Legislature(2017 - 2018)BUTROVICH 205

02/16/2018 01:30 PM HEALTH & SOCIAL SERVICES

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01:31:25 PM Start
01:31:27 PM Presentation: Department of Health and Social Services "medicaid Services Waivers"
02:49:12 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Department of Health and Social TELECONFERENCED
"Medicaid Services Waivers"
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
      SENATE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE                                                                    
                       February 16, 2018                                                                                        
                           1:31 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator David Wilson, Chair                                                                                                     
Senator Natasha von Imhof, Vice Chair                                                                                           
Senator Cathy Giessel                                                                                                           
Senator Peter Micciche                                                                                                          
Senator Tom Begich                                                                                                              
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
PRESENTATION: DEPARTMENT OF HEALTH AND SOCIAL SERVICES "MEDICAID                                                                
SERVICES WAIVERS"                                                                                                               
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
JON SHERWOOD, Deputy Commissioner                                                                                               
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented on Medicaid Services Waivers.                                                                   
DUANE MAYES, Director                                                                                                           
Division of Senior and Disabilities Services                                                                                    
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented on Medicaid Services Waivers.                                                                   
ACTION NARRATIVE                                                                                                              
1:31:25 PM                                                                                                                  
CHAIR DAVID WILSON 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  Begich, von Imhof, Giessel and Chair                                                               
^Presentation:   Department  of   Health   and  Social   Services                                                               
"Medicaid Services Waivers"                                                                                                     
 PRESENTATION: DEPARTMENT OF HEALTH AND SOCIAL SERVICES "MEDICAID                                                           
                       SERVICES WAIVERS"                                                                                    
1:31:27 PM                                                                                                                    
CHAIR  WILSON announced  the presentation  by  the Department  of                                                               
Health  and   Social  Services   (DHSS)  on   "Medicaid  Services                                                               
JON  SHERWOOD,  Deputy  Commissioner, Department  of  Health  and                                                               
Social Services (DHSS), presented on Medicaid Services Waivers.                                                                 
DUANE  MAYES,  Director,  Division  of  Senior  and  Disabilities                                                               
Services,  Department  of  Health  and  Social  Services  (DHSS),                                                               
presented on Medicaid Services Waivers.                                                                                         
1:32:20 PM                                                                                                                    
MR.  MAYES said  the  presentation would  be  on waiver  optional                                                               
services. The first  part of the presentation will  be on federal                                                               
Medicaid law  and then  go on  to show where  the state  is today                                                               
with the optional  services. He pointed out that  states have the                                                               
authority to determine who is eligible for service                                                                              
     Federal law  sets broad  requirements for  the Medicaid                                                                    
     program. States can then make  the many operational and                                                                    
     policy decisions that determine                                                                                            
        • who is eligible for enrollment,                                                                                       
        • which services are covered, and                                                                                       
        • how payments are set.                                                                                                 
     State  Medicaid  programs   must  comply  with  federal                                                                    
     requirements,    but    states    seeking    additional                                                                    
     flexibility  can apply  for formal  waivers of  some of                                                                    
     these  requirements from  the Secretary  of Health  and                                                                    
     Human Services (HHS).                                                                                                      
     Medicaid   waivers  can   be   classified  broadly   as                                                                    
     demonstration waivers or program waivers.                                                                                  
        • Demonstration waivers allow a state to test new                                                                       
          or existing approaches to program financing and                                                                       
        • Program waivers, on the other hand, have                                                                              
          generally  been designed  to expand  the array  of                                                                    
          defined  program  options  available to  a  state.                                                                    
          Rather    than   to    provide   an    avenue   of                                                                    
          experimentation with new models.                                                                                      
MR. MAYES said what the state is  doing under SB 74 is an example                                                               
of a  Section 1115 demonstration  waiver. A  demonstration waiver                                                               
is granted for five years, with  a possibility of extending up to                                                               
three  years. "Testing  new or  existing approaches"  is the  key                                                               
part of a demonstration waiver.                                                                                                 
He said  program waivers are  not an avenue  for experimentation.                                                               
The  majority  of the  presentation  will  be about  the  1915(c)                                                               
program waiver.                                                                                                                 
1:34:28 PM                                                                                                                    
SENATOR  VON IMHOF  asked  if a  data  and reporting  requirement                                                               
exists for  these waivers  so their  effectiveness can  be shown.                                                               
She asked where she can find that data collection and analysis.                                                                 
MR.  SHERWOOD said  1115 demonstration  waivers  do require  that                                                               
level of  evaluation. Part  of the waiver  application is  how to                                                               
monitor and evaluate  results. To his knowledge,  Alaska has only                                                               
had one, very  small 1115 demonstration waiver  several years ago                                                               
for  children  on  the  portion  of Medicaid  paid  for  by  CHIP                                                               
[Children's Health  Insurance Program]  that subjected them  to a                                                               
period of ineligibility if parents  dropped health insurance. The                                                               
waiver  operated   five  years   and  was  dropped   after  their                                                               
evaluation  did  not  show  the desired  effects.  The  topic  of                                                               
today's   presentation,    1915(c)   waivers,    have   reporting                                                               
requirements  about  expenditures   and  quality  assurance.  The                                                               
financial  reports, CMS  372s, are  posted  on federal  websites.                                                               
They can provide the CMS  quality reports required for waivers if                                                               
the committee wants.                                                                                                            
1:37:12 PM                                                                                                                    
SENATOR VON  IMHOF said she wants  to know if the  waiver program                                                               
works, "outcome reporting."                                                                                                     
1:37:45 PM                                                                                                                    
MR.  SHERWOOD  said  they don't  explicitly  report  measures  of                                                               
outcomes,  but some  of their  quality  measures include  outcome                                                               
measures in terms of the health  status of the people seeking the                                                               
1:38:06 PM                                                                                                                    
MR.  MAYES  made  the  following  points  about  Program  Waiver:                                                               
     Enacted in 1981 legislation,  ?1915(c) allows states to                                                                    
     waive  some Medicaid  requirements, in  order to  offer                                                                    
     home  and community-based  services  (HCBS) to  limited                                                                    
     These waivers  also allow states  to cap the  number of                                                                    
     individuals who can receive HCBS.                                                                                          
MR. MAYES  pointed out the waivers  allow them to offer  home and                                                               
community-based  services (HCBS)  to targeted  populations as  an                                                               
alternative to mandatory institutionalized care.                                                                                
1:38:58 PM                                                                                                                    
CHAIR  WILSON   asked  if  Alaska   has  caps  on   services  for                                                               
MR. MAYES said one of the  four waivers (which he will break down                                                               
later in  the presentation),  for individuals  with [Intellectual                                                               
and] Developmental Disabilities  (IDD), has a cap.  The others do                                                               
He explained  that individuals must meet  institutional level-of-                                                               
care requirement to be eligible for these waivers.                                                                              
     To  be eligible,  individuals  must meet  level-of-care                                                                    
     requirements-that        they       would       require                                                                    
     institutionalization  in   the  absence  of   Home  and                                                                    
     Community-Based Services (HCBS).                                                                                           
     Coverable HCBS, then, are the  services needed to avoid                                                                    
     institutionalization;  for example,  care coordination,                                                                    
     supported    employment,    adult   day,    residential                                                                    
     habilitation, respite care.                                                                                                
     A  separate 1915(c)  waiver is  generally required  for                                                                    
     each  eligible  population. Alaska  currently  operates                                                                    
     four waivers under this authority.                                                                                         
Mr.  Mayes  went  over  some  of the  services  needed  to  avoid                                                               
     Adult day center (Alaska has  11 adult day care centers                                                                    
     for seniors with dementia.)                                                                                                
     Chore services to help with upkeep of the home.                                                                            
     Residential   rehabilitation    (learning   independent                                                                    
     living skills)                                                                                                             
     Support    employment   (people    with   developmental                                                                    
     disabilities may  need support in a  job, especially at                                                                    
     Respite (providing relief for a caregiver)                                                                                 
1:41:52 PM                                                                                                                    
MR. MAYES  said he has  created the  Continuum of Care  slide for                                                               
the  past five  years. The  left side  shows the  community-based                                                               
grants, the lower  end of care. To the far  right is the facility                                                               
care, high-end costs.                                                                                                           
SENATOR VON IMHOF asked if she  can have slides from the previous                                                               
years to  see trends in the  number of patients served,  the cost                                                               
per patient, etc.                                                                                                               
MR. MAYES  said yes. He  said the  Continuum of Care  chart shows                                                               
they have  realized some reductions through  utilization control,                                                               
the  rewrite of  the  regulations, what  he  calls right  sizing.                                                               
Looking at the 2015 chart will show differences in expenditures.                                                                
MR. MAYES directed the committee's  attention to the four columns                                                               
linked to the  Home and Community-Based waivers in  the chart. He                                                               
noted the presentation is about the four waivers shown there.                                                                   
     Alaskans  Living   Independently  Waiver   $37,330  Avg                                                                    
     Children w/  Complex Medical Conditions  Waiver $48,391                                                                    
     Avg cost/person                                                                                                            
     Intellectual   &   Developmental  Disabilities   Waiver                                                                    
     $89,542 Avg cost/person                                                                                                    
     Adults w/ Physical  & Developmental Disabilities Waiver                                                                    
     $96,083 Avg cost/person                                                                                                    
Alaskans Living  Independently are  primarily seniors  and people                                                               
with physical  disabilities. The FY  17 total for this  waiver is                                                               
$72 million  for 1,933  people. The average  cost is  $37,000 per                                                               
person vs. $164,000 per person in a nursing home.                                                                               
Children with  Complex Medical Conditions  is a  relatively small                                                               
waiver serving 222 children. The FY 17 total is $10.7 million.                                                                  
For individuals with  Intellectual and Developmental Disabilities                                                               
(IDD)  Waiver,  the  total  is $186  million  with  2,085  people                                                               
served. All these waivers have  a dollar-for-dollar match between                                                               
federal and state government.                                                                                                   
The Adults  with Physical and Developmental  Disability Waiver is                                                               
very small with  88 people served for a total  cost of about $8.5                                                               
The total cost for FY 17  for Home and Community-Based Waivers is                                                               
$278 million.                                                                                                                   
1:46:14 PM                                                                                                                    
SENATOR VON  IMHOF said she  likes the  way the slide  provides a                                                               
snapshot.  One issue  from previous  DHSS presentations  has been                                                               
maintenance of effort.  When a program has  been established, the                                                               
level of maintenance of effort seems  to go up each year. The bar                                                               
keeps going  up. She  asked how  to manage  level of  effort with                                                               
traditional programs and whether it applies to waiver programs.                                                                 
1:47:01 PM                                                                                                                    
CHAIR WILSON recognized the presence of Senator Micciche.                                                                       
1:47:17 PM                                                                                                                    
MR. SHERWOOD  said no explicit  maintenance efforts  are required                                                               
for  the HCBS  waivers.  They  are operated  at  the decision  of                                                               
states. Every state  does have these waivers as they  are seen as                                                               
cost-effective alternatives. They have  not had problems limiting                                                               
people   served   for    the   Intellectual   and   Developmental                                                               
Disabilities Waiver. Later in the  presentation they are going to                                                               
talk about case law, the  Olmstead decision, which does constrain                                                               
the  state's ability  to remove  these  waivers, or  any kind  of                                                               
service,  for  people  with disabilities.  The  most  significant                                                               
maintenance  of  effort  in  the  Medicaid  program,  other  than                                                               
agreements to provide services  to certain mandatory populations,                                                               
is around  children. As a result  of the Affordable Care  Act and                                                               
extended  through  reauthorizations  of  CHIP,  states  operating                                                               
Children Health Insurance Programs have  to maintain the level of                                                               
eligibility for  children on Medicaid  through age 18.  He thinks                                                               
one  of the  last bills  passed pushed  that requirement  through                                                               
He said there  is a maintenance of effort related  to Medicaid in                                                               
the Adult  Public Assistance  (APA) program,  which is  the state                                                               
supplement  to SSI.  It requires  the state  to maintain  payment                                                               
levels that  were in  the place in  the 80s or  to spend  as much                                                               
money  as  the  state  did  in   the  prior  year  on  the  state                                                               
supplement, the  APA program.  The penalty  for not  meeting that                                                               
requirement is the  loss of all federal funding  for the Medicaid                                                               
program.  That   is  the  other   major  maintenance   of  effort                                                               
requirement.  They manage  that by  trying to  stay cognizant  of                                                               
their obligations,  but generally  speaking those  are provisions                                                               
in  federal law.  If the  state is  going to  operate a  Medicaid                                                               
program, it must meet those provisions.                                                                                         
1:50:31 PM                                                                                                                    
SENATOR  VON  IMHOF  said  a   constituent  once  told  her  that                                                               
maintenance of  effort can be addressed  by resetting eligibility                                                               
requirement to be  more of federally average  requirements in the                                                               
lower 48.  For new  patients, keeping the  same level  of payment                                                               
and eligibility as for previous  patients or for patients already                                                               
in the  system . . .  For example, to  pick a year, in  2020, any                                                               
new  patients  are in  the  new  requirements and  new  services.                                                               
Previous patients  will be  in the exact  same levels  as before.                                                               
So, there will be two  groups of patients receiving services, one                                                               
that phases  out over time  and the  new group. This  person said                                                               
that is  how the maintenance  of effort is  reset. It may  take a                                                               
generation. She asked if that is true.                                                                                          
MR. SHERWOOD said  he didn't know of a provision  that works like                                                               
that. The state must meet some  mandatory levels tied to point in                                                               
time. Others are tied to  the federal poverty level, which cannot                                                               
be  reset. Some  eligibility  standards increase  each year  with                                                               
changes  in  the  CPI  [Consumer Price  Index].  There  are  some                                                               
categories where they can choose  not to increase those limits at                                                               
that  level. At  one  time,  before there  was  a maintenance  of                                                               
effort  around   CHIP,  the  legislature  chose   to  reduce  the                                                               
eligibility  levels for  children and  pregnant women  and freeze                                                               
them at  the 2003  standards. Something similar  can be  done for                                                               
pregnant women but not children  under the current maintenance of                                                               
effort requirement. There  are some options to  do something like                                                               
that.  More  details are  needed  for  certain scenarios  because                                                               
there are different  categories of eligibility. Some  are tied to                                                               
federal  standards which  change every  year and  some the  state                                                               
establishes  those  standards and  they  may  not be  subject  to                                                               
change.  They  would have  to  go  through the  approximately  30                                                               
categories of eligibility.                                                                                                      
SENATOR MICCICHE  said at some  point they have to  work together                                                               
on containing the cost of  Medicaid. They have to understand what                                                               
escalation looks like. He knows DHSS  has a new tool. He will say                                                               
it every  time he meets  with DHSS,  he knows how  important what                                                               
they  do is,  he  knows they  care about  Alaskans  who have  the                                                               
greatest needs,  but at some  point, they must contain  costs. He                                                               
asked for the list of 30 categories.                                                                                            
1:54:51 PM                                                                                                                    
MR. SHERWOOD said it is  about 30 categories of eligibility. Some                                                               
are not very different from  each other, but federal law requires                                                               
them to distinguish.                                                                                                            
SENATOR MICCICHE  said it is  something they need to  evaluate in                                                               
the subcommittee process. Most categories  are around 200 percent                                                               
of the federal poverty level. He  wondered if removing the top 10                                                               
percent--say 190 percent  of federal poverty level,  would have a                                                               
material effect  on cost. It  still protects the  most vulnerable                                                               
Alaskans. Perhaps there  could be a transition  period for people                                                               
who would not be covered. He  asked if that is something DHSS has                                                               
evaluated, or  do they  think that is  the responsibility  of the                                                               
1:56:43 PM                                                                                                                    
MR. SHERWOOD  said they  have looked at  the impacts  of reducing                                                               
eligibility standards  in 2003.  Eventually, they  increased them                                                               
not all  the way back to  the original point, but  about halfway.                                                               
About 2008,  2009. If they  reduce the standard some  people will                                                               
become ineligible  and they will  save money. To the  extent that                                                               
the people  with the  greatest need have  the ability  to control                                                               
their income,  they will make  sure to maintain coverage  if that                                                               
is  their only  option. A  ten percent  reduction in  eligibility                                                               
will  not result  in ten  percent reduction  in spending.  People                                                               
with  the worst  health have  a  limited ability  to make  money.                                                               
Reducing  eligibility   would  have  some  impact   on  spending.                                                               
Legislative actions are required to reduce eligibility.                                                                         
SENATOR MICCICHE said that is  the definition of a broken system.                                                               
Folks  will  push  themselves  to   earn  less,  so  they  remain                                                               
qualified.  They need  a comprehensive  solution, which  they are                                                               
not  talking about  today. They  could  control some  of that  by                                                               
handpicking  the  eligibility  categories  so the  most  in  need                                                               
health wise will  not have the same changes  as healthier adults.                                                               
It is something they have to  look at. They have reduced costs in                                                               
every other  area except Medicaid  eligibility. He  openly admits                                                               
that DHSS has  worked with them for substantial cuts  in the last                                                               
five  to  six years.  It's  hard  to  get  at an  answer  without                                                               
considering the level of eligibility.                                                                                           
2:00:01 PM                                                                                                                    
At ease.                                                                                                                        
2:01:09 PM                                                                                                                    
CHAIR WILSON reconvened the meeting.                                                                                            
SENATOR  BEGICH asked  if he  would read  the division    mission                                                               
statement, if they have one.                                                                                                    
MR. MAYES  said whenever people  ask him  what he does,  he loses                                                               
them  in   five  minutes,  so   he  says,  because  it   is  very                                                               
complicated,  that  they  are   the  long-term  support  services                                                               
division,   supporting   vulnerable  populations,   people   with                                                               
disabilities and seniors. They consolidated  the mission and have                                                               
a  very comprehensive  vision statement.  To simplify,  it is  to                                                               
promote  the independence  of Alaskan  seniors  and persons  with                                                               
physical  and  developmental  disabilities.  Supporting  them  in                                                               
their  communities, community-based  settings,  is their  primary                                                               
SENATOR MICCICHE  said he wanted to  make it clear that  his goal                                                               
is to  have adequate  funding without a  revolution for  the most                                                               
vulnerable populations.  Perhaps at some point  they evaluate the                                                               
needs of the least needy served  by DHSS. Everyone knows where he                                                               
stands on seniors and care  for those with disabilities. They are                                                               
going to continue  to fight for those programs. That  is the role                                                               
of  government  for  folks  who  have  difficulty  providing  for                                                               
themselves because  of disabilities or extreme  adverse financial                                                               
issues related to  those problems. He thinks  everyone knows that                                                               
is  his  position. Sometimes  it  is  worth  saying that  on  the                                                               
MR.  MAYES  said the  division  has  been accountable  for  every                                                               
penny. Looking  at past  Continuum of Care  slides will  show the                                                               
division  has slowed  growth.  When he  started  at the  division                                                               
about eight years ago, they were  growing at $40 to $60 million a                                                               
year. That  is not  happening today. Making  sure they  have good                                                               
regulations,  consistent  eligibility  .  . .    Whether  someone                                                               
thinks  this  is  good  or  bad,  it  is  one  of  the  strictest                                                               
eligibilities in  the country.  Their advocacy  organizations may                                                               
not like it,  but that is what they have  had since the beginning                                                               
of his  time with the division.  They have worked to  account for                                                               
every penny and can provide that evidence.                                                                                      
2:05:17 PM                                                                                                                    
SENATOR MICCICHE said he had a  question on the Continuum of Care                                                               
chart.  He said  he is  assuming, considering  the percentage  of                                                               
federal support  on the grant  programs vs. the 50/50  support of                                                               
the waiver  programs, that they  have maximized or  evaluated all                                                               
the grant programs for the potential of a 50/50 waiver program.                                                                 
MR.  MAYES said  they were  flat  funded for  several years  with                                                               
their grants.  It is  a low-cost  solution to  supporting seniors                                                               
and people with  disabilities in the community. In  May, under SB
74, they  are taking the  general fund component, referred  to as                                                               
Community and  Developmental Disability grants, $11.6  million of                                                               
general  funds and  moving  that over  to  a Medicaid  authority,                                                               
putting a cap on it, and creating  a wait list so they can manage                                                               
its growth.  So, they  are taking that  general fund  program and                                                               
moving it to a Medicaid authority.  Half of that will go away, so                                                               
that  is the  reduction, replaced  by the  1915(c) Individualized                                                               
Supports waiver. They  have been thinking about how  to move some                                                               
of the general fund grant programs over to a Medicaid authority.                                                                
2:07:08 PM                                                                                                                    
MR. MAYES presented the History of Alaska's Waiver Program.                                                                     
        • 1990--The  State   Legislature    directed   the                                                                      
          Department to look at waiver options to serve                                                                         
          Alaskans with Disabilities and Seniors.                                                                               
        • 1993, following    legislative   approval,   the                                                                      
          department began operating 1915(c) Home and                                                                           
          Community-Based Waivers.                                                                                              
      • 2018 is the 25th anniversary of Alaska's waivers                                                                        
        • In 2018 a new 1915(c) waiver--Individualized                                                                          
          Supports Waiver will be implemented to refinance                                                                      
          the 100% general fund program, Community and                                                                          
          Developmental Disabilities grant.                                                                                     
MR.  MAYES said  the Alaska  Commission on  Aging celebrated  the                                                               
25th anniversary,  something other  advocacy groups will  also be                                                               
celebrating. In  May of 2018, they  will add a fifth  waiver that                                                               
he just  described, the Individualized  Supports Waiver.  That is                                                               
the  refinancing  of  the  general  funds  grant  component,  100                                                               
percent general  funds program. They  are going  to move it  to a                                                               
Medicaid authority, reduce  it by half, but a  match is required.                                                               
Fifty percent will  come from CMS and 50 percent  from the state.                                                               
There are  close to  700 individuals  that are  currently getting                                                               
grant dollars.  The majority  of them  will be  moved to  the new                                                               
authority.  Based  on  a  thorough analysis,  17.5  or  lower  is                                                               
generally the amount that those  who are on grants are receiving.                                                               
That  cap will  be manageable.  The other  critical piece  is the                                                               
waitlist.  To answer  an earlier  question, yes,  they do  have a                                                               
2:09:24 PM                                                                                                                    
MR. MAYES reviewed Senior and Disabilities Home and Community-                                                                  
Based Service Options.                                                                                                          
     1915(c) Waivers                                                                                                            
     Nursing Facility Level of Care (NFLOC)                                                                                     
        • Adults Living Independently                                                                                           
        • Adults  with    Physical    and    Developmental                                                                      
        • Children with Complex medical                                                                                         
    Intermediate     Care     Facility/Individuals     with                                                                     
     Intellectual Disabilities (ICF/IID)                                                                                        
        • Persons with Intellectual Disabilities                                                                                
        • Individualized Supports Waiver                                                                                        
MR.   MAYES   explained    people   receiving   Alaskans   Living                                                               
Independently  Waivers, Adults  with  Physical and  Developmental                                                               
Disabilities   Waivers,  and   Children   with  Complex   Medical                                                               
Conditions Waivers must  meet nursing facility level  of care and                                                               
then  waive that  right to  remain  in the  community with  wrap-                                                               
around supports.                                                                                                                
MR. MAYES explained that the  other two waivers, Intellectual and                                                               
Developmental  Disabilities  (IDD)  Waiver and  the  new  waiver,                                                               
Individualized  Supports Waiver,  fall under  the second  option,                                                               
Intermediate  Care Facilities  for Individuals  with Intellectual                                                               
Disabilities (ICF/IID).                                                                                                         
2:10:36 PM                                                                                                                    
SENATOR BEGICH asked if someone denied a waiver can appeal.                                                                     
MR.  MAYES said  yes. The  initial eligibility  is determined  by                                                               
income eligibility and then a  functional assessment. A recipient                                                               
has  to be  reassessed every  year to  determine eligibility.  If                                                               
someone does  not meet  eligibility the second  year, there  is a                                                               
second  internal  review  and  if  someone  is  still  determined                                                               
ineligible, then it  goes to a third-party  contractor. An appeal                                                               
after those levels of review is unlikely to be successful.                                                                      
SENATOR BEGICH asked whether anyone has successfully appealed.                                                                  
MR. MAYES  said a  small percent of  appeals have  been reversed.                                                               
That requires additional medical documentation.                                                                                 
SENATOR BEGICH said it sounds like a thorough and fair process.                                                                 
CHAIR WILSON  asked if people with  intellectual disabilities get                                                               
help with waiver applications and the appeal process.                                                                           
2:13:43 PM                                                                                                                    
MR. MAYES said  two entities outside the structure  of the state,                                                               
Short-Term  Assistance &  Referral Program  (STAR) and  the Aging                                                               
and Disability  Resource Centers,  assist people  with completing                                                               
applications.  They  are  stand-alone  agencies and  so  are  not                                                               
conflicted. They do not belong to agencies that might benefit.                                                                  
SENATOR VON  IMHOF asked  which insurance  pays first  if someone                                                               
has two insurances, Medicaid and something else.                                                                                
MR. SHERWOOD  said under federal  law, private insurance  and any                                                               
other  coverage, including  VA  coverage,  pays before  Medicaid.                                                               
Tribal services is an exception.  But for waivers, most insurance                                                               
packages do  not pay for  things such  as long term  services and                                                               
supports that would be paid under the waiver.                                                                                   
SENATOR VON IMHOF asked if  IHS [Indian Health Service] insurance                                                               
is paid second.                                                                                                                 
MR.  SHERWOOD said  his commissioner  would want  him to  clarify                                                               
that IHS  coverage is not insurance.  It is not that  full set of                                                               
services. It  is available to  individuals in  specific locations                                                               
to the  extent that the  resources are there. Under  federal law,                                                               
Medicaid pays  before IHS. Congress  decided several  decades ago                                                               
that IHS  would bill Medicaid  for services provided  to Medicaid                                                               
2:17:08 PM                                                                                                                    
MR.  MAYES  went  through  a list  of  Home  and  Community-Based                                                               
Services provided through waivers.                                                                                              
     Care Coordination (ALI, APDD, CCMC, IDD, ISW)                                                                              
     Adult Day                                                                                                                  
     Day Habilitation                                                                                                           
     Supported Employment                                                                                                       
     Residential Supportive Living                                                                                              
     Residential Habilitation                                                                                                   
     Intensive Active Treatment (over 21)                                                                                       
     Specialized Medical Equipment                                                                                              
     Nursing Oversight and Care Management                                                                                      
     Specialized Private Duty Nursing                                                                                           
MR. MAYES reviewed the Olmstead Decision.                                                                                       
     On June 22, 1999, the  United States Supreme Court held                                                                    
       in Olmstead v.  L.C. that unjustified  segregation of                                                                    
       persons with disabilities  constitutes discrimination                                                                    
       in  violation  of  title II  of  the  Americans  with                                                                    
       Disabilities Act.                                                                                                        
        • The Olmstead Decision is not specific to                                                                              
          Medicaid. The decision obligates the state no                                                                         
          matter what type of health care coverage a person                                                                     
          may have.                                                                                                             
MR. MAYES recounted how the Olmstead Decision was triggered in                                                                  
the state of Georgia by two women who went back and forth                                                                       
between hospitals and their communities.                                                                                        
     The  Court  held  that  public  entities  must  provide                                                                    
     community-based services  to persons  with disabilities                                                                    
     (1) such services are appropriate;                                                                                         
     (2) the affected  persons do not oppose community-based                                                                    
         treatment; and                                                                                                         
     (3)  community-based   services   can   be   reasonably                                                                    
         accommodated,  taking  into  account the  resources                                                                    
         available  to the  public entity  and the  needs of                                                                    
         others  who are receiving disability  services from                                                                    
         the entity.                                                                                                            
2:21:24 PM                                                                                                                    
MR. MAYES called the Olmstead Decision historic. States shifted                                                                 
from institutional care to supporting people in their                                                                           
MR. MAYES reviewed the Cost of Institutional Care without Home                                                                  
and Community-Based Service Options.                                                                                            
     The top  horizonal box has  a column for the  four Home                                                                    
     and  Community-Based  Waivers,  with a  column  of  the                                                                    
     number served  and a  column for  the average  cost per                                                                    
     person. The  last column is  for total costs,  which is                                                                    
     $278 million.                                                                                                              
     The   middle  horizontal   box  is   for  institutional                                                                    
     placements.  There are  16  nursing  homes serving  840                                                                    
     individuals  with  an  average  cost  of  $164,234  per                                                                    
     person and  a total cost  of $138 million.  Alaska does                                                                    
     not have  intermediate care facilities  for individuals                                                                    
     with   intellectual   disabilities   (ICF/IID).   Those                                                                    
     facilities have been closed, and  all those people have                                                                    
     been integrated in communities.                                                                                            
MR. MAYES said 15 individuals  with challenging behaviors are out                                                               
of state  in Idaho.  He has  been clear  with advocates  that the                                                               
state  should do  due  diligence to  try to  bring  them back  to                                                               
Alaska. The  cost is  over $200,000  per person  to have  them in                                                               
institutions  in  the  lower  48.   He  believes,  and  he  knows                                                               
advocates  believe, that  there  is  a place  for  anyone in  the                                                               
community with the right kind of services.                                                                                      
He  said that  eliminating optional  services, because  mandatory                                                               
services  are either  nursing  home or  ICF/IID,  would grow  the                                                               
budget.  The  cost  of institutional  placements  if  HCB  Waiver                                                               
services did not exist would  be $506 million. The operating cost                                                               
estimate  does not  include  the cost  of  building more  nursing                                                               
homes in Alaska, along with intermediate care facilities.                                                                       
SENATOR  MICCICHE  said if  institutional  care  is $201,000  per                                                               
person in Idaho, how that price  could be reduced in Alaska where                                                               
it is more expensive than anywhere else.                                                                                        
2:25:52 PM                                                                                                                    
MR. MAYES  said they would  bring them home to  a community-based                                                               
setting, not  into an  institution. The  guardians and  those who                                                               
are responsible for them want  that. They are working on creating                                                               
support services for those individuals, so they can return.                                                                     
CHAIR WILSON  said he  was trying to  understand the  increase in                                                               
cost. In FY 16  it was about $20 million less.  He asked what the                                                               
increase for the four waiver services  is due to. The budget just                                                               
says it was underfunded but does  not say what was underfunded in                                                               
the 2017 budget.                                                                                                                
MR. MAYES  said they did not  see increases to three  of the four                                                               
waivers. There were some to the IDD Waiver.                                                                                     
CHAIR  WILSON  asked  if  the fifth  category  will  offset  that                                                               
through the wait list.                                                                                                          
2:27:55 PM                                                                                                                    
MR. MAYES  said they are  adding the  fifth waiver and  putting a                                                               
cap and wait list in place.  As a division director, seeing costs                                                               
going up  with the IDD  Waiver, he  reached out to  the providers                                                               
and said that  they need to step back from  the landscape of this                                                               
particular  waiver and  recalibrate. One  of the  ways to  try to                                                               
manage that is to reduce the  number drawn. They were drawing 200                                                               
[from the  waitlist] and about two  years ago they reduced  it to                                                               
50. That  is one  way to manage  that. Another,  whether advocacy                                                               
groups  agree with  this  or not,  is their  ability  to look  at                                                               
certain  service categories  within that  particular waiver  that                                                               
has significant growth  and capping it, making  the argument that                                                               
if they  are at risk of  institutionalization, documentation must                                                               
be provided  to ask for more  hours. They are trying  to see that                                                               
people get what they need and nothing beyond that.                                                                              
SENATOR VON  IMHOF asked if  autism was going  to be a  whole new                                                               
category and service program.                                                                                                   
2:30:03 PM                                                                                                                    
MR. SHERWOOD said people with  autism do qualify for the waivered                                                               
services  under  the IDD  Waiver,  but  services for  autism  are                                                               
federally  mandated  services   under  early  periodic  screening                                                               
diagnosis  and treatment  provisions of  Medicaid or  EPSDT. They                                                               
are  offered  under the  behavioral  health  budget of  Medicaid.                                                               
Those regulations have been adopted  and are at the Department of                                                               
Law for  review. When they  become effective,  applied behavioral                                                               
analysis services they will offered  for children with autism. It                                                               
is not linked directly to the waiver.                                                                                           
2:31:24 PM                                                                                                                    
SENATOR VON  IMHOF said that  would add  cost to the  budget. She                                                               
asked if it were correct  that families can qualify regardless of                                                               
income levels.                                                                                                                  
MR. SHERWOOD  said there  are income  limits for  most categories                                                               
(and  EPSDT only  applies to  children through  age 20)  in which                                                               
children  would  qualify  for  Medicaid. The  top  limit  is  208                                                               
percent  of the  federal  poverty level.  Children  who meet  the                                                               
criteria of  a waiver  but do not  need the  specialized services                                                               
that are  available through a  waiver (It  is referred to  as the                                                               
TEFRA  category in  the budget  bill from  many years  ago.) must                                                               
meet an income determination, but  the parents' income and assets                                                               
are  disregarded.  They must  be  determined  disabled under  the                                                               
Social Security standard  and they must be determined  to meet an                                                               
institutional  level  of  care.  Some children  on  the  Medicaid                                                               
program in  Alaska are in that  category. Some of them  do have a                                                               
diagnosis of  autism, but it is  not the only situation  in which                                                               
they  qualify.  Since  those  children typically  are  not  in  a                                                               
position  to  earn  income  on  their  own,  they  would  qualify                                                               
regardless of  the parental income. That  category exists because                                                               
under the  rules of the Social  Security Administration, children                                                               
can  qualify  for cash  assistance  payment  if they  meet  those                                                               
standards and are  living in an institution.  The cash assistance                                                               
program, the Supplemental  Security Income program, automatically                                                               
qualifies them for  Medicaid. Parents were faced  with the choice                                                               
of getting care for their child  if placed in an institution, but                                                               
if  the parents  took them  out of  an institution,  the parents'                                                               
income  would  make  them ineligible  for  those  services.  That                                                               
provision was added  early in the Reagan  administration to avoid                                                               
those  perverse  consequences  of how  well-intentioned  programs                                                               
2:34:42 PM                                                                                                                    
MR. MAYES  presented National  Information on  the Value  of HCBS                                                               
(Home-and Community-Based Services) Programs.                                                                                   
        • Nearly 3.2 million people receive HCBS services                                                                       
        • Total Medicaid HCBS spending was $58 Billion                                                                          
        • HCBS Medicaid waiver services now exist in all 50                                                                     
          states (2014)                                                                                                         
        • HCBS 1915(c) waiver accounts for the majority of                                                                      
          enrollment and spending                                                                                               
MR.  MAYES said  there  are states  that have  20  to 30  1915(c)                                                               
      All states are reducing the number of individuals in                                                                      
     institutional placements through optional HCBS waivers                                                                     
        • Significant cost savings                                                                                              
        • Olmstead decision/ADA                                                                                                 
        • Person Centered                                                                                                       
        • The demands on elder community-based care (baby                                                                       
2:37:27 PM                                                                                                                    
SENATOR  BEGICH  asked  if  they are  projecting  how  the  aging                                                               
population in Alaska is changing.                                                                                               
MR.  MAYES said  the  Commission on  Aging  is tracking  numbers.                                                               
Alaska  will have  130,000 people  over age  65 in  the next  few                                                               
years.  As division  director, he  has been  concerned that  they                                                               
have been  flat funded. The  state has  a waiver specific  to the                                                               
senior population.  The personal  care attendant  option supports                                                               
the senior population. In a  presentation he gave, "What's Next,"                                                               
he said they should always focus  on low cost, no cost solutions.                                                               
Some  states  have implemented  the  family  caregiver model  and                                                               
shown cost savings by extending seniors'  time at home by five to                                                               
ten years before placement in nursing  homes. In the next year or                                                               
two he  will want to  shore that up  and replicate some  of these                                                               
models  that  have demonstrated  success,  such  as driving  down                                                               
nursing home costs.                                                                                                             
MR.  MAYES  said  the  state  should  be  more  aggressive  about                                                               
existing nursing homes. He met  with his counterpart in the state                                                               
of Oregon and asked  him what he will be most  proud of when he's                                                               
done with  the job. He said  they really shored up  their ability                                                               
of  their staff  to go  into nursing  homes to  see who  wants to                                                               
leave  and get  back in  the community.  As a  result, they  have                                                               
reduced their costs by millions of  dollars. He told Mr. Mayes to                                                               
address that  issue in the  next few  years. Keeping a  finger on                                                               
the pulse of  what is happening elsewhere can  help them generate                                                               
ideas in Alaska going forward.  The senior population is going to                                                               
explode   in   Alaska,   so   National   Family   Caregiver   and                                                               
transitioning people out of nursing  homes will be two big pieces                                                               
going forward.                                                                                                                  
2:40:30 PM                                                                                                                    
MR. MAYES presented National Types of HCBS waivers.                                                                             
     A 2012 study looked at  1915(c) waivers provided by the                                                                    
     33 states  that had federally recognized  tribes at the                                                                    
     time, referred  to as  "reservation states."  The study                                                                    
     found that  state waivers  mainly covered  4 categories                                                                    
     in 2012:                                                                                                                   
        • Developmental disability (including autism)                                                                           
        • Elderly and disabled                                                                                                  
        • Medically fragile and palliative care                                                                                 
        • Brain injury                                                                                                          
2:41:46 PM                                                                                                                    
MR. MAYES  presented a  list of  Medicaid Waiver  Authorities, so                                                               
the  members could  understand  what those  look  like under  the                                                               
Social Security Act.                                                                                                            
     1915(a) voluntary managed care program                                                                                     
     1915 (b) managed care delivery system:                                                                                     
             • (b)(1) Freedom of Choice--restricts Medicaid                                                                     
               enrollees to receive services within the                                                                         
               managed care network                                                                                             
             • (b)(2)  Enrollment    Broker--utilizes    a                                                                      
               "central broker"                                                                                                 
             • (b)(3) Non-Medicaid Services Waiver--uses                                                                        
               cost savings to provide additional services                                                                      
               to beneficiaries                                                                                                 
             • (b)(4)  Selective   Contracting    Waiver--                                                                      
               restricts the provider from whom the                                                                             
               Medicaid eligible may obtain services                                                                            
     1915(c) Home and Community-Based Waivers                                                                                   
      1915(d) State Plan Home and Community-Based Services                                                                      
     for individuals 65 of age or older                                                                                         
        1915(e) State Plan Medical Care for Children who                                                                        
     require Hospital or nursing facility level of care                                                                         
      1915(i) State Plan Home and Community-Based Services                                                                      
     for Elderly and Disabled Individuals                                                                                       
       1915(j) Self-Directed Personal Assistance Services                                                                       
     Under State Plan                                                                                                           
         1915(k) State Plan Option to Provide Home and                                                                          
     Community-Based Attendant Services and Supports                                                                            
MR.  MAYES said  the state  will be  implementing 1915(k)  in May                                                               
with SB  74. Other states  have done  that to bring  more federal                                                               
dollars into their states. There  is an additional enhanced match                                                               
from  the federal  government. They  had  considered 1951(i)  but                                                               
concluded they would not be able to control costs.                                                                              
2:42:45 PM                                                                                                                    
SENATOR  BEGICH  asked,  based  on the  actions  of  the  federal                                                               
government this  past year  and possible  future actions,  how he                                                               
was preparing for the potential loss of federal money.                                                                          
MR.  MAYES  said plan  b  is  what they  have  right  now, to  be                                                               
extremely  accountable  and  provide  assurances  that  they  are                                                               
stretching dollars to serve as many people as possible.                                                                         
CHAIR  WILSON  said he  appreciates  the  presentation about  the                                                               
value of Medicaid optional waiver  services. Something struck him                                                               
about  the department's  ability to  expand coverage  of Medicaid                                                               
through  regulations.  He  asked   how  the  legislature  as  the                                                               
appropriating body help will control  costs if the department can                                                               
just go through regulation to  expand services. He noted that the                                                               
supplemental budget this year was a sticker shock.                                                                              
2:45:43 PM                                                                                                                    
MR.  SHERWOOD said  he wanted  to give  credit to  Director Mayes                                                               
because the  portion of the  Medicaid budget that is  not driving                                                               
the supplemental  budget is Senior and  Disabilities Services. In                                                               
most states  this is the most  expensive part of the  program. It                                                               
is, per capita, probably the  most expensive population to serve.                                                               
The state is able to manage  those with the waivers, nursing home                                                               
transition, and family caregivers.  These are more cost-effective                                                               
ways to  serve people.  They work  hard at  trying to  manage the                                                               
costs of  health care.  The Alaska Medicaid  program is  not only                                                               
the  health  care payer  challenged  by  that; the  challenge  of                                                               
trying  to contain  those costs  is universal,  at least  in this                                                               
MR.  SHERWOOD  said  all their  regulations  are  constrained  by                                                               
federal law  and state statute.  After working with  the Medicaid                                                               
program  for more  than 28  years,  they give  full deference  to                                                               
state  statute with  regard to  what their  obligation is  in the                                                               
program. Ultimately the legislature  wants the department to have                                                               
some  flexibility in  regulation to  make adjustments  and figure                                                               
out better  ways of doing things  without having to come  back to                                                               
the legislature every time to  ask for permission. Among Medicaid                                                               
statutes,  Alaska's  is   proscriptive.  Other  states'  Medicaid                                                               
statutes  are   more  permissive.  Under  Alaska   statutes,  the                                                               
legislature  determines what  options  the  department can  take,                                                               
both in  eligibility and the  services they provide. A  big piece                                                               
of  it is  keeping the  communication lines  open about  what the                                                               
department is doing  and making sure they all  understand how the                                                               
program is moving forward.                                                                                                      
2:48:45 PM                                                                                                                    
CHAIR WILSON said he was not  just trying to reference the waiver                                                               
services. This is something that sort  of stuck out as an ominous                                                               
SENATOR  BEGICH thanked  the presenters  saying  that he  learned                                                               
more about Medicaid waivers than he thought he'd ever know.                                                                     
2:49:12 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Wilson adjourned  the Senate  Health  and Social  Services                                                               
Standing Committee at 2:49.                                                                                                     

Document Name Date/Time Subjects
SDS HCBS Presentation 2.16.18 final.pdf SHSS 2/16/2018 1:30:00 PM
DHSS Medicaid Services Waiver 2.16.18 FINAL