Legislature(1995 - 1996)
04/24/1996 09:02 AM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
= 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.
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