Legislature(2009 - 2010)BELTZ 211
04/08/2009 08:00 AM Senate EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| SB174 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | SB 174 | ||
SB 174-PROF STUDENT EXCHANGE LOAN FORGIVENESS
8:05:52 AM
CHAIR DAVIS announced SB 174 to be up for consideration.
8:05:58 AM
SENATOR MENARD, sponsor of SB 174, said this measure will boost
the number of Alaska's health care providers by making it more
financially feasible and attractive for a recent graduate to
come back to the state. The Washington, Wyoming, Alaska, Montana
and Idaho Program (WWAMI) currently provides for educational
opportunities for medical students, but not for dentists,
pharmacists, and optometrists. This is where SB 174 comes into
play.
She said there is no doubt about Alaska's shortage of dentists
especially in rural Alaska. She said a well-crafted loan
forgiveness program will entice Alaskans graduating in
dentistry, pharmacy and optometry to come home to their careers.
SB 174 accomplishes this by setting requirements for loan
forgiveness. Working with the Western Interstate Commissions for
Higher Education (WICHE), residents will be able to attend
professional health care programs not offered in Alaska's
university system. WICHE is a regional organization adopted in
the 1950s; its purpose is to create resource sharing among
higher education systems in the American West. This bill
establishes a minimum number of supported Alaskans participants
in dentistry, pharmacy and optometry. It also sets the loan
interest rate for the postsecondary education loan at 5 percent
and provides a 0 percent interest while participating in the
school period. SB 174 will establish a forgiveness program
entitlement up to 25 percent for participants who meet these
criteria: they must accept Medicaid for not less than 5 percent
of their total average gross billings of the year; they can get
an additional 25 percent forgiveness if they maintain a practice
that serves an underserved population in Alaska.
SENATOR MENARD summarized that it is not secret how very
expensive dental schools are and Nevada is even considering
closing its dental school. She said that dental equipment for
schools is much more expensive than for medical schools; so she
didn't see that Alaska would ever be able to provide a dental
school.
8:11:10 AM
SENATOR HUGGINS moved to adopt the proposed committee substitute
(CS) to SB 174, labeled 26-LS0764\ S, as the working document.
CHAIR DAVIS objected for discussion purposes.
8:12:04 AM
SENATOR HUGGINS asked if the 5 percent interest rate is standard
or if it varies.
DIANE BARRANS, Executive Director, Alaska Commission on
Postsecondary Education (ACPE) answered that this language would
set a fixed interest rate in statute that would apply to the
entire repayment period of the loan program.
SENATOR HUGGINS asked if this applies to other loan programs she
administers.
MS. BARRANS replied the interest rate for loans financed through
the Alaska Student Loan Corporation is reset annually; the
current rate on the Alaska Supplemental Education Loan is 7.3
percent. This is fixed for the life of the loan; the new loans
would be reset in the next year. This would have no impact on
the corporation's ability to set the interest rate on any other
program except the Professional Education Exchange Program.
One concern may be that this program is being overlaid on an
existing professional student exchange loan program that applied
to fields other than dentistry, pharmacy and optometry. It would
impose that interest rate as well as the zero interest period on
the other fields that are being supported by the Student Loan
Corporation. When they finance loans through the Student Loan
Corporation, they need interest to accrue during the entire
period of the borrowing. The corporation needs the ability to
set that rate in such a fashion that those loans can be financed
through the capital markets.
SENATOR HUGGINS said it makes more sense to not set the rate in
statute, but to have an adjustment factor.
8:15:49 AM
MS. BARRANS remarked that fixing interest rates below market
rates is a policy call for the legislature; this would be funded
by the general fund.
8:16:25 AM
SENATOR STEVENS said he feels this is a slippery slope. What
they are really doing is saying these particular occupations are
especially needed, but he has heard that about teachers,
doctors, dentists, and engineers. How do they logically decide
who needs it the most?
MS. BARRANS replied that the proposal before them is somewhat
different in that it doesn't forgive other education loans. The
only debt this benefit applies to is the extra debt these
students are incurring by paying support fees. She explained
that the Professional Student Exchange Program works is that it
is managed by the WICHE organization, but it's one of three
student exchange programs. It is the only one that has a per-
student support fee paid by the sending state to the receiving
institution. That is above what the student is already incurring
as a tuition cost. In the case of dentists, that is a little
over $18,000/yr. What they get in exchange for that support fee
is preferential consideration for admission into that graduate
program. This might actually be considered leveling the playing
field between the professions that are offered through the
University of Alaska or other institutions in Alaska and ones
that are not available in Alaska.
SENATOR STEVENS asked if there are other occupations they should
consider for this type of help.
MS. BARRANS answered yes; this bill originally addressed all of
the fields that currently provide support fees through a loan
mechanism. So they would just shift from a student loan
corporation funding model to a general fund (GF) funding model.
That has now been narrowed to three occupations. One reason is
that the UA is working on developing a partnership to deliver
physician assistant training. She wasn't sure what the
rationales were for eliminating occupational therapy and
podiatry; physical therapy wasn't included.
MS. BARRANS explained that the fiscal note hadn't changed for
the CS.
8:19:42 AM
SENATOR OLSON said obviously they are all concerned about the
unsustainability of the budget, but they need to be more
concerned about the health care industries that affect the
health and welfare of the state's aging population which is
increasing than other professions that don't involve life and
death situations. He asked what happens to the interest rate
when the students are in residency.
MS. BARRANS replied that the interest accrues during residency,
but these three occupations don't require residency.
SENATOR OLSON asked if a student is eligible who wants to go on
to oral surgery, for instance, that has residency.
8:23:23 AM
MS. BARRANS replied yes; as the bill is written.
SENATOR OLSON said the fiscal note goes from zero during 2010 to
double that in 2011, and asked if she really anticipated that
great a participation.
8:24:00 AM
MS. BARRANS replied it is quite possible because so many
advantageous terms are made available. She prepared the fiscal
note with the full complement of students for each of the
occupations. The bill provides for a minimum number of seats to
be supported each year; and to the extent that the legislature
were to appropriate more money, more students could be funded.
SENATOR OLSON asked what the return rate is now for students
participating in the program and what the expected return rate
is once this program is implemented.
8:25:03 AM
MS. BARRANS replied that she did not have return rate
statistics, but she would get the figures from the WICHE office.
Right now participants who are borrowing the support fee don't
have an obligation to return to Alaska.
8:25:25 AM
VICE CHAIR DAVIS said the fiscal note was based on a 7.5 percent
interest rate and it is now 5 percent. Wouldn't that change the
fiscal note?
MS. BARRANS replied that the interest rate is not reflected at
all in the fiscal note. It is just the amount of the support fee
for the five seats per field of study listed in the original
bill. What would impact the fiscal note (considerably, she
thought) would be the elimination of the other fields that were
required to be supported.
8:26:06 AM
SENATOR STEVENS asked if keeping track of the forgiveness for
treating Medicaid patients and underserved Alaskans was a
function of her office.
MS. BARRANS replied that her division has no capacity or
expertise to do that work. They would rely on the Department of
Health and Social Services (DHSS) for the information in section
AS 14.44.042 (2)(a). With respect to attestation to comply in
(2)(b) they would likely require independent third-party
documentation that the provider had done that at their expense.
MS. BARRANS also stated that the Department of Law indicates
that the bill's current provision about the providers
maintaining their license to practice in the state could be
problematic for providers who are working for a federal agency
in the state. The license requirement poses a potential conflict
with the supremacy clause of the U.S. Constitution; the federal
government sets standards for its own employees, which may not
include state licenses. In that case, those individuals would
not be eligible for the forgiveness provisions.
8:28:23 AM
SENATOR OLSON explained that this issue has to do with licensure
of federal facilities. Many of those people are commissioned
corps and are already under a program that looks out for them
financially.
8:28:53 AM
PAT CARR, Section Chief, Health Planning and Systems
Development, Department of Health and Social Services (DHSS),
said the department, her section in particular, is currently
preparing applications for underserved areas; they do that in
the course of their work. They are usually determined to be a
"medically underserved area," a federal designation. Those
designations are used for establishment of community health
centers in the state that can apply for federal funds. The
designation of "underserved area" calculates in a
provider/population ratio as well as several other factors.
They also use medical assistance information by provider. So in
their bill analysis, the department, through the commissioner,
can identify these underserved areas or the percentage of
participation of a provider in medical assistance as criteria
for working with providers and can work with the Division of
Postsecondary Education in determining it. They also identified
that there is no fiscal note, because this kind of work is
already ongoing with a number of providers, especially now with
the reduced number of providers in this group.
8:30:49 AM
VICE CHAIR DAVIS asked if the Department of Health and Social
Services provided information indicating a shortage in these
occupational fields.
MS. CARR replied that they have identified shortages of dentists
and pharmacists. She would have to find information on
optometry. Part of the question is whether the state has an
adequate number of providers; and the other part is the
distribution of providers. But they have identified almost all
of their areas as having shortages right now.
8:31:27 AM
SENATOR OLSON asked where physicians stack up in the priority
list of professional shortages in Alaska.
MS. CARR said she didn't have that answer, but she could get it
from the vacancy study they did several years ago.
SENATOR OLSON said it was his understanding that physicians,
pharmacists and dentists were the top 3 or 4.
MS. CARR agreed that those are very high need categories.
SENATOR OLSON asked if the DHSS maintains oversight of the
(2)(b) provisions in AS 14.44.042 so they can see if the
provider is measuring up to the underserved standard.
MS. CARR replied that currently they don't look at it in that
regard, but they have the capability of doing that to support
this particular bill.
SENATOR STEVENS said he appreciates the attempt to address the
Medicaid problem the state is facing, but 5 percent seems a
little small. Does it actually do us any good?
MS. CARR replied that most providers already see Medicaid
participants.
SENATOR STEVENS asked if she had the percentage of Alaskans who
are on Medicaid.
MS. CARR replied yes, but she would have to get that for him.
8:34:30 AM
SENATOR STEVENS said he'd appreciate that.
SENATOR HUGGINS amended that it would be nice to see what the
gross billing actually equates to in terms of number of patients
so the state will know what it is getting for its money.
MS. CARR said she would have to do some research to answer that
question.
8:36:36 AM
VICE CHAIR DAVIS thanked the members for bringing up these
questions. She agreed that the state needs more of these
providers, but the big problem is that many of them, especially
dentists, won't take Medicaid or Medicare participants because
that system doesn't pay enough, and this bill doesn't address
that problem.
8:38:25 AM
DR. DAVE LOGAN, DDS, Alaska Dental Society, supported SB 174. He
said that he attended dental school through the WICHE program,
and can speak to the success of the program in bringing students
back to the state. Most dentists under 50 years of age were born
here, went out to go to school, and have come back. This is his
th
20 year of practicing here. He explained that Medicaid pays
about 50 percent of what others pay; and 5 percent Medicaid
really represents 10 percent of practice volume, which is a
palatable number.
8:40:29 AM
SENATOR OLSON said he's unfamiliar with residency requirement
for oral surgeons.
8:40:53 AM
DR. LOGAN replied that it would depend on the specialty. There
is a general practice residency for dentists that lasts one
year, but it's not mandatory for licensure. General practice
residency (GPR) lasts one year and provides some specialized
training; oral surgery is the most at four years of additional
training and the rest are anywhere from two to three years.
SENATOR OLSON asked if there is a shortage of oral surgeons in
Alaska and should something be done to bring them back.
8:42:07 AM
DR. LOGAN answered that Alaska has a shortage of every
specialty. We probably don't have a major need for an oral
pathologist, but otherwise we are short of everything else.
8:42:41 AM
SENATOR HUGGINS asked what happens to the Medicaid patients
after the five years.
DR. LOGAN replied that his hope is that if new practitioners
start out treating Medicaid patients, those patients will become
part of their practice. The financial incentive that the bill
contains will help defray some of the costs that will make it
more feasible for a new practitioner with a heavy debt load.
8:44:14 AM
SENATOR HUGGINS asked how many Medicaid patients that would be
per practitioner.
DR. LOGAN replied that would be about 3 Medicaid patients per
day for an average dental practice of 30/day - 12 patients per
week.
8:45:10 AM
SENATOR HUGGINS asked what Medicaid would pay for a root canal,
for instance, and what would the actual charge be.
DR. LOGAN replied that Medicaid pays about $400 for a molar root
canal and he normally charges $1150.
8:45:48 AM
SENATOR STEVENS asked if Medicaid has been reimbursing doctors
that amount consistently for a long time. Would that amount be
addressed at the federal level at some point?
8:46:29 AM
DR. LOGAN replied that last year is the first year in eight that
there was an increase in Medicaid fees for dentists. There is no
statutory requirement that those be reviewed regularly so he
doesn't know.
SENATOR STEVENS wondered if the 5 percent clause would be
problematic if the fee changes.
DR. LOGAN replied if the fee doesn't increase for a long time,
the 5 percent would become more and more difficult in real
numbers. If the adult supplemental system in HB 26 passes, that
takes away a large pool of money that is available for dentists
for treating Medicaid patients.
8:48:07 AM
SENATOR HUGGINS asked him to explain the effects of HB 26.
DR. LOGAN replied that HB 26 removes the sunset date from the
end of this fiscal year on the adult supplemental Medicaid
system.
8:48:46 AM
DR. MARK PRAETER, President, Alaska Dental Society, supported SB
174. He was born and raised in Alaska and had to leave to attend
dental school. He has practiced here for 32 years. This bill
offers students a good incentive to come back to Alaska and to
serve the state's underserved populations. He remarked that some
of the other practitioners they have mentioned are covered
through other programs, which is one of the reasons they were
removed from this bill. Podiatry, for instance, is covered
through WWAMI.
8:51:10 AM
SENATOR OLSON asked if he knew the number of applicants who
applied to dental school that didn't get into any programs, and
had to find a different way to make a living.
DR. PRAETER replied he didn't have that information, and he
wasn't sure how to get it. But anecdotally, one of his
associates has a son who has applied and is on the waiting list
for three dental schools right now. He's willing and able and
excited to do this and would be happy to enter this kind of
program.
SENATOR OLSON asked how many dentists actually work 24 hours a
day when they are on call.
DR. PRAETER replied that those are the dentists who practice in
a hospital setting. His office is on call 24 hours a day, but
the hospital in the Mat-Su Valley where he practices has a
couple of oral surgeons who take calls. He is not required to do
that.
8:53:33 AM
SENATOR HUGGINS asked if he knew of any other incentive programs
in other states that they might want to look at.
DR. PRAETER said some other states have incentive programs, but
he doesn't have a lot of detail about them.
8:55:31 AM
JIM POWELL, Executive Director, American Dental Society, said he
has nothing to add, but that he will research the questions that
have been raised.
He didn't know how many changed from having a dental career due
to financial issues, and he wasn't sure that information was
available. He does not have specifics about other state programs
in front of him, but 44 other states have some kind of incentive
program designed to entice these practitioners to their state
because all states have shortages.
8:58:01 AM
VICE CHAIR DAVIS closed public testimony. She said there are
some loose ends in the bill and asked Senator Menard to come
back up to address them.
8:59:24 AM
SENATOR MENARD said she would take the bill back to her office
and try to get some of these questions answered. She reminded
the committee that there is no residency for these three fields;
practitioners can go right to work after school. She feels
strongly and is aware of how hard it is to get into dental
school; there are six dentists in her family. She feels that the
medical profession is already covered nicely under WWAMI.
9:01:06 AM
SENATOR OLSON asked if these three fields require an admissions
test, like the LSAT.
SENATOR MENARD answered yes for all three fields. Pharmacy is a
little different, but there is a test.
9:03:02 AM
SENATOR HUGGINS moved to report CSSB 174(EDC) from committee
with individual recommendations and attached fiscal note(s).
There being no objection, the motion carried.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 174 ACPE sectional analysis.pdf |
SEDC 4/8/2009 8:00:00 AM |
SB 174 |
| SB 174 AK Dental Soc. lttr 2.pdf |
SEDC 4/8/2009 8:00:00 AM |
SB 174 |
| SB 174 Sponsor Statement.pdf |
SEDC 4/8/2009 8:00:00 AM |
SB 174 |
| SB 174 CS draft E.pdf |
SEDC 4/8/2009 8:00:00 AM |
SB 174 |
| SB174-EED-ACPE-04-03-09.pdf |
SEDC 4/8/2009 8:00:00 AM |
SB 174 |
| SB 174 AK Dental Soc. lttr.pdf |
SEDC 4/8/2009 8:00:00 AM |
SB 174 |
| SB 174 CS draft S.pdf |
SEDC 4/8/2009 8:00:00 AM |
SB 174 |