04/23/1997 01:40 PM House FIN

  HOUSE BILL 202                                                               
                                                                               
       "An Act relating to the medical assistance program; and                 
       providing for an effective date."                                       
                                                                               
  Co-Chair  Therriault placed  HB  202  in  Subcommittee  with                 
  himself as Chair and with  members Representative Hanley and                 
  Representative Grussendorf.  He  requested the Department to                 
  present an outline of their concerns.                                        
                                                                               
  KAREN  PERDUE, COMMISSIONER, DEPARTMENT OF HEALTH AND SOCIAL                 
  SERVICES,  provided  testimony  addressing  the  issues   of                 
  concern.                                                                     
  (Tape Malfunction-for portion of tape HFC 97-111, Side 1).                   
                                                                               
  Commissioner Perdue  noted that  the Department  has made  a                 
  detailed list of  the cost management activities  which will                 
  produce necessary savings.  Because  of the number of claims                 
  and  the  volume,  the  Department  cannot  guarantee  those                 
  savings.   There has  been discussion  regarding a  possible                 
  supplemental request.                                                        
                                                                               
  The Medicaid program is currently a large insurance program.                 
  There  are  about  thirty-nine  hundred  Alaskan   providers                 
  serving roughly  seventy  thousand  patients  per  year  and                 
  submitting  1.8 million claims.   A small staff of employees                 
  and  the contractor,  co-located in  Anchorage,  manage that                 
  system  on a timely  basis.  The  program is run  well as an                 
  insurance program.                                                           
                                                                               
  The Medicaid program  is an entirely general  fund supported                 
  program which either lapses  money into the general  fund or                 
  over expends.   She commented that  the margin of error  has                 
  become  increasingly  more  problematic as  the  program has                 
  gotten larger.                                                               
                                                                               
  The  intent  language   details  approximately  $21  million                 
  dollars in cost  savings which  the Department will  achieve                 
  next year.   She reiterated that the Department is committed                 
  to making the savings.                                                       
                                                                               
  Commissioner Perdue advised  that the  options list had  not                 
  been  intended  to be  a tool  placed in  statute.   All the                 
  options were not  covered.  The list  was not meant to  be a                 
  budgetary tool because  the lag time needed  to make changes                 
  to  the program  is  at  least six  to  eight months.    She                 
  stressed  that it  would be important  to remember  that the                 
  program must be managed far in advance.                                      
                                                                               
  Commissioner  Perdue  concluded  noting  that the  providers                 
                                                                               
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  stability and the State's need to pay the bills is essential                 
  for the patients ongoing access.                                             
                                                                               
  Co-Chair Therriault explained that it was his intent to have                 
  the medical assistance priority list rewritten, and that the                 
  Subcommittee   would  work  on  those  concerns  during  the                 
  interim.                                                                     
                                                                               
  HB 202 was HELD in Committee for further consideration.