Legislature(2019 - 2020)ADAMS ROOM 519
04/29/2019 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB20 | |
| Presentation: a Look-back in Criminal Justice Reform | |
| HB96 | |
| HB31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 31 | TELECONFERENCED | |
| + | HB 96 | TELECONFERENCED | |
| + | HB 49 | TELECONFERENCED | |
| += | HB 145 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 20 | TELECONFERENCED | |
HOUSE BILL NO. 96
"An Act relating to Alaska Pioneers' Home and Alaska
Veterans' Home rates and services."
2:57:32 PM
REPRESENTATIVE ZACK FIELDS, BILL SPONSOR, introduced
himself.
REPRESENTATIVE LADDIE SHAW, BILL SPONSOR, introduced
himself.
Representative Fields thanked the committee for allowing
him to present HB 96. He turned to slide 2: "Goal of House
Bill 96" to explain the goals of the legislation. He
offered that the bill had a couple of simple goals. The
first goal was to maintain the Pioneer Homes' commitment
for Alaska elders. The following day marked the 106th
anniversary of the Pioneer Homes system. The second goal
was to grow revenues and improve the financial stability of
the Pioneers Home. He thanked Representative Shaw,
Representative Ortiz, and Representative Josephson for
being the original cosponsors of the bill. He also thanked
Representative Johnston for co-chairing the Health and
Social Services Committee and making sure there was
adequate funding for the Pioneer Homes. The bill was a two-
part effort of making sure there was adequate funding while
at the same time addressing the statutes. He turned the
presentation over to Representative Shaw to talk about his
involvement with the bill and some of the reasons he was
working to protect the Pioneer Homes.
Representative Shaw explained that when he was working for
the administration in 1999, he was looking at the potential
for a Veteran's home in Alaska, as it did not have one at
the time. The cost of building a Veteran's home would be
cost prohibitive. Instead, he approached the Pioneer Homes
to discuss the possibility of tying in with the Pioneer
Homes system. He had hoped to bring about a Veteran's home
in the state regardless of its size. The Pioneer Homes were
onboard with the idea. The process was initiated in 2001
and designated the Pioneer Home in Palmer as the Pioneer
and Veteran's Home for Alaska. He was about to establish a
Veteran's home commitment. Alaska ended up being the last
of the 50 states to have its own Veteran's home. The
process took place and was initiated after he had left the
administration in 2003. It was put into place in 2007.
Currently, the State of Alaska had a representation of a
Veteran's home. He was pleased to be an initial part of the
process.
Representative Fields turned to slide 3: "Pioneer Homes:
Background." He thought Representative Shaw helped frame
the backdrop which was that Alaska had an amazing system
built over the previous 100 years in Sitka, Fairbanks,
Palmer, Anchorage, Ketchikan, and Juneau. However,
currently the Pioneer Homes faced some challenges which he
asserted were two-fold. Currently, Pioneer Home rates were
adjusted by regulation. It was a time-consuming contentious
process. He surmised that because the regulation process
was time-consuming and contentions, the real value of rates
had actually fallen by about 15 percent. In other words,
the real value of rates had fallen as the division had
adjusted rates periodically but not enough to keep pace
with real value. At the same time, the state had an aging
population with a rising rate of dementia. He reported that
about half of residents had dementia. The state also had
budgetary challenges. The goal of the bill was to protect
the incredible system that so many Alaskans, including
Representatives Shaw, helped build.
3:01:06 PM
Representative Fields moved to slide 4: "Resident
Population." He highlight an important point with respect
to the financial sustainability of the Pioneer Homes:
Presently 51 percent of residents were self-pay. In other
words, they paid the advertised rates in the respective
Pioneer Homes and contributed about $17 million annually to
the system. It was very significant in terms of the system
being self-supporting. One of the reasons he introduced the
bill and one of his concerns was inadvertently pushing out
self-pay people. The departments were not allowed to
advertise the rates, which were very high. He wanted to
avoid having an adverse selection process, where self-pay
people leave and go to private care, while those who would
take their places would be more subsidized by the state. He
suggested that if that were to happen the state would find
itself with more obligations as the number of self-pay
residents declined. He did not have a problem with having a
larger population of poor seniors supported by the state.
However, looking at the long-time mission of the Pioneer
Homes, the diversity of their population was integral to
their mission. He thought the housing should continue to be
affordable even for those families that could pay their own
way.
Representative Fields reviewed the changes to the committee
substitute on slide 5: "Committee Substitute for House Bill
96." The rates were adjusted to reflect real cost increases
since 2004. Levels 4 and 5 were added to allow for more
complex care, so the bill would have 5 levels of care
consistent with the direction of the department. It was
consistent with the Agnew Beck Report which was issued
following SB 74 [Legislation passed in 2016: Short Title:
Medicaid Reform; Telemedicine; Drug Database] in broader
Medicaid reforms.
Representative Sullivan-Leonard had heard that for some
residents, because of a change in their health like
Dementia or Alzheimer's, they were being transferred from
the Pioneer Homes to Alaska Psychiatric Institute (API) for
care or housing. If the information was correct, she asked
that Representative Fields provide an explanation. She
wondered if the added levels of care took the circumstance
into account.
Representative Fields had not heard about residents being
transferred from Pioneer Homes to API. However, he was
aware of seniors with complex behavior health issues
including severe dementia who were housed at API for a cost
of more than a half million dollars per year per person. He
reported that Agnew Beck and DHSS wanted to have behavioral
health neighborhoods in some of the Pioneer Homes where
people with severe dementia would be physically separated
to be safe - a care level of 5. He noted that the cost of
level 5 care was about $15,000 per month, which was
expensive but much less than $500,000 per year, per person.
He thought, when looking at the broader system of how to
save money in healthcare and long-term care, the Pioneer
Homes were an important part. Some of the most
expensive-to-care-for seniors could be taken out of API and
placed into the Pioneer Homes system in a safe environment
while saving hundreds of dollars. It would be part of a
broader evolution where there was an increasingly elderly
population at the Pioneer Homes with a rising rate of
residents with dementia.
Co-Chair Wilson asked Representative Fields to explain the
difference between assisted living and a nursing home,
since the Pioneer Homes were no longer nursing homes.
Representative Fields responded that assisted living
generally had a lower acuity or intensity of care compared
to a nursing home. There were different reimbursement rates
for federal healthcare programs. He understood that
Medicaid-eligible residents in the Pioneer Homes were under
the Residential Supported Living (RSL) Medicaid Program
which billed at a daily rate of approximately $160 per day
resulting in a cost of $4880 per month. The monthly amount
was not sufficient to cover the cost for the higher level
of care. Aside from level 5, the Pioneer Homes system was
assisted living, just higher on the acuity scale. The
Pioneer Homes system served an important need. He
elaborated that in some cases in the private market, a
person would have a difficult time finding assisted living
homes at a higher level of care for people with dementia.
He concluded that the Pioneer Homes offered a higher acuity
of care without reaching the level of care at a nursing
home.
Co-Chair Wilson asked what the rate would be if the Pioneer
Homes were nursing homes. Representative Fields did not
know the rates in terms of the federal programs. In a
subsequent slide he would discuss the significant cost
differences.
3:06:07 PM
Vice-Chair Johnston thought there might be a great output
of capital costs for the Pioneer Homes system to the meet
the requirements of a nursing home.
Co-Chair Wilson was concerned with trying to provide a
certain level of care without being certified to provide
that level of care.
Vice-Chair Johnston clarified that the Pioneer Home in
Anchorage had a separate wing for patients with dementia.
Representative Fields added that there was a wide range of
category for assisted living. The Pioneer Homes system fell
within the assisted living category. It was not at the
nursing home rate. Many of the Pioneer Home residents were
at the upper end of the spectrum for assisted living care.
Co-Chair Wilson agreed that many of the homes fell under
the assisted living category. She was concerned that the
Pioneer Homes were starting to behave like nursing homes
where the level of care was much different. She was trying
to better understand the line of distinction between
assisted living and nursing home care. She thought the
committee could get her queries answered at a later time.
Representative Fields turned to slide 6: "CSHB 96: Proposed
Levels of Care." He reported that under the committee
substitute there was a wide range of rates. The goal was to
be competitive and to keep self-pay people in the system
with relatively affordable rates of care for level 1 and 2.
Under the committee substitute (CS) the rate increases
could be annual and could be as high as the Social Security
rate of inflation - a more efficient process that could
keep pace with the cost of care, rather than having to go
through the more arduous public comment process. The
concept would ideally keep the state from falling back into
a hole like it had over the previous 15 years.
Representative Tilton asked about the Social Security rate
of inflation compared to a health care inflation rate she
had heard of that was higher. Representative Fields
responded that he was aware of the health care rate of
inflation which had generally been higher. Most of the
Pioneer Homes' costs related to personnel were higher. He
mentioned that the sum had been discussed in the Health and
Social Services Committee. He suggested that, in reality,
the Pioneer Homes' costs would not perfectly reflect either
the health care costs or the CPI [Consumer Price Index]. He
thought it would be somewhere in the middle.
Representative Fields explained slide 7: "Complexity of
Care." The slide reflected the changes from 3 levels of
care to 5 levels of care. He reiterated the levels of care
were consistent with where the department was going and
consistent with Agnew Beck and the broader changes made to
the state's health care system in SB 74.
3:09:44 PM
Representative Fields reviewed slide 8: "Would you buy a
$37 hamburger?" He stated that Pioneer Homes were assisted
living homes which existed in a competitive marketplace. He
reemphasized the importance of retaining the self-paying
residents. He commended the Pioneer Homes' staff and
Department of Health and Social Services (DHSS) leadership
at the division director level about adapting to changing
in very challenging circumstances. His concern with the
department's proposed rate increases was that it was
assuming inelastic demand - if a certain price was charged,
fees would be collected from a significant number of
people. He had heard from people in his district and people
who had left the Pioneer Homes system based on the threat
of price increases. They were self-pay residents. He did
not want to see the state go into an adverse selection
process where more and more residents were fully subsidized
by the state. He believed it was in the interest as a state
to have a financially viable system with a health mix of
self-pay individuals.
Representative Fields continued that under the CS, the
prices for levels 1 and 2 of care would continue to be
competitive in Alaska's region and to make sure to retain
the self-paying individuals that contributed $17 million
annually to the system. The bill did not put a cap on the
rates for level 5 because it was a different set of
reimbursement that was separate from Residential Support
Living (RSL). The state could set a high price at level 5
and continue to save money as a state by shifting people
out of API and other environments that were less
appropriate.
Representative Fields turned to slide 9: "Cost of Long-Term
Care in Pacific Northwest" which was an illustration of
regional costs. He pointed out that in the Pacific
Northwest and in Anchorage assisted living care rates were
in the range of $5000 to $6000 which was competitive with
the bill he had laid out.
Representative Fields moved to slide 10: "Social Security
Cost of Living Adjustment." He explained that the slide was
an illustration of the Cost of Living Adjustment (COLA). He
indicated that if the state had been adjusting rates every
year, it would not have fallen into a hole like the state
had over the previous 15 years. He thanked the committee
for hearing his presentation and made himself available for
questions.
Representative Josephson asked how the cost increases
proposed in the bill compared to the administration's
regulatory increase. Representative Fields replied that
they were substantially less. He returned to side 8. He
pointed out that the blue bars represented the current
monthly rate; the orange bars reflected the department's
proposal; and the green bar indicated rates advertised
under the bill.
Representative Josephson asked what the administration was
going to do with the extra dollars. Representative Fields
responded that the administration's proposal regarding
advertised rates corresponded to a change in the way they
put forward a budget. The department still requested a
significant amount of general funds but changed it to a
needs-based payment assistance program. The reality was
that either under the administration's plan or the bill,
the state would continue to invest a significant amount of
money into the Pioneer Homes. The question remained about
what the advertised rated would be. He deferred to the
division for additional details.
Representative Josephson referred to the topic of state
assistance. He wondered about the difference between the
general fund subsidy and state assistance. Representative
Fields responded that the orange bars equated to what the
division said was the true cost of providing care. In
looking at the difference between the green bar and the
orange bar for level 1, there would be a small differential
between what people paid and the actual cost to provide
care, if HB 96 passed as written. The traditional general
fund allocation would fill the very small gap. Under the
administration's bill, if people were able to pay the
rates, there would be no gaps and no state subsidy needed.
Representative Carpenter asked if there was an inverse
relationship with demand. He wondered if there was more
demand at level 1 than level 5 and across the spectrum.
Representative Fields replied that he thought people
recognized the Pioneer Homes provided quality care and many
people got on the waitlist before they were at level 4. He
reemphasized the importance of having competitive pricing
at levels 1 and 2 because, regardless of when people
actually enter the Pioneer Homes, many of them get on the
list before being at level 1. Once people enter the Pioneer
Homes it was not unusual for people to move up the tiers.
They might end up paying at levels 1, 2 and 3.
3:15:30 PM
Co-Chair Wilson OPENED Public Testimony
3:15:48 PM
MARGIE BEEDLE, SELF, JUNEAU (via teleconference), reported
being in support of HB 96. She represented 119 people that
had signed a letter in support of the bill. Her mother was
a self-pay resident of the Pioneer Home in Juneau. The
governor's budget proposed increases up to 140 percent for
some residents to mitigate the state's cost to run the
Pioneer Homes. The governor's proposal illuminated how much
the state had subsidized the Pioneer Homes previously. She
informed the committee that many of the residents of the
Pioneer Home came to Juneau before statehood. They helped
develop and defend the state. She mentioned that they paid
a state income tax for most of the years they had worked
including during the time of inception of the Pioneer
Homes. She thought the people in the Pioneer Homes had
contributed greatly to the state and deserved proper care.
She relayed a number of contributions made by the elderly
in the community. Her mother worked until she was 87 years
old. She had been good and generous to the community. She
thought the state should meet her half way at supporting
her care. House Bill 96 was a compromise. She urged support
for the bill. She submitted a letter signed by 120 people.
3:19:31 PM
BRAD RIDER, SELF, JUNEAU (via teleconference), favored
HB 96 and supported Alaska's elders. He thought they had
been kicked around with all of the suggested pieces of
legislation. He opined that from the beginning of time
people have taken care of their elders and thought the
state should continue to do so. He reiterated his support
of the bill.
3:21:11 PM
FRED KOKEN, SELF, JUNEAU (via teleconference), appreciated
the committee's time. He had been a resident of Alaska for
about 50 years. His wife was a resident of the Pioneer Home
in Juneau. He had worked in the state for 30 years as a
financial consultant. He relayed that when he received the
information regarding the administration's proposed rate
increase, it was like a punch in the gut. He suggested that
the current residents within the Pioneer Homes should be
grandfathered with the prices they currently paid and had
budgeted for. He implored members to support HB 96 and
urged them not to balance the budget on the backs of the
elderly.
3:23:25 PM
JANET HENDERSON, SELF, JUNEAU, reported that her mother was
currently in the Pioneer Home. Her mother had worked in the
school district and her father had worked as a contractor
and an employee of the state. Both parents had paid into
the system and planned to enter into the Pioneer Home. Her
mother was scared about the future and finances. She
supported the bill. She did not think it was fair to raise
the elders' rent by 140 percent.
3:25:07 PM
AVES THOMPSON, SELF, ANCHORAGE (via teleconference),
thought HB 96 was a step in the right direction. His wife
was currently in the Anchorage Pioneer Home. He paid over
$6,795 per month for his wife to be there. The annual cost
was over $81,540 per year. The governor's proposed change
would increase the rate to $13,333 per month or $159,996
per year. The annual increase would equate to $78,456. He
thought the increase was driven by the fact that the
governor's amended budget proposal zeroed out about $34
million in undesignated general funds shifting the entire
fund source to user fees. He continued that the Alaska
House of Representatives just passed a budget that included
the fund shift. However, it was not a budget reduction, it
was a change in the fund source shifting all of the burden
to the user.
Mr. Thompson continued that his wife was a self-paying
resident of the Pioneer Home and received no monetary
subsidies from the state or federal governments. He had a
small amount of long-term care insurance that would last
about 12 to 13 months. The rest of the cost was paid for by
their retirement income and personal savings. The proposed
cost increase would displace his wife out of the Pioneer
Home. In the long run, many of the residents would be
subsidized by public dollars. The proposed 30 percent
increase remained excessive in his mind. He quoted
Representative Foster from an article in the Anchorage
Daily News. He urged members to carefully consider the
impact of an increase and to support HB 96.
3:29:17 PM
SHARON LONG, SELF, ANCHORAGE (via teleconference), was the
wife of a 2-year resident of the Pioneer Home and a friend
of a 92-year-old resident, Mrs. Lucy Gross. Lucy could not
sit back and watch Alaska's pioneers and veterans get
bludgeoned with exploited rates. She created a petition
that members should have that gave families a voice. She
urged members to read the letter signed by over 1120 people
petitioning a change in the proposed increase in rates. She
was speaking on behalf of the petitioners who were scared
and bewildered by how the state they helped build was
threatening their financial bearings and peace of mind.
She thanked the committee for attempting to find a
legislative solution to repeal the regulatory authority
under which the administration was making unprecedented and
draconian changes to the mission and operation of the
Pioneer Homes and for confirming existing rates as drafted
in the original version of HB 96. She thought the Social
Security COLA was a rational and incremental approach to
increases and something people could plan for. She
encouraged the committee to do the right thing for the
elders of the state.
3:32:10 PM
WILLIAM HARRINGTON, SELF, ANCHORAGE (via teleconference),
was a 70-year-old resident and believed an elder subsidy
should be equal for all residents. He proposed several
amendments to the bill. He thought a business should be run
by a business or should be out of business. He suggested
the golden years would be tough everywhere. He hoped the
legislature could come up with some solutions.
3:33:26 PM
ROCKY PLOTNICK, SELF, ANCHORAGE (via teleconference),
thanked members for hearing her testimony. She was
currently looking for assisted living in Seattle for her
92-year-old mother. She was testifying in favor of HB 96.
Her husband was in his 70s and lived in the Anchorage
Pioneer Home with Parkinson's disease. He had spent most of
his years as a physician working throughout Alaska. He was
a level 2 self-pay resident. Currently, they paid $56,304
per month. If HB 96 were to pass, their costs at the
Pioneer Home would increase to $75,600 per month. She hoped
the rate would not increase any more than what was proposed
in HB 96. She was grateful to know that her husband was
safe at the Pioneer Home.
3:36:22 PM
GEORGE PAUL, SELF, WASILLA (via teleconference), supported
the concept of HB 96. He had been in the nursing field
since 1999. He supported the governor's proposed amendment.
He had worked at two different Pioneer Homes and currently
worked at a private assisted living facility. He spoke of
the different services provided at the Pioneer Homes that
were not provided at private sector facilities. He provided
some examples. He argued that services such as physical
therapy that had to be sought independently of a private
facility should be subsidized to make things equitable.
3:40:09 PM
Co-Chair Wilson CLOSED Public Testimony.
Co-Chair Wilson indicated amendments were due Thursday,
May 2, 2019 by 5:00 P.M. The committee would review
amendments and the fiscal notes at another hearing.
HB 96 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2019 House Finance Criminal Justice Reform.pdf |
HFIN 4/29/2019 1:30:00 PM |
HFIN |
| HB031 Sponsor Statement 4.24.19.pdf |
HFIN 4/29/2019 1:30:00 PM |
HB 31 |
| HB031 Sectional Analysis ver U 4.24.19.pdf |
HFIN 4/29/2019 1:30:00 PM |
HB 31 |
| CSHB 96 Sectional Analysis Version M 4.24.19.pdf |
HFIN 4/29/2019 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| CSHB 96 Sponsor Statement 4.24.19.pdf |
HFIN 4/29/2019 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| CSHB 96 Summary of Changes Version M to Version U 4.24.19.pdf |
HFIN 4/29/2019 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| CSHB 96 Supporting Document Combined Letters of Support 4.24.19.pdf |
HFIN 4/29/2019 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| CSHB 96 Supporting Document PPT Presentation 4.24.19.pdf |
HFIN 4/29/2019 1:30:00 PM |
HB 96 |
| HB031 Presentation 4.29.19.pdf |
HFIN 4/29/2019 1:30:00 PM |
HB 31 |
| HB 96 Supporting Doc. Support .pdf |
HFIN 4/29/2019 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |
| HB 96 Supporting Doc Petition of Support.pdf |
HFIN 4/29/2019 1:30:00 PM SHSS 2/12/2020 1:30:00 PM |
HB 96 |