Legislature(1995 - 1996)
04/26/1996 09:10 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 26, 1996
9:10 a.m.
MEMBERS PRESENT
Senator Lyda Green, Chairman
Senator Loren Leman, Vice-Chairman
Senator Mike Miller
Senator Johnny Ellis
Senator Judy Salo
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 393(FIN)
"An Act relating to managed care for recipients of medical
assistance; and providing for an effective date."
CS FOR HOUSE BILL NO. 216(HES)
"An Act establishing the Alaska education technology program; and
providing for an effective date."
CS FOR HOUSE BILL NO. 528(FIN)
"An Act relating to applications for certificates of need and
licensing of nursing homes; establishing a moratorium with respect
to acceptance of new applications for a certificate of need or for
a license for additional nursing home capacity in the state until
May 1, 1998; establishing a working group to study and issue a
report about long-term care; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
HB 393 - See Senate Health, Education & Social Services minutes
dated 4/19/96, 4/24/96.
HB 216 - See Senate Health, Education & Social Services minutes
dated 4/12/96.
HB 528 - No previous action to record.
WITNESS REGISTER
Representative Norman Rokeberg
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of HB 393
Bob Labbe, Director
Division of Medical Assistance
Department of Health & Social Services
P.O. Box 110660
Juneau, AK 99811-0660
POSITION STATEMENT: Testified in support of HB 393
Ed Hansen
Yukon-Kuskokwim Health Care Corporation
Box 528
Bethel, AK 99559
POSITION STATEMENT: Testified on HB 393
Roger Poppe, Staff to Representative Pete Kott
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on HB 216
Jay Livey, Deputy Commissioner
Department of Health & Social Services
P.O. Box 110601
Juneau, AK 99811-0601
POSITION STATEMENT: Testified in support of HB 528
Gladys Jung
P.O. Box 506
Bethel, AK 99559
POSITION STATEMENT: Supports HB 528
Jim Beck
Box 508
Palmer, AK 99645
POSITION STATEMENT: Supports passage of HB 528
Harlan Knudson
Alaska State Hospital & Nursing Home Association
319 Seward St., #11
Juneau, AK 99801
POSITION STATEMENT: Supports concept of HB 528
Mary Lou Meiners
American Association of Retired Persons
805 Goldbelt
Juneau, AK 99801
POSITION STATEMENT: AARP supports HB 528
Connie Sipe, Director
Division of Senior Services
Department of Administration
3601 C St., Suite 310
Anchorage, AK 99503-5984
POSITION STATEMENT: Testified in support of HB 528
Paul Gregory
Box 393
Bethel, AK 99559
POSITION STATEMENT: Supports HB 528
Kimberly Duke, Staff to Representative Mark Hanley
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information in support of HB 528
ACTION NARRATIVE
TAPE 96-35, SIDE A
Number 001
CHAIRMAN GREEN called the Senate Health, Education and Social
Services (HESS) Committee to order at 9:10 a.m., and noted there
was a quorum present.
Number 015
CSHB 393(FIN) MANAGED CARE PROGRAM FOR MEDICAID
CHAIRMAN GREEN brought CSHB 393(FIN) before the committee.
REPRESENTATIVE ROKEBERG, prime sponsor of HB 393, advised that
after the previous hearing on the legislation, further discussions
with the Department of Health & Social Services resulted in an
agreement by the department to modify their amendment and indicate
their willingness to proceed by developing the program and the
pilot programs almost immediately. One of the issues that remains
to be worked out by the department is the makeup of a pilot program
involving the public, affected consumers, the legislature and the
provider community. He expressed his pleasure that these efforts
have ended up with a modified amended bill, and it is his hope that
it will accelerate the process.
Representative Rokeberg explained that the amended amendment puts
a date on the implementation, as well as adding in the word
"public" into those people that should be involved in the process
of developing a managed care system that will be used in the
projects.
Number 055
SENATOR LEMAN moved the adoption of the following amendment to CSHB
393(FIN):
Amendment No. 1
Delete existing Section 2 and replace with:
*Sec. 2. MANAGED CARE PROGRAM. (a) The Department of
Health and Social Services shall begin development of a managed
care system for recipients of medical assistance under AS 47.07 by
designing and implementing no fewer than two innovative managed
care pilot projects by June 30, 1997. The projects must be in one
or more predominantly urban areas of the state that take into
account the unique features of the project areas and include a
rural element, if feasible. The department shall involve the
public, affected consumers and providers of health care services in
the selected project areas in the development of the managed care
system that will be used in the projects.
(b) Upon developing a system required under (a) of this
section, the Department of Health and Social Services shall submit
through the governor legislation if necessary that would provide
for implementation of the proposed system in two or more pilot
project areas to the legislature on the first day of the First
Regular Session of the Twentieth Alaska State Legislature.
(c) The department under this Act may require that a
recipient of medical assistance under 47.07 must participate in a
managed care system in order to remain eligible for medical
assistance under AS 47.07. This participation requirement may be
based on geographical, financial, social, medical, and other
factors that the Department of Health and Social Services
determines are relevant to the development and efficient management
of the managed care system.
(d) The department under this Act may apply for waivers of
federal law or for other federal approval if federal approval is
required in order to implement the pilot projects for the managed
care system developed under this section.
(e) Nothing in this section precludes the department from
acting to effectively manage costs through case management and
other cost containment measures that are within the department's
statutory authorization in order to assure the operation of the
program within its budget.
Hearing no objection to the motion to adopt the amendment, CHAIRMAN
GREEN stated Amendment No. 1 was adopted.
Number 061
REPRESENTATIVE ROKEBERG said the legislation is important because
it provides statutory authority, clearly for the first time, that
the department should manage care, per se. He added that he
compliments the department because of intent language in the budget
and the implicit need for cost containment while they move forward.
Number 083
BOB LABBE, Director, Division of Medical Assistance, Department of
Health & Social Services, also expressed his pleasure that the
department and the sponsor have been able to work through an
agreement. The department is committed to managing the program
within the constraints that they have and to assure the best
service for the consumers. He said he is looking forward to
challenge, and although there is a bit of anxiety with the date, he
thinks they need to have that to motivate them a bit.
Number 104
SENATOR SALO inquired if the department has selected sites for the
pilot programs. MR. LABBE responded that the department is
currently getting data from the contractor to give them an idea of
utilization patterns, and the contractor will be coming up with
some recommendations. The department will then approach
communities that seem appropriate and see if there is a willingness
for a pilot project. SENATOR SALO noted there is a physician in
her area who has been interested in setting up a managed care
facility, but one of the impediments to doing it has been that he
would like to have a birthing center as part of this clinic, but he
has been told that Medicaid doesn't allow the cost of delivery to
be reimbursed if the birthing center is outside of the hospital.
MR. LABBE said that in true in terms of the facility cost.
Medicaid will pay for the practitioner cost, but not the cost of a
facility.
Number 140
ED HANSEN, representing the Yukon-Kuskokwim Health Care Corporation
and testifying by teleconference from Bethel, said the Yukon-
Kuskokwim Delta Regional Hospital located in Bethel services a
substantially economically depressed population, a large percentage
of which are Medicaid eligible. The hospital is able to address
acute levels of needs and high demand for services in large part
because of Medicaid reimbursement. Any action taken by the
legislature which limits Medicaid reimbursement to their hospital
will directly and adversely impact the actual health status of the
residents of the delta. Any managed care for Alaska Medicaid must
be constructed in a manner that does not limit the capacity of the
Native health care or limit the potential to pass through federal
dollars at 100 percent. He said managed care is something that we
must prepare for as Alaskans, however, care should be taken not to
act in a manner that destabilizes current dynamics which may be to
the advantage of multiple parties.
In his closing remarks, Mr. Hansen said the Yukon-Kuskokwim Health
Care Corporation wants to go on record with their concerns and
their request for thoughtful, strategic implementation. Whatever
the planning process for implementation, it should include focused
consideration of the health and welfare of Alaskan Natives and the
Native health care delivery system.
There being no further testimony on HB 393, CHAIRMAN GREEN asked
for the pleasure of the committee.
Number 226
SENATOR LEMAN moved that SCS CSHB 393(HES) with accompanying fiscal
notes be passed out of committee with individual recommendations.
Hearing no objection, it was so ordered.
CSHB 216(HES) EDUCATION TECHNOLOGY PROGRAM
CHAIRMAN GREEN brought CSHB 216(HES) before the committee as the
next order of business.
Number 238
ROGER POPPE, staff to Representative Pete Kott, explained the
legislation would encourage and enable the Department of Education
to be a center for encouragement of education technology on a
statewide basis. He noted the bill has had bipartisan support, as
well as support from the Department of Education, NEA-Alaska and
the Alaska Association of School Boards. He added that there are
no state dollars available for the center this year, but the
sponsor wanted to set the fund up anyway in order to provide a
source mechanism for the pass-through to make the state and the
school districts eligible for federal and private foundation
dollars, which will be coming available. There is over $2 billion
in federal grants that the state would be eligible to apply for
through the school districts.
Number 262
There being no further testimony on HB 216, CHAIRMAN GREEN asked
for the pleasure of the committee.
SENATOR LEMAN moved CSHB 216(HES) and the accompanying zero fiscal
notes be passed out of committee with individual recommendations.
Hearing no objection, it was so ordered.
Number 268
CSHB 528(FIN) NURS.HOME MORATORIUM/CERTIFICATES OF NEED
CHAIRMAN GREEN brought CSHB 528(FIN) before the committee as the
final order of business.
JAY LIVEY, Deputy Commissioner, Department of Health & Social
Services, said the legislation will establish a approximately 20-
month moratorium on the granting of a certificate of need to
construct a nursing home, or the licensing of a certificate of
need, or the licensing of a nursing home bed.
There are two ways that nursing home beds essentially can be
created in Alaska. A new facility can be built, and, if the
building of that facility costs more than $1 million, then a
certificate of need is required. Or an existing bed can be
converted to nursing home usage, and, if that conversion costs less
$1 million, it can be done without a certificate of needs. HB 528
would be a moratorium that would stop both the conversion of beds
that cost less $1 million, as well as the granting of a certificate
of need for a facility or a changeover that costs more than a $1
million. This moratorium would be in place until May 1, 1998.
Mr. Livey said the department supports this legislation because it
believes it is essential for controlling Medicaid costs. There
are potentially 147 nursing home beds that could come on line over
the next three to four years. If all of those beds were to come on
line, it would cost the Medicaid program approximately $57 million
over those seven years. Medicaid pays from 85 to 90 percent of the
cost of these beds if they are built.
The average cost of nursing homes in the state of Alaska ranges
from about $75 thousand to $134 thousand per bed per year. The
average cost of home community-based care is about $30,000, so
there are less expensive alternatives out there.
Mr. Livey pointed out that current general fund dollars in the
Medicaid program total about $155 million. If there were a five
percent growth over a 5-year period, it would mean an additional
$43 million to pay for that growth. If these nursing home beds
were added to the mix of the services they have, that number jumps
from $43 million to approximately $75 million. The department does
not believe that building these beds is cost effective in terms of
that kind of growth when there are less expensive alternatives that
provide the same level of care.
It was also pointed out by Mr. Livey that there is no facility
currently providing service that will lose any money under this
bill. This bill just addresses how future revenues will be divided
up and what services they are willing to purchase. Further, this
is a temporary measure.
Number 373
SENATOR LEMAN observed that if the act takes effect immediately and
it goes to May 1, 1998, that would be a 24-month moratorium. MR.
LIVEY agreed with his observation.
Number 400
GLADYS JUNG, representing the Senior Center in Bethel testified
from Bethel in support of HB 528. She suggested there should be a
needs assessment on this issue and a study done that looks at the
entire state and what impact all the areas have on the state. She
agreed that the legislation will not harm their plans in Bethel for
caring for their elders, and she acknowledged there are
alternatives for serving people other than just a regular nursing
home.
Number 410
JIM BECK, testifying from Mat-Su in support of HB 528, agreed that
if HB 528 does not pass, Medicaid costs will definitely increase.
He noted the state has an excellent Medicaid waiver program in
place, but these waivers are underfunded as it is. The current
long-term care system is very unbalanced in favor of institutions
because it limits peoples' choices and it wastes a lot of money.
He noted there are many people in the state who are under the age
of 65 that are stuck in nursing homes and would much rather take
advantage of community-based care but are unable to because all of
the Medicaid money is being diverted to nursing homes.
Mr. Beck cited a case filed by an individual against the state of
Pennsylvania's Department of Public Welfare, which the state lost.
The Unites States Third Circuit of Appeals found that the states
cannot fund nursing home incarceration while, at the same time,
cutting funding for community-based program. He asserted that by
not passing HB 528, it will put Alaska at the top of the list to be
next in line to lose a similar suit.
Number 471
HARLAN KNUDSON, representing the Alaska State Hospital and Nursing
Home Association, stated the nursing homes in Alaska have a lot to
be proud of. He added there is no question that probably everybody
in the state prefers home and community-based care. It's the way
to go and the association endorses it heartily.
Mr. Knudson pointed out that Section 3 of the bill, which calls for
the study, was put in the bill by the providers who agree the need
to identify the long-term care needs in this state, where they are,
and what it is going to cost to provide those cares, and HB 538
will
provide some of that badly needed information.
Mr. Knudson said there is very serious study out, and anybody who
thinks that to move from nursing home care to home and community-
based care and save money should step back as the AARP has done and
take a look the cost of providing home and community-based
services. He observed it is not going to be a cost free catchall
for meeting patient needs.
Mr. Knudson said the only argument the association has with the
bill is the length of the moratorium. They believe that a study on
long-term care can be accomplished in a year, however, they are
willing to live with the bill and support its concept if the
legislature decides it should be two years.
Number 504
MARY LOU MEINERS, representing the American Association of Retired
Persons, stated their support for CSHB 528(FIN).
Number 508
CONNIE SIPE, Director, Division of Senior Services, Department of
Administration, informed the committee that the Commission on Aging
has been on record for five years in favor of a moratorium.
Ms. Sipe noted that Medicaid has been paying for nursing home beds
for nearly 30 years, and Medicaid has only been paying for
comprehensive home care waivers since 1980 in some states and in
Alaska only two years. So there is a faster growth in home
community care costs in expenses and use, but there is some
catching up to do. There are approximately 147 elders who are
nursing home level qualified and could walk into a empty nursing
home bed today under Medicaid who are instead receiving care.
Their annual total Medicaid costs are about $4.3 million a year.
If these individuals were in 147 nursing home beds, their annual
cost today would be at least $12.8 million, and, depending on which
area of the state they went into nursing home beds, it would be
more.
Ms. Sipe said the state's nursing homes are important and they are
good nursing homes, but things are changing, and once the state
commits to a nursing home, it is committed for 30 or 40 years.
She noted there are nursing homes in the state where we pay in
Medicaid costs over $100 a day per bed just for financing of the
interest on the mortgage of the building. She said it is an
important franchise decision whether or not to build more or
whether to see if the communities can have time to respond.
Ms. Sipe said home and community-based services are developing,
they need some time to develop and the communities, as well as the
industry, need some time to really participate in this study.
Concluding, she stated the Division of Senior Services supports the
bill with the two-year moratorium.
Number 551
PAUL GREGORY, testifying in support of HB 528, stated he was
representing the senior citizens of Alaska. Having been born in
Alaska, as well as working with the seniors for the last 60 years
of his life, he feels bad when he sees seniors put into nursing
homes in areas that are unfamiliar to them and where no family
members reside. By having an intermediate center, people will
begin to live longer, and people want to take care of their own if
possible. He said the seniors of the Yukon-Kuskokwim Delta are in
support of a study to determine where the greatest need is going to
be.
TAPE 96-35, SIDE B
Number 005
SENATOR GREEN advised that she filed a bill earlier in the week
that repeals the certificate of need process, and her reason for
doing so is so that hearings can be held in the interim to
determine what other states are doing and what Alaska might need to
do to change so that there isn't this debate every other year and
then having to come back in with another moratorium. She added
that she has no intention of attempting to repeal the certificate
of need, but took that approach to get the discussions going.
Number 025
KIMBERLY DUKE, staff to Representative Mark Hanley, who is the
prime sponsor of HB 528, said Representative Hanley is very
supportive of the legislation and that he introduced it on behalf
of the department to give the community-based services a chance to
develop in areas where they haven't been located before. He
believes it is a service more people would prefer rather than being
in the nursing home setting; the intent of the bill is to give a
period of time for that to develop. She said Representative Hanley
supports the length of the moratorium, which was changed in House
Finance to May 1998, to allow for the construction season.
Number 063
SENATOR GREEN noted that Senator Miller had expressed the
possibility of proposing an amendment to the legislation, but that
it could be dealt with in Senate Finance, so it was her intent to
pass the bill out of committee with the understanding that there is
the likelihood of some changes that may come forward. She then
asked for a motion to move the bill out of committee.
SENATOR LEMAN moved that CSHB 528(FIN) and the accompanying zero
fiscal note be passed out of committee with individual
recommendations. Hearing no objection, it was so ordered.
There being no further business to come before the committee,
CHAIRMAN GREEN adjourned the meeting at 10:02 a.m.
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