Legislature(2009 - 2010)SENATE FINANCE 532

02/11/2010 09:15 AM Senate FINANCE

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                  SENATE FINANCE COMMITTEE                                                                                      
                     February 11, 2010                                                                                          
                         9:24 a.m.                                                                                              
9:24:31 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Stedman called the Senate  Finance Committee meeting                                                                   
to order at 9:24 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Joe Thomas                                                                                                              
MEMBERS ABSENT                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Donny Olson                                                                                                             
ALSO PRESENT                                                                                                                  
David  Logan,  Alaska  Dental Society;  Mark  Prator,  Alaska                                                                   
Dental Society,  Wasilla; Senator Joe Paskvan;  Trena Heikes,                                                                   
Director,  Division of Workers'  Compensation, Department  of                                                                   
Labor  and  Workforce  Development;  Barbara  Huff  Tuckness,                                                                   
General Teamsters  959. Don Etheridge, Alaska,  AFL, CIO; Jon                                                                   
Sherwood, Director,  Office of Program Review,  Department of                                                                   
Health and Social Services (DHSS).                                                                                              
PRESENT VIA TELECONFERENCE                                                                                                    
Kevin Dougherty,  Alaska Laborers, Eagle River;  Stacy Allen,                                                                   
Laborers Local 341, Anchorage.                                                                                                  
SB  83    VOCATIONAL REHABILITATION COMMITTEE                                                                                   
          CSSB 83 (L&C) was REPORTED out of Committee with a                                                                    
          "do pass" recommendation and with attached fiscal                                                                     
          note by the Department of Labor and Workforce                                                                         
SB 199    MEDICAID COVERAGE FOR DENTURES                                                                                        
          SB 199 was HEARD and HELD in Committee for further                                                                    
SB 159    WORKERS' COMPENSATION FUNERAL EXPENSES                                                                                
          SB 159 was HEARD and HELD in Committee for further                                                                    
SENATE BILL NO. 83                                                                                                            
     "An   Act   repealing  the   governor's   committee   on                                                                   
     employment  of people  with  disabilities; creating  the                                                                   
     state vocational  rehabilitation committee  and relating                                                                   
     to the committee; and providing  for an effective date."                                                                   
9:24:53 AM                                                                                                                    
Co-Chair Stedman  introduced SB  83 and explained  that today                                                                   
was the  second hearing  for the  bill. Public testimony  was                                                                   
taken on February 8, 2010.                                                                                                      
9:26:29 AM     AT EASE                                                                                                        
9:27:00 AM     RECONVENED                                                                                                     
Senator  Huggins MOVED  to report  CSSB 83  out of  Committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
CSSB 83 (L&C) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation   and  with  attached   fiscal  note   by  the                                                                   
Department of Labor and Workforce Development.                                                                                  
SENATE BILL NO. 199                                                                                                           
     "An Act providing for a two-year funding cycle for                                                                         
     medical assistance coverage for dentures."                                                                                 
9:28:08 AM                                                                                                                    
Senator Ellis  shared a story  about a gentleman  who visited                                                                   
his  office and  threatened  to  commit suicide  following  a                                                                   
negative interaction  with employees  at the Medicaid  Dental                                                                   
Program.  The interaction  was negative  because of  statutes                                                                   
and regulations  concerning dentures and the  Medicaid Dental                                                                   
Program.  The  gentleman  qualified for  dentures  under  the                                                                   
Medicaid Dental Plan,  but was told that he had  to choose to                                                                   
have either  his upper or  lower dentures installed.  To this                                                                   
person, the  situation was of  dire concern as he  was unable                                                                   
to  chew with  only  one set  of  dentures.  The bill  allows                                                                   
patients to forward fund the complete  set of dentures versus                                                                   
waiting two years for the entire set of dentures.                                                                               
Senator Ellis explained  that studies have shown  that if the                                                                   
government   helps  people  with   dental  health   expenses,                                                                   
expensive  fiscal  health problems  are  prevented.  Allowing                                                                   
patients to  receive a full set  of dentures during  the same                                                                   
fiscal year  is crucial for oral  health and will  reduce the                                                                   
impact on Medicaid  patients and Alaska's dentists.  The bill                                                                   
allows  patients  who are  eligible  for dentures  under  the                                                                   
Medicaid Adult  Dental Program  to forward fund  the complete                                                                   
set  of dentures.  Current law  limits patients  to $1150  in                                                                   
preventative  or  restorative  services.  The bill  does  not                                                                   
increase  eligibility for  the total  amount of benefits,  it                                                                   
simply  allows them  to access  the funding  they would  have                                                                   
received the  next fiscal year  to complete a procedure  in a                                                                   
cost effective manner.                                                                                                          
9:33:45 AM                                                                                                                    
JON SHERWOOD, DIRECTOR, OFFICE  OF PROGRAM REVIEW, DEPARTMENT                                                                   
OF  HEALTH  AND  SOCIAL  SERVICES  (DHSS),  stated  that  the                                                                   
department  conceptually  approves  of the  legislation.  The                                                                   
department  agrees that it  is best  for patients to  receive                                                                   
two  sets  of  dentures  in  the  same  appointment.  If  the                                                                   
legislation  passes,  patients  would receive  both  sets  of                                                                   
dentures in the  same year. He acknowledged  that the current                                                                   
system  does not  always work.  The  department does  project                                                                   
that  the expenditures  will  increase  as most  people  will                                                                   
address denture needs in the first  few years. The department                                                                   
projects costs  of approximately  $900 thousand in  the first                                                                   
year, with $300 thousand from  general funds. The second year                                                                   
projection  includes $467  thousand in  the second year  with                                                                   
$200  thousand  from  general   funds.  Administrative  costs                                                                   
include automating the two year  limit. He expressed concerns                                                                   
about the automation prior to  freezing the claims processing                                                                   
system, which  requires one position  for one year  if manual                                                                   
tracking is required.                                                                                                           
9:37:53 AM                                                                                                                    
Co-Chair Stedman expressed concern  about the fiscal note and                                                                   
the positions needed. Potential  positive fiscal effects also                                                                   
exist as  savings for  people traveling  from rural  areas to                                                                   
receive dentures.                                                                                                               
Mr. Sherwood  added that if  system changes were  implemented                                                                   
prior to the freeze, then the  new position is not necessary,                                                                   
which  would reduce  the  cost. He  spoke  about research  to                                                                   
identify means  of quantifying  potential savings.  He stated                                                                   
that  the  department  did  not   see  many  travel  expenses                                                                   
associated  with providing  a  second set  of dentures.  Some                                                                   
expenses incurred  are the result  of emergency  room visits.                                                                   
He stated  that the  department lacked  data about  potential                                                                   
savings for the state.                                                                                                          
Senator Thomas  commented on the  fiscal notes.  He requested                                                                   
further   estimates  of   state  expense.   He  asked   about                                                                   
contractual  agreements   for  the  department's   electronic                                                                   
changes.   Mr.  Sherwood   responded   that  the   department                                                                   
contracts with the Affiliated  Computer Systems (ACS) for the                                                                   
operation of the current claims processing system.                                                                              
Senator Thomas  asked if the  technical changes were  made in                                                                   
conjunction with  dental offices. Mr. Sherwood  answered that                                                                   
the  changes  would happen  on  a  technical level.  The  new                                                                   
system will track  expenditures over two years,  but will not                                                                   
affect the interaction with dental offices.                                                                                     
Senator  Thomas  hoped to  recruit  insight from  the  dental                                                                   
practitioners  about  the  filing  of  claims.  Mr.  Sherwood                                                                   
responded  that the change  is internal  and does not  affect                                                                   
the interface with dental offices.                                                                                              
9:44:26 AM                                                                                                                    
Co-Chair Stedman  asked if the administration  has a position                                                                   
on  the  bill. Mr.  Sherwood  stated  that  SB 199  is  under                                                                   
consideration by  the administration, although  a position is                                                                   
not currently stated.                                                                                                           
Co-Chair Stedman reviewed the fiscal notes.                                                                                     
9:45:42 AM                                                                                                                    
DAVID  LOGAN, ALASKA  DENTAL SOCIETY  spoke in  favor of  the                                                                   
legislation. He opined that the  bill is appropriate for many                                                                   
reasons. The bill serves patients  and dentists. He addressed                                                                   
the  medical cost  of removing  damaged  teeth. He  explained                                                                   
that multiple  trips are often required for  the construction                                                                   
of  dentures. He  noted  that travel  costs  often dwarf  the                                                                   
denture  expenditures.  He shared  a professional  story.  He                                                                   
pointed  out that  SB  199  allows rehabilitation  for  those                                                                   
patients in need of both upper and lower dentures.                                                                              
9:50:01 AM                                                                                                                    
Senator   Thomas  compared   the  dental   and  the   billing                                                                   
procedures.  Dr.   Logan  pointed  out  that   the  procedure                                                                   
requires molds and dentures constructed  at the same time. He                                                                   
recalled a meeting with the Medicaid  Dental Program allowing                                                                   
insight into  the process of  claims and billing.  He thought                                                                   
that  potential  problems  are  yet unknown  for  the  dental                                                                   
MARK PRATOR, ALASKA  DENTAL SOCIETY, WASILLA,  spoke in favor                                                                   
of the legislation.  He stated  that he does accept Medicaid.                                                                   
He pointed out that he donates  approximately half of his fee                                                                   
for the  denture procedure,  in order to  be able  to provide                                                                   
the   service  for   the  fee   provided   by  Medicaid.   He                                                                   
acknowledged that  the cost of  travel increases each  time a                                                                   
person travels  for an  appointment. He  also saw savings  in                                                                   
emergency  room visits.  In the  past, he  has remade  entire                                                                   
sets of dentures as one set must  fit well against the other.                                                                   
Co-Chair Stedman  asked if the  department planned to  take a                                                                   
positive  or negative  position  on  the bill.  Mr.  Sherwood                                                                   
noted  that  the  administration's   position  has  not  been                                                                   
established. Co-Chair  Stedman encouraged the  administration                                                                   
look at  the bill  with consideration.  Senator Thomas  urged                                                                   
the administration to address  SB 199 during this session for                                                                   
the benefit  of the patients  and the state.  Senator Huggins                                                                   
encouraged the department to consider the legislation.                                                                          
9:58:37 AM                                                                                                                    
Senator Ellis  stated that  governor Murkowski brought  adult                                                                   
dental  Medicaid.  The end  of  the sunset  led  to the  cost                                                                   
savings  intention,  but  he  opined  that it  was  not  well                                                                   
thought   out.  He  expressed   desire   to  work  with   the                                                                   
department. He opined  that the cost control  measure was ill                                                                   
SB  199  was   HEARD  and  HELD  in  Committee   for  further                                                                   
SENATE BILL NO. 159                                                                                                           
     "An Act increasing the maximum funeral expenses payable                                                                    
     as a workers' compensation death benefit; and providing                                                                    
     for an effective date."                                                                                                    
10:00:51 AM                                                                                                                   
SENATOR JOE PASKVAN presented  the legislation and the merits                                                                   
of SB  159. He gave a  statement including history  about the                                                                   
workers' compensation  death benefit.  He discussed  the cost                                                                   
of  funeral expenses.  The payment  of the  death benefit  is                                                                   
granted  to the  survivors.  The  act increases  the  maximum                                                                   
funeral  expense payable  as  a workers'  compensation  death                                                                   
benefit  and  provides  for  an   effective  date.  The  bill                                                                   
addresses Section  1 of the  statute stating that  reasonable                                                                   
and necessary funeral expenses  are increased from $5000 to a                                                                   
more appropriate level of $10,000.  During the last ten years                                                                   
there have  been an  average of   26  fatalities per  year in                                                                   
Alaska  that require payment  of funeral  expenses under  the                                                                   
workers'  compensation  statutes. In  that  decade, the  most                                                                   
number of  deaths in a year was  39 and the fewest  number of                                                                   
deaths was 15.  Last year there were 17 fatalities  in Alaska                                                                   
that required  the payment  of workers' compensation  funeral                                                                   
expenses. He mentioned  the wide range of  necessary services                                                                   
involved in a funeral. These funeral  services easily surpass                                                                   
the maximum  death benefit. If  SB 159 is implemented,  there                                                                   
is no fiscal impact to the state.  System costs will increase                                                                   
by less  than 0.1 percent.  Current funeral benefit  has been                                                                   
unchanged for  a decade, and since  then the cost  of funeral                                                                   
expenses has risen significantly.                                                                                               
10:03:58 AM                                                                                                                   
Co-Chair  Stedman  asked  for  an  approximation  of  funeral                                                                   
costs. Senator  Paskvan responded  that funeral expenses  are                                                                   
estimated at  $12 to $15  thousand. The $10 thousand  benefit                                                                   
is  designed  to  compensate   for  reasonable  and  moderate                                                                   
funeral services.                                                                                                               
Co-Chair  Stedman  noted  the   zero  fiscal  note  from  the                                                                   
Department of Labor and Workforce Development.                                                                                  
10:05:37 AM                                                                                                                   
TRENA HEIKES,  DIRECTOR, DIVISION  OF WORKERS'  COMPENSATION,                                                                   
DEPARTMENT  OF LABOR  AND WORKFORCE  DEVELOPMENT stated  that                                                                   
the department  does  not have  a position  on the bill.  She                                                                   
researched  the average  funeral  cost excluding  burial  and                                                                   
cemetery charges and  the cost is between $6  and $7 thousand                                                                   
for the casket and the funeral home cost.                                                                                       
Co-Chair  Stedman   requested  various  amounts   of  funeral                                                                   
expenses comparing cremation versus burial.                                                                                     
Senator Huggins  asked if insurance  is available  to workers                                                                   
in the state.  He asked about insurance offered  by unions or                                                                   
recurring  employers.  Ms.  Heikes responded  that  for  work                                                                   
related deaths, workers' compensation  would pay up to $5000.                                                                   
She supposed  that private  insurance  and unions might  also                                                                   
contribute if a person participated in them.                                                                                    
Senator Huggins  asked if the  payment is doubled from  $5 to                                                                   
$10 thousand, who pays for the additional amount.                                                                               
10:09:40 AM                                                                                                                   
Ms. Heikes answered that the workers'  compensation insurance                                                                   
carrier who contracts  with the employer to  provide workers'                                                                   
compensation  insurance. The overall  increase in  premium is                                                                   
0.1 percent.  She clarified  that if  an employer paid  $1000                                                                   
premium per year, the cost would  be an additional dollar for                                                                   
the increase from $5 to $10 thousand.                                                                                           
Senator  Thomas asked  if private  benefits would  compromise                                                                   
the ability to  collect workers' compensation  benefits.  Ms.                                                                   
Heikes answered that if the person  has private insurance for                                                                   
funerals, then the  first $5000 would be covered  by workers'                                                                   
10:11:25 AM                                                                                                                   
DON  ETHERIDGE, ALASKA,  AFL,  CIO spoke  in  support of  the                                                                   
legislation.   He  acknowledged   that  funeral  costs   have                                                                   
increased dramatically.  Typically when  a person is  lost on                                                                   
the job,  the income is lost  for the family. He  opined that                                                                   
the increase is appropriate.                                                                                                    
Senator Huggins  asked about the percentage increase  for the                                                                   
employees. Mr. Etheridge  responded that he was  not aware of                                                                   
the  percentage  increase for  individuals.  Senator  Huggins                                                                   
thought  that  the information  was  important  to  determine                                                                   
exactly how the legislation would impact those involved.                                                                        
10:13:29 AM                                                                                                                   
BARBARA   HUFF   TUCKNESS,  DIRECTOR   OF   LEGISLATIVE   and                                                                   
GOVERNMENTAL AFFAIRS,  GENERAL TEAMSTERS LOCAL  959, spoke in                                                                   
support of the legislation. She  noted the safety perspective                                                                   
and the history of members lost  though work related efforts.                                                                   
She  noted that  the impact  and  focus on  safety issues  is                                                                   
greater. She added  that despite the choice  of casket versus                                                                   
burial,  the act  of transporting  the  body adds  additional                                                                   
10:16:10 AM                                                                                                                   
Co-Chair  Stedman   pointed  out  questions   regarding  data                                                                   
retrieval  about the number  of deaths  that occurred  in the                                                                   
workplace. He requested  data about the cost  of funerals and                                                                   
additional  expenses.   He  expressed  curiosity   about  the                                                                   
employees in union and out of union.                                                                                            
KEVIN   DOUGHERTY,   ALASKA  LABORERS,   EAGLE   RIVER   (via                                                                   
teleconference)  spoke  in  favor   of  the  legislation.  He                                                                   
pointed  out  that the  amount  of  work related  deaths  has                                                                   
declined.  He opined that  the legislation  is of benefit  to                                                                   
workers  and  also  saves  insurance   funding  for  workers'                                                                   
compensation.  He  stated that  he  sent  price data  to  the                                                                   
committee from various funeral  homes around Alaska. The data                                                                   
shows that  a typical  funeral has escalated  from $6  to $10                                                                   
thousand.  The bill  would  allow the  workers'  compensation                                                                   
insurance to cover  up to $10 thousand, but  a funeral charge                                                                   
that  is less  would only  receive the  amount necessary.  He                                                                   
noted that  the benefit has  not increased for  approximately                                                                   
10   years,  yet   the  cost   of   funerals  has   increased                                                                   
STACY   ALLEN,    LOBORERS   LOCAL   341,    ANCHORAGE   (via                                                                   
teleconference)  relayed a  recent experience  where a  union                                                                   
member was  lost and she was  privy to the  financial worries                                                                   
that greatly  affect families  and compound the  tragedy. She                                                                   
noted  that  collections  and resources  were  received  from                                                                   
other union  members, but she  could not imagine  the absence                                                                   
of the union family.                                                                                                            
10:21:27 AM                                                                                                                   
Senator  Thomas  asked about  the  fatalities  listed in  the                                                                   
documentation  provided  by  the   Department  of  Labor  and                                                                   
Workforce  Development,  "Total  Filings  by Type"  (Copy  on                                                                   
File). He was uncertain about  the fatality numbers listed in                                                                   
the lower section  of the table beginning with  number 224 in                                                                   
FY99 running to FY08.                                                                                                           
Ms.  Heikes responded  that  the upper  portion  of the  data                                                                   
sheet indicates  the actual numbers  of injuries  reported in                                                                   
the  division. The  lower portion  represents  the number  of                                                                   
files  open  by  insurers.  She   noted  that  ongoing  death                                                                   
benefits  were payable  to the survivors  under the  statute.                                                                   
The insurance  carriers  would have open  files because  they                                                                   
continue  to  pay  benefits. The  numbers  cited  by  Senator                                                                   
Thomas indicate the ongoing files  through which benefits are                                                                   
paid. The questions  address the issue of whether  or not the                                                                   
workers' compensation act had  jurisdiction over the reported                                                                   
SB  159  was   HEARD  and  HELD  in  Committee   for  further                                                                   
10:29:10 AM                                                                                                                   
Co-Chair  Stedman  provided  an   overview  of  the  upcoming                                                                   
committee meetings.                                                                                                             
The meeting was adjourned at 10:35 AM.                                                                                          

Document Name Date/Time Subjects
2010_02_10 AARP Support for SB 199.pdf SFIN 2/11/2010 9:15:00 AM
SB 199