03/29/1994 06:40 PM Senate FIN

                                                                               
  SENATE BILL NO. 366                                                          
                                                                               
       An  Act  relating  to  medical  support  for  children;                 
       allowing a member of the teachers' retirement system or                 
       the public employees' retirement system  to assign to a                 
       Medicaid-qualifying trust the member's right to receive                 
       a monetary  benefit from  the system;  relating to  the                 
       effect   of   a   Medicaid-qualifying  trust   on   the                 
       eligibility of a  person for Medicaid; relating  to the                 
       recovery of certain Medicaid payments from  estates and                 
       trusts; requiring persons who receive Medicaid services                 
       to be liable for sharing in  the cost of those services                 
       to   the  extent   allowed   under   federal  law   and                 
       regulations; and providing for an effective date.                       
                                                                               
  Co-chair  Pearce directed  that  SB 366  be  brought on  for                 
  discussion and noted that  a number of people had  signed up                 
  to speak to the legislation.                                                 
                                                                               
  GARREY  PESKA, representing  the Alaska  State Hospital  and                 
  Nursing Home Association,  first came before committee.   He                 
  attested to concern  regarding bill  provisions relating  to                 
  Medicaid co-pay since  it is difficult to determine  how the                 
  provisions  will impact in-patient  hospital services.   The                 
  association has been told by the director of the division of                 
  medical  assistance that,  under  federal law,  the  maximum                 
  allowable co-pay for in-patient services is 50% of one day's                 
  charges.      Mr.   Peska   then   advised   that   hospital                 
  representatives would  speak to  what that  means for  their                 
  particular facilities.                                                       
                                                                               
  BILL  HARRISON,  Chief   Finance  Officer,  Alaska  Regional                 
  Hospital, explained that  concern relates  to the fact  that                 
  patients must meet a certain medical criteria in order to be                 
  classified as in-patients.  If the  purpose of the co-pay is                 
  to try  to impact utilization, that outcome  is not foreseen                 
  because  a  criteria  review process  is  already  in place.                 
  Cases  are  reviewed  for  necessity  of  the  medical  care                 
  received.    Since this  portion  of Medicaid  involves poor                 
  patients, there is  a question as  to whether they have  any                 
  ability to make co-payments.                                                 
                                                                               
                                                                               
  Another side to the issue focuses on the fact  that when co-                 
  payments are involved, hospitals incur administrative costs.                 
  Bills must be sent and payment may be as little as $5.00 per                 
  month over a substantial period of time.                                     
                                                                               
  ROGER  STONE,  Chief  Financial  Officer, Ketchikan  General                 
  Hospital,  advised  that  the  association  is  not  totally                 
  opposed to the concept  of co-pays.  They do,  however, need                 
  to  be  reviewed  in  the  broader  context  of  the  entire                 
  Medicaid/welfare system.  He noted that a single mother with                 
  two children receives approximately $910.00 a month in state                 
  assistance.  A co-pay of $200.00 to $400.00 on an in-patient                 
  stay represents  an unpayable amount for the recipient.  Mr.                 
  Stone  urged  that co-pays  be  established at  a reasonable                 
  amount.    He acknowledged  that  the concept  that everyone                 
  should pay for at least a  portion of their care is probably                 
  good in the long  run.  Concern by the  hospital association                 
  is that those who are already in dire straits will be forced                 
  into worse situations,  and hospitals  will be saddled  with                 
  costly attempts to  collect dollars  that "are probably  not                 
  collectible . . . ."                                                         
                                                                               
  Co-chair Frank acknowledged that 50% of the first day's stay                 
  would result in a "pretty healthy"  co-payment for a patient                 
  only  staying one  day  in the  hospital.   However, federal                 
  government payments of  $1.00 or  $2.00 are too  small.   He                 
  then asked for  an explanation of  the inconsistency in  the                 
  two examples.  Mr. Stone  responded that he had not yet  had                 
  an  opportunity  to  conduct  that  type  of   review.    He                 
  acknowledged that co-pay amounts  stipulated in federal code                 
  are very small and almost not worth dealing with in terms of                 
  administrative costs.                                                        
                                                                               
  Senator Rieger noted earlier discussion of the bill relating                 
  to utilization control.   He  then voiced his  understanding                 
  that the only control is  an "after-the-fact" contract where                 
  a hospital billing is  denied for a stay beyond  the "median                 
  stay."    No gatekeeping  process is  in  place.   Mr. Stone                 
  acknowledged  the  "length-of-stay"  criteria.     Ketchikan                 
  General has its own  utilization management program.  It  is                 
  constantly reviewing "these cases to  make certain that they                 
  do meet certain medical criteria."  That is consistent among                 
  all patients.   Mr. Harrison  advised that a  similar review                 
  process  is in  place at  Alaska  Regional for  both before,                 
  during,  and  after  a patient's  stay,  in  particular with                 
  Medicaid.   Under in-patient  regulations and  reimbursement                 
  criteria  set  by   the  division,   a  maximum  amount   of                 
  reimbursement for an in-patient stay is established.  It  is                 
  in the hospital's best  interest to get patients in  and out                 
  as quickly as  possible.   If the stay  exceeds the  maximum                 
  amount, no matter how  long the patient is in  the hospital,                 
  the hospital will not be paid "any more money."                              
                                                                               
                                                                               
  In  response  to  further comments  by  Senator  Rieger, Mr.                 
  Harrison said  that  financial inducement  to discharge  the                 
  patient  sooner will not  change the  medical criteria.   It                 
  remains to the physician  to decide when the patient  may be                 
  discharged.                                                                  
                                                                               
  Co-chair Frank pointed to savings  assumptions and noted the                 
  $100.00 deductible for  in-patient care  rather than 50%  of                 
  the first day.   He voiced need to work  with the department                 
  to establish "something that would be reasonable."                           
                                                                               
  JON  SHERWOOD,  Division  of Medical  Assistance,  Dept.  of                 
  Health  and  Social Services,  next  came before  committee.                 
  Speaking  to  questions  regarding  inconsistencies  in  co-                 
  payments, he  explained that  it reflects  federal law.   He                 
  acknowledged that he did not  have background information on                 
  why the amount  is so high  for in-patient stays.   Co-chair                 
  Frank  asked if the  co-payment could be  structured so that                 
  one staying in  the hospital a  single day pays only  $25.00                 
  while someone staying longer would accumulate co-payments up                 
  to $100.00.  Mr. Sherwood explained that  maximum limits are                 
  based on the  total unit of  service, without regard to  the                 
  length of stay. He  said he could not say whether  a sliding                 
  co-payment based on the number of days could be implemented,                 
  but  he  agreed to  explore such  an arrangement.   Co-chair                 
  Frank advised  he would work  with the department  and bring                 
  the bill back for  further discussion at a  later time.   SB
 was thus HELD in committee.