Legislature(2015 - 2016)SENATE FINANCE 532

02/29/2016 09:30 AM FINANCE

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Audio Topic
09:32:03 AM Start
09:32:31 AM SB74
02:06:53 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 74 MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                     February 29, 2016                                                                                          
                         9:32 a.m.                                                                                              
                                                                                                                                
9:32:03 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:32 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Karen  Forrest, Deputy  Commissioner,  Department of  Health                                                                    
and  Social  Services;   Stacie  Kraly,  Assistant  Attorney                                                                    
General, Department  of Law; Tom Chard,  Executive Director,                                                                    
Alaska  Behavioral  Health  Association(ABHA);  Dr.  Carlton                                                                    
Heine,  Emergency  Room  Doctor, Juneau;  Valerie  Davidson,                                                                    
Commissioner, Department of Health and Social Services.                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Dr. Jay Butler, Chief  Medical Officer, Department of Health                                                                    
and  Social   Services;  Dr.  Erin  Narus,   State  Medicaid                                                                    
Pharmacist, Department  of Health  and Social  Services; Dr.                                                                    
Andrew  Elsberg,   Emergency  Medicine,   Providence  Alaska                                                                    
Medical   Center,  Anchorage;   Doug   Jones,  Division   of                                                                    
Healthcare  Services, Anchorage;  Becky Hultberg,  President                                                                    
and   CEO,   Alaska   State  Hospital   and   Nursing   Home                                                                    
Association,   Anchorage.                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 74     MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES                                                                               
                                                                                                                                
          SB 74 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SENATE BILL NO. 74                                                                                                            
                                                                                                                                
     "An Act relating to  permanent fund dividends; relating                                                                    
     to a medical assistance  reform program; establishing a                                                                    
     personal  health savings  account  program for  medical                                                                    
     assistance recipients;  relating to  the duties  of the                                                                    
     Department of Health  and Social Services; establishing                                                                    
     medical   assistance    demonstration   projects;   and                                                                    
     relating to  a study  by the  Department of  Health and                                                                    
     Social Services."                                                                                                          
                                                                                                                                
9:32:31 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon discussed housekeeping.                                                                                      
                                                                                                                                
9:33:57 AM                                                                                                                    
                                                                                                                                
KAREN  FORREST, DEPUTY  COMMISSIONER,  DEPARTMENT OF  HEALTH                                                                    
AND SOCIAL  SERVICES, offered brief remarks  on the language                                                                    
in  the bill  that would  remove  the language  in the  bill                                                                    
pertaining  to   the  community  grantee   requirement.  She                                                                    
explained  that   the  Center  for  Medicare   and  Medicaid                                                                    
Services  (CMS) required  that the  department change  their                                                                    
practice in  the area of community  grantee requirement. She                                                                    
stated that in the last  onsite evaluation, CMS had informed                                                                    
the  department  that  the requirement  had  to  be  removed                                                                    
because  the requirement  that a  provider be  a grantee  in                                                                    
order to bill Medicaid restricted  the freedom of choice for                                                                    
Medicaid  recipients by  restricting access.  She said  that                                                                    
the department  had the ability to  set reasonable standards                                                                    
related to  the qualifications  of a provider;  however, CMS                                                                    
generally questioned  state established  qualifications that                                                                    
would effectively  limit services  only to providers  of the                                                                    
state's choosing. She said that  the department had promised                                                                    
CMS  to change  the  requirement, and  in  return CMS  would                                                                    
provide technical assistance with  the change. She furthered                                                                    
that  CMS  had  stated  that,  while  the  department  could                                                                    
continue its  practice if it  used general funds,  but would                                                                    
not  be   allowed  to  continue  to   claim  federal  funds.                                                                    
Additionally, the department believed  the change was needed                                                                    
because   the  current   behavioral  health   system  needed                                                                    
foundational  reform. She  stated that  some aspects  of the                                                                    
current system no  longer worked, and the  requirement to be                                                                    
a  grantee  in order  to  bill  Medicaid  was one  of  those                                                                    
features.  She   shared  that   the  requirement   had  been                                                                    
established  25 years  ago,  when  behavioral health  grants                                                                    
were  first refinanced  to Medicaid  with  the intention  to                                                                    
avoid excessive  growth in Medicaid,  ensure accountability,                                                                    
and  track   outcomes.  She  relayed  that,   overtime,  the                                                                    
department's  model of  the  comprehensive community  mental                                                                    
health center  had eroded,  and highlighted  that additional                                                                    
providers were  needed in  order to  address gaps.  She said                                                                    
that the  department had developed and  alternative in which                                                                    
it  provided $100  grants in  order  for an  agency to  bill                                                                    
Medicaid,  which had  resulted  in a  patchwork of  services                                                                    
across the state  as well as gaps in continuum  of care. She                                                                    
stressed that  the change would  be the beginning  of needed                                                                    
reform by initiating increased access for services.                                                                             
                                                                                                                                
9:37:36 AM                                                                                                                    
                                                                                                                                
Co-Chair   MacKinnon  clarified   that  the   committee  was                                                                    
discussing Page 28, line 22 of the bill.                                                                                        
                                                                                                                                
9:38:00 AM                                                                                                                    
                                                                                                                                
Ms. Forrest  relented that, while the  change would increase                                                                    
access; access needed to be  balanced with quality and cost.                                                                    
She  related that  the vehicle  for  addressing the  balance                                                                    
would  be the  1115 Behavioral  Health Medicaid  Waiver. She                                                                    
explained  that the  purpose of  the waiver  was to  improve                                                                    
care,  increase efficiency,  and  reduce  costs. She  shared                                                                    
that once  the waiver was  complete the department  would be                                                                    
evaluated by CMS on whether  the waiver increased access to,                                                                    
and  strengthened,  providers  and  provider  networks.  She                                                                    
related  that  providers  had expressed  concern  about  the                                                                    
administrative burden placed  on behavioral health grantees,                                                                    
and the  department anticipated  brining changes  before the                                                                    
legislature  concerning   the  complexities   in  behavioral                                                                    
health   statutes   and   regulations.  She   stressed   the                                                                    
importance  for  all parties  of  having  a coordinated  and                                                                    
thoughtful  process  for   discussion  moving  forward.  She                                                                    
assured the  committee that the department  was committed to                                                                    
a  thriving behavioral  health system,  and  hoped that  the                                                                    
legislature and  the administration could work  on the issue                                                                    
collectively. She  said that removing the  requirement for a                                                                    
grantee was an important first  step and was foundational to                                                                    
behavioral   health  reform,   which  was   foundational  to                                                                    
Medicaid reform.                                                                                                                
                                                                                                                                
9:39:21 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon reiterated  the  version  of bill  under                                                                    
consideration. She  explained that the word  "community" had                                                                    
been removed from the language on  Line 22 of page 28, which                                                                    
caused a discrepancy between the  federal government and the                                                                    
state.  She said  that under  current Alaska  State Statute,                                                                    
only grantees could bill  Medicaid. She solicited additional                                                                    
comments concerning the deletion of the word "community".                                                                       
                                                                                                                                
9:40:41 AM                                                                                                                    
                                                                                                                                
STACIE  KRALY,  ASSISTANT  ATTORNEY GENERAL,  DEPARTMENT  OF                                                                    
LAW, reminded  the committee that  she would  be referencing                                                                    
Sections 22 and  23 of the bill. She relayed  that a further                                                                    
edit  to state  statute that  had been  contemplated in  the                                                                    
current  bill version  removed the  word "community"  in the                                                                    
two different sections. She said  that the desire to examine                                                                    
the removal for unintended  consequences had been previously                                                                    
discussed.  She stated  that after  considerable review  she                                                                    
believed  that the  purpose  of the  amendment  had been  to                                                                    
create  a  broader  framework of  what  would  constitute  a                                                                    
clinic. She noted that by  removing the word "community" the                                                                    
section of the statute that  was being amended contained the                                                                    
definition of "clinic".  She thought that the  intent of the                                                                    
removal was to  increase the number of  providers that could                                                                    
be  considered a  clinic for  purposes of  billing Medicaid.                                                                    
She felt that  the goal was laudable,  but expressed concern                                                                    
that  the edit  would do  what was  intended. She  furthered                                                                    
that Community  Mental Health Clinic  was already a  term of                                                                    
art already articulated in state  statute under AS 47.30.520                                                                    
- 47.30.620; an entire  statutory scheme existed to identify                                                                    
the Community  Behavioral Health System, developed  25 years                                                                    
ago.  She  stressed that  removal  of  the word  "community"                                                                    
eliminated a term  that was part of the term  of art written                                                                    
into  another  provision  of  statute,  which  could  create                                                                    
conflict  and  confusion  as   the  behavior  health  system                                                                    
redesign moved forward.                                                                                                         
                                                                                                                                
9:43:45 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon referred  to  a letter  from the  Alaska                                                                    
Behavioral Health Association (ABHA) (copy on file).                                                                            
TOM  CHARD,  EXECUTIVE  DIRECTOR, ALASKA  BEHAVIORAL  HEALTH                                                                    
ASSOCIATION  (ABHA),  testified  that  the  association  was                                                                    
comprised of  mental health and  drug and  alcohol treatment                                                                    
centers   throughout  the   state  and   was  the   provider                                                                    
association. He  highlighted the  letter referred to  by Co-                                                                    
Chair   MacKinnon.  He   expressed   that  the   association                                                                    
appreciated the  idea of removing  the grant  requirement in                                                                    
order  to  increase  access,  but felt  that  it  should  be                                                                    
balanced  with quality  and cost  effectiveness. He  relayed                                                                    
that   the  association   recommended  that   the  committee                                                                    
consider copying language form Section  19, pages 23 and 24,                                                                    
in order to balance the  increased access recommended in the                                                                    
provisions  discussed  in  Section   22  and  23.  He  spoke                                                                    
specifically of  language in Section 19  that ensured access                                                                    
to  healthcare  without  reducing  the quality  of  care;  a                                                                    
component  for  cost  effectiveness should  additionally  be                                                                    
considered.                                                                                                                     
                                                                                                                                
9:46:32 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:47:29 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr.  Chard  expressed  appreciation  to  the  committee  for                                                                    
having  the discussion,  and  reiterated  the importance  of                                                                    
moving with caution during this time of reform.                                                                                 
                                                                                                                                
9:48:11 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon stated  that  the  committee review  the                                                                    
proposed language  compromise, and elucidated that  her lead                                                                    
legislative staff,  Erin Shine, would work  with all parties                                                                    
involved to address concerns.                                                                                                   
                                                                                                                                
Co-Chair MacKinnon shifted the  committee focus to mandatory                                                                    
language for prescription drugs.                                                                                                
                                                                                                                                
9:48:45 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:49:17 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon  related that a change  had been proposed                                                                    
to  make   language  pertaining   to  a   prescription  drug                                                                    
monitoring  program mandatory  in  response  to the  state's                                                                    
opioid drug problem. She stated  that the recommendation had                                                                    
received  push  back from  physician  groups  that would  be                                                                    
impacted  by the  reporting  requirements  contained in  the                                                                    
language. She directed committee  attention to Page 10, line                                                                    
30, sections 4, 5, 6, 7, and  8. She added that there was an                                                                    
online document  that spoke  to the  issue from  DHSS, dated                                                                    
February 26, 2016(copy on file).                                                                                                
                                                                                                                                
9:51:04 AM                                                                                                                    
                                                                                                                                
DR. JAY BUTLER, CHIEF  MEDICAL OFFICER, DEPARTMENT OF HEALTH                                                                    
AND SOCIAL SERVICES (via teleconference),   related that the                                                                    
current   bill   version   included   improvement   in   the                                                                    
prescription drug monitoring program  (PDMP) in keeping with                                                                    
recommendations  of   the  Controlled   Substances  Advisory                                                                    
Committee.   He    shared   that   PDMPs    were   important                                                                    
communication  tools for  providers to  get a  more complete                                                                    
picture of  a patient's  recent medical history.  He relayed                                                                    
that the changes to Alaska's  PDMP were intended to strike a                                                                    
balance   between   maintaining   access  to   opioids   for                                                                    
appropriate   use,   supporting   provider   autonomy,   and                                                                    
maintaining   the   right    to   patient   privacy,   while                                                                    
simultaneously  assuring safe  and effective  utilization of                                                                    
drugs  while minimizing  the  risk of  drug  fraud and  drug                                                                    
diversion.  He  stated  that   opioids  could  be  medically                                                                    
useful, but  that the previous  decade had seen  an epidemic                                                                    
of  opioid   related  deaths   and  disabilities   that  had                                                                    
highlighted  the need  for better  management. He  said that                                                                    
concerns from providers had been  related to the language in                                                                    
Section  8, page  14, lines  7 through  9, which  required a                                                                    
prescriber   to  check   the  database   before  dispensing,                                                                    
prescribing,  or administering  a  controlled substance.  He                                                                    
noted  that  other  states   had  regulatory  language  that                                                                    
required providers  to check the PDMP;  however, the current                                                                    
language could go  beyond what was necessary  to address the                                                                    
current  public health  problem. He  stressed that  the goal                                                                    
was to remove barriers, and  to encourage providers that did                                                                    
not currently use the PDMP to  do so. He elucidated that the                                                                    
two greatest  risk factors for  overdose were  escalation of                                                                    
dosage, often  needed to  achieve continued  analgesia among                                                                    
persons  receiving opioids  over long  periods of  time, and                                                                    
co-administration  with  other   controlled  substances.  He                                                                    
recommended  providing  the   following  exemptions  to  the                                                                    
requirements:                                                                                                                   
                                                                                                                                
     · an exemption in patient settings                                                                                         
     · an    exemption    for   anesthesia    or   analgesia                                                                    
        administered immediately to during, or after,                                                                           
        outpatient surgery                                                                                                      
     · an exemption for emergency situations - emergency                                                                        
        medical services at scene, or during transport, or                                                                      
        in the emergency department.                                                                                            
     · an exemption for hospice care                                                                                            
                                                                                                                                
Dr.   Butler  reminded   the  committee   the  PDMP   was  a                                                                    
communication tool  for providers and dispensers,  which had                                                                    
proven useful to  reduce the misuse of  opioids, and address                                                                    
the epidemic of dependency and overdose.                                                                                        
                                                                                                                                
9:54:39 AM                                                                                                                    
                                                                                                                                
Senator Olson  expressed a concern for  rural hospitals that                                                                    
were staffed by health  aides working directly from manuals.                                                                    
He wondered whether the PDMP  would interfere with emergency                                                                    
medical situations.                                                                                                             
                                                                                                                                
Mr. Butler felt  that the question highlighted  the need for                                                                    
an  exemption  for  emergency   situations.  He  added  that                                                                    
emergencies  often  overlaid   the  day-to-day  practice  of                                                                    
medicine in clinics and emergency  departments. He felt that                                                                    
this was  an area  that made delegation  authority critical;                                                                    
the  authority  would  allow  the day  to  day  practice  of                                                                    
providing  pain management,  and accessing  the PDMP,  to be                                                                    
delegated to  an assistant in  the clinic who  could provide                                                                    
information to the provider in a timely manner.                                                                                 
                                                                                                                                
9:56:41 AM                                                                                                                    
                                                                                                                                
Senator Olson  understood that the emergency  room exemption                                                                    
would extend to emergency patients.                                                                                             
                                                                                                                                
Dr. Butler  replied in  the affirmative.  He added  that the                                                                    
intent  of  the emergency  situations  was  broad, the  main                                                                    
focus should  be on limiting barriers  to the administration                                                                    
of drugs in  a timely fashion in  emergency situations where                                                                    
opioid medication would be beneficial.                                                                                          
                                                                                                                                
9:57:24 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  asserted  that  over  prescription  by                                                                    
providers  could be  partially  responsible  for the  opioid                                                                    
problem.                                                                                                                        
                                                                                                                                
Mr. Butler responded that when  looking at the national data                                                                    
on  the patterns  of opioid  use it  had been  observed that                                                                    
certain   specialty  providers   did  prescribe   a  greater                                                                    
proportion  of opioids  upon initial  prescription, but  the                                                                    
overall volume  also included  primary care  providers; over                                                                    
half  of  all  prescriptions  for opioids  were  by  general                                                                    
internists, family  practice doctors, and  advanced practice                                                                    
nurse  practitioners. He  believed that  the issue  was much                                                                    
broader   than  only   what   occurred   in  the   emergency                                                                    
department.  He said  safeguards existed  for patients  that                                                                    
came  into the  emergency  room on  a  recurrent basis,  but                                                                    
stressed the  importance of striking a  balance and avoiding                                                                    
unintended  barriers to  administering opioids  in emergency                                                                    
situations. He  believed that the  question was  specific to                                                                    
emergency departments and should be further addressed.                                                                          
                                                                                                                                
10:00:07 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Micciche maintained  that  there was  a lack  of                                                                    
accountability for providers.  He understood that exemptions                                                                    
should be  made for  hospice care,  but believed  that there                                                                    
should be  accountability for the  opioids used to  care for                                                                    
the  hospice  patient.  He  feared  that  relatives  of  the                                                                    
hospice patient could misuse prescribed  opioids if the PDMP                                                                    
was not adequately populated and  monitored. He believed the                                                                    
issue required further discussion.                                                                                              
                                                                                                                                
10:01:08 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon   relayed  that  she  had   proposed  an                                                                    
amendment to  her staff regarding  Section 8, page  14, line                                                                    
8:                                                                                                                              
                                                                                                                                
     (4) that a pharmacist  or practitioner shall access the                                                                    
     database  to  check  a patient's  prescription  records                                                                    
     before  dispensing,  prescribing,  or  administering  a                                                                    
     controlled substance to the patient.                                                                                       
                                                                                                                                
Co-Chair  MacKinnon wondered  whether  using best  practices                                                                    
before,  and  then following  up  and  reporting the  opioid                                                                    
after could work.                                                                                                               
                                                                                                                                
Mr.  Butler  thought that  the  amendment  would be  a  more                                                                    
simplistic approach.  He cautioned whether the  highest risk                                                                    
situations  would be  sufficiently  addressed. He  explained                                                                    
that a  person with  a broken leg  receiving morphine  in an                                                                    
ambulance  was  probably not  at  risk  for becoming  opioid                                                                    
dependent;   the  bigger   risk  factor   was  the   patient                                                                    
prescribed  a bottle  of 100  tablets from  their orthopedic                                                                    
surgeon upon  discharge from the hospital.  He asserted that                                                                    
focusing the  PDMP on the  higher risk situations  should be                                                                    
the  goal. He  admitted  that  it would  be  a challenge  to                                                                    
capture all  of the  at risk  situations, but  believed that                                                                    
progress  could  be  made  by  working  with  providers  and                                                                    
dispensers.                                                                                                                     
                                                                                                                                
10:03:50 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon clarified  that the  amendment that  she                                                                    
would  possibly propose  would look  at  the word  "before",                                                                    
while mandating the reporting.                                                                                                  
                                                                                                                                
10:04:15 AM                                                                                                                   
                                                                                                                                
Vice-Chair Micciche  liked the current language.  He thought                                                                    
that if  there was going to  be an exemption that  it should                                                                    
be in a subsection, and  should state that only in emergency                                                                    
situations should  a pain  medication be  distributed before                                                                    
checking the database.                                                                                                          
                                                                                                                                
Co-Chair MacKinnon simply wanted the  burden to report to be                                                                    
placed on  a lower  level employee so  that doctors  did not                                                                    
have to use their time in that manner.                                                                                          
                                                                                                                                
10:05:18 AM                                                                                                                   
                                                                                                                                
Vice-Chair Micciche  though that  pressure should  be placed                                                                    
on the  medical community  to only  dispense opioids  when a                                                                    
certain level of  need had been established,  rather than in                                                                    
anticipation  of the  need. He  felt that  medical providers                                                                    
were  not  conservative  enough   in  their  assumptions  of                                                                    
pharmaceutical need.                                                                                                            
                                                                                                                                
10:06:13 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  stated that her sister  was a registered                                                                    
nurse,  and  that a  conversation  about  what doctors  were                                                                    
mandated to do in regard  to prescription drugs could be had                                                                    
offline.                                                                                                                        
                                                                                                                                
10:06:37 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy wondered  whether a time frame of  24 or 48                                                                    
hours, with a definitive  end-period would help. He believed                                                                    
that  everyone  understood  the idea  of  the  immediacy  of                                                                    
emergency situations,  and wondered at what  point it became                                                                    
reasonable  that the  information would  become part  of the                                                                    
database.                                                                                                                       
                                                                                                                                
Co-Chair MacKinnon  agreed and thought that  a doctor needed                                                                    
to work  without regard to  legislative requirements  and in                                                                    
the  best interest  of the  patient. She  admitted that  the                                                                    
state  was suffering  from a  significant  problem and  that                                                                    
lenient  prescription   providers  could  be  part   of  the                                                                    
problem.                                                                                                                        
                                                                                                                                
10:07:56 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly spoke  in  support  of Co-Chair  MacKinnon's                                                                    
language. He  thought that an  accurate database would  be a                                                                    
useful tool for pushing back on opioid abuse.                                                                                   
                                                                                                                                
10:08:29 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  relayed that amendments would  be due by                                                                    
noon of the following day.                                                                                                      
                                                                                                                                
10:09:01 AM                                                                                                                   
                                                                                                                                
DR.  ERIN NARUS,  STATE MEDICAID  PHARMACIST, DEPARTMENT  OF                                                                    
HEALTH AND  SOCIAL SERVICES (via  teleconference), testified                                                                    
that she was available for questions.                                                                                           
                                                                                                                                
10:09:35 AM                                                                                                                   
                                                                                                                                
DR. CARLTON HEINE, EMERGENCY  ROOM DOCTOR, JUNEAU, testified                                                                    
that  he agreed  90 percent  with  the changes  to the  PDMP                                                                    
proposed  in  the  legislation. He  recognized  that  opiate                                                                    
addiction was  a significant problem  in the state  that was                                                                    
causing  numerous  deaths.  He   asserted  that  there  were                                                                    
physicians in  the state  that overprescribed  narcotics. He                                                                    
expressed concern  that the language  in the  bill attempted                                                                    
to address  a problem,  but would not  be successful  in its                                                                    
intent. He offered  a background of the  opioid epidemic. He                                                                    
shared  that  the epidemic  had  gotten  worse in  the  late                                                                    
1990s,  early 2000s,  after  the  Joint Commission  asserted                                                                    
that pain  was a 5th vital  sign that was not  being treated                                                                    
aggressively   enough.   He   said  that   current   patient                                                                    
satisfaction surveys included a  question about the adequate                                                                    
control of  pain, and  that one of  the quality  metrics CMS                                                                    
held  doctors to  was the  length of  time before  narcotics                                                                    
were administered to a person  with a long bone fracture. He                                                                    
felt  that  there was  significant  pressure  on doctors  to                                                                    
prescribe pain  medication. He  felt that  finding a  way to                                                                    
identify  the   providers  that  were   overprescribing  was                                                                    
necessary, but he did not  believe that the current language                                                                    
in  the  bill would  address  the  problem effectively,  and                                                                    
would  cause more  work  for the  majority  of patients  and                                                                    
providers. He likened  it to a "really big  hammer trying to                                                                    
hit a  small nail." He  thought that  work could be  done to                                                                    
craft better  language to identify  the providers  that were                                                                    
the  problem.  He  reiterated previous  testimony  that  the                                                                    
issue of addiction did not stem  from a person with a broken                                                                    
leg receiving  intravenous (IV)  narcotics in  an ambulance.                                                                    
He state  that the addiction  issue stemmed from  the longer                                                                    
term  prescription of  opioid for  pain. He  echoed previous                                                                    
testimony  that  the  problem  was  not  stemming  from  the                                                                    
administering   of   pain   medication,   but   rather   the                                                                    
prescription  and dispensing  of  inappropriate amounts  and                                                                    
quantities of pain medication. He  explained his process for                                                                    
distribution  of pain  medication.  He explained  that if  a                                                                    
patient came  to him  in acute pain,  he administered  IV or                                                                    
acute  medication without  delay. He  furthered that  if the                                                                    
injury were going to cause  prolonged pain, he would write a                                                                    
short prescription for  pain medication: 5 to  15 tablets of                                                                    
pain  medicine.  He  admitted that  the  short  prescription                                                                    
could  lead  to   an  addiction  issue,  but   that  it  was                                                                    
predominately  the long-term  prescribing patters  that were                                                                    
driving addiction.                                                                                                              
                                                                                                                                
10:14:25 AM                                                                                                                   
                                                                                                                                
Senator  Dunleavy asked  whether  there  was an  established                                                                    
science that indicated  how many pills a person  had to take                                                                    
to  be  at  risk  for addiction.  He  wondered  whether  the                                                                    
database would help doctors to flag possible addicts.                                                                           
                                                                                                                                
Dr.  Heine responded  that the  PDMP was  currently used  to                                                                    
flag over prescription. He said  that the system was used to                                                                    
look   up  patients   that  might   be  receiving   multiple                                                                    
prescriptions from multiple providers,  which was a red flag                                                                    
for abuse.  He stated  that there  was science  available on                                                                    
addiction and  who was at  risk, as well as  screening tools                                                                    
that  had been  established  to  give providers  information                                                                    
concerning  higher risk  patients. He  concluded that  there                                                                    
was not  a set number  of pills or a  length of time  of use                                                                    
that lead  to addiction, but characteristics  of the patient                                                                    
that were complicated. He added  that it had been documented                                                                    
that high  doses of pain  medication administered  for long-                                                                    
periods to terminal cancer patients  had been effective, but                                                                    
chronic narcotic use for chronic  pain had not been shown to                                                                    
be effective.                                                                                                                   
                                                                                                                                
10:17:37 AM                                                                                                                   
                                                                                                                                
Senator  Bishop wondered  whether  opioids  were always  the                                                                    
first choice for  a pain medication. He shared  that he used                                                                    
Flexeril, a  nonnarcotic, for pain management  from compound                                                                    
fractures.                                                                                                                      
                                                                                                                                
Dr. Heine  replied that an  opioid was not always  the first                                                                    
choice; many different medications  were considered for pain                                                                    
management  depending  upon  the  source  of  the  pain.  He                                                                    
relayed that  Flexeril was a  muscle relaxer that  was great                                                                    
for  chronic back  pain from  muscle spasms.  He added  that                                                                    
there were  other situations where an  over-the-counter pain                                                                    
medicine, or  a prescription  nonsteroidal anti-inflammatory                                                                    
drug (NSAID),  could be a  more appropriate  pain treatment.                                                                    
He  noted that  all of  the above  were used,  but that  the                                                                    
latter  choices were  not problems  and were  therefore less                                                                    
well known.                                                                                                                     
                                                                                                                                
10:18:36 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  asked whether Dr. Heine  used electronic                                                                    
records.                                                                                                                        
                                                                                                                                
Dr. Heine replied in the affirmative.                                                                                           
                                                                                                                                
Co-Chair MacKinnon queried whether  he had the capability of                                                                    
making an electronic transmission of the opioid use.                                                                            
                                                                                                                                
Dr. Heine  responded that currently the  PDMP was web-based,                                                                    
a log  on was required  and then patient  information needed                                                                    
to be entered.                                                                                                                  
                                                                                                                                
Co-Chair  MacKinnon interrupted  asking whether  he had  the                                                                    
technology available to streamline the information.                                                                             
                                                                                                                                
Dr.  Heine  replied  that  he did  not  currently  have  the                                                                    
technology because  electronic medical records  had numerous                                                                    
firewalls.  He noted  that  the State  of  Washington had  a                                                                    
system that could be studied for potential implementation.                                                                      
                                                                                                                                
10:19:48 AM                                                                                                                   
Vice-Chair  Micciche  commented  that   15  percent  of  the                                                                    
state's  physicians currently  used the  PDMP. He  said that                                                                    
physicians  in his  district  had  expressed concerns  about                                                                    
over  prescription of  pain medication.  He  felt that  many                                                                    
people   could  manage   pain  with   over-the-counter  pain                                                                    
medications.  He felt  that people  should be  encouraged to                                                                    
use over-the-counter drugs.                                                                                                     
                                                                                                                                
10:21:59 AM                                                                                                                   
                                                                                                                                
DR.  ANDREW ELSBERG,  EMERGENCY MEDICINE,  PROVIDENCE ALASKA                                                                    
MEDICAL CENTER, ANCHORAGE  (via teleconference), agreed with                                                                    
Dr. Heine's perspective on the  matter. He said that working                                                                    
in a  busy emergency department  made logging into  the PDMP                                                                    
time  intensive.   He  felt  that  mandating   login  before                                                                    
administration of drugs was  unrealistic and unnecessary. He                                                                    
believed that prescription of pain  medications was the root                                                                    
of  the addiction  problem in  the state.  He said  that the                                                                    
center was  working to identify repeat  emergency department                                                                    
visitors. He reiterated that mandating  a login in emergency                                                                    
situations would  affect his ability  to serve  patients. He                                                                    
stated  that  he  supported and  information  exchange  that                                                                    
would automatically  provide patient information  from other                                                                    
providers,  which he  believed would  take any  bias out  of                                                                    
looking up patients, and would be more efficient.                                                                               
                                                                                                                                
10:25:43 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:26:18 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon discussed housekeeping.                                                                                      
                                                                                                                                
10:26:55 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
1:35:46 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair   MacKinnon  related   that  the   committee  would                                                                    
continue by discussing the audits.                                                                                              
                                                                                                                                
1:37:16 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:37:50 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon  invited Ms.  Kraly  to  the table.  She                                                                    
directed  the committee's  attention to  a letter  from DHSS                                                                    
dated February 26, 2016 (copy on file):                                                                                         
                                                                                                                                
     2.   Duty  to   identify   and  repay   self-identified                                                                    
     overpayments                                                                                                               
     • Section 16, Page 17, Lines 14 - 15                                                                                       
     "An enrolled medical  assistance provider shall conduct                                                                    
     at  least one  annual  review or  audit  of all  claims                                                                    
     submitted to the department…"                                                                                              
     •   For  the   committee's  consideration:   "Unless  a                                                                    
     provider  is  being   audited  under  47.05.200(a),  an                                                                    
     enrolled  medical assistance  provider shall  conduct a                                                                    
     biennial  review  or  audit of  a  statistically  valid                                                                    
     sample of claims submitted to the department…"                                                                             
                                                                                                                                
1:39:10 PM                                                                                                                    
                                                                                                                                
Ms.  Kraly testified  that concerns  had arisen  in previous                                                                    
committee meetings regarding Section  16 of the legislation.                                                                    
She state that  the primary concern that had  been raised by                                                                    
providers had been a reference  to the words "all claims" on                                                                    
live 15  of the  section. She said  that the  language would                                                                    
have been unduly burdensome upon  providers to have to audit                                                                    
all claims going  forward. She relayed that in  an effort to                                                                    
allay  some  of  the  concern the  department  crafted  some                                                                    
conceptual language that would  ensure that individuals that                                                                    
were currently under an audit  under AS 47.05.200, would hot                                                                    
have to  do a self-audit  that would be duplicative  of that                                                                    
effort.  She said  that language  was also  provided that  a                                                                    
biennial  review of  a statistically  valid sample  would be                                                                    
sufficient  to performing  an annual  review of  all claims.                                                                    
She stated  that the hope  was that providers  would examine                                                                    
their records every 2 years and  to review a valid sample of                                                                    
those claims to identify overpayments.                                                                                          
                                                                                                                                
1:41:10 PM                                                                                                                    
                                                                                                                                
DOUG JONES, DIVISION OF  HEALTHCARE SERVICES, ANCHORAGE (via                                                                    
teleconference),   shared   that   he  was   available   for                                                                    
questions.                                                                                                                      
                                                                                                                                
1:42:02 PM                                                                                                                    
                                                                                                                                
BECKY  HULTBERG, PRESIDENT  AND CEO,  ALASKA STATE  HOSPITAL                                                                    
AND NURSING HOME ASSOCIATION, ANCHORAGE                 (via                                                                    
teleconference), believed  that the language  would mitigate                                                                    
the  administrative  burden  that  had  been  referenced  in                                                                    
previous  testimony.  She  noted that  there  were  existing                                                                    
concerns related  to the timing  of the  Medicaid Management                                                                    
Information System  (MMIS); some claims and  some categories                                                                    
were  consistently  overpaid. She  did  not  think that  the                                                                    
problem  would  be  a  barrier, but  that  audits  would  be                                                                    
"cleaner"  once  the  system   was  performing  better.  She                                                                    
thought that the  effective date should be  beyond the point                                                                    
at  which the  system was  paying timely  and accurately  on                                                                    
claims.                                                                                                                         
                                                                                                                                
1:44:07 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon reminded  the committee  that amendments                                                                    
had been due by 12pm,  but that she would accept significant                                                                    
input from committee members for a limited time extension.                                                                      
                                                                                                                                
Co-Chair  MacKinnon  requested  further  discussion  of  the                                                                    
issues  of fraud  and false  claims, which  had been  raised                                                                    
during public testimony.                                                                                                        
                                                                                                                                
Ms. Kraly  stated that the  Medicaid Assistance  False Claim                                                                    
Act provisions  could be found  beginning in Section  1, and                                                                    
through  Section 3,  pages 2  through 10.  She relayed  that                                                                    
provider  testimony from  the  previous  week had  indicated                                                                    
that there were  concerns about the private  right of action                                                                    
and how  individuals would have  the ability  to potentially                                                                    
bring a  suit. She  said that  the department  believed that                                                                    
the language  in current bill version  properly balanced the                                                                    
concerns. She  related that  the department  was comfortable                                                                    
with the balance provided by the legislation.                                                                                   
                                                                                                                                
1:46:24 PM                                                                                                                    
                                                                                                                                
Ms. Hultberg testified  that this was a  new legal framework                                                                    
for Alaska  that had already  existed on the  federal level,                                                                    
and had  resulted in  significant judgements,  often against                                                                    
institutional  providers, for  fraud. She  pointed out  that                                                                    
many of the  cases were not for  intentional wrongdoing, but                                                                    
from  provider's  running  afoul  of  very  complex  federal                                                                    
regulatory or  billing regimes. She remained  concerned that                                                                    
the  framework  could  result in  the  filing  of  frivolous                                                                    
lawsuits.  She  did  not  believe  that  the  provision  was                                                                    
targeted   at  large   institutions,  which   were  low-risk                                                                    
providers, but it  was likely that cases  would come against                                                                    
them because they billed significant Medicaid dollars.                                                                          
                                                                                                                                
1:47:55 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon discussed the  extension of the amendment                                                                    
deadline for 12pm the following day.                                                                                            
                                                                                                                                
1:48:42 PM                                                                                                                    
                                                                                                                                
VALERIE  DAVIDSON, COMMISSIONER,  DEPARTMENT  OF HEALTH  AND                                                                    
SOCIAL SERVICES,  reiterated her comments from  the previous                                                                    
week  lauding the  efforts of  the subcommittee  on Medicaid                                                                    
reform. She  said that the  department had spoken to  all of                                                                    
the recommendations in the previously referenced letter.                                                                        
                                                                                                                                
Co-Chair MacKinnon  directed attention to a  letter from the                                                                    
U.S.  Department of  Health and  Human Services  Centers for                                                                    
Medicare & Medicaid Services (CMS)  dated February 26, 2016;                                                                    
and  asked  Commissioner  Davidson  to  walk  the  committee                                                                    
through the letter and highlight any concerns.                                                                                  
                                                                                                                                
1:49:58 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:50:51 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon explained  that she  had requested  DHSS                                                                    
view  on  the  Indian  Health Travel  Policy,  and  how  the                                                                    
government had responded to the state on the issue.                                                                             
                                                                                                                                
Commissioner   Davidson  explained   that  the   letter  was                                                                    
received the previous week, and  provided more detail to the                                                                    
states  on how  to  implement policy  changes. She  directed                                                                    
attention to  Page 2  of the  letter, which  reiterated that                                                                    
CMS  was  modifying  the  scope  of  services  eligible  for                                                                    
enhanced Federal  Medical Assistance Percentage  (FMAP), and                                                                    
were expanding  the meaning  of contractual  agent to  be an                                                                    
enrolled Medicaid  provider, which would allow  state's more                                                                    
flexibility. She  relayed that  the letter also  stated that                                                                    
flexibility would  be increased for billion  arrangements so                                                                    
that  Indian  Health  Services  (IHS)/Tribal  facilities  or                                                                    
their contractual  agents could  bill Medicaid  directly for                                                                    
services.                                                                                                                       
                                                                                                                                
Commissioner Davidson  directed attention  to Page  3, under                                                                    
"Permitting  a Wider  Scope  of  Services," explaining  that                                                                    
that services  that were considered through  an IHS facility                                                                    
would  be interpreted  more broadly  than the  services that                                                                    
they  had  prior.  She  noted  that the  middle  of  Page  3                                                                    
clarified  that  the  Freedom   of  Choice  requirement  for                                                                    
Medicaid beneficiaries  had not been changed.  She continued                                                                    
to  the bottom  of  Page  3, which  reflected  that CMS  had                                                                    
indicated that there  had to be a  written care coordination                                                                    
agreement, the form of which was flexible.                                                                                      
                                                                                                                                
Commissioner Davidson  stated that Page 4  indicated that an                                                                    
IHS  beneficiary,  that  was also  a  Medicaid  beneficiary,                                                                    
could   not   self-refer   to  a   non-IHS   provider,   and                                                                    
additionally  indicated that  a non-IHS  provider could  not                                                                    
self-refer.                                                                                                                     
                                                                                                                                
Commissioner  Davidson  stated that  the  bottom  of Page  4                                                                    
described the minimum requirements for care coordination:                                                                       
                                                                                                                                
     (1)  The IHS/Tribal  facility practitioner  providing a                                                                    
     request for  specific services (by electronic  or other                                                                    
     verifiable  means) and  relevant information  about his                                                                    
     or her patient to the non-IHS/Tribal provider;                                                                             
     (2)  The  non-IHS/Tribal provider  sending  information                                                                    
     about the  care it  provides to the  patient, including                                                                    
     the results  of any screening, diagnostic  or treatment                                                                    
     procedures, to the IHS/Tribal facility practitioner;                                                                       
     (3) The IHS/Tribal  facility practitioner continuing to                                                                    
     assume  responsibility   for  the  patient's   care  by                                                                    
     assessing  the   information  and   taking  appropriate                                                                    
     action,  including,   when  necessary,   furnishing  or                                                                    
     requesting additional services; and                                                                                        
     (4)   The   IHS/Tribal   facility   incorporating   the                                                                    
     patient's  information in  the  medical record  through                                                                    
     the  Health Information  Exchange or  other agreed-upon                                                                    
     means.                                                                                                                     
                                                                                                                                
Commissioner  Davidson  stated that  the  bottom  of Page  5                                                                    
offered the government's willingness  to be flexible in term                                                                    
of  the  form  that  the  agreements  took:  a  contract,  a                                                                    
provider  agreement,   a  memorandum  of   understanding  or                                                                    
agreement; as long  as the form was consistent  with what an                                                                    
Indian health  facility was in  their authority  to provide.                                                                    
She  said that  the department  had requested  the CMS  have                                                                    
some flexibility  regarding who  performed the  billing, and                                                                    
the letter indicated  that they were willing  to be flexible                                                                    
as long as the state met the requested requirements.                                                                            
                                                                                                                                
1:57:05 PM                                                                                                                    
                                                                                                                                
Commissioner   Davidson   stated   that  Page   6   provided                                                                    
clarification  for that  the state  could claim  100 percent                                                                    
for care management opportunities.  She relayed that CMS had                                                                    
indicated that they were not  "willing to write states blank                                                                    
checks",  and that  the understanding  should be  that there                                                                    
was a significant  amount of work that needed to  be done in                                                                    
order  for  them  to  provide the  state  with  100  percent                                                                    
federal match. She relayed that  the requirements written at                                                                    
the top of Page 7:                                                                                                              
                                                                                                                                
     (1)  the item  or  service was  furnished  to an  AI/AN                                                                    
     patient   of   an  IHS/Tribal   facility   practitioner                                                                    
     pursuant   to  a   request   for   services  from   the                                                                    
     practitioner;                                                                                                              
     (2) the  requested service  was within  the scope  of a                                                                    
     written  care coordination  agreement  under which  the                                                                    
     IHS/Tribal     facility      practitioner     maintains                                                                    
     responsibility for the patient's care;                                                                                     
     (3) the rate  of payment is authorized  under the state                                                                    
     plan and is consistent  with the requirements set forth                                                                    
     in this letter; and                                                                                                        
     (4) there is no duplicate  billing by both the facility                                                                    
     and  the provider  for  the same  service  to the  same                                                                    
     beneficiary.                                                                                                               
                                                                                                                                
Commissioner Davidson  spoke further on Page  7, and related                                                                    
that  state  expenditures  for services  under  section  115                                                                    
demonstration authority  were eligible for 100  percent FMAP                                                                    
as long as  all of the required elements  of being "received                                                                    
through"  an  IHS  or  Tribal  facility  were  present.  She                                                                    
explained  that  the letter  clarified  that  if there  were                                                                    
other special  enhanced matching rate, that  the 100 percent                                                                    
FMAP matching rate would supersede other rates.                                                                                 
                                                                                                                                
2:00:14 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  whether it  was possible  for the                                                                    
department to issue a fiscal note  on the issue now that the                                                                    
letter had been received.                                                                                                       
                                                                                                                                
Commissioner Davidson  related that the department  would be                                                                    
focusing  on  fiscal  notes under  the  recognition  that  a                                                                    
change in the system would be  required by CMS, and that all                                                                    
parties involved  would need to provide  agreements for this                                                                    
benefit that  accrued to  the state,  and DHSS  received the                                                                    
benefit of 100  percent match. She noted that  it would take                                                                    
time to  craft the agreements,  so the current  fiscal notes                                                                    
had  been conservative  estimations that  would be  built up                                                                    
over time. She  related that it would be nice  to be able to                                                                    
claim  services  soon, but  that  it  would take  more  time                                                                    
because of  the system and  audit requirements that  CMS had                                                                    
placed  on  the department.  She  stressed  that the  fiscal                                                                    
notes  have been  conservatively estimated  but that  it was                                                                    
expected that savings would accrue.                                                                                             
                                                                                                                                
2:01:44 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  said that the legislature  expected some                                                                    
of the savings to begin at the start of FY 17.                                                                                  
                                                                                                                                
2:02:08 PM                                                                                                                    
                                                                                                                                
Vice-Chair Micciche  commented that  the letter  comprised a                                                                    
significant "win" for the  state, and expressed appreciation                                                                    
for  the  work  of  any   committee  members  who  had  been                                                                    
involved.                                                                                                                       
                                                                                                                                
2:02:41 PM                                                                                                                    
                                                                                                                                
Commissioner  Davidson asserted  that her  staff had  worked                                                                    
long  hours   in  order  to  prepare   information  for  the                                                                    
committee.                                                                                                                      
                                                                                                                                
2:03:04 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  reiterated that  amendments were  due to                                                                    
her office by noon the following day.                                                                                           
                                                                                                                                
2:04:18 PM                                                                                                                    
                                                                                                                                
Senator Olson queried page 14,  section 8, line 7 pertaining                                                                    
to  the requirement  that pharmacists  check a  prescription                                                                    
record   database  before   dispensing,  administering,   or                                                                    
prescribing pain medication.                                                                                                    
                                                                                                                                
Co-Chair MacKinnon shared that  she was accepting amendments                                                                    
until   noon  the   following  day.   She   said  that   her                                                                    
recommendation  to  the  committee  was that  it  should  be                                                                    
mandatory, period.  She reiterated that Senator  Olson could                                                                    
bring an  amendment to the  contrary, but that she  would be                                                                    
voting no on such an amendment.                                                                                                 
                                                                                                                                
2:05:35 PM                                                                                                                    
                                                                                                                                
Senator  Olson contended  that  the  language addressed  all                                                                    
controlled  substances,  of  all  schedules,  and  not  just                                                                    
opioids. He said that his office would craft an amendment.                                                                      
                                                                                                                                
Co-Chair  MacKinnon hoped  that future  conversation on  the                                                                    
issue would be helpful  for not overburdening doctors, which                                                                    
providing  them the  tools necessary  to administer  quality                                                                    
care.                                                                                                                           
                                                                                                                                
SB  74  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
2:06:53 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:06 p.m.                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
SB 74 ASMA Testimony CS SB 74 Changes.pdf SFIN 2/29/2016 9:30:00 AM
SB 74
SB 74 ABHA ltr to Sen Fin re-CSSB74 elimination of grant req.pdf SFIN 2/29/2016 9:30:00 AM
SB 74
SB 74 CMS Testimony.pdf SFIN 2/29/2016 9:30:00 AM
SB 74