Legislature(1995 - 1996)
04/24/1996 09:02 AM Senate HES
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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
CSHB 393(FIN) MANAGED CARE PROGRAM FOR MEDICAID
CHAIRMAN GREEN brought CSHB 393(FIN) before the committee as the
final order of business.
REPRESENTATIVE NORMAN ROKEBERG, prime sponsor of HB 393, said the
legislation requests the Department of Health & Social Services to
submit draft legislation, through the Governor, to establish funded
programs for managed for Medicaid recipients in the state of
Alaska. The intent of the legislation is to expedite and give
direction to the implementation of managed care and to involve the
legislature, the provider community and the public in this process.
Representative Rokeberg pointed out that this is a major change in
the public policy of this state, and it is important to remember
that Medicaid is the second largest component of the state's
budget, after education. He stressed the importance to get cost
containment and control of this growing budget area, which has
increased 13.9 percent each year for the past five years.
Representative Rokeberg believes it is inevitable that there will
be block grants, whether it is the Medicaid per capita or the
National Governors Association proposal that will be adopted by
Congress and, ultimately, approved by whoever is in the presidency.
He said the state needs to be prepared to take block grants and
have a system in place for health care delivery that accounts for
that. In addition, it needs to be done in a cost-effective,
quality manner.
Representative Rokeberg noted there are 43 states that have some
form of managed care for Medicaid, and Alaska has an opportunity to
learn from the examples of these other states. The department has
awarded a contract to the Fox Corporation of Arizona to study other
states' models and to propose plans for development of managed care
in Alaska. Presently, the department is developing a managed care
program that has worked in other states called the Primary Care
Case Management (PCCM) program, which assigns the patient a
specific physician or care provider, however, this primary care
doctor could direct the patients to other specialists, etc.
Representative Rokeberg said HB 393 has the support of the
Department of Health & Social Services, the Alaska State Hospital
& Nursing Home Association, the Tanana Chiefs Conference and the
Alaska State Medical Association.
Number 396
SENATOR SALO asked what will happen as a result of passage of this
bill that will not happen otherwise. REPRESENTATIVE ROKEBERG
replied that it is the intention to specifically require that the
department set up a pilot program in two areas of the state, which
would include a rural portion of the state, as well as assuring
that the legislature is included in the loop of this determination
of public policy. He added it is not his intention to inhibit the
development of this program, but he believes it is incumbent upon
the legislature to ensure that the people who are going to be
affected by this be part of the process.
SENATOR SALO asked Representative Rokeberg why he thinks the Alaska
State Medical Association supports this legislation.
REPRESENTATIVE ROKEBERG replied that after AMA first reviewed the
legislation, they gave it kind of a tepid endorsement, but just
before the bill went to the House floor, AMA wrote a letter, which
was a much warmer endorsement of the bill, as well as suggesting
that when considering the final legislation, to take into account
the concept of "any willing provider." He reiterated the
importance of giving the department some direction to make sure
that the program is implemented in such a way that the public of
this state will accept it and agree to it.
Number 441
BOB LABBE, Director, Division of Medical Assistance, Department of
Health & Social Services, said the department has been meeting with
Representative Rokeberg since the bill was first introduced in
order to work together on the development of the bill. As the
department understood the bill, it was to direct them to develop
some pilot projects, a process that they begun. They have hired a
contractor that's helping educate the staff on various managed care
models and they are working with the contractor on some recommended
approaches for Alaska that would take into account the vast
geography, the rural and Native sector, as well as the urban areas.
Mr. Labbe said a problem they have encountered and that needs to be
clarified is the requirement that the department would have to come
back for legislation to implement managed care pilots. They
believe they already have adequate authority and direction from an
earlier session to begin doing this, which is why they have the
contract and are looking at it. Because of budget constraints, the
department feels it needs to be more aggressive in looking at
options to control costs, and there is the concern that as they
move forward, if it is necessary to come back to get permission to
move ahead, that opportunity will be lost. Their view is that
modification of the bill should require only to bring legislation
back if it is necessary to implement what they are doing.
Mr. Labbe also pointed out that since the term "managed care" is
not defined in the legislation, there is concern that any activity
they take on could be construed to be a managed care activity and
be prohibited, and the department has drafted some language to be
considered to address that concern.
Number 485
KAREN PERDUE, Commissioner, Department of Health & Social Services,
said one of the reasons she recruited Mr. Labbe is that he comes
from Oregon where he was the chief Medicaid person who helped them
develop a very consumer sensitive managed care program. She added
she is only interested in doing managed care if it both manages
costs prudently and it meets the needs of consumers and providers.
Commissioner Perdue also expressed her concern with the provision
in the bill requiring the department to come back to the
legislature and ask for permission, if needed. She believes the
department has got clear direction from the legislature that they
need to start these pilots. These pilots will only be done on a
voluntary basis with the providers in those communities, and there
are federal processes in place for the department to protect
consumers.
Number 496
SENATOR SALO commented she didn't know whether or not involvement
in the process by the legislature was necessary, but she thinks it
is important that the legislature receive a report on the pilot
projects, and she wondered if there was a way that could be
addressed in the legislation.
Number 505
BOB LABBE, directed attention to the department's proposed
amendment, which after the term "draft legislation" inserts the
words "if necessary" so that the department would only bring back
draft legislation if it were necessary. The second change would
clarify that nothing in the bill would prevent the department from
acting to effectively manage costs through case management and
costs containment measures that are within the department's
statutory authorization in order to assure the operation of the
program within the FY 97 budget.
Mr. Labbe said the legislation requires that the department submit
draft legislation on the first day of the next legislative session,
but he does see that time frame being realistic. The contractor
should have its report by the end of the June, but it will take
some time to decide where they would do this and who they would be
working with, etc. However, he expressed the department's
willingness to come in an give a report to the committees, even if
they are just in the planning process. Also, right now their
computer system cannot accommodate what would be considered managed
care without upgrades to the system.
Number 542
COMMISSIONER PERDUE said if they were doing a program design and
negotiating with a provider and then had to come back to the
legislature to have a contract approved, it would be too cumbersome
for the department in terms of managing this program. If it was
found they need legislation, that could be requested, but she
believes that if it is not needed, it is a very cumbersome process.
She thought a report to the legislature on the progress of the
pilot projects was a good idea.
Number 553
REPRESENTATIVE ROKEBERG said he is sensitive to the Commissioner's
concerns, and it is not the intent of this bill to inhibit or
hinder the department in any way. His concern is that they proceed
rapidly and he doesn't want them to lose the momentum in moving
forward. He has been looking at the proposed amendment and he has
some recommendations that he will make. He suggested there are
anti trust issues that need to be looked at and a number of
statutory issues that should be focused on to make sure the
department has the statutory authority to proceed without being
inhibited in any way.
Number 572
SENATOR SALO suggested a conceptual amendment to subsection (b)
that would delete the requirement for draft legislation and replace
it with a requirement that the Department of Health and Social
Services submit to the legislature, through the Health, Education
& Social Services committees, a report of a design for
implementation of the proposed system.
REPRESENTATIVE ROKEBERG stated he would look at the conceptual
amendment as hostile to the intent of the bill.
TAPE 96-34, SIDE B
Number 010
COMMISSIONER PERDUE reiterated she believes an amendment is needed
because the current bill requires the department to come back for
legislation no matter what the situation is.
REPRESENTATIVE ROKEBERG reiterated his point that this is a major
change in public policy in this state and that is why the
legislature needs to be involved.
Number 050
CHAIRMAN GREEN requested that the sponsor, the department and
interested parties get together before the committee's next meeting
to see if the concerns expressed during the meeting can be worked
out.
There being no further business to come before the committee, the
meeting was adjourned at 10:00 a.m.
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