CS FOR HOUSE BILL NO. 176(FIN) "An Act relating to medical assistance reimbursement for emergency medical transportation services; and providing for an effective date." 2:20:47 PM REPRESENTATIVE ADAM WOOL, SPONSOR, introduced himself. ROB EARL, STAFF, REPRESENTATIVE ADAM WOOL, introduced himself. 2:21:00 PM Representative Wool explained that the bill would set up a mechanism that the Department of Health and Social Services (DHSS) could use to gain access to federal funds that could then be dispersed to municipalities to further reimburse them for medical transport, both ground and air. He relayed that, currently, emergency medical services (EMS) were only compensated for a fraction of the costs associated with transporting a Medicaid beneficiary. The bill requests that the federal government amend Alaska's Medicaid plan to include supplemental reimbursements for medical transport. He said that the Title 19 Social Security Act allowed for a certain reimbursement for states. Tribal transports would be reimbursed at 100 percent. He noted other states that had enacted similar programs. He stated that in 2017, Alaska had 21,000 claims for ground transport, averaging $800, unreimbursed by Medicaid, for each transport. Based on those numbers, the state could receive roughly $8.5 million to recoup some of the transport costs. He furthered that there had been 281 claims in air transport in 2017, averaging $17,000 for each incident. Based on those numbers the state could receive $2 million in unreimbursed costs. He stated that the number of transports was increasing in the state due to the opioid crisis. He cited the document "HB 176 Flow Chart"(copy on file). 2:25:23 PM Mr. Earl looked at the document titled, "Flow Chart" (copy on file). The chart illustrated the flow of funds for medical transport: Explanation Based on Hypothetical $1000 Transport  Cost The Provider is reimbursed $400 under regular state Medicaid for a $1000 transport. This leaves a $600 UCC. Under HB 176, the Provider then sends $300 to DHSS (Supplemental) and CMS matches with the $300 federal share. DHSS then sends $600 back to the Provider. The Provider recoups $700 of the $1000 Transport Cost ($400 Regular State Medicaid + $300 Federal Share). Administrative fees (expected to be nominal) will be deducted from the reimbursement to the Provider. 2:27:00 PM Vice-Chair Bishop asked what would happen in the hypothetical scenario if the bill were not to pass. Mr. Earl replied that the provider would get the $400, but that the bill would offer significant help. 2:27:18 PM Vice-Chair Bishop said that the non-reimbursable rate of transport was reaching crucial levels in his district. 2:27:53 PM Co-Chair MacKinnon queried how the department would process the $800 piece of paperwork. 2:28:11 PM Representative Wool looked at the fiscal note, which reflected that one person would need to be hired to process the paperwork. The cost would be passed on to the federal government in the overall cost of the uncompensated portion of the transportation bill. The 50/50 split for the administrative cost was between the federal government and municipalities. 2:28:59 PM Vice-Chair Bishop understood that the position started at Range 18, or $97,000 annually. 2:29:26 PM Co-Chair MacKinnon asked whether the state would need to apply for a waiver. Representative Wool replied that a negotiated new contract would need to be approved by the Center for Medicaid Services (CMS); approval was expected. 2:30:02 PM Co-Chair MacKinnon asked whether the program involved a waiver or a contract. Representative Wool deferred to the department for confirmation. 2:30:44 PM MARGARET BRODIE, DIRECTOR, DIVISION OF HEALTHCARE SERVICES, ANCHORAGE (via teleconference), shared that the bill would not require a waiver but would require a state plan amendment. 2:31:05 PM Co-Chair MacKinnon asked how ling the state plan amendment process would take. Ms. Brodie replied that the state plan was amended on a regular basis; the entire process could take 30 days to 9 months. Co-Chair MacKinnon asked whether the state had been certified for its Medicaid system. Ms. Brodie responded that the system had yet to be certified. 2:31:48 PM Co-Chair MacKinnon asked where the state was in the certification process. Ms. Brodie said that the department had received an email from CMS and was in the process of setting up a teleconference to discussed issues that had been raised. She said that some of the issues raised by CMS were optional and not mandatory for certification. Co-Chair MacKinnon asked whether the state had covered all of the critical outstanding issues. Ms. Brodie relayed that the one issue outstanding was that of the National Correct Coding Initiative Editing Sequence. The issue should be cleared up by the end of April 2018. 2:33:10 PM Co-Chair MacKinnon understood that there were other issues still unresolved. Ms. Brodie asserted that there were no critical defects in the system. She added that the defects that were relevant did no impact claims payments. 2:34:04 PM Co-Chair MacKinnon expressed appreciation for the work done by Ms. Brodie and her team. 2:34:49 PM JEFF TUCKER, PRESIDENT, ALASKA FIRE CHIEFS ASSOCIATION, KENAI (via teleconference), spoke in support of the bill. He noted that there was zero cost to the state to implement the program. [Mr. Tucker has a letter of support on file.] 2:37:38 PM Co-Chair MacKinnon asked whether he was comfortable with the 50/50 split between municipalities and the federal government. Mr. Tucker replied in the affirmative. 2:38:31 PM Co-Chair MacKinnon understood that claims would be paid one per year. Mr. Tucker said that the payment timing would be set up in the plan; the processing of the claims could be set up monthly, quarterly, or annually. 2:39:15 PM Senator Micciche warned that EMS organizations might over invest, and the federal government could discontinue the program. Mr. Tucker believed that any federal program carried the same risk. He noted that the program had existed for over 30 years. 2:40:56 PM Co-Chair MacKinnon noted that the State of Alaska was picking up approximately 60 percent of all healthcare costs, at a 30 percent higher fixed cost for medical services than the rest of the nation. She asked whether the bill would provide another federal dollar that would drive costs up further. Mr. Tucker replied that he did not know whether the legislation would drive up the cost. 2:42:25 PM Senator Micciche lamented that medical procedures under Medicaid were high. he was concerned that they would increase for transport related services under the bill. Mr. Tucker did not believe so. He stated that most transport was provided by local municipalities or volunteer organizations and were non-profit or publicly funded. He believed that the bill would result in the fully realized cost of services already being provided. 2:44:48 PM RICH ETHERIDGE, FIRE CHIEF, JUNEAU, spoke in strong support of the legislation. He relayed that the call volume for emergency transportation was increasing rapidly and without staffing increases. He understood that the program would offset the costs that were already being incurred. 2:47:47 PM Vice-Chair Bishop understood that the intent of the legislation was to help municipalities collect on expenses already incurred and not to buy new equipment. Mr. Etheridge replied in the affirmative. He said that a few more personnel would be needed to drive the ambulances that were already part of the fleet. 2:48:21 PM Co-Chair MacKinnon spoke again of the high cost of healthcare in Alaska. She felt that Medicaid reimbursements led to the increase in costs in the private sector. Mr. Etheridge could not speak to the private sector. He replied that local municipalities were required to justify any cost increases. 2:49:54 PM Co-Chair MacKinnon said that it was easier to raise a fee that was being reimbursed by the federal government and the state. She asserted that the more services provided by the state and federal governments, the higher the private sector cost to receive the services. 2:50:27 PM Senator Micciche warned that the smaller districts needed to remember that the program was not guaranteed into the future. 2:51:33 PM Co-Chair MacKinnon asked whether the opioid crisis had contributed to an increase in emergency transportation calls. Mr. Etheridge replied that there had been a 16 percent increase from 2016 to 2017. In 2018 there had already been a 12 percent increase in the call volume. Medicaid cases constituted 25 percent of the calls received. 2:52:20 PM Co-Chair MacKinnon asked whether EMS directed indigent patients to DHSS to sign up for Medicaid. Mr. Etheridge replied in the negative. He said that hospital employees helped people to obtain services. He said that the fire department generally ended up absorbing the costs. 2:53:05 PM BRITTANY SMART, FAIRBANKS NORTH STAR BOROUGH/MAYOR'S OFFICE, FAIRBANKS (via teleconference), testified that the borough supported the legislation. She shared that the borough charged $1000 per ambulance transport, plus mileage charges; however, the average Medicaid reimbursement was only $455 per patient. During 2016, approximately 30 percent of the patients transported by borough EMS providers were Medicaid beneficiaries, accruing more than $430,000 in uncompensated costs. 2:54:26 PM Co-Chair MacKinnon CLOSED public testimony. 2:54:32 PM AT EASE 2:54:54 PM RECONVENED 2:54:57 PM AT EASE 2:55:21 PM RECONVENED 2:55:24 PM DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION, explained the fiscal notes. He used the $1000 hypothetical example illustrated on the flow chart. He said that the administrative costs were projected at approximately $110,000, per year. He noted that local municipalities would be reimbursed - the state would receive nothing and would be charged nothing. 2:58:16 PM Co-Chair MacKinnon said that the fiscal note under discussion was note #3(copy on file). She furthered that the second note under discussion was #4(copy on file). Mr. Teal said that the funding sources on the fiscal notes gave the illusion that the bill would cost the state $22 million, but that it was a net zero fiscal note. He stressed that the fiscal notes reflected a zero cost to the state. 3:00:44 PM Vice-Chair Bishop interjected that the bill was budget neutral. 3:01:07 PM Senator Micciche asked whether the vision was that the department would change municipalities or medical transportation service providers a few dollars per transport to recoup costs. 3:01:36 PM Mr. Teal said that the state position would be paid for with interagency receipts that came from what EMS paid to the state. The state commission would be paid by municipalities. 3:02:13 PM Senator Micciche thought that the full cost would be reimbursed, and the state would be compensated for costs. Mr. Teal replied in the affirmative. He reiterated that the state would not be fronting money; the municipality would pay and then the federal government would be matching those funds. 3:04:09 PM Vice-Chair Bishop said that the plan was all contingent on the federal government. 3:04:17 PM Co-Chair MacKinnon asked for the location in the bill that said that the state would not be fronting the money and would not reimburse prior to receiving the federal funds. Ms. Brodie replied that she did not know where in the bill the language was located. 3:05:13 PM Co-Chair MacKinnon believed that such a safeguard should be written into the bill. Representative Wool agreed. 3:05:40 PM Co-Chair MacKinnon expressed concern that the state was covering much of the cost of Medicaid in the state at the expense of driving up private sector costs. Ms. Brodie replied that the bill was for government entities exclusively and would not include private sector transportation. 3:07:32 PM Co-Chair MacKinnon felt that there had been conflicting information given during the meeting. She believed that the inclusion of Tribal entities meant that private entities had to be included in the bill. Ms. Brodie replied that tribal entities were considered government entities. 3:08:13 PM Senator Micciche cited Page 2, line 10. He asked whether there was no one enrolled at the department who was a medical assistance provider that was a private entity. He said that he was unaware of any air transportation providers that were not private entities. Ms. Brodie replied that there were private entities that provided transport and that one of those entities was partially owned by a Tribal entity. 3:09:04 PM Senator Olson informed the committee that the North Slope Borough had a leer jet and a king air aircraft for air transport. 3:09:33 PM Co-Chair MacKinnon relayed that the bill would be reviewed again for consistency. Ms. Brodie stated that there would not be a change in the rate paid to private providers. 3:10:28 PM Representative Wool referred to an earlier asked question. He believed that answer could be found on Page 1, lines 8 through 13: Except as provided in (b) of this section, the amount of the supplemental reimbursement paid to a provider must be equal to the amount of federal financial participation that the department receives for the nonfederal matching funds paid by the provider through intergovernmental transfers or certified public expenditures, less any administrative fee described in (d) or (e) of this section. 3:10:45 PM Co-Chair MacKinnon added that answers to questions about the private section could be found on Page 2, lines 8 through 14: (c) An emergency medical transportation service provider is eligible to participate in the program if the provider (1) is enrolled with the department as a medical assistance provider; (2) voluntarily enters into an agreement with the department to participate in the program; (3) is owned or operated by the state, a political subdivision of the state, or a federally recognized tribe or tribal organization; 3:10:48 PM Representative Wool offered to walk through a Sectional Analysis. 3:11:15 PM Co-Chair MacKinnon determined that it would be unnecessary. 3:12:10 PM Co-Chair MacKinnon announced that concerns and amendments were due to her office by 5pm the following day. CSHB 176(FIN) was HEARD and HELD in committee for further consideration.