Legislature(2005 - 2006)HOUSE FINANCE 519
03/14/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SJR6 | |
| HB155 | |
| SB98 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| SJR 6 | |||
| HB 155 | |||
| = | SB 98 | ||
SENATE JOINT RESOLUTION NO. 6
Relating to a reduction in the Federal Medical
Assistance Percentage for Alaskans, and urging the
United States Congress to take action to prevent the
reduction.
SENATOR GARY WILKEN, CO-CHAIR, SENATE FINANCE, read the
sponsor statement for SJR 6:
Senate Joint Resolution 6 urges federal action to
maintain the current level of federal funding for the
state's Medicaid program. The U.S. Department of
Health and Human Services recently announced that the
federal share of the medical assistance program, known
as the Federal Medical Assistance Percentage (FMAP),
will be reduced by 7.58% on October 1, 2005.
The reduction in the FMAP will result in an
approximately $53 million loss in federal Medicaid
dollars in fiscal year 2006 and $73 million in fiscal
year 2007.
It is imperative that Congress and the federal
administration know and understand the reasons behind
the high level of health care costs in Alaska. Senate
Joint Resolution 6 requests Congress to take action to
correct the formula flaw that resulted in the proposed
substantial FMAP reduction and to take whatever
measures necessary to hold Alaska harmless from the
reduction in the Federal Medical Assistance Percentage
for Alaska.
Please join me in support of our state Medical program
and endorse Senate Joint Resolution 6.
1:44:33 PM
Representative Weyhrauch asked how 7.58 percent was
determined and if it only applies to Alaska. Senator Wilken
deferred to Commissioner Gilbertson.
JOEL GILBERTSON, COMMISSIONER, DEPARTMENT OF HEALTH & SOCIAL
SERVICES, explained that the Medicaid program, a partnership
between state and federal government, was created in 1965 to
provide health care coverage and to reimburse some social
services, primarily for needy and low income populations.
Each state has its own Medicaid "match rate" or Federal
Medical Assistance Percentage (FMAP). The formula was based
on a state's per capita income over a certain period of time
and the national per capita average. Mississippi has always
received the highest level of federal support, which is 80
percent. The lowest amount of federal support is 50
percent, which is what Alaska paid until 1997 when Senator
Frank Murkowski had the amount adjusted to slightly over 40
percent for three years, bringing in $100 billion in
additional federal support. Senator Murkowski passed
further legislation, a five-year extension, which brought in
an additional $200 billion in federal support.
Commissioner Gilbertson noted that the Medicaid match rate
is not paid on every claim. A sizeable percent of Medicaid
volume goes through services provided to Alaska Natives in a
Native non-profit 638 or in an Indian Health Services (IHS)
compacted facility, which are reimbursed at 100 percent.
The expiration of the five-year Medicaid adjustment is Oct.
1, 2005, and Alaska's per capita income has increased.
Those two factors plus the fact that there was a
recalculation of how to determine per capita income, which
involves including employer contributions to retirement
plans as income earned, have led to a great reduction in
Alaska's Medicaid match support from 57.58 percent to 50
percent.
Commissioner Gilbertson maintained that the reason Alaska
was so successful in getting Medicaid match reductions twice
before is because the formula is fundamentally flawed. It
looks solely at per capita income and does not consider cost
of delivering health care, which is exponentially higher in
Alaska. He suggested that the formula should reflect this
higher cost. Senate Joint Resolution 6 encourages a
resolution to hold Alaska harmless this year and work toward
a solution.
1:52:08 PM
Commissioner Gilbertson related that the impact on the next
fiscal year would be a loss of $53 million of Medicaid
support, which would have to be replaced by general funds or
by service reductions. The impact on FY 2007 would be a
loss of $73 million. Over the next ten years the total
impact would be $914 million. He noted that other states
are affected, but not by as much. Wyoming's match rate
drops by three points. He concluded that Alaska's reduction
is unprecedented in history.
Representative Hawker referred to the chart "Impact of FMAP
Reduction on State Match" (copy on file.) He argued that the
impact of reduction is understated because a linear growth
trend for Medicaid expenditures is being used. He suggested
that growth rate has been exponential rather than linear.
Commissioner Gilbertson agreed that it is difficult to
predict growth rate in the Medicaid program because there
are moving targets such as population changes. He called
this chart "our best guess" at projections. Representative
Hawker noted legislators could also exacerbate the situation
with further additions to the program such as adult dental
care. Commissioner Gilbertson responded that he personally
supports the dental care policy and other preventative
programs. He concluded that it is fair to say reductions in
Medicaid programs could lead to increases in services by the
state outside of Medicaid.
1:56:08 PM
Representative Hawker observed that the federal formula
includes personal income levels and as incomes go up the
willingness to match goes down. The assumption is that
state income has increased as the per capita has increased,
which is true everywhere except Alaska. Commissioner
Gilbertson responded that the formula is fundamentally
flawed; the cost of delivery and care has to be included in
it.
Representative Croft mentioned a recent trip to Bethel where
members of the committee met with the head of the Yukon-
Kuskokwim Health Corporation (YKHC). They visited the
Bethel prenatal center, recently taken over by YKHC, which
now gets 100 percent Medicaid match. There was discussion
about other areas where that same percentage of match could
be received. He asked about the advantages and
disadvantages of moving from partial to full funding of
Medicaid and why it is not done more often.
Commissioner Gilbertson explained that Mr. Peltola,
President and CEO of YKHC, helped to set up a planning group
and management team to move such integration projects
forward in his region. They found that a number of service
delivery providers were not eligible to receive 100 percent
reimbursement from Medicaid. He explained the Native Health
Care Improvement Act, which allows Native-operated
facilities to bill for services under Medicaid. He related
the benefits for dual eligibility. He noted that a large
portion of the current Medicaid claim volume for services to
Alaska Natives goes outside of the IHS system and can only
be reimbursed under the base rate. He stressed that he has
had a number of dialogues with Alaska Native Health Care to
try to built up its system and not create a new, general
fund responsibility. An effort was made, with the help of
MR. Peltola, to move all services under the umbrella of one
Native Health Corporation. He pointed out downstream
benefits: elimination of a wait list, increased services,
and general fund savings. He suggested that integration of
these services is a strong opportunity to strengthen the
system and save money, but there has to be consensus at the
community level. He concluded that more opportunities would
be found in rural regions where there are large Alaska
Native populations and strong native health corporations,
plus local consensus.
2:05:44 PM
Representative Croft asked if any Alaskan Native could
obtain this service and why there would be a wait list. Mr.
Gilbertson replied that the service has to be in a region
where there is a qualified Native provider. There has to be
a "dual eligible served by a 638" in order to get 100
percent reimbursement. He pointed out that currently 40
percent of Medicaid beneficiaries are Alaska Native. The
challenge is that there is no integrated managed care in
this state and individuals can go wherever they want to
receive health service. He pointed out that there is a need
to expand services.
Commissioner Gilbertson informed the committee that
currently there is a dispute between the states and the
federal government concerning the Native Health Care
Improvement Act. The Department of Health and Social
Services believes that Congress intended the language which
states, "services provided through an IHS facility are
reimbursed at 100 percent FMAT" to also include referral and
contract. He provided examples of the department's
interpretation of the intended language. Greater clarity of
this language would make it easier to collect 100 percent
reimbursement because then contract and referral networks
could deliver the services. Representative Croft clarified,
in that case, the individual would go to the facility, even
if it were not an Indian Health provider, be referred, and
then be able to receive full Medicaid reimbursement.
2:11:29 PM
Representative Croft asked Commissioner Gilbertson to talk
to the sponsor about encouraging clarification of that
language before the resolution goes to Congress. He
inquired if it would be best to do a Congressional
resolution or a judicial resolution. Commissioner
Gilbertson replied that the Medicaid match rate is statute
and will not be handled by the courts. He opined that it
would be resolved by an act of Congress with Congressman
Young's help.
2:13:46 PM
Co-Chair Meyer asked if an Alaska Native could choose either
an Alaska Native Hospital or Providence Hospital when
medical services are the same. Commissioner Gilbertson said
that is correct. The state does not manage service
delivery; it authorizes the service and licenses the
providers.
2:15:07 PM
Co-Chair Meyer closed public testimony.
Representative Weyhrauch referred to line 11, page 2,
"gasoline prices in much of rural Alaska are close to $6 a
gallon" and opined that gas is expensive in other areas of
Alaska, as well. He MOVED to ADOPT Amendment 1, which would
delete "are" and substitute "can be". There being NO
OBJECTION, it was so ordered.
Representative Foster MOVED to report HCR SJR 6 out of
Committee, as amended, with the accompanying zero fiscal
notes.
HCS SJR 6 was REPORTED out of Committee as amended with a
"do pass" recommendation and with four zero fiscal notes
from the Department of Health and Social Services.
2:17:29 PM
At ease.
2:21:21 PM
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