Legislature(2001 - 2002)
04/23/2002 03:03 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 345 - EDUC. FUNDING/DISABLED/CORRESPONDENCE CHAIR DYSON announced that the first order of business would be SENATE BILL NO. 345, "An Act relating to medical assistance for rehabilitative services for certain children with disabilities; relating to agreements to pay medical assistance for covered services paid for or furnished to eligible children with disabilities by a school district; and providing for an effective date." Number 0105 JERRY BURNETT, Staff to Senator Lyda Green, Alaska State Legislature, presented SB 345 on behalf of the Senate Health, Education and Social Services Standing Committee, sponsor. He explained that SB 345 allows schools to become Medicaid providers for certain special education students who qualify under the Medicaid program. Under this bill, schools which are currently required to provide these same services, such as physical or speech therapy, under the IDEA [Individuals Disabilities Education Act], receive about 16 percent of the money for special education services that Congress should be providing. This bill allows school districts to provide the services and then bill Medicaid for those services. The school districts would pay the state match, so there is no additional cost to the state. It allows the school districts in Alaska to generate about $7 million in additional funding for special programs, with no additional cost to the state other than the small administrative fiscal note. He said 42 other states do this. Number 0245 REPRESENTATIVE WILSON asked if this is just transferring the responsibility from the state to the school district or if the districts actually gain some money. Number 0275 MR. BURNETT answered that right now the schools provide these services with the general fund money received under the school foundation formula. If this bill passes, the school districts can seek reimbursement from the Medicaid program for those services that are eligible. Currently, no one can seek the Medicaid reimbursement. If the federal match rate for Medicaid is 60:40, that means for a dollar that the districts put at a state match, they get back $1.50 from the federal government. He told Representative Wilson that it doesn't transfer any state responsibility to the schools. REPRESENTATIVE WILSON asked if the state would provide forms for the schools or if this will be complicated. MR. BURNETT agreed it may require some complicated forms to be filled out. There is a small administrative fiscal note that's with the bill to help with training and setting up the program. He noted that the school districts would not be required to do this for any student. Number 0475 REPRESENTATIVE KOHRING asked if there was any concern as far as this encouraging more spending in Medicare than was necessary. MR. BURNETT replied that he didn't think it would, but that has been discussed. He explained that the students have to have an IEP [individual education plan] to qualify for this, and those students are getting those services now. There could be some legitimate concern that a school district could decide to provide more services for students who are Medicaid eligible than for students that aren't. But, the school district would be under pressure not to do that, and he said he can't imagine that the educators would do that. Number 0535 REPRESENTATIVE STEVENS asked what the districts would be required to do that they are not now doing. MR. BURNETT suggested that the department could answer that better, but basically the difference between what is being done now and what will be done is billing Medicaid. The difference would be paperwork, he noted. Number 0575 REPRESENTATIVE COGHILL commented that he thinks IDEA has been characterized as an unfunded mandate. He wondered if this bill would change that a little bit. MR. BURNETT replied yes, that was most of the point for doing this. Number 0616 BOB LABBE, Director, Division of Medical Assistance, Department of Health & Social Services, expressed support of SB 345. He noted that the schools will participate voluntarily, and each of the districts will have to assess the cost benefit of entering into this, because it does require some build up of administrative structure. The intent is to have something streamlined to the extent possible under a Medicaid program, and to do it in a way that is less burdensome, but there are requirements that will need to be met. Number 0738 MR. LABBE expressed concern about the provider complying with the regulations to avoid potential pitfalls of recoupment or other types of activity that could occur if people weren't diligent. He noted that there is some ability to tailor the requirements and the services. Most of the states participating in this have generated some revenue, but they've also had to jump through some hoops. It isn't necessarily an easy thing to do, but this legislation will get the discussion started on policy and the best way to do it. Number 0790 CHAIR DYSON asked what part of the fiscal note is general fund dollars that will be used to prepare the forms and the administrative procedures. MR. LABBE answered that it amounts to about $52,000 in 2003, $40,000 in 2004, $54,000 in 2005, and then drop back to $51,000 for on going. He explained that the costs to modify the computer system is generally matched at 75 percent; but the staff effort is generally matched at 50 percent. REPRESENTATIVE STEVENS asked about the funding. Number 0937 GREG MALONEY, Special Education, Teaching and Learning Support, Department of Education & Early Development, replied that the funds used now are a mixture of local, state, and federal funds to provide the services. This bill would be another "catchment of services" that is allowed under the IDEA to help pay for those services. He replied to an earlier question and told the committee that the services covered are speech and language therapy, occupational therapy, physical therapy; those types of services which have a licensed provider providing those services within the school. Another set of services are medical services that are now being required to be provided in the schools. Since the conclusion of several court cases, schools now have a larger responsibility for providing medical services in the school setting. This bill then allows the federal funds to offset some more of those costs without significant cost to the state, he noted. REPRESENTATIVE STEVENS asked for clarification on the funding. Number 1073 MR. MALONEY explained that the expectation is that approximately $7 million in costs, once the system is fully ramped up, would be able to be billed as Medicaid. After the match was taken out, it would create about $4 million in new revenue for the districts, and that could be a conservative estimate. There would be new revenue that districts would be able to use to provide the services. He indicated that there plans to be a group of stakeholders to look at what will be the most feasible system for reimbursement. He noted that it's a voluntary system. MR. MALONEY explained that the match would not require up-front funds but would come after the Medicaid reimbursement. The district would never be required to put funds up front. He commented that electronic billing is being looked at to ease the burden on the districts. He said, hopefully, the impact on districts would be limited. Also taken into account has been rural districts versus urban districts and making sure that everyone has an equal opportunity to participate, and there will be benefits for all. In some of the smaller districts, the benefits are going to be smaller, but he reiterated that there would be new revenue coming in. Number 1146 CHAIR DYSON asked if the schools are not providing all these services now, will they be required to provide more services. MR. MALONEY replied that that is not expected. Under federal law and state law, the districts are providing the services developed by the IEP team. With additional funds, it is hoped there will be improved services. He said that extra services wouldn't be expected, because the incentive to provide additional services coming from Medicaid alone is not strong enough, because the paperwork or the challenge of providing the services, even with this additional revenue, is going to outweigh the incentive. Number 1253 REPRESENTATIVE WILSON asked for an explanation on the fiscal note where it says, "Districts would reimburse the Department of Health and Social Services for the state match required." MR. MALONEY answered that while there is no process attached to this legislation that says how it exactly would happen, the expectation is that once a district bills its Medicaid-eligible cost, it would receive 100 percent reimbursement; from that allotment, it would return a check back to the state that covers the match requirement. It may sound like duplicative efforts, but this makes sure that the audit trail is clean. It shows that the matching requirements are met, there is no additional burden on the districts, and the funds are able to be cleanly disbursed. Number 1320 MR. LABBE said one of the concerns was to make sure that there was no additional cost to the state program for putting this in. Normally if a new service is added to Medicaid, there would be a new state general fund cost to draw down the federal funds. In this case, the district will be providing the match, but instead of getting 100 percent of the payment, they're getting the federal share of the payment because they are responsible for the match. Instead of the districts sending the state funding for the match, the state will forward fund it and get the match back from the districts. He agreed it was a bit circular, but that makes the audit trail for the federal government easier to find, so it doesn't have to audit all the school districts to see if there were actually matching funds available for payment claimed. Number 1483 REPRESENTATIVE WILSON asked Mr. Labbe to track the trail of the money. MR. LABBE answered the school sends the state a bill for the services; the state pays the district for that service; the state collects back from the district the amount for the state match for the federal funds; the state bills the federal government and the federal government pays the state. Number 1595 REPRESENTATIVE STEVENS asked what happens to the districts who choose not to enter the program. MR. MALONEY answered that no change would be expected. Districts are currently receiving a portion of Medicaid funds under the "admin capturement." It's based on a time survey that's done; it's not a direct billing reimbursement system, and that would stay in place. These additional funds would be for direct reimbursement. So if a district chose to participate in that system, it would get those funds. If it chose not to, then the system would just be the same. The real purpose of this funding is to give districts a better shot at providing the services they are required to provide. There are some very expensive programs that districts are not able to get additional support for. This bill will help provide some significant support for on-going costs. It may be complicated in description, but the actual process for application does not have to be that complicated. He indicated that the stakeholders group would discuss how best to get that process in place. REPRESENTATIVE STEVENS asked if there would be any penalties to those districts who chose not to enter the program. He said he assumes that most districts would voluntarily enter the program. Number 1659 MR. LABBE said each district would have to make an assessment. There might be a district that had only one child with expensive service, but it still might be worthwhile to participate even for one child on Medicaid. On the other hand, it may not be worth it if the cost of the services is less than the cost of complying. The bigger districts will certainly see a benefit; the smaller ones may see a benefit depending upon their caseload. The state will work with them on the assessment. Number 1715 REPRESENTATIVE COGHILL commented that the federal government is going through a revamp of IDEA and wondered how that would interface with this. MR. MALONEY answered that the reauthorization of IDEA is expected to move forward, and this is one of the topics being discussed around the country, because there are conflicts in federal law regarding special education and Medicaid. He told the members that there has been discussion with the Medicaid folks in Washington, D.C., and there has been no indication of any interference or conflict. Number 1765 REPRESENTATIVE COGHILL moved to report SB 345 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, SB 345 was reported out of the House Health, Education and Social Services Standing Committee.