Legislature(1993 - 1994)
03/31/1994 08:05 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
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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 referenced Amendments 1 through 4 and a proposed letter of intent. DAVE SKIDMORE, aide to Senator Frank, came before committee. He explained that Amendment No. 1 was drafted in response to recommendations by the division of insurance. It breaks health maintenance organizations out onto a separate line under the part of the bill that defines "insurer," and it links HMOs with the appropriate citation from Alaska Statutes. The amendment is technical in nature. Co-chair Frank MOVED for adoption of Amendment No. 1 and requested unanimous consent. No objection having been raised, Amendment No. 1 was ADOPTED. Mr. Skidmore said that Amendment No. 2 was recommended by the drafter, Terri Lauterbauch, who felt that the title was not sufficiently broad to include some insurance language in Sec. 3 of the bill. Co-chair Frank MOVED for adoption of Amendment No. 2 and requested unanimous consent. No objection having been raised, Amendment No. 2 was ADOPTED. Mr. Skidmore explained that Amendments 3 and 4 were drafted in response to concerns raised by hospital representatives. The bill currently directs the state Medicaid plan to provide the maximum co-payment allowed by federal law. For in-patient hospital care, the maximum is 50% of the cost associated with the first day of care. Hospital representatives indicated that cost can range from $300 to $20,000, based on what services are provided. When calculating potential savings from the bill, $100 was used as the co-payment, since that is the amount set by a number of other states. Amendment No. 3 is recommended by the Alaska State Hospital and Nursing Home Association. It would provide a straight co-payment of $50. Amendment No. 4 was developed by Senator Frank. It would provide for a co- payment of $25 per day up to a maximum of $100 per discharge. Co-chair Frank said he did not have a strong preference for one amendment over the other. He acknowledged that the hospital and nursing home association prefers Amendment No. 3 over Amendment No. 4 since the latter involves more administrative effort. He then advised that the House envisions a co-payment of $100 a day. The division of medical assistance is supportive of that approach. The Co-chair asked that staff from the division speak to the issue prior to committee action on the amendments. DAVE WILLIAMS, Division of Medical Assistance, Dept. of Health and Social Services, came before committee. Co-chair Frank asked if the maximum allowable co-payment is $100. Mr. Williams responded negatively, advising that the maximum allowable is 50% of the cost of the first day of hospital stay. That is the controversy. Co-chair Frank noted that the average stay is approximately four days. He then advised he was attempting to establish a reasonable co- payment that would not be too onerous but would achieve cost sharing. Sharing in the cost and discouraging unnecessary use are the purposes behind the co-payment. Mr. William advised that the average stay is three days. Under federal law, the amount of the co-payment depends on what happens on the first day. The fiscal note for in-patient hospital care assumes $200. If the co-payment is reduced to $50, the savings would be approximately $300.0. Speaking to costs that might be reasonable for Medicaid eligible clients, Mr. Williams said it would be unlikely the client would pay any of the co-pay. Federal law says that if they do not have it, they do not have to pay. For hospitals that means that part of the debt would remain unpaid. Other states have advised that collection efforts on Medicaid eligible recipients are not productive. That effort, however, would be up to the hospital. HARLAN KNUDSON, Alaska State Hospital and Nursing Home Association, came before committee voicing support for the $50 co-payment. Co-chair Frank inquired concerning hospital experience in attempts to collect on co-pays. Mr. Knudson voiced his understanding that all prepaid health care is "into deductibles and co-pay." He noted that hospitals fully expect the co-pay to end up as bad debt. The individuals will be billed once or twice, and then the hospital will consider it bad debt. Co-chair Frank stressed need for individuals to pay their debts, even if the co-pay must be repaid over time. The service should not be free. Senator Kerttula stressed that patients must not be turned away from hospitals because of lack of ability to pay the co-pay. Mr. Knudson voiced support for the deductible but concurred that it should not delay entry to a medical facility. Senator Rieger voiced need for authorization for the department to institute a case management service to make the best use of Medicaid dollars. The present system is excessively rigid. He attested to problems with priority ranking of services set in statutes. He then suggested that if the committee intends to revamp the state Medicaid program, the proposed bill is the proper vehicle. Co-chair Frank referenced Amendment No. 4 and explained that it would apply a $25 co-payment per day up to a maximum of $100. He then asked why that approach would cause problems. GARREY PESKA, Alaska Hospital and Nursing Homes Association, came before committee, advising that hospital finance officers have indicated the system would be much simplified if the co-payment is established at a specific amount per discharge. That eliminates having to calculate the number of days up to a maximum for each Medicaid patient. Co-chair Frank then voiced a preference for a $100 co-payment per discharge. He observed that that is considerably less than the maximum allowed by the federal government. In response to a question from Co-chair Frank concerning the average daily rate, Mr. Peska said, "You will not find an admission for less than $1,000 a day." The Co-chair then recommended changing the co-payment amount set forth on Amendment No. 3 from $50 to $100 per discharge. Mr. Williams voiced his belief that the current rate for general relief medical is $50 a day up to $200. Co-chair Frank then suggested that the Medicaid co-payment should be consistent with general relief. That could be accomplished by increasing the $25 co-payment set forth on Amendment No. 4 to $50 and the maximum from $100 to $200. Co-chair Frank next inquired concerning medical facility experience in collection of general relief medical co- payments. Mr. Peska advised that he would have to consult with hospital finance officers to properly respond. Co- chair Frank voiced need to understand what the experience has been in terms of whether people are paying, not paying because collection is not undertaken, or not paying simply because they cannot. SB 366 was thus HELD in committee with Amendments 3 and 4 pending.
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