Legislature(2003 - 2004)
03/18/2004 03:05 PM House HES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HB 511-CERTIFICATE OF NEED PROGRAM
Number 0092
CHAIR WILSON announced that the first order of business would be
HOUSE BILL NO. 511,"An Act relating to the certificate of need
program for health care facilities; and providing for an
effective date."
JANET CLARKE, Director, Division of Administrative Services,
Department of Health and Social Services, testified in support
of HB 511 and answered questions from the committee members.
She told the members that the administration support HB 511 in
its current form which includes one amendment the committee
adopted during the first hearing of the bill. That amendment
was related to residential psychiatric treatment centers (RPTC)
which the department believes strikes the right balance of
technical corrections in closing some of the loopholes to make
the CON program work better.
MS. CLARKE referred to a letter she sent to the member on March
15 which addressed a number of the questions from the members.
She commented that Tanana Valley Clinic testified that 99
percent of the CONs submitted have been approved. Ms. Clarke
explained that the department did a review of that point and
asked the members to look at Attachment 1, Response to TVC
Assertions. There were also issues of non-hospital CON
approvals and the assertion that the department protects
hospitals from competition. Ms. Clarke pointed to the third
page of the attachment, Certificate of Need Decisions from 1996-
2003. She noted that the table at the top of the page reflects
that 61 percent of the CONs had been approved as requested, 11
percent were denied, 11 percent were partially approved, 6
percent were withdrawn, 14 percent had special conditions
attached to their CONs, and 17 percent were shaped by the CON
process. In other words, the process provides technical
assistance with the application, and the questions that were
asked in the CON process helped shape the direction the
facilities chose to go. Ms. Clarke emphasized that this is not
a rubber stamping process, but a public interactive process.
She summarized that she believes the CON process is doing the
job the legislature intended.
Number 0367
REPRESENTATIVE SEATON commented on the differences between the
CON processes in Alaska as opposed to the process in Utah. He
said the committee was told that in Utah the department assesses
the needs of a community when a CON application comes in.
However, in Alaska when a CON application comes in there is a
public notice for 30 days where counter proposals can come
forward. He asked Ms. Clarke to address this point.
MS. CLARK directed the members' attention to Attachment 3,
History of Concurrent (Competing) Certificate of Need Reviews.
This attachment shows the number of competing CON applications
in Alaska since 1982, she said. In the 1980s there were four
[competing CON applications], and in the 1990s there were two
[competing CON applications]. She agreed with Representative
Seaton's description of the way CONs are handled in Alaska.
During the 30-day public notice there would be an opportunity
for someone to come in with a competing application, she
acknowledged. Ms. Clarke commented that the department does not
solicit, encourage, or in any way encourage competition to CONs.
She summarized that competing CONs have been a very rare
occurrence particularly in the last twenty years where it has
only happened twice.
Number 0544
CHAIR WILSON announce that Representatives Cissna and Wolf have
joined the meeting.
Number 0561
REPRESENTATIVE CISSNA asked if the CON process is time
consuming.
MS. CLARKE referred to Attachment 2, Certificate of Need
Questions & Answers, and directed the members' attention to the
question: "What are the components of the certificate of need
(CON) process?" She provided the following list [original
punctuation provided]:
· Submission of a letter of intent (includes who,
what, how large, the cost and timeline);
· Letter of intent (LOI) determination - a decision
is made as to whether a CON is required;
· 60-Day wait - A CON application may be submitted
60 days after the LOI determination;
· Completeness Check - The application is checked
for completeness, and more information is
requested if the application is incomplete. The
applicant has 60-days to submit information;
· Review Period - The analysis document must be
submitted to the Commissioner in 90 days;
· Public Notice & Public Comment - Public notice is
given at the beginning of a review and the public
comment period runs concurrently with the review,
· Commissioner's Decision - The Commissioner makes
the decision, which is published, and
· Appeal - The applicant has 30 days to appeal if
dissatisfied.
MS. CLARKE added that the commissioner will make a
decision, and if an applicant is still unhappy litigation
is still an option.
Number 0709
REPRESENTATIVE CISSNA asked at what point in the process does
the department make the application public. Is it when a
submission of a letter of intent is received or later in the
process.
MS. CLARKE replied that the letter of intent is a one-page
document that is public information.
REPRESENTATIVE CISSNA asked if the letter of intent is
published.
MS. CLARKE responded that a lot of things are published on the
department's web page, but would have to verify that the letter
of intent is one of them.
MS. CLARKE summarized information on Attachment 2 which was
titled "Certificate of Need Questions and Answers." She
explained that the types of projects which require CON are
health care facility projects that involve expenditures of $1
million or more for construction, renovation, or the purchase of
new equipment. Ms. Clarke told the members that there are other
projects which are exempt from CON; for example, if the project
costs under $1 million, or is for routine maintenance or repair,
or routine replacement of equipment. Specifically, exemptions
are for pioneer homes, private physicians' offices, dentists'
offices, and any other project that is not included in the
definition. Ms. Clarke emphasized that if HB 511 passes the
legislature the definition will change to include residential
psychiatric treatment centers and independent diagnostic testing
facilities.
Number 0843
MS. CLARKE explained that the department is required to have a
decision on a CON application to the commissioner within 90
days, and then the commissioner can take as long as necessary to
make the determination. She added that there is usually a lot
of pressure to turn that decision around fairly quickly.
MS. CLARKE responded to earlier comments concerning the cost of
a CON as being between $5,000 to $100,000 or more, by saying
that a lot of the cost depends on the whether the applicant is
happy with the decision and if there is a decision to litigate
it. However, one example from a group in the state of
Washington that has done consulting in the state of Alaska and
has done at least four CON applications charges $15,000 per
application. She said she believes that is a good independent
assessment of the cost.
MS. CLARKE summarized that the department supports HB 511 and
urged the members to pass it from committee.
CHAIR WILSON commented that an amendment will be presented
shortly that will remove residential psychiatric treatment
centers (RPTC) from the bill and asked Ms. Clarke to comment on
the purpose of including them.
Number 0933
REPRESENTATIVE WOLF moved Amendment 1. He told the members that
many communities are looking at adding RPTC's and this bill
simply adds one more layer of bureaucracy. He pointed out that
Ms. Clarke stated the cost could be between $15,000 to $100,000
to obtain a CON.
Number 0977
REPRESENTATIVE KAPSNER objected for purposes of discussion. She
explained that in her area a tribal health consortium, Yukon-
Kuskokwim Health Corporation, is planning on building a RPTC for
Native kids. She added that there are no RPTCs in Rural Alaska,
so most of these kids get shipped out of state. Representative
Kapsner said that there is concern that a for-profit hospital
could come into the area and take that option way from the
tribal health consortium.
Number 1024
MS. CLARKE responded that the department opposes Amendment 1.
She explained that there is an effort to bring the 500 children
who are currently placed in out of state facilities back to
Alaska. Ms. Clarke told the members it is the department's wish
to do this in a planned community-based way where many smaller
facilities would be constructed throughout Alaska if needed.
She emphasized that it is important not to over build the
system. The department wants a three-pronged approach where
there would be a gate keeping system in place to ensure that
kids are going to the right place. It is important to make sure
that RPTCs are built in the right locations so kids can be as
close to home as possible. Kids who are not close to their
parents do not receive the same benefit as those who are. It is
also important these facilities not be large. Ms. Clarke added
that while there are 500 kids out of state, the department does
not believe it would be prudent to build 500 beds in Alaska.
Instead, the department believes having a smaller number of beds
with a variety of options will be helpful in making the kids
successful.
MS. CLARKE noted that three of the members of the House Health,
Education and Social Services Standing Committee are on the
House Finance Budget Subcommittee which deals with this issue.
She told the members that this is one of the fastest growing
areas of the Medicaid budget. She explained that the budget is
now well over $40 million and is growing rapidly every year. It
is important that as the kids are moved back to Alaska, they are
provide with better treatment, and that the Medicaid budget is
not broken. Ms. Clarke explained that the administration wishes
to work with Tribal partners because there is 100 percent
federal funding available for those services, and it is
important to do it in a planned manner.
Number 1153
REPRESENTATIVE CISSNA commented that she understands that there
is legislation currently moving through the process that would
removed reimbursement to this kind of program. She added that
she hopes there is some coordination to ensure that the
community-based RPTCs are paid enough to remain open.
MS. CLARKE replied that she believes Representative Cissna is
referring to some cost containment regulations that are
currently out for public comment.
Number 1199
REPRESENTATIVE GATTO asked for clarification on residential
psychiatric treatment center. In this context what does the
word "residential" mean. "Is this a locked-down facility," he
asked?
MS. CLARKE replied that some of the facilities will be locked
facilities; however, some are secured facilities. By that she
said she means the facility is secured by staff; it is not like
a locked cell.
REPRESENTATIVE GATTO asked if there is 100 percent control.
MS. CLARKE responded that there are a whole array of residential
facilities including many levels of security. She clarified
that RPTCs are one step away from an inpatient psychiatric
hospital.
REPRESENTATIVE GATTO asked how many kids the department plans on
bringing back to Alaska.
MS. CLARKE replied that it is the intention to bring back as
many children as will benefit from returning to the state of
Alaska. There are some specialized facilities in the Lower-48
that deal with for example, fire starters. That program cannot
be replicated in every state. Ms. Clarke emphasized that the
department wants to stem the tide of kids going out of state and
bring some back to the appropriate placement.
Number 1383
REPRESENTATIVE WOLF pointed out that the committee has heard
from a program in Southeast Alaska [Crossing Wilderness
Expeditions for Youth, Overview, 1/29/04] that has a remote
program, yet it would be considered a residential facility which
would fall under the CON process.
MS. CLARKE responded that there is no retroactive clause in HB
511. There are a couple of facilities, in Anchorage and Palmer,
that have the designation of RPTCs. She emphasized that not all
residential centers will fall under the CON process. Many
communities have residential homes that fall under a different
program and CON does not apply to them.
REPRESENTATIVE WOLF said that the members were told the CON
process would apply to the program he is referring to. Unless
Ms. Clarke can confirm that it does not apply, he will assume it
does.
MS. CLARKE responded that she would have to look at the program
to determine the level of care and intensive services that are
being provided.
Number 1405
REPRESENTATIVE COGHILL commented that the budget debate has made
it clear that there needs to be management of RPTCs because they
are largely publicly funded. He told the members that he
opposes the amendment even though he struggles with the idea of
the state managing many of these programs.
CHAIR WILSON agreed with Representative Coghill's comments. She
pointed out that there are many companies in the Lower-48 who
know the current problems Alaska is experiencing and without the
CON process these companies could come up here and build many
facilities as a way to make money.
Number 1441
A roll call vote was taken. Representative Wolf voted in favor
of Amendment 1. Representatives Cissna, Kapsner, Gatto,
Coghill, and Wilson voted against it. Therefore, Amendment 1
failed to be adopted by a vote of 1-5.
Number 1508
REPRESENTATIVE COGHILL moved to report HB 511 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, CSHB 511(HES) was reported out
of the House Health, Education and Social Services Standing
Committee.
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