HOUSE BILL NO. 21 "An Act relating to the membership of the Statewide Suicide Prevention Council." 1:38:33 PM VICE-CHAIR FAIRCLOUGH, SPONSOR, introduced the workdraft CSHB 21(FIN). She and Representative Berta Gardner currently served on the Alaska Suicide Prevention Council and with the support of the council they had been asked to move forward with two changes to the existing state statute regarding suicide prevention in Alaska. She pointed to page 2, line 15 of the work draft and explained that the previous version had read "when appointed is at least 16, but not more than 20 years of age." The change modified the language to read "...not more than 24 years of age." Vice-chair Fairclough discussed that the change moved the age limit from 20 to 24, which would permit college students to participate on the council. The bill expanded the eligibility age to begin at age 16 in order to allow high school students to participate. The council discovered that participation usually began in the 11th or 12th grades versus the 9th and 10th grades. The council decided that it would be more appropriate to include younger teenagers given the sensitivity of the subject and the importance of the ability to talk about death. She explained that the other modification to the statute increased the number of members who served on the council from 16 to 17. The request was made due to an increased number of suicides in the military population and the council's desire to ensure that there was a military influence as they moved forward with prevention strategies for the state. Representative Wilson asked why the new position could not have been included within the original 16 council members. Vice-Chair Fairclough directed attention to the Statewide Suicide Prevention Council FY 10 Annual Report titled "Mending the Net: Suicide Prevention in Alaska" (copy on file). She discussed that page 5 listed the different council participants. She clarified that she, along with Representative Gardner and the council, believed that the military personnel should be an addition to the participant list and not a replacement. She communicated that their contribution would be valuable. She listed the current participating members: · one person representing the Department of Health and Social Services; · one person representing the Department of Education and Early Development; · one person from the Advisory Board on Alcoholism and Drug Abuse; · one person from the Alaska Mental Health Board; · one person recommended by the Alaska Federation of Natives; · one person who works for a high school; · one person who is active in a youth organization; · one person who has experienced the death by suicide of a member of their family; · one person who resides in a rural Alaska community not on the road system; · one person who is a member of the clergy; · one person who is enrolled in grades 9 through 12 of a secondary school in Alaska; and, · one public member. Vice-chair Fairclough remarked that in deference to the committee, it could choose to replace a person on the council. She illuminated that the council typically worked as a consensus group as opposed to a voting group, however, the addition of a seventeenth position would help eliminate an occurrence of a tie in the event of a vote. Co-Chair Stoltze asked a question regarding the intent of language added to page 2, subsection J, that read "one person who, when appointed, is at least 16 years of age but not more than 24 years of age." He wanted to make certain that the language did not restrict the council to only one participant in the age category. He also asked for verification that the bill did not restrict the number of veterans allowed to participate on the council. He queried whether the intent was "at least one person." Vice-Chair Fairclough responded that the intent was "at least one person." She explained that each of the categories represented a cross-section of the state and that many members on the board represented a variety of areas that were important for the education and engagement of the population regarding suicide prevention. Co-Chair Stoltze wanted the commentary of the committee to reflect that the language did not restrict the council from having more than one member who fell within a certain category. Representative Gara asked whether there was a way to reduce the number of members needed for a quorum in order to address low meeting attendance. Vice-Chair Fairclough responded that legislation passed in the previous session had solved the issue related to reaching a quorum. She clarified that the council had not experienced a problem reaching a quorum subsequent to the change. Representative Gara wondered about the obligation to report a person who confided that they were contemplating suicide. He wondered whether a person was deterred from seeking help when they believed a confidant would report them. He contemplated whether there was an answer to the problem and remarked that people might not seek help because of a fear of institutionalization. 1:46:17 PM Vice-Chair Fairclough responded that the council had discussed two different philosophies at a previous meeting. Some people believed that many times a person on the verge of committing suicide was irrational and it was not possible to change their mind. Other members of the council preferred the alternative view that engaging youths in discussion about hope and the future would help them to think first, reach out for help, and realize that suicide was not the only answer. Co-Chair Thomas MOVED Work Draft CSHB 21(FIN) (27-LS0154\D, Bullard, 2/2/11) as a working document before the committee. Co-Chair Stoltze OBJECTED for discussion. Vice-Chair Fairclough discussed her opening remarks. She emphasized that suicides in Alaska were twice the national rate. She explained that 15 to 24 year olds had the highest rate of suicide. Alaska Natives had the highest rate of suicide out of all other ethnic groups within the United States and Native men were particularly susceptible. She reported that page 11 of the Statewide Suicide Prevention Council FY 10 Annual Report cited suicide as one of the top ten causes of death in Alaska. Page 20 of the report discussed the role of the public health model as a means to address the crisis facing Alaska. The report discussed the importance of a community readiness and willingness to take personal responsibility for events that occurred in their communities and for the development of a path forward. She thanked staff and the new Executive Director Kate Burkhart. She explained that the council had been without assistance from the administration for a two-year period and that it was back on the right path. She directed attention to page 6 of the report and stressed that 140 Alaskans committed suicide in 2009; the average age was 20 years old. Vice-chair Fairclough pointed to page 7 and specified that between 2000 and 2009, there were 1,369 confirmed suicides in Alaska. The deaths occurred in 176 communities, where school districts, local community councils, and villages discussed the tragedy that occurred and the difficulty that each family faced in the loss of a loved one. Page 8 specified that "Alaska Native individuals are twice as likely to commit suicide as individuals of other ethnicities." She discussed that 15 to 24 year olds tended to have the highest rate of suicide in Alaska. She referenced a bar graph on page 9 that showed suicide rates declined as age increased; however, the suicide rate began to increase again in the 65 to 74 age group. She relayed that many reasons could contribute to the increase later in life, such as cancer or loss of hope. She shared that 44 percent of people who committed suicide tested positive for alcohol, and 48 percent had one or more drugs present in their body (page 10). She emphasized the extent of the impact that the loss of a loved one had on families. She explained that the Suicide Prevention Council of Alaska was working quickly and hard to bring the legislature a strategic plan with the hope of preventing suicide in the state. 1:51:49 PM Representative Neuman asked whether there was a correlation between unemployment and suicide. He believed that there were other factors related to suicide in addition to drugs and alcohol. He wondered whether there was a list that identified other reasons that influenced a person's decision to commit suicide. Vice-Chair Fairclough responded that page 12 in the report addressed the impact that unemployment could have on suicide rates. When there was a lack of hope within a community and a person had an inability to provide for themselves or their family, high suicide rates existed. Representative Neuman asked about the range of different reasons that might impact a person's decision to commit suicide. Vice-Chair Fairclough answered that specific to the age group of 15 to 24, hormones were present and life experiences were more limited than those of an adult. She explained that some youths did not have the resiliency or coping skills to deal with the loss of a close friend, relative, or a romantic relationship. She detailed that the youth could believe that nothing could ever make them feel better. The presence of people within a community that made others feel a sense of value and contribution was a significant factor in fighting suicide. She discussed that rural Alaska experienced a higher number of per ratio suicides, but that Anchorage had the highest number of deaths. Suicide was a social issue and not just a rural versus urban issue. The prevalence of drugs and alcohol could be a person's way of attempting to numb painful feelings and may not mean a person had a substance abuse problem. She listed that there were many reasons a person could feel hopeless, including child abuse and violence in the home. The council believed that ultimately it was about hope and the ability for a young person to feel connected to a community that cared about them. Representative Neuman asked about indicators such as self mutilation that might be prevalent in a person who contemplated suicide. KATE BURKHART, EXECUTIVE DIRECTOR, ALASKA SUICIDE PREVENTION COUNCIL, discussed that the council worked hard to educate people about the many warning signs. Sometimes indicators involved self harm and sometimes extreme changes in mood were present. She explained that an extreme change of mood did not necessarily mean that a person would appear severely depressed or down. She pointed to the public comment from a father in Bethel who had been very surprised that his son had been much happier right before committing suicide. Other indicators could be: a sudden disinterest in activities that a person had previous interest in, such as sports, or church; increased attention to lethal means, such as knowing the location of a fire arm or about the contents of a medicine cabinet; and, overt or covert disclosures such as, "I just don't want to be here anymore" or "life doesn't have meaning." Education, prevention, and intervention models, including Gatekeeper and Applied Suicide Intervention Skills Training, helped people to pick up on less extreme warning signs and to ensure that people were connected to services long before they developed a suicide plan. 1:57:25 PM Co-Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Work Draft CSHB 21(FIN) was ADOPTED. Vice-Chair Fairclough discussed Fiscal Note 1; the $4,000 fiscal note was for travel expenses associated with the council. 1:58:37 PM AT EASE 1:58:50 PM RECONVENED Co-Chair Stoltze CLOSED public testimony. Vice-Chair Fairclough MOVED to report CSHB 21(FIN) out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 21(FIN) was REPORTED out of Committee with a "do pass" recommendation and with previously published fiscal note: FN1 (DHSS). 2:00:00 PM AT EASE 2:01:36 PM RECONVENED 2:02:33 PM ^OVERVIEW: MEDICAID 101 AND FMAP DISCUSSION WILLIAM J. STREUR, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, presented a PowerPoint titled "Overview of National and State Medicaid" (copy on file). He introduced Kimberli Poppe-Smart, Director, Division of Health Care Services. He explained that an addition to the presentation had been inserted after slide 28. He highlighted topics including, Alaska's status compared to the national level, issues that faced Alaska, actions that had been taken by the Medicaid Task Force, and others. He explained the importance of "bending the curve" and moving forward with Medicaid reform for Alaska. Commissioner Streur discussed slide 2: "U.S. Medicaid Enrollment Increases in Economic Downturns: FY 1992 - FY 2010." He explained that Medicaid moved in four-year up and down cycles. The reason for the cycles was not known, but was most likely linked to economic upturns and downturns. He moved on to discuss slide 3: "Medicaid Spending Growth, U.S. and State of Alaska, 1996-2010." He relayed that the national annual growth in Medicaid in 2010 was 6.6 percent; whereas, Medicaid spending in Alaska grew from -2.8 percent in 2008 to 14.2 percent in 2010. He cited concerns associated with the spending growth that included an increase in Medicaid enrollment, cost for services, and the overall budget. Commissioner Streur addressed slide 3: "Total Medicaid Spending Growth, U.S. FY 2000 - FY 2010." He reported that Alaska had been comparable to other states from FY 00 to FY 08, and in FY 09 and FY 10 Alaska benefited from the Federal Medicaid Assistance Percentage (FMAP) enhancement. With FMAP contributions the state went from 51.9 percent to approximately 62 percent. As a result, the state was able to reduce its general fund contribution by $74 million in 2009, $102 million in 2010, and approximately $114 million in 2011. He pointed to slide 5 titled "Total Medicaid Spending Growth, State of Alaska FY 2000 - FY 2010." He discussed the overall spending growth trend for Alaska; increased state spending on Medicaid occurred (primarily in enrollment), despite the $102 million FMAP funding. 2:08:30 PM Commissioner Streur turned to slide 6: "End of ARRA FMAP in July 2011." He relayed that in July 2011, the American Recovery and Reinvestment Act (ARRA) and FMAP funding would end. He stated that on the average, states would see an increase in the non-federal share by over 30 percent due to the loss of FMAP inflation and enrollment growth. California had a 50 percent FMAP and the loss of the funds would result in a 30 percent growth of its non-federal share, with a projection of approximately 37 percent. Arkansas had a 71.37 percent FMAP and could see a 44 percent growth due to the economic downturn. Florida had a 55 percent FMAP and could see a 36 percent growth in its non-federal share. Alaska would see a 38 percent growth in its non-federal share due to the loss of FMAP funds, inflation, and enrollment growth; this was the genesis for the $123 million funding request for Medicaid. Commissioner Streur had met with the Medicaid Task Force and they had compiled a list of options in response to the upcoming loss of federal Medicaid funding. The challenge was how to determine what to focus on. He discussed various possibilities on slide 7 titled "Options." The first option related to eligibility. He explained that one of the basic tenets of the federal stimulus money was "maintenance of efforts", which instructed that services could not be changed for the people who were currently receiving them; therefore, eligibility had to be taken off the table until 2014. The second option related to provider rates; many states were currently looking at the option as a solution to the loss of federal funding. Commissioner Streur discussed that the third option was to take a look at the benefits packages that were provided by the state (slide 7). Option four was to increase utilization controls; however, there were issues related to "maintenance of efforts." The fifth option focused on improved purchasing. He stated that improved purchasing worked for other states. For example, a state could choose a single durable medical equipment provider for the entire state; however, Alaska did not have a large enough durable medical vendor that was equipped for such a large demand. The geographic separation was a challenge for Alaska's ability to provide durable medical equipment on a timely basis. Option six focused on cost sharing, which people frequently expressed interest in exploring. The seventh option related to anti-fraud, but he did not know what the solution was regarding the specific option. He explained that some people believed there was significant money in anti-fraud in Alaska and some people disagreed. The state would continue to increase its anti-fraud efforts. He detailed that recipient anti-fraud would bring in a small amount of money and that provider anti-fraud would bring in more. Funds from anti-fraud in Alaska would not compare to the billions of dollars that had been recovered from fraudulent activity perpetrated by mafia rings in Florida and New York. He added that states would be required to mimic Medicare efforts. 2:12:18 PM Representative Doogan asked whether the term "non-federal share" on slide 6 was synonymous with the state's share. Commissioner Streur answered in the affirmative. The 38 percent increase listed on slide 6 included a small percentage of other funding, but was primarily the state's share. Representative Doogan asked for a breakdown of the 38 percent increase related to the loss of FMAP, inflation, and enrollment growth. Commissioner Streur responded that he would get back to the committee with the requested information. Representative Joule referred to earlier discussion regarding State of Alaska cost savings in the amount of $104 million or $114 million. He wondered how the savings worked with the 38 percent cost increase that Alaska would experience in the absence of FMAP funding. Commissioner Streur answered that the FMAP funding would go through July 1, 2011; the 38 percent increase would begin at that time. Representative Gara referenced earlier comments regarding fraud cases that negatively impacted providers. He asked the department to be sensitive and to recognize that innocent mistakes could also occur. Commissioner Streur replied that the department was working to differentiate between administerial errors and intentional fraud. He explained administerial errors could include a person's failure to provide adequate documentation in a chart or the accidental transposition of a number. 2:15:22 PM Commissioner Streur provided an in-depth report on each of the options he had previously outlined, beginning with "Eligibility" on slide 8. Eligibility was normally an option states used to control budget. He relayed that the State of Alaska had not provided additional services to a population beyond the basic Medicaid levels other than Denali KidCare. Similar to most states, Alaska was currently at the 175 percent level for Denali KidCare. He explained that the eligibility option was prevented by maintenance of effort restrictions including ARRA and PPACA [Patient Protection and Affordable Care Act] until 2014. He detailed that beginning in 2014 Medicaid would increase from 100 percent of poverty level to 138 percent of poverty level and maintenance of effort restrictions would end. He relayed that more restrictive standards, methodologies, or procedures could not be adopted regarding eligibility or enrollment in the Medicaid program. Representative Wilson wondered whether there was a particular age bracket that was influencing the Medicaid growth. Commissioner Streur responded that growth was occurring across the board. He furthered that enrollment growth primarily resulted from children and families and not the senior population. Representative Wilson asked what portion of the growth was related to new cases. She wondered whether it was possible to tell how many new families had enrolled due to hardship. Commissioner Streur responded that he would get back to the committee with the requested information. Commissioner Streur discussed that "Provider Rates" (slide 9) represented the most common reduction by states. He detailed states that currently utilized the provider rate option, which included Kentucky, Arizona, California, and Washington. He relayed that the State of Washington had recently imposed a 15 percent rate reduction. He read from slide 9: · Many rate reduction options · Considerations o Reducing rates in one area may cause cost increases in another o Potential litigation o CMS [Centers for Medicare and Medicaid Services] approval of State Plan Amendment (SPA) o Impact on access and quality of care o Provider taxes affect state's ability to reduce rates Commissioner Streur reported that he wasn't very concerned about potential litigation in Alaska. He discussed that CMS was involved in everything that the state did and that everything required the SPA approval. He mentioned that some states were interested in receiving federal "block grants" in order to continue providing Medicaid benefits. He explained that changes to provider reimbursement would need to be included in the SPA. Vice-Chair Fairclough asked for clarification on the meaning of the acronym CMS. Commissioner Streur responded that CMS stood for Centers for Medicare and Medicaid Services. Representative Joule wondered whether the reference to "impacting" provider rates on slide 9 essentially meant lowering rates. Commissioner Streur answered in the affirmative. Representative Joule asked whether providers could choose to take their business elsewhere in response to lowered rates. Commissioner Streur acknowledged that it was a possibility. He thought that Medicare provided a good example of a place that the state had experienced the problem; however, he opined that the state was currently in a good position. He communicated that he would speak more about the issue later in the presentation. 2:20:25 PM REPRESENTATIVE WES KELLER joined the committee table and asked what the process would be in the event of a rate reduction. He wondered whether the reduction would be a flat percentage and who would be designated to determine what would get cut. He was concerned that the significant difference in the size and influence of the various providers could present a problem. Commissioner Streur answered that the responsibility would continue to reside with the department. He thought that reductions would most likely impact certain provider groups and types that would be determined by a study conducted by the department. Representative Keller thought the question was important because the issue would be relevant for the department and legislature. Representative Gara referenced that the presentation indicated Alaska as one of the higher paying Medicaid states. He had heard that in most states insurance companies were required to reimburse medical providers at an average rate; however, Alaska reimbursed at the 70th percentile, which may have been an explanation for higher medical rates in Alaska. He wondered whether the information was accurate. Commissioner Streur replied that the issue was more closely related to the commercial sector than to Medicaid. Representative Gara wondered whether providers would take issue with a reduced Medicare reimbursement rate that would result in much lower pay than the insurance reimbursement they were able to receive in the commercial sector. Commissioner Streur replied in the affirmative. He explained that the situation was currently more relevant to Medicare. He would discuss a Medicaid fee comparison on slide 11. He remarked that the situation was more difficult to justify than it should have been. Commissioner Streur directed attention to Medicaid physician fees for the 25 highest paying states (slide 10). Alaska was shown as second, given that the chart was cost adjusted based on the cost of living in each state; however, fees in the state were actually significantly higher than those in all other states. He believed there were four other states where Medicare rates were higher than those in Alaska. Representative Wilson asked how many states had implemented a co-pay. She had heard that a $5.00 co-pay could make a difference for a patient. Commissioner Streur responded that he would speak about co-pays later on in the presentation. Commissioner Streur moved on to discuss 2009 payment levels for the highest level primary care office visit (level 5) on slide 11, titled "Payment Comparisons." He relayed that Alaska Medicaid paid $209.11 compared to Alaska Medicare, which paid $164.32. Medicaid paid $76.00 in Washington and $129.21 in Montana. The department had conducted a comparison of approximately 12 states, which had all shown similar results as those on slide 11. 2:25:50 PM Commissioner Streur discussed slide 12 titled "Benefits:" · States that provide optional benefits can eliminate them for adults o EPSDT (Early Periodic Screening, Diagnosis, and Treatment) and nursing facility services are not optional · States can establish limits on benefits for certain adults o Can be soft or hard limits Commissioner Streur continued to discuss benefits on slide 13. He explained that a reduction of benefits in one area may result in cost increases in another. He noted that it was possible to reduce an optional benefit in one of the state's waiver or personal care attendant programs; however, most of the eligible individuals met the nursing home level of care requirements; therefore, the elimination of one of the programs introduced the possibility that an individual would be forced into a nursing home and would be a considerable "push on the balloon." He pointed to the second bullet point: "Federal Litigation-Medicare Rules and Olmstead." He relayed that the Olmstead Act required the state to provide services in the least restrictive setting possible. To ensure an individual continued to receive services in other areas, it may be necessary to address transition issues if a service was eliminated. He reiterated his earlier remark regarding CMS approval of a SPA. He discussed the impact on access and quality of care; many of the state's optional programs were built into the continued care of services. Representative Joule understood that the term "push on the balloon" meant that cost cuts in one area could lead to increased hospital or homecare costs. He believed the additional costs were significant and noted that members of the public may not know what the term meant. Commissioner Streur replied that the costs were significant. He expounded that the average annual cost for an individual in the waiver program was $30,000 compared to a much higher amount for nursing home level of care. KIMBERLI POPPE-SMART, DIRECTOR, DIVISION OF HEALTHCARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, added that the nursing home level of care for an individual was $202,000 on an annual basis. 2:28:39 PM Co-Chair Thomas thought that high assisted care living facility costs should incentivize the state to help fund personal care attendants who would reduce costs for the state. He had heard from a constituent who had taken a brother out of an assisted care living facility that had cost the state $17,000 per month. The individual had hoped to become a personal care attendant; however, the costs were too high and they were currently faced with putting the brother back in the assisted living facility. He noted that he would follow up with Commissioner Streur at a later time. Commissioner Streur moved on to slide 14: "Mandatory vs. Optional Benefits." He relayed that it would not be easy to just remove the optional Medicaid benefits in order to save costs. The mandatory benefits utilized by individuals without chronic complex medical conditions included items such as inpatient and outpatient hospital, nurses, physicians, nurse midwives, lab and X-ray, advanced nurse practitioners, early periodic screening, diagnosis, and treatment, family planning, pregnancy, and other. Optional Medicaid benefits included items such as mental health rehabilitation and stabilization; diagnostic, screening, and preventative therapies; inpatient psychiatry; drugs, which cost $65 million per year, would be a significant challenge to cut; Intermediate Care Facility and Mental Retardation (ICF/MR) residential facilities; personal care attendants; dental services, which served approximately 10,000 adults and had helped people with various issues that included returning to work and eating different foods; other home health services, other licensed practitioners; and transportation, which cost approximately $70 million per year and was necessary for the rural villages throughout the state. He emphasized that it was a very difficult challenge to determine areas to cut that would reduce costs. 2:32:21 PM Representative Joule pointed out that mandatory and optional benefits were different for adults than they were for children. He expounded that many typical adult services fell under the optional category; however, most children services were mandatory. He had been surprised to learn about the differences and the costs associated with items in each category. Commissioner Streur responded that Medicaid SCHIP [State Children's Health Insurance Program] was very oriented towards children first and families second. He informed the committee that beginning in 2014 every person who met the 138 percent poverty level would be eligible under Medicaid. He thought that the optional and mandatory categories for children would still exist, but they would see an increased melding together. Commissioner Streur addressed slide 15 titled "Utilization Controls." He stressed that it was challenging to determine whether the $1.5 billion annual Medicaid expenditure was directed at the right care, at the right time, in the right place, and for the right amount of money. He emphasized the importance of making improvements to a range of controls and screens to ensure the state was providing individuals with the appropriate care. A new Medicaid Management Information System (MMIS), which paid claims for the state, would be active in the spring of 2012. He was looking into the possibility of moving data from the old system into the new system that would allow the department to implement some utilization controls at an earlier date. The current 25 year old MMIS system paid claims efficiently; however, it was not possible to determine how it paid claims unless a report was built. The data warehouse would help the Divisions of Healthcare Services, Behavioral Health, and Senior Disability Services; he was hopeful that it would be activated in the fall of 2011. Representative Gara wondered whether it was possible to prevent Medicaid recipients from going to the emergency room for non-emergency related health problems. He asked whether a system could be implemented that would pay in- full for Medicaid patients to go to physicians for non- emergency health issues, but would cover much less of an emergency room visit for the same issues. Commissioner Streur responded in the affirmative. The department was looking into options that would deal with people it termed "frequent fliers," who tended to use higher cost services. He thought that putting people in medical homes and ensuring access to services was a better option than co-pays and deductibles. He referred to a former client who had visited the emergency room 300 times in one year, which had cost between $600 hundred and $800 hundred per visit. He added that there was a downside to the option; therefore, it was important to figure out the best way to handle the issue and to let patients know they had "skin in the game." 2:38:49 PM Vice-Chair Fairclough asked whether certain items (related to individual families) that could not be tracked with the current MMIS, would be accessible under the new data tracking system. Commissioner Streur replied that it was currently possible to retrieve the information; however, a time consuming report had to be built each time the information was needed. Vice-Chair Fairclough queried whether the state knew if there were duplicate services being accessed. She referred to the $1.5 billion annual Medicaid cost in Alaska and wondered whether the state was working to look at care for individuals and families in a more holistic way instead of only looking at crisis intervention. She asked whether there were any controls on the annual spending limit for available Medicaid services and if there was a trigger in the system to indicate whether a patient's needs had changed or increased. Commissioner Streur answered that DHSS was currently looking only at individuals because each Medicaid recipient had a personal identification number that was not linked to other family members. He detailed that a data warehouse would help as it would allow the department to enter groupings. The department was currently working on the ability to look at families and was doing the best it could with the information that was available. He relayed that the annual Medicaid cost was approximately $9,300 per person; the cost for a family of four was $36,000; the 15 percent overhead on a monthly premium would cost a family approximately $3,000. He stressed that the costs were very expensive and that the state needed to bend the curve; he was more concerned about the overall spin and the need to get a grip on costs. He talked about the importance of utilization controls and eliminating duplicative services. He noted that funding for the data warehouse had previously been acquired. 2:43:09 PM Commissioner Streur discussed a wide range of controls and screens on slide 15: (1) the department was moving to an electronic prior authorization and care management system through its current vendor at a considerable savings. The Division of Health Care Services was focused on getting more out of the services that were provided by the vendor. Currently the majority of prior authorization was hospital based and the department wanted to expand it to other areas as well, including outpatient hospitals; (2) post payment reviews were necessary to determine whether duplicate services were conducted; (3) hard or soft edits would take a look at whether specific services were appropriate for the given health problem; (4) bundling, unbundling, and order of billing were tools the department used with hospitals and physician offices to group services into a single billing; and, (5) the department was interested in new edits and audits of fee-for-service and in the possibility of movement away from the area. Commissioner Streur addressed slide 16 titled "Improved Purchasing:" (1) Medicaid had significant market share at an annual cost to the State of Alaska of $1.5 billion; (2) the department was working to determine whether improvements could be made to purchasing; durable medical equipment continued to be a challenge. He was proud of the generous pharmacy benefit that provided a wide range of drugs to recipients; returns on the program, satisfaction, and management worked well on the provider and recipient sides. There was a Pharmacy and Therapeutics Committee that consisted of providers and pharmacists that conducted a quarterly review of how drugs were handled; (3) pharmacy provider and manufacturer contracting; and, (4) the department worked to recognize centers for excellence when possible. 2:46:56 PM Commissioner Streur discussed slide 17 titled "Cost Sharing:" · Recipient pays a portion of the cost services · Personal responsibility-reduction in inappropriate utilization · Recipient assumes a portion of responsibility for services · Considerations o May cause care to be delayed resulting in higher cost care later o Medicaid rules complex and prescriptive o May result in a reduction in provider revenues Commissioner Streur explained that individuals with a co- pay may decide to delay a visit to the doctor, which could result in a higher cost at a later time; therefore, it was important to be careful about where cost sharing was utilized and how it was conducted. He discussed that according to Medicaid rules an individual could only be charged on a limited percentage of their income on an annual basis; however, the department did not currently have the necessary tracking tools available. He thought that it was important to begin cost-sharing in areas where people who could make decisions were forced to do so. He had talked with multiple provider groups about the possibility that cost sharing could result in a reduction in provider revenues and had solicited input regarding potential solutions. Commissioner Streur moved on to discuss slide 18 titled "Existing Cost Sharing in Alaska:" · $50 per day, up to a maximum $200 per discharge, for inpatient hospital services · 5 percent of charges for outpatient hospital services · $3 per day for physician services · $2 for each prescription filled/refilled Commissioner Streur estimated that the provider collected less than 50 percent of the cost sharing fees that it was owed. Representative Gara asked whether individuals that went to the emergency room for non-emergency related services represented a significant cost in the Medicaid system. Commissioner Streur responded in the negative. Co-Chair Stoltze had been told multiple times that Medicaid patients represented the most frequent number of no-shows at dental and medical appointments. He expressed concern that the medical providers already took a cut in pay for Medicaid patients. He did not want patients in need of treatment to be denied; however, he did not want people to have such a cavalier attitude towards the services. He wanted the situation to improve so providers would not decide to discontinue service to Medicaid patients. 2:51:06 PM Commissioner Streur answered that dental providers provided a good example of the situation. The single greatest frustration with Medicaid recipient treatment was the high frequency of no-shows. There were several dental offices that were currently tracking the Medicaid versus non- Medicaid no-show rates for the state. Dental offices could implement a charge for no-shows across the board; however, they could not implement the charge for Medicaid patients only. The issue was significant and he had heard the frustration most frequently from dental providers. Co-Chair Stoltze emphasized that the state should try harder to solve the no-show problem. Commissioner Streur replied that Medicaid was an entitlement program and the challenge was significant. He had enlisted support and input from providers to help find a solution. Co-Chair Stoltze replied that there were people that were not as sympathetic to the entitlement aspect of the program. He encouraged medical providers to continue stressing the importance of the problem to the department. Vice-Chair Fairclough appreciated the value of a no-show survey that included all patients. She discussed that one of the no-show issues in Anchorage was due to problems with transportation, specifically with Share-A-Ride and other services that provided transportation to groups of individuals. She pointed to the Alaska Native Medical Center that had implemented some successful strategies, including a no-show fee. She agreed that it was important to convey the value of medical providers' time. Representative Gara had discussed the issue previously with the commissioner. He believed that the administrative burden often times cost more than the savings. He relayed that he had missed a handful of dental appointments the past summer due to injury and he appreciated that he had not been charged a fee. He pointed out that it could be challenging for offices to determine when a person had a valid reason for missing an appointment. He opined that sometimes it could cost more to enforce a rule. He agreed that a solution was important, but did not believe there was an easy answer. Representative Wilson noted that there were dentists in Fairbanks who no longer took Medicaid patients due to the cancelation problem. She stressed that the state could not continue to lose more Medicaid providers, given the negative impact it would have on the program. 2:56:41 PM Commissioner Streur reiterated his earlier remarks regarding slide 18: "Existing Cost Sharing." He directed attention to slides 19 through 20 related to services that were exempt from cost sharing requirements: · Services provided to a recipient under age 18 · Services provided to a recipient in a long term care facility · Services provided to a pregnant woman, including postpartum services · Family planning services and supplies · Emergency services · Hospice care services · Tribal health services provided to an American Indian or an Alaska Native · Services provided to an individual who is eligible for both Medicare and Medicaid when Medicare is the primary payer of the service Commissioner Streur remarked that Medicaid could not mandate the exemption of services from cost sharing requirements for Alaska Natives; internal cost sharing was an available option. He addressed slide 21 related to the inability to pay cost share: · 42 CFR 447.15 The provider may not deny services to any eligible individual on account of the individual's inability to pay the cost sharing amount Commissioner Streur noted that Alaska did not have complaints about denial of access to care due to the inability to pay cost share. Providers had worked to ensure that care was available. He discussed slide 22: "Anti- Fraud:" (1) some states may be an untapped area for savings; (2) fraud in Medicaid was a reality and departmental and attorney general efforts would be increased to help determine its extent in the system; and, (3) numerous anti-fraud methods and vendors included a Medicaid Integrity Program, Payment Error Rate Measurement, and other. Co-Chair Stoltze wondered whether fraud typically involved a patient or provider. He remembered legislative work that had been done in the past related to Medicaid anti-fraud. Commissioner Streur answered that fraud related to recoveries was typically committed by providers; whereas, recipient fraud was related to prescription drugs. Co-Chair Stoltze requested an example related to the typical magnitude of provider fraud. 3:00:30 PM Commissioner Streur replied that the majority of fraud settlements ranged from $25,000 to $125,000 up to $150,000. There had been one fraud case related to on-call nursing that cost somewhere in the millions of dollars. Co-Chair Thomas queried whether a provider would lose their license for committing fraud against the state. Commissioner Streur responded that it depended on the extent of the fraud. The department was provided a weekly list of people who were no longer allowed to participate in Medicare and in many cases it pulled the people from Medicaid as well; the department was occasionally mandated by CMS to pull the person's participation. He would follow up with more detail. Co-Chair Thomas discussed that stealing was a felony. He thought that those who committed fraud should be treated equally in their punishment. Co-Chair Stoltze commented that not every fraud investigation was born with malice. He opined that the regulations and laws were complex and it was possible for a person to find themselves in the midst of an investigation accidentally. Commissioner Streur agreed. Co-Chair Thomas thought that in the case of a settlement a document could be signed that stated no further penalties or charges would be filed against the offender. Co-Chair Stoltze referenced complicated federal regulations imposed on the state that were difficult for medical professionals to keep up with. He had heard of cases where people had been accused of Medicaid fraud because they were charging too little. He added that there were people who egregiously abused programs and those who made innocent mistakes due to the complexity of the regulations and laws. Co-Chair Thomas noted that drivers and commercial fishermen would lose their license for certain offences; he reiterated that fraud offenders should also receive an appropriate penalty. 3:04:00 PM Commissioner Streur believed it was necessary to be judicious in the handling of fraudulent cases and that intentional fraud should be penalized; whereas, the state should collect money owed from those who committed mistakes, but should not apply an additional penalty. Commissioner Streur discussed slide 23 titled "Anti-Fraud Efforts, Audits, and Other Activities in Alaska:" (1) the Surveillance Utilization Review (SUR) looked at payment patterns, diagnosis, recipients who saw multiple doctors and received multiple prescriptions, billing comparison between physicians, and other; (2) the department conducted 70 annual audits required by AS 47.05.200, which were moderately effective; (3) credit balance audits; (4) focused reviews identified particular patterns, groups, and outlying providers; (5) CMS Medicaid Integrity Program was new and would conduct provider audits; (6) Alaska's payment error rate the prior year had been the lowest in the nation at under 1 percent. Through the Payment Error Rate Measurement system CMS vendors worked to verify that services had been paid appropriately; (7) Cluster Audits; (8) the Medicaid Recovery Audit was a federal program that the department hoped would replace the current audits required by AS 47.05.200; and, (9) Medicaid Fraud Control Unit. 3:08:17 PM Commissioner Streur addressed slide 24 titled "Provider Taxes." He explained that provider taxes offered a means to generate revenue specifically to fund Medicaid. The department used the taxes generated to supplant general fund money and to fund providers at a higher rate in order to offset the taxes. The state was able to charge a tax and leverage the 50 percent federal participation. He discussed that between 14 and 15 states had implemented provider tax in the past 18 months. He read additional bullet points from slide 24: · Can provide needed provider rate increases/avoid decreases · Can provide money for the state · Some provider types work better than others · Federal rules complex but taxes can work Commissioner Streur elaborated that the tax worked better for non-specialty physician offices, primary care offices, and other, given that the majority of income in specialty offices was not Medicaid related. Representative Wilson wondered why the federal government was creating an incentive for states to tax providers. She could not imagine taxing providers who were already not paid what they were worth. Commissioner Streur answered that individual states had introduced the provider tax and that it was not related to the federal government. He communicated that states needed to meet the 50 percent match rate; general fund sources in some states were not available and Medicaid costs continued to increase. States were looking for ways to provide matching funds that were not painful to recipients and the state. Co-Chair Stoltze wondered why the provider tax option was listed in the presentation if the state did not intend to utilize it. Commissioner Streur replied that the option had been included in order to fully disclose all available possibilities for Medicaid funding. 3:11:53 PM Commissioner Streur addressed slides 25 and 26 titled "Provider Tax Considerations." He read from the presentation: · Unlikely in a state with an aversion to any kind of taxes · Taxes are levied against all providers of a certain type or group · Taxation will affect current payment methodologies. Tax payments could be accounted for in cost-based payment methodologies for hospitals and nursing homes · Where used, the industry is more than not in support · If Alaska Medicaid cuts funding, industry support may develop · If implemented in Alaska, there will be a high degree of CMS oversight Commissioner Streur continued on slide 27: "Revenue Maximization:" · While most states have focused on this, still may be opportunities · Allowable federal funding can replace state funding · States should make sure their reviews are current · Opportunities with state and local programs and certain inmate care Commissioner Streur believed that Alaska had an opportunity for revenue maximization with its tribal partners in particular. He read additional points related to revenue maximization on slide 28: · When Medicaid-eligible IHS [Indian Health Services] beneficiaries receive services at IHS facilities, the State receives 100 percent FMAP (Federal Medical Assistance Percentage) · In FY 10, if all Alaska Native Medicaid recipients had received services exclusively from IHS facilities, it would have saved Alaska Medicaid about $108 million general fund Co-Chair Thomas asked whether the figure was in addition to what had been provided. Commissioner Streur responded in the affirmative. Co-Chair Stoltze asked how many Denali KidCare participants could be utilizing the revenue maximization. Commissioner Streur did not have the number on hand. Co-Chair Stoltze asked for an estimate and wondered whether the number represented tens of millions out of the $108 million. Commissioner Streur responded that the $108 million was Medicaid only. He did not believe there would be any savings in the areas of cardiac care, cancer care, and complex children's conditions. Co-Chair Stoltze expressed frustration that savings were discussed that may not have been possible. Commissioner Streur believed that approximately half of the money could be realized through a more effective partnership with tribal partners in areas such as nursing care and other. He opined that it was necessary to take a look at savings of $15 million to $30 million whenever possible; however, the $108 million in savings was not available. 3:15:04 PM Representative Joule referred to testimony from a recent meeting that had pertained to the Division of Behavioral Health, Medicaid, and opportunities that were available. He wondered whether IHS facilities were associated with the opportunities. Commissioner Streur believed the discussion had been related to the behavioral health encounter rate. The department had started retroactively reimbursing at an encounter rate for all behavioral health services. The money would go a long way towards funding behavioral health services within the IHS community. The transportation rate would be reduced because services had been increased in communities. Representative Wilson asked for a breakdown of the $108 million. Commissioner Streur replied that DHSS would provide the information to the committee. Commissioner Streur moved on to slide 29 titled "Proposed Strategies." [Note: slide 29 was an addition to the presentation and appears as a separate document on BASIS; therefore, slides in the original presentation labeled 29 through 30 are referred to as slides 30 through 31 below.] He referred to Ms. Poppe-Smart's role in home and community-based services. Ms. Poppe-Smart discussed her past position as acting director of the Division of Senior and Disability Services and her work related to cost control strategies (e.g. provider tax, etc.) for the long-term care arena that had been proposed by the Medicaid Task Force. She communicated that based on multiple studies the long-term care population in Alaska that included senior and disabled individuals, was increasing and had outpaced other states; growth was most notable in the senior population. Ms. Poppe-Smart explained that home and community based services had been instrumental in the state's success in keeping individuals out of institutions. She explained that unlike other states, Alaska did not have the opportunity to control its spending, given that institutional care was significantly more expensive than home and community based care. There were approximately 708 nursing home beds in the state and no more than 10 or 20 of the beds were available at any given time. Additionally, there were approximately 3,500 individuals in home and community based services through the department's four waiver programs and roughly 3,500 individuals who received personal care attendant services (half of whom were waiver recipients). The average cost of nursing home care was approximately $202,000 per year in Alaska. She relayed that the Medicaid cost was much less: the average cost for elderly Alaskans who received waivered services at home was about $30,000 and cost an additional $33,000 for personal care attendant services. Approximately 3,000 of the 3,500 in the personal care program were in need of an institutional level of care. Ms. Poppe-Smart highlighted that other long-term care service options included: the few individuals in out-of- state ICF/MR institutes that provided care for developmental disabilities and administrative wait days and swing beds in critical access hospitals, which acted as nursing home beds in acute care facilities. Ms. Poppe-Smart communicated that subsequent to the implementation of maintenance of effort requirements, the state was not able to increase eligibility restrictions for its waiver programs through 2014. She reiterated that the state had few options to reduce or restrict current services; therefore, it was necessary to be creative and to look at successes in other states. One option was long-term managed care; other states had developed a demonstration project or SPA to manage individuals who required long-term care services in a holistic manner, similar to the medical home model. It was important to consider that Medicaid was the primary payer for long-term care services and that very few private insurance companies would pay for any of the long-term care services. Long-term care insurance did not pay for home and community based services and Medicare would only pay a maximum of 100 institutional days. Ms. Poppe-Smart continued to discuss proposed strategies on slide 29. The state could look at its current personal care attendant program and develop a new program under a demonstration project. She informed the committee that there was currently a 6 percent federal matching program through the Affordable Care Act, which would require the state to build in oversight quality monitors. Another option was to put a "safe independent" in the home, where a home would be evaluated for safety and items such as grab bars would be installed; the option was available for homes that did not meet the institutional level of care and were not eligible for waiver services. Ms. Poppe-Smart pointed to a strategy (slide 29) related to quality, utilization, and compliance management. She discussed Medicaid fraud and noted that in Alaska a person could be convicted due to reckless disregard and it was not required for a person to have the intention to commit fraud; many other states required proof of intent. 3:24:00 PM Ms. Poppe-Smart moved on to discuss the last proposed strategy on slide 29 that related to the examination of options to refinance current general fund programs through demonstration project. She delineated that the long-term care arena included "general relief," which paid for assisted living homes for individuals who were not waiver eligible and the CAMA [Chronic and Acute Medical Assistance] program paid for ongoing medication services for individuals who had specific limited medical conditions. She detailed that many studies in the past had recommended that the state should refinance the populations through the development of a demonstration project and obtain a federal match. She elaborated that eligibility criteria would be defined in order for the populations to fall within the Medicaid eligible categories; therefore, a portion of the general fund financing would be diverted to the federal government. Commissioner Streur discussed slide 30 titled "Third Party Liability." He explained that third party liability provided the opportunity to shift costs or collect money from third party entities including insurance companies, Medicare, estates, and other. He read from slide 30: · Wide range of programs and activities · Electronic matches can improve effectiveness · Contingent fee contracts are matchable Commissioner Streur noted that the state had contingent fee contracts, but did not use them all. He pointed to slide 31: "Alaska Medicaid TPL Activity," and was proud of the state's efforts in third party liability that had netted a considerable return. The state's net recovery in post- payment reviews was $9.1 million in the prior year. The state had collected $2.5 million for accident, estate, and trust recovery (accidents included situations in which the state funded patient care and was reimbursed by insurance settlements). He discussed cost avoidance that included: state assisted Health Insurance Premium Payments and coverage; the department had experienced success in data matches with insurance carriers to identify primary insurance carriers that may not have been reported by an individual; and, Medicare buy-in where the state paid Medicare Part A and B premiums, which had saved $35.4 million the prior year. He noted that the cost avoidance programs had been successful. Representative Joule asked what the state's Medicaid related general fund expenditures had been three years earlier compared to future expenditures through 2012. Commissioner Streur answered that costs were approximately $1.1 billion in 2008, $1.2 billion in 2009, and $1.3 billion in the current year. Representative Joule asked whether the numbers provided were only related to general fund expenditures. Commissioner Streur responded in the negative. Representative Joule wondered specifically about general fund expenditures. He thought that general fund costs had been approximately $300 million to $400 million in the past, were approaching approximately $700 million in FY 11, and depending on FMAP funding the costs could potentially be $850 million or so looking out to 2012. Commissioner Streur responded that the figures were a good approximation. He added that they were a little light in 2007, in 2008 and 2009 the state's general fund share was slightly reduced, in 2010 there was a small increase, in 2001 there was an increase, and there was an increase of roughly $180 million in 2012. Representative Doogan congratulated Commissioner Streur on his new appointment at DHSS.