HOUSE BILL NO. 176 "An Act relating to medical assistance reimbursement for ground emergency medical transportation services; and providing for an effective date." 2:14:18 PM REPRESENTATIVE ADAM WOOL, SPONSOR, explained HB 176. He stated that the bill allowed reimbursement to local fire departments and emergency medical transport providers to get more fully reimbursed when transporting a Medicaid payment. He stated that, currently, the maximum reimbursement was $400 for an ambulance ride, but the service cost more than $400 to the departments. He stated that it allowed for the Department of Health and Social Services (DHSS) to apply for reimbursement from the federal government. He explained that many states had similar allowments. He noted that currently, the response services were only compensated a fraction of the cost, so this bill allowed for 50 percent more of the funding. Representative Wilson queried more information about the numbers. Representative Wool replied that $600 was mission. He stated that the provider would send in $300 to the state; the state would apply and receive $600 from the federal government; and $600 would be returned to the department, with a net of $300. Representative Wilson asked who was paying for the other $400. Representative Wool responded that Medicaid paid for the $400. He stated that typically Medicaid was paid for with 50 percent from the state and 50 percent from the federal government. Representative Wilson surmised that $1000 would be charged for the ambulance. The first $400 would come from the state Medicaid program. She stated that, once the other $600 was sent, the state would pay an additional $300 and another $300 from the federal government. She wondered whether the $600 totally came from the federal government. Representative Wool replied that the entire $600 would come from the federal government. He deferred to other testifiers for more information. 2:20:38 PM ROB EARL, STAFF, REPRESENTATIVE ADAM WOOL, returned to the example of the $1000 ambulance ride. He explained that the first $400 would be paid through state Medicaid, which was funded divided in half between the state and federal government. He stated that there would be a $600 non- reimbursed cost, so the provider would submit their non- federal match of $300 to DHSS. He explained that DHSS would then receive $300 from the federal government, and would return the entire $600 to the provider. Therefore, the provider would net $300. Representative Wilson wondered about the 20 percent administrative fee. Mr. Earl responded that the administrative fee could be up to 20 percent of the entire transport cost. Representative Wilson wondered whether there was a cap, so the department could not go higher than 20 percent. Mr. Earl replied that there was a state plan amendment that DHSS would apply for federal Medicaid. He stated that, at that state, the 20 percent was able to be added to the provider's costs. Then they could apply for the larger reimbursement. Representative Guttenberg felt that the example "low-balled the cost." He queried a maximum allowable amount for reimbursement. He wondered whether there was a need to include medivac air transport. Representative Wool reported that they would be adding air and water transport to the bill. He stated that Alaska had many remote areas. He did not believe that there was a maximum allowable reimbursement, because the transport of longer hauls was expensive. 2:25:10 PM Vice-Chair Gara supported the concept of the bill. He felt that the fiscal note showed that of the $21 million annual cost to the state, $11 million would come directly from the federal government and the other $10 million would be some form of statutory designated receipts. He queried the state cost of the bill. Representative Wool responded that the $21 million was not a cost, rather it was a net gain to the state. He stated that $11 million of that gain was from the federal government, and $10 million was from the providers. Co-Chair Seaton asked for a bubble flow chart. He thought it would make it easier to follow the numbers. He asked for an example to be included. Representative Wool agreed to provide that information. Representative Grenn wondered whether there would be a change in percentage depending on a cost change. Representative Wool believed there was no change in the percentage based on cost of service. Representative Pruitt wondered whether there was a general fund expenditure. Representative Wool responded affirmatively. He indicated a person to manage the program would be paid for with GF dollars. Representative Pruitt remarked that the Anchorage Fire Department would send the state $300, which would be submitted to the federal government, and the full $600 would be returned to the fire department. He surmised that the concept was that the fire department would receive $300 from the federal government. He wondered why the federal government would want to participate in the program. Representative Wool replied that the example was correct. He stated that there was something in federal law that required the federal government to make those payments. Representative Pruitt wondered whether the other states required the local community to go through the state to access the federal money; or would the state take on the role to request all. He queried the number of states that had the program, and how the models compared to the bill. Representative Wool replied that California, Washington, Montana, Nevada, Texas, and Florida had similar programs in place. He furthered that Oregon, Nebraska, Kansas, and Illinoi had pending programs. He deferred to Mr. Clough for more states' information. 2:32:44 PM SCOTT CLOUGH, ALASKA FIRE CHIEFS, PORTLAND, OREGON (via teleconference), stressed that the program was not a new program. He shared that it was an entitlement program that was part of Title 19 of the Social Security Act. He stated that every state participated in the program in some form. He shared that the concept was in effect in Alaska. He remarked that there was no limit to the program, in the reimbursement section. He stated that as an entitlement program, it was a cost-based program. He shared that other Medicaid programs had an upper payment limit (UTL), but the UTL was tied to cost in this program. He used California as an example, and remarked that the cost per transport in the larger cities were approximately $500 to $600. He stated that, conversely, there were remote areas in California that saw transport costs of $4000 to $5000 on the federal program. He stressed that the cap was the cost of the transport service. He noted that the program was an opportunity for the local government to share in the federal government's Medicaid program. He shared that, if an agency had a $1000 cost of transport, they would currently receive Medicaid funds from the state for $400. He furthered that there was an uncompensated cost of $600. He shared that, instead of the state participating in federal financial participation, local government would be allowed to participate in federal financial participation at the same rate. He remarked that 50 percent of the uncompensated cost was the non-federal share was the partnership of the fire department and the federal government. He stated that the federal government would match the 50 percent. 2:37:50 PM Mr. Clough shared that the program was voluntary and the individual local government providers were asking to participate. Therefore, there could not be an expenditure to the state. He shared that the state may need to hire a full-time equivalent (FTE) employee for program oversight, but the cost of that hire must be paid for by the participating parties. He stressed that there would never be exposure to the GF. He agreed to provide some illustrations to help describe the 20 percent. He stressed that the state had the right to charge a fee for the services, because the program was voluntary. He explained that the fee was arbitrary as it related to the cost of the charge. He stated that Indiana charged 27 percent and California charged 20 percent. He stated that the 20 percent fee was a cost associated with the ambulance transport. 2:41:58 PM RICH ETHERIDGE, JUNEAU FIRE CHIEF, JUNEAU FIRE DEPARTMENT, stressed that fire departments across the state were seeing unprecedented calls for service and decreasing revenues. He stressed that the call volume in the Juneau Fire Department increased 16 percent the year prior, and the year prior it increased 14 percent. He furthered that the call volume had already increased 10 percent from the year prior, so there was no expectation of flattening the call volume. He shared that the bill would help to make up the debt portion of the budget. He remarked that he estimated that Juneau would receive approximately $500,000, which was enough money to put another ambulance into service. 2:45:18 PM Co-Chair Seaton queried the percentage of Medicaid runs, compared to the total. Mr. Etheridge responded that Medicaid runs were approximately 25 percent of the call volume. He furthered that smaller communities with larger Medicaid population, the Medicaid runs could be 80 percent or 90 percent of their call volume. He shared that the Juneau Fire Department saw approximately 5000 incidents per year, and 80 percent of those 5000 incidents were medical calls. Co-Chair Foster OPENED Public Testimony. KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE, spoke in support of the bill. She stressed that the bill allowed for the municipalities to access needed funds through other avenues. She shared that the money was revenue neutral, so there would be no cost to the state. Vice-Chair Gara shared that he did not recall receiving an email from his community on their stance on the bill. He noted that each communities' tax caps were different. He wondered whether the bill would raise the revenue to the municipality, if Anchorage were to leverage $3 million. Ms. Wasserman answered that she thought it most communities would put the money in their general fund, and then pass it to the fire department to cover those costs. Vice-Chair Gara stressed that he was a cosponsor of the bill. Representative Wilson felt that the bill would be positive for every community. She assumed that the City of Anchorage would apply the money to their general fund, because the city "took care of their police departments and fire stations." She stated that it was different than the Fairbanks North Star Borough, because there were "fire service areas." She wondered whether there was that distinction in the bill. Ms. Wasserman replied that each community would participate differently in the program. 2:50:24 PM BILL HOWELL, BETHEL FIRE DEPARTMENT, BETHEL (via teleconference), testified in support of the legislation. He stated that the bill would match what the fire department had as its discretionary budget. The department had a conservative estimate of a cost of $1,200 per ambulance run, and they were losing money annually from Medicaid runs. He remarked that the Bethel Fire Department provided an important public service and were looking at ways to provide training and keep the service going. He asked the committee to pass the legislation. 2:53:01 PM JIM STYERS, FAIRBANKS FIRE CHIEF, FAIRBANKS (via teleconference), spoke in favor of the bill. He detailed that the bill would impact the city and its citizens. The state's budget situation was trickling down and impacting municipalities. He was fully supportive of the bill. 2:55:32 PM ALEX BOYD, ANCHORAGE FIRE DEPARTMENT, ANCHORAGE (via teleconference), spoke in support of the bill. He announced that the Anchorage Fire Department was seeing a 38 percent increase in transports. He stated that, currently, they were answering 28 thousand transports in the City of Anchorage. The costs were going up while the support was going down. Representative Pruitt asked if Mr. Boyd saw any impact based on the tax cap. Mr. Boyd responded that he was unfamiliar with how the collection of the funds would impact the tax cap, but felt that there may potential to relieve the tax encumbrances by alleviating some of the potential bond propositions. Representative Pruitt had not heard this information from anyone in the community. He did not want to unknowingly cause any other challenges. 2:58:44 PM Co-Chair Foster CLOSED Public Testimony. Co-Chair Foster asked that amendments be turned into his office by the following Tuesday. Co-Chair Seaton asked if Ms. Brodie was available for questions. Co-Chair Seaton wondered whether the program treated regular Medicaid patients and Medicaid expansion patients in the same manner. MARGARET BRODIE, DIRECTOR OF HEALTH CARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via teleconference), responded that the patients were treated the same. She furthered that the department received a higher federal match for the Medicaid expansion population. Co-Chair Seaton wondered whether there would be a higher match for the Medicaid expansion client in the program. Ms. Brodie replied that there would not be a charge of 50 percent regardless of the client. She stated that there would be an examination of the claims, and then there would be an appropriate match request. Co-Chair Seaton queried the percentage for the match portion for the transport for the Medicaid expansion patients. Ms. Brodie responded that the department would apply the same match requirements as the original claim paid out. Representative Guttenberg wondered how the bill would apply across the state, because of the different systems of emergency medical transport. Ms. Brodie replied that it would be anyone who provided the match for the unpaid share. She stressed that all the entities already enrolled in the Medicaid program, and met all the other requirements. 3:03:35 PM Representative Guttenberg indicated that the concern was the tax cap for various communities. He surmised that there would not be a detrimental effect of every entity, should they not file for the program. Ms. Brodie agreed. Vice-Chair Gara noted that the only state cost was for the administrative position, which would be reimbursed by fees. Ms. Brodie relayed that there were no state funds, because the match would be provided through the fees. Vice-Chair Gara indicated there had been some testimony that the fee could be capped at a lower amount. He noted that the department would not charge more than was needed for the position. Ms. Brodie replied in the affirmative. She stated that the department would only charge the amount of the costs, which were currently 0.28 percent. Representative Wilson understood that the bill did up to 20 percent. Ms. Brodie responded, "That's correct." HB 176 was HEARD and HELD in committee for further consideration. Co-Chair Foster relayed the agenda for the following meeting on Monday, February 19, 2018.