Legislature(1999 - 2000)
03/03/1999 01:35 PM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 59-CERTIFICATES OF NEED FOR HEALTH FACILITY
VICE-CHAIRMAN KELLY brought up SB 59 and announced that Mr. Jay
Livey would provide an overview of the bill.
Number 376
MR. JAY LIVEY, Deputy Commissioner, Department of Health & Social
Services, explained that SB 59 would change the criteria for
review of Certificate of Need applications for long-term care.
Currently, if a facility is going to cost more than $1 million,
it has to ask for a Certificate of Need from the department.
Under the current criteria of review, the standards are
availability, accessibility and quality. If a need can be
demonstrated for the nursing bed, the DHSS is hard-pressed not to
say yes.
This bill adds several other criteria for the department to
consider in its decision, including whether or not the nursing
home expansion fits into the plans of the community for long-term
care; whether or not the service provided will be efficient; and
most importantly, the cost-effectiveness of the nursing home
expansion. MR. LIVEY said 90% of the nursing home costs in
Alaska are paid by Medicaid. The department operating budget in
particular has an interest in the expansion of nursing home beds.
If other ways to provide that long-term care were less expensive
or more cost-effective to the state, the department could
consider those in its decision-making process.
Number 401
SENATOR WILKEN commented that SB 59 relates to Recommendation #21
of the LTCTF final report. He asked Mr. Livey to discuss the
skepticism surrounding this kind of legislation.
MR. LIVEY replied the skepticism probably arises from the degree
to which people want the state to regulate this kind of business.
The nursing home industry is largely run by private, nonprofit
organizations, but it's all state money. Ninety percent of the
$43 - $44 million the department spends on nursing homes out of
the Medicaid program is state money. The department needs tools
to regulate the growth and expenditure of the nursing home
business.
He continued, saying the department needs to look at other
alternatives for providing that same level of care through
assisted living, or through home and community-based waivers.
DHSS runs the waiver program in conjunction with the DOA. Home
and community-based care can be provided for significantly less
expenditure than nursing home care.
Number 426
SENATOR WILKEN asked Mr. Livey to explain the effect of the two-
year moratorium on the Certificate of Need.
MR. LIVEY said that two years ago the Legislature placed a two-
year moratorium on the development of nursing home beds. The
intent was to stop the growth of nursing home beds to let the
more efficient and less expensive community based care system
develop, including the building of more assisted living homes and
expansion of the home and community-based waiver. It was fairly
successful over the 2-year period. In 1998, about 143,000
patient days were provided through the home and community- based
care system. These patient days included the provision of
nutritional meals or a nurse visiting the home. Now, around
160,000 patient days are provided through the nursing homes,
about equalizing the two different services. However, the 143,000
patient days cost the Medicaid program about $6.5 million,
whereas the 160,000 patient days in institutions cost the
Medicaid program about $44 million.
The moratorium is now off. Where families have a choice, some
feel the nursing home is the best care provider, while others
like the community options.
SENATOR ELTON asked if the department might never issue a
Certificate of Need, if a criteria is cost-effectiveness. MR.
LIVEY replied it is just one of the criteria that include
accessibility and need. If there is consistently a waiting list
for nursing home care, that would still be a criteria considered
in the decision.
SENATOR ELTON assumed there might be a demand, due to the two-
year moratorium. MR. LIVEY stated that since it ended last
September, the department has had one certificate pending.
Facilities expanding the number of beds but falling below the $1
million threshold don't come to the department for review.
Regarding the pending certificate, the department would review
whether community-based services are available and the family
still prefers the nursing home option; if so, the Medicaid
program has an obligation to make it available and pay for that
service.
SENATOR WILKEN invited Ms. Jane Demmert to comment on the four
bills.
MS. JANE DEMMERT, Executive Director of the Commission on Aging,
expressed the commission's support for the four bills which
consider basic infrastructure to help aging residents stay in the
state. The commission is now drafting resolutions of support for
the bills that will be forwarded to the committee.
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