Legislature(1995 - 1996)
03/07/1996 04:12 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 528 - NURS.HOME MORATORIUM/CERTIFICATES OF NEED Number 1835 CO-CHAIRMAN BUNDE announced that the next order of business to come before the committee was HB 528. JAY LIVEY, Deputy Commissioner, Department of Health & Social Services, that stated he would give a brief overview of the bill. The certificate of need process is a planning process by which the state reviews the appropriateness of the development of hospitals and nursing homes in the state. Applications are made to the state for projects in excess of one million dollars of capital cost, and the state reviews them against criteria which are established in the existing certificate of need law. A project must have a certificate of need from the state in order to proceed. MR. LIVEY further explained that if the one million dollar threshold is not exceeded, then existing beds can be converted. In the past, hospital beds have been converted to long-term care beds. As long as one million dollars is not expended, this process is allowable under current law. HB 528 makes two changes to existing law. First, it defines a criteria by which applications for certificates of need are reviewed. Currently, the review criteria is primarily based on the need for a particular service. If an application shows that a particular service area lacks enough nursing home beds, then the certificate will most likely be granted. One of the changes in HB 528 would be to apply a cost effectiveness criteria to the request. In addition to surveying need, the division could also determine if the proposed service would be the most cost effective way to meet the need. MR. LIVEY stated that the proposed bill would also propose a two- year moratorium on the granting of a certificate of need or the licensing of additional long-term care beds in the state. This section is needed to stop the conversion of nursing home beds. He noted that the proposed moratorium would not apply to extended care or sub-acute care beds. Mr. Livey explained that the Department of Health & Social Services supports HB 528, because the department expects to spend about $54 million on nursing home care during the current fiscal year, which represents care for about 640 Alaskans in nursing homes. Nursing home care costs an average of about $86 thousand per year per patient. Of all nursing home revenues in the state, 85 percent come from Medicaid. In contrast, the cost of supporting a person in the home and community-based waiver program is about $30 thousand per year. Over the next few years, there is a potential for 160 new nursing home beds to be added in the state, both through conversions and new construction. If this were to happen, the annual total cost to the state would be about $47 million. The department believes that the state cannot control the Medicare budget, given this kind of growth in long-term care beds. Thus, HB 528 would help the state in its cost containment efforts. Number 2055 CONNIE SIPE, Director, Division of Senior Services, Department of Administration (State of Alaska), stated that the proposed moratorium was also a response to the changing budget situation, both state and federal. The division believes that putting a moratorium on the licensing of nursing home care beds will give the home and community care system time to grow and catch up, which will benefit everyone. Home and community care is not only less expensive for the state, it is also more often cost affordable by the family or individual, which means they can carry a larger proportion of the cost of care. The growth of the home health care system means that public money is being better spent. MS. SIPE also commented that professionals in the field of aging are trying to move away from the idea that long-term care is an unavoidable part of the continuum. Long-term care is now viewed as part of a network, which also includes home care and assisted living alternatives. If home health care and assisted living are added on to family care, many people may never need a nursing home bed. Number 2190 REPRESENTATIVE TOOHEY asked what would happen to pending certificate of need applications under the proposed legislation. MR. LIVEY responded that the applications would be reviewed under the new criteria. REPRESENTATIVE TOOHEY then asked what would happen if a certificate had already been granted. MR. LIVEY replied that if a certificate had already been granted, then the project could go forward. CO-CHAIRMAN BUNDE announced that teleconference testimony would now be taken. He called on the next witness, Dennis Murray, via teleconference from Kenai. DENNIS MURRAY, Administrator of Heritage Place in Soldotna, Alaska, stated that he had a different perspective on HB 528. For example, he said, the legislation references a low occupancy rate for nursing homes in Alaska. However, this is not true in southcentral Alaska. Both facilities in Anchorage are at near 100 percent occupancy. His own facility has run between 97 and 100 percent occupancy for the past 12 months. TAPE 96-23, SIDE B Number 001 MR. MURRAY further noted that the state has, in fact, two nursing home systems, which include private facilities and the Pioneer Home system. He also observed that Alaska has one of the lowest per capita nursing home populations in the country. But, we also have an exploding elderly population. He commented that the proposed legislation appears short-sighted. Number 037 LEANNA SMITH, of the Palmer Senior Center, testified via teleconference from Mat-Su. She agreed with Ms. Sipes that the cost of home and community-based care was much lower than nursing home care. She stated, however, that only a small number of people can currently receive help from the state for the cost of home care. She stated that if nursing home beds are available, Medicaid will pick up the cost for people who cannot afford to pay. However, if no beds are available, and assisted living funds are also unavailable, people will be left without care. Ms. Smith asked if there would be some way to transfer funds from Medicaid to help with assisted living. Number 074 GLORIA SIMEON, Executive Director of the Calista Elders Council, testified via teleconference from Anchorage. Ms. Simeon stated that since 1986 the elders of the Calista region have worked to organize themselves so that the regional entity could provide services and programs to them responsive to their needs. The council is concerned that too many elders have to leave the region to receive the medical care and services they require. She stated that elders are forced to leave their homes, families, friends, and most important their language. They are relocated to unfamiliar environments, and exposed to a language and way of life that is not their own. No roads link the Calista region to the rest of the state, and the cost of a ticket from one of the regional villages to Anchorage is in excess of seven hundred dollars. The region is also one of the most economically depressed in the state, and most families cannot afford the cost of even an annual visit to their elderly relatives in nursing homes. Left alone in an unfamiliar environment, the elders lose their will to live and often come home in a short period of time, to be buried. This conflicts with the values and traditions of the Yupik culture. MS. SIMEON stated that while she understands the reasoning behind the proposed legislation, she is also aware that the majority of nursing homes are located in urban centers. She further understands that the rural health corporations are developing and expanding programs to offer home care delivery, and are considering assisted living centers as a viable option on a community level. However, the reality is that there is a need for a nursing home facility in the Calista region, and the regional hospital is an ideal place to locate such a facility. MS. SIMEON further stated that a study done by the state of Alaska in 1993 showed 41 Calista elders in nursing facilities throughout the state, and that being forced to relocate resulted in poor adjustment and a much higher death rate. The study also indicates that the two fastest growing segments of our population are elders, age 65 and over, and children age 5 and under. With the number of elders increasing, the state needs to examine how future needs will be met. She proposed that, rather than putting a moratorium on nursing homes and beds, the state should take a serious look at the present and future needs of its elders, and focus on how these needs can be met. In closing, Ms. Simeon suggested that elders should be involved in the development of any plan, and that they should be able to live out the remainder of their lives as close to their homes as possible. Number 219 HELEN KEIM, Care Coordinator, Homer Senior Citizens, testified via teleconference from Homer. Ms. Keim stated that she supports HB 528. She urged the committee's support for the Choice medicaid waiver program for the elderly, and asked the committee not to cut funding for the program. The average cost of a Choice client is $25 to $30 thousand annually, as opposed to $100 thousand or more for each long-term care patient. Also, the Choice program keeps clients in their own homes, as opposed to an institution. CO-CHAIRMAN BUNDE announced that a number of people still wished to testify. He stated he would attempt to hear the bill again on Tuesday, March 12. Number 293 BRENDA STEENBLOCK, Administrative Assistant, Homer Senior Citizens, testified via teleconference from Homer. Ms. Steenblock stated that Homer's new, 40 unit assisted living facility is scheduled to open in May. She stated that Homer Senior Citizens supports HB 528. Number 325 ALYSHA MATHEWSON, of Homer Independent Living Center, testified via teleconference from Homer. Ms. Mathewson stated that she supports HB 528 because the state needs to develop home and community-based services as an alternative to costly nursing home facilities. Each person receiving extended care has their own personal circumstances. Some would choose to stay at home, but cannot afford to pay the cost of a home health aide. These fees would total approximately $240 per day, but Medicaid doesn't cover this service. In the Palmer area, Medicaid pays about $12 thousand per month for long-term care. If this amount were instead paid directly to the certified home health aides, there would be a savings of $4800 per month. MS. MATHEWSON stated that she would also like to see further development of the Medicaid Choice program. She urged the committee to pass the bill, keeping mind that changes in the health care delivery system are urgently needed. Number 400 JOYANNA GEISLER, of Homer, testified that she provides services for people with disabilities throughout the entire Kenai Peninsula. She stated that she supports HB 528. All of her clients with disabilities would definitely prefer to receive community-based services, rather than live in nursing homes. She noted that such community-based services cost about one-third the amount of institutional care. Ms. Glyser stated the bill seems to be a win- win situation, as it would reduce costs to the state and improve the quality of life for disabled and elderly Alaskans. She further noted she supports limiting the growth of long-term care beds, and diverting the resulting funds into community-based services. Number 462 REPRESENTATIVE TOOHEY mentioned the handout received from Homer Senior Citizens. She noted that the handout compares the price of services available, and contrasted this with materials received from Providence Hospital, which do not mention cost. CO-CHAIRMAN BUNDE responded that information on cost of services could most likely be obtained before the bill was heard again. Number 504 JOE ALTER, Chairman of the Pioneer's Homes Advisory Board and a member of the Alaska Commission on Aging (ACOA), stated that the Pioneers' Homes Advisory Board represents roughly half of the long- term care beds in the state. On behalf of the Commission on Aging, Mr. Alter read a resolution, as follows: "Alaska Commission on Aging Resolution 96-3, In support of a moratorium on construction of additional facility beds: "WHEREAS Alaska's existing long-term care system is now largely made up of institutional, long-term care services; and "WHEREAS the current availability of nursing home beds in many areas exceeds the actual need for nursing home beds in the state; and "WHEREAS Alaska's seniors have indicated through surveys an overwhelming preference for alternatives to nursing homes, and they want to live in the least restrictive setting close to family and friends; and "WHEREAS seniors often have to choose nursing home care, which is the most intensive, restrictive and expensive type of care, because there is no community-based service available; and "WHEREAS the future of Medicaid financing is under discussion at the federal level; and "WHEREAS the state Medicaid financing is finite, and is forcing choices among Medicaid programs; and "WHEREAS the growth and maintenance of much needed community-based care is threatened by construction of unnecessary nursing home beds; and "WHEREAS if new nursing home beds are added, senior's choices will be restricted, because new nursing home beds compete directly for public funds available for community-based services; and "WHEREAS HB 528 will encourage the development of home and community-based services, and allow time for Alaska to move toward a more balanced, long-term care system; "NOW, THEREFORE, BE IT RESOLVED that the Alaska Commission on Aging strongly encourages the Alaska legislature to enact HB 528, which would place a two year moratorium on new, nursing home beds. "Adopted this 5th day of March, 1996. Donald M. Hoover, Chair, Alaska Commission on Aging" This concluded Mr. Alter's testimony. Number 653 HARLAN KNUDSON, representing the Alaska State Hospital and Nursing Home Association, stated that he is a strong proponent of home and community-based care, but that his organization opposes HB 528. The association shares the concerns about cost, but disagrees with this approach to solving the problem, and with the findings of the bill. They do not agree that there is an overabundance of nursing home beds in the metropolitan areas of the state. He referred to a January 31, 1992, census report on licensing and certification, which shows 764 beds being reimbursed in the Medicare system. He stated this is important, because it disputes other figures relating to the number of licensed beds in the state. MR. KNUDSON further stated that the 1992 report shows 100 percent and 98 percent occupancy for nursing homes in Anchorage. One of the pending certificates of need, which would be impacted by the proposed legislation, is for a nursing home in the Palmer/Mat Su area. Mr. Knudson pointed out that the 1996 census report shows that rates for nursing home care in Anchorage have actually shown a slight decrease since 1992, in one center, and have only increased about $20 per day in another center. He also noted that, of the two centers in Anchorage, one is 98 percent full, and the other 96 percent. He stated that the bill proposes a solution which is far too simplistic. When nursing home beds are full, there is no place open for acute care and convalescent patients. They then have to stay in the hospital, which is the most expensive setting. Mr. Knudson also pointed out that in 1992, there were 764 licensed beds. In 1996, there are 768. This represents an increase of only four beds in five years. He summed up his testimony by calling the committee's attention to Section 2 of the bill, which changes the word "shall" issue a certificate of need to "may" issue a certificate of need. This refers to situations where the criteria have already been met. Mr. Knudson reminded the committee that there is a big difference between "shall" and "may". The proposed statue would allow the department to deny a certificate, even when need has been proven. This represents a major change in public policy. MR. KNUDSON also stated that providers feel shut out of the policy- making procedure, with respect to long-term care. Perhaps a one year moratorium would be appropriate. The HESS Department should be required to work with advocacy groups, providers, bush and rural Alaska, and propose a bill that will meet the people's needs. He referred to a report by the American Association of Retired Persons which raises serious questions about the cost of home and community-based care. He reiterated that HB 528 does not effectively deal with problems in the system. CO-CHAIRMAN BUNDE announced that HB 528 would be scheduled for further hearing.
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