Legislature(2005 - 2006)HOUSE FINANCE 519
04/18/2006 10:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB426 | |
| HB500 | |
| HB496 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 304 | ||
| + | HB 426 | TELECONFERENCED | |
| + | HB 496 | TELECONFERENCED | |
| *+ | HB 500 | TELECONFERENCED | |
| + | TELECONFERENCED |
10:17:08 AM HOUSE BILL NO. 426 An Act relating to medical assistance eligibility and coverage for persons under 21 years of age. REPRESENTATIVE JOHN COGHILL, SPONSOR, stated that in times when federal dollars are diminishing, the Legislature will have to review policies for providing for public health. To better provide medical assistance to the needy, eligibility requirements need to be changed. rd HB 426 puts best practices to use by increasing 3 party reimbursement, reducing Medicaid abuse and fraud. The bill requires that a person applying for medical assistance for a minor be the parent or legal guardian. If the child is in State custody, an employee of the Department can apply for the coverage. The House HESS Committee placed a waiver for unemancipated children, in the bill. Representative Coghill observed that at this time, an unmarried father's income and resources are not considered when determining eligibility of a pregnant woman for Medicaid. The committee substitute eliminates income guidelines for the unmarried fathers; his office is exploring ways to make the father financially responsible for medical costs. The bill also repeals a statute that rd allowed the Department to waive subjugation rights to 3 party reimbursements in cases of undue hardship. The rd Department will not require pursuit of all 3 party reimbursement. Representative Coghill advised that Section 8 of the bill addresses a lawsuit filed against the State that would require the determination of a medical condition of the client on the Medicaid waiver be "materially improved" before removing the client from the waiver. The section also adds that requirement to the Alaska Statute. HB 426 directs the Department to report back no later than th the first day of the 25 Legislature regarding ways to reduce medical assistance expenditures for services received in residential psychiatric treatment centers by enhancing parental financial responsibilities and rd maximizing 3 party resources available. 10:20:37 AM RYNNIEVA MOSS, STAFF, REPRESENTATIVE JOHN COGHILL, noted that Section 10 provides an applicibility clause regarding subjugation, assignment or lien in existence on the date listed, added to statute. The effective date would be July st 1, 2006 or the date the federal plan is approved - language indicated in Section 12. Ms. Moss advised that Section 11 is the "meat" of the original bill. In subcommittee discussions, it was determined to send some children outside the State to treatment centers and after 30 days, they would become qualified for Medicaid services. She indicated that addressing that concern is the priority for the interim. Their office has asked the Department to investigate concerns including the authorization process with rd comparison to private insurance companies; maximizing 3 party coverage. 10:24:50 AM DWAYNE PEEPLES, DIRECTOR, DIVISION OF HEALTH CARE SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, stated that over the past couple years, the Department has been pursuing cost containment activities in Medicaid services. One area being addressed is the coordination of benefits with other rd 3 party payers and subjugation of claims that other payers paid for services received by Medicaid participants. Within the past 18 months, the Department of Health and Social Services has increased collaboration with the Department of Law to pursue that. Mr. Peeples highlighted each section: • Section 1 brings the Department of Health and Social Services in line with the recently passed federal rd Budget Reduction Act (BRA), which requires that 3 party payers in the State of Alaska cooperate with the Department. 10:26:52 AM • Section 2 puts the Department and the State of Alaska into a more aggressive stance on subjugation in any medical claim. The claims will be pursued by the Department of Law. Representative Coghill asked about the subjugation process. STACY KRALY, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, rd explained that subjugation claims are 3 party claims, rd should the Department act as a collector of 3 party claims. If an individual receives Medicaid and is injured in an accident, the Department pays Medicaid coverage for services related to that accident. The Department has the ability to go in and recover the cost of the Medicaid rd expenditures if there is a 3 party claim. Sometimes attorneys are involved but generally there is insurance involved. The Department will notify the insurer regarding the lien for the cost of the Medicaid coverage and will rd seek reimbursement out of the 3 party's recovery. Representative Kelly asked if the federal government also tracks insurance companies. Ms. Kraly advised that the State seeks the recovery for both the State and federal portions. stnd Representative Joule asked who the 1 and 2 parties would rd be. Ms. Kraly explained that the 3 party indicates that there is an additional party to the accident who is rd responsible for the payment of the services. The 3 party recovery refers to the insurance company or responsible stnd individual. The 1 and 2 are generally the insurers and rd the 3 party references the payer. 10:30:13 AM Mr. Peeples continued: • Section 3 reinforces the Departments ability and rd information to obtain any subjugation or other 3 party payments. rd Representative Kelly asked if the 3 party could be someone other than an insurance company. Ms. Kraly replied correct. 10:31:16 AM Mr. Peeples noted: • Section 4 delineates the priority of recoveries and liens for the subjugation, putting the State only after tax and attorney fees. Vice Chair Stoltze asked if it would be placed behind child support due. Ms. Kraly did not know for sure. She knew that section clarifies that the State has a lien ahead of the hospital & doctors. She offered to research the priority for the Child Support Enforcement Agency (CSEA). st Representative Holm asked why the State could take the 1 position before providers of the services. Ms. Kraly responded that the State actually pays for those services and should be able to recover before the other entity. Representative Joule questioned if the service providers could anticipate timely payments. Ms. Kraly explained that generally, in Medicaid payments, the provider is paid within 90-days, depending on how fast they submit the claims. 10:34:51 AM KEVIN HENDERSON, MEDICAL ASSISTANCE ADMINISTRATOR, DIVISION OF PUBLIC HEALTH, DEPARTMENT OF HEALTH & SOCIAL SERVICES, spoke to Section 5: • Section 5 addresses recipients. He pointed out that Federal law mostly applies to providers; there is not much that identifies recipients. That section allows the Department to garnish the Permanent Fund Dividend of a recipient and address the abuse of fair hearings so that they can continue some months of benefits. Vice Chair Stoltze asked if there were safe guards for the garnishments made by CSEA. Mr. Henderson explained that with the continued benefit recovery, there is a series of fair hearing rights; the PFD cannot be garnished without opportunity to make their case. He thought there were adequate safeguards. 10:39:40 AM Mr. Henderson continued: • Section 6 - Currently, federal law has a number of rules for the "transfer of assets" at fair market value. Research is done to see if the recipient gave money away in order to qualify for Medicaid services. There are a number of ways that people can establish Medicaid trusts that would allow them to transfer resources. The provision in Section 6 results from the Deficit Reduction Act (DRA). Any new annuity after the effective date of the legislation would need to contain a provision that the Department could be paid back for any costs to Medicaid. It is a preemptive provision. 10:42:12 AM Mr. Henderson noted: • Section 7 addresses a combination of concerns: • Subsection J & K restricts who can apply. It obligates the Department to make contact with the parent of the minor seeking services, if appropriate. If the parent has insurance, making sure the insurance company pays before Medicaid. The language provides a "gate-keeping provision" regarding who can apply on behalf of a child. • Subsection L indicates a requirement that provides federal approval for those eligible for Medicare; they would be required to apply for the Medicare first. He clarified that there are services, paid for by Medicare and not by Medicaid. • Subsection M gets to the "heart" of new federal law. The federal act made changes that tend to "tighten up" the area for individuals seeking long-term care services. The Department supports the provision as it makes a "clean-tie" to the Deficit Reduction Act (DRA) in State law. The provisions in the DRA change the "back window" date from 36 months to 60 months. It also changes the penalty period for transferring assets & restricting life estates. • Subsection N resulted from the DRA. The home would be exempt for long-term care recipients. Federal law provided a requirement that if the equity value of the home exceeds $500 thousand dollars, they would not be eligible for Medicaid, unless they had a spouse, a minor, or a disabled child still living at home. It also extends the requirement to almost all eligibility categories. 10:49:04 AM Ms. Kraly continued: • Section 8 resulted from a proposed amendment by Representative Cissna. The Department has been sued in a couple different cases regarding the determination of how waivers are made for individuals. The context of the amendment identifies how to characterize material improvement for purposes of eligibility determination. 10:51:15 AM Mr. Peeples continued: • Section 9 waives a previous standing section under AS 47.05.070, indicating that the Department may waive the rights of subjugation. That section removes that option for the Department. 10:52:10 AM Mr. Peeples reminded members that Representative Coghill reviewed Sections 10 & 11. 10:53:13 AM JANET CLARKE, ASSISTANT COMMISSIONER, DIVISION OF FINANCE AND MANAGEMENT SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES, spoke to the five fiscal notes and distributed a spreadsheet outlining the overall view for the notes. (Copy on File). The summary highlights the fiscal impact through 2012, resulting from the legislation, indicated by section. The assumption is that in FY07, regulations will not be in place until the fourth quarter, showing savings for only 25% of the fiscal year. Overall, in FY07, the Department calculates a savings of $2.6 million federal and General Fund dollars. For FY08, that number jumps dramatically to a reduction of $10.9 million dollar savings. The primary savings is calculated under Section 7(L). She pointed out that it addresses mandatory requirements for individuals eligible for Medicare, apply for Medicare first. She assumed the numbers could reach 1,800. Ms. Clarke discussed cost avoidance areas, particularly Sections 6 & 8. There will be smaller savings in other categories (Sections 1-4 & 9-10). Those numbers are consistent throughout the fiscal notes. 10:57:00 AM Co-Chair Chenault referenced the spreadsheet, fourth quarter savings and asked if there could be any assurances that the regulations would be assembled by then. Ms. Clarke stated that was their best assumption and is top priority if the legislation is passed. Co-Chair Chenault questioned if the Department was close to having regulations in place. Ms. Clarke responded they st could be in effect April 1. Vice Chair Stoltze questioned if the Denali Kid Care program recipients were eligible for Medicaid. Representative Coghill replied that was the original concern with discussion regarding determination of household income. They did look at the Denali Kid Care program & there should be more to come. Co-Chair Chenault referenced spreadsheet percentages. Ms. Clarke explained that the numbers are estimates based on the National Formula related to the State's Federal Medicaid Authorized Percentage (FMAP). The Deficit Reduction Act held the State of Alaska harmless for two years. Through FY07, the federal Medicaid percentage will be 57.5% and then the State will move to the national formula. Estimates indicated that in FY08, the formula rate would drop to 53.2%. 11:00:59 AM ELINOR FITZGERALD, DIVISION OF PUBLIC ASSISTANCE, DEPARTMENT OF HEALTH & SOCIAL SERVICES, offered to answer questions of the Committee. 11:01:39 AM JIM DAVIS, (TESTIFIED VIA TELECONFERENCE), ATTORNEY, NORTHERN JUSTICE PROJECT, ANCHORAGE, stated that Section 8 was "bad policy" for the State. The Choice Waiver Program for older Alaskans is a program where seniors with serious disabilities are provided a waiver of benefits in lieu of being institutionalized or placed into nursing homes. He thought it would save the State more money opting for the waiver program. Mr. Davis noted that assessments are subjective, depending on the various nature of each assessor. He pointed out that lawsuits have been filed, and that two Alaskan Superior Courts found that if the State finds someone disabled, they cannot withdraw benefits. Mr. Davis advised that Section 8 attempts to legalize something that has been found to be illegal. That process will lead to further litigation and many Alaskan pioneers would be placed in life threatening situations or at the very least having their quality of life diminished. He encouraged the Committee carefully consider whether elders ought to have their benefits subject to a 45 minute evaluation. PUBLIC TESTIMONY CLOSED 11:07:58 AM Co-Chair Meyer MOVED to ADOPT Amendment #1. Vice Chair Stoltze OBJECTED. Ms. Kraly noted that the amendment is a "word-smith" of the existing Section 8. There are nuances in that section that need to be clarified. She referenced concerns voiced by Mr. Davis, indicating that the filed lawsuits spoke to the concept of "material improvement". The amendment attempts to fashion a remedy to the allegation, which would establish a standard for assessment of each individual placed in the waiver program. She stressed the importance of understanding that a waiver is a benefit provided for the determination of eligibility. The old assessment tool used by the Department was not medically based. Presently, there are two preliminary injunctions issued and there has been no determination of that merit. Amendment #1 attempts to qualify and define material improvement so that it can be assessed. A waiver is a yearly benefit following an assessment. There is no assumption that you receive a waiver for the rest of your life. Ms. Kraly addressed Mr. Davis' inference that the review was a "rubber stamp", pointing out that it establishes a premise to analyze improvement. Under the premise, prior years would be examined. She disagreed with the characterizations, proposing that a high burden had been established to show waiver benefits. 11:13:51 AM Representative Joule inquired if an assessment could be made without the actual observation. Ms. Kraly stated that assessments are done in person. Currently, a contractor, receiving information from the individual, family members and care providers, as well as actually observing the individual in their home environment, provides the assessment. If there is a conflict regarding the assessment, a further one can be made. Representative Joule asked who determined the qualifications of the assessor. Ms. Kraly noted that the amendment defines a qualified health care professional. She noted that the assessors are specialized individuals defined by statute, including nurses, nurse practitioners, etc. She also noted that the waivers dealt with a nursing level care and are not medically based decisions. 11:17:02 AM Representative Weyhrauch inquired if Mr. Davis was currently in litigation with the State. Ms. Kraly replied he is. Representative Weyhrauch questioned if the amendment would remedy such legal issues and the costs incurred. Ms. Kraly hoped that the amendment could resolve the pending litigation. The premise of the amendment is to clearly identify the rules of the program, as well as responding to injunctive orders, which are currently restraining any decisions being made by the Department, creating an administrative burden. 11:19:06 AM Representative Weyhrauch expressed a concern for those individuals who were currently engaged in a grievance as identified by Mr. Davis. Ms. Kraly said if the legislation passes, the issue is mute; those individuals would still have the authority to seek attorney fees and recoveries. Vice Chair Stoltze WITHDREW his OBJECTION. There being NO further OBJECTION, Amendment #1 was adopted. 11:20:19 AM Representative Kelly thanked the Sponsor for the cost saving measures of the legislation. He asked about communication through our US Congressional delegation for assistance on the matter. Representative Coghill affirmed that requests were underway. 11:21:37 AM Representative Holm pointed out that many Alaskans have experienced difficulty, obtaining waivers. He questioned if the legislation would result in transferring of assets to those that are in real need. Representative Coghill said that was his intent. Representative Holm emphasized the obligation of government to care for those in need, even in the face of cost cutting. 11:23:19 AM Representative Foster MOVED to REPORT CS HB 426 (FIN) out of Committee individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 426 (FIN) was reported out of Committee with "individual" recommendations and with zero note #1 by the Department of Health and Social Services and fiscal notes #2, #3, #4 & #5 by the Department of Health and Social Services.
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