Legislature(2003 - 2004)
03/31/2003 03:25 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 153
An Act repealing the statute that sets priorities for
the Department of Health and Social Services to apply
to administration of the medical assistance program
when there are insufficient funds allocated in the
state budget for that program; authorizing the
department to make cost containment decisions that may
include decisions about eligibility of persons and
availability of services under the medical assistance
program; and providing for an effective date.
JOEL GILBERTSON, COMMISSIONER, DEPARTMENT OF HEALTH & SOCIAL
SERVICES, stated that under current law, if funds
appropriated to the Medicaid program are insufficient for a
given fiscal year, the Department is directed to eliminate
optional Medicaid services based on a priority list that is
out-of-date. The existing list is not an effective
management tool and if used, would result in the denial of
necessary and cost-effective services to Alaskans in need of
health care.
He continued that the proposed bill would replace that
obsolescent language with authority for the Department to
undertake cost containment based on three key principles.
· First, the Department must pursue all other reasonable
cost containment measures before eliminating any
eligibility groups or services;
· Second, the Department should aggressively pursue
strategies to maximize federal financial participation
in the Medicaid program;
· Third, cost containment decisions should be made in a
manner that best reflects the needs and interests of
eligible Medicaid recipients.
Commissioner Gilbertson noted that it is imperative to slow
the growth of State funding for Medicaid while at the same
time maintaining health care coverage for needy Alaskans,
which is an issue that can no longer be avoided. Passage of
the legislation will give the Department additional tools to
meet these challenges.
Representative Stoltze asked if the Department would see
benefit in being able to prorate the amount of payment to
eligible persons.
BOB LABBE, DEPUTY DIRECTOR, DEPARTMENT OF HEALTH AND SOCIAL
SERVICES, stated that the payments made in the Medical
Assistance Program are to health care providers rather than
to individual beneficiaries. It is difficult to prorate
once they have provided the service.
Representative Croft pointed out that the Department could
determine to eliminate item #11, mammography screening, if
the bill was passed.
Commissioner Gilbertson acknowledged that under the current
options list, item #11 could go. The Department would
maintain the discretion to help achieve cost containment.
Representative Croft commented that the Department could get
rid on any item on the list and that they would not be
required to move in the order already established.
Commissioner Gilbertson acknowledged that was correct.
Representative Croft asked if there was any intent language,
which would require the Department to come back to the
Legislature before eliminating any one provision.
Commissioner Gilbertson replied that there is not a
provision in the bill that would require that, however, the
Department would be working with the coordination of the
Legislature, to find ways to insure that the funding was
available for services that are needed. There is direction
from the Legislature to the agency to provide for cost
containment of the Department to manage the Medicaid budget
within the amount that the Legislature appropriates. The
Department needs the flexibility, which the bill provides
to, accomplish that mission.
Representative Hawker commented on the latitude the
Department needs in order to provide for cost containment.
He inquired if situations might occur when the Legislature
is not in session.
Mr. Labbe responded that in the past, the Department has
projected the expenditures for the Medicaid program while in
session. If the Department realizes that they have a
significant reduction, they would bring the choices to the
Legislature at that time. However, with only the option
list available, there have been unintended consequences
resulting from the high federal matching rate to achieve any
savings. Mr. Labbe anticipated that if there were
significant budget actions taken, the Department would then
indicate a plan on how to meet that, such as:
· Eligibility levels
· Eliminating services and/or
· Providing enhancements
Mr. Labbe added that there would be a package deal in order
to achieve the program outlined. The intent is to preserve
the benefit and the eligibility levels. He pointed out that
taking the proposed actions requires regulation change,
which does not move very quickly. Based on the proposed
budget, the Department will not be able to make it through
this next year without taking some additional measures.
Commissioner Gilbertson pointed out that the fiscal note
indicates zero expenditures. The Department believes that
if the Governor's budget passes as submitted, that budget
contains all the cost containment intended.
Representative Hawker understood that the bill would give
the Department latitude and/or flexibility to choose amongst
alternate means to meet the budget shortfall.
Commissioner Gilbertson agreed that was correct. The
current structure limits the Department's flexibility and
disproportionately places the burden on a number of services
that may not be efficient, such as the elimination of
prescription drug coverage. The Department would have to go
after some needed services before affecting the eligibility
standards. The additional flexibility would allow the
Department to manage the program to the same level of
responsiveness to maintain costs. It would also reduce the
impact on the consumers.
Co-Chair Williams noted that HB 153 would be HELD for
further consideration.
HOUSE BILL NO. 153
An Act repealing the statute that sets priorities for
the Department of Health and Social Services to apply
to administration of the medical assistance program
when there are insufficient funds allocated in the
state budget for that program; authorizing the
department to make cost containment decisions that may
include decisions about eligibility of persons and
availability of services under the medical assistance
program; and providing for an effective date.
Representative Hawker MOVED to report HB 153 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 153 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note #1 by the
Department of Health and Social Services.
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