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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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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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