Legislature(1995 - 1996)
04/11/1996 01:45 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 528
"An Act relating to applications for certificates of
need and licensing of nursing homes; amending the
standard of review for certificates of need for health
care facilities in the state; establishing a moratorium
with respect to new applications by prohibiting the
issuance of a certificate of need or a license for
additional nursing home capacity in the state until
July 1, 1998; and providing for an effective date."
CLIFF ORME, (TESTIFIED VIA TELECONFERENCE), CHIEF EXECUTIVE
OFFICER, VALLEY HOSPITAL ASSOCIATION, MAT-SU, voiced support
for a one year moratorium on applications for certificates
of need and licenses for nursing home capacity. He added
his support of a working group being created for studying
and issuing a report on long term care. Mr. Orme agreed
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with the primary substance of the legislation, although, did
not agree with Section 1, the Findings, indicating that the
State has a problem with the distribution of nursing home
beds. He thought that the most cost effective way of
addressing the concerns would be to affiliate long term care
services with a hospital association.
Representative Martin asked why the moratorium should be
limited to one year. Mr. Orme noted that a one year
moratorium would in effect be a two year moratorium because
of building stipulations.
MIKE MILLER, ALASKA COMMISSION ON AGING, JUNEAU, stated that
the Alaska Commission on Aging is in support of HB 528.
That group would prefer the original bill which provided for
a two year moratorium. He concurred that the resolution
stated "it all". The availability of nursing home beds in
many areas does exceed the actual need.
CONNIE SIPE, DIRECTOR, DIVISION OF SENIOR SERVICES,
DEPARTMENT OF ADMINISTRATION, spoke in support of the
legislation and of the two year moratorium as indicated in
the original legislation. She requested that a study be
provided determining the areas where additional nursing home
beds were needed.
(Tape Change, HFC 96-114, Side 2).
Ms. Sipe continued, "home and community-based services"
enable elderly Alaskans to entirely avoid or postpone
nursing home placement. These are programs specifically
designed to keep seniors out of nursing homes.
A two year moratorium on long-term care beds would allow
time for the community based service programs to more fully
develop. Also, it would allow the Department of Health and
Social Services (DHSS), Division of Senior Services, time to
create a plan for the orderly development and proper mix of
community based services and long-term care beds.
Co-Chair Hanley pointed out that once the beds are built,
they will need to be paid for. This is a formula-funded
concern and the Department will be required to pay at that
level. He reminded Committee members that there are
competing needs for Medicaid dollars, both nursing homes and
hospital bases. The moratorium would provide the nursing
home group time to reevaluate their needs.
JAY LIVEY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND
SOCIAL SERVICES, commented that the Department generally
supports HB 528, and that it would be essential in
controlling Medicaid costs. The average Medicaid cost per
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person per year is approximately $86 thousand dollars. A
patient can be kept in a home-based community setting for
approximately $30 thousand dollars per year. About 85% of
the private nursing home revenues originate from Medicaid
dollars.
Mr. Livey pointed out that there are one hundred forty-seven
(147) proposed new beds to be built around the State in the
next five years. If all those beds were built, the cost to
the Medicaid program would be nearly $57 million dollars,
with $28 million dollars in general funds. He stated that
the Department does not know how the Medicaid budget could
absorb that amount of money.
There are basic issues within the Medicaid program which
need to be addressed.
* Nursing care is a mandatory service.
* Medicaid patients enjoy freedom of choice.
* All costs must be incurred by an efficient
and economically operated facility.
If a bed is built and receives a certificate of need, the
State would end up paying the bill which will create a
serious situation for the Medicaid budget over the next five
years.
Mr. Livey pointed out that there is no facility in the State
that currently looses revenue and that no current facilities
will be harmed by the proposed legislation. The Department
supports the original language of the bill including a two
year moratorium. The Department also recognizes that this
is only a temporary measure. Medicaid has the
responsibility to provide long-term care services to older
Alaskans.
Representative Martin asked who authorizes the
certification. Mr. Livey replied that the certificate of
need comes to the Department, where it is reviewed and if
the project meets the criteria, the certificate of need is
then granted by the commissioner.
Representative Martin asked the cost of empty beds. Mr.
Livey responded that the total cost of running a nursing
home is spread across the total number of Medicaid patients
who are in the home. Currently in Alaska, there exists one
hundred fifteen (115) vacant beds.
Representative Martin inquired if the increased number of
seniors currently living in the State has resulted from a
migration north or the natural aging of current residents.
Ms. Sipe stated that it was difficult to track migration.
She added, studies do exist which demonstrate what Alaska is
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experiencing; this is called "new elders". Alaska finally
has elders staying in the State, aging in place and not
moving away. More people are staying longer, many elders
are living longer and the life expectancy has increased
dramatically in the last ten years. Representative Martin
suggested that the State of Alaska has too many generous
programs for seniors, thus encouraging out-of-state seniors
to move to Alaska.
HB 528 was HELD in Committee for further consideration.
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