Legislature(2003 - 2004)
04/02/2003 09:00 AM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 02, 2003
9:00 AM
TAPES
SFC-03 # 40, Side A
SFC 03 # 40, Side B
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:00 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Con Bunde, Vice-Chair
Senator Robin Taylor
Senator Donny Olson
Senator Ben Stevens
Also Attending: JERRY BURNETT, Director, Division of Administrative
Services, Department of Corrections; JOEL GILBERTSON, Commissioner,
Department of Health and Social Services; BOB LABBE, Deputy
Commissioner, Department of Health and Social Services; ELMER
LINDSTROM, Special Assistance to the Commissioner, Department of
Health and Social Services; KAREN PEARSON, Acting Director,
Division of Alcoholism & Drug Abuse, Department of Health and
Social Services
Attending via Teleconference: From Anchorage: JACK NIELSON,
Executive Director, Medicaid Rate Advisory Commission, Division of
Medical Assistance, Department of Health and Social Services
SUMMARY INFORMATION
SB 115-CORRECTIONAL INDUSTRIES PROGRAM EXPENSES
The Committee heard testimony from the Department of Corrections
and reported the bill from Committee.
SB 108-HEALTH FACILITY MEDICAID RATES/ADV. COM'N
Testimony was presented by the Department of Health and Social
Services, and the bill was held in Committee.
SB 109-MEDICAID COST CONTAINMENT & PRIORITY LIST
The Committee heard testimony from the Department of Health and
Social Services and held the bill in Committee.
SB 124-ALCOHOLISM AND DRUG ABUSE GRANTS
The Committee heard testimony from the Department of Health and
Social Services and held the bill in Committee.
SENATE BILL NO. 115
"An Act allowing expenses of the correctional industries
program that may be financed from the correctional industries
fund to include the salaries and benefits of state employees."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-chair Wilken informed the Committee that this bill involves a
$963,000 fund source change from the general fund to the
Correctional Industry Fund. He stated that the Senate Rules
Committee, at the request of Governor Murkowski, sponsors the bill.
JERRY BURNETT, Director, Division of Administrative Services,
Department of Corrections stated that this bill would amend the
Alaska Correctional Industries' (ACI) statutes to allow ACI State
employees salaries to be paid from ACI product-cost revenues, from
which "all other administrative costs" are currently paid, rather
than from the general fund. He expressed, that were this bill
adopted, the Division of Correctional Industries would be 100-
percent self-supporting.
Mr. Burnett specified that ACI operates eight programs in the State
including: two laundries, a wood furniture plant, an office
furniture plant, a metals plant, an auto body shop, and two garment
shops. Additionally, he specified, ACI cooperates with the
Department of Natural Resources to operate the Mt. McKinley Meat
Plant in Palmer.
Senator Taylor asked whether ACI programs generate a net profit.
Mr. Burnett responded that a net revenue of $150,000 is projected
in FY 03. He continued that with improved marketing, improved
products, and program oversight, ACI is expected to begin FY 04
with a fund balance of approximately $300,000.
Senator Taylor asked how the fund balance would be utilized.
Mr. Burnett stated that the beginning FY 04 fund balance, combined
with FY 04 projected revenues, would allow the Department to pay
salary expenses and allow ACI to expand its programs.
Senator Taylor asked whether the current $960,000 general fund
expense provides for such things as materials and supplies in
addition to salary expenses.
Mr. Burnett clarified that the $960,000 exclusively provides for
salaries and benefits.
Senator Taylor commented that ACI currently grosses approximately
$3 million annually.
Mr. Burnett agreed and voiced optimism that ACI would gross in
excess of $4 million in FY 04.
Senator Taylor summarized, therefore, that the ACI fund balance of
approximately $300,000 and projected FY 04 revenues would provide
for all Department expenses, including $960,000 in salary expenses.
Mr. Burnett concurred.
Senator Taylor puzzled as to "how exchanging one fund source for
another" would allow for ACI program expansion. He further
questioned whether there should be an additional $300,000 in
savings to the general fund because of the ACI FY 04 beginning fund
balance.
Mr. Burnett expressed that the goal of this fund source change
request is to save $960,000 in general fund expenditures relating
to ACI salaries.
Senator Taylor voiced concern that this would be identified "as
another dedicated fund within the revenue streams of Alaska." He
asked whether program expansion would require additional personnel.
Mr. Burnett responded that no increases in personnel are expected,
and that consideration is being given to form partnerships with
public entities to market Correctional Industries products.
Senator Taylor voiced support for ACI efforts to develop industry
"to provide meaningful activities and training to individuals;"
however, he declared, aggressive marketing and program expansions
should not compete with private industry.
Co-Chair Green asked how ACI programs are evaluated; specifically
the criteria used to determine whether a program is self-
sufficient.
Mr. Burnett responded that a Correctional Industries Board reviews
each program to evaluate its viability and to ensure that the
service does not compete with private industry.
Senator Bunde noted that the Mt. McKinley Meat Processing Plant has
experienced "difficulties in functioning successfully." He asked
"at what point," it might be decided that this program should be
eliminated. He additionally asked how the plant's closure would
affect ACI finances.
Mr. Burnett clarified that the Department of Natural Resources owns
the facility and provides for salaries of the ACI personnel. He
noted that the salaries paid to ACI employees generate a small
profit for the Department of Corrections.
Mr. Burnett informed the Committee that the eight ACI industries
would be reviewed this year to determine program continuance and
expansion as well as to consider the development of new industries.
Senator Bunde surmised, therefore, that the Department has
mechanisms in place to expand or terminate programs.
Mr. Burnett concurred.
Co-Chair Wilken asked for confirmation that the Department's fiscal
note is incorporated into the Governor's proposed FY 04 budget.
Mr. Burnett confirmed.
Senator Taylor moved to report SB 115 from Committee with
individual recommendations and accompanying fiscal note.
There being no objection, the bill REPORTED from Committee with
previous fiscal note #1 from the Department of Corrections.
SENATE BILL NO. 108
"An Act relating to payment rates under the Medicaid program
for health facilities and to budgeting, accounting, and
reporting requirements for those facilities; abolishing the
Medicaid Rate Advisory Commission; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken explained that this bill, which is being presented
at the request of Governor Murkowski, would eliminate the Medicaid
Rate Advisory Commission and, thereby, specify that the Department
of Health and Social Services would be responsible "for calculating
and setting Medicaid payment rates for health care facilities."
JOEL GILBERTSON, Commissioner, Department of Health and Social
Services, distributed, at the request of Co-chair Wilken, Medicaid
program charts [copies on file] titled: "Medicaid Total Average
Eligibles and Costs;" "Medicaid Eligible Children and Costs;"
"Medicaid Eligible Adults and Costs;" "Medicaid Elderly Eligibles
and Costs;" "Medicaid Disabled Eligibles and Costs" to Committee
members.
Co-chair Wilken explained that these charts are being distributed
because, "the width and breadth and the growth" of the program's
history would be beneficial for the Senate Finance Committee
members.
[NOTE: Further discussion regarding these charts occurs later in
the meeting.]
Commissioner Gilbertson informed the Committee that SB 108
eliminates the Medicaid Rate Advisory Commission that was
established in 1984 to determine Medicaid payment rates that must,
by federal law, guarantee that a fair rate for reasonable costs be
paid to acute care facilities. He continued that "in 1989, by
Executive Order," the Commission's role changed from a rate-setting
entity to that of advisor to the Commissioner of the Department of
Health and Social Services, who was, thereby, responsible for
establishing the Medicaid payment rates.
Commissioner Gilbertson continued that the federal law was repealed
in 1997 and replaced with public process requirements. Therefore,
he continued, this legislation would: eliminate the Medicaid Rate
Advisory Commission; acknowledge that the rate setting function is
a responsibility of the Department; and provide for a single public
process within the Department. Additionally, he furthered, these
changes would allow the Department to align with current federal
law and develop a variety of payment methodologies that would be
more efficient and responsive to the needs of differing size
facilities.
Commissioner Gilbertson elaborated that this legislation would
allow the Department to establish an Office of Rate Review within
the Commissioner's Office and to centralize the Department's rate
setting operations for care facilities as well as for other
services such as physician services, subsidized adoptions and
foster care. He summarized that this legislation would allow
"Alaska law to mirror federal law which requires simply a public
process."
Commissioner Gilbertson informed that the elimination of the
Medicaid Rate Advisory Commission would result in a small fiscal
note savings resulting from associated travel and per diem
expenses.
Senator Taylor clarified that the Medicaid Rate Advisory
Commission's current role is advisory.
Commissioner Gilbertson concurred.
Senator Taylor furthered that the Commissioner must approve
payments to facilities.
Commissioner Gilbertson concurred.
Senator Taylor asked whether additional benefits would be afforded
by the elimination of the advisory Commission.
Commissioner Gilbertson reiterated that, in addition to the savings
resulting from the elimination of the Commission's travel expenses,
this legislation would allow the Department's policies to align
with current federal regulations that would permit the Department
to develop, through the public process, separate payment policy
methodologies for facilities rather than being restricted to the
current single methodology.
Senator Taylor asked how this new system would differ from the
current system in addressing a Certificate of Need request, as, he
revealed, Bartlett Regional Hospital in Juneau underwent five
hearings over a six-year period in order to be granted a
Certificate of Need for the purchase of a Magnetic Resonance
Imaging (MRI) machine, and he declared that it is unknown as to
whether Bartlett ever received the Certificate of Need that was
required for the hospital to receive reimbursement. He opined that
the Commissioner was responsible for the delay in this situation;
and he questioned whether the elimination of the Advisory
Commission would improve the situation.
Commissioner Gilbertson clarified that the legislation would not
affect the Certificate of Need regulation.
JACK NIELSON, Executive Director, Medicaid Rate Advisory
Commission, Division of Medical Assistance, Department of Health
and Social Services testified via teleconference from Anchorage to
respond to Senator Taylor's question. He reiterated that this bill
would provide the Department with "rate setting flexibility and
regulatory relief." He noted that the State settled the
aforementioned situation with Bartlett Regional Hospital, and he
stressed that the flexibility afforded by this legislation would
help the Department "avoid those situations in the future."
Co-Chair Green shared her surprise at having received letters from
Commission members lobbying legislators to increase Medicaid
funding. She stated that Commission members should advise the
Department rather than lobby, and she voiced support for this
legislation.
Senator Olson voiced discomfort regarding language in Section 2 of
the bill that reads as follows.
Sec. 2(a) The department by regulation shall require a uniform
system of accounting, budgeting, and [FINANCIAL] reporting for
health facilities receiving [PROSPECTIVE] payments under this
chapter. The regulations must provide for reporting revenues,
expenses, assets, liabilities, [AND} units of service, and
other items considered necessary by the department to
implement this chapter. [THE DEPARTMENT SHALL SPECIFY THE DATE
THE SYSTEM BECOMES EFFECTIVE FOR EACH HEALTH FACILITY.]
New Text Underlined [DELETED TEXT BRACKETED]
Senator Olson stated that this language indicates that, "the
determination regarding what the rates would be is at the
discretion of the Department." He continued that, "there appears to
be no oversight."
Mr. Nielsen responded that were the Department to implement a
reporting requirement on a facility, the Department would be
required to abide by the public process and regulation adoption
process procedures before the requirements could be imposed.
Senator Olson reiterated that the Department would still make the
determination.
Mr. Nielson specified that, while the Department makes the
decision, the regulatory process is required.
Senator Olson asked the composition of Commission members.
Mr. Nielson reported that four of the five Commission member
positions have representation; however, he noted that the physician
allocation on the Commission has been vacant for approximately one
year.
Senator Olson asked whether Commission members support the bill.
Mr. Nielson affirmed that three of the four members "generally"
support the bill. He specified that he has not had contact with the
fourth member.
Senator Olson asked whether hospitals support the legislation.
Mr. Nielson replied that hospital administrators have not
communicated a position regarding the bill; however, he believed
that hospital administrators testified on the bill in earlier
committee hearings.
Commissioner Gilbertson interjected that the Alaska State Hospital
Nursing Home Association does not oppose the bill.
Commissioner Gilbertson responded to Senator Olson's concern
regarding Section 2 by specifying that the section would allow the
Department to gather information from facilities necessary for
establishing rates. He stated that this information would provide
for a uniform accounting and budgeting system for the rate setting
function, and he verified that the public process is a requirement
for gathering the information.
Senator Taylor voiced that he does not object to the bill as he has
questioned the value of the Commission for some time. However, he
opined, "rate setting has always been very contentious between the
State and our hospital and medical facilities." He professed that
the rates often determine whether a facility would survive, and he
voiced concern that language in the bill would provide broader
authority to the Department to audit and review facilities.
Senator Taylor voiced appreciation for language in the bill that
would allow differing rates for facilities; however, he noted that
federal and State auditors place "great, and duplicate," demands on
medical facilities. He urged the Commissioner to determine measures
to reduce the burden that auditing places on a facility.
Commissioner Gilbertson replied that, while the costs associated
with the auditing function are high, the need for good data is
important. He stated that the Department would endeavor to reduce
the administrative burden of the reporting requirement.
Co-Chair Wilken asked whether the Department's negative fiscal note
is included in the Governor's budget proposal.
Commissioner Gilbertson replied that it should be.
Co-Chair Wilken ordered the bill HELD in Committee.
[Note: Further discussion concerning SB 108 continues later in the
meeting.]
SENATE BILL NO. 109
"An Act repealing the statute that sets priorities for the
Department of Health and Social Services to apply to
administration of the medical assistance program when there
are insufficient funds allocated in the state budget for that
program; authorizing the department to make cost containment
decisions that may include decisions about eligibility of
persons and availability of services under the medical
assistance program; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Commissioner Gilbertson explained that this bill would allow the
Department of Health and Social Services to eliminate the optional
Medicaid services priority list regulation that the Department must
abide by when budgeted Medicaid funds are insufficient to meet the
fiscal year's demands. He continued that the optional services list
would be replaced with language authorizing the Department to
undertake cost containment strategies for the Medicaid program
based on three principles: 1) that the Department pursue all
reasonable cost containment measures before eliminating any
eligibility groups or services; 2) that the Department pursue
strategies to maximize federal financial participation in the
Medicaid program; and 3) that the Department make cost containment
decisions that best reflect the needs and interests of eligible
Medicaid recipients.
Commissioner Gilbertson shared that the Medicaid Options list is
viewed by Governor Murkowski and the Department as an inefficient
method to contain costs as, he explained, no annual review of the
options list is conducted, and the items on the list are
inappropriately ordered in that the most expensive procedures would
be disallowed last. He explained that the listing, in effect,
forces the Department "to eliminate broad categories" such as
prosthetics, wheelchairs, prescription drugs, and other valuable
services "before any real savings are incurred." He stated that
this legislation proposes that the same level of savings could be
obtained without impacting services to beneficiaries in a negative
manner. He continued that this change would allow the program to be
operated within its appropriated budget without eliminating such
things as pharmaceutical products that might incur more costs in
the long run.
Commissioner Gilbertson assured "that individual decisions on
individual procedures or individual cases" would not be allowed,
but rather that decisions would be determined on a broad category
of eligibility groups or services. He summarized that this
legislation would allow the Department to make decisions on an
annual basis as technology and medical industry changes occur.
In response to a question from Senator Taylor, Co-Chair Wilken
clarified that the Members' packets contain information detailing
the optional Medicaid services list in regulations "Sec. 47.07.035
Priority of medical assistance" [copy on file] that would be
repealed.
Commissioner Gilbertson affirmed that the statute would be repealed
and replaced with language that provides the Department with the
discretion "to engage in the same level of cost containment but
with greater flexibility" through the implementation of the three
aforementioned guidelines.
Senator Taylor voiced appreciation that the Administration is
addressing the Medicaid situation in this manner.
Co-Chair Wilken expressed that were the Committee's action on this
bill to incur criticism, the three aforementioned objectives would
assist in defending Committee action. He continued that the intent
of the action is clearly identified by the Governor and in the bill
on pages two, 24, and 31. He joined Senator Taylor in applauding
the Administration's efforts to control the increasing expenses of
the Medicaid program.
Co-Chair Green expressed that the zero fiscal note further supports
the Department's effort to contain program costs without further
"cuts or general fund money being withdrawn from the program."
Commissioner Gilbertson stated that the accompanying zero fiscal
note is based on Governor Murkowski's efforts to offset projected
Medicaid program growth by implementing other "sizable general fund
reductions" in FY 04. He informed that continuing the Medicaid
program in FY 04, as it is currently designed, would result in
"well over $60 million in general fund growth" over the FY 03
budget. He stated that the Administration has exerted substantial
effort to contain general fund growth in the Medicaid program and
to limit impacts to beneficiaries and providers. He stated that the
zero fiscal note is based on the assumption that the FY 04 Medicaid
funding would be approved at the Governor's proposed budget level,
which contains numerous cost containment strategies. He declared
that, were the Governor's funding level approved, additional cost
containment measures would not be required.
Senator Olson agreed that the more expensive procedures are at the
bottom of the thirty-one items on the optional priority list;
however, he voiced concern that the proposed change would eliminate
the long established list that was developed "by a fair amount of
thought and effort." He questioned whether the Department's
decision-making process would allow the same level of input and
consideration from such people as medical personnel.
Commissioner Gilbertson stated that this legislation would provide
the Department "the discretion and the authority to make and weigh
decisions" and the subsequent impact of those decisions. He
reiterated that the current optional priority list is inadequate
and is not a good cost containment method in that it does not allow
for annual review or current circumstances to be considered. He
avowed that the issue is complex and that the Department would be
presenting cost containment strategies and their impact, on an
annual basis, to the Legislature. He expressed that the Department
anticipates a "very interactive process" with clear directives as
to how the Department would "engage in cost containment" measures.
Senator Olson voiced that the mission of the Medicaid program is to
provide a health care delivery system "to people in need" as
determined by the eligibility standards defined in State statute,
rather than "driving the program" from a cost containment position
as proposed in this legislation.
Co-Chair Wilken reiterated that the sponsor statement and the three
aforementioned guidelines indicate that this bill would provide
benefits in addition to cost containment.
Commissioner Gilbertson agreed that "the Medicaid program is about
providing care," and he specified that approximately $900 million
of health care services is projected to be spent in FY 04 to
support those services and to protect service for low income
individuals at a time when State revenue resources are limited. He
specified that cost containment efforts should be enacted in an
effort "to protect the program and allow for good reimbursement
rate." He continued that, were the program allowed to be "stretched
so thin," such things as good reimbursement rates and the ability
to "take care of our neediest seniors and disabled individuals"
would be jeopardized. Therefore, he continued, cost containment is
required in order to continue adequate level of care. He alerted
that the Department has experienced tremendous growth that could
jeopardize the Medicaid program.
Senator Bunde asked whether the Department would increase delivery
of Medicaid services were the Legislature to increase funding to
the program.
Commissioner Gilbertson responded that the Department would manage
the program within the parameters of the budget provided. He stated
that program expansions or increases in services would be
determined through the Legislative process.
SFC 03 # 40, Side B 09:48 AM
Senator Bunde summarized the Department's position to be that there
is "the very great likelihood that the Medicaid program would have
less money or would grow beyond" available funding; however, he
questioned whether the Department would further "these options of
limitation" efforts, were an increased amount of funding made
available to the Medicaid program.
Commissioner Gilbertson responded that regardless of the funding,
cost containment measures would be implemented, as he asserted, the
program must be administered efficiently. He stated that were
additional funding provided, the Department could not expand
programs or services without Legislative approval. He stated that
the program would be managed as efficiently as possible and that
any remaining funds would be returned to the general fund at the
end of the fiscal year.
Senator Bunde commented that, were the program to continue to grow
beyond the State's funding ability, cost containment measures must
be implemented. He asked whether it could be anticipated that the
Department might produce "its own list of thirty-one" services
guideline.
Commissioner Gilbertson anticipated this would occur. He voiced the
hope that "a dialogue with the Legislature" would take place during
the development of the forthcoming fiscal year's budget.
Co-Chair Green informed the Committee that the options list, to her
knowledge, has not been reviewed since its original development;
however, she opined, it has been expanded in response to requests
from "special interest groups," without "proof" regarding the need
or ranking of the item on the list. She summarized the process as
"inconsistent" and "troublesome." In contrast, she stated that the
Department's approach to the program is "consistent with their
message that they are engaging in cost containment measures in the
right way."
Co-chair Wilken ordered the bill HELD in Committee.
[Note: the following Committee discussion regards the Medicaid
program discussed in SB 108 and SB 109.]
Senator B. Stevens, referring to the Medicaid charts provided by
the Department of Health and Social Services during the hearing on
SB 108, generalized that the Medicaid program is experiencing "a
two-pronged" containment problem: the first being the cost of
providing services; and the second being "the eligibility of your
monthly recipients." He noted that, according to the chart on page
one, titled "Medicaid Total Average Monthly Eligibles and Costs,"
there has been a 47 percent increase in eligible monthly
participants between FY 99 and projected FY 04. He continued that
the chart on page two titled "Medicaid Eligible Children and Costs"
indicates that, during the same time frame, there has been an
increase of 73 percent in monthly eligible children, while, he
noted, the page three chart titled "Medicaid Eligible Adults and
Costs" reflects a decrease of approximately one half of one
percent. He continued that other charts in the packet indicate an
approximate 18-percent increase in senior recipients and a 33-
percent increase in disabled recipients. He asserted that, "no
sector of our population is growing at that rate." He asked for an
explanation to justify the increases in eligible participants.
Senator B. Stevens stated that SB 108 and SB 109 focus on cost
containment, and he specified that, "the average cost per month per
member" is identified on the charts. However, he identified the
containment of program eligibility as the primary focus. He
expressed that between FY 99 and FY 04, the total number of program
recipients has increased by 30,691, with 27,734 of that total
number being children.
Commissioner Gilbertson acknowledged Senator B. Stevens's concern,
and stated that the growth in the Medicaid program "is a national
trend." However, he clarified that on the national level, 71
percent of Medicaid cost increases result from seniors and disabled
individuals; whereas, he attested, these groups account for
approximately 50-percent of the cost increase in Alaska. He
furthered that the costs for these groups are projected to align
with the national average as "the graying of Alaska" results in
more demand for long-term care and as people with disabilities
"live longer." He specified that the most rapid population growth
in the Medicaid program has been in children services, which is
reflected by the growth of the Denali KidCare program while the
only program that reflects a reduction is the adult program. He
attributed this reduction to the success of such efforts as the
State's welfare reform and welfare to work programs. However, the
program has experienced an increase in costs associated with the
number of pregnant women in the program. He noted that separate
legislation is being considered to address eligibility standards
for the various programs.
Co-Chair Green interjected that the increase in costs is associated
with pregnant women who qualify for services through the Denali
KidCare program.
Commissioner Gilbertson concurred, and he commented that "the vast
majority" of growth in terms of children is associated with the
Denali KidCare program. He professed that the State would
eventually incur the majority of its cost increases from the
overall growth in services to seniors and the disabled.
BOB LABBE, Deputy Commissioner, Department of Health and Social
Services informed that prior to the "expansion" of the Denali
KidCare program in 1999, the child population growth in the
Medicaid program "was flat," and the family being on temporary
assistance determined the edibility for a child. With the
implementation of welfare reform measures, he continued, the number
of child participants in the Medicaid program decreased "as the
parents went to work." He noted that when the eligibility policy
expanded to 200-percent of the poverty level, the caseloads started
to increase.
Mr. Labbe stated that while the elderly Medicaid population growth
has been "very predictable and very constant," the level does not
correspond to the overall number of seniors in the State. He
informed that to qualify for Medicaid funding, seniors must be
receiving public assistance. However, he stated, the high incomes
of many seniors excludes them from the program.
Mr. Labbe opined that these seniors might not qualify for the
program until the age of 85 or older when long-term care services
might be required.
Mr. Labbe noted that the State is experiencing a growth of
individuals with disabilities as "baby boomers" are aging and as
adults and children with disabilities live longer lives. He
expressed that the population growth in the number of children in
the Medicaid program is the result of a State "policy choice" to
expand the State services through the Denali KidCare program.
Senator B. Stevens asked whether the eligibility specifications are
located in Section B(13) of the Denali KidCare program.
Mr. Labbe was unsure of the specific section.
Commissioner Gilbertson interjected that the 200 percent of poverty
level eligibility guideline is the standard for children and
pregnant women through the Denali KidCare program.
Senator B. Stevens asked the level of the current federal poverty
guidelines.
Commissioner Gilbertson replied that it is determined by the size
of the family.
Co-Chair Wilken interjected that discussion relating to eligibility
for the Denali KidCare program would be more appropriately
addressed through forthcoming legislation.
Senator Bunde commented that, antidotally, people move to Alaska in
order to qualify for the Permanent Fund Dividend and other State
benefits. He asked whether the Department "tracks" the length of
residency of new individuals to the Medicaid program.
Mr. Labbe responded that the Department does not track length of
residency; however, he noted, Medicaid recipients are required to
be a resident of the State. He mentioned that the Department had,
several years previously, conducted studies in which a length of
residency question was included and, he commented, that information
could be provided.
Senator Bunde suggested that a length of residency question would
be beneficial. He asserted that the minimum length of residency to
qualify for Medicaid benefits should be at least 30 days.
Commissioner Gilbertson responded that the Medicaid program is an
entitlement program whereby if an individual meets the program's
criteria, they must be enrolled in the program. However, he agreed
that the length of residency information could be beneficial.
Senator Taylor asked the penalty that might be incurred were a
state to deny benefits to individuals, contrary to federal
standards.
Commissioner Gilbertson responded that were the State to disregard
federal guideline standards for the Medicaid program, the State
would be denied access to federal Medicaid funds. However, he noted
that a state's participation in "the Medicaid program is optional;
it is voluntary for States," and he continued, although "it is
rare," states have the option to submit and manage their own plans
through a wavier process.
Co-Chair Wilken asked whether a bill that passed in an earlier
Legislative session included a study being conducted regarding the
Medicaid program and the Permanent Fund.
Co-Chair Green reminded the Committee that the bill in question had
been vetoed.
SENATE BILL NO. 124
"An Act relating to grants for alcoholism and drug abuse
programs; and providing for an effective date."
AT EASE 10:06 AM / 10:07 AM
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken explained that this bill, sponsored by the
Governor, proposes to increase the required local match levels for
alcohol and drug abuse programs from ten percent to twenty-five
percent. He noted that this change would result in a $1.61 million
reduction in State spending.
ELMER LINDSTROM, Special Assistant to the Commissioner, Department
of Health and Social Services, affirmed Co-chair Wilken's
explanation of the bill, and he added that this is "the appropriate
time" to change the level of local match specified in statute. He
stated that while the statute regarding the local match level would
be changed, language would remain "that would allow the Department
to waive the local match in whole or in part, upon a determination
that it would not be feasible in fact for the grantee to generate
that local match." He referenced the Department of Health and
Social Services seven-page listing of grant programs titled "SB
124\HB 167 Increase Local Match Requirement for Substance Abuse
Grants (Revised 3/12)" [copy on file] that would be subject to the
provisions of this bill. He noted that some entities, specifically
small rural based programs such as rural based suicide prevention
programs, would be exempt from the local match requirement.
Additionally, he qualified, some programs such as the substance
abuse treatment programs for women and children would be held
harmless from the increase.
Senator Taylor surmised that tax-based communities would be subject
to the increased match levels; however, he noted, most other
entities are exempt.
Mr. Lindstrom expressed that while there is no expectation that
"local governments would necessarily be stepping in to provide the
local match; …there is an underlying assumption that larger
communities, where many of these non-profits organizations operate,
have a greater ability to raise funds."
Senator Taylor asked how local match funds are currently provided.
Mr. Lindstrom responded that client fees, grants, foundation
funding, and local community fundraising are among the variety of
methods that non-profits use to raise funds. He acknowledged that
while the increased match level would be a challenge for some
programs, he opined that, "the programs would be successful…in
generating this additional match."
Senator Bunde asked why the Anchorage domestic violence program, as
specified on page four of the aforementioned list of grantees,
would be exempt from the local match requirement.
Mr. Lindstrom verified that the program is exempt from the local
match. He explained that certain programs for women and children
would be exempted; although he was uncertain whether this program
is one of them.
Senator Bunde further questioned why the suicide prevention program
on St. George Island, as specified on page six of the list, was
exempt from the match, as he contended, the community's gambling
revenue equates to $15,000 per person per year. He suggested that
the list of grantees be further reviewed.
Senator Olson specified that the gambling revenue referred to was
in response to a fundraising endeavor.
Senator Taylor asked why an Anchorage program for Services for
Families-Women with Children was exempt from the local match as
identified on page four of the list, while a similar program in the
smaller community of Sitka was specified for the ten percent match
level.
Co-Chair Wilken asked for information regarding the 10%(A) and
10%(B) notations designated on the grantee listing.
Mr. Lindstrom explained that these notations are footnoted on page
seven of the aforementioned grantee list as follows: "10%(A)
Community Action against Substance Abuse programs receiving grant
awards of $30,000 or less; and 10%(B) designates treatment for
youth, woman and children and special projects."
KAREN PEARSON, Acting Director, Division of Alcoholism and Drug
Abuse, Department of Health and Social Services responded to
Senator Taylor's question regarding the equitable methodology for
determining which programs are exempt or specified to remain at the
ten percent level by responding that she was newly appointed to
this position and would supply the requested information to the
Committee upon further research.
Co-Chair Wilken asked that the Fairbanks Native Association
program, another similar program specified at the ten percent level
listed on page three of the report, also be included in the
research.
Co-chair Wilken ordered the bill HELD in Committee.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 10:16 AM.
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