03/30/2009 09:00 AM Senate FINANCE

SENATE BILL NO. 32                                                                                                            
                                                                                                                                
     "An Act relating to medical assistance payments for                                                                        
     home and community-based services."                                                                                        
                                                                                                                                
9:09:21 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to  ADOPT CSSB  32 (FIN),  version M                                                                    
out of  Committee with the accompanying  fiscal notes. There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
Senator  Ellis reviewed  the Committee  Substitute (CS).  He                                                                    
explained  that  his  aide  Max  Hensley  will  explain  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
HENSLEY,   MAX,   STAFF,   SENATOR   ELLIS,   reviewed   the                                                                    
legislation. He  thanked the staff  of the Co-chair  for the                                                                    
work done in  developing the CS. He stated that  the CS is a                                                                    
simpler  bill which  greatly reduces  the forecasted  fiscal                                                                    
impact  to the  state.  The CS  removes  the general  relief                                                                    
medical programs formerly in the  Health and Social Services                                                                    
committee's  work version.  The  intention is  focus on  the                                                                    
Medicaid  sector.   He noted  Page 2,  Line 5  replacing the                                                                    
word "consider" for  "use" and Page 2, Line  6 replacing the                                                                    
word  "cost"  with  "periodic cost  surveys."  Both  changes                                                                    
achieve  the goals  of the  original  legislation with  less                                                                    
overhead and administrative burden.  He noted two new fiscal                                                                    
notes;  the  first  maintains  funding  for  three  existing                                                                    
positions  not included  in the  FY10 operating  budget, the                                                                    
second includes updated assumptions  for rates whose funding                                                                    
is  appropriated  by the  legislature.  He  defined the  new                                                                    
fiscal notes as predictive assumptions.                                                                                         
                                                                                                                                
9:12:49 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  requested  a  brief  explanation  of  the                                                                    
bill's purpose for constituents  at home. Mr. Hensley stated                                                                    
that SB  32 provides  regular and  periodic rate  review for                                                                    
the  providers of  home and  community based  services under                                                                    
the Medicaid waiver program.                                                                                                    
                                                                                                                                
Co-Chair Stedman addressed the  fiscal notes. The first note                                                                    
is from Support Services in  an annual general fund match of                                                                    
$182 thousand  to fund  three new  full time  positions. The                                                                    
second  note   is  from   Senior  and   Disability  Services                                                                    
illustrating zero cost  for FY10 and FY11, and  a $3 million                                                                    
cost   in   FY12   for   increased   Medicaid   benefit   on                                                                    
appropriation.                                                                                                                  
                                                                                                                                
Senator Ellis  noted appreciation for  the work done  on the                                                                    
bill.   He   expressed    satisfaction   at   the   improved                                                                    
legislation.                                                                                                                    
                                                                                                                                
9:14:50 AM                                                                                                                    
                                                                                                                                
JON   SHERWOOD,   DIRECTOR,   OFFICE  OF   PROGRAM   REVIEW,                                                                    
DEPARTMENT   OF   HEALTH   AND   SOCIAL   SERVICES   (DHSS),                                                                    
represented the  administration. He appreciated the  bill in                                                                    
the  current  draft.  He felt  that  there  was  flexibility                                                                    
present  in the  amended  draft  and he  felt  it worthy  of                                                                    
statute.                                                                                                                        
                                                                                                                                
Co-Chair Stedman  reminded of public testimony  taken at the                                                                    
previous hearing.                                                                                                               
                                                                                                                                
Co-Chair Hoffman informed that  the fiscal notes stating the                                                                    
amounts do not include inflation unless otherwise noted.                                                                        
                                                                                                                                
Mr. Sherwood  answered that  there is  not inflation  on the                                                                    
administrative  cost of  the  fiscal note,  but  there is  a                                                                    
specific inflation  rate for the  Medicare home  health care                                                                    
market  basket  index.  In  an   effort  to  give  the  best                                                                    
approximation  of   the  impact  of  the   bill  showed  the                                                                    
inflation rate moving forward from FY12.                                                                                        
                                                                                                                                
9:17:44 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  asked  if  the  inflation  rate  was  2.8                                                                    
percent. Mr. Sherwood confirmed 2.8 percent.                                                                                    
                                                                                                                                
Senator Olson asked the department's  view on Section 3. Mr.                                                                    
Sherwood  responded   that  Section   3  would   repeal  the                                                                    
provision  that  the  department  must report  on  the  rate                                                                    
setting process  by 2014.  By 2014,  he opined  the progress                                                                    
will be well established and  functional. He stated that the                                                                    
department  did not  anticipate the  need to  provide annual                                                                    
progress  reports.  He  stated that  reporting  would  prove                                                                    
redundant each  year although the  department is  willing to                                                                    
present reports at the will of the legislature.                                                                                 
                                                                                                                                
Senator  Olson  asked  how  to  ensure  that  the  community                                                                    
service providers continue to  receive compensation for fair                                                                    
market  value.   Mr.  Hensley  explained  that   the  sunset                                                                    
provision removes the reporting  provision fee, but the rate                                                                    
setting provision remains in statute.                                                                                           
                                                                                                                                
9:19:30 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  asked   about  the  additional  personnel                                                                    
requested. Mr. Sherwood answered  that the department sought                                                                    
information regarding  reports from providers  learning that                                                                    
the  providers   neglect  to   report  accurate   costs.  He                                                                    
suggested that  the legislation must inform  providers about                                                                    
surveys. Surveys and  analysis must occur prior  to new rate                                                                    
setting.                                                                                                                        
                                                                                                                                
Co-Chair   Hoffman  asked   why   the  department   requests                                                                    
continuation  of  the  three  new  positions  following  the                                                                    
process of  survey and analysis.  Mr. Sherwood  replied that                                                                    
cost  surveys  are  anticipated  periodically.  The  ongoing                                                                    
process  ensures  current   information  required  for  rate                                                                    
setting.  He mentioned  that hiring  new providers  requires                                                                    
training.  Mr. Hensley  explained that  the three  positions                                                                    
exist  currently  and   therefore  maintenance  rather  than                                                                    
creation is the goal.                                                                                                           
                                                                                                                                
9:22:27 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman asked  for verification  of Mr.  Hensley's                                                                    
comment.   Mr.  Sherwood   responded   that  the   requested                                                                    
positions  are   currently  filled  and  funded   under  the                                                                    
previous SB 61 efforts addressing Medicaid reform.                                                                              
                                                                                                                                
Senator Ellis MOVED to report  CSSB 32 out of Committee with                                                                    
individual recommendations and  the accompanying fiscal note                                                                    
there being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
9:23:50 AM