2003-03-06                     Senate Journal                      Page 0393
SB 108                                                                                            
SENATE BILL NO. 108 BY THE SENATE RULES COMMITTEE                                                   
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act relating to payment rates under the Medicaid                                      
          program for health facilities and to budgeting,                                           
          accounting, and reporting requirements for those                                          
          facilities; abolishing the Medicaid Rate Advisory                                         
          Commission; and providing for an effective date."                                         
                                                                                                    
was read the first time and referred to the Health, Education and Social                            
Services and Finance Committees.                                                                    
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Department of Health and Social Services                                        
                                                                                                    
Governor's transmittal letter dated March 5:                                                        
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill to provide greater flexibility to                            
the Department of Health and Social Services to set Medicaid payment                                
rates for Alaska's hospitals, nursing home and other health care                                    
facilities.                                                                                         
                                                                                                    

2003-03-06                     Senate Journal                      Page 0394
The proposed bill would eliminate the Medicaid Rate Advisory                                        
Commission and place the responsibility for calculating and setting                                 
Medicaid payment rates for health care facilities under the general                                 
authority of the Department of Health and Social Services.                                          
                                                                                                    
Historically, the Medicaid facility rate setting process has been                                   
extremely cumbersome and costly for both the state and health care                                  
facilities. The current rate-setting process is both a barrier to effective                         
cost containment as well as problematic for assuring adequate                                       
reimbursement for Alaska's diverse mix of health care facilities.                                   
                                                                                                    
Passage of this legislation will allow the department to develop in                                 
regulation a more flexible, cost-effective rate setting process that will,                          
for the first time, allow the department to explicitly take into account                            
the appropriations made by the legislature for the Medicaid program                                 
when setting rates.                                                                                 
                                                                                                    
I urge your prompt and favorable action on this measure.                                            
                                                                                                    
Sincerely,                                                                                          
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor