (H)  REFERRED TO HES                                                                                     
 2/24/00               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
BILL: HB 257                                                                                                                  
SHORT TITLE: BOARDING SCHOOL FUNDING                                                                                            
Jrn-Date    Jrn-Page           Action                                                                                           
 1/10/00      1886     (H)  PREFILE RELEASED 12/30/99                                                                           
 1/10/00      1887     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 1/10/00      1887     (H)  HES, FIN                                                                                            
 2/24/00               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
BILL: HB 325                                                                                                                  
SHORT TITLE: MEDICAL ASSISTANCE:LIENS & CLAIMS                                                                                  
Jrn-Date    Jrn-Page           Action                                                                                           
 2/02/00      2061     (H)  READ THE FIRST TIME - REFERRALS                                                                     
 2/02/00      2061     (H)  HES, JUD, FIN                                                                                       
 2/02/00      2061     (H)  FISCAL NOTE (DHSS)                                                                                  
 2/02/00      2061     (H)  GOVERNOR'S TRANSMITTAL LETTER                                                                       
 2/24/00               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
WITNESS REGISTER                                                                                                                
DOUG WOOLIVER, Administrative Attorney                                                                                          
Office of the Administrative Director                                                                                           
Alaska Court System                                                                                                             
820 West Fourth Avenue                                                                                                          
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:  Testified on HB 321.                                                                                       
KAREN PERDUE, Commissioner                                                                                                      
Department of Health & Social Services                                                                                          
PO Box 110601                                                                                                                   
Juneau, Alaska  99811                                                                                                           
POSITION STATEMENT:  Testified on HB 321 and HB 325.                                                                            
BARBARA MIKLOS, Director                                                                                                        
Central Office                                                                                                                  
Child Support Enforcement Agency                                                                                                
Department of Revenue                                                                                                           
550 West Seventh Avenue, Suite 310                                                                                              
Anchorage, Alaska  99501                                                                                                        
POSITION STATEMENT:  Presented HB 300.                                                                                          
REPRESENTATIVE JEANNETTE JAMES                                                                                                  
Alaska State Legislature                                                                                                        
Capitol Building, Room 102                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Presented HB 257 as sponsor.                                                                               
JOHN ANGAIAK                                                                                                                    
PO Box 1233                                                                                                                     
Bethel, Alaska  99559                                                                                                           
POSITION STATEMENT:  Testified in support of HB 257.                                                                            
BOB KNIGHT, Mayor                                                                                                               
City of Nenana                                                                                                                  
PO Box 70                                                                                                                       
Nenana, Alaska  99760                                                                                                           
POSITION STATEMENT:  Testified in support of HB 257.                                                                            
TERRY BENTLEY, Superintendent                                                                                                   
Nenana City Schools                                                                                                             
PO Box 10                                                                                                                       
Nenana, Alaska  99760                                                                                                           
POSITION STATEMENT:  Testified in support of HB 257.                                                                            
EDDY JEANS, Manager                                                                                                             
School Finance and Facilities Section                                                                                           
Education Support Services                                                                                                      
Department of Education & Early Development                                                                                     
801 West Tenth Street, Suite 200                                                                                                
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified on HB 257.                                                                                       
JOHN CYR, President                                                                                                             
National Education Association (NEA)-Alaska                                                                                     
114 Second Street                                                                                                               
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified on HB 257.                                                                                       
BOB MEDINGER, Principal                                                                                                         
Bethel Alternative Boarding School                                                                                              
PO Box 1858                                                                                                                     
Bethel, Alaska  99559                                                                                                           
POSITION STATEMENT:  Testified in support of HB 257.                                                                            
JON SHERWOOD, Program Officer                                                                                                   
Division of Medical Assistance                                                                                                  
Department of Health & Social Services                                                                                          
PO Box 110660                                                                                                                   
Juneau, Alaska  99811                                                                                                           
POSITION STATEMENT:  Presented HB 325.                                                                                          
LISA KIRSCH, Assistant Attorney General                                                                                         
Human Services Section                                                                                                          
Civil Division (Juneau)                                                                                                         
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, Alaska  99811                                                                                                           
POSITION STATEMENT:  Answered questions on HB 325.                                                                              
LEONARD ANDERSON, Attorney                                                                                                      
Davis & Davis, PC                                                                                                               
405 West 36th Avenue                                                                                                            
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Testified in support of HB 325.                                                                            
ACTION NARRATIVE                                                                                                                
TAPE 00-21, SIDE A                                                                                                              
Number 0001                                                                                                                     
CHAIRMAN FRED DYSON called the House  Health, Education and Social                                                              
Services  Standing  Committee  meeting   to  order  at  3:06  p.m.                                                              
Members present  at the call  to order were Representatives  Dyson                                                              
and Coghill.   Representatives Whitaker, Green,  Morgan, Brice and                                                              
Kemplen arrived as the meeting was in progress.                                                                                 
HB 321 - CONFIDENTIALITY OF CINA HEARINGS & RECORD                                                                            
Number 0088                                                                                                                     
CHAIRMAN  DYSON announced  the first  order of  business as  House                                                              
Bill  No.  321,  "An  Act  relating   to  the  confidentiality  of                                                              
investigations,  court  hearings,  and  court  and  public  agency                                                              
information in child in need of aid  matters; relating to immunity                                                              
regarding  disclosure  of information  in  child  in need  of  aid                                                              
matters; amending  Rules 3 and 22,  Alaska Rules of Child  in Need                                                              
of Aid; and providing for an effective date."                                                                                   
DOUG   WOOLIVER,   Administrative    Attorney,   Office   of   the                                                              
Administrative  Director,  Alaska Court  System,  came forward  to                                                              
testify.  He  indicated that the court doesn't take  a position on                                                              
HB 321 one way or another, but HB  321 makes a lot of changes that                                                              
will affect the court system.  In  most courts, the CINA [Child in                                                              
Need of Aid] records  are kept in the "one child,  one file rule,"                                                              
so the  delinquency file  is with  the CINA file  if it  is joint.                                                              
Procedurally the  court will separate  all of those type  of files                                                              
into two  separate files, and then  separate the CINA  files based                                                              
on what parts are open or closed.                                                                                               
MR. WOOLIVER explained that the clerks  will need to be trained on                                                              
what information  is going  to be confidential  and how  to handle                                                              
records requests.  When someone requests  a CINA file, it could be                                                              
a simple process,  or it could be  an enormous process.   Not only                                                              
are there certain documents that  are entirely confidential, there                                                              
are lots  of documents  that are  only confidential  in part.   If                                                              
there is  any confidential information  in the document,  it would                                                              
have  to be  redacted.   The clerk  will  have to  go through  the                                                              
document page  by page to make  sure there isn't  any confidential                                                              
information mentioned  anywhere in the  document.  There  are many                                                              
unknowns in this process.  The court  is assuming there won't be a                                                              
huge interest in the records requests;  if the court is wrong, his                                                              
fiscal note is inadequate.   If 80 percent of the  hearings are in                                                              
fact going  to be closed,  that will add a  great deal of  time to                                                              
the process.   Another unknown is  how much motion  practice there                                                              
will be.                                                                                                                        
MR. WOOLIVER  noted that  the pilot project  on this  in Minnesota                                                              
didn't  get as bad  as previously  thought.   However, Alaska  may                                                              
have a  completely different approach.   Oregon has  open hearings                                                              
because of the way their court interpreted  Oregon's constitution;                                                              
it  wasn't a  statute that  their legislature  passed opening  the                                                              
Number 0574                                                                                                                     
CHAIRMAN  DYSON expressed  his concern  about the  unsubstantiated                                                              
information in  the CINA  files in the  department.  He  asked Mr.                                                              
Wooliver if he  understood that the unsubstantiated  records would                                                              
remain closed.                                                                                                                  
MR.  WOOLIVER  answered he  didn't  look  at the  provisions  that                                                              
govern the agency  records closely.  If it were to  become part of                                                              
a court record,  it would be open.  He is not  sure how the agency                                                              
handles unsubstantiated reports and  whether the records end up in                                                              
a  court proceeding  or court  record.   He  understands that  the                                                              
agency  records wouldn't  release the  unsubstantiated reports  of                                                              
harm, but he  doesn't know the likelihood of those  making it into                                                              
a  subsequent  court  record.   Those  records  have  always  been                                                              
confidential so it hasn't been an issue.                                                                                        
CHAIRMAN DYSON asked Mr. Wooliver about the fiscal note.                                                                        
MR. WOOLIVER indicated there is a  $116,000 fiscal note.  There is                                                              
$33,000  for training the  court clerks,  magistrates, judges  and                                                              
developing  the new  filing  procedures.   The  ongoing costs  are                                                              
$83,000 for  part-time clerks to  be distributed around  the state                                                              
where the needs are.                                                                                                            
KAREN  PERDUE,   Commissioner,  Department  of  Health   &  Social                                                              
Services  (DHSS),  came  forward  to  testify  on  HB  321.    She                                                              
indicated that she  had participated in the two-year  process that                                                              
brought  this bill  forward.   The  bill provides  for open  court                                                              
proceedings,   open  court   records   and  the   fact  that   the                                                              
confidentiality  of the child  should be  protected at  all times.                                                              
It gives  the court  the ability  to not  release certain  records                                                              
that are confidential  as well.  There is some  increased openness                                                              
of agency records,  but by in large, agency records  are to remain                                                              
closed because there are unsubstantiated  records and confidential                                                              
information about reporters.                                                                                                    
COMMISSIONER PERDUE  explained that the task force  looked at what                                                              
was going  on in  other states.   Alaska would  be on the  leading                                                              
edge  in terms  of openness  with this  bill, but  the task  force                                                              
picked up some ideas from the other  states.  It complies with the                                                              
federal  law which  says  information should  be  released on  the                                                              
agency's  activities if  a child  died  who was  in state  custody                                                              
within  the  past  12  month;,  it   brings  the  department  into                                                              
compliance with  CAPTA [Child Abuse Prevention and  Treatment Act]                                                              
in that area.                                                                                                                   
COMMISSIONER  PERDUE  stated  this  will  be  a  major  change  in                                                              
practice for the  department.  The bill before the  committee is a                                                              
carefully crafted  compromise in weighing  the privacy needs  of a                                                              
child and the public's ability to know.                                                                                         
CHAIRMAN  DYSON asked  Commissioner  Perdue if  the department  is                                                              
saying "pass  this law or we're going  to get in trouble  with the                                                              
feds  because we  will not  be legal  under state  law to  release                                                              
information they're requiring, and they're going to get us."                                                                    
COMMISSIONER  PERDUE answered  no, that  is not  being said.   She                                                              
wasn't sure if it is close.  She  will have to check to see if any                                                              
state has been  sanctioned under the capital law,  but she doesn't                                                              
believe so.                                                                                                                     
CHAIRMAN DYSON  asked Commissioner Perdue  if a parent  involved a                                                              
CINA case  has counsel, what agency  records can the  attorney not                                                              
get under discovery.                                                                                                            
COMMISSIONER  PERDUE replied she  didn't know  the answer  to that                                                              
CHAIRMAN DYSON asked  her to get that answer in writing  so he can                                                              
distribute it to the committee members.                                                                                         
CHAIRMAN DYSON asked Commissioner  Perdue what is gained by having                                                              
the openness permitted in HB 321.                                                                                               
COMMISSIONER PERDUE replied that  the public can see how the child                                                              
protection system operates including  seeing the judge has certain                                                              
responsibilities to  make a decision, seeing there  is counsel for                                                              
the parent and the state and seeing  a lot of things people do not                                                              
understand about  the system.   There are  multiple parts  and all                                                              
those  parts have  to work  together to  do the best  job for  the                                                              
public  in  protecting  children  and  protecting  the  rights  of                                                              
parents.  There is so much mystery  around the process, and people                                                              
need to see  it.  However, the  line must be drawn to  protect the                                                              
child and family.                                                                                                               
She agreed with Chairman Dyson that  the main thing gained will be                                                              
a better informed public and some more accountability.                                                                          
CHAIRMAN  DYSON asked  Commissioner  Perdue to  let the  committee                                                              
know what the priority is for HB  321 because it will be difficult                                                              
to get through  all the legislation  for DHSS this year.   [HB 321                                                              
was heard and held.]                                                                                                            
HB 300 - MEDICAL SUPPORT ORDERS FOR CHILDREN                                                                                  
Number 1440                                                                                                                     
CHAIRMAN DYSON announced the next  order of business as House Bill                                                              
No. 300, "An Act relating to the  establishment and enforcement of                                                              
medical  support  orders  for  children;   and  providing  for  an                                                              
effective date."                                                                                                                
Number 1467                                                                                                                     
BARBARA   MIKLOS,   Director,  Central   Office,   Child   Support                                                              
Enforcement Agency (CSED), Department  of Revenue, came forward to                                                              
present HB  300.  Her agency  has requested that  this legislation                                                              
be introduced because  it will better serve the public.   The bill                                                              
makes three  changes  to existing  statute.  First  it allows  the                                                              
CSED to  establish a medical  support order  only.  Right  now the                                                              
courts  and  the  CSED establish  financial  support  orders  that                                                              
require  a monthly  support obligation,  and  in conjunction  with                                                              
that, there  is a medical support  order.  There isn't  the option                                                              
under state law  just to establish a medical support  order.  This                                                              
becomes a  problem for some people  in Medicaid or  Denali KidCare                                                              
because the  federal government  requires CSED  to have  a medical                                                              
support  order.  When  the order  is established,  it comes  along                                                              
with a  monthly support obligation  which is not  necessarily what                                                              
the parents want.                                                                                                               
MS.  MIKLOS explained  that a  medical support  order would  order                                                              
either parent to  provide health insurance for the  child if it is                                                              
available  to  the  parent  at  reasonable   cost.    The  federal                                                              
definition  of reasonable  is health  insurance available  through                                                              
the  parent's employer.    The state  has  further  defined it  by                                                              
saying if  it is available through  work but may be  expensive, it                                                              
wouldn't  necessarily be  considered reasonable.   As  far as  the                                                              
federal government  is concerned, if someone has  health insurance                                                              
available,  he/she must  provide it.   If it's  not available,  it                                                              
doesn't mean he/she can't provide  it.  There are still other ways                                                              
to provide  cost of medical care,  and that is defined  in some of                                                              
the child support  orders.  The intent is the public  will not pay                                                              
for the  child's health  care if the  parents can provide  for the                                                              
MS. MIKLOS said  the way it is now, when the orders  are done, the                                                              
financial order  comes along with it.   Some people don't  want to                                                              
go on Medicaid  or Denali KidCare because they don't  want a child                                                              
support order.   The CSED prefers to give the  parents that choice                                                              
but  cannot give  them  that choice  right  now  under state  law.                                                              
Sometimes when  people go  on Medicaid,  they'll have a  financial                                                              
support order, and  the CSED will not enforce that  order, and the                                                              
obligation will  continue to accumulate.   The CSED would  like to                                                              
make  it simpler  by having  the option  of just  doing a  medical                                                              
support order.                                                                                                                  
MS.  MIKLOS explained  the  second  change in  the  law says  that                                                              
either parent  may be  required to  provide health insurance,  not                                                              
just the obligor.  Court Rule 90.3,  Guidelines for Child Support,                                                              
already says that; the CSED would like to have that in statute.                                                                 
MS. MIKLOS  said the  third change just  clarifies that  the order                                                              
may be established before the order  is in place, but the order is                                                              
not in effect until the insurance is in place.                                                                                  
MS. MIKLOS  summarized  that HB 300  helps the  public, helps  the                                                              
CSED and is consistent with federal law.                                                                                        
Number 1722                                                                                                                     
REPRESENTATIVE GREEN asked if a family  couldn't afford insurance,                                                              
would it be in contempt if insurance wasn't provided.                                                                           
MS. MIKLOS replied no, not at all.   Insurance is only required if                                                              
it is  available at  reasonable cost.   The  original intent  when                                                              
Congress passed  this years  ago was that  if someone had  a first                                                              
family, and that first family didn't  have insurance available and                                                              
had public insurance,  but then the person had a  second family on                                                              
insurance,  then  the children  from  the  first family  would  be                                                              
included on the insurance.                                                                                                      
REPRESENTATIVE GREEN asked who determines reasonable cost.                                                                      
MS. MIKLOS answered  CSED would make that  original determination.                                                              
Someone  may appeal  that decision  through a  hearing within  the                                                              
Department of Revenue  or further through the court.   People have                                                              
an  opportunity  to  say  it  is  not  reasonable.    She  further                                                              
explained  there are circumstances  when  parents work things  out                                                              
and  would choose  not to  be involved  and  choose not  to get  a                                                              
financial support  order, and the  CSED would like to  honor those                                                              
CHAIRMAN DYSON asked how someone  would accumulate a debt from the                                                              
support orders.                                                                                                                 
MS. MIKLOS explained  in order to do a medical  support order now,                                                              
the CSED also has  to put on a financial obligation.   The CSED is                                                              
not  enforcing  the financial  obligation,  so  the debt  for  the                                                              
monthly  support obligation  still accumulates.   There are  rules                                                              
that must  be done consistently  so the  amount for the  financial                                                              
order  could not  be zero;  the obligation  is based  on how  much                                                              
money is  earned by the  parent.  The CSED  doesn't want to  be in                                                              
the position of collecting a debt  that no one wanted in the first                                                              
place, and  HB 300 will  do that.  If  the bill doesn't  pass, the                                                              
CSED has to continue to put on debts.                                                                                           
CHAIRMAN DYSON  asked if the  state starts supporting  a custodial                                                              
parent and  children, and a debt  starts accumulating to  the non-                                                              
custodial  parent,  and  the children  are  covered  under  Denali                                                              
KidCare, does  the non-custodial  parent owe  a debt to  reimburse                                                              
the  state and  the  federal government  for  the insurance  costs                                                              
obligated under Denali KidCare.                                                                                                 
MS. MIKLOS answered no.                                                                                                         
CHAIRMAN  DYSON  asked Ms.  Miklos  why  does it  say  "insurance"                                                              
instead  of  just saying  the  parents  have  to provide  for  the                                                              
children's medical needs.                                                                                                       
Number 2175                                                                                                                     
MS. MIKLOS admitted it never occurred  to them.  In terms of child                                                              
support,  the CSED  has gone  as far  as required  by the  federal                                                              
government which is that the insurance  be available.  In terms of                                                              
providing for medical care, there  could be a lot of problems, but                                                              
it wouldn't  necessarily be  a child support  issue.  The  CSED is                                                              
only trying  to separate  out the medical  support order  from the                                                              
financial support order to make it easier for people.                                                                           
CHAIRMAN DYSON  said it sounds like  the bill is trying  to remove                                                              
the administrative  barrier to get  children signed up  for Denali                                                              
MS. MIKLOS agreed  that might be one of the things,  but it is not                                                              
the only thing.   It is also that there are  debts accumulating in                                                              
existing cases  in the Medicaid  program; a  debt goes on  that no                                                              
one really wanted  in the first place.  In response  to a question                                                              
by  Representative  Coghill,  Ms.  Miklos explained  that  if  any                                                              
family goes on  Medicaid, CSED must go after medical  support, and                                                              
that is why the CSED is involved.                                                                                               
Number 2284                                                                                                                     
REPRESENTATIVE KEMPLEN asked Ms.  Miklos how the CSED will address                                                              
the orders that  have been accumulating but not  enforced under HB
MS. MIKLOS said  ways are being looked at to  reestablish an order                                                              
that would be medical support only if it can be done.                                                                           
MS.  MIKLOS explained  the  intent of  a  financial support  order                                                              
originally was to  reimburse the state and federal  government for                                                              
public assistance,  and a  medical support  order was for  medical                                                              
assistance.   The first choice is  for the parents to  support the                                                              
TAPE 00-21, SIDE B                                                                                                              
Number 2364                                                                                                                     
REPRESENTATIVE WHITAKER asked Ms.  Miklos for clarification on the                                                              
connection of  a parent  providing health coverage  if it is  at a                                                              
reasonable cost and Denali KidCare.                                                                                             
MS. MIKLOS  said she is  not the expert  on Denali KidCare  so she                                                              
can only  go so far.   The idea is if  someone is on  the Medicaid                                                              
program, the state's obligation for  that program would be reduced                                                              
if there  is other insurance available.   She doesn't know  if the                                                              
obligation  goes  totally  away;  all  she knows  is  the  state's                                                              
obligation is reduced.                                                                                                          
REPRESENTATIVE  WHITAKER asked  if he heard  correctly that  there                                                              
was an  inference that this  was somehow tantamount  to increasing                                                              
the number of children on Denali KidCare.                                                                                       
MS. MIKLOS stated  that HB 300 would not make  more people qualify                                                              
for  Denali KidCare.   It's  just that  there may  be people  that                                                              
wouldn't get involved at all because of the financial issue.                                                                    
Number 2215                                                                                                                     
CHAIRMAN DYSON informed  the committee he does not  intend to move                                                              
HB 300  out today so  there will be  time to have  other questions                                                              
REPRESENTATIVE  KEMPLEN  asked how  the CSED  will  deal with  the                                                              
paper debts that have been accumulating.                                                                                        
MS. MIKLOS answered as long as the  custodial parent does not want                                                              
CSED  to enforce  the  paper debt,  it won't.    If the  custodial                                                              
parent asked CSED to enforce the paper debt, it would have to.                                                                  
REPRESENTATIVE KEMPLEN  commented he would like CSED  to commit to                                                              
getting those paper debts off the books if HB 300 passes.                                                                       
CHAIRMAN DYSON  asked Ms. Miklos  for responses on  the following:                                                              
1) Representative  Kemplen's last  question; 2)  where and  why in                                                              
the  law it  says  "medical insurance"  and  doesn't say  "medical                                                              
care";  3) the portion  of the  bill that  fixes the  accumulating                                                              
paper debt;  4) the  definition of  the criteria of  "reasonable";                                                              
why isn't it a certain percentage of the income.                                                                                
REPRESENTATIVE COGHILL  said he was  interested to know if  a debt                                                              
on  responsible health  care delivery  can be  levied against  the                                                              
Number 2086                                                                                                                     
REPRESENTATIVE GREEN asked if the  accumulated paper debts include                                                              
some bad debts that shouldn't be eliminated.                                                                                    
MS. MIKLOS  said the bad  debts will not  be eradicated.   That is                                                              
why the  bill would not  be effective  the day the  Governor signs                                                              
it.  If  possible, the old order  would be vacated and a new order                                                              
established  separating those  debts out.   She cannot  definitely                                                              
answer that will be done, but that is what is being looked at.                                                                  
CHAIRMAN DYSON  asked if  the paper  debts were accumulating  with                                                              
interest and penalties.                                                                                                         
Number 1919                                                                                                                     
MS. MIKLOS answered yes.                                                                                                        
CHAIRMAN  DYSON suspended  the hearing  on HB  300.   [HB 300  was                                                              
heard and held.]                                                                                                                
HB 257 - BOARDING SCHOOL FUNDING                                                                                              
Number 1898                                                                                                                     
CHAIRMAN DYSON announced the next  order of business as House Bill                                                              
No.  257,  "An  Act  relating  to  funding  for  school  districts                                                              
operating secondary  school boarding  programs; and  providing for                                                              
an effective date."                                                                                                             
Number 1877                                                                                                                     
REPRESENTATIVE   JEANNETTE   JAMES,  Alaska   State   Legislature,                                                              
sponsor,  came  forward to  present  HB  257.   She  prefaced  her                                                              
remarks with  the fact  that she  has supported regional  boarding                                                              
schools for  15-20 years.   When Nenana  was in her  district, she                                                              
tried  to  get  some  support for  a  boarding  school  which  was                                                              
unsuccessful.   Now things  are in place  for a dormitory  for the                                                              
boarding  school in  Nenana;   the  school  could  have twice  the                                                              
population   without  additional   teachers  or   funding.     She                                                              
principally filed  this bill  for them.   However, she  knew there                                                              
would be other beneficiaries if this bill passed.                                                                               
REPRESENTATIVE  JAMES  explained   that  under  the  current  law,                                                              
boarding students who  don't have the opportunity to  go to school                                                              
in their own district can go to a  boarding school and get stipend                                                              
rates for  their room and board.   This bill would  allow students                                                              
who don't qualify  because there is a school in  their district to                                                              
attend  boarding school.   She  found  out Bethel  has a  boarding                                                              
school that is operating on a very  low budget;  the school leases                                                              
a four-plex for  the students to live in.  The  30 students at the                                                              
Bethel Alternative  Boarding School are students  that wouldn't be                                                              
going to school otherwise; the Bethel  Alternative Boarding School                                                              
is a safety net  for students.   The school has  been getting some                                                              
grants but  is at  the "bottom of  the barrel"  as far  as getting                                                              
grants.  If it  doesn't get some assistance some  way, this school                                                              
may not be able to continue.                                                                                                    
REPRESENTATIVE JAMES  has consistently  said that the goal  of the                                                              
legislature and the state should  be to determine what is the best                                                              
way  to  deliver  education  to the  many  different  students  in                                                              
different parts  of the state  with different needs  and different                                                              
kinds of learning abilities.  The  boarding school wouldn't be for                                                              
everyone.   Not everyone can make  it in a regular  classroom, and                                                              
those students need to have this opportunity.                                                                                   
REPRESENTATIVE JAMES indicated that  the fiscal note for the first                                                              
year would  be about $600,000, which  is a small price  to pay for                                                              
these students have this opportunity.   She urged the committee to                                                              
consider this legislation.                                                                                                      
Number 1666                                                                                                                     
REPRESENTATIVE KEMPLEN  asked Representative James if  she had any                                                              
letters  of support  from  school districts  that  would use  this                                                              
option.  He didn't see any backup information in the packet.                                                                    
REPRESENTATIVE  JAMES answered she  doesn't; she hasn't  solicited                                                              
any.   Most of  the support she  has been  given has been  verbal.                                                              
She could get that if it were required.                                                                                         
CHAIRMAN  DYSON asked Representative  James  if this bill  passes,                                                              
the existing boarding schools will gain more resources.                                                                         
Number 1567                                                                                                                     
REPRESENTATIVE  JAMES answered  for the  most part,  yes.   Galena                                                              
does have  five students who qualify  under existing law,  but the                                                              
rest of  the boarding  schools will get  resources to  assist with                                                              
room and board.                                                                                                                 
CHAIRMAN DYSON  said when SB 36  was discussed two years  ago, the                                                              
legislature was  told that SB 36  would force the closure  of some                                                              
schools  and  would  force  Native  students  to  go  to  boarding                                                              
schools.    He  asked  Representative  James  if  she  has  gotten                                                              
feedback from the Native community  to see if there is going to be                                                              
resistance to this bill.                                                                                                        
Number 1519                                                                                                                     
REPRESENTATIVE  JAMES commented  that there  would always  be that                                                              
concern,  but she has  heard more  that it  is an opportunity  for                                                              
students.   She's heard  of places  that wish  there were  more of                                                              
those opportunities  for their  children.  It  is a mixed  bag out                                                              
there.  The Native communities really  want the best education for                                                              
their children.   She believes there is big support  out there for                                                              
this school system as a way to deliver education.                                                                               
CHAIRMAN DYSON asked  her if this bill affects  Mt. Edgecumbe High                                                              
REPRESENTATIVE JAMES answered no,  unless some of the students who                                                              
currently attend Mt.  Edgecumbe go somewhere else  closer to home.                                                              
She  further explained  that this  bill gives  the other  boarding                                                              
schools approximately half of what Mt. Edgecumbe gets.                                                                          
REPRESENTATIVE   GREEN  asked  Representative   James   about  the                                                              
additional cost of room and board  for the other boarding schools.                                                              
REPRESENTATIVE  JAMES indicated  that the  boarding schools  would                                                              
have to  find that funding  elsewhere; the  parents might  have to                                                              
pay  something.   The stipend  is not  enough to  cover the  whole                                                              
cost; it  just assists with  the cost.   Without the  stipend, the                                                              
schools might  not be able to do  it.  She further  explained that                                                              
the stipend  is paid monthly based  on the actual count  of who is                                                              
at the school.  The stipend does  not fall into the count taken in                                                              
the  fall.   She  went  on  the  answer Chairman  Dyson  that  the                                                              
Department of  Education & Early  Development has not  submitted a                                                              
fiscal  note because  the proposed  committee  substitute has  not                                                              
been adopted.                                                                                                                   
Number 1251                                                                                                                     
REPRESENTATIVE  COGHILL  made  a  motion  to  adopt  the  proposed                                                              
committee substitute  (CS) for HB  257, version 1-LS1055\I,  Ford,                                                              
2/2/00, as a work draft.  There being  no objection, that proposed                                                              
CS was before the committee.                                                                                                    
CHAIRMAN DYSON asked what committee referrals HB 257 has.                                                                       
REPRESENTATIVE JAMES  answered the  HES committee and  the Finance                                                              
REPRESENTATIVE  COGHILL  asked if  there  is a  wait  list at  Mt.                                                              
REPRESENTATIVE JAMES replied yes.                                                                                               
Number 1138                                                                                                                     
JOHN  ANGAIAK  testified  via  teleconference  from  Bethel.    He                                                              
expressed his  support for HB 257.   He explained his  reasons for                                                              
support which included  the school districts being  reimbursed for                                                              
some expenses in running these schools  which often offer a second                                                              
chance to some  students.  The Bethel Alternative  Boarding School                                                              
serves 30 students whose lives have  been changed.  Room and board                                                              
is a  costly item.   He believes  if this  becomes law,  the state                                                              
will save  money in the long  run because students will  be turned                                                              
around and will become productive adults.                                                                                       
REPRESENTATIVE KEMPLEN  asked Mr.  Angaiak what his  connection is                                                              
to the educational system in Bethel.                                                                                            
MR. ANGAIAK  answered he  is speaking as  a committed parent.   He                                                              
was on the school board last year.   His commitment is unending to                                                              
improve the educational situation  for the students whether or not                                                              
he is on the board.                                                                                                             
Number 0865                                                                                                                     
BOB KNIGHT,  Mayor, City of  Nenana, testified via  teleconference                                                              
from Nenana.   He expressed his support  for HB 257.   He believes                                                              
this will be an opportunity for students  in the state to increase                                                              
their  potential  for  their  education,  and  it  will  give  the                                                              
students in  Nenana a chance to  intermingle with the rest  of the                                                              
Number 0767                                                                                                                     
TERRY BENTLEY, Superintendent, Nenana  City Schools, testified via                                                              
teleconference  from Nenana.   He  expressed support  for HB  257.                                                              
Nenana is trying  to get a boarding school going,  and the stipend                                                              
will allow Nenana,  Bethel, Galena and Takotna a  chance to recoup                                                              
some  money for  the  student's room  and  board.   Each  boarding                                                              
school runs a different style of  program.  These boarding schools                                                              
give  the students  choices  about  where they  want  to  go.   He                                                              
believes  that Nenana  can offer  a good program  by offering  the                                                              
students a choice.                                                                                                              
Number 0624                                                                                                                     
EDDY  JEANS,  Manager,  School  Finance  and  Facilities  Section,                                                              
Education  Support  Services,  Department  of  Education  &  Early                                                              
Development (EED),  came forward to  testify.  He referred  to the                                                              
spreadsheet that  was handed  out to committee  members.   He told                                                              
the committee  that  since the proposed  CS has  been adopted,  he                                                              
will prepare  and submit a fiscal  note immediately.   He reviewed                                                              
the five different residential programs  around the state that are                                                              
shown  on  the spreadsheet.    The  five  schools are  located  in                                                              
Bethel, Nenana,  Galena, Takotna [Iditarod REAA  District] and St.                                                              
MR. JEANS pointed out that 123 students  are being served by these                                                              
five schools,  and if  they receive the  current stipend  rate for                                                              
boarding  homes, it  will cost  approximately $540,000.   When  an                                                              
average figure  of $500 is figured  in for airfare, the  cost goes                                                              
up to $601,671.  When the enrollment  projections are figured, the                                                              
total cost  in FY 2002  could be approximately  $1.4 million.   He                                                              
explained  other districts  could  start other  programs, but  the                                                              
figures on the spreadsheet are the ones out there right now.                                                                    
Number 0430                                                                                                                     
REPRESENTATIVE KEMPLEN  asked Mr. Jeans if the EED  has a position                                                              
on HB 257.                                                                                                                      
MR. JEANS  said that the EED  supports choice; but  the department                                                              
has  not had  the legislative  meeting  to establish  a policy  on                                                              
this.  That  meeting will be this  week, and he could  report back                                                              
after the meeting.                                                                                                              
REPRESENTATIVE KEMPLEN stated he  felt the EED's comments would be                                                              
relevant especially since concern  was expressed several years ago                                                              
on  SB 36  about  schools closing  in  villages  and the  students                                                              
having to  attend boarding  schools.  He  would like to  allay any                                                              
concerns about those  issues.  He asked Mr. Jeans  how the stipend                                                              
rate is determined.                                                                                                             
Number 0336                                                                                                                     
MR. JEANS explained  that the stipend rate was  established by the                                                              
department years ago, and it is set  out in regulation.  The rates                                                              
are not  included in regulation but  are included in  the boarding                                                              
home application  packet.  He  didn't know the  actual origination                                                              
of the rates.                                                                                                                   
REPRESENTATIVE COGHILL  asked if schools are shutting  down, would                                                              
this allow  more latitude to open  a high school in a  REAA [Rural                                                              
Education Attendance  Area]; could this  be a cost saving  in that                                                              
area that has to be done.                                                                                                       
MR. JEANS explained  that SB 36 changed the funding  mechanism for                                                              
schools serving  less than ten  children, which basically  did not                                                              
give the schools enough money to  operate.  The local school board                                                              
makes  the  decision  to  continue   to  operate  using  resources                                                              
generated  by other  schools or  whether  the school  needs to  be                                                              
closed.  He said  since SB 36 passed, a number  of schools closed,                                                              
but a number have convinced their  school boards to remain open to                                                              
show that the student population  would come back and get back the                                                              
funding.  The  communities have to work through  the school boards                                                              
to  make the  ultimate decision.    This bill  allows parents  and                                                              
students more  choice.   The choice is  already happening,  but HB
257 will  provide some  additional revenue  to those districts  to                                                              
defray the residential component of their program.                                                                              
REPRESENTATIVE  BRICE asked  Mr. Jeans  if SB  36 didn't give  the                                                              
school districts enough to operate, why did the EED support it.                                                                 
MR. JEANS replied  the legislature made a decision  that it didn't                                                              
want to provide  the same level of funding to  schools that served                                                              
less than  ten students.   It  was the  legislature that  made the                                                              
decision  that the  threshold would  be  ten students.   It  still                                                              
provides the  school with revenue,  just not enough to  operate an                                                              
independent school at the level the school was accustomed to.                                                                   
TAPE 00-22, SIDE A                                                                                                              
Number 0001                                                                                                                     
JOHN CYR, President, National Education  Association (NEA)-Alaska,                                                              
came forward  to testify.   He indicated  that the NEA-Alaska  has                                                              
not  taken  a formal  position  on  HB 257,  but  NEA-Alaska  does                                                              
support more  boarding schools, more  flexibility and  more choice                                                              
within the  public school  system.   If this bill  is going  to be                                                              
used in  the future to close  local schools, obviously  NEA-Alaska                                                              
is not  in favor of  local schools closing.   The NEA-Alaska  does                                                              
believe HB 257 is  a good idea.  It gives added  potential to help                                                              
students who need help.                                                                                                         
Number 0173                                                                                                                     
REPRESENTATIVE BRICE  asked Mr. Jeans  if a school with  less than                                                              
ten students  brought in  a number of  boarding students  to raise                                                              
the  enrollment  number, how  would  the  stipend and  funding  be                                                              
MR. JEANS  noted that would be  dealt with through  regulation and                                                              
may have  to be  addressed.  He  gave a  brief explanation  of the                                                              
foundation funding formula.                                                                                                     
REPRESENTATIVE   WHITAKER  asked  why   small  schools   would  be                                                              
discouraged from attracting more students.                                                                                      
Number 0583                                                                                                                     
REPRESENTATIVE JAMES pointed out  that the stipend is for room and                                                              
board,  not the  cost of running  the  school.  She  sees that  as                                                              
mixing apples and oranges.                                                                                                      
REPRESENTATIVE  BRICE said  that was  the point  he was trying  to                                                              
have clarified.                                                                                                                 
Number 0629                                                                                                                     
BOB  MEDINGER,  Principal,  Bethel  Alternative  Boarding  School,                                                              
testified  via  teleconference  from   Fairbanks.    He  told  the                                                              
committee that the Bethel Alternative  Boarding School has been in                                                              
operation since  August 1998, and  the program is  meeting student                                                              
needs  that weren't  addressed in  regular programs.   The  Bethel                                                              
Alternative Boarding School is having  difficulty with the funding                                                              
formula  because it  is  treated  as a  classroom  on the  biggest                                                              
school in its  community.  By not having the  site allocation, the                                                              
school  board has had  to subsidize  the boarding  school for  the                                                              
boarding  portion.     There  aren't  grants  available   to  fund                                                              
residential programs  under state school districts.   The boarding                                                              
school has had  to come up with about $150,000-$165,000  a year to                                                              
operate  the  boarding   portion.    The  need   is  greater  than                                                              
anticipated,  and the school  could serve  more students  if there                                                              
were an  avenue to fund  this program.   Mr. Medinger  stated that                                                              
the Bethel Alternative  Boarding School is desperate  for funding.                                                              
He expressed strong support for HB 257.                                                                                         
Number 0776                                                                                                                     
CHAIRMAN  DYSON  closed  the  public  hearing  on  HB  257.    The                                                              
committee took an at-ease from 4:51 p.m. to 4:52 p.m.                                                                           
REPRESENTATIVE BRICE  made a motion  to move CSHB 257,  version 1-                                                              
LS1055\I,  Ford,   2/2/00,  out   of  committee  with   individual                                                              
recommendations  with accompanying  fiscal note.   There  being no                                                              
objection, CSHB  257(HES) moved from  the House Health,  Education                                                              
and Social Services Committee.                                                                                                  
HB 325 - MEDICAL ASSISTANCE:LIENS & CLAIMS                                                                                    
Number 0838                                                                                                                     
CHAIRMAN DYSON announced the next  order of business as House Bill                                                              
No. 325,  "An Act relating  to priorities,  claims, and  liens for                                                              
payment  for   certain  medical   services  provided   to  medical                                                              
assistance recipients; and providing for an effective date."                                                                    
Number 0847                                                                                                                     
JON  SHERWOOD, Program  Officer, Division  of Medical  Assistance,                                                              
Department of  Health & Social  Services, came forward  to present                                                              
HB 325.   He explained that  HB 325 proposes to  make improvements                                                              
to the Medical Assistance program  in the third-party recovery and                                                              
a  timely  filing  of  medical  claims  by  the  provider  to  the                                                              
department.   When  a  person applies  for  medical assistance  in                                                              
Alaska, he/she  assigns his/her right  to third-party  recovery to                                                              
the  state.   Under Medicaid,  this  is a  federal requirement  as                                                              
well.   Over  the years,  the  contractor,  who does  much of  the                                                              
third-party  recovery, has  identified weaknesses  in the  present                                                              
law that  limit the  department's ability  to recover against  the                                                              
third-party claims.  There is usually  litigation involved, either                                                              
against an  insurance company or  an individual, in these  type of                                                              
MR.  SHERWOOD offered  an  example:   Someone  is hit  by a  drunk                                                              
driver,  and the  medical care  is  paid by  Medicaid; the  person                                                              
makes  a claim  against the  drunk  driver or  the drunk  driver's                                                              
insurance  company.   This  bill  would improve  the  department's                                                              
ability to  recover money in these  situations.  It  would require                                                              
recipients  to  notify  the department  of  recovery  actions;  it                                                              
creates the  authority for  the state  to place  a lien  upon such                                                              
recoveries that  are made and  establishes a precedent;  and gives                                                              
the department  the  ability to take  its own  action against  the                                                              
third party if the individual doesn't pursue it themselves.                                                                     
MR. SHERWOOD  explained that additionally,  HB 325 is  intended to                                                              
bring medical assistance statutes  "in sync" with current practice                                                              
of  other health  care payers.    Right now  the department  gives                                                              
providers  six  months to  make  claims  for payment  for  medical                                                              
assistance; twelve  months if the recipient has  private insurance                                                              
that must be billed first.  The industry  standard generally gives                                                              
people 12  months to  file claims.   The twelve-month  period will                                                              
give providers  an opportunity to  identify those claims  and make                                                              
claims against  the department  within the  timely filing  limits.                                                              
The bill would also  amend the law to allow the  department to pay                                                              
for 100 percent  of a claim when  it finds that a  provider missed                                                              
the  timely filing  deadline  with good  cause.   Currently  under                                                              
statute, if the department makes  that finding, it can only pay 50                                                              
percent of the claim.                                                                                                           
Number 1075                                                                                                                     
REPRESENTATIVE   BRICE   commented   that   he  had   dealt   with                                                              
constituents on a  similar drunk driving case in  which the victim                                                              
received close  to a  $300,000 court award  against someone.   The                                                              
department came in and took every  penny of it, and the victim had                                                              
to go back  on medical assistance.   He asked Mr. Sherwood  how HB
325 fixes that situation.                                                                                                       
MR. SHERWOOD answered that HB 325  is intended to give the state a                                                              
clear position in making a claim.   When someone is reimbursed for                                                              
medical claims  that the department  has paid for,  the department                                                              
wants to  be reimbursed  for those claims.   There is  a provision                                                              
under law  that allows for  attorneys' fees  to be paid  under the                                                              
court rules.   In the situation he is familiar  with in Fairbanks,                                                              
the department's  eventual recovery  was not  100 percent;  it was                                                              
substantially less  than 100 percent.   He doesn't believe  HB 325                                                              
would fix  the problem  in the  sense that  if the department  has                                                              
paid  for expenses  and someone  recovers on  those expenses,  the                                                              
department  intends to  be  reimbursed for  those  expenses.   The                                                              
money doesn't go  to the recipient, even though  the recipient may                                                              
have other valid uses for the money.                                                                                            
Number 1188                                                                                                                     
REPRESENTATIVE BRICE  said he would feel better  limiting what the                                                              
department can  go after.  If  there were compensatory  damages as                                                              
well as punitive damages, then the  department could only go after                                                              
the compensatory damages.                                                                                                       
MR.  SHERWOOD indicated  the  department does  not  "go after  the                                                              
victim."   The department  goes after the  award that was  made as                                                              
part  of the  settlement or  the  court case.   In  theory, it  is                                                              
before any money  goes to the victim.  The department  has a right                                                              
to collect  reimbursement  for the services  it paid  for.   If an                                                              
award is  paid, then  the department  is trying  to collect  those                                                              
funds for  the services it  paid for.   He doesn't believe  HB 325                                                              
will give  the department  any entitlement  to  a greater pool  of                                                              
money; it  simply improves  and clarifies the  ability to  get the                                                              
money the department is already entitled to by law.                                                                             
REPRESENTATIVE  BRICE  commented that  basically  this is  turning                                                              
Medicaid and medical assistance programs  into a low-interest loan                                                              
MR. SHERWOOD  said HB  325 would  not create  a low-interest  loan                                                              
program.  This  bill does not create any special  requirement that                                                              
a recipient pay back Medicaid; if  there is a recovery against the                                                              
third party, on behalf of that recipient,  Medicaid is entitled to                                                              
that part  of the  recovery for  which the  expenses have  already                                                              
been paid.                                                                                                                      
Number 1354                                                                                                                     
CHAIRMAN DYSON asked Mr. Sherwood  when the administration started                                                              
working on HB 325.                                                                                                              
MR.  SHERWOOD  indicated  it  has been  discussed  over  the  past                                                              
several  years.   The bill  was put  forward this  year, about  in                                                              
CHAIRMAN DYSON  noted that  it is almost  word for word  what came                                                              
out of the privatization commission.                                                                                            
Number 1392                                                                                                                     
COMMISSIONER PERDUE  restated that the department  has done third-                                                              
party recovery  for about 15  to 20 years.   This is not  new; the                                                              
department simply wants to refine the way it is done.                                                                           
CHAIRMAN DYSON asked  Mr. Sherwood if the attorneys  in the third-                                                              
party cases get paid before or after the state.                                                                                 
MR. SHERWOOD  indicated there  is a provision  in the  court rules                                                              
for the  determination of attorneys'  fees, and the fees  come out                                                              
before the  state makes its recovery.   That determination  is not                                                              
the attorney-client  contingency  fee; that's  based on the  court                                                              
rule formula for determining the allowable attorney fees.                                                                       
Number 1461                                                                                                                     
REPRESENTATIVE   COGHILL  said   according  to   section  2,   the                                                              
department  would be  the first right  of payer  and the  hospital                                                              
would stand  in line.  He asked  how the percentages of  the total                                                              
costs that the hospital would get affects the accounting.                                                                       
MR. SHERWOOD clarified that when  the department pays a bill under                                                              
Medicaid,  the  provider accepts  this  payment  in full  for  the                                                              
service  with   the  exception  of  some  small   co-payments  and                                                              
deductibles.  If  the provider has accepted payment  from Medicaid                                                              
for the  service, even though  the department might  not reimburse                                                              
for the full charge, the provider  has no claim for the additional                                                              
percentage  of  what the  department  didn't  pay for.    It is  a                                                              
condition  of  participation;  the  provider  has  to  accept  the                                                              
department's payment as payment in full.                                                                                        
REPRESENTATIVE COGHILL asked about the rates.                                                                                   
MR.   SHERWOOD   agreed   that  there   are   slightly   different                                                              
reimbursement rates for different kinds of providers.                                                                           
REPRESENTATIVE COGHILL asked what  the process of payout would be.                                                              
MR. SHERWOOD  said he  believes the  department's lien  would come                                                              
first;  if there  were funds  left over,  the next  lien would  be                                                              
CHAIRMAN DYSON  offered some  amendments to discuss.   On  page 3,                                                              
line 7, strike the period after liable and add "for cause."                                                                     
Number 1641                                                                                                                     
LISA KIRSCH,  Assistant Attorney General, Human  Services Section,                                                              
Civil  Division  (Juneau),  Department  of Law,  came  forward  to                                                              
answer questions.   She responded to  the amendment.  She  said it                                                              
doesn't  appear to  be problematic;  she  is not  sure it  changes                                                              
things  much.   She  wondered what  he was  trying  to correct  or                                                              
CHAIRMAN  DYSON said  he will go  through all  the amendments  and                                                              
then Ms. Kirsch can decide if there are any problems.                                                                           
Number 1664                                                                                                                     
CHAIRMAN DYSON offered the following amendments:                                                                                
     Page 3, lines 5 and 9, strike the word "payor" and insert                                                                  
     Page 4, line 25, strike "and" after assistance, insert "that                                                               
     Page 4, line 28, insert "that are" after "services";                                                                       
     Page 4, lines 28-29, delete "for which the medical services                                                                
     were provided";                                                                                                            
     Page 4, line 9, delete "has not been" and insert "is not".                                                                 
CHAIRMAN  DYSON referred  to page  4,  line 6.   He  asked for  an                                                              
explanation  of what  is the  effect of  an action  that has  been                                                              
filed but is not in effect.                                                                                                     
MS.  KIRSCH  explained  that  is the  notice  provision  which  is                                                              
designed to assure  that everyone who is involved  in the lawsuit,                                                              
if there is a lawsuit, is aware that  the lien exists.  The second                                                              
sentence modifies the first.  If  the notice provision is not met,                                                              
then the lien is not enforceable.                                                                                               
Number 1864                                                                                                                     
CHAIRMAN DYSON asked what "perfected" means.                                                                                    
MS. KIRSCH said it doesn't imply  any particular action other than                                                              
that the  lien is not legally  enforceable until it  is perfected.                                                              
She indicated  that the chronological  order is probably  reversed                                                              
from the way it  appears in this paragraph.  That  provision is in                                                              
there so everyone involved is aware  of the lien, so people aren't                                                              
going into settlement negotiations,  and the plaintiff compromises                                                              
their claim based  on a belief that they are going  to receive all                                                              
of the funds.   If they know about the lien, that  will affect how                                                              
they  posture  in  a settlement  proceeding  because  it  has  the                                                              
potential of reducing the ultimate recovery.                                                                                    
Number 1919                                                                                                                     
LEONARD  ANDERSON,  Attorney, Davis  &  Davis, PC,  testified  via                                                              
teleconference from Anchorage.  He  explained that he has been the                                                              
state's contractor for about 2.5  years and supports HB 325.  Over                                                              
those years,  he has  had many  conversations and  correspondences                                                              
with  plaintiffs  related to  the  State of  Alaska's  subrogation                                                              
rights under  the current statute.   A problem was  encountered in                                                              
recovering  an amount  that Medicaid  recipients  promised to  pay                                                              
back if  the Medicaid  recipients have  a claim,  if they  bring a                                                              
claim  against  a  liable  third   party,  is  that  the  Medicaid                                                              
recipients will  reimburse the State  of Alaska.  The  problem has                                                              
been under  the current statute,  it gives a subrogation  claim to                                                              
the State  of Alaska.   The  result has  been that  the state  has                                                              
compromised for  probably the past  12-14 years or  longer amounts                                                              
that it recovered under the current statute.                                                                                    
MR. ANDERSON  indicated that  the bill  before the committee  will                                                              
allow the state  to have a lien  right that it does  not currently                                                              
have under AS 47.05.070.  By giving  the state that lien right, it                                                              
forces  attorneys  representing Medicaid  recipients  in  personal                                                              
injury cases  to add it to the  checklist to ask their  clients if                                                              
they've  received Medicaid;  unfortunately, his  client has  found                                                              
over the years that the attorneys  don't always ask that question.                                                              
MR.  ANDERSON reported  that he  has had  counsel ask  him if  the                                                              
state actually has  a lien right, and he had to  answer, "Read the                                                              
statute,  but I  don't  see it."    The problem  is  if the  state                                                              
doesn't have a  lien right, the attorney doesn't  have to add that                                                              
to his checklist  to ask the  client, and sometimes doesn't.   His                                                              
client doesn't get notice that there's  a possible pot of money to                                                              
recover amounts  that Medicaid has  paid for the treatment  of the                                                              
recipient's injuries.   Or, at the last minute,  the contractor is                                                              
informed of  a potential settlement  that's happening  right away,                                                              
and asked  if the  state will  settle for  "x" amount of  dollars,                                                              
which  is  pennies  on the  dollar.    The  state  has not  had  a                                                              
mechanism by which it has had any  strong enforceable rights to go                                                              
out  and disagree  with  the settlement  amount.    The state  has                                                              
always opted  to settle cases due  to the weakness of  the current                                                              
Number 2078                                                                                                                     
MR. ANDERSON  commented on  the proposed  amendments.   The reason                                                              
for  the proposed  change  on page  3, lines  5  and 9,  inserting                                                              
"tort-feasor" is the  state won't have privity or  the state won't                                                              
have a  contract with a third  party payor, possibly  an insurance                                                              
company.   Since  the state  isn't  insured under  the policy,  it                                                              
doesn't have the contractual right  to go back after that company.                                                              
The claim  has to  be actually  brought against  the liable  third                                                              
party.  Tort-feasor  is a fancy  name for the liable  third party.                                                              
He noted that language is present  also on page 4, line 3.  If the                                                              
amendment is accepted, it ought to be changed there as well.                                                                    
MR.  ANDERSON referred  to  Representative  Brice's comment  about                                                              
making a loan provision.  On page  3, line 26, section 8, there is                                                              
a hardship  provision  required by  federal law  that the  current                                                              
state  statute doesn't  have.   Under  federal law,  the state  is                                                              
required to have  a hardship provision so that  the department can                                                              
waive any  subrogation rights it  has underneath this bill  or any                                                              
new statute that's adopted.                                                                                                     
CHAIRMAN DYSON asked  Mr. Anderson to explain  the proposed change                                                              
on page 4, line 9.                                                                                                              
Number 2206                                                                                                                     
MR.  ANDERSON indicated  it  is a  grammatical  change  to use  an                                                              
active voice  instead of a  passive voice.   It is easier  to read                                                              
and understand.                                                                                                                 
CHAIRMAN DYSON asked Mr. Anderson  to explain the proposed changes                                                              
on page 4, line 25 and lines 28-29.                                                                                             
MR.  ANDERSON  said that  didn't  make  any  major change.    That                                                              
proposed change is for clarity.                                                                                                 
CHAIRMAN DYSON  asked Mr.  Anderson about  the proposed  change on                                                              
page 3, line 3.                                                                                                                 
MR. ANDERSON said he wasn't involved  in that change.  He believes                                                              
it read fine as it was.                                                                                                         
Number 2287                                                                                                                     
MS.  KIRSCH   stated  her  only   difficulty  with   the  proposed                                                              
amendments were  on page 3,  lines 5 and 9.   If it is  changed to                                                              
tort-feasor, the  ability to claim  against a third-party  insurer                                                              
is eliminated when there is no tort.   For example, a person had a                                                              
claim  against Medicaid  at  one  time, but  then  there was  some                                                              
insurer who was  ultimately liable, maybe for cause  or maybe not,                                                              
those  amendments  changing  "payor"   to  "tort-feasor"  and  the                                                              
amendment, page  3, line [7] "for  cause" might limit  the ability                                                              
to recover in certain circumstances.   She would resist those, but                                                              
the other proposed  amendments for grammatical and  clarity issues                                                              
are not a problem.                                                                                                              
CHAIRMAN DYSON  asked Mr. Anderson  to respond to the  comments on                                                              
substituting "tort-feasor" for "payor."                                                                                         
MR. ANDERSON  said the  point may  be well  taken for both  "tort-                                                              
feasor" and "for cause"; however,  he does see a potential problem                                                              
in trying to bring it against possibly  just an insurer as opposed                                                              
to a liable  third party.  If  there is an insurer out  there from                                                              
whom a pot of  money is being collected, he would  have to believe                                                              
there is a liable third party being insured.                                                                                    
TAPE 00-22, SIDE B                                                                                                              
Number 2341                                                                                                                     
REPRESENTATIVE  GREEN  made  a  motion  to  adopt  the  conceptual                                                              
amendments for clarity, which read:                                                                                             
     Page 4, line 25, strike "and", insert "that are";                                                                          
     Page 4, line 28, insert "that are" after "services";                                                                       
     Page 4, lines 28-29, delete "for which the medical services                                                                
     were provided";                                                                                                            
     Page 4, line 9, delete "has not been" and insert "is not".                                                                 
CHAIRMAN DYSON asked  if there was any objection.   There being no                                                              
objection, the conceptual amendments were adopted.                                                                              
Number 2327                                                                                                                     
REPRESENTATIVE  BRICE made a  motion to move  HB 325,  as amended,                                                              
from  the committee  with  individual recommendations  and  fiscal                                                              
notes.   There being  no objection, CSHB  325(HES) moved  from the                                                              
House Health, Education and Social Services Standing Committee.                                                                 
There being  no further business  before the committee,  the House                                                              
Health, Education  and Social Services Standing  Committee meeting                                                              
was adjourned at 5:31 p.m.                                                                                                      

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