Legislature(2015 - 2016)CAPITOL 106
03/28/2015 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
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| Start | |
| HB148 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 148 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
March 28, 2015
3:02 p.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Liz Vazquez, Vice Chair
Representative Neal Foster
Representative Louise Stutes
Representative David Talerico
Representative Geran Tarr
Representative Adam Wool
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Dan Saddler
Representative Mike Hawker
Representative Andy Josephson
COMMITTEE CALENDAR
HOUSE BILL NO. 148
"An Act relating to medical assistance reform measures; relating
to eligibility for medical assistance coverage; relating to
medical assistance cost containment measures by the Department
of Health and Social Services; and providing for an effective
date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 148
SHORT TITLE: MEDICAL ASSISTANCE COVERAGE; REFORM
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/18/15 (H) READ THE FIRST TIME - REFERRALS
03/18/15 (H) HSS, FIN
03/24/15 (H) HSS AT 3:00 PM CAPITOL 106
03/24/15 (H) Heard & Held
03/24/15 (H) MINUTE(HSS)
03/26/15 (H) HSS AT 3:00 PM CAPITOL 106
03/26/15 (H) Heard & Held
03/26/15 (H) MINUTE(HSS)
03/28/15 (H) HSS AT 3:00 PM CAPITOL 106
WITNESS REGISTER
LINCOLN BEAN SR., Elected Tribal Leader
Chair, Alaska Native Health Board
Kake, Alaska
POSITION STATEMENT: Testified in support of HB 148.
LOUISE DEKREON-WATSJOLD
St. Anthony Catholic Parish
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
MARY VALLEJO BLOES
Anchorage Faith & Action Congregations Together
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
KATE BURKHART, Executive Director
Alaska Mental Health Board/Advisory Board on Alcoholism and Drug
Abuse
Division of Behavioral Health
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 148.
SHARON WHYTAL
Homer, Alaska
POSITION STATEMENT: Ms. Whytal's testimony in support of HB 148
was read by Taneeka Hansen, Staff to Representative Paul Seaton,
Alaska State Legislature.
RANDI SWEET, Spokesperson
United Way of Anchorage
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
JOHN LAUX
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 148.
DAVE MORGAN
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 148.
WIL THEUER
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 148.
FRED BUGARIN, Pastor
St. Anthony Parish
Anchorage Faith & Action Congregations Together
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
BOB RUPKEY (ph)
Anchorage Faith & Action Congregations Together
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 148.
PAUL SHERRY
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 148.
LUKE HOPKINS, Mayor
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 148.
JEANNETTE GRASTCO, President
National Alliance on Mental Illness
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 148.
SHEILA SMITH, Licensed Clinical Social Worker
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 148.
RICHARD ROBB
Bethel, Alaska
POSITION STATEMENT: Testified in support of HB 148.
LACEY KEIL
Seward, Alaska
POSITION STATEMENT: Testified in support of HB 148.
KATHLEEN YARR
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of HB 148.
DAVID OTNESS
Cordova, Alaska
POSITION STATEMENT: Testified in support of HB 148.
DEROTHA FERRARO, Director
Public Relations & Marketing
South Peninsula Hospital
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 148.
CHARLES BINGHAM
Sitka, Alaska
POSITION STATEMENT: Testified in support of HB 148.
ROBIN MENARD, Spokesperson
Mat-Su Health Foundation
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 148.
ANNETTE ALFONSI
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
MARY MINOR
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 148.
RUTH WOOD
Talkeetna, Alaska
POSITION STATEMENT: Testified during the discussion of HB 148.
MIKE COONS
Palmer, Alaska
POSITION STATEMENT: Testified in opposition to HB 148.
ELIZABETH RIPLEY, Executive Director
Mat-Su Health Foundation
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 148.
ROSS BIELING
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 148.
SARAH KEHOE
Talkeetna, Alaska
POSITION STATEMENT: Testified in support of HB 148.
JEANNE SWARTZ
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
NANCY BALE
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
JESSICA CLER, Alaska Public Affairs Manager
Planned Parenthood Votes Northwest
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
CLAYTON WALKER, Sr.
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 148.
CANDUS MILLER
Wasilla, Alaska
POSITION STATEMENT: Testified in opposition to Medicaid
expansion.
PAT CHAPMAN
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of HB 148.
JEANNE PARKER
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 148.
KELLY WALTERS
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 148.
ROBERT NEWMAN, Student
Juneau-Douglas High School
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 148.
ERIC JORDAN, Policy Analyst
Alaska Native Health Board
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 148.
JON SHERWOOD, Deputy Commissioner
Medicaid and Health Care Policy
Office of the Commissioner
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 148.
VALERIE DAVIDSON, Commissioner Designee
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 148.
STACIE KRALY, Chief Assistant Attorney General
Human Services Section
Civil Division
Department of Law
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
HB 148.
ACTION NARRATIVE
3:02:38 PM
CHAIR PAUL SEATON called the House Health and Social Services
Standing Committee meeting to order at 3:02 p.m.
Representatives Tarr, Stutes, Talerico, Foster, and Seaton were
present at the call to order. Representatives Vazquez and Wool
arrived as the meeting was in progress. Also in attendance were
Representatives Saddler, Hawker, and Josephson.
HB 148-MEDICAL ASSISTANCE COVERAGE; REFORM
3:03:12 PM
CHAIR SEATON announced that the only order of business would be
HOUSE BILL NO. 148, "An Act relating to medical assistance
reform measures; relating to eligibility for medical assistance
coverage; relating to medical assistance cost containment
measures by the Department of Health and Social Services; and
providing for an effective date."
3:05:29 PM
LINCOLN BEAN SR., Elected Tribal Leader; Chair, Alaska Native
Health Board, paraphrased from the following prepared statement
[original punctuation provided]:
Honorable Representative Seaton and Members of the
Committee: Thank you for the opportunity to provide
input for this hearing on House Bill 148, "An Act
relating to medical assistance reform measures;
relating to eligibility for medical assistance
coverage; relating to medical assistance cost
containment measures by the Department of Health and
Social Services; and providing for an effective date."
I am the Chairman of the Alaska Native Health Board
(ANHB). ANHB, established in 1968, is recognized as
the statewide advocacy voice on Alaska Native Health
issues; and serves as the support organization for the
Alaska Tribal Health System (ATHS). The ATHS is a
voluntary affiliation of over 30 tribal organizations
that serve over 145,000 Alaska Natives and American
Indians (ANAIs) and thousands more non-Natives
throughout the state. The ATHS network includes a
statewide hospital in Anchorage, 25 sub-regional
clinics, 6 regional hospitals, nearly 200 village
clinics, and 5 residential treatment centers. I am
here to speak before you today in support of HB 148
and to voice our concern on the critical and urgent
need to expand Medicaid in our state. Expanding
Medicaid and implementing smart reforms will provide
immediate relief to an over-taxed system. It will do
this by addressing the chronic underfunding of our
health care facilities; reducing the unique and
complex geographic challenges associated with our
rural villages; and, promoting innovative solutions
that leverage the strengths of the ATHS model. Chronic
Underfunding Chronic underfunding afflicts our Native
health facilities. Currently, federal dollars from the
Indian Health Service (IHS) cover approximately 55% of
the funding needed to provide health care services to
the Native population. The finite federal funds mean
that for every person referred there are fewer dollars
available for the next. If Tribal programs operated
solely on federal funds, services would be curtailed
or halted long before the fiscal year ended. However,
Tribal health programs have developed capacity and
access, and depend on third party billing in their
business models. Medicaid is critical and has
contributed to the improved health status of tribal
people. However, the disparities still exist and
Tribal programs are stretch to cover the costs of care
for the uninsured. Medicaid expansion closes the gap
caused by uncompensated care. Alaska Native Health
Board 2 Geographic Challenges Almost 80% of Alaska
Native villages are not connected by a road system.
This presents a major challenge for Alaska's rural
villages. The Community Health Aide Program (CHAP) is
the backbone of the rural health care system and in
many cases provides the only local source of health
care for many Alaska Native people. But when health
care services are needed beyond what the community
health aides can provide, tens of thousands of
Alaskans do not have access. The IHS funding typically
covers only "urgent" travel, meaning when a patient is
at risk of loss of life or limb. In other words,
transportation is only funded when a trip to the
emergency room is needed. However, Medicaid offers
travel benefits that will allow earlier detection of
illness and preventative measures. Innovative
Solutions Medicaid expansion and reform offer the
greatest opportunity to plant the seeds and implement
innovative solutions. In collaboration between the
State of Alaska and the ATHS, there are true
opportunities to develop savings. 100% FMAP: From a
tribal perspective, Medicaid Expansion would create a
tremendous opportunity to allow newly eligible
beneficiaries to receive services where 100% FMAP
continues to apply. In doing this, the Tribal system
would have increased resources to provide greater
access and a higher level of health care delivery.
This expanded capacity will create healthier lives and
safer communities across the state. Uncompensated care
waiver: Other states with large ANAIs populations that
cut back their Medicaid program due to budget
shortfalls helped to overcome that shortfall working
with tribes and CMS to develop 1115 waivers under
which Indian health provider types were approved and
could be compensated for a different array of services
(and sometimes eligibility categories) than other
providers. And 100% FMAP will remain for ANAIs even
after the FMAP rate for others decline to 90%.
Transportation and accommodation waiver: Alaska is
highly unique given its vast size, disconnected (by
road) village communities, and cohesive Alaska Tribal
Health System. Medicaid expansion and reform offers an
opportunity to leverage these attributes by designing
reimbursement model that fits our system of care.
Expanding Medicaid now will save lives. Expanding
Medicaid now will save lives and dollars. It will also
create job opportunities in rural Alaska during a time
when many industries are cutting back on hiring. It
will provide the safety net so those who become sick
don't risk losing everything. It will improve access
and provide for proactive approaches and support
innovation. Our decisions today will not only impact
our lives, but those of our children and our
grandchildren. Please pass HB 148.
3:13:05 PM
LOUISE DEKREON-WATSJOLD, St. Anthony Catholic Parish, informed
the committee that St. Anthony Parish is a member of Anchorage
Faith & Action Congregations Together (AFACT), which is a
federation of 15 churches representing about 8 denominations and
10,000 residents throughout the Anchorage area. Ms. Dekreon-
Watsjold said AFACT represents a typical Alaska demographic of
ethnicities, nationalities, education levels, socio-economic
levels, political affiliations, and non-affiliations. The
organization has a common belief in the inherent dignity and
worth of human beings. Members of AFACT have extended family
throughout the state, and have been working with legislators and
others to explain the effects of the Medicaid gap, which affects
those who have no access to Medicaid and no access to the health
exchange marketplaces. She said this situation denies health
care coverage, which is a basic right for most citizens, and
puts those affected, through no fault of their own, on the wrong
side of the law. Ms. Dekreon-Watsjold stated that one
alternative idea to Medicaid expansion is to provide medical
care through neighborhood clinics and health centers. However,
these services are limited to primary care and cannot meet the
needs of many. Another alternative suggestion is for physicians
to donate their time, which is an unreasonable expectation.
Finally, it was suggested that churches should step in, and she
assured the committee that churches are already involved and
have been for two years; for example, in 2013, AFACT produced
4,000 copies of a Medicaid informational booklet on Medicaid
expansion, gave 800 presentations on the subject in communities,
and repeatedly contacted elected officials. She characterized
the foregoing alternative ideas as limited in scope and
unrealistic, and urged for Medicaid expansion this session. Ms.
Dekreon-Watsjold provided AFACT's mission statement.
3:17:37 PM
MARY VALLEJO BLOES, Anchorage Faith & Action Congregations
Together (AFACT), stated she was speaking out of concern about
the Patient Protection and Affordable Care Act (PPACA) including
coverage for everyone. Ms. Bloes said she is an 83-year-old
widow and has been an Alaska resident for 55 years. Her son is
45, has worked all of his life, and was suddenly stricken with
severe depression. In July 2014, he was denied coverage under
PPACA and was referred to coverage under Medicaid. It was eight
months before she was notified that his application was
received. During the delay, Ms. Bloes paid for counselling by a
psychologist and sought treatment through the Anchorage
Community Health Center; however, she said, "it's not what he
needs, really." Ms. Bloes stated that countless people are
suffering, although she acknowledged that legislators must
follow the [Alaska State Constitution] and are working hard to
ensure programs are not abused. She urged the committee to
remember the law of compassion.
3:21:21 PM
KATE BURKHART, Executive Director, Alaska Mental Health
Board/Advisory Board on Alcoholism and Drug Abuse, Division of
Behavioral Health, Department of Health and Social Services
(DHSS), informed the committee that the Alaska Mental Health
Board and the Advisory Board on Alcoholism and Drug Abuse, the
state's planning councils for behavioral health, support HB 148.
Adults without dependent children are not eligible for Medicaid
unless qualified as disabled by the Social Security
Administration, which is very difficult, especially for those
experiencing mental illness. In addition, DHSS constituents
experiencing a primary disability related to a substance abuse
disorder are not eligible for disability benefits. Ms. Burkhart
advised that many adults in Alaska who are disabled due to a
serious and chronic behavioral health disorder, cannot currently
access Medicaid. Medicaid expansion in HB 148 is based on
indigence and not on a categorical eligibility, which would
allow the aforementioned sector access to healthcare. She
stressed that access to health care has been shown to prevent
recidivism in those returning to a community from prison,
therefore, expanding Medicaid is not only an issue of health
care but is also a factor to reduce costs across systems,
including [the Department of Corrections].
REPRESENTATIVE TARR asked for a description of some of the
conditions of substance use disorder.
MS. BURKHART offered to provide the committee a memo with the
requested information.
3:25:06 PM
TANEEKA HANSEN, Staff to Representative Paul Seaton, Alaska
State Legislature, read the testimony submitted by email from
Sharon Whytal as follows [original punctuation provided]:
Dear Committee members: Please read my following
comments into the record. As a recently retired Public
Health Nurse and an ongoing participant in community
health improvement planning, I am writing to encourage
your full support for HB 148; I am delighted that this
bill has been so well crafted and that you are
considering it. Gov. Walker, Commissioner Davidson and
many others have worked hard to make this a viable
option for Alaska, both financially and to increase
access to health care for vulnerable populations in
our state. Even more in this time of budget shortfall,
AK is overdue to take advantage of this opportunity
for sharing of large health care expenses with
rightful federal assistance. There will be other
improvements in funding and affordability of health
care in the future; this bill creates solutions now.
It is absolutely imperative that we address the
inequities in present access to healthcare, and this
bill extends coverage to many of our working poor or
otherwise disadvantaged Alaskans who, with access to
health can live productive, fulfilling lives. I urge
you to pass this bill immediately.
3:26:28 PM
RANDI SWEET, Spokesperson, United Way of Anchorage, stated that
Alaska is at a crossroads between having the world's most
expensive health care system, even as some are without health
insurance, and taking the opportunity to improve the Alaska
health care system and provide coverage for more Alaskans
through Medicaid reform and expansion. A place for regular
medical, behavioral, and oral health care enables all Alaskans
to maintain good health, along with childhood screenings and
immunizations to catch and treat disease early. Ms. Sweet
advised that the cost of routine treatment in an emergency
department is paying "high dollars" for less effective care.
Reducing care in hospitals will reduce the cost of uncompensated
care in hospitals and community health centers, will add to the
revenue stream needed to sustain the health care system, and
will reduce the cost of insurance premiums for all. She advised
that the lost revenue from delaying Medicaid expansion would be
put to better use to cover more Alaskans, improve Alaska's
health care system, and offset current budget expenses. Ms.
Sweet said HB 148 has broad support in Alaska and provides the
framework for Medicaid reform, Medicaid expansion and
accountability, and urged for its passage during this
legislative session.
3:30:41 PM
JOHN LAUX disclosed he is a member of the board of directors of
the Anchorage Health and Human Services Commission, Alaska
Volunteers of America, and the Alaska Public Health Association,
and a member of the American Public Health Association. Mr.
Laux is also a health care consultant, and was testifying on his
own behalf. His personal experience as a former employee of
DHSS is that the Alaska Medicaid program is barely functional.
Although generally supportive of the principles of Medicaid
expansion, Mr. Laux said the ethical and moral action would be
successful Medicaid expansion, and he questioned how Alaska will
reinforce DHSS in its failed state in order to expand the
Medicaid system. Mr. Laux said he was reserving judgement, and
urged for more discussion on how Medicaid expansion will be done
successfully.
CHAIR SEATON advised that the proposed legislation includes
Medicaid reform to accompany Medicaid expansion.
3:33:36 PM
DAVE MORGAN informed the committee he has had experience with
Medicaid and Medicare reimbursement for 31 years during his
positions as the former chair of the municipal health care
commission, a member of the Alaska Health Care Commission, and
as a fellow of the Healthcare Financial Management Association.
He has been acknowledged for his 25 years of providing resources
by the Alaska Primary Care Association. He worked for the
Southcentral Foundation and Providence Hospital, and his
educational background is in health care economics and
accounting. Mr. Morgan said HB 148 would bring a new criteria
of single individuals, aged 21-63 years and without children,
into a new category with 100 percent Federal Medical Assistance
Percentage (FMAP). Otherwise, the bill contains little change,
reform, or action to contain health care costs or improve
processing, but is an addition to the current Medicaid program.
Individuals still have to enroll through a provider, which can
only bill for covered services. Processing is still through the
Xerox Health Enterprise Medicaid Management Information System,
which is currently in arbitration with the state. He expressed
concern about the amount of time presently needed to enroll
individuals who are qualified for regular Medicaid. Mr. Morgan
turned to the "gap population" and noted that about 40 percent
get coverage from Indian Health Services (IHS); in fact, the
Internal Revenue Service has ruled that IHS beneficiaries are
not penalized and their benefits are treated as insurance, thus
the gap population is smaller. He acknowledged the bill
provides reforms and activities to improve the delivery of
services and contain costs; however, the only date certain is
for a report related to a health care tax. He suggested that
the committee review related information provided by the Alaska
State Hospital and Nursing Home Association (ASHNA) and the
Office of Management & Budget.
3:40:21 PM
WIL THEUER said he was in support of the expansion of Medicaid
and reform in Alaska based on the recovery of costs and the
consistency of delivery. He yielded the remainder of his time
to testify to Fr. Fred Bugarin.
3:41:31 PM
FRED BUGARIN, Pastor, St. Anthony Parish, and board member of
Anchorage Faith & Action Congregations Together (AFACT), stated
that seven members of AFACT from five congregations are on
record in support of Medicaid expansion. Fr. Bugarin
acknowledged that the committee is very busy and introduced the
other AFACT members in attendance.
3:43:39 PM
BOB RUPKEY (ph), Anchorage Faith & Action Congregations
Together, said he has been an insurance adjuster handling
liability claims for 45 years. Mr. Rupkey said many claimants
do not have insurance because they cannot afford coverage or
coverage is not provided by their employer, and Medicaid
expansion would help those without insurance.
3:45:03 PM
PAUL SHERRY said he was a 40-year resident and was testifying on
his own behalf. Mr. Sherry said he has worked in health care
management in Alaska for many years. He said he supported [HB]
148 because it provides better access to care for about 5
percent of the population, is beneficial to a sustainable health
care workforce, reduces the uncompensated care burden on
hospitals, is beneficial to the tribal health system, and allows
for investments in preventative care that will reduce the higher
cost of care later in life. In addition, the bill increases
access to behavioral health and assisted living. Mr. Sherry
pointed out the bill's "trickledown effect" on air services,
restaurants, taxis, and hotels due to the transportation aspect
of Medicaid coverage. The bill is supported by the public,
unions, chambers of commerce, the hospital industry, the Native
community, and the faith community. Mr. Sherry acknowledged
that the Medicaid system needs improvement and he encouraged the
committee to pursue with DHSS strategies for improvement;
however, his experience is that the system meets the needs of
many Alaskans. Finally, he said this is a good use of federal
tax dollars and an intelligent investment by the state.
3:47:40 PM
LUKE HOPKINS, Mayor, Fairbanks North Star Borough, referred to
previous testimony by Medicaid service providers who have
experienced exclusions to medical care coverage and financial
program costs, and said these are real situations in the
Fairbanks community. Mayor Hopkins noted that "17 resolutions"
address the issues of reducing uncompensated costs to medical
providers, creating new jobs across Alaska, and allowing many
Alaskans to seek medical care and avoid hospital charity care.
One resolution is supported by 19 social service executive
directors and seeks to "fix and clear some of the backlogs,"
accept the federal money for Medicaid expansion, and approve
supplemental funding for Medicaid expansion administration. If
the projected savings of $6 million for the first year is
correct, he said, "We should be after that." There are
resolutions of support from across the state. Alaska seeks
federal dollars for highways, for landfill operations, and for
sewer and water systems, and Alaskans need this coverage. Mayor
Hopkins stated his hope that amendments addressing the number of
audits and reform issues would be added to the legislation, and
he urged that the bill move this year.
3:50:57 PM
JEANNETTE GRASTCO, President, National Alliance on Mental
Illness (NAMI), stated that NAMI of Fairbanks supports Medicaid
expansion and reform because it is ethically, morally, and
financially the right thing to do. The bill would allow
Alaskans access to physical and mental healthcare, many of whom
do not have access now. Ms. Grastco pointed out the most
economical and effective health care is provided at the local
level. When local care is unavailable, it must be provided by
institutional settings which are more expensive, such as
emergency rooms, hospitals, and corrections. Institutional
settings are very expensive and care comes at a delayed state.
Ms. Grastco advised that treatment for mental illness leads to a
better quality life and enables one to work and be productive.
Suffering a mental illness doesn't necessarily mean one is not
productive unless medical care is not available through
insurance. She stated that her intent is for the federal taxes
she pays to be invested in Alaskans. Ms. Grastco acknowledged
that billing Medicaid is not an easy system; however, the Xerox
system is improving, and she encouraged the committee to support
HB 148.
3:54:15 PM
SHEILA SMITH, Licensed Clinical Social Worker (LCSW), informed
the committee she has been a mental health provider for over 20
years, providing services to adults, families, and couples,
including the chronically mentally ill. Ms. Smith addressed
[proposed Section 6] to authorize a provider tax to offset costs
of the Medicaid program. She said this provision would
discourage proficient and highly qualified mental health
professionals from participation because providers are paid
below insurance reimbursement rates, and a tax would further
reduce payment rates. She directed attention to proposed
Section 3(a), and noted that a mental health investigator should
be looking at patient records - or audits should include -
treatment goal, type of psychotherapy treatment, estimated
length of treatment, and evidenced-based treatment outcomes.
The question for auditors should be whether the provider is
effective, which would lead to fewer treatments. Ms. Smith
pointed out that therapy is psychotherapy, not pharmacology.
Pharmacology may reduce symptoms, but does not treat the
underlying illness. Turning to proposed Section 4(b), she
advised that overpayments should be prevented by reviewing
claims as they are received; in fact, competent clinicians
should have no objection to accountability for treatment. She
questioned whether successful practitioners would be willing to
work far below market rates, as suggested in proposed Section 9,
and this provision would attract unskilled providers. Proposed
Section 10 seeks an increase in federal match, and she cautioned
that if federal funds dry up the state would be fiscally
responsible. Ms. Smith opined cost savings by telemedicine was
only considered because there is a fiscal crisis. She remarked:
If a project or program is suddenly unnecessary in
tight financial times, then it is unnecessary when
implemented in good times. Here is the reality of
mental health in Fairbanks: There are not enough
mental health agencies or independent mental health
providers in Fairbanks. (2) Of those, many are not
qualified to treat families, couples, or children, let
alone the chronically mentally ill. (3) Only a couple
of clinics or agencies accept Medicaid ... those that
do are backlogged or have established accessibility
criteria that would exclude many who are in need of
mental health services.
MS. SMITH concluded that there is the appearance of helping the
disadvantaged, in contrast with the reality of effectively
providing services needed. If Fairbanks does not have mental
health providers, there is no value in Medicaid expansion.
3:59:35 PM
RICHARD ROBB disclosed he is the mayor for the City of Bethel,
but is testifying on his own behalf. In addition, he works for
the Yukon-Kuskokwim Health Corporation as the director of
residential services. Mr. Robb expressed his support for HB 148
and Medicaid expansion, and encouraged legislators to pass the
bill. Medicaid expansion would save the state money, bring in
federal revenues, create jobs, reduce dependence on state
grants, and provide insurance for about 40,000 Alaskans. Most
of the expansion is paid for by the federal government, is 100
percent reimbursed for the first year, and will be maintained at
90 percent federally funded. Mr. Robb relayed that expansion is
estimated to save the state $6.5 million and bring to the state
$148 million in federal funding in the first year. Further,
Medicaid expansion is estimated to create 4,000 jobs in Alaska
and save the state grant funding to medical and behavioral
health programs. He acknowledged that Medicaid expansion is a
political hot potato and very unpopular in some political
circles; however, as a registered Libertarian elected to public
office, he has learned to put political ideology aside in public
service. Although there may be political risk for many, Mr.
Robb encouraged the committee to support Medicaid expansion.
4:02:54 PM
LACEY KEIL said she has been a health care professional for 10
years and expressed her support for Medicaid expansion.
Recently, the local hospital reported that in 2014,
approximately $1.9 million [she later e-mailed a request to
correct this amount to $1.6 million] was spent on charitable
care. This deficit endangers the ability of the community to
maintain local healthcare; therefore, combining reform and
Medicaid expansion improves the community's financial viability,
and would ensure affordable and accessible health care for its
residents.
REPRESENTATIVE TARR asked which hospital reported the loss due
to charity care.
MS. KEIL answered Seward [Community Health] Center.
4:04:11 PM
KATHLEEN YARR expressed agreement with previous testifiers
Jeannette Grastco, Paul Sherry, Kate Burkhart, and David Morgan.
Ms. Yarr said she was originally against Medicaid expansion but
now realizes it is in the best interest of Alaskans. In her
experience as a drug and alcohol counselor, she advised that
getting people into substance abuse treatment immediately after
they have experienced a crisis is critical; in fact, any delay
in time is detrimental to patients.
4:05:32 PM
DAVID OTNESS said he was testifying as a person caught in the
middle of this issue because he is one year short of receiving
Medicare, and cannot afford health insurance premiums as health
issues have caused him to take Social Security early. Mr.
Otness was a commercial fisherman with health care provided by
the Fisherman's Fund, [Department of Labor & Workforce
Development] and the U.S. Public Health Service. This coverage
was provided because watermen and their vessels are available
for the country's defense if called upon. However, at the age
of 27, he was injured and admitted to the U.S. Public Health
Service hospital in Seattle for an extended time.
Unfortunately, Seaman's coverage was ended after he was
diagnosed with a chronic disease. Mr. Otness' diagnosis placed
him in a high-risk category for insurance, and his medical bills
led to the loss of fishing boats, his home, and opportunities
for fishing permits and individual fishing quotas (IFQs) during
his career as a third generation fisherman. Under the
protection of union-sponsored medical coverage and Medicaid, he
received lifesaving surgeries. Mr. Otness opined that since the
early '80s, citizens have had a drastic erosion of social
support systems that were once provided by income taxes. He
cautioned against the rise of both the Military-Industrial
Complex and the medical insurance complex.
CHAIR SEATON suggested Mr. Otness provide the remainder of his
testimony in written form, and asked if he was correct in
assuming that Mr. Otness supported Medicaid expansion.
MR. OTNESS said correct.
4:10:21 PM
DEROTHA FERRARO, Director, Public Relations & Marketing, South
Peninsula Hospital, stated that South Peninsula Hospital is a
small critical access hospital in Homer. Ms. Ferraro said the
hospital's board of directors recently passed a resolution in
support of Medicaid expansion. She advised that in South
Peninsula Hospital's service area, Medicaid expansion would
result in over 1,300 residents being eligible for coverage,
which could make a difference in their lives, in the population
of the hospital's service area, and in the ability of a small
community hospital to meet its mission and stay financially
viable. Last year the hospital provided $2.4 million in bad
debt and charity care, thus having even a small portion of
currently uninsured residents getting insurance could be
significant. Furthermore, Homer's 2009 community health needs
assessment identified "access to care" as the most significant
issue facing residents, and expanding Medicaid would assist in
this effort. Ms. Ferraro said small hospitals are tasked to
succeed during times of increased expenses, reduced income, cuts
to Medicare reimbursement, and additional costs required by the
PPACA. Finally, Medicaid expansion will provide many benefits
to the state, communities, hospitals, and to beneficiaries.
4:13:19 PM
CHARLES BINGHAM said he was a 45-year Alaska resident. Mr.
Bingham expressed his support of Medicaid expansion because
there are many people "living on the margins," especially in the
rural communities, who may not be able to afford insurance
premiums. Medicaid expansion was meant to be a key element in
PPACA, but was lost through a U.S. Supreme Court decision. As
an individual, Mr. Bingham said he is currently working on a
contract position that ends soon, and he could become someone
who qualifies for Medicaid. He described his personal
experience as a diabetic seeking insurance under PPACA. The
Sitka Community Hospital also has a high level of charity care,
and would benefit from 100 percent to 90 percent federal
reimbursement. He restated the benefits of Medicaid such as
access to behavioral health, substance abuse treatment, and
emergency medical evacuation services. Mr. Bingham restated his
desire to see Alaskans receive the full benefit of ACA. He
disclosed that he previously worked for Southeast Alaska
Regional Health Consortium but was testifying on his own behalf.
4:16:23 PM
ROBIN MENARD, Spokesperson, Mat-Su Health Foundation, reminded
the committee that the majority of those who would be eligible
for Medicaid expansion are the working poor; in fact, over 40
percent are working at jobs that do not pay enough for a subsidy
to buy insurance, but who are required to have insurance. In
addition, Medicaid "puts them on a path to self-sufficiency" and
to obtain health care before health issues become a crisis. Ms.
Menard said accepting federal dollars in this issue does not
differ from federal money accepted for other projects throughout
Alaska.
4:18:19 PM
ANNETTE ALFONSI informed the committee that about three years
ago she sustained a traumatic brain injury and other physical
injuries as the result of an automobile accident. Traumatic
brain injury (TBI) is now recognized to be a medically
manageable chronic physical condition, and victims can work
every day with adequate medical management. Before the
accident, Ms. Alfonsi held a good job with benefits and had
never used services. Presently, she lives with her mother and
has personal insurance; however, her personal insurance company
is dissolving at the end of this year. Ms. Alfonsi said she is
currently unable to work, but is improving with appropriate
treatment. Medicaid expansion is the bridge to enable her to
again contribute to Alaska's economy and reenter the workforce.
At the end of this year, Medicaid will be needed to manage her
condition so that she can get and keep employment. Ms. Alfonsi
said she is in her 20s, and the treatment she receives now is
critical for her future success and opportunities, or she could
"fall through the cracks, deteriorate, and become permanently
dependent on state-funded services." Ms. Alfonsi pointed out
that one with uncontrolled diabetes could not sustain
employment, and her condition also requires medical maintenance.
She suggested that expanding Medicaid is a great opportunity to
allow residents crucial access to medical care while gathering
data - at no financial obligation for the state - so that
Medicaid reform can be addressed next session.
4:21:41 PM
MARY MINOR said in December 2008 she was working at a clinic in
Fairbanks, and paid $400 per month for health insurance with a
$3,000 deductible. She was in her early 50s with no health
issues when she sustained a skiing accident and, after paying
her deductible, her insurance paid less than $10. However, in
2009 her insurance premiums increased to $800 per month with a
$5,000 deductible. Ms. Minor said her knee injury ended up
costing her $60,000. In 2010, she could no longer afford
insurance until she recently got insurance through PPACA. Her
premiums are now $22 for health insurance and $38 for dental
insurance, however, she is now unemployed. At this time, she
does not fear bankruptcy due to illness or injury. Ms. Minor
agreed with legislators' concerns about waste, fraud, and abuse
of the health care system, but noted that this is a separate
issue. The charges made by hospitals are unrelated to what
items cost; in fact, 60 percent of personal bankruptcies in 2013
were due to medical bills, and insurance companies do not pay
actual costs because of their agreements with providers. Ms.
Minor acknowledged that containing costs is difficult; however,
Medicaid expansion can address those who are in difficult
situations.
4:25:30 PM
RUTH WOOD stated that she doesn't work in the mental health
industry. She reported that she pays $1,000 each month for
health insurance with a $5,000 deductible. She said she was
fortunate for her good health and that she could afford health
insurance. She indicated that she did not try to switch health
care options to obtain additional deductions since she will be
on Medicare soon. She offered her belief that good health care
was a basic need, and nothing is more important than health,
food, shelter, and family, so it would be unconscionable not to
have Medicaid expansion. She stated that she pays federal taxes
and there are not any federal funds she would rather see than
Medicaid expansion. She offered that even though it does not
personally affect her, it was so important to her that she was
willing to listen in for an hour and a half in order to testify
today. She concluded by stating that [Medicaid expansion] is
very critical, the state needs to do so, and should have done so
earlier.
4:27:35 PM
MIKE COONS stated that he is a retired paramedic and U.S. Air
Force non-commissioned officer so he has observed socialized
medicine. He indicated that he previously sent an e-mail in
opposition to HB 148. He stated that many charitable cases are
emergency room cases, in fact, as a paramedic, he observed that
approximately 99 percent of the minor cases treated at the
emergency room were Medicaid patients. He offered his belief
that nothing will make these people go to a medical provider
since it seemed easier for them to go to the emergency room. He
said he liked Representative Seaton's amendment requiring [the
state] to establish a primary care case management system;
however, he cautioned that the state needs to manage the
emergency room care usage by Medicaid patients. Further, he
agreed with Representative Vazquez's amendment since he believes
that fraud "needs to be hammered and hammered hard." He related
that as a veteran it takes six months for the Veterans
[Benefits] Administration, U.S. Department of Veterans Affairs,
to pay his doctor, which he thought was much too long. He
referred to the projection of 4,000 new medical jobs and
predicted that doctors will drop Medicare patients since they
will derive more money from Medicaid than they do from Medicare.
He further predicted that the additional taxes will be passed on
to paying patients, which will increase the cost of medicine.
He concluded by stating that he didn't mind helping those who
can't help themselves fully, but he was tired of handouts versus
"hand-ups" so he urged members to vote no on Medicaid expansion
and on HB 148.
CHAIR SEATON clarified that the jobs created were not just for
the health care field. He said the 4,000 new jobs was based on
the number of jobs generated for every $10 million the state
receives in federal funds and does not mean 1,000 primary care
doctors each hiring three other people.
4:32:20 PM
ELIZABETH RIPLEY, Executive Director, Mat-Su Health Foundation
(MSHF), stated that the foundation "has a foot in both worlds"
since it co-owns the hospital that takes care of people when
injury and illness are not prevented. It also makes grants to
make a measurably healthier Mat-Su population. She said that
the state is at the apex of health care reform. The foundation
believes it is possible, and the foundation brings data,
analysis, and new perspectives to help achieve the triple aim in
the Mat-Su area, which includes better care for individuals,
better health for populations, and lower per-capita costs. She
said the Mat-Su Health Foundation strongly urges members to pass
HB 148 since it takes steps toward meaningful Medicaid reform
for a more sustainable Medicaid program, it would expand
Medicaid for the benefit of Alaskans and the economy, and it
would help achieve the triple aim. The MSHF recently published
a report that included a deep-dive on Mat-Su regional emergency
department utilization in 2013. She previously provided the
committee with this data via e-mail. Clearly, the care of these
high utilizers needs to be managed more effectively. Reforms
built into HB 148 in Section 10 could do this, she said. With
respect to the proposed amendment, she suggested stronger
language be added to manage "super utilizers," in particular, to
include sharing the savings with hospitals that have to
implement the program.
MS. RIPLEY paraphrased from written testimony [letter dated
3/26/15], as follows:
Mat-Su Regional's ED sees five times the number of
people with behavioral health issues than our
community mental health center. The Mat-Su population
nearly doubled from 50,000 people to 98,000 people
since 2000 but Mat-Su's community mental health center
grants from the Department of Behavioral Health stayed
flat. State funding mechanisms for this safety net
population literally drove people to seek care in the
ED instead of in lower cost settings. Instead of
getting care in a timely way from our community mental
health center, these folks delayed care until it was a
crisis and presented to the ED. Because they couldn't
pay the bill for those ED services, the ED recoups
those dollars by cost-shifting to other payers and the
public.
Medicaid expansion would improve access to care for
these behavioral health issues and prevent costly ED
visits. Medicaid expansion would reduce this cost-
shifting and help lower health care costs across the
system. Medicaid reform would ensure that we manage
our costs and prevent unnecessary and preventable ED
visits through care coordination. HB 148 takes steps
in the right direction to pair meaningful reform
measures with expansion to improve access to care and
reduce costs. MSHF endorses HB 148.
CHAIR SEATON welcomed suggested changes to the amendments,
especially with respect to super utilizers.
4:35:53 PM
The committee took an at-ease from 4:35 p.m. to 4:45 p.m.
4:45:13 PM
ROSS BIELING described his 30-year background in health care, as
a college graduate working to teach physicians on surgical
stapling procedures, and currently working for Medical Bidline,
which provides orthopedics for hip and knee implants and in home
health care. He said he is also an attorney.
MR. BIELING expressed concern on the structural issues in
Alaska. First, the state has an unreliable business partner
since the federal government is $18 trillion in debt. Second,
the state has a big footprint. The state can do lots of things
to address health care in the Bush, such as using schools for
clinics and addressing out-of-control travel costs. He noted
over $100 million in travel costs by Alaska Natives traveling to
Anchorage in the past year including airfare and food. He
expressed concern these costs could increase to $200 million.
He referred to an [Alaska] Health Care Commission report [from
the] Parnell [Administration] that identified inflated costs for
items such as a $26,000 wheelchair cost to Bethel, and lifts, as
well as undefined actual costs. He offered that the challenge
for the committee will be to define reform and identify detail
to achieve a specific, measureable, and reproducible plan of
action to exceed the financial goals and markers. He offered
his belief competitive bidding does work since it levels the
playing field for large and small providers. In closing, he
said that his company, Medical Bidline, has a unique background
and provides expertise in orthotic services, post-operation
braces, medical equipment, and surgical procedures including
total hips, total knees, arthroscopies, back surgeries,
colonoscopies, podiatry services, chiropractic services, and
diagnostic services such as MRIs [magnetic resonance imaging].
CHAIR SEATON thanked Mr. Bieling, noting the committee has the
company's mission statement already. He suggested a forthcoming
amendment may address competitive bidding preferences.
4:49:39 PM
SARAH KEHOE, PA, stated she is a 24-year Alaska resident, a
physician assistant, who has worked in private practice in
Fairbanks and for 16 years in the Upper Susitna Valley in a
community health center. She spoke in support of HB 148, both
for reform and expansion, but not to do one at the expense of
the other. She expressed concern for the daily loss of federal
revenue that could be put towards the health and wellbeing of
Alaskans. She related that she is British, but is an American
who has lived in Alaska since 1991. She has been a physician
assistant for 18 years. In the past five years she has worked
in care coordination, so she understands the concerns with
community and home-based waivers. She presently works in case
management, she said, so she meets patients every day who are in
the gap - hardworking, good Alaskans who still remain uninsured
or underinsured. She urged members to pass this bill quickly so
this plan can be rolled out smoothly, effectively, and
efficiently to help Alaskans. She emphasized that this would
touch many Alaskans and represents an opportunity that should
not be missed. She would like to see the $33.5 million
appropriated for the Susitna-Watana Dam be reappropriated.
4:52:56 PM
JEANNE SWARTZ stated she is a nearly 40-year resident of Alaska
and would like to offer her full support for HB 148. She stated
that many citizens of Alaska have expressed eloquent support for
this bill. She asked to make three points: care and compassion
is a primary concern of government and a healthy society is a
stable and prosperous society; the efficiencies attached will
provide better service and bring down the health care costs in
Alaska, including for people not covered by Medicaid expansion;
and Alaska obtains federal money for many things, so to take
federal money for improved health is the best and highest
purpose.
4:55:26 PM
NANCY BALE stated she is a school nurse and has been a nurse in
a hospital setting taking care of elders in Alaska. She
received her degree in the 1990s at the University of Alaska
Anchorage. She previously lived in Bush Alaska for many years.
She has been blessed with good health and has not had to use her
insurance policy. She said she is 69 years old so she is
eligible for Medicare, but she has not had to use Medicare, Part
B, due to her current employment. She meets parents daily whose
families fall into the gap. Their children may be covered by
Denali Kid Care, but the parents cannot afford health care. She
said that elders survive in nursing homes through Medicaid, and
their benefits should be assured through the expansion of
Medicaid. She offered her belief that most Alaskans support the
expansion of Medicaid and she would like to see the climate that
is pro-reform, but not reform that halts expansion. She urged
members to set benchmarks and move forward this year while the
federal government provides 100 percent support, but still
continue to consider reforms on an ongoing basis. In fact, she
said, that is what other states have been doing. She thought
many people expected this to move forward since it was a major
point in the gubernatorial election so many people are perplexed
that it has stalled. She cautioned members on the provider tax,
since Medicaid providers are already offering services at a
lower rate so to add an additional tax would "chill" the
addition of Medicaid providers in outlying areas of the state.
She said, "Do not let reform be the enemy of expansion."
4:59:32 PM
JESSICA CLER, Alaska Public Affairs Manager, Planned Parenthood
Votes Northwest, stated that she is a lifelong Alaskan. She
offered that Planned Parenthood operates four health centers in
Alaska and in 2013, served nearly 8,000 people with life-saving
and cost-saving reproductive health care. As a health care
provider that serves thousands of low-income women and men each
year, the organization is keenly aware of the needs of
vulnerable adults in Alaska. She stated that many childless
adults without disability making less than $20,000 annually have
no affordable health care coverage. She said, "This has to
change." She offered that expansion would give 42,000 people
coverage for vaccinations, cancer screenings, and mental health
services. The increased health care usage could be an economic
driver creating thousands of jobs and generating billions of
dollars in new wages. Medicaid expansion also would give
Alaskans an opportunity to take entrepreneurial risks without
fear of losing insurance coverage, and ensure coverage for
working adults or those who wish to start a business or seek an
education. It would also mean people who have been foregoing
medication or treatment to pay rent will no longer have to make
that decision. Women who have put off their annual exams could
finally obtain cancer screening instead of needing to go to
emergency rooms for treatment. She urged members not to wait to
expand Medicaid, even though reform is important. She urged
members to support HB 148.
5:01:59 PM
CLAYTON WALKER, Sr., stated that since 1970 the state has had a
medical problem in the practice section of the national
examination for auditing qualification for certified public
accountants. He expressed a concern for the number of audits as
opposed to the profitability of audits. He has served as an
auditor for the Internal Revenue Service, the United States
Treasury, and for U.S. General Accounting Office (GAO). He said
that auditors can produce resources and should be able to focus
their skills. He said that statistical audit designs are more
adaptable to situations that continually change. He referred to
earlier testimony, noting there is a significant variability in
the problem to be addressed; however, a group of professional
auditors are trained to handle the complexity of this situation.
CHAIR SEATON asked about the issue of audits. One suggestion
under consideration is that if there are federal audits that
overlap with state audits, the state would consider accepting
the audit in lieu of conducting separate audit. He asked
whether this makes sense to an auditor.
MR. WALKER answered that the goal learned at IRS was to produce
10 times more than it cost. He suggested that if the federal
government provided $50 million, the audits should produce 10
times that or $500 million. He emphasized that should be the
standard of production for the audit; however, if the state is
required to follow laws written by non-certified public
accountants, it represents a separate issue.
CHAIR SEATON welcomed suggestions submitted in writing.
5:06:11 PM
CANDUS MILLER suggested the committee consider privatization
regarding Medicaid expansion. She said she had concerns with
privacy rights and parental rights, in particular, with parents
not having knowledge of their children seeking to terminate
pregnancies. She had further concerns that expansion going
through Denali Kid Care would provide funds for abortion. She
expressed concern that other problems would surface, just as it
did when the Patient Protection and Affordable Care Act was
being deliberated. She mentioned that Oklahoma stood up against
Medicaid expansion since it would cost trillions of dollars.
She suggested members could go to Heartland Institute or Alaska
Policy Forum for information on problems with Medicaid
expansion. She expressed concern that the federal government
will provide funding initially, but then the state must later
cover 90 percent of the costs. She said her family switched to
a policy that costs less than $4,000 - $4,500 per year. She
characterized it as a co-dependency, but Alaska can rely on the
private sector to provide health care. She spoke in opposition
to Medicaid expansion.
5:10:41 PM
PAT CHAPMAN said she is a citizen advocate. She suggested that
HB 148 can help those who work hard, but earn lower incomes and
can't afford the high cost of insurance. This population tends
to get sick, and is ignored until the ailment is severe and they
then access emergency services. She said that the cost of
emergency services are much more costly than physician office
visits, and the service ends up being "charity care" that
increases the cost of health insurance. She would like to see
HB 148 pass so low-income people can stay healthy. She
emphasized that this health care is necessary and the state
needs to be proactive for health care, not reactive, as
preventative care is less expensive in the long run. She
offered her support for HB 148.
5:13:30 PM
JEANNE PARKER characterized herself as a hardworking community
member who has lived in Homer for 39 years and raised a family
here. She strongly urged members to pass HB 148. She said that
she falls in the "donut hole" of the uninsured because she can't
afford health insurance. She stated that she teaches pre-school
and gymnastics. She feels lucky to be a healthy person and she
pays attention to her health through preventative means. The
health care expansion would not cover some of her health care,
such as acupuncture and exercising which she covers on her own.
She said that the catastrophic insurance available through
Medicaid expansion would be helpful. She related a scenario in
which she sliced her hand and obtained emergency room care as a
charity case. She offered her belief that Alaska should accept
federal funding, noting that the state receives a huge amount of
federal funding for the military. She characterized the funding
as a "win-win" situation.
5:16:23 PM
KELLY WALTERS spoke in support of HB 148 to expand [Medicaid].
He said the public "spoke" about this in November [by selecting
candidates] since Medicaid expansion was a cornerstone of the
last gubernatorial election. He offered his belief that it is
very difficult to unseat an incumbent governor, and yet that
happened, largely due to Medicaid expansion. He predicted that
in five years the state will save $330 million, by spending
between $17 and $20 million. He suggested cancelling the Bragaw
Road extension in Anchorage that nobody wants through the
university medical district, which would save $18 million. He
said that everyone pays federal taxes, but by not accepting this
due to some partisan witch hunt, our tax dollars are supporting
and subsidizing wiser states. He reminded members that U.S.
Senator Ted Stevens supported the original bill for affordable
care in 1994. He reminded members that Senator Stevens brought
in significant federal dollars to Alaska. This will create
4,000 jobs with over $1 billion in wages and salaries. Given
the oil tax situation, the state needs every possible revenue
stream, he said. He hoped members would expand Medicaid.
5:20:02 PM
ROBERT NEWMAN, Student, Juneau-Douglas High School, spoke in
support of HB 148, which would expand Medicaid. He said he is a
senior and is worried about when he leaves college with debt
that he won't be able to afford insurance. He said his father
left a job he loved when he could not afford insurance for his
family. He offered his belief that entrepreneurs will be
adversely affected if they cannot afford health insurance. He
said that if members love the free market and support
capitalism, please support HB 148, Medicaid expansion.
5:21:51 PM
ERIC JORDAN, Policy Analyst, Alaska Native Health Board (ANHB),
stated that not only does he represent ANHB, but he wanted to
speak on behalf of all the uninsured Alaskans. He said not only
has the committee heard about the fiscal, economic, and moral
reasons to expand Medicaid, but there was also another reason to
do so: empowerment. He said that health insurance is
empowering. He related his personal experience, noting that he
had a colonoscopy exam and the surgeon found benign polyps,
which were removed. He was advised to obtain screenings every
three years. His stepmother has colon cancer so he has seen
firsthand the devastation that pain has caused her and his whole
family. He urged members to please consider Medicaid expansion
and provide insurance since it is empowering and gives people
the tools and the knowledge to take care of themselves.
5:25:45 PM
The committee took an at-ease from 5:25 p.m. to 5:32 p.m.
5:32:39 PM
CHAIR SEATON, after ascertaining that no one further wished to
testify, closed public testimony on HB 148.
CHAIR SEATON explained that the committee would review some
questions on the bill before amendments would be proposed.
REPRESENTATIVE VAZQUEZ referred to page 1, line 11 of HB 148,
which read:
(1) the governor, through the Department of Health and
Social Services, take all necessary action to capture
federal revenues and offset state general funds and
evaluate the most cost-effective method for revising
expansion coverage,...
REPRESENTATIVE VAZQUEZ asked what the department meant by that
language.
5:34:44 PM
JON SHERWOOD, Deputy Commissioner, Medicaid and Health Care
Policy, Office of the Commissioner, Department of Health and
Social Services (DHSS), explained that the aforementioned
language means that the Medicaid expansion population is not
required to have the same benefit package that the current
Medicaid adult population has. He stated that the department
must ensure that the individuals have a benefit package that
provides for coverage for essential health benefits as defined
by federal law or an alternative benefit package determined by
the federal government to be equivalent. He offered his belief
that the most effective way to implement Medicaid expansion was
to start with the existing Medicaid benefit package; however,
the department will evaluate whether a more appropriate cost
effective benefit package is available and could pursue it in
the future.
REPRESENTATIVE VAZQUEZ asked for clarification that the
department will examine the existing Medicaid services provided
to Medicaid recipients to see if it is appropriate to provide
the same services to the newly expanded group.
5:36:48 PM
VALERIE DAVIDSON, Commissioner Designee, DHSS, explained that
the strategy to get the Medicaid expansion up as quickly as
possible was to mirror the existing Medicaid program. As
previously testified, much of the bill does not address
expansion, but consists of reform for the entire Medicaid
program. As those reforms come into play, since the expansion
population would mirror the Medicaid program, the reform efforts
would all be applied to the expansion population.
REPRESENTATIVE VAZQUEZ asked about the 14 mandatory services
plus the 27 optional services and if the department planned to
offer all of the services.
COMMISSIONER DAVIDSON answered that the Medicaid expansion
coverage would mirror the existing Medicaid coverage.
REPRESENTATIVE VAZQUEZ asked to clarify the 27 optional services
will be provided to the expansion group.
MR. SHERWOOD said that what was currently offered to Medicaid
recipients will be offered to the expansion group.
COMMISSIONER DAVIDSON explained that the state had decided that
some optional services provide a more cost-effective way of
providing care for people who are Medicaid beneficiaries. For
example, being able to provide pharmaceutical coverage, covering
prescription drugs, is an optional service under Medicaid.
However, the department also recognizes that some individuals
who are prescribed medications, but don't take them, could
result in higher costs since their injury or illness could
worsen, which will result in more costly emergency care. Other
optional services that the Medicaid program covers include home-
and community-based service. In order to qualify for services
the individual must receive skilled nursing level of care under
the optional Medicaid program; however, the mandatory service
under Medicaid is skilled nursing care. The question raised is
whether the department should provide home and community-based
services in Alaska at a much lower cost by supporting
individuals in their homes and communities as an option, or if
the state should take away the optional service and instead
provide the mandatory coverage at a much more costly skilled
nursing facility.
5:40:40 PM
REPRESENTATIVE VAZQUEZ asked whether transportation to and from
the point of Medicaid was included as optional.
MR. SHERWOOD answered that access to medical care was required
to be provided by the Medicaid program. It could be provided as
an optional service or administratively. In Alaska it is
treated as an optional service, but if it was not treated as an
optional service, the state would still need to provide it and
claim it administratively, he said.
5:41:26 PM
REPRESENTATIVE VAZQUEZ asked whether the federal government
would reimburse the state for all 27 optional services.
MR. SHERWOOD answered that the state receives federal match for
all the Medicaid services the state provides under the statute.
REPRESENTATIVE VAZQUEZ asked for the expenditures for the last
year for optional services.
MR. SHERWOOD replied that he did not have the figures for last
year.
CHAIR SEATON reminded members that the department had not
anticipated detailed questions, which is fine.
REPRESENTATIVE VAZQUEZ asked whether the figures were included
in the fiscal notes.
MR. SHERWOOD said that the estimated cost for Medicaid
expenditures for the expansion included estimates for all
optional and mandatory services.
CHAIR SEATON reiterated that the fiscal note includes estimates
for all services for Medicaid expansion.
REPRESENTATIVE VAZQUEZ related her understanding that the fiscal
note were based on estimates.
MR. SHERWOOD answered yes.
REPRESENTATIVE VAZQUEZ asked the department to provide a list of
the mandatory services.
MR. SHERWOOD agreed to do so.
5:43:19 PM
REPRESENTATIVE VAZQUEZ referred to page 1, lines 13-14 which
read:
most cost-effective method for revising expansion
coverage, including more efficient benefit plans, cost
sharing, utilization control, and other innovative
health care financing strategies;
REPRESENTATIVE VAZQUEZ asked about the department's vision for
more efficient benefit plans.
COMMISSIONER DAVIDSON replied that the more efficient benefit
plans include many of the reform efforts explained later in the
bill, including allowing the department the flexibility to
pursue waiver opportunities, for example, taking advantage of
the existing 100 percent federal match or conducting
demonstration projects for the department. Thus the department
may pursue other options to provide health care services in a
more efficient manner, she said.
5:44:17 PM
REPRESENTATIVE VAZQUEZ asked how long Mr. Sherwood has worked
for the department.
MR. SHERWOOD answered that he has worked for the department for
over 25 years.
REPRESENTATIVE VAZQUEZ asked for his ideas on a more efficient
benefit plan.
MR. SHERWOOD offered his belief that the commissioner had
answered the question quite well, that the department has been
looking at the types of things described in the reforms.
5:44:51 PM
REPRESENTATIVE VAZQUEZ asked for the department's vision for
utilization controls.
COMMISSIONER DAVIDSON answered that utilization controls were
designed to be relatively broad to allow the department as much
flexibility as possible. As the Department of Health and Social
Services has frequently testified to in the past, the department
views reform as an ongoing process and not a point in time,
similar to other states which have effectively implemented
Medicaid and health care programs. Some of the utilization
controls include ones identified in the reform section of the
bill, including addressing the "super utilizer" or "over
utilizer" who use emergency rooms [for primary care]. The
department hopes to teach people how to use health care services
in a more efficient and effective manner at less cost.
5:46:24 PM
REPRESENTATIVE TARR asked for clarification on how the public
can follow implementation measures. She related her
understanding that [Medicaid expansion and reform] was a process
and the public and legislature will have opportunities to
participate.
COMMISSIONER DAVIDSON answered yes. As the department has
previously testified, it has issued a request for proposal (RFP)
- which just closed - for an independent consultant to identify
reforms adopted in Lower 48 states since many states are also
grappling with Medicaid and health care [costs and
efficiencies]. The state could benefit from lessons learned by
other states, she said, pointing out that the department,
legislators, providers, and the public all have ideas. She
envisioned that the independent consultant will review all ideas
for reform and evaluate how these might work in Alaska - a state
with a relatively small population and the unique challenges
posed by its large geographic size and lack of specialists in
most communities. In addition, the department desires to engage
the public and stakeholders in a transparent process, she said.
CHAIR SEATON pointed out the committee is currently discussing
legislative intent language, which it has previously reviewed.
In fact, the committee has already adopted amendments to address
cost containment and reform. He suggested the committee move on
from the legislative intent section unless members have specific
questions related to the intent of HB 148. Otherwise, he
suggested the committee could ask the department to start over
and re-introduce the bill [to obtain further clarification on
the details].
REPRESENTATIVE VAZQUEZ directed attention to page 6, lines 5-15
which read:
disabled persons, as described in 42 U.S.C.
1396a(a)(10)(A)(ii)(XIII), who are in families whose
income, as determined under applicable federal
regulations or guidelines, is less than 250 percent of
the official poverty line applicable to a family of
that size according to the United States Department of
Health and Human Services, and who, but for earnings
in excess of the limit established under 42 U.S.C.
1396d(q)(2)(B), would be considered to be individuals
with respect to whom a supplemental security income is
being paid under 42 U.S.C. 1381 - 1383c; a person
eligible for assistance under this paragraph who is
not eligible under another provision of this section
shall pay a premium or other cost- sharing charges
according to a sliding fee scale that is based on
income as established by the department in
regulations;
REPRESENTATIVE VAZQUEZ asked for clarification [of paragraph
12].
MR. SHERWOOD answered that this provision is existing language
for eligibility not impacted by HB 148. It describes what has
been commonly known as the "working disabled buy in" that allows
individuals with a disability who are eligible for Medicaid
except that their earned income makes them ineligible. This
provision would allow these "working disabled" individuals to
stay on Medicaid by paying a premium to the Medicaid program.
He reported that several hundred people are in this eligibility
group at any given time.
CHAIR SEATON remarked that this provision was previously covered
in the department's introduction of HB 148.
REPRESENTATIVE VAZQUEZ asked whether there were any changes to
the aforementioned program.
MR. SHERWOOD answered no.
5:52:05 PM
REPRESENTATIVE VAZQUEZ referred to page 2, line 10-13 which
read:
(3) the Department of Health and Social Services,
after consulting with stakeholders, submit to the
legislature not later than January 25, 2016, a
proposal to authorize a provider tax up to the maximum
extent allowed by federal law to offset some of the
cost of the Medicaid program.
REPRESENTATIVE VAZQUEZ asked whether this provision would allow
the department to authorize a provider tax to offset Medicaid
costs as allowable under federal statute.
MR. SHERWOOD answered that federal statutes allow states to tax
providers, noting that specific provisions address how the
provider tax can be treated to ensure that states are not using
provider tax revenue as the state's matching funds for Medicaid.
He offered his belief that Alaska is the only state without a
provider tax. He characterized the provider tax as "broad
based" and not a specific tax of Medicaid revenue.
5:53:15 PM
CHAIR SEATON commented that a six-page document from [the Alaska
State Hospital and Nursing Home Association] was in members'
packets.
REPRESENTATIVE VAZQUEZ responded that the aforementioned
document did not answer her specific question. She asked
whether this tax applied to all providers, or was limited to
providers who accept Medicaid patients.
COMMISSIONER DAVIDSON advised that the department previously
testified it has started an RFP process with Fiscal Year 2015
(FY 15) funds to hire a consultant to recommend the best
solutions for Alaska given its unique challenges. She reported
that other states imposing a provider tax have limited the tax
to hospitals and skilled nursing homes based on revenues, but
the provider tax is not tied to Medicaid. She anticipated that
the evaluator will examine whether it makes sense to extend the
provider tax to everyone. She pointed out that many providers
in Alaska are small independent providers. She cautioned that
the state would not be interested in impacting a provider's
ability to continue to provide valuable Medicaid services to its
beneficiaries, but rather to identify the best tax structure for
Alaska.
CHAIR SEATON pointed out an amendment requiring the department
to use a third-party contractor to provide this service. He
offered his belief that the only question remaining is whether
to consider an additional amendment to restrict the department
from moving forward with a provider tax.
REPRESENTATIVE VAZQUEZ repeated her question. She asked whether
the provider tax would apply to all providers or if it applies
to providers who accept Medicaid since some providers don't
accept Medicaid.
COMMISSIONER DAVIDSON reiterated that the provider tax does not
tax Medicaid receipts, but refers to a tax based on revenues,
and was not tied to Medicaid. She envisioned that a contractor
would engage with stakeholders to determine and recommend
solutions that will work for Alaska. She further anticipated
that this process will allow large and small providers to weigh
in with their recommendations and identify "best practices"
other states have implemented with respect to provider taxes.
REPRESENTATIVE VAZQUEZ thanked the commissioner.
REPRESENTATIVE TARR asked for further clarification that there
was not currently a provider tax in Alaska.
CHAIR SEATON agreed that Alaska was the only state that did not
have a provider tax; however, an amendment requires a third-
party evaluator to make suggestions on a provider tax to help
pay for health care in Alaska.
5:57:37 PM
REPRESENTATIVE VAZQUEZ referred to page 3, lines 17-20, related
to audits, which read:
The department may assess interest penalties on any
identified overpayment. Interest under this section
shall be calculated using the statutory rates for
post-judgment interest accruing from the date of the
issuance of the final audit.
REPRESENTATIVE VAZQUEZ noted that in previous hearings she had
asked about the interest rate, but now she would like to know
what effect it would have if the provider was allowed a 30-day
period since it seemed fair to allow providers time to have
their questions answered.
MR. SHERWOOD answered that the department anticipates that it
will issue a final audit identifying a date of expected payment,
with interest accruing after that time. He said he didn't feel
comfortable addressing all the different circumstances since he
is not an audit expert, but he offered to provide additional
information to the committee.
CHAIR SEATON reminded committee members that specific changes
could be presented as amendments to allow the department time to
analyze their impact.
6:00:19 PM
REPRESENTATIVE VAZQUEZ directed attention to page 7, lines 17-
28, which read:
(b) The department, in implementing this section,
shall take all reasonable steps to implement cost
containment measures that do not eliminate program
eligibility or the scope of services required or
authorized under AS 47.07.020 and 47.07.030 before
implementing cost containment measures under (c) of
this section that directly affect program eligibility
or coverage of services. The cost containment measures
taken under this subsection may include new
utilization review procedures, changes in provider
payment rates, and precertification requirements for
coverage [OF SERVICES, AND AGREEMENTS WITH FEDERAL
OFFICIALS UNDER WHICH THE FEDERAL GOVERNMENT WILL
ASSUME RESPONSIBILITY FOR COVERAGE OF SOME INDIVIDUALS
OR SOME SERVICES FOR SOME INDIVIDUALS THROUGH SUCH
FEDERAL PROGRAMS AS THE INDIAN HEALTH SERVICE OR
MEDICARE].
REPRESENTATIVE VAZQUEZ offered her belief the first statutory
provision referred to the mandatory Medicaid services and the
second provision related to optional services, which appears to
tie the state's hands during any fiscal crisis since it would
not allow eligibility criteria to be changed or any optional
services to be eliminated.
CHAIR SEATON pointed out that subsection (b) is existing law.
He stated that the only change was to add "and" and remove
language beginning on page 7, line 2.
6:02:51 PM
CHAIR SEATON asked the committee to focus on the changes being
made to the Medicaid system under the bill.
REPRESENTATIVE VAZQUEZ suggested that this provision would
change a major component beginning on page 7, line 23.
REPRESENTATIVE SEATON explained that the aforementioned language
was moved to Section 10.
MR. SHERWOOD offered that the language in Section 10 does not
replace the deleted language [page 7, lines 23-28]; however it
does outline a somewhat different approach to obtain the federal
participation for coverage of services. This language has been
in statute for many years and the approach has been exhausted so
this section was removed to avoid a conflict [with the language
in proposed Section 10].
REPRESENTATIVE SEATON clarified that the language was replaced
in Section 10.
6:04:23 PM
STACIE KRALY, Chief Assistant Attorney General, Human Services
Section, Civil Division, Department of Law (DOL), agreed that
Section 9 was existing law, but the provision being deleted is
language that would have been in conflict with proposed Section
10. The language was deleted, a conforming grammatical edit was
made on line 23, and the concepts were added in proposed Section
10.
6:05:01 PM
REPRESENTATIVE VAZQUEZ asked about the deleted language since
this provision would charge the department with entering into
agreements under which the federal government will assume
responsibility for coverage of some individuals, or some
services for some individuals, through federal programs such as
the Indian Health Service or Medicare. She asked for further
clarification on what was wrong with this provision.
MS. KRALY answered that nothing was wrong with the language, but
the language in Section 9 did not quite track the new reform
measures in Section 10. She referred to page 7, line 31 through
page 8, line 4, stating that language was removed to avoid the
apparent conflict with proposed Section 10 that will achieve the
same focus, which is to maximize the state's participation with
the federal government for Indian health beneficiaries through
the tribal health system.
CHAIR SEATON related his understanding that was provided through
the Section 115 waiver.
MS. KRALY agreed.
REPRESENTATIVE VAZQUEZ, referring to the deleted provision,
asked whether Medicaid was the second payer after Medicare.
MS. KRALY answered that Medicaid was the payer of last resort.
REPRESENTATIVE VAZQUEZ asked for the reference to a similar
provision in the bill that ensures that the state is the payer
of last resort.
MS. KRALY answered that the general premise that Medicaid is the
payer of last resort has been well established in federal law,
state law, and case law so it exists without being specifically
referenced in this section.
REPRESENTATIVE VAZQUEZ asked for the specific state and federal
statutory citations.
MS. KRALY answered that she did not have the citations, but she
offered to provide them to the committee.
6:07:25 PM
COMMISSIONER DAVIDSON asked to correct earlier testimony that
stated the IRS rule under the Patient Protection and Affordable
Care Act (PPACA) recognizes that access to Indian Health
Services is considered insurance coverage. As one of the
drafters of those specific provisions of the PPACA in her prior
job, she clarified those provisions do two things. First, a
provision in the PPACA would exempt IHS beneficiaries from the
mandate for health coverage and the subsequent penalty. In
fact, IHS services are not considered health coverage, but
rather this provision refers to a group membership exemption
based on the federal trust responsibility to IHS beneficiaries.
Secondly, another section of the PPACA expressly allows IHS
beneficiaries to be able to participate, purchase, and receive
subsidies for marketplace plans. Clearly, the U. S. Congress
did not consider access to health care services through an IHS
facility to be health insurance, she said.
[HB 148 was held over]
6:08:52 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 6:09 p.m.