04/24/2003 02:18 PM House FIN

SENATE BILL NO. 108                                                                                                           
                                                                                                                                
     An  Act relating  to payment  rates  under the  Medicaid                                                                   
     program   for  health  facilities   and  to   budgeting,                                                                   
     accounting,   and  reporting   requirements  for   those                                                                   
     facilities;   abolishing  the  Medicaid   Rate  Advisory                                                                   
     Commission; and providing for an effective date.                                                                           
                                                                                                                                
Co-Chair  Harris  MOVED  to adopt  work  draft  #23-GS1125\I,                                                                   
Lauterbach, 4/23/03,  as the version  of the bill  before the                                                                   
Committee.  There being NO OBJECTION, it was adopted.                                                                           
                                                                                                                                
JOEL GILBERTSON, COMMISSIONER,  DEPARTMENT OF HEALTH & SOCIAL                                                                   
SERVICES,  commented on  the changes  made  to the  committee                                                                   
substitute.   He  stated that  the bill  would eliminate  the                                                                   
Medicaid   Rate    Advisory   Commission   and    place   the                                                                   
responsibility for  calculating and setting  Medicaid payment                                                                   
rates for health care facilities  under the general authority                                                                   
of the  Department  of Health  & Social Services.   The  bill                                                                   
would  modify   the  Alaska  Statutes  to   parallel  federal                                                                   
statutory  requirements  for   setting  facility-based  rates                                                                   
under Medicaid.   Originally,  the structure was  modified in                                                                   
1997 to  remove the Medicaid  facility payment  standards and                                                                   
place  them in  the public  process  requirements of  federal                                                                   
law.   The Alaska Statutes have  not changed to  reflect that                                                                   
modification.                                                                                                                   
                                                                                                                                
Commissioner  Gilbertson  continued,  the  legislation  would                                                                   
provide  for  the  Alaska  Statutes  to  mirror  the  federal                                                                   
statutory requirement  for rate setting.   He noted  that the                                                                   
Department  had worked  with the  Alaska  State Hospital  and                                                                   
Nursing  Home  Association  (ASHNHA)  to  provide  compromise                                                                   
language  as  adopted  in  the  committee  substitute.    The                                                                   
language  clarifies  that the  State  will continue  to  have                                                                   
rates based on  reasonable costs.  The  Administration agrees                                                                   
that there should not be "unreasonable"  costs or rates.  The                                                                   
Department  does  have  an interest  in  grouping  rates  for                                                                   
facilities.  The current structure  allows for the Department                                                                   
to only adopt  one rate setting structure and  does not allow                                                                   
differentiating  between   a  ten-bed  facility   and  a  two                                                                   
hundred-bed  facility.    The  legislation is  an  effort  to                                                                   
provide a unique methodology in grouping facilities.                                                                            
                                                                                                                                
Commissioner   Gilbertson   pointed   out  that   Section   5                                                                   
references  audits   and  are  optional  and   would  not  be                                                                   
required.   Those audits  would not happen  every year.   The                                                                   
Department  would retain  their  ability  to have  reasonable                                                                   
access to medical assistance for auditing records.                                                                              
                                                                                                                                
Representative Croft referenced  the committee substitute and                                                                   
asked if the  section regarding the reasonable  costs for the                                                                   
facility  managers  were  listed  on Page  2.    Commissioner                                                                   
Gilbertson replied that was correct.                                                                                            
                                                                                                                                
Representative  Croft  asked  if  there had  been  any  other                                                                   
changes  between  the  committee  substitute  and  the  prior                                                                   
version  of   the  legislation.     Commissioner   Gilbertson                                                                   
responded  that  there were  a  number  of small  changes  to                                                                   
accommodate  some   concerns  voiced  by   Legislative  Legal                                                                   
Services.  The  substantive changes were the  ones concerning                                                                   
the language on legal costs related to patient care.                                                                            
                                                                                                                                
Representative  Croft asked  if Section  5 would be  changed.                                                                   
Commissioner Gilbertson responded it would not.                                                                                 
                                                                                                                                
Representative  Foster MOVED to  report HCS  CS SB  108 (FIN)                                                                   
out  of Committee  with individual  recommendations and  with                                                                   
the accompanying fiscal note.                                                                                                   
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HCS CS SB 108 (FIN) was reported  out of Committee with a "do                                                                   
pass"  recommendation   and  with  fiscal  note   #1  by  the                                                                   
Department of Health and Social Services.