Legislature(2003 - 2004)
04/02/2004 01:31 PM Senate HES
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ALASKA STATE LEGISLATURE
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE
April 2, 2004
1:31 p.m.
TAPE (S) 04-18
MEMBERS PRESENT
Senator Fred Dyson, Chair
Senator Lyda Green, Vice Chair
Senator Gary Wilken
Senator Bettye Davis
Senator Gretchen Guess
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 364
"An Act relating to liability for expenses of placement in
certain mental health facilities; relating to the mental health
treatment assistance program; and providing for an effective
date."
MOVED CSSB 364(HES) OUT OF COMMITTEE with Letter of Intent
CS FOR HOUSE BILL NO. 25(JUD)
"An Act relating to health care decisions, including do not
resuscitate orders, anatomical gifts, and mental health
treatment decisions, and to powers of attorney relating to
health care, including anatomical gifts and mental health
treatment decisions; and providing for an effective date."
BILL POSTPONED TO April 7, 2004
PREVIOUS COMMITTEE ACTION
BILL: SB 364
SHORT TITLE: LIMIT STATE AID FOR MENTAL HEALTH CARE
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
03/08/04 (S) READ THE FIRST TIME - REFERRALS
03/08/04 (S) HES, FIN
03/19/04 (S) HES AT 1:30 PM BUTROVICH 205
03/19/04 (S) -- Meeting Canceled --
03/22/04 (S) HES AT 1:30 PM BUTROVICH 205
03/22/04 (S) Heard & Held
03/22/04 (S) MINUTE(HES)
03/24/04 (S) HES AT 1:30 PM BUTROVICH 205
03/24/04 (S) Heard & Held
03/24/04 (S) MINUTE(HES)
04/02/04 (S) HES AT 1:30 PM BUTROVICH 205
WITNESS REGISTER
MR. BILL HOGAN, Director
Division of Behavioral Health
Department of Health & Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Presented the proposed changes to SB 364.
MR. RICHARD RAINERY, Executive Director
Alaska Mental Health Board
431 N. Franklin
Juneau, Alaska 99801
POSITION STATEMENT: Spoke to SB 364, suggesting a possible
contradiction between Sec. 2 and the Letter of Intent.
MR. ROD BETIT, President
Alaska State Hospital and Nursing Association (ASHNA)
426 Main Street
Juneau, Alaska 99801
POSITION STATEMENT: Answered questions pertaining to SB 364, and
testified that Sec. 2 trumps everything.
ACTION NARRATIVE
TAPE 04-18, SIDE A
CHAIR FRED DYSON called the Senate Health, Education and Social
Services Standing Committee meeting to order at 1:31 p.m.
Present at the call to order were Senators Green, Wilken, Davis,
Guess, and Chair Dyson.
SB 364-LIMIT STATE AID FOR MENTAL HEALTH CARE
The committee took up SB 364.
CHAIR DYSON moved to adopt Amendment 1, [and clarified version A
was before the committee].
SENATOR GARY WILKEN objected for purposes of clarification.
MR. BILL HOGAN, Director, Division of Behavioral Health,
Department of Health & Social Services (DHSS), addressed the
changes made to SB 364. He said a Letter of Intent had been
submitted for the committee's review and approval outlining DHSS
intent to continue hospital-based care, inpatient evaluation,
and treatment services pertaining to mental health care.
CHAIR DYSON asked Mr. Hogan if the Letter of Intent was to
accompany SB 364 and he received confirmation this was correct.
CHAIR DYSON asked if there was any objection to the Letter of
Intent.
SENATOR WILKEN referred to paragraph 2, line 1, noting that the
word, "appropriations" was underlined, and asked if this was
intentional.
MR. HOGAN responded he did not know why it was underlined, nor
did he know the reason for the writing on the bottom of the
page, but believed this had been faxed to/from the attorney
general's office. He did not believe either should be there.
SENATOR WILKEN made note that the underline in paragraph 2, line
1, and the written notes at the bottom of the page would be
removed.
SENATOR WILKEN removed his objection to adopt Amendment 1.
[Because the Letter of Intent and Amendment 1 were before the
committee simultaneously, the motion to adopt Amendment 1 was
treated as withdrawn.]
SENATOR WILKEN then moved to adopt the Letter of Intent as
amended.
CHAIR DYSON asked if there was any objection. Seeing and
hearing none, the Letter of Intent [as amended] was adopted.
SENATOR WILKEN then moved to adopt Amendment 1.
CHAIR DYSON objected so that Mr. Hogan could explain Amendment
1.
MR. HOGAN noted the use of "shall" rather than "may" on page 2,
line 28. He said Section 2 is retained, and the change on page
2, line 28, would not preclude or change the intent as outlined
in Section 2. Page 4, lines 23 - 28 are deleted. In working
with various stakeholders, particularly ASHNA, Mental Health
Board, and Mental Health Trust, the department agreed that this
could be deleted without impairing the intent of the bill. Page
5, lines 12 - 13, Sections 1 - 9, are deleted, and Sections 1 -
8 are inserted; this recommendation reflects a re-numbering.
The other subsequent changes on page 5, line 20, and page 5,
line 21 are related to the reduction in the overall number of
sections.
CHAIR DYSON asked if there were questions on the amendment.
MR. RICHARD RAINERY, Executive Director of Alaska Mental Health
Board, said the board is generally in support of the changes,
but because there has been little time to discuss the changes
with the division, he referred to the Letter of Intent,
indicating in the event of a shortfall in the appropriation, the
department will make every effort to identify additional
financing sources, and noted a contradiction with Section 2 of
the bill. It says, "Notwithstanding any contrary provision of
this chapter, financial assistance under this chapter is subject
to appropriation by the legislature." In talking with the
division, he understands they do not believe there is a
contradiction, but thought members might consider this.
SENATOR GRETCHEN GUESS asked the board's view on SB 364, given
the amendment.
MR. RAINERY replied the board only had hesitation with a
possible conflict in Section 2.
CHAIR DYSON said he understood from the commissioner that they
were asking for more flexibility to transfer funds as needed.
MR. RAINERY said this was how it was described to him as well,
and if that's the case, then "it's not an issue."
CHAIR DYSON said it was clear the last time SB 364 was heard,
and the administration agreed, that there wouldn't be folks
badly needing treatment who wouldn't get it.
SENATOR GUESS said she thought this was the intent, but in law
there are multiple administrations, multiple commissioners and
directors. This bill, with Section 2 in it, still leaves the
possibility of funds not being available for these services, and
therefore, that leaves either "the rest of us to pay, or that
person is on the street, or goes to API, and it still provides
the uncertainty to the providers to ensure that we have this
capacity in the state."
CHAIR DYSON asked if she wanted to suggest an amendment.
SENATOR GUESS moved to remove Section 2. [This was considered as
conceptual Amendment 2.]
A roll call vote was taken. Senators Guess and Davis voted in
favor of the motion; Senators Green, Wilken, and Dyson voted
against it. Therefore the amendment failed.
1:45 p.m.
CHAIR DYSON noted the department had made significant efforts to
answer questions that had come up; those answers were provided
in the committee packets. He referred to his question of "How
can we be sure when the state pays a provider, that they aren't
cost-shifting, and aren't shifting costs from another function
they provide to this one, where you all faithfully pay?"
MR. HOGAN said regulations were noticed and the public comment
period closed Wednesday, March 31, and allowed the department to
determine rates for distinct psychiatric units in acute care
hospitals that would be different from how rates are established
for other beds within the hospital. This moves toward assuring
the cost of providing mental health care is reflected in the
rate rather than including additional costs from throughout the
hospital.
CHAIR DYSON asked if billing and accounting could be audited to
ensure that "we weren't being taken advantage of?"
MR. HOGAN said he believes the department has that authority.
CHAIR DYSON asked, "Have you?"
MR. HOGAN said there are routine site reviews of all community
and mental health providers, and medical records were reviewed
at a recent site review of the psychiatric unit at Fairbanks
Memorial Hospital. Also, it is a requirement for any community
and mental health grantee to annually submit an independent
audit to the department for review.
CHAIR DYSON said he knows "not to take anecdotes as data" but he
keeps hearing horror stories, such as a man whose wife was in
the hospital who was billed $1.50 for every q-tip she used. He
asked, "What do we allow in terms of mark-up, that providers
bill the state for?"
MR. HOGAN replied the hospital rate is determined, based on a
Medicare cost report, and there are a number of different
factors determining that particular rate. He said he would be
glad to further research those factors, and to provide that
information.
CHAIR DYSON indicated he'd ask that of somebody affiliated with
the hospitals so Mr. Hogan shouldn't bother, and asked if the
answer is the State doesn't get billed for the cost, but for the
allowable rate.
MR. HOGAN said the allowable rate is based on cost, so they are
linked.
CHAIR DYSON said, "So the answer to my question is yes?"
MR. HOGAN confirmed, yes.
SENATOR WILKEN referred to the committee packet [a table
entitled "2003 Monthly Federal Poverty Guidelines for Alaska"]
and asked for help with the acronyms.
MR. HOGAN said the table was generated because Representative
Seaton had a question in House HES about the difference between
Denali Kidcare's 175 percent of poverty rate, versus DET's 185
percent of poverty rate. He apologized for not knowing what all
of the acronyms stand for, but said he could get that
information to the committee.
SENATOR WILKEN noted the table was "effective 9/1/2002" and
asked if there was information from September of 2004.
MR. HOGAN said he was not sure, but would be glad to get that
information.
SENATOR GUESS read from the [committee packet, DET Bill Summary,
3/31/04], "clearly communicate that costs incurred will only be
covered up to the amount appropriated by the Legislature." She
reiterated [Mr. Rainery] previously expressed concern about a
contradiction between the bill's intent and the Letter of
Intent, commenting this is a little different message than,
"we'll look high and low for any other money, and move money
around."
MR. HOGAN responded he understands that interpretation and
acknowledged that a better job of incorporating the intent
language attached to the proposed statute could have been done
as it is the department's intent to follow what is attached to
the statute. He apologized and said they would do a better job
of re-wording.
CHAIR DYSON recollected that since last week, the Letter of
Intent has been attached, and other language wasn't similarly
modified.
SENATOR GUESS commented there is still a contradiction because
the statute has not been changed.
CHAIR DYSON noted the statute now says "shall."
SENATOR GUESS said she had two more questions. She asked if
"shall" in Section 3 was nullified because of Section 2.
MR. HOGAN said he didn't see this as nullifying or
contradictory. It clearly stipulates the department is required
to pay for the service. Section 2 states the department is
obligated to pay for the service up to the appropriation, with
the understanding that we will look for dollars throughout the
department to help pay for the service.
SENATOR GUESS mentioned, "Letter of Intents are nice, but that's
all they are. The statute still says it's limited by the amount
appropriated by the Legislature." She asked, "What happens when
you run out of money, and you can't use any of these funding
sources?"
MR. HOGAN said the department would go to great lengths to make
sure this doesn't happen. If it does happen, unfortunately, the
worse case scenario is the person would go to API. Capacity has
previously been exceeded at API; it's not the best situation to
be in and would create pressure to move people out of API. "We
will do the best we can to manage the system with the resources
we have available," he stated.
SENATOR GUESS expressed concern that priorities could change
with persons other than Mr. Hogan or the commissioner, and
"we're allowing that change by keeping this language. There is
nothing ensuring that we either don't turn away someone, or put
that cost to API, or on the DET facility."
MR. ROD BETIT, President, Alaska State Hospital and Nursing
Association (ASHNA), commented the department has worked
diligently to close the gaps on ASHNA's concerns, but they
haven't been closed completely. The language in Section 2
trumps everything else in this legislation, he said. Finances
for this program are down $1 million for FY 05, and there's no
assurance of having funds to fill that gap. In talking with the
department, there is agreement that a lot of patient care days
won't be saved when there's co-management between the facility
and the department, whether they use their own clinicians or
First Health's. In looking at Bartlett Regional Hospital's
information, a lot of extended stays have been approved and are
related to the difficulty in getting medications to work
effectively with this population, and that isn't going to go
away, he said.
1:59 p.m.
MR. BETIT continued that both Fairbanks and Bartlett - the
facilities most affected by this - are committed to this program
and have seen the good it's done in the community. Their intent
is not to pull out if this legislation goes forward. There will
be concern because notwithstanding the department's best
efforts, if money runs out, something has to give. He said he
suggested to the department that the Letter of Intent include an
additional statement indicating that if everything else fails
and the worse case develops, the department will work with these
community hospitals to ensure these patients transfer to API as
quickly and safety as possible. Care would be delivered there,
rather than the community hospitals having to figure out what to
do. This would avoid discharging a patient into the community,
who is not safe to be there, or providing care without getting
paid for it, thereby building up a significant problem for that
community hospital. He suggested the Letter of Intent have that
kind of commitment in it, and it wouldn't un-do Section 2,
because if there's no money, they won't pay. It would assure
hospital administrators that the department's intent is to not
leave patients in community hospitals if they can't pay for it,
but to move them to API. Earlier testimony on SB 364 indicated
that there might be a need to go over the 72 beds, at times. A
choice is being made whether this can be provided in the
community or through API.
MR. BETIT addressed how hospitals are paid, and said ASHNA
doesn't support paying psychiatric stays at a different rate.
Alaska has chosen to pay hospitals on an average rate, meaning
all diagnoses are lumped together. The department uses a very
sophisticated process to review each hospital's costs, and
refers to Medicare, the federal principle of what's allowable,
and negotiates with the hospital for an all-inclusive rate. By
paying a diagnosis differently, this takes the costs - and this
is one of the lower-cost procedures a hospital performs for care
- and those costs then disappear in the equation in terms of
reimbursement. Typically in hospital reimbursement, there is
either an all-inclusive or a diagnoses rate. DRG refers to
diagnoses-related-group, and if we want to move down that road,
we can't pick and choose diagnoses to pay differently.
MR. BETIT added that the department could look at the books,
under the provider agreement each facility signs with the state,
as a condition of getting Medicaid payment. He explained that
when Medicaid pays, once a rate is agreed upon with the
department, that is payment in full, and "we can't go after the
patient for anything more."
CHAIR DYSON asked what the reasonable mark-up is for hospital
supplies over the wholesale cost.
MR. BETIT said there is a "firestorm of controversy across the
country" as these costs are sometimes enormous, and result in
the uninsured population having to pay possibly 10 times what
others pay. Each hospital has a charity policy, whether it's
150 percent or 300 percent of poverty, and won't go after a
patient unable to pay those bill charges. He said hospitals
around the country have to devise a more rational way of dealing
with this.
CHAIR DYSON mentioned a woman purchasing diapers and then being
able to get reimbursed at 4.5 times that amount.
MR. BETIT responded this was a red herring because the bill
doesn't necessarily correlate to what's paid; that distortion
will get straightened out in the next few years because
"Congress has had it as well."
SENATOR GREEN moved to report SB 364 as amended, with the Letter
of Intent [as amended], out of committee with individual
recommendations and accompanying fiscal note.
SENATOR DAVIS objected. She said it costs more to be at API
than at community-based hospitals, and in winter, it is filled
to capacity, and this probably just won't work. She said good
intentions are good, but it's "what you do in the end" that
counts. Lawmakers/policy makers should not go on intent without
having a plan in place. If Section 2 were removed, she would
vote for the bill. She wanted the department to have the
flexibility and accountability needed, but not the way it is
currently.
CHAIR DYSON suggested that a report be requested in January.
SENATOR DAVIS commented this would be heard again.
CHAIR DYSON asked Mr. Hogan if there was an internal method of
tracking monthly expenditures against the allotted budget, so
projections of being short could be indicated prior to the next
budget cycle.
MR. HOGAN replied this was correct.
CHAIR DYSON said in January (if he were here), he would
appreciate Mr. Hogan reminding him about seeing that.
MR. HOGAN responded they'd be glad to do that.
A roll call vote was taken. Senators Wilken, Green, and Dyson
voted in favor of the motion; Senators Guess and Davis voted
against it. CSSB 364 (HES), with the Letter of Intent, as
amended, moved out of committee.
There being no further business to come before the committee, he
adjourned the meeting at 2:10 p.m.
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