Legislature(2015 - 2016)BUTROVICH 205

03/23/2015 01:30 PM HEALTH & SOCIAL SERVICES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 23 IMMUNITY FOR PROVIDING OPIOID OD DRUG TELECONFERENCED
Moved SB 23 Out of Committee
-- Testimony <Invitation Only> --
+= SB 74 MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
      SENATE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                    
                         March 23, 2015                                                                                         
                           1:31 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bert Stedman, Chair                                                                                                     
Senator Cathy Giessel, Vice Chair                                                                                               
Senator Pete Kelly                                                                                                              
Senator Bill Stoltze                                                                                                            
Senator Johnny Ellis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
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."                                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 23                                                                                                              
"An  Act  relating to  immunity  for  prescribing, providing,  or                                                               
administering opioid overdose drugs."                                                                                           
                                                                                                                                
     - MOVED SB 23 OUT OF COMMITTEE                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 74                                                                                                                   
SHORT TITLE: MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES                                                                            
SPONSOR(s): SENATOR(s) KELLY                                                                                                    
                                                                                                                                
03/13/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/15       (S)       HSS, STA, FIN                                                                                          
03/13/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/13/15       (S)       -- MEETING CANCELED --                                                                                 
03/23/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 23                                                                                                                   
SHORT TITLE: IMMUNITY FOR PROVIDING OPIOID OD DRUG                                                                              
SPONSOR(s): SENATOR(s) ELLIS                                                                                                    
                                                                                                                                
01/21/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (S)       HSS, JUD                                                                                               
03/18/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/18/15       (S)       Heard & Held                                                                                           
03/18/15       (S)       MINUTE(HSS)                                                                                            
03/23/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
HEATHER SHADDUCK, Staff                                                                                                         
Senator Pete Kelly                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                
POSITION STATEMENT: Presented information on SB 74 on behalf of                                                               
the sponsor.                                                                                                                    
                                                                                                                                
AMANDA RYDER, Fiscal Analyst                                                                                                    
Legislative Finance Division                                                                                                    
Legislative Affairs Agency                                                                                                      
Juneau, Alaska                                                                                                                
POSITION STATEMENT: Answered questions related to SB 74.                                                                      
                                                                                                                                
VALERIE DAVIDSON, Commissioner                                                                                                  
Department of Education and Early Development (DEED)                                                                            
Anchorage, Alaska                                                                                                             
POSITION STATEMENT: Provided information regarding SB 74.                                                                     
                                                                                                                                
JOHN SHERWOOD, Deputy Commission                                                                                                
Department of Health and Social Service                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Provided information regarding SB 74.                                                                     
                                                                                                                                
RICK SVOBODNY, Deputy Attorney General                                                                                          
Criminal Division                                                                                                               
Department of Law                                                                                                               
Juneau, Alaska                                                                                                                
POSITION STATEMENT: Answered questions related to SB 23.                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:31:12 PM                                                                                                                    
CHAIR BERT STEDMAN  called the Senate Health  and Social Services                                                             
Standing Committee meeting  to order at 1:31 p.m.  Present at the                                                               
call  to order  were  Senators Giessel,  Ellis,  Kelly and  Chair                                                               
Stedman. He noted  there were two bills  for consideration today,                                                               
SB 74 and SB 23. It is the first hearing of SB 74.                                                                              
                                                                                                                                
         SB 74-MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES                                                                      
                                                                                                                                
1:32:10 PM                                                                                                                    
CHAIR STEDMAN announced the consideration of SB 74.                                                                             
                                                                                                                                
SENATOR PETE KELLY,  sponsor of SB 74, stated  that the increases                                                               
in Medicaid  are eventually going  to "eat our budget  alive." He                                                               
drew attention  to a graph  that shows the anticipated  growth of                                                               
Medicaid.                                                                                                                       
                                                                                                                                
1:33:29 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:34:11 PM                                                                                                                    
SENATOR KELLY said the graph  shows the need for Medicaid reform.                                                               
He highlighted another graph that  shows the cost of Medicaid and                                                               
education, which  take up  half of the  state's budget.  He noted                                                               
that Medicaid  is the fastest  growing cost driver in  the state.                                                               
Attempts  to reform  Medicaid have  fallen somewhat  flat in  the                                                               
past. SB 74 is about reforming Medicaid, not expansion.                                                                         
                                                                                                                                
Senator Kelly  stated the highlights  of the bill. It  instills a                                                               
medical health  care plan which  pays like  insurance. Recipients                                                               
receive  a policy  and  the state  pays for  it.  There are  case                                                               
managers that  walk clients  through optimal  use of  the system.                                                               
Clients   are  given   a  primary   care  physician.   It  is   a                                                               
comprehensive and integrated health care plan.                                                                                  
                                                                                                                                
He said  Denali Kid Care would  be carved out as  a pilot program                                                               
because it is  easily identifiable and a high  priority. The bill                                                               
will mitigate  inappropriate ER  visits, excessive  travel, self-                                                               
referring  to  expensive  providers,   and  expensive  drugs.  In                                                               
addition to  the health care  plan, waivers will  direct patients                                                               
to travel  facilities. The bill  contains emergency  room reform,                                                               
the  use  of  telemedicine,  and  payment  reform  of  negotiated                                                               
charges.  The  bill  addresses abuses  of  the  current  Medicaid                                                               
system.                                                                                                                         
                                                                                                                                
CHAIR STEDMAN noted the arrival of Senator Stoltze.                                                                             
                                                                                                                                
1:38:39 PM                                                                                                                    
SENATOR  KELLY pointed  out that  the  sponsor statement  clearly                                                               
explains the bill.                                                                                                              
                                                                                                                                
HEATHER  SHADDUCK,  Staff,  Senator   Pete  Kelly,  Alaska  State                                                               
Legislature, Juneau,  Alaska, presented  information on SB  74 on                                                               
behalf of the sponsor.  She read from the sponsor statement:                                                                    
                                                                                                                                
      Senate Bill 74 starts the process of cost containment                                                                     
     and reform needed to slow the growth of the Alaska                                                                         
     Medicaid program. Medicaid has grown to $1.8 Billion                                                                       
     of the annual operating budget, and has accounted for                                                                      
     22% of the total UGF increases over the last ten                                                                           
     years. The current and former administrations have                                                                         
     testified the Medicaid program, as it stands, is not                                                                       
     sustainable. Low oil prices and billions of dollars in                                                                     
     revenue shortfalls have forced us to change how we do                                                                      
     business.                                                                                                                  
                                                                                                                                
     In July 2013, the Medicaid Budget Group of the                                                                             
     Department of Health and Social Services reported the                                                                      
     total spending on Medicaid services will reach $6.3                                                                        
     billion in 2032, including $2.8 billion in state                                                                           
     matching funds. If we don't act now to bend the growth                                                                     
     curve of Medicaid, many of our most venerable Alaskans                                                                     
     will be without critical health care services they                                                                         
     need.                                                                                                                      
                                                                                                                                
MS.  SHADDUCK stated  that the  bill is  about reform.  Reform is                                                               
about pushing  the right care  and the  right place at  the right                                                               
time at the right price.                                                                                                        
                                                                                                                                
1:40:47 PM                                                                                                                    
MS. SHADDUCK addressed the sections of SB 74.                                                                                   
                                                                                                                                
She  explained  that  Section  1  allows  recipients  of  medical                                                             
assistance  to have  10 percent  of their  annual permanent  fund                                                               
dividends  deposited  into  a  personal  health  savings  account                                                               
(HSA).  She  said  the  section was  modeled  after  the  college                                                               
savings  plan.  The  HSA  could  cover  co-pays,  the  difference                                                               
between brand  name and generic  drugs, replacement  eye glasses,                                                               
and others.                                                                                                                     
                                                                                                                                
CHAIR STEDMAN  asked why  10 percent was  selected and  who would                                                               
administer the HSA.                                                                                                             
                                                                                                                                
MS. SHADDUCK said 10 percent was  chosen as a starting place, but                                                               
it is optional  and could be changed. This is  an area that still                                                               
needs  work. Section  3  addresses setting  up  the HSA's.  Other                                                               
states have  used health savings  accounts. It  is a way  to have                                                               
Medicaid  recipients thinking  about how  much their  health care                                                               
costs and ways they  can help pay for it. She  said all ideas are                                                               
not flushed out yet.                                                                                                            
                                                                                                                                
SENATOR GIESSEL  asked if the  health savings account  is pre-tax                                                               
money, but is deductible from federal tax.                                                                                      
                                                                                                                                
MS. SHADDUCK thought so. She said  a HSA that she had was pre-tax                                                               
deductible.                                                                                                                     
                                                                                                                                
1:43:32 PM                                                                                                                    
CHAIR STEDMAN asked if recipients can add other funds to it.                                                                    
                                                                                                                                
MS. SHADDUCK  said yes. In  Alaska there is a  unique opportunity                                                               
with PFD's.                                                                                                                     
                                                                                                                                
1:44:07 PM                                                                                                                    
MS. SHADDUCK  continued with Section  2 that deals  with Medicaid                                                               
reform  programs. She  related that  Section 2  requires DHSS  to                                                               
design  and  implement  a medical  assistance  (Medicaid)  reform                                                               
program. There  are eleven  items the  program must  include. She                                                               
read the subsections one and two in Section 2.                                                                                  
                                                                                                                                
CHAIR  STEDMAN asked  about rural  communities that  do not  have                                                               
community and social support services, such as jobs programs.                                                                   
                                                                                                                                
SENATOR KELLY said that would be answered at a later date.                                                                      
                                                                                                                                
SENATOR  STOLTZE  asked if  the  assumption  is that  all  40,000                                                               
recipients will remain  eligible for the PFD and  will fall under                                                               
a hold harmless provision.                                                                                                      
                                                                                                                                
CHAIR STEDMAN said that is another issue.                                                                                       
                                                                                                                                
SENATOR KELLY clarified  that since there is  no expansion, there                                                               
are not 40,000 recipients.                                                                                                      
                                                                                                                                
CHAIR  STEDMAN  summarized  that  SB   74  attempts  to  do  cost                                                               
containment on  Medicaid itself and  the Medicaid  expansion bill                                                               
will be heard next week.                                                                                                        
                                                                                                                                
1:46:50 PM                                                                                                                    
MS. SHADDUCK turned to subsections  three through five. She noted                                                               
that much has already been done in the area of fraud control.                                                                   
                                                                                                                                
CHAIR STEDMAN expected the department  to pursue subsections four                                                               
and five regardless of the bill.                                                                                                
                                                                                                                                
SENATOR KELLY agreed  that there are provisions in  the bill that                                                               
already are in the works.                                                                                                       
                                                                                                                                
MS.  SHADDUCK  highlighted  subsections six  through  eight.  She                                                               
spoke  of   innovative  programs  in  home   and  community-based                                                               
services.                                                                                                                       
                                                                                                                                
She addressed subsection nine and  listed examples of redesigning                                                               
the payment  process. She explained  subsections ten  and eleven.                                                               
She noted the sponsor expects a choice waiver.                                                                                  
                                                                                                                                
1:52:39 PM                                                                                                                    
CHAIR STEDMAN asked if a  federal waiver is needed for subsection                                                               
eight.                                                                                                                          
                                                                                                                                
MS. SHADDUCK said yes; that request is in Section 7.                                                                            
                                                                                                                                
CHAIR STEDMAN asked  if the request for the  department to design                                                               
and  implement  the reform  program  will  show savings  and  not                                                               
departmental expansion with increased funding needs.                                                                            
                                                                                                                                
SENATOR KELLY replied that they  are looking at programs in other                                                               
states that have produced savings.                                                                                              
                                                                                                                                
CHAIR STEDMAN  requested detailed  information about  savings. He                                                               
voiced concern about  a larger GF draw for the  department due to                                                               
the design and implementation of the reforms.                                                                                   
                                                                                                                                
MS. SHADDUCK  said they  received the fiscal  notes late,  but it                                                               
looks  like  a  net  savings for  the  department.  However,  the                                                               
department  did  request  additional   positions.  She  said  the                                                               
sponsor shares those concerns.                                                                                                  
                                                                                                                                
CHAIR STEDMAN  noted that he requested  his staff to list  the 14                                                               
fiscal notes  in order  to see  the total  GF and  federal funds,                                                               
operating costs,  and staff positions.  He said the  fiscal notes                                                               
may change over time.                                                                                                           
                                                                                                                                
1:55:02 PM                                                                                                                    
MS. SHADDUCK  continued with subsection  (b) which  requires DHSS                                                               
to  annually report  to the  legislature regarding  realized cost                                                               
savings and whether annual targets have been met.                                                                               
                                                                                                                                
CHAIR  STEDMAN  asked  how  the targets  for  quality  and  cost-                                                               
effectiveness are set.                                                                                                          
                                                                                                                                
MS. SHADDUCK  said the stakeholders  are involved in  setting the                                                               
targets.                                                                                                                        
                                                                                                                                
She  highlighted Section  3 which  provides  that the  department                                                               
must  develop  a  personal  health  savings  account  that  would                                                               
require  consumer  education strategies,  recipient  cost-sharing                                                               
and copayment structures, a procedure  for deposits and payments,                                                               
and education  on the application process  through the Department                                                               
of Revenue.                                                                                                                     
                                                                                                                                
CHAIR  STEDMAN asked  whether  the structure  is  within a  state                                                               
department.                                                                                                                     
                                                                                                                                
MS.  SHADDUCK said  yes;  it's within  Department  of Health  and                                                               
Social Services.                                                                                                                
                                                                                                                                
CHAIR STEDMAN  asked who would  administer the program  and track                                                               
the funds.                                                                                                                      
                                                                                                                                
SENATOR KELLY said it would be the Department of Revenue.                                                                       
                                                                                                                                
CHAIR STEDMAN  inquired how  loss in the  account is  handled and                                                               
what kind of  investment options would be available.  He asked if                                                               
that is that state's role and if it should take on the exposure.                                                                
                                                                                                                                
1:58:02 PM                                                                                                                    
MS.  SHADDUCK   clarified  that   the  account  stays   with  the                                                               
individual,  similar to  other health  savings  accounts. If  the                                                               
individual leaves Medicaid,  the money in the  account stays with                                                               
them.                                                                                                                           
                                                                                                                                
CHAIR STEDMAN did not want to add more layers on the state.                                                                     
                                                                                                                                
MS.  SHADDUCK said  the department  said it  could require  a lot                                                               
more work up front.                                                                                                             
                                                                                                                                
She continued to  say that Section 4 sunsets  the personal health                                                               
savings  accounts in  Sections 1  and 3  and the  Medicaid reform                                                               
program in  Section 2  on October  1, 2022.  This will  bring the                                                               
program back in front of the legislature to evaluate.                                                                           
                                                                                                                                
CHAIR STEDMAN asked why 2022 was chosen.                                                                                        
                                                                                                                                
MS. SHADDUCK said it was just a starting point.                                                                                 
                                                                                                                                
2:00:03 PM                                                                                                                    
MS.  SHADDUCK turned  to  Section 5,  the  Medicaid managed  care                                                               
demonstration  program for  Denali  Kid Care  and  an option  for                                                               
other  Medicaid  recipients.  She  shared  some  of  the  project                                                               
components  that  may  be  included  in  the  program.  She  said                                                               
subsection  (d)  must  include cost-savings  measures  to  reduce                                                               
travel and simplify administrative  procedures. This program also                                                               
sunsets on October 1, 2022.                                                                                                     
                                                                                                                                
CHAIR  STEDMAN asked  if  the  program could  be  set  up by  the                                                               
initiation date of October 1, 2015.                                                                                             
                                                                                                                                
MS. SHADDUCK deferred  to the department to answer.  She said the                                                               
sponsor's  goal was  to include  hard deadlines  in order  to see                                                               
savings.                                                                                                                        
                                                                                                                                
CHAIR STEDMAN  inquired if the  managed care program  was modeled                                                               
after a particular state's plan.                                                                                                
                                                                                                                                
SENATOR  KELLY said  it  is a  pre-packaged  service provided  by                                                               
companies such as AETNA and Moda.                                                                                               
                                                                                                                                
CHAIR  STEDMAN requested  a comparative  analysis of  states that                                                               
have done this.                                                                                                                 
                                                                                                                                
SENATOR KELLY offered to provide that information.                                                                              
                                                                                                                                
2:04:55 PM                                                                                                                    
MS.  SHADDUCK described  Section 6  which would  require DEED  to                                                               
design and  implement a demonstration  project that  would reduce                                                               
non-urgent use of  the emergency room by  Medicaid recipients. It                                                               
would  built on  what the  department has  already done  with the                                                               
super-utilizer  program. She  described  what  the program  would                                                               
contain.                                                                                                                        
                                                                                                                                
CHAIR STEDMAN asked  what it means on line 15,  "to the extent of                                                               
federal law"  and the  system of  electronic exchange  of patient                                                               
information.                                                                                                                    
                                                                                                                                
MS. SHADDUCK explained it refers  to the federal Health Insurance                                                               
Portability and Accountability Act (HIPPA).                                                                                     
                                                                                                                                
CHAIR STEDMAN asked about line 17  - the process for defining and                                                               
identifying frequent users of emergency departments.                                                                            
                                                                                                                                
MS.  SHADDUCK  thought  the  department  already  had  a  way  of                                                               
identifying those patients.                                                                                                     
                                                                                                                                
SENATOR  GIESSEL   related  that  a  hospital   in  Anchorage  is                                                               
proposing to  offer a regional  emergency room, and  other states                                                               
also use  this method. The  result is a significant  reduction in                                                               
ER use.                                                                                                                         
                                                                                                                                
CHAIR STEDMAN  requested that the  department describe  what they                                                               
already are doing and what the bill asks them to do that is new.                                                                
                                                                                                                                
MS. SHADDUCK commented on the need  to expand the program that is                                                               
in Anchorage.                                                                                                                   
                                                                                                                                
2:08:16 PM                                                                                                                    
CHAIR STEDMAN  inquired if there  is any data on  frequent users,                                                               
such as "20 percent of the people use 80 percent of the assets."                                                                
                                                                                                                                
SENATOR KELLY  said he has heard  the number but does  not recall                                                               
it.                                                                                                                             
                                                                                                                                
MS. SHADDUCK  thought a lot  of the users were  behavioral health                                                               
users. She offered to provide that information.                                                                                 
                                                                                                                                
2:09:17 PM                                                                                                                    
MS. SHADDUCK highlighted Section  7 which requires the department                                                               
to apply for a Medicaid Choice Waiver listed in Section 2.                                                                      
                                                                                                                                
She said  Section 8 relates  to the feasibility studies  that are                                                               
required  before  privatization  of  services can  occur  at  the                                                               
Alaska Pioneers' Homes, Alaska  Psychiatric Institute, and select                                                               
facilities in the Division of Juvenile Justice.                                                                                 
                                                                                                                                
CHAIR STEDMAN  inquired what the selected  facilities of Juvenile                                                               
Justice are.                                                                                                                    
                                                                                                                                
SENATOR KELLY  said the  Nome and  Ketchikan facilities  could be                                                               
turned over to regional health corporations.                                                                                    
                                                                                                                                
CHAIR STEDMAN asked why they were not specified in the bill.                                                                    
                                                                                                                                
MS. SHADDUCK  said the sponsor  wanted the wording to  be general                                                               
at first.  She noted  the Nome  facility could  be turned  into a                                                               
residential  psychiatric treatment  center and  then be  eligible                                                               
for Medicaid billing.                                                                                                           
                                                                                                                                
CHAIR STEDMAN  pointed out that  it is  the first hearing  of the                                                               
bill and the committee is hearing concepts today.                                                                               
                                                                                                                                
2:12:09 PM                                                                                                                    
SENATOR  KELLY said  the Ketchikan  facility  qualifies less  and                                                               
Nome meets more criteria.                                                                                                       
                                                                                                                                
CHAIR STEDMAN  asked if there  was any discussion  of privatizing                                                               
state prisons.                                                                                                                  
                                                                                                                                
MS.  SHADDUCK  said  it  is  not   a  part  of  SB  74,  but  the                                                               
administration has discussed it.  Governor Walker mentioned it in                                                               
his state of the state address  and the OMB director is exploring                                                               
options. She  pointed out  that the  feasibility studies  are the                                                               
first step toward privatization.                                                                                                
                                                                                                                                
CHAIR STEDMAN  noted the report  is required ten days  after next                                                               
session  starts. He  suggested there  is  not enough  time to  go                                                               
through it  then and  the report should  be given  to legislators                                                               
before the session begins.                                                                                                      
                                                                                                                                
MS. SHADDUCK said  the sponsor is not opposed  to the suggestion.                                                               
She  thought  the fiscal  notes  show  that the  department  will                                                               
contract out the reports.                                                                                                       
                                                                                                                                
She  related that  Section 9  requires  DEED to  amend the  state                                                               
Medicaid plan and  apply for waivers. Section  10 sunsets Section                                                               
11 on  October 1, 2022. Section  11 provides that Sections  1 - 3                                                               
take effect  only if the  department certifies to the  revisor of                                                               
statutes,  on  or  before  October  1,  2017,  that  all  of  the                                                               
provisions enacted by Sections 2 and 3, 5  - 7, and 9 of the bill                                                               
have been  approved by  the U.S. Department  of Health  and Human                                                               
Services.                                                                                                                       
                                                                                                                                
2:14:48 PM                                                                                                                    
CHAIR STEDMAN addressed the graph  on Medicaid appropriations and                                                               
noted  that  the  red  bars  designate  general  funds.  However,                                                               
historically,  the general  funds  were under  reported and  look                                                               
backs comparing  general funds  makes this  analysis meaningless.                                                               
He said he  is going to request  Legislative Finance reconstitute                                                               
the funds and  add inflation and population  percentages in order                                                               
to see growth and to figure out costs in real dollars.                                                                          
                                                                                                                                
He addressed  the historical and  projected Medicaid  growth line                                                               
graph.  He  requested  information from  Legislative  Finance  to                                                               
explain what  happened in  2012 to cause  a $200,000  increase in                                                               
GF.                                                                                                                             
                                                                                                                                
MS. SHADDUCK  said that in  years previous  to 2012 there  was an                                                               
enhanced  FMAP as  part of  the  stimulus program.  She said  she                                                               
would  forward the  information  the department  provided to  the                                                               
committee.                                                                                                                      
                                                                                                                                
CHAIR STEDMAN said he also wanted  to check out the general funds                                                               
in 2006 and 2007 so that the data is meaningful.                                                                                
                                                                                                                                
2:18:39 PM                                                                                                                    
AMANDA  RYDER,  Fiscal  Analyst,  Legislative  Finance  Division,                                                               
Legislative Affairs Agency, answered  questions related to SB 74.                                                               
She said the  GF data on the  charts is apples to  apples and the                                                               
fund  codes were  reclassified.  She explained  that  the dip  is                                                               
primarily to  the American Recover  and Reinvestment  Act (ARRA).                                                               
It was the enhanced FMAP when  ARRA passed and, as a result, less                                                               
GF was needed  - federal funds filled that gap.  That occurred in                                                               
FY 2012.                                                                                                                        
                                                                                                                                
CHAIR STEDMAN  asked about  the growth  analysis beginning  in FY                                                               
2012 and  going forward. He  questioned the dip  in FY 2015  - FY                                                               
2016.                                                                                                                           
                                                                                                                                
MS.  RYDER explained  that  it  is the  $20  million decrease  in                                                               
Medicaid  services  that the  Governor  included  in his  amended                                                               
budget.                                                                                                                         
                                                                                                                                
CHAIR STEDMAN summarized that the  last hard numbers are the peak                                                               
of the blue line.                                                                                                               
                                                                                                                                
MS. RYDER clarified that that is  the FY 2015 management plan and                                                               
the Governor's request  is at the junction of the  red and yellow                                                               
lines.                                                                                                                          
                                                                                                                                
CHAIR STEDMAN  requested more data  on real numbers and  the rate                                                               
of growth from FY 2012 to FY  2015. He emphasized that we have to                                                               
figure out  where we've been, where  we're at, and where  we want                                                               
to go. He stated he does not want to accelerate growth rates.                                                                   
                                                                                                                                
MS. RYDER cautioned that the  growth rates are historical. The FY                                                               
2012 to FY 2016 rates  are strictly a numerical calculations. The                                                               
department  will have  better data  for  projections and  impacts                                                               
from the bill.                                                                                                                  
                                                                                                                                
2:24:10 PM                                                                                                                    
CHAIR STEDMAN asked for definitions  of growth rates shown in the                                                               
chart.                                                                                                                          
                                                                                                                                
SENATOR  KELLY  said  something  happened in  2012  to  make  the                                                               
Medicaid  growth line  flatten out.  The yellow  line shows  that                                                               
curve continuing, and the red line shows historic growth.                                                                       
                                                                                                                                
MS. RYDER said  that is correct. She noted  she was uncomfortable                                                               
providing the FY 2006 to FY  2016 growth rate considering that it                                                               
would  have  distorted  the  growth due  to  the  enhanced  FMAP.                                                               
However, using  FY 2012 to  FY 2016  is also problematic,  so she                                                               
included both.                                                                                                                  
                                                                                                                                
CHAIR  STEDMAN  asked  for help  with  population  and  inflation                                                               
figures.  He stated  that the  committee needs  a benchmark  with                                                               
real growth rates.                                                                                                              
                                                                                                                                
MS. RYDER agreed to provide that.                                                                                               
                                                                                                                                
CHAIR STEDMAN noted it is a huge component at 22 percent.                                                                       
                                                                                                                                
2:26:50 PM                                                                                                                    
MS. SHADDUCK  commented that the  22 percent was specific  to the                                                               
total UGF increase from FY 2006 to FY 2015.                                                                                     
                                                                                                                                
CHAIR STEDMAN requested the department's input regarding SB 74.                                                                 
                                                                                                                                
2:28:00 PM                                                                                                                    
VALERIE  DAVIDSON,  Commissioner,  Department  of  Education  and                                                               
Early Development  (DEED), provided information regarding  SB 74.                                                               
She listed the  items of Medicaid reform in SB  74 that have also                                                               
been recognized  by the  administration and  are included  in the                                                               
Governor's  bill,  continuing efforts  of  DEED.  The first  item                                                               
already in  place or  in progress in  the department  is reducing                                                               
the cost for  Alaskans with behavioral health needs  and those in                                                               
need of  senior and  disability service  through the  1915(i) and                                                               
(k)  options that  allow  the state  to be  able  to enhance  the                                                               
federal match.  Another item in  place is the enhancing  of other                                                               
federal  match opportunities,  such  as the  100 percent  federal                                                               
match where  possible, including  enhancing the  tribal providers                                                               
ability  to  provide  care.  She  said  the  department  is  also                                                               
committed to  actively pursue reform opportunities  wherever they                                                               
can be found.                                                                                                                   
                                                                                                                                
COMMISSIONER DAVIDSON  explained that there are  several areas in                                                               
the bill that  need clarification and time for  the department to                                                               
realize  savings.  They  included   the  health  savings  account                                                               
program,  which is  not  an area  of  departmental expertise  and                                                               
would require  additional help at  the start to  implement. Also,                                                               
two  demonstration projects,  the Medicaid  managed care  and the                                                               
reduction  of non-urgent  emergency department  use require  more                                                               
discussion. For  the latter, the department  estimated that there                                                               
were over  5,000 super-utilizers  of emergency departments  and a                                                               
number of  them have  already been matched  with a  care manager.                                                               
She  reported  that the  Medicaid  beneficiaries  love the  extra                                                               
supervision and care.                                                                                                           
                                                                                                                                
2:31:17 PM                                                                                                                    
SENATOR GIESSEL  asked what number  of the  5,000 super-utilizers                                                               
have been targeted for implementation.                                                                                          
                                                                                                                                
COMMISSIONER DAVIDSON  said 2,000  have been  targeted initially,                                                               
but there  is opportunity for more.  This is reflected in  SB 74,                                                               
as well as in the department's on-going reform effort.                                                                          
                                                                                                                                
SENATOR GIESSEL asked when that effort began.                                                                                   
                                                                                                                                
JOHN  SHERWOOD,  Deputy  Commission,  Department  of  Health  and                                                               
Social  Service, provided  information regarding  SB 74.  He said                                                               
efforts  began  in December  and  January.  Today the  number  of                                                               
contacts are in the hundreds and it is a voluntary program.                                                                     
                                                                                                                                
SENATOR  GIESSEL  asked  if  a   particular  community  is  being                                                               
targeted or if it is random.                                                                                                    
                                                                                                                                
MR. SHERWOOD thought most of the targeting was in Anchorage.                                                                    
                                                                                                                                
CHAIR  STEDMAN   requested  that  the  department   provide  that                                                               
information in more detail.                                                                                                     
                                                                                                                                
2:33:04 PM                                                                                                                    
COMMISSIONER  DAVIDSON  turned  to   the  Medicaid  managed  care                                                               
demonstration  project.  She  explained  the  difference  between                                                               
managing the  care of patients  and a managed  care organization,                                                               
which  is  a  separate  legal structure.  A  legal  managed  care                                                               
structure, such as  several other states have,  involves a labor-                                                               
intensive  process and  getting permission  from the  Centers for                                                               
Medicare   and  Medicaid   Services.  There   are  also   federal                                                               
requirements  under  the  Affordable  Care  Act  that  ensure  if                                                               
individuals  are  enrolled  in  managed  care  organizations  for                                                               
certain kinds of  eligibility, that they are allowed  to opt out,                                                               
or  there  are requirements  for  them  to access  services.  For                                                               
example, there  was a time  when managed care  organizations were                                                               
paid  to   manage  the  care  if   beneficiaries,  including  IHS                                                               
beneficiaries  who  are  mandatorily  enrolled  in  programs  who                                                               
weren't  receiving their  care  from  their preferred  providers.                                                               
Instead, the care  was through the tribal  health organization in                                                               
that  state. However,  the managed  care  organizations were  not                                                               
paying for  the care through  the tribal organizations.  A change                                                               
in federal  law resulted.  This type of  managed care  requires a                                                               
very structured format.                                                                                                         
                                                                                                                                
She  said  if  the  bill  is  addressing  managing  the  care  of                                                               
beneficiaries,  there  is a  lot  more  flexibility in  terms  of                                                               
negotiating a waiver  with the Centers for  Medicare and Medicaid                                                               
Services that will  allow the state to achieve  the same results.                                                               
It is challenging, but not as cumbersome.                                                                                       
                                                                                                                                
2:35:51 PM                                                                                                                    
SENATOR STOLTZE  requested the  department provide  a comparative                                                               
list for the committee.                                                                                                         
                                                                                                                                
CHAIR STEDMAN said  the department would be working  on that over                                                               
the next week.                                                                                                                  
                                                                                                                                
COMMISSIONER  DAVIDSON requested  clarification from  the sponsor                                                               
on  community   and  social  support   services.  She   said  the                                                               
department  supports the  concept, but  the Centers  for Medicare                                                               
and Medicaid  Services have, so  far, not approved a  waiver from                                                               
any  state  requiring  employment  services.  They  have  allowed                                                               
states to do so on a  voluntary basis. Those services can be made                                                               
available, but not mandated.                                                                                                    
                                                                                                                                
COMMISSIONER DAVIDSON  emphasized that the  biggest gap in  SB 74                                                               
is the  omission of Medicaid  expansion. The  department believes                                                               
expansion and reform go hand in hand.                                                                                           
                                                                                                                                
2:38:04 PM                                                                                                                    
CHAIR STEDMAN said that position  is included in a different bill                                                               
the committee will hear next week.                                                                                              
                                                                                                                                
COMMISSIONER DAVIDSON said the department  has provided 13 fiscal                                                               
notes because  some provisions  in the bill  affect a  variety of                                                               
budget  components;  some  provisions are  aligned  with  current                                                               
departmental  reform  efforts  and others  are  speculative.  She                                                               
agreed  to work  through those  and  refine them.  She noted  the                                                               
department currently anticipates undesignated  GF savings of $1.1                                                               
million in  FY 2016, increasing  to $17.9 million by  2021, based                                                               
on their best understanding of the bill.                                                                                        
                                                                                                                                
She concluded that  reform is a process and is  not necessarily a                                                               
point in  time. She  voiced excitement  about the  opportunity to                                                               
reform Medicaid  and looks  forward to  working with  the sponsor                                                               
and legislature  to continue reform  efforts. She  requested that                                                               
the efforts be  done on a timeline and with  a work schedule that                                                               
is doable for Alaska and the department.                                                                                        
                                                                                                                                
2:40:25 PM                                                                                                                    
CHAIR  STEDMAN  assumed  the  fiscal  notes  contained  aggregate                                                               
numbers  and would  be revised.  He requested  to know  the total                                                               
number of employees included in the fiscal notes.                                                                               
                                                                                                                                
MR.  SHERWOOD related  that there  would  be 9  employees in  the                                                               
initial year, 12 in the second and third years, and 11 thereon.                                                                 
                                                                                                                                
CHAIR STEDMAN said  the committee would be working  on that issue                                                               
and  the  department  would  be   working  with  the  sponsor  on                                                               
alignment.                                                                                                                      
                                                                                                                                
2:41:40 PM                                                                                                                    
SENATOR  KELLY  asked  if  managing  care  means  taking  current                                                               
department  resources  and  managing  patient care  or  hiring  a                                                               
provider such as Aetna.                                                                                                         
                                                                                                                                
COMMISSIONER DAVIDSON  clarified that  setting up a  managed care                                                               
organization would be setting up  a separate legal structure that                                                               
would contract to provide that service.  Or, it can be simply, as                                                               
described in  the bill, setting  up a managed  care demonstration                                                               
project. One of the big  differences is risk; a capitated payment                                                               
pool  system  versus  providing an  administrative  fee  for  the                                                               
contractor or insurance company  to provide an additional service                                                               
and share savings opportunities.  A demonstration project entails                                                               
a number of possibilities and needs to be defined.                                                                              
                                                                                                                                
CHAIR STEDMAN thanked the department and the sponsor's staff.                                                                   
                                                                                                                                
CHAIR STEDMAN held SB 74 in committee.                                                                                          
                                                                                                                                
          SB 23-IMMUNITY FOR PROVIDING OPIOID OD DRUG                                                                       
                                                                                                                                
2:44:41 PM                                                                                                                    
CHAIR STEDMAN announced the consideration  of SB 23. He said that                                                               
SB 23 is an Act  relating to immunity for proscribing, providing,                                                               
and administering opioid overdose drugs.                                                                                        
                                                                                                                                
SENATOR ELLIS  related that the  Department of Law will  speak to                                                               
concerns related to  criminal liability. He noted the  bill has a                                                               
referral to the Senate Judiciary Committee.                                                                                     
Senator Ellis  explained that SB  23 provides a relief  for civil                                                               
liability for  those who would administer  the overdose reversing                                                               
drug,  naloxone.  Twenty-nine  other states  have  similar  laws.                                                               
There is  no known opposition  to the  bill. The bill  deals with                                                               
relief from  civil liability  in overdose  life-saving situations                                                               
for doctors,  family members, and  friends, rather  than criminal                                                               
liability relief.                                                                                                               
                                                                                                                                
2:47:02 PM                                                                                                                    
SENATOR STOLTZE asked for  clarification about criminal liability                                                               
and mitigating factors.                                                                                                         
                                                                                                                                
RICK  SVOBODNY,  Deputy   Attorney  General,  Criminal  Division,                                                               
Department  of  Law, answered  questions  related  to SB  23.  He                                                               
explained that  SB 23 does  not deal with sentencing  in criminal                                                               
cases related  to mitigating factors  and the bill has  no effect                                                               
on  criminal  liability.  Police   officers,  EMT's,  and  family                                                               
members who are given or who administer the drugs are protected.                                                                
                                                                                                                                
SENATOR STOLTZE asked  what happens to the person  who might have                                                               
caused the overdose.                                                                                                            
                                                                                                                                
MR.  SVOBODNY said  there was  a bill  last year  about emergency                                                               
responders.  It  was  entirely different  and  does  not  relieve                                                               
people of the consequences of dealing drugs.                                                                                    
                                                                                                                                
2:51:50 PM                                                                                                                    
SENATOR STOLTZE asked if the administration supports the bill.                                                                  
                                                                                                                                
MR. SVOBODNY  said yes. The  Department of Corrections  thinks it                                                               
will be helpful to them, also.                                                                                                  
                                                                                                                                
2:52:25 PM                                                                                                                    
SENATOR  ELLIS  moved  to  report   SB  23  from  committee  with                                                               
individual recommendations  and attached zero fiscal  note. There                                                               
being no objection, the motion carried.                                                                                         
                                                                                                                                
2:53:05 PM                                                                                                                    
There being nothing further to come before the committee, Chair                                                                 
Stedman adjourned the Senate Health and Social Services Standing                                                                
Committee at 2:53 p.m.                                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
SB 74 Bill Hearing Request SHSS.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Sponsor Statement.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Sectional Analysis.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Supporting Documents - Legislative Finance Graphs.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Supporting Documents - LRS Report 15.284.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Supporting Documents - NPR HSAs for Medicaid.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Ver H.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
Fiscal Note SB 23.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 23
SB 74 Fiscal Notes 233.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 242.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 309.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 317.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 354.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 2077.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 2660.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 2662.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 2663.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 2696.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 2787.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 2880.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Fiscal Notes 3099.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Congregation Sukkat Shalom.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74
SB 74 Supporting Document - Aetna Letter 3.27.15.pdf SHSS 3/23/2015 1:30:00 PM
SHSS 4/1/2015 1:30:00 PM
SB 74