Legislature(2017 - 2018)CAPITOL 106

01/24/2017 03:00 PM HEALTH & SOCIAL SERVICES

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Audio Topic
03:32:18 PM Start
03:33:36 PM Presentation: Fy2018 Department Overview
05:01:18 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Joint with DHS Subcommittee
+ Overview: Dept. of Health & Social Services TELECONFERENCED
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
      HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                     
    HOUSE FINANCE SUBCOMMITTEE ON HEALTH AND SOCIAL SERVICES                                                                  
                        January 24, 2017                                                                                        
                           3:32 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                             
 Representative Ivy Spohnholz, Chair                                                                                            
 Representative Bryce Edgmon, Vice Chair                                                                                        
 Representative Sam Kito                                                                                                        
 Representative Geran Tarr                                                                                                      
 Representative David Eastman                                                                                                   
 Representative Jennifer Johnston                                                                                               
 Representative Colleen Sullivan-Leonard                                                                                        
HOUSE FINANCE SUBCOMMITTEE ON HEALTH AND SOCIAL SERVICES                                                                        
 Representative Les Gara, Chair                                                                                                 
 Representative Cathy Tilton                                                                                                    
 Representative Ivy Spohnholz                                                                                                   
 Representative Bryce Edgmon                                                                                                    
 Representative Sam Kito                                                                                                        
 Representative Geran Tarr                                                                                                      
 Representative David Eastman                                                                                                   
 Representative Jennifer Johnston                                                                                               
 Representative Colleen Sullivan-Leonard                                                                                        
MEMBERS ABSENT                                                                                                                
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                             
Representative Jonathan Kreiss-Tomkins (alternate)                                                                              
HOUSE FINANCE SUBCOMMITTEE ON HEALTH AND SOCIAL SERVICES                                                                        
 All Members Present                                                                                                            
OTHER LEGISLATORS PRESENT                                                                                                     
Representative Dan Saddler                                                                                                      
COMMITTEE CALENDAR                                                                                                            
OVERVIEW: FY2018 DEPARTMENT OF HEALTH & SOCIAL SERVICES BUDGET                                                                  
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
VALERIE DAVIDSON, Commissioner                                                                                                  
Office of the Commissioner                                                                                                      
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented a PowerPoint overview of the                                                                   
Department of Health and Social Services.                                                                                       
SHAWNDA O'BRIEN, Acting Assistant Commissioner                                                                                  
Central Office                                                                                                                  
Finance and Management Services                                                                                                 
Department of Health and Social Services                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented a PowerPoint overview of the                                                                   
Department of Health and Social Services.                                                                                       
ACTION NARRATIVE                                                                                                              
3:32:18 PM                                                                                                                    
CHAIR IVY SPOHNHOLZ called the  House Health and Social Services                                                              
Standing   Committee    meeting   to   order   at    3:32   p.m.                                                                
Representatives Spohnholz,  Gara, Kito,  Tarr, Sullivan-Leonard,                                                                
Johnston, Tilton, and Eastman were present at the call to order.                                                                
Representative Edgmon  arrived as the  meeting was  in progress.                                                                
Also in attendance was Representative Saddler.                                                                                  
^Presentation: FY2018 Department Overview                                                                                     
            Presentation: FY2018 Department Overview                                                                        
3:33:36 PM                                                                                                                    
CHAIR SPOHNHOLZ announced that the only order of business would                                                                 
be an overview by the Department of Health and Social Services.                                                                 
[Chair Spohnholz passed the gavel to Chair Gara]                                                                                
3:33:47 PM                                                                                                                    
CHAIR  GARA explained  that a  goal  of the  House  Finance Sub-                                                                
committee  on Health  and Social  Services was  to  present full                                                                
recommendations to the  House Finance Committee, which  could be                                                                
accepted  or rejected.   He  expressed his  intention to  accept                                                                
amendments and to forward them whether or not they had passed or                                                                
failed.  He declared that  the focus would be on whole programs,                                                                
and  whether there  were  programs that  were  not working,  not                                                                
serving a  purpose, not necessary,  or could be  working better.                                                                
He  shared that  one other  goal  of this  sub-committee was  to                                                                
assist the  House Health and Social  Services Standing Committee                                                                
to adopt  statutory changes  as needed.   He  described indirect                                                                
expenditures as  revenue which  the State  of Alaska  could have                                                                
generated,  but did  not.   He  offered as  an  example oil  tax                                                                
credits,  which he  declared was  revenue that  could have  been                                                                
generated  for production  taxes,  but had  been  foregone.   He                                                                
directed   attention  to   a   study   of  these   expenditures,                                                                
commissioned by Representative Thompson, which listed the "money                                                                
that  we're missing  out  on that  maybe  we  shouldn't" through                                                                
Department of Health and Social Services.                                                                                       
3:36:47 PM                                                                                                                    
CHAIR GARA  reiterated that amendments  would be allowed  at the                                                                
close out  and that  he would  prepare a report  summarizing the                                                                
work  and  the recommendations  from  the  sub-committee.   This                                                                
report would include all  the proposed amendments, regardless of                                                                
whether each had passed.                                                                                                        
REPRESENTATIVE JOHNSTON asked  whether there would be a  vote on                                                                
these amendments.                                                                                                               
CHAIR GARA explained that each  amendment would be voted on, and                                                                
those amendments which  passed would be  sent as recommendations                                                                
to  the  House  Finance  Committee.     He  clarified  that  any                                                                
amendments which  did not  pass would also  be forwarded  to the                                                                
House Finance  Committee for review.   He noted that  there sub-                                                                
committee alternates from both the minority and the majority.                                                                   
3:39:01 PM                                                                                                                    
VALERIE  DAVIDSON,  Commissioner, Office  of  the  Commissioner,                                                                
Department  of Health  and  Social  Services (DHSS),  introduced                                                                
herself and other members of the Department of Health and Social                                                                
Services  (DHSS) in  attendance.   She directed  attention to  a                                                                
PowerPoint presentation entitled "FY2018 Department Overview."                                                                  
3:40:44 PM                                                                                                                    
CHAIR   GARA  introduced   Amanda  Ryder,   Legislative  Finance                                                                
Division, and declared that she was available for support to the                                                                
3:41:37 PM                                                                                                                    
COMMISSIONER  DAVIDSON   shared  slide   2,  "Health   &  Social                                                                
Services," and relayed that DHSS had been originally established                                                                
in 1919 as the [Alaska] Territorial Health Department, and then,                                                                
upon statehood  in 1949,  its responsibilities were  expanded to                                                                
provide for "the  promotion and protection of  public health, as                                                                
well as public welfare."  She pointed out that this was outlined                                                                
in Article 7  of the Constitution of  the State of  Alaska.  She                                                                
described  the  links listed  on  slide  2,  which included  the                                                                
proposed FY18 department budget.                                                                                                
3:42:50 PM                                                                                                                    
SHAWNDA O'BRIEN, Acting  Assistant Commissioner, Central Office,                                                                
Finance and Management Services, Department of Health and Social                                                                
Services, explained that  slide 3 represented  the total general                                                                
funds for DHSS, noting  that general fund spending had increased                                                                
annually until  2015, when  there had  been  a reduction  in the                                                                
"overall UGF spending" of  $190 million.  She moved  on to slide                                                                
4, which  depicted the "fund  sources for the  entire department                                                                
spread  across our  lines of  authority."   She  noted that  the                                                                
majority of the spending was included on the line for grants and                                                                
benefits, pointing  out on the  timeline that, although  the UGF                                                                
funding had  declined,  the service  levels had  been maintained                                                                
largely due "to  the increase in federal authority."   She moved                                                                
on to slide 5, which portrayed the UGF funding spread across the                                                                
departmental divisions.                                                                                                         
CHAIR  GARA  asked  for  acknowledgement that  all  the  members                                                                
understood UGF.                                                                                                                 
COMMISSIONER DAVIDSON noted  that these slides  were referred to                                                                
as a "10-year look back" in order "to show the progression for a                                                                
10-year time period," in this case the period from 2008 - 2018.                                                                 
3:44:51 PM                                                                                                                    
MS.  O'BRIEN   continued  with   slide  5,  and   reported  that                                                                
expenditures for Medicaid services comprised the majority of the                                                                
departmental budget,  about 64 percent.   She pointed  out that,                                                                
although the UGF spending for Medicaid services had begun to dip                                                                
in  2010,  there  had   been  an  increase  of  federal  funding                                                                
opportunities through the American Recovery and Reinvestment Act                                                                
(ARRA).    She reported  that  overall  growth in  the  Medicaid                                                                
program was reflected  in the large increase  to expenditures in                                                                
FY2011.  She  noted that the UGF funding  began to decline again                                                                
in FY2015 through the present year.                                                                                             
3:45:41 PM                                                                                                                    
MS. O'BRIEN explained  slide 6 as a  representation of all funds                                                                
spread  across  each  of  the  DHSS  divisions,  reporting  that                                                                
Medicaid services represented the largest expenditure.  Although                                                                
the  UGF  spending  had  decreased, a  maximization  of  federal                                                                
funding had  allowed for  the service  levels to  be maintained.                                                                
She  pointed out  that,  since 2015,  the  Medicaid program  had                                                                
reduced general fund spending  by $112 million, while increasing                                                                
federal authority by $198  million.  She moved on to  slide 7, a                                                                
graph  for  total  funding  spread across  the  various  funding                                                                
sources for  DHSS.  She  pointed out that,  although the general                                                                
funds  had decreased,  the services  levels had  been maintained                                                                
through the  federal funding  opportunities.  She  declared that                                                                
these services  were critical  safety net  programs and  had all                                                                
been maintained.                                                                                                                
CHAIR  GARA,  addressing  slide  5,  surmised  that  the  annual                                                                
increase to  the Medicaid budget was  due to an  increase in the                                                                
number of people on Medicaid in  "bad times," and that the State                                                                
of  Alaska had  the  highest or  second  highest average  annual                                                                
increase to medical costs nationwide.                                                                                           
COMMISSIONER DAVIDSON expressed her  agreement, and in response,                                                                
explained that when  state economies were doing  well there were                                                                
fewer  people  unemployed,  hence  a   lower  number  of  people                                                                
eligible.    However,  when  a  state  experienced  an  economic                                                                
downturn, there was a rise in people eligible for services.  She                                                                
explained that, as  Medicaid was a  federal entitlement program,                                                                
if there was  an eligible applicant, the person  must be served.                                                                
She acknowledged that the cost of  health care in Alaska was the                                                                
highest  in the  nation, noting  that, as  the  state population                                                                
aged, the  cost of health  care increased as  younger people did                                                                
not  need as  many acute  services.   She allowed  that the  one                                                                
exception, noting the  2009 dip on the slide,  was reflective of                                                                
the financial boost from the federal government match.                                                                          
REPRESENTATIVE SULLIVAN-LEONARD asked for more  detail as to why                                                                
the State of Alaska had the highest dollar amount for Medicaid.                                                                 
COMMISSIONER  DAVIDSON,  in  response, explained  that  Medicaid                                                                
payment rates were  set.  She explained that the  best payer for                                                                
reimbursement to  medical  costs was  private  health insurance,                                                                
with Medicaid most  likely second best, and  with Medicare being                                                                
the third best.   She stated that  private payment was generally                                                                
"written  off  to  some  percentage."   She  reported  that,  as                                                                
utilization impacted the medical budget,  DHSS had reviewed this                                                                
over-utilization  of services  which  occurred in  inappropriate                                                                
places.  She offered an example of emergency room use for health                                                                
services as it was required by  federal law for every patient to                                                                
be stabilized  prior to  release or transfer.   She  described a                                                                
DHSS program  which matched the  over-utilizers with a  plan for                                                                
more appropriate  care to attempt  to reduce this  as a  part of                                                                
Senate  Bill 74.   She  referenced a  private-public partnership                                                                
between the  State of Alaska  and the Alaska  State Hospital and                                                                
Nursing Home Association (ASHNHA).                                                                                              
3:55:40 PM                                                                                                                    
REPRESENTATIVE  TARR   commented  on  experiences   with  super-                                                                
utilizers  in her  district.   She asked  for  verification that                                                                
Alaska had the most expensive Medicaid program in the country.                                                                  
COMMISSIONER DAVIDSON, in response, expressed her agreement that                                                                
the Medicaid expenditures  were higher in many  categories.  She                                                                
pointed  out  that  the  state  participated  in  many  optional                                                                
services as  part of the  Medicaid program.   She explained that                                                                
Medicaid was a federal  program administered by both the federal                                                                
government and the  states.  Each  state had a  federal match, a                                                                
federal   medical  assistance   percentage  (FMAP),   which  was                                                                
determined by the average income of  the citizens of that state.                                                                
The  FMAP  in  Alaska   was  50  percent,  although  there  were                                                                
exceptions for children, pregnant  women and Medicaid expansion.                                                                
Under the federal program, Medicaid required certain programs to                                                                
be mandatory, which  included in-patient and out-patient visits.                                                                
Other programs could be provided at each state's option.  Alaska                                                                
had chosen to implement  optional services that would save money                                                                
in the long term.   She offered as an example that prescriptions                                                                
and  pharmaceutical  services   were  considered  optional,  not                                                                
mandatory, services.   She stated that,  as poor people  did not                                                                
generally have  the  money to  spend on  pharmaceuticals out-of-                                                                
pocket, it did not take  long for acute emergency care, a result                                                                
of  failure  to   take  medications,  to  cost   more  than  the                                                                
medications.  She offered another example for long term care and                                                                
support services, and explained that a nursing level of care was                                                                
a required,  mandatory service with  a very high  cost; however,                                                                
home and community based services for chores, cooking, etc. were                                                                
an optional service offered by the state which allowed people to                                                                
live  independently in  their  own  homes.    She reported  that                                                                
eligibility for these  home and community  based waiver services                                                                
required the individual  to meet the level  of service necessary                                                                
for in-patient nursing level of care.   If the optional home and                                                                
community based services were not  offered, the state would have                                                                
to  supply  a residential,  in-patient  service  which was  more                                                                
expensive and in short supply in Alaska.                                                                                        
REPRESENTATIVE TILTON asked that a list of the optional programs                                                                
with  the  corresponding state  funding  be  distributed to  the                                                                
committee members.                                                                                                              
4:02:48 PM                                                                                                                    
MS. O'BRIEN returned attention to slide  7 and pointed out that,                                                                
although  there  had  been  a  decrease in  state  general  fund                                                                
spending, there  had been  an increase  in federal  authority in                                                                
order to maintain historic service levels.                                                                                      
4:03:31 PM                                                                                                                    
COMMISSIONER DAVIDSON moved  on to slide 8,  explaining that the                                                                
next 12  slides included 99 rows of  detail in 12  columns.  She                                                                
explained the header for each column, which included the program                                                                
name/budget allocation, the funding, the  number of employees in                                                                
that program, and the number of Alaskans served by the program.                                                                 
4:05:59 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD,  directing  attention  to  the                                                                
column regarding rating of importance, asked how this system was                                                                
determined with a rate of effectiveness and importance.                                                                         
COMMISSIONER DAVIDSON, in response, explained that the rating of                                                                
importance was prescribed by the  House Finance Committee in its                                                                
budget memo  and directions  to the  department.   She explained                                                                
that  the  guidelines had  been  offered  by  the House  Finance                                                                
Committee and  the department then  made an assessment  for each                                                                
program as to how each best fit into the rating category.                                                                       
CHAIR GARA added that a memo from Representative Seaton for what                                                                
was most important had been included.                                                                                           
REPRESENTATIVE JOHNSTON asked for clarification about the rating                                                                
of effectiveness.                                                                                                               
COMMISSIONER DAVIDSON,  in response, explained that  this rating                                                                
was categorized as (1) getting the job done; (2) getting the job                                                                
done but with a  substantial opportunity for improvement; or (3)                                                                
not  getting   the  job   done  with  limited   opportunity  for                                                                
REPRESENTATIVE JOHNSTON asked  if the  performance measures were                                                                
used as criteria.                                                                                                               
COMMISSIONER DAVIDSON expressed  her agreement.  She  added that                                                                
this was  the first use of  the rating system  matrix, which had                                                                
resulted "in exciting and  vigorous debate within the department                                                                
about where that rating should land."                                                                                           
4:11:56 PM                                                                                                                    
COMMISSIONER  DAVIDSON explained  that the  final  three columns                                                                
outlined whether each  program was a federal  or state statutory                                                                
requirement,  or a  constitutional requirement.    She explained                                                                
that a grey  horizontal row indicated a summary  with the detail                                                                
below, pointing  out that  not all of  these boxes  were filled.                                                                
She reported that,  in recent budget years, DHSS  had looked for                                                                
ways to maximize  its federal participation through partnerships                                                                
and re-financing, in order to save state general funds.                                                                         
4:14:47 PM                                                                                                                    
MS. O'BRIEN referenced the  information about the Alaska Pioneer                                                                
Homes on slide 8.  She reported that the majority of staffing in                                                                
the Pioneer Homes provided direct services, and that the Pioneer                                                                
Homes were 2.3 percent of DHSS budget.                                                                                          
COMMISSIONER  DAVIDSON  shared  that,  since  FY15,  the  Alaska                                                                
Pioneer Homes  budget had  been reduced in  UGF by  9.8 percent,                                                                
about $3.6  million, which included  reductions of 23  full time                                                                
positions, about 4 percent.                                                                                                     
4:16:03 PM                                                                                                                    
MS. O'BRIEN moved on to  slide 9, which outlined the Division of                                                                
Behavioral  Health.   She  shared  that  this  division was  4.9                                                                
percent of the department budget, with the majority of its staff                                                                
working  for  the  Alaska  Psychiatric Institute  and  providing                                                                
direct services  to the  residents of the  facility.   She noted                                                                
that the  largest amount of  UGF was for  treatment and recovery                                                                
grants, which were issued for  direct services to grantees.  She                                                                
shared  that Medicaid  Expansion now  allowed client  billing of                                                                
services to  Medicaid, thereby decreasing the  reliance on state                                                                
CHAIR  GARA pointed  out  there would  be  separate hearings  on                                                                
treatment   services,   Medicaid  Expansion,   privatizing   the                                                                
pharmaceutical function  at the  Pioneer Homes, and  [Office of]                                                                
Children's Services.                                                                                                            
COMMISSIONER DAVIDSON  reported that the  Division of Behavioral                                                                
Health  had been  reduced by  24 percent,  about  $18.96 million                                                                
since  FY2005,  with  a  full   time  position  reduction  of  5                                                                
positions, about 1.4 percent.                                                                                                   
REPRESENTATIVE SULLIVAN-LEONARD  asked for clarification  to the                                                                
reduction of positions.                                                                                                         
COMMISSIONER  DAVIDSON stated  that  these  were elimination  of                                                                
MS.  O'BRIEN  moved on  to  slide  10  regarding the  Office  of                                                                
Children's Services,  which was  5.6  percent of  the department                                                                
budget.  She pointed out  that the majority of staff funding was                                                                
for  front  line social  workers  providing  direct services  to                                                                
children and their  families. She reported that  the majority of                                                                
UGF dollars was spent on formula programs, including foster care                                                                
and adoption and guardianship payments.                                                                                         
COMMISSIONER DAVIDSON stated  that, since FY2015, the  Office of                                                                
Children's  Services  had  been  reduced by  7.3  percent,  $6.8                                                                
million, although the  job positions had increased  by 24, about                                                                
4.7 percent,  largely due to  the number of  children in out-of-                                                                
home placement.                                                                                                                 
CHAIR  GARA asked  if the  number of  youth in  foster  care had                                                                
increased from 1800  youth to about  3000 youth in  the last six                                                                
COMMISSIONER DAVIDSON expressed her agreement.                                                                                  
CHAIR GARA asked if the staffing had also increased commensurate                                                                
to the caseload.                                                                                                                
COMMISSIONER DAVIDSON assessed that the number  of staff had not                                                                
increased commensurate to the increase in case load.                                                                            
4:21:42 PM                                                                                                                    
MS. O'BRIEN  reported on slide  11, the Division of  Health Care                                                                
Services.   She  relayed that  this division  accounted for  0.8                                                                
percent  of  the  overall  departmental budget,  and  its  staff                                                                
administered the  Medicaid claims payment  programs and  for the                                                                
Medicaid redesign work.   Moving on to the  next program listed,                                                                
she  reported   that  the   Catastrophic  and   Chronic  Illness                                                                
Assistance program had  previously served more  than 400 people,                                                                
but since Medicaid Expansion  and subsequent reform efforts, the                                                                
majority  of  the  recipients  were now  eligible  for  Medicaid                                                                
Expansion and the program now served fewer than 10 people.                                                                      
4:22:38 PM                                                                                                                    
REPRESENTATIVE  JOHNSTON asked  if  there  would  be a  specific                                                                
hearing relative to the report from  Senate Bill 74, in order to                                                                
determine  what  has   been  accomplished  and   what  could  be                                                                
accomplished in the upcoming FY2018 budget.                                                                                     
CHAIR GARA asked for clarification.                                                                                             
REPRESENTATIVE   JOHNSTON  explained   that   she  wanted   more                                                                
information relative to the current status of the reform efforts                                                                
in Senate Bill  74 and the possible impact to  decisions for the                                                                
FY2018 budget.                                                                                                                  
COMMISSIONER DAVIDSON  expressed her agreement that  Senate Bill                                                                
74 was "a comprehensive  Medicaid redesign bill" and that reform                                                                
and expansion  should move  "hand in hand."   She  declared that                                                                
DHSS had met all of its statutory requirements for timelines and                                                                
the department would provide more budget detail.  She lauded the                                                                
extensive bi-partisan work to this point.                                                                                       
CHAIR GARA,  in response to Representative  Johnson, shared that                                                                
this would be the topic of the next committee meeting.                                                                          
COMMISSIONER  DAVIDSON returned  attention  to  the Division  of                                                                
Health Care Services and reported  that, since FY2005, there had                                                                
been a  17.5 percent reduction,  about $1.7 million.   She added                                                                
that there had been a reduction of 3 positions since 2015, about                                                                
2.4 percent.  She pointed out that these positions were handling                                                                
the analysis and available opportunities in Senate Bill 74.                                                                     
4:25:17 PM                                                                                                                    
MS. O'BRIEN moved on to slide 12, and reported that the Division                                                                
of   Juvenile  Justice  accounted   for  2.1   percent   of  the                                                                
departmental budget.  She relayed that  it was important to note                                                                
that the  department had  recently closed the  Ketchikan [Youth]                                                                
Facility and that the Nome Youth Facility was scheduled to close                                                                
in FY2018 due to the loss of one time funding.                                                                                  
REPRESENTATIVE TARR asked for more information about the closure                                                                
of the Nome Youth facility.                                                                                                     
COMMISSIONER  DAVIDSON replied  that  the  Division of  Juvenile                                                                
Justice privatization  study would  soon be  released,  and that                                                                
more detail could then be  provided.  She added that Senate Bill                                                                
74  had required  privatization studies for  the  Alaska Pioneer                                                                
Homes and  its pharmaceutical  services, as  well as  the Alaska                                                                
Psychiatric Institute.  She stated  that these reports would all                                                                
be released shortly.                                                                                                            
REPRESENTATIVE TARR expressed her concern  for kids being placed                                                                
so far away from  their home communities and those corresponding                                                                
nearby support networks.  She asked  where the kids would now be                                                                
COMMISSIONER  DAVIDSON   explained  that   the   current  budget                                                                
proposals were released  prior to completion  of the feasibility                                                                
studies.  She reported that, as the Nome Youth Facility had only                                                                
received a one  year funding, DHSS did not  include the facility                                                                
in its recommendations to the  governor during discussion of the                                                                
proposed  budget  cuts.   She  noted  that  DHSS would  also  be                                                                
reviewing the privatization studies.                                                                                            
COMMISSIONER DAVIDSON  relayed that, since FY2015,  the Division                                                                
of Juvenile Justice had sustained a  7 percent budget cut, about                                                                
$4 million,  as well  as 38  full time position  reductions, 7.9                                                                
REPRESENTATIVE  SULLIVAN-LEONARD asked  for  a  summary  of  the                                                                
reductions and its effect on DHSS.                                                                                              
COMMISSIONER DAVIDSON asked  whether this was a  request for the                                                                
dollar reductions  and the  percent reductions,  as well  as the                                                                
staff reductions and those percentages.                                                                                         
REPRESENTATIVE SULLIVAN-LEONARD expressed her agreement.                                                                        
4:30:37 PM                                                                                                                    
MS. O'BRIEN moved on to slides 13 and 14, the Division of Public                                                                
Assistance budget.  She reported that the division entailed 11.2                                                                
percent of the departmental budget, and that the majority of its                                                                
staff were responsible for determining eligibility and assisting                                                                
recipients with  the benefit  process.   She explained  that the                                                                
Adult Public Assistance program  was "responsible for satisfying                                                                
the maintenance of  effort requirement for  the Medicaid program                                                                
in the State of Alaska."                                                                                                        
COMMISSIONER  DAVIDSON  reported that  there  had  been  a  15.7                                                                
percent reduction within the Division of Public Assistance since                                                                
FY2015, about $25.3 million.  The full time staff reductions had                                                                
been about 1.6 percent although, she surmised, this seemed to be                                                                
low.   She relayed that  the department had  received calls from                                                                
legislators and concerned  Alaskans that there  were unduly long                                                                
wait times for the  process of applications to eligibility.  She                                                                
pointed out  that during the  first year of  Medicaid Expansion,                                                                
the Alaska Mental  Health Trust Authority had  made $1.3 million                                                                
available to  the Department of  Health and Social  Services for                                                                
positions within  the  Division of  Public Assistance  to assist                                                                
with  the  additional 22,000  Alaskans  projected to  apply  for                                                                
Medicaid  Expansion.   She relayed  that,  unfortunately, during                                                                
this same budget year,  the Division of Public Assistance budget                                                                
for positions  to process the  applications was reduced  by $1.5                                                                
million, between 23 - 26  positions.  She declared that, as this                                                                
would  be a  recurring  reduction, the  department would  remain                                                                
short of staff to  process applications.  She allowed that there                                                                
were some  fast tracks  for immediate assistance  in processing,                                                                
including for pregnant women.                                                                                                   
4:34:42 PM                                                                                                                    
MS.  O'BRIEN explained  that  slides 15  and  16 referenced  the                                                                
Division of  Public Health  which comprised  4.3 percent  of the                                                                
departmental budget, and  that the majority of  its staffing was                                                                
in nursing which  provided direct services.  She  added that the                                                                
general funds  for the community  health grant program  had been                                                                
reduced  through refinancing  opportunities  under the  Medicaid                                                                
COMMISSIONER DAVIDSON pointed out this refinancing had been with                                                                
a 100 percent federal match.  She added that, since FY2015, this                                                                
division had  a  22.9 percent  reduction, about  $12.79 million.                                                                
She  shared that  there had  been a  reduction of  57 positions,                                                                
about 11.9 percent.                                                                                                             
REPRESENTATIVE TARR  asked for clarification that  these numbers                                                                
were from FY2015 until the present.                                                                                             
COMMISSIONER DAVIDSON expressed her agreement.                                                                                  
REPRESENTATIVE JOHNSTON  asked  if the  community  health grants                                                                
were for community centers or rural health centers.                                                                             
COMMISSIONER  DAVIDSON explained  that  these  grants were  pass                                                                
through funds which  were shared with the  communities, and were                                                                
not through rural  health centers.  She offered  that some funds                                                                
went to the Municipality of  Anchorage, and that these funds had                                                                
also experienced some reductions during the budget process.                                                                     
REPRESENTATIVE JOHNSTON  asked to  clarify that  there  had been                                                                
some savings due to additional federal funding.                                                                                 
COMMISSIONER DAVIDSON explained that in this category there were                                                                
both community  health grants as  well as community  health aide                                                                
training grants.  She stated that the training grant funding had                                                                
been zeroed out of the UGF budget, but were recouped through 100                                                                
percent federal match funding from  the Centers for Medicare and                                                                
Medicaid Services (CMS)  to the tribal  facilities which trained                                                                
these community health aides.                                                                                                   
REPRESENTATIVE JOHNSTON  asked if the  UGF cuts were  mainly for                                                                
the community health center grants.                                                                                             
COMMISSIONER DAVIDSON expressed her agreement.                                                                                  
4:38:35 PM                                                                                                                    
MS.  O'BRIEN  directed  attention to  slide  17,  outlining  the                                                                
Division of  Senior  and Disabilities  Services.   This division                                                                
comprised  2.5  percent  of  the  departmental  budget  and  the                                                                
majority  of  the staff  provided  direct  services through  the                                                                
administrative  services.   She  addressed  the community  based                                                                
grants  programs which  provided low  cost, in-home  services to                                                                
seniors in order to help maximize independence and allow seniors                                                                
to remain in their homes longer.                                                                                                
COMMISSIONER DAVIDSON reported that  this division had sustained                                                                
a $208,000  reduction, about 0.5  percent, since FY2015.   There                                                                
had  been  an increase  of  3  full  time  positions, about  1.8                                                                
percent.    She explained  that,  in  FY2016, the  $8.9  million                                                                
Independent  Living  program  had  been  transferred  into  this                                                                
program from  the Department  of Labor &  Workforce Development,                                                                
and  the Early  Intervention  Infant Learning  Program had  been                                                                
transferred from the Office of Children's Services.                                                                             
4:41:02 PM                                                                                                                    
MS. O'BRIEN  directed attention  to slide  18 and  addressed the                                                                
Department Support Services.   She relayed that  the majority of                                                                
this staff were  information technology and that  the IT manager                                                                
would  be transferred  to the  Shared  Services as  part of  the                                                                
centralized information office in the FY2018 budget.                                                                            
COMMISSIONER DAVIDSON shared that, since FY2015, this department                                                                
had  a  31.8  percent  reduction, about  $7.8  million,  with  a                                                                
reduction of 22 full time positions, about 8.5 percent.                                                                         
4:41:59 PM                                                                                                                    
MS. O'BRIEN  moved on to  slide 19 which  addressed the Medicaid                                                                
Services budget.   She pointed  to the various programs  and the                                                                
number of  Alaskans each  program served.    She noted  that the                                                                
adult preventive dental  component did not  represent the entire                                                                
body of  expenditures for the dental program,  but only detailed                                                                
some of the services provided through adult dental.                                                                             
4:42:50 PM                                                                                                                    
REPRESENTATIVE  JOHNSTON  asked   about  the  transfer   of  the                                                                
Children's Medicaid Services.                                                                                                   
MS. O'BRIEN explained that Children's Medicaid Services had been                                                                
transferred  to  the  Behavioral Health  component  of  Medicaid                                                                
Services as most of its services were behavioral health related.                                                                
CHAIR  GARA asked  about the  elimination of  a  dental services                                                                
program in the prior year.                                                                                                      
4:43:56 PM                                                                                                                    
COMMISSIONER DAVIDSON explained that there  had been a reduction                                                                
to the optional dental services, but not an elimination.                                                                        
CHAIR GARA asked which dental services were now provided through                                                                
COMMISSIONER DAVIDSON explained that some of these services were                                                                
included  under  health  care  Medicaid services.    When  these                                                                
optional adult  preventive dental  Medicaid services  were first                                                                
offered,  the  Alaska  State  Legislature  asked  that  they  be                                                                
accounted for separately.  She pointed out that this service was                                                                
most often for dentures, as  it enhanced the possibility for job                                                                
CHAIR GARA asked if the program had remained intact.                                                                            
COMMISSIONER DAVIDSON  explained that there had  been reductions                                                                
in utilization.                                                                                                                 
4:45:19 PM                                                                                                                    
MS. O'BRIEN shared that, although there had been $112 million in                                                                
general fund reductions to the Medicaid services, there had been                                                                
an  increase of  $198  million in  federal  authorization.   She                                                                
shared that service  levels had been maintained  while there had                                                                
been success in reducing the UGF.                                                                                               
CHAIR SPOHNHOLZ asked how much the UGF had been decreased.                                                                      
MS. O'BRIEN, in response, reiterated that UGF had been decreased                                                                
by $112 million, a reduction of 8 percent.                                                                                      
4:46:41 PM                                                                                                                    
REPRESENTATIVE JOHNSTON  asked about  any cost  and  any savings                                                                
through  Medicaid Expansion  which had  been  applied to  tribal                                                                
COMMISSIONER DAVIDSON asked for further clarification.                                                                          
REPRESENTATIVE JOHNSTON  asked if  any Medicaid  expansion funds                                                                
had gone  to tribal health  organizations, and, if so,  had this                                                                
resulted in any savings to the state.                                                                                           
COMMISSIONER  DAVIDSON  explained  that  any  Medicaid  provider                                                                
enrollee who  had supplied  a medically necessary  service under                                                                
Medicaid, whether through Medicaid  or Medicaid Expansion, could                                                                
seek reimbursement from the Medicaid program for those services.                                                                
She stated that  this could include both tribal  health and non-                                                                
tribal health programs.  She offered background to the extensive                                                                
negotiations between  tribal and non-tribal  organizations since                                                                
Centers for  Medicare and  Medicaid Services (CMS)  had provided                                                                
new guidance for the tribal claiming policy.  She explained that                                                                
previously  the federal  government had  required  tribal health                                                                
organizations to seek third party reimbursement, such as private                                                                
insurance,  Medicaid,   or  Medicare.     However,  the  federal                                                                
government had now  implemented a rule that  offered 100 percent                                                                
federal reimbursement if  a person was an  Indian Health Service                                                                
(IHS) beneficiary,  as well as  a Medicaid beneficiary,  and the                                                                
care  was  received  through  an IHS  facility,  which  included                                                                
tribally operated facilities in  Alaska.  The interpretation had                                                                
now been expanded to include both medically necessary travel, as                                                                
this was  an access-to-care  issue, and care  started in  an IHS                                                                
facility but referred to a non-tribal facility because of a lack                                                                
of capacity for specific care; hence, these were now offered for                                                                
100  percent federal  reimbursement.   She  offered an  example,                                                                
citing  an expansion  of care  available to  Alaskans without  a                                                                
duplication of services, and a  savings of general fund dollars.                                                                
She relayed that these negotiations for expansion were on-going.                                                                
4:53:17 PM                                                                                                                    
REPRESENTATIVE KITO asked what would happen  if there were a cut                                                                
to  the larger  programs such  as  Medicaid, as  the 50  percent                                                                
reimbursable rate  generated a cost of  about $600 million.   He                                                                
asked if service would  then only be offered for a  portion of a                                                                
year, or were  there other mechanisms to decrease  this level of                                                                
service to beneficiaries.                                                                                                       
COMMISSIONER  DAVIDSON  replied  that there  were  some  options                                                                
through utilization management.  She  offered an example of home                                                                
and community  based waiver  services, and suggested  that there                                                                
could be limitations on the number  of hours or units of service                                                                
for which Medicaid would pay.   She pointed out that a reduction                                                                
to this service could also limit  the amount of time that people                                                                
were allowed to stay in their own home, instead requiring a move                                                                
to a  facility, and  thereby increasing the cost  of care.   She                                                                
reported that  DHSS  was scrutinizing  travel, as  Medicaid only                                                                
paid  for medically  necessary  travel for  care  which was  not                                                                
available in the patient's location.   She pointed out that many                                                                
of the benefits from Medicaid,  such as pre-natal care and child                                                                
immunizations, saved money in the long run.                                                                                     
REPRESENTATIVE KITO asked if a reduction of Medicaid funding for                                                                
expected services would lead to Alaskans without care.                                                                          
COMMISSIONER  DAVIDSON explained  that changes  to  the Medicaid                                                                
program  could  be   reductions  in  eligibility,  reduction  of                                                                
reimbursement rates  to providers, or  reductions in utilization                                                                
as previously explained.  She pointed out that there had been an                                                                
aggressive movement for the  leveraging of federal resources and                                                                
working with  the tribal and non-tribal  health organizations to                                                                
develop partnerships to continue the level of service.                                                                          
CHAIR GARA lauded the tribal health waivers and other                                                                           
initiatives DHSS had launched.                                                                                                  
5:00:41 PM                                                                                                                    
[Chair Gara returned the gavel to Chair Spohnholz]                                                                              
5:01:18 PM                                                                                                                    
There being no further business before the committee, the House                                                                 
Health and Social Services Standing Committee meeting was                                                                       
adjourned at 5:01 p.m.                                                                                                          

Document Name Date/Time Subjects