Legislature(1995 - 1996)
04/24/1996 09:02 AM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE April 24, 1996 9:02 a.m. MEMBERS PRESENT Senator Lyda Green, Chairman Senator Loren Leman, Vice-Chairman Senator Mike Miller Senator Judy Salo MEMBERS ABSENT Senator Johnny Ellis COMMITTEE CALENDAR -- CONFIRMATION HEARING: Irvin A. Rothrock, M.D., Governor's Appointee to State Medical Board HOUSE CONCURRENT RESOLUTION NO. 27 am Relating to prevention of teenage pregnancy by implementation of the Sugar Baby project. HOUSE BILL NO. 515 am "An Act repealing a restriction on the use of youth residential services grants that prohibits use of the grants for capital assets; and providing for an effective date." CS FOR HOUSE BILL NO. 393(FIN) "An Act relating to managed care for recipients of medical assistance; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION HCR 27 - See Senate Health, Education & Social Services minutes dated 4/19/96. HB 515 - No previous action to record. HB 393 - See Senate Health, Education & Social Services minutes dated 4/19/96. WITNESS REGISTER Irvin A. Rothrock, M.D. Fairbanks Psychiatric & Neurological Clinic 1919 Lathrop St., Drawer 30 Fairbanks, AK 99701 Representative Con Bunde State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of HCR 27 Kyle Johansen, Staff to Representative Bill Williams State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on behalf of sponsor of HB 515 Pat Clasby Alaska Association of Homes for Children 319 Seward St., #10 Juneau, AK 99801 POSITION STATEMENT: Testified in support of HB 515 James Steele P.O. Box 874275 Wasilla, AK 99687 POSITION STATEMENT: Supports HB 515 Jack Duckworth Residential Youth Care, Inc. 2514 First Ave. Ketchikan, AK 99901 POSITION STATEMENT: Testified in support of HB 515 Representative Norman Rokeberg State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of HB 393 Commissioner Karen Perdue Department of Health & Social Services P.O. Box 110601 Juneau, AK 99811-0601 POSITION STATEMENT: Has some concerns with HB 393 Bob Labbe, Director Division of Medical Assistance Department of Health & Social Services P.O. Box 110660 Juneau, AK 99811-0660 POSITION STATEMENT: Reviewed suggested changes to HB 393 ACTION NARRATIVE TAPE 96-34, SIDE A Number 001 CHAIRMAN GREEN called the Senate Health, Education and Social Services (HESS) Committee to order at 9:07 a.m. She stated the first order of business would be a confirmation hearing on the Governor's appointee to the State Medical Board, Dr. Rothrock. IRVIN A. ROTHROCK, M.D., speaking to the committee via teleconference from Fairbanks, stated he had no specific questions or comments to present to the committee, but he would respond to questions from them. There being no questions from committee members, CHAIRMAN GREEN thanked Dr. Rothrock for availing himself for the hearing, and she stated a letter would be sent to the Senate President stating the committee had held a confirmation hearing on his appointment to the State Medical Board. Number 032 HCR 27 am TEEN PREGNANCY EDUCATION:SUGAR BABY CHAIRMAN GREEN introduced HCR 27 am as the next order of business. REPRESENTATIVE CON BUNDE, prime sponsor of HCR 27, explained the essence of the program is that the young people who take part in it have to pack around a 10-pound package of sugar for a week and treat as if it were a live baby. After a week of constant care of the "sugar baby," it dawns on these seventh and eighth graders that packing around a 10-pound bag of sugar is a real pain, but packing around a 10-pound human being for several years would be a far greater challenge. He said it has worked to encourage young people to think about the responsibility that they take on when they become pregnant as teenagers. Representative Bunde believes young people have to be far more aware of the consequences of their behavior, and the ultimate goal is to encourage abstinence because that is the only 100 percent guarantee of preventing pregnancy. Representative Bunde pointed out that when he was growing up and was a teenager, the notion of a teenage pregnancy was scandalous. There was a great public condemnation of teen pregnancy; it was socially unacceptable, so there was a push not to get pregnant for a lot of reasons. He said many of those pressures have gone away, and this project is an attempt to put more pressure back on the teenagers, not from a condemnation point of view, but just from the practical realities of what it must be like to have to care for an infant day in and day out. Number 116 CHAIRMAN GREEN asked if this curriculum was developed at Mears Junior High School in Anchorage. REPRESENTATIVE BUNDE responded that it was not; it is a program that has been around for a long time and Mears simply adopted it. Number 140 There being no further testimony on HCR 27, CHAIRMAN GREEN asked for the pleasure of the committee. SENATOR LEMAN moved HCR 27 am be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. HB 515 am USE OF YOUTH SERVICES GRANTS CHAIRMAN GREEN introduced HB 515 am as the next order of business. Number 161 KYLE JOHANSEN, staff to Representative Bill Williams who is the prime sponsor of HB 515, read the following sponsor statement into the record: "House Bill 515 allows the recipient of an operating grant for residential services to use grant money to pay for the purchase of a building, vehicle or other assets. Residential services are defined in statute as "24-hour care and supervision of minors in residential child care facilities that are commonly known as group homes or institutions" (AS 47.40.091). Currently, recipients of these grants may not use the grant money to purchase buildings, vehicles or other assets. They may, however, use the money for rent and lease payments. Today, recipients pay rent/lease payments year after year with no chance of building equity. The residential youth home in Ketchikan has spent over $200,000 in rent over the last six years. They could own their facility today had it not been for the present statute. By changing this statute, these residential centers can, in many cases, lower monthly payments and eventually own their own asset. In the long run this will lessen their dependency on the state and allow more money for the programs that help our troubled youth. During these times of fiscal responsibility, we need to get the most out of every dollar the state spends. I believe this legislation will give these homes flexibility toward bettering their programs. I urge you to support this legislation." Number 196 SENATOR SALO expressed her strong support for the legislation. Number 204 PAT CLASBY, representing the Alaska Association of Homes for Children, said their association comprises 17 private nonprofits that provide residential care and other youth services throughout the state. Much of the use of these facilities is based on the lease payments that's found both in the statute and regulations of the department. These providers are trying to provide services in a more cost-effective manner in the face of budget constraints, and this bill would provide the opportunity to do business in a wiser way. Number 225 SENATOR SALO asked if, in addition to being able to allow the grant monies to be spent on a mortgage type payment, would it also then be possible for them to use the grant monies for maintenance projects. PAT CLASBY replied it is her understanding that this bill would be removing that part of the statute that does not allow these facilities to provide capital expenditures. They could then make minor renovations, improvements, etc., as long as it was within their grant budget. Number 263 JAMES STEELE of Wasilla, testifying from the Mat-Su LIO in support of HB 515, said in many cases this bill will allow providers of residential child care to ower monthly payments and eventually own their own facility. It will allow and provide a level of flexibility of control basically to use state dollars to the benefit of the children served, the agencies providing the services and to the people of Alaska. It also provides more stability for the children that are being served. He noted the bill is specific only to grants for residential services, as well as having a zero dollar fiscal impact. Number 295 JACK DUCKWORTH, representing Residential Youth Care in Ketchikan and testifying from the Ketchikan LIO, said there is a tremendous amount of cost to get these residential facilities on line to meet state fire codes, etc. If a landlord decides to sell the facility, it would not just be a matter of going to a new place and signing a new lease; it would also mean the additional costs of putting in sprinkler systems, fire alarm systems and updating the facility to make sure it meets the needs of the children. Mr. Duckworth advised that the Residential Youth Care program in Ketchikan has been in existence for over six years and they have spent over $200,000 for lease payments. They have two programs, and the lease payments for one of their programs totals $20,000 a year and the lease payments for the other program total $25,200 a year. The monthly lease payments total $2,100, and they have estimated that if they could buy the building, it would lower their monthly payments by approximately $400, so not only would they be lowering their monthly expenses, they would be building up an equity in the facilities as well. Number 323 There being no further testimony on HB 515 am, CHAIRMAN GREEN asked for the pleasure of the committee. SENATOR SALO moved HB 515 am be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 331 CSHB 393(FIN) MANAGED CARE PROGRAM FOR MEDICAID CHAIRMAN GREEN brought CSHB 393(FIN) before the committee as the final order of business. REPRESENTATIVE NORMAN ROKEBERG, prime sponsor of HB 393, said the legislation requests the Department of Health & Social Services to submit draft legislation, through the Governor, to establish funded programs for managed for Medicaid recipients in the state of Alaska. The intent of the legislation is to expedite and give direction to the implementation of managed care and to involve the legislature, the provider community and the public in this process. Representative Rokeberg pointed out that this is a major change in the public policy of this state, and it is important to remember that Medicaid is the second largest component of the state's budget, after education. He stressed the importance to get cost containment and control of this growing budget area, which has increased 13.9 percent each year for the past five years. Representative Rokeberg believes it is inevitable that there will be block grants, whether it is the Medicaid per capita or the National Governors Association proposal that will be adopted by Congress and, ultimately, approved by whoever is in the presidency. He said the state needs to be prepared to take block grants and have a system in place for health care delivery that accounts for that. In addition, it needs to be done in a cost-effective, quality manner. Representative Rokeberg noted there are 43 states that have some form of managed care for Medicaid, and Alaska has an opportunity to learn from the examples of these other states. The department has awarded a contract to the Fox Corporation of Arizona to study other states' models and to propose plans for development of managed care in Alaska. Presently, the department is developing a managed care program that has worked in other states called the Primary Care Case Management (PCCM) program, which assigns the patient a specific physician or care provider, however, this primary care doctor could direct the patients to other specialists, etc. Representative Rokeberg said HB 393 has the support of the Department of Health & Social Services, the Alaska State Hospital & Nursing Home Association, the Tanana Chiefs Conference and the Alaska State Medical Association. Number 396 SENATOR SALO asked what will happen as a result of passage of this bill that will not happen otherwise. REPRESENTATIVE ROKEBERG replied that it is the intention to specifically require that the department set up a pilot program in two areas of the state, which would include a rural portion of the state, as well as assuring that the legislature is included in the loop of this determination of public policy. He added it is not his intention to inhibit the development of this program, but he believes it is incumbent upon the legislature to ensure that the people who are going to be affected by this be part of the process. SENATOR SALO asked Representative Rokeberg why he thinks the Alaska State Medical Association supports this legislation. REPRESENTATIVE ROKEBERG replied that after AMA first reviewed the legislation, they gave it kind of a tepid endorsement, but just before the bill went to the House floor, AMA wrote a letter, which was a much warmer endorsement of the bill, as well as suggesting that when considering the final legislation, to take into account the concept of "any willing provider." He reiterated the importance of giving the department some direction to make sure that the program is implemented in such a way that the public of this state will accept it and agree to it. Number 441 BOB LABBE, Director, Division of Medical Assistance, Department of Health & Social Services, said the department has been meeting with Representative Rokeberg since the bill was first introduced in order to work together on the development of the bill. As the department understood the bill, it was to direct them to develop some pilot projects, a process that they begun. They have hired a contractor that's helping educate the staff on various managed care models and they are working with the contractor on some recommended approaches for Alaska that would take into account the vast geography, the rural and Native sector, as well as the urban areas. Mr. Labbe said a problem they have encountered and that needs to be clarified is the requirement that the department would have to come back for legislation to implement managed care pilots. They believe they already have adequate authority and direction from an earlier session to begin doing this, which is why they have the contract and are looking at it. Because of budget constraints, the department feels it needs to be more aggressive in looking at options to control costs, and there is the concern that as they move forward, if it is necessary to come back to get permission to move ahead, that opportunity will be lost. Their view is that modification of the bill should require only to bring legislation back if it is necessary to implement what they are doing. Mr. Labbe also pointed out that since the term "managed care" is not defined in the legislation, there is concern that any activity they take on could be construed to be a managed care activity and be prohibited, and the department has drafted some language to be considered to address that concern. Number 485 KAREN PERDUE, Commissioner, Department of Health & Social Services, said one of the reasons she recruited Mr. Labbe is that he comes from Oregon where he was the chief Medicaid person who helped them develop a very consumer sensitive managed care program. She added she is only interested in doing managed care if it both manages costs prudently and it meets the needs of consumers and providers. Commissioner Perdue also expressed her concern with the provision in the bill requiring the department to come back to the legislature and ask for permission, if needed. She believes the department has got clear direction from the legislature that they need to start these pilots. These pilots will only be done on a voluntary basis with the providers in those communities, and there are federal processes in place for the department to protect consumers. Number 496 SENATOR SALO commented she didn't know whether or not involvement in the process by the legislature was necessary, but she thinks it is important that the legislature receive a report on the pilot projects, and she wondered if there was a way that could be addressed in the legislation. Number 505 BOB LABBE, directed attention to the department's proposed amendment, which after the term "draft legislation" inserts the words "if necessary" so that the department would only bring back draft legislation if it were necessary. The second change would clarify that nothing in the bill would prevent the department from acting to effectively manage costs through case management and costs containment measures that are within the department's statutory authorization in order to assure the operation of the program within the FY 97 budget. Mr. Labbe said the legislation requires that the department submit draft legislation on the first day of the next legislative session, but he does see that time frame being realistic. The contractor should have its report by the end of the June, but it will take some time to decide where they would do this and who they would be working with, etc. However, he expressed the department's willingness to come in an give a report to the committees, even if they are just in the planning process. Also, right now their computer system cannot accommodate what would be considered managed care without upgrades to the system. Number 542 COMMISSIONER PERDUE said if they were doing a program design and negotiating with a provider and then had to come back to the legislature to have a contract approved, it would be too cumbersome for the department in terms of managing this program. If it was found they need legislation, that could be requested, but she believes that if it is not needed, it is a very cumbersome process. She thought a report to the legislature on the progress of the pilot projects was a good idea. Number 553 REPRESENTATIVE ROKEBERG said he is sensitive to the Commissioner's concerns, and it is not the intent of this bill to inhibit or hinder the department in any way. His concern is that they proceed rapidly and he doesn't want them to lose the momentum in moving forward. He has been looking at the proposed amendment and he has some recommendations that he will make. He suggested there are anti trust issues that need to be looked at and a number of statutory issues that should be focused on to make sure the department has the statutory authority to proceed without being inhibited in any way. Number 572 SENATOR SALO suggested a conceptual amendment to subsection (b) that would delete the requirement for draft legislation and replace it with a requirement that the Department of Health and Social Services submit to the legislature, through the Health, Education & Social Services committees, a report of a design for implementation of the proposed system. REPRESENTATIVE ROKEBERG stated he would look at the conceptual amendment as hostile to the intent of the bill. TAPE 96-34, SIDE B Number 010 COMMISSIONER PERDUE reiterated she believes an amendment is needed because the current bill requires the department to come back for legislation no matter what the situation is. REPRESENTATIVE ROKEBERG reiterated his point that this is a major change in public policy in this state and that is why the legislature needs to be involved. Number 050 CHAIRMAN GREEN requested that the sponsor, the department and interested parties get together before the committee's next meeting to see if the concerns expressed during the meeting can be worked out. There being no further business to come before the committee, the meeting was adjourned at 10:00 a.m.