Legislature(2009 - 2010)SENATE FINANCE 532

03/11/2009 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 13 MEDICAL ASSISTANCE ELIGIBILITY TELECONFERENCED
Moved SB 13 Out of Committee
+ SB 32 MEDICAID:HOME/COMMUNITY BASED SERVICES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 116 APPROP: RURAL ENERGY ASSISTANCE
Moved CSSB 116(FIN) Out of Committee
                  SENATE FINANCE COMMITTEE                                                                                      
                       March 11, 2009                                                                                           
                         9:04 a.m.                                                                                              
                                                                                                                                
9:04:09 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate  Finance Committee meeting                                                                   
to order at 9:04 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator Gene  Therriault, Jay Livey, Staff,  Senator Hoffman;                                                                   
Ron  Kreher  Chief  of Field  Services,  Division  of  Public                                                                   
Assistance;  Senator  Bettye  Davis,  Sponsor;  Lynne  Koral,                                                                   
Intern, Senator  Bettye Davis;  Ellie Fitzjarrald,  Director,                                                                   
Division  of  Public  Assistance, Department  of  Health  and                                                                   
Social  Services;  Max  Hensley, Staff,  Senator  Ellis;  Jon                                                                   
Sherwood, Director,  Office of Program Review,  Department of                                                                   
Health   and  Social   Services   (DHSS);  Denise   Daniello,                                                                   
Director, Alaska  Commission on  Aging; Tim Schuerch,  Policy                                                                   
Analyst, Alaska Native Health  Board. Jon Sherwood, Director,                                                                   
Office  of Program Review,  Department  of Health and  Social                                                                   
Services (DHSS);                                                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Pat Luby,  Advocacy Director,  Alaska Association  of Retired                                                                   
Persons (AARP), Anchorage; Marita  Kaplan, Senior Citizens of                                                                   
Kodiak;  Jack  Nielson,  Department   of  Health  and  Social                                                                   
Services; Steve Lesko, President  of Key Coalition of Alaska;                                                                   
Connie Sipe,  Executive Director for Center  for Communities;                                                                   
Emily   Ennis,   Fairbanks  Resource   Agency;   Don   Cline,                                                                   
Therapist,   Bristol  Bay   Behavioral  Health   Corporation,                                                                   
Dillingham;   Rachel  Green,   Palmer  Senior  Center;   Emma                                                                   
Huntsman, self.                                                                                                                 
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 13     "An Act relating to eligibility requirements for                                                                      
          medical   assistance  for   certain  children   and                                                                   
          pregnant  women;  and  providing for  an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          SB  13  was  REPORTED  out of  Committee  with  "no                                                                   
          recommendation"  and with a new fiscal  impact note                                                                   
          by  the Department  of Health  and Social  Services                                                                   
          and  with two  previously  published fiscal  impact                                                                   
          notes: FN1 (DHS) and FN2 (DHS).                                                                                       
                                                                                                                                
SB 32     "An Act relating to medical assistance payments                                                                       
          for home and community-based services."                                                                               
                                                                                                                                
          SB 32  was HEARD and HELD in Committee  for further                                                                   
          consideration.                                                                                                        
                                                                                                                                
SB 116    "An Act  making a special appropriation  for energy                                                                   
          assistance  for  rural communities;  and  providing                                                                   
          for an effective date."                                                                                               
                                                                                                                                
          CSSB 116  (FIN) was REPORTED out of  Committee with                                                                   
          a "do pass" recommendation.                                                                                           
                                                                                                                                
SENATE BILL NO. 116                                                                                                           
                                                                                                                                
     "An Act making a special appropriation for energy                                                                          
     assistance for rural communities; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
9:04:29 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman MOVED  to ADOPT work  draft LS0600\R,  Kane                                                                   
3/3/09. There being NO OBJECTION, it was so ordered.                                                                            
                                                                                                                                
Co-Chair Hoffman  stated that  the initial approach  to bring                                                                   
energy   relief  to   rural  Alaskan   communities  was   the                                                                   
establishment of  a separate entity  under the  title "Energy                                                                   
Assistance for Rural Communities."  A broad approach followed                                                                   
a  review  with  the  administration  for  energy  assistance                                                                   
without   the  establishment   of   a  second   entity.   The                                                                   
legislation allows  energy assistance through the  Low Income                                                                   
Home  Energy  Assistance  Program  (LIHEAP)  and  the  Alaska                                                                   
Heating Assistance Program (AKHAP).  The funds were increased                                                                   
from $5  million to $9  million in an  effort to  broaden the                                                                   
program  and to  assist  all  Alaskans qualifying  under  the                                                                   
LIHEAP program.                                                                                                                 
                                                                                                                                
9:07:21 AM                                                                                                                    
                                                                                                                                
JAY LIVEY, STAFF,  SENATOR HOFFMAN, explained  the changes in                                                                   
the bill. He referred to the PowerPoint  presentation "Alaska                                                                   
Heating Assistance Programs" (Copy on File):                                                                                    
                                                                                                                                
Mr. Livey discussed Slide 3, "Program Participants":                                                                            
                                                                                                                                
   • Program is statewide                                                                                                       
   • Directly serves 162 communities                                                                                            
   • Through contracts  with Native organizations  serves 114                                                                   
     more communities                                                                                                           
   • Outside  of tribal  areas, 47% of  households using  the                                                                   
     program live in 6 communities - Anchorage, Wasilla,                                                                        
     Fairbanks, Palmer, North Pole, Homer                                                                                       
                                                                                                                                
9:10:49 AM                                                                                                                    
                                                                                                                                
Mr. Livey discussed Slide 4, "Eligibility":                                                                                     
                                                                                                                                
   • Resident of the State                                                                                                      
   • Living in the home in which the heating costs occur                                                                        
   • For  LIHEAP  have  income  (family of  four)  less  than                                                                   
     $39,750                                                                                                                    
   • For  AkHAP  have  income  (family  of  four)  less  than                                                                   
     $59,750                                                                                                                    
   • For heating  costs incurred  from November 1st   through                                                                   
     April 30                                                                                                                   
                                                                                                                                
9:12:11 AM                                                                                                                    
                                                                                                                                
Mr. Livey discussed Slide 5, "Program Mechanics":                                                                               
                                                                                                                                
   • Individual must apply on behalf of a household                                                                             
   • Household  is  assigned   points  based  on  application                                                                   
     information                                                                                                                
   • Number of applications is estimated                                                                                        
   • Based on  state and federal appropriations  and estimate                                                                   
     of the number of applications, a dollar amount is                                                                          
     assigned to each point                                                                                                     
   • Initial grant  is made on behalf of household  to vendor                                                                   
     in community                                                                                                               
   • Supplemental assistance is provided if available                                                                           
                                                                                                                                
9:13:38 AM                                                                                                                    
                                                                                                                                
Mr. Livey discussed Slide 6, "Amounts of Assistance":                                                                           
                                                                                                                                
   • Based on household points                                                                                                  
   • Fuel cost and climatic conditions                                                                                          
   • Size and type of housing                                                                                                   
   • Household size and income                                                                                                  
   • If  elderly,  disabled  or  young children  are  in  the                                                                   
     household                                                                                                                  
   • Federal and state appropriations                                                                                           
                                                                                                                                
9:15:27 AM                                                                                                                    
                                                                                                                                
Mr. Livey explained Slide 7, "Sample Calculation":                                                                              
                                                                                                                                
   • Based on application, household has 15 points.                                                                             
   • Based on available funds and estimate of total number                                                                      
     of applications - each point is worth $220.                                                                                
   • Applicant would receive $3300                                                                                              
   • Based on heating oil prices of $6.50 per gallon user                                                                       
     could purchase 507 gallons or 84 gallons per month                                                                         
   • Assuming each household uses 150 gallons per month,                                                                        
     only 56 per cent of household's fuel needs are                                                                             
     recognized by the program                                                                                                  
                                                                                                                                
                                                                                                                                
9:17:24 AM                                                                                                                    
                                                                                                                                
Mr.   Livey   explained   the   document   "Average   Monthly                                                                   
Temperatures for Bethel Alaska"  (Copy on File). The document                                                                   
intends to communicate that temperatures  for March and April                                                                   
are  still  quite  low, illustrating  the  ongoing  need  for                                                                   
heating assistance.                                                                                                             
                                                                                                                                
Mr.  Livey addressed  the document  "Estimated  Impact of  $9                                                                   
Million Appropriation for Heating  Assistance Programs" (Copy                                                                   
on File). The  communities' average fuel oil  cost determines                                                                   
eligibility.   The  estimates   illustrate  the  impacts   on                                                                   
households  participating   in  the  state-operated   heating                                                                   
assistance  programs.  The  program   does  not  discriminate                                                                   
between fuel  types, although  natural gas is  less expensive                                                                   
than oil.                                                                                                                       
                                                                                                                                
9:20:29 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman reminded the  public that the Senate Finance                                                                   
Committee hearing  followed a huge escalation  in oil prices.                                                                   
Some areas,  particularly in Western  Alaska do not  have the                                                                   
ability   to  benefit   from  the  lower   gas  prices.   The                                                                   
legislation  is an  effort to  help people  around the  state                                                                   
afford to heat their homes this winter.                                                                                         
                                                                                                                                
Co-Chair  Hoffman stated  that between  November of  2005 and                                                                   
November of 2008 a reduction in  costs was calculated in many                                                                   
regions of Alaska,  excluding Western Alaska.  He stated that                                                                   
Western  Alaska has yet  to receive  reductions although  the                                                                   
cost of living has increased.                                                                                                   
                                                                                                                                
Senator Huggins asked  for a contrast between  the $5 million                                                                   
and the $9  million appropriation. Co-Chair  Hoffman answered                                                                   
that  the  original  piece of  legislation  was  targeted  at                                                                   
Western  Alaska. The  new  legislation addresses  the  entire                                                                   
state including  Anchorage, Fairbanks,  Homer, and  the Matsu                                                                   
valley. The expansion of the program  requires an increase in                                                                   
funds.                                                                                                                          
                                                                                                                                
9:23:26 AM                                                                                                                    
                                                                                                                                
Senator Huggins  asked how many people  currently participate                                                                   
in  the program.  Mr. Livey  answered that  there are  14,000                                                                   
Alaska   households  participating   in   LIHEAP  and   AKHAP                                                                   
combined. An  additional 4500  members receive services  from                                                                   
tribal  organizations.  The  expectation  is  19,000  Alaskan                                                                   
households participating  in the two  programs by the  end of                                                                   
the year.                                                                                                                       
                                                                                                                                
9:24:32 AM                                                                                                                    
                                                                                                                                
RON  KREHER  CHIEF  OF FIELD  SERVICES,  DIVISION  OF  PUBLIC                                                                   
ASSISTANCE, responded  that the  number of households  served                                                                   
is  only  an  estimate.  Currently  the  Division  of  Public                                                                   
Assistance  has received  approximately 13,000  applications,                                                                   
which  is 30 percent  more than  the year  prior. Only  6,000                                                                   
applications  have been processed.  He informed that  200-300                                                                   
applications are received each week.                                                                                            
                                                                                                                                
Mr. Livey  discussed a  planned supplemental  check  run. The                                                                   
appropriation would  be attached to the run.  The vendor will                                                                   
have  a  credit  account  established  on the  behalf  of  an                                                                   
individual. The  appropriation would  ensure that  the vendor                                                                   
is paid later. The individual  could then extend their credit                                                                   
line with  the vendor, knowing  that money will  be available                                                                   
to pay for the oil.                                                                                                             
                                                                                                                                
9:27:07 AM                                                                                                                    
                                                                                                                                
Senator Huggins asked  if heating oil for senior  housing was                                                                   
eligible  for  assistance  within  the  program.  Mr.  Kreher                                                                   
answered that  individuals living in residential  housing are                                                                   
not eligible  for heating  assistance. Individual  residences                                                                   
are covered by  the program, but citizens living  in shelters                                                                   
or   residential  housing   do   not  qualify   for   heating                                                                   
assistance.  Senator   Huggins  encouraged  a   mechanism  to                                                                   
accommodate  senior citizens  who face  the same  demographic                                                                   
challenges as individuals qualifying for the program.                                                                           
                                                                                                                                
Co-Chair  Hoffman stated  that he  would like  to modify  the                                                                   
LIHEAP program  with separate legislation. Mr.  Kreher stated                                                                   
that the elderly  and disabled are a priority  population for                                                                   
AKHAP,  however,  individuals  in residential  or  subsidized                                                                   
housing have minimal heating costs.                                                                                             
                                                                                                                                
Co-Chair  Stedman asked  if  the administration  supports  SB
116.  Mr. Kreher  stated  that  the administration  does  not                                                                   
oppose  SB  116. Co-Chair  Stedman  asked  if Mr.  Kreher  is                                                                   
stating that the  administration supports SB  116. Mr. Kreher                                                                   
stated   that   he  was   informed   only  briefly   by   the                                                                   
administration  and has  not had the  opportunity to  consult                                                                   
about  the  position,  but his  understanding  was  that  the                                                                   
administration does not oppose SB 116.                                                                                          
                                                                                                                                
9:29:17 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  asked  how   many  Alaskan  citizens  were                                                                   
considered in  the Emergency  Relief Appropriation  Bill. Mr.                                                                   
Livey estimated between 15,000  or 18,000 Alaskan households.                                                                   
                                                                                                                                
Co-Chair  Hoffman concluded  that he  wanted to approach  the                                                                   
issue  earlier, but  he  felt that  the  new approach  allows                                                                   
broader  assistance  to  many   low  income  households.  The                                                                   
fairness of the bill is amplified by the increased cost.                                                                        
                                                                                                                                
Senator Huggins highlighted  that when rent is  raised due to                                                                   
increased fuel cost,  some senior citizens are  forced out of                                                                   
their housing  arrangements. He  did not  want to see  senior                                                                   
citizens excluded.                                                                                                              
                                                                                                                                
Co-Chair  Hoffman  MOVED to  report  CSSB  116 (FIN)  out  of                                                                   
Committee  with individual  recommendations.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSSB  116 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation.                                                                                                           
                                                                                                                                
SENATE BILL NO. 13                                                                                                            
                                                                                                                                
     "An Act relating to eligibility requirements for                                                                           
     medical assistance for certain children and pregnant                                                                       
     women; and providing for an effective date."                                                                               
                                                                                                                                
SENATOR BETTYE  DAVIS, SPONSOR,  introduced the bill  and her                                                                   
staff member.                                                                                                                   
                                                                                                                                
LYNNE  KORAL, INTERN,  SENATOR  BETTYE  DAVIS, discussed  the                                                                   
legislation,  which increases  eligibility limits for  Denali                                                                   
Kid  Care  (DKC) from  175  to  200 percent  of  the  federal                                                                   
poverty level  (FPL). She explained  that SB 13  restores the                                                                   
original level of the qualifying  income eligibility standard                                                                   
for the DKC program to 200 percent  of the FPL. She explained                                                                   
that  DKC is  considered  an enhanced  reimbursement  program                                                                   
with  up  to  70 percent  matching  funds  from  the  federal                                                                   
government's  State   Children's  Health  Insurance   Program                                                                   
(SCHIP), created in 1997.                                                                                                       
                                                                                                                                
Ms. Koral stated that uninsured  children with a medical need                                                                   
are four times  more likely to use emergency rooms  at a much                                                                   
higher  cost because  they tend  not to receive  care from  a                                                                   
regular care provider. Alaska  is one of five states who fund                                                                   
its  SCHIP program  below  200 percent  of  the FPL.  Private                                                                   
health  care  coverage  for children  has  declined  over  30                                                                   
percent in the  last 10 years and the deepening  recession is                                                                   
pulling more children and families  into the uninsured ranks.                                                                   
SB 13 makes insurance eligibility  accessible to an estimated                                                                   
1,277 additional  children and 225 additional  pregnant women                                                                   
in Alaska.                                                                                                                      
                                                                                                                                
9:36:34 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  commented  that  the  administration  does                                                                   
support CSSB 116.                                                                                                               
                                                                                                                                
Senator Huggins  asked if the administration  supports SB 13.                                                                   
Senator Bettye  Davis stated that  she had not  been informed                                                                   
about  a  lack  of  support  from   the  administration.  The                                                                   
department  stated that  they indeed  support an increase  in                                                                   
eligibility  limits to  200 percent  of the  FPL in the  last                                                                   
Senate Finance Committee meeting of 2/25/09.                                                                                    
                                                                                                                                
9:38:06 AM                                                                                                                    
                                                                                                                                
JON SHERWOOD, DIRECTOR, OFFICE  OF PROGRAM REVIEW, DEPARTMENT                                                                   
OF  HEALTH AND  SOCIAL SERVICES  (DHSS),  explained that  the                                                                   
Governor  publically supported  expanding income  eligibility                                                                   
levels  to 200  percent of  the FPL.  The Governor  expressed                                                                   
interest in provisions  such as premiums. He  stated that the                                                                   
administration does  not have a position in  opposition to SB
13.                                                                                                                             
                                                                                                                                
Senator  Huggins asked  for the  contrast  between a  similar                                                                   
bill addressing  the increase of eligibility  limits for DKC.                                                                   
Mr.  Sherwood   answered  that  there  were   four  different                                                                   
proposals on the table to expand  the DKC program. Two of the                                                                   
bills expand beyond  200 percent of the FPL  with some degree                                                                   
of cost sharing  in the form of premiums and  or co-pays. One                                                                   
bill expands  from 175 to  250 percent  of the FPL  with cost                                                                   
sharing in the  form of premiums beginning at  175 percent of                                                                   
the FPL and expanding for children only.                                                                                        
                                                                                                                                
Senator  Huggins   assumed  that   the  specialists   in  the                                                                   
department  favor one  bill that best  supports children  and                                                                   
remains cost effective.                                                                                                         
                                                                                                                                
9:40:43 AM                                                                                                                    
                                                                                                                                
Mr.  Sherwood  stated  that  he  had  disclosed  all  of  the                                                                   
information that was  available to him. He did  not feel that                                                                   
he could answer the question further.                                                                                           
                                                                                                                                
Senator  Huggins encouraged  an  effective  means of  helping                                                                   
Alaskans   with   healthcare   costs   and   he   asked   the                                                                   
administration to come forward with a position.                                                                                 
                                                                                                                                
Senator  Bettye Davis  stated that  the cost  of the  various                                                                   
bills remains  the same,  however, SB  13 allows children  to                                                                   
obtain coverage as soon as possible.  She emphasized that the                                                                   
proper action was to bring as  many children onto DKC as soon                                                                   
as possible.  She maintained  that cost  sharing was  still a                                                                   
possibility  with   another  bill.  She  stressed   that  the                                                                   
solitary goal of SB 13 was raising  income eligibility limits                                                                   
to 200 percent of the FPL.                                                                                                      
                                                                                                                                
Senator  Huggins stated  that  he preferred  an omnibus  bill                                                                   
that combines the best methods within the available means.                                                                      
                                                                                                                                
9:43:33 AM                                                                                                                    
                                                                                                                                
Senator Bettye Davis stated that  SB 13 could pass while work                                                                   
occurs with the  other bills providing the  accomplishment of                                                                   
many good ideas.                                                                                                                
                                                                                                                                
Co-Chair   Stedman  asked   if   additional  employees   were                                                                   
necessary  to process  the paperwork.  Mr. Sherwood  answered                                                                   
that the program's caseload will  increase by 1500 additional                                                                   
individuals.  He informed  that  given the  current  caseload                                                                   
averages,  two additional employees  are necessary.  Co-Chair                                                                   
Stedman  asked   if  the   positions  were  eliminated   when                                                                   
eligibility was reduced in 2003.                                                                                                
                                                                                                                                
9:45:43 AM                                                                                                                    
                                                                                                                                
ELLIE FITZJARRALD,  DIRECTOR, DIVISION OF  PUBLIC ASSISTANCE,                                                                   
DEPARTMENT OF  HEALTH AND SOCIAL  SERVICES, commented  on the                                                                   
elimination  of positions  with  eligibility reductions.  The                                                                   
two  positions requested  for  SB 13  are due  to changes  in                                                                   
Medicaid  requirements surrounding  citizenship  verification                                                                   
and  the  emphasis   on  payment  accuracy  to   ensure  that                                                                   
applicants are  eligible for the program. When  income scales                                                                   
are increased,  more time  is needed  to ensure  eligibility.                                                                   
The  request for  additional employees  serves the  increased                                                                   
number of applicants.                                                                                                           
                                                                                                                                
9:47:58 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  spoke to the three fiscal  notes increasing                                                                   
the general  fund spending $861,000  in FY09 and  $940,000 in                                                                   
FY10.                                                                                                                           
                                                                                                                                
Senator Bettye Davis  stated that she wished for  the bill to                                                                   
pass out during the current hearing.                                                                                            
                                                                                                                                
Co-Chair Hoffman MOVED to report  SB 13 out of Committee with                                                                   
individual  recommendations   and  the  accompanying   fiscal                                                                   
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB 13 was REPORTED out of Committee  with "no recommendation"                                                                   
and  with a  new  fiscal impact  note  by the  Department  of                                                                   
Health and Social Services and  with two previously published                                                                   
fiscal impact notes: FN1 (DHS) and FN2 (DHS).                                                                                   
                                                                                                                                
SENATE BILL NO. 32                                                                                                            
                                                                                                                                
     "An  Act relating  to  medical assistance  payments  for                                                                   
     home and community-based services."                                                                                        
                                                                                                                                
9:50:14 AM                                                                                                                    
                                                                                                                                
Senator Ellis presented SB 32.                                                                                                  
                                                                                                                                
     Senate Bill 32 creates a  mechanism for regular Medicaid                                                                   
     rate review  for providers of home-  and community-based                                                                   
     services   to  Alaska's   elderly  and   developmentally                                                                   
     disabled  citizens.    Institutional  service  providers                                                                   
     receive regular reviews in  order to bring rates in line                                                                   
     with costs.                                                                                                                
                                                                                                                                
     However, home  and community-based services  (HCBS) have                                                                   
     been  conclusively  proven  to lower  overall  long-term                                                                   
     Medicaid  costs.    One recent  study  in  the  academic                                                                   
     journal  Health  Affairs found  that  states with  long-                                                                   
     established high  proportions of HCBS spending  saw a 3%                                                                   
     overall  decrease  in long-term  care  spending  between                                                                   
     1995 and 2005 as opposed to a 14.5% increase in low-                                                                       
     HCBS states.  The study concluded:                                                                                         
       "Justifications     based     on    financial                                                                            
          constraints   can   no  longer   be  credibly                                                                         
          offered  as reasons  for forcing  such  people                                                                        
          [seniors   and  persons   with  developmental                                                                         
          disabilities]  into  nursing homes  and  other                                                                        
          institutions.    HCBS  programs   may  be  one                                                                        
          instance  in  which  offering  people greater                                                                         
                                           1                                                                                    
          choice also helps reduce costs."                                                                                      
                                                                                                                                
     Over the  last few years,  however, rates for  home- and                                                                   
     community-based services  have been frozen.  During that                                                                   
     time,  not  only  have  costs   increased,  the  medical                                                                   
     environment  -  including regulations,  technology,  and                                                                   
     client expectations  - has shifted dramatically.   These                                                                   
     shifts threaten the continued  viability of the hundreds                                                                   
     of  HCBS providers,  primarily  private businesses  that                                                                   
     employ  thousands of  Alaskans  in every  region of  the                                                                   
     state.                                                                                                                     
                                                                                                                                
     Home  and  community  based  services  are  the  key  to                                                                   
     helping our seniors and those  living with developmental                                                                   
     disabilities live  their lives as productive  members of                                                                   
     our communities  while controlling the growth  of health                                                                   
     care  costs.   Without  the  regular review  process  in                                                                   
     Senate  Bill 32, many  providers will  be forced  out of                                                                 
                                                                                                                                
                                                                                                                                
1                                                                                                                               
  Health Affairs 28, no. 1 (2009): 262-272.                                                                                     
     business and HCBS services will be taken away from                                                                         
     thousands of Alaskans across the state.                                                                                    
                                                                                                                                
9:58:25 AM                                                                                                                    
                                                                                                                                
Senator  Ellis  noted  that  most  providers  have  not  seen                                                                   
increases  in   ten  years.  He  pointed  to   problems  with                                                                   
contractor's  assessments precluding  testimony from  smaller                                                                   
providers. He  explained that SB  32 gives the  Department of                                                                   
Health and Social  Services (DHSS) the flexibility  to devise                                                                   
a cost  based system, while  repairing the disparity  between                                                                   
home  and community  based  services and  institutional  care                                                                   
rates.  Hospitals  and  nursing homes  require  regular  rate                                                                   
reviews. Home  and community based services deserve  the same                                                                   
treatment from the state.                                                                                                       
                                                                                                                                
10:00:19 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman asked  for  a list  of  home and  community                                                                   
based providers.  He asked how the fiscal notes  would affect                                                                   
their earnings.                                                                                                                 
                                                                                                                                
Senator  Ellis noted  that new  and  possibly reduced  fiscal                                                                   
notes would be provided to the  committee. He emphasized that                                                                   
the legislation is  not a rate increase, but  a mechanism for                                                                   
rate review. He  believed that work in the  finance committee                                                                   
could further  reduce the cost.  He informed that  DHSS could                                                                   
provide the requested provider information.                                                                                     
                                                                                                                                
10:01:55 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman observed  that  the fiscal  notes are  $4.4                                                                   
million  for  FY10  and  $8 million  for  FY11.  A  committee                                                                   
substitute  (CS) bill is  in the  works, but information  for                                                                   
committee  members is  today's goal.  Senator Ellis  stressed                                                                   
that the fiscal impact could be reduced.                                                                                        
                                                                                                                                
Senator  Olson asked  how non-Medicaid  eligible  individuals                                                                   
would  be impacted  by  the  mandatory rate  review.  Senator                                                                   
Ellis  explained  that SB  32  addresses providers  that  are                                                                   
reimbursed  through Medicaid.  Senator Olson  stated that  he                                                                   
had  not  witnessed  a  component  of  the  fiscal  note  for                                                                   
providers ineligible for Medicaid.                                                                                              
                                                                                                                                
10:03:32 AM                                                                                                                   
                                                                                                                                
MAX HENSLEY,  STAFF, SENATOR  ELLIS, responded to  questions.                                                                   
He  informed  that  there  are  approximately  350  home  and                                                                   
community  based providers,  who  receive approximately  $140                                                                   
million in Medicaid funding per year.                                                                                           
                                                                                                                                
Mr. Hensley informed  that Section 1 of SB 32  creates a rate                                                                   
review process for home and community  based services as well                                                                   
as assisted living  homes, which are outside  of the Medicaid                                                                   
arena.  Section 1 adds  personal care  services and  assisted                                                                   
living homes for needy and vulnerable  adults to the services                                                                   
receiving the rate review process.  As drafted, the bill only                                                                   
covered home and  community based services provided  though a                                                                   
Medicaid waiver.                                                                                                                
                                                                                                                                
Mr. Hensley reviewed  Sections 2 and 3, which  are conforming                                                                   
language  for  the  assisted   living  homes  for  needy  and                                                                   
vulnerable adults. Section 4 creates  an annual report to the                                                                   
legislature  detailing trends  in rates  based on the  review                                                                   
process  in the bill,  and sunset  that reports  in 2014.  He                                                                   
stressed  that the legislation  is designed  as a  management                                                                   
tool.                                                                                                                           
                                                                                                                                
10:06:15 AM                                                                                                                   
                                                                                                                                
Mr.   Hensley   explained   that   Section   6   delays   the                                                                   
implementation of the program  for two years to allow DHSS to                                                                   
create the methodology to set the rates.                                                                                        
                                                                                                                                
10:07:25 AM                                                                                                                   
                                                                                                                                
JON SHERWOOD, DIRECTOR, OFFICE  OF PROGRAM REVIEW, DEPARTMENT                                                                   
OF  HEALTH AND  SOCIAL  SERVICES  (DHSS), observed  that  the                                                                   
process  has  been  collaborative.  The  department  hired  a                                                                   
consultant  to   review  the   program.  The  department   is                                                                   
committed to moving  forward with a rate setting  system, but                                                                   
is  still seeking  compromise,  including adequate  direction                                                                   
without  restriction in  the rate setting  process of  larger                                                                   
hospitals  and nursing  homes.  The department  supports  the                                                                   
process of accountability.                                                                                                      
                                                                                                                                
10:09:21 AM                                                                                                                   
                                                                                                                                
Senator  Olson questioned  how the  legislation would  affect                                                                   
residents  of  the  Mary  Conrad  center  in  Anchorage.  Mr.                                                                   
Sherwood observed that they would not be affected by SB 32.                                                                     
                                                                                                                                
Senator Olson  asked if semi-private home  services providers                                                                   
were  affected. Mr.  Sherwood answered  that the  legislation                                                                   
requires  the department  to  change rates  reflecting  costs                                                                   
incurred   by  providers.   Senator   Olson   asked  if   the                                                                   
legislation would  affect health  care corporations  in rural                                                                   
Alaska.                                                                                                                         
                                                                                                                                
10:10:51 AM                                                                                                                   
                                                                                                                                
Senator Ellis acknowledged that  there are home and community                                                                   
based  providers,  especially  in  rural  Alaska,  who  would                                                                   
benefit from the  legislation. The intent of  the legislation                                                                   
is  to   find  the  proper   balance.  Rural   providers  are                                                                   
struggling  and the  state is  in  danger of  losing a  cross                                                                   
section of service providers.                                                                                                   
                                                                                                                                
10:12:19 AM                                                                                                                   
                                                                                                                                
Senator  Huggins requested  clarification  regarding the  two                                                                   
year  delay in  the  implementation of  SB  32. Mr.  Sherwood                                                                   
agreed  that the  department requested  the  two year  delay.                                                                   
Senator  Huggins asked  if the  department  has concerns  for                                                                   
home  and  community  service organizations  that  might  not                                                                   
survive two  years. He  felt concern  about the attrition  of                                                                   
these services.                                                                                                                 
                                                                                                                                
Mr. Sherwood  answered that two  years was an  ambitious goal                                                                   
for implementing  a cost based rate system.  He explained the                                                                   
difficulty in creating the system.                                                                                              
                                                                                                                                
Senator  Huggins  asked when  the  five year  repealer  would                                                                   
begin. Mr. Hensley explained that  the repealer addresses the                                                                   
report from  the department and  takes effect June  30, 2014,                                                                   
meaning that  the report would  occur during the  first three                                                                   
years of the program.                                                                                                           
                                                                                                                                
10:14:27 AM                                                                                                                   
                                                                                                                                
DENISE  DANIELLO,   DIRECTOR,  ALASKA  COMMISSION   ON  AGING                                                                   
testified in favor of SB 32.                                                                                                    
                                                                                                                                
     Good Morning.  My name is  Denise Daniello and I  am the                                                                   
     executive director of the  Alaska Commission on Aging. I                                                                   
     am  here to testify  in support  of CSSB  32, a  bill to                                                                   
     allow for  regular rate reviews of home-  and community-                                                                   
     based services for Medicaid-eligible  persons similar to                                                                   
     the  process used  by hospitals  and  nursing homes.  We                                                                   
     believe  that this  proposed  legislation addresses  the                                                                   
     need for a  fair and consistent process  to maintain the                                                                   
     systems  of care  for vulnerable  Alaskans and  promotes                                                                   
    sounds fiscal planning for providers and the State.                                                                         
                                                                                                                                
     The  Governor's  Council  on  Disabilities  and  Special                                                                   
     Education,  the  Alaska Mental  Health  Board,  Advisory                                                                   
     Board  on  Alcoholism  and  Drug Abuse  along  with  the                                                                   
     Alaska  Mental  Health  Trust   Authority,  the  Suicide                                                                   
     Prevention Council, the Alaska  Brain Injury Network and                                                                   
     the Alaska  Commission on Aging have  jointly identified                                                                   
     the establishment of a regular  and periodic schedule of                                                                   
     rate reviews  for home and  community based  services as                                                                   
     one  of our four  legislative priorities  for 2009.  The                                                                   
     provisions  that address  our  legislative priority  are                                                                   
     included in SB 32 sponsored by Senator Ellis.                                                                              
                                                                                                                                
     Alaska's most  vulnerable populations depend  heavily on                                                                   
     a  network  of community  nonprofit  provider  agencies.                                                                   
     Before  last year's  rebasing  for FY09,  many home  and                                                                   
     community-based  service   providers  had  been  over  a                                                                   
     decade without  a rate review  receiving the  same level                                                                   
     of reimbursement  while their  costs continued  to climb                                                                   
     along with demand for more services.                                                                                       
                                                                                                                                
     Home- and community-based  services are an effective and                                                                   
     efficient  means  of providing  care  for nearly  57,000                                                                   
     Alaskans who  would otherwise need to be  served by more                                                                   
     costly  institutions. Investment  in  the foundation  of                                                                   
     home- and community-based  services is prudent to assure                                                                   
     that services meet the needs  of all vulnerable Alaskans                                                                   
     to maintain their  quality of life and to  hold down the                                                                   
     costs of higher level health care.                                                                                         
                                                                                                                                
     According  to  2006  estimates provided  by  Senior  and                                                                   
     Disabilities  Services,  the average  annual  cost of  a                                                                   
     semi-private  room in  a nursing  facility was  $172,685                                                                   
     compared to $21,436 for the Medicaid waiver.                                                                               
                                                                                                                                
     It should also be kept in  mind that as more individuals                                                                   
     are able to receive home-  and community-based services,                                                                   
     fewer  of  them will  need  to  enter much  more  costly                                                                   
     institutions  such as nursing  homes. Thus, it  is quite                                                                   
     possible  that  by  adequately  funding  these  critical                                                                   
     pieces  of  the  continuum  of care  may  result  in  an                                                                   
     ultimate cost savings for the State.                                                                                       
                                                                                                                                
     Older  Alaskans  depend  on  home-  and  community-based                                                                   
     services  which help  them to continue  living  in their                                                                   
     home  communities  for  as  long as  possible  close  to                                                                   
     family,  friends, and cultural  tradition. For  seniors,                                                                   
     these   services  may   include  home-delivered   meals,                                                                   
     transportation,   chore  services,  care   coordination,                                                                   
     assisted  living homes, and  other services.  Thirty-six                                                                   
     percent  of the  3,498  individuals  served by  Medicaid                                                                   
     waivers are  older Alaskans -  the majority of  whom are                                                                   
     elders in their 80's on the Older Alaskans waiver.                                                                         
                                                                                                                                
     This  bill  has  broad  support   from  a  coalition  of                                                                   
     providers  who have also  signed on  to our joint  Trust                                                                   
     and Advisory Boards' position paper. They include                                                                          
                                                                                                                                
        · Alaska Association on Developmental Disabilities,                                                                     
          serving 2,636 Alaskans                                                                                                
        · AgeNet, serving 18,953 Alaskans                                                                                       
        · Personal Care Attendant Providers' Association,                                                                       
          serving 3,807 Alaskans                                                                                                
        · Assisted Living Association of Alaska, serving                                                                        
          1,500 Alaskans                                                                                                        
        · Alaska Behavioral Health Association, serving                                                                         
          26,285 Alaskans                                                                                                       
                                                                                                                                
10:19:24 AM                                                                                                                   
                                                                                                                                
TIM  SCHUERCH, POLICY  ANALYST,  ALASKA  NATIVE HEALTH  BOARD                                                                   
represented  the  state's  Native  Health  Organizations.  He                                                                   
stressed that providing basic  services in outlying areas has                                                                   
grown expensive. The medical inflation   index and employer's                                                                   
health insurance increase every  year. The rates for home and                                                                   
community based services  have been frozen for  nine years. A                                                                   
rate  freeze for  cost  effective  services does  save  money                                                                   
overall by  preventing and intervening  up front.  The Alaska                                                                   
Native  Health   Board  supports  SB  32.   Concerns  include                                                                   
gathering  the necessary data.  He stated  that the  two year                                                                   
delay was  crucial to  work with the  department to  create a                                                                   
rate establishing methodology.                                                                                                  
                                                                                                                                
10:22:16 AM                                                                                                                   
                                                                                                                                
PAT LUBY,  ADVOCACY DIRECTOR,  ALASKA ASSOCIATION  OF RETIRED                                                                   
PERSONS (AARP), ANCHORAGE (testified  via teleconference), in                                                                   
favor  of the  legislation. The  goal of  home and  community                                                                   
based  services is  to avoid  premature  institutionalization                                                                   
for  individuals. Rates  must  undergo review  ensuring  that                                                                   
providers  are  accurately reimbursed.  Older  citizens  have                                                                   
fewer options  without the help  of home and  community based                                                                   
services.                                                                                                                       
                                                                                                                                
MARITA  KAPLAN,  SENIOR  CITIZENS OF  KODIAK  (testified  via                                                                   
teleconference). She urged the  committee to allow the annual                                                                   
rate review. The Senior Citizens  are challenged with keeping                                                                   
services  alive  and  having trained  staff  available.  Home                                                                   
based services  are essential  for families striving  to keep                                                                   
elders at home.                                                                                                                 
                                                                                                                                
JACK  NIELSON,  DEPARTMENT  OF  HEALTH  AND  SOCIAL  SERVICES                                                                   
(testified via  teleconference). He  stated that he  works in                                                                   
the office  of rate  review, which  works directly  with cost                                                                   
reporting and rate setting proposed under SB 32.                                                                                
                                                                                                                                
Co-Chair Hoffman  asked if the  department believes  that the                                                                   
rate review must occur annually  or is a less frequent review                                                                   
prudent.                                                                                                                        
                                                                                                                                
10:27:26 AM                                                                                                                   
                                                                                                                                
Mr. Nielson replied that his work  was involved with statutes                                                                   
and regulations.  Requirements  outlined in federal  statutes                                                                   
outline  the requirements  for rate setting  in the  Medicaid                                                                   
program. The department  must provide access  to services for                                                                   
clients  with  rates that  are  consistent with  economy  and                                                                   
efficiency, which  has an element  of cost. The  current laws                                                                   
do not require a cost review each year.                                                                                         
                                                                                                                                
STEVE LESKO, PRESIDENT OF KEY  COALITION OF ALASKA (testified                                                                   
via teleconference)  in  favor of the  legislation.  He asked                                                                   
that  the impact  on  families  be considered.  This  governs                                                                   
rebasing, which accounts for mandatory  pass through costs on                                                                   
a periodic  basis. Community and  home based programs  do not                                                                   
have access  to such  a process. This  fiscal year  marks the                                                                   
fifth   year  of  the   rate  freeze.   These  factors   have                                                                   
devastating  consequences on  the community.  He mentioned  a                                                                   
few  of the  ways  impacts  are perceived.  Families  receive                                                                   
fewer and fewer  services. Care for so many is  not an option                                                                   
it is a matter of life and death.                                                                                               
                                                                                                                                
10:33:37 AM                                                                                                                   
                                                                                                                                
CONNIE SIPE,  EXECUTIVE DIRECTOR FOR CENTER  FOR COMMUNITIES,                                                                   
SITKA  (testified  via teleconference)  representing  a  non-                                                                   
profit  based   in  Sitka.   She  spoke   in  favor   of  the                                                                   
legislation. She explained  that the budget is made  up of 50                                                                   
percent Medicaid  reimbursements. She stated that  the center                                                                   
does not  receive grants.  She spoke of  the areas  served in                                                                   
Southeast Alaska. She stated that  the center had 113 clients                                                                   
in  Sitka,  Kake,  and  Ketchikan.   Medicaid  pays  for  the                                                                   
services. She  felt that her  organization had  been unfairly                                                                   
treated in  the Medicaid arena  for home and  community based                                                                   
services leading  to many position  cuts. SB 32  is necessary                                                                   
to keep home and community based services stable.                                                                               
                                                                                                                                
10:38:38 AM                                                                                                                   
                                                                                                                                
EMILY ENNIS,  EXECUTIVE DIRECTOR,  FAIRBANKS RESOURCE  AGENCY                                                                   
(testified  via   teleconference),  in  support   of  SB  32.                                                                   
Medicaid  supported home  and community  services enable  the                                                                   
care of  people who  are not able  to independently  care for                                                                   
themselves.   She  believed  that   the  Medicaid   community                                                                   
services  along with  hospitals and  nursing homes  represent                                                                   
Alaska's long term healthcare system in the community.                                                                          
                                                                                                                                
10:42:32 AM                                                                                                                   
                                                                                                                                
DON   CLINE,  THERAPIST,   BRISTOL   BAY  BEHAVIORAL   HEALTH                                                                   
COORPORATION,  DILLINGHAM  (testified   via  teleconference),                                                                   
spoke   in  support  of   SB32.  He   mentioned  the   recent                                                                   
termination of  the crisis center, "Our House,"  which served                                                                   
as respite for  the chronically mentally ill.  The center was                                                                   
closed and  the service  is missed by  both the families  and                                                                   
the mentally ill individuals.                                                                                                   
                                                                                                                                
10:46:05 AM                                                                                                                   
                                                                                                                                
RACHEL GREEN,  REPRESENTATIVE FROM  THE PALMER SENIOR  CENTER                                                                   
(testified  via teleconference),  in  support of  SB 32.  She                                                                   
supported the  bill due to the  regular rate review  of state                                                                   
services. The  senior citizen  population is increasing,  and                                                                   
senior  citizen  services  have  been  underfunded  for  many                                                                   
years.  This  bill  allows the  necessary  tools  to  provide                                                                   
educated  funding  decisions  for home  and  community  based                                                                   
services now and in the future.                                                                                                 
                                                                                                                                
10:48:19 AM                                                                                                                   
                                                                                                                                
EMMA HUNTSMAN,  SELF, BARROW (testified via  teleconference),                                                                   
in support of SB 32. She spoke  in support of the North Slope                                                                   
area.  She  spoke in  support  of  Medicaid and  annual  rate                                                                   
reviews.  She  relayed  appreciation   for  the  benefits  of                                                                   
Medicaid utilized by her disabled son.                                                                                          
                                                                                                                                
10:51:14 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:50 AM.                                                                                          

Document Name Date/Time Subjects
2009-02-25 Denali KidCare, CHIP.PDF SFIN 2/25/2009 9:00:00 AM
SFIN 3/11/2009 9:00:00 AM
SB 13
Alaska Heating Assistance Programs.ppt SFIN 3/11/2009 9:00:00 AM
SB 116
sectional.pdf SFIN 2/25/2009 9:00:00 AM
SFIN 3/11/2009 9:00:00 AM
SB 13
Repercussions.pdf SFIN 2/25/2009 9:00:00 AM
SFIN 3/11/2009 9:00:00 AM
SB 13
Poverty Guidelines.pdf SFIN 2/25/2009 9:00:00 AM
SFIN 3/11/2009 9:00:00 AM
SB 13
Background of SCHIP.pdf SFIN 2/25/2009 9:00:00 AM
SFIN 3/11/2009 9:00:00 AM
SB 13
ANHB Support Letter.pdf SFIN 3/11/2009 9:00:00 AM
SB 116
AVERAGE MONTHLY TEMPERATURES FOR BETHEL ALASKA.doc SFIN 3/11/2009 9:00:00 AM
SB 116
SB 116 - gallons by comunity.xls SFIN 3/11/2009 9:00:00 AM
SB 116
SFIN letters of support addendum.pdf SFIN 3/11/2009 9:00:00 AM
SB 32
SFIN explanation of changes.pdf SFIN 3/11/2009 9:00:00 AM
SB 32
sb13_2009 summary 3-9-09.pdf SFIN 3/11/2009 9:00:00 AM
SB 13
SFIN letters of support.pdf SFIN 3/11/2009 9:00:00 AM
SB 32
SFIN sponsor statement.pdf SFIN 3/11/2009 9:00:00 AM
SB 32
SFIN supporting information.pdf SFIN 3/11/2009 9:00:00 AM
SB 32
sponsor statement.pdf SFIN 2/25/2009 9:00:00 AM
SFIN 3/11/2009 9:00:00 AM
SB 13
Work Draft CS for SB116(Fin) 031109.pdf SFIN 3/11/2009 9:00:00 AM
SB 116