Legislature(2019 - 2020)DAVIS 106

03/05/2020 03:00 PM HEALTH & SOCIAL SERVICES

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Audio Topic
03:06:40 PM Start
03:07:21 PM Presentation: Addressing Gaps in the Crisis Psychiatric Response System
03:49:00 PM HB86
04:32:19 PM HB183
04:57:08 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Addressing Caps in the Crisis TELECONFERENCED
Psychiatric Response System by
- Dept. of Health & Social Services
- Dept. of Law
Heard & Held
-- Testimony <Invitation Only> --
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
          HB 86-MENTAL HEALTH HOSPITAL: CONTRACTS/BIDS                                                                      
3:49:00 PM                                                                                                                    
CHAIR ZULKOSKY  announced that the  next order of  business would                                                               
be  HOUSE  BILL  NO.  86,  "An  Act  relating  to  a  state-owned                                                               
inpatient mental health treatment  hospital; and providing for an                                                               
effective date."  [Before the  committee, adopted as a work draft                                                               
on 3/28/19,  was the  proposed committee  substitute (CS)  for HB
86, Version 31-LS0623\U, Marx, 3/26/19.]                                                                                        
3:49:08 PM                                                                                                                    
REPRESENTATIVE   SPOHNHOLZ,  in   response  to   Chair  Zulkosky,                                                               
[renewed] the  motion to adopt the  proposed committee substitute                                                               
(CS)  for  HB 86,  Version  31-LS0623\U,  Marx, 3/26/19,  as  the                                                               
working draft.                                                                                                                  
3:49:21 PM                                                                                                                    
CHAIR ZULKOSKY objected for the purpose of discussion.                                                                          
3:49:43 PM                                                                                                                    
REPRESENTATIVE ZACK  FIELDS, Alaska  State Legislature,  as prime                                                               
sponsor of  HB 86, using  a PowerPoint presentation,  shared some                                                               
history and facts about  API on slides 2-3.  He  said API had far                                                               
fewer beds than were needed  to meet present needs, which created                                                               
a  myriad  of  problems  ranging  from  people  with  psychiatric                                                               
illnesses  not receiving  treatment, which  put Alaskans  at risk                                                               
and necessitated  hospitals' holding  of psychiatric  patients in                                                               
the ER,  guarded one-on-one, effectively  driving up the  cost of                                                               
health  care.      Representative Fields  noted  the  controversy                                                               
surrounding   attempted   privatization    of   API   since   the                                                               
introduction of HB 86; some  headlines from news stories could be                                                               
seen  on  slide  4  of  the   PowerPoint.    The  state  was  not                                                               
permanently privatizing API, he  said; Wellpath (WP) continued to                                                               
have  shorter-duration  contracts   to  provide  some  management                                                               
services.  What HB 86  would do was prevent overall privatization                                                               
of  the  entire  facility,  he  related,  while  not  prohibiting                                                               
privatization of certain functions within API.                                                                                  
3:51:45 PM                                                                                                                    
REPRESENTATIVE FIELDS related there  were many troubling examples                                                               
of negligent care  at WP facilities across the  U.S., and Correct                                                               
Care Solutions,  which was the former  name of WP, had  been sued                                                               
about 1,400  times since 2003, including  substantiated claims of                                                               
wrongful death and inadequate care.                                                                                             
3:52:58 PM                                                                                                                    
REPRESENTATIVE FIELDS,  referencing slides  5-6, shared  with the                                                               
committee  a  timeline of  API's  relationship  with WP  and  the                                                               
latter's   corporate   history.       Referencing   slides   7-8,                                                               
Representative Fields  noted there  had been  a high  turnover of                                                               
numerous  positions  under WP.    Staff  were concerned  with  WP                                                               
management, he  related, and there has  been criticism, including                                                               
in the  media, of WP's failure  to bring conditions at  API where                                                               
they needed  to be.   Referencing slide 9,  Representative Fields                                                               
noted  that the  legislature had  looked at  API management  in a                                                               
recent comprehensive  study in  2017, examining  a wide  range of                                                               
options  for   managing  the  facility  ranging   from  wholesale                                                               
privatization   to  partial   privatization  to   modified  state                                                               
management.  In the study,  full privatization entailed decreased                                                               
quality  of  service  and higher  costs,  and  recommended  state                                                               
management  with   outsourcing  what  they   considered  non-core                                                               
services.   Consistent with  the 2017 study,  HB 86  would ensure                                                               
public  management   with  opportunities  to   outsource  certain                                                               
functions, but not management of the whole facility.                                                                            
3:55:24 PM                                                                                                                    
REPRESENTATIVE FIELDS  noted public support for  continued public                                                               
management  of  API,  as  exemplified   on  slide  10.    Pacific                                                               
Consulting  Group  (PCG)  had looked  at  private  management  of                                                               
facilities such as API, and  when those facilities were privately                                                               
managed for profit,  it cost a significant amount  of extra money                                                               
in  terms of  profit margin  on top  of basic  operations of  the                                                               
facility.   In conclusion, Representative Fields  stated that the                                                               
for-profit model was  incompatible with the basic  mission of API                                                               
because it created an ongoing  incentive for the private owner to                                                               
provide  inadequate staffing  to  meet  patients' and  employees'                                                               
3:56:19 PM                                                                                                                    
REPRESENTATIVE FIELDS  said HB 86  had some  adjusted terminology                                                               
and  did allow  for privatization  of certain  functions, a  good                                                               
balance to  ensure the entity that  ran API had a  public mission                                                               
but  there was  flexibility to  run  the facility  and adjust  to                                                               
current needs.                                                                                                                  
3:57:01 PM                                                                                                                    
REPRESENTATIVE  PRUITT  confirmed API  had  been  managed by  the                                                               
state prior  to the last election.   He then asked,  when looking                                                               
at the  Ombudsman's report  and some  things that  occurred under                                                               
state management including the sexual  assaults in 2018 and 2019,                                                               
why state management  would be better than a private  entity.  He                                                               
also  mentioned HB  86 seemed  to group  all private  entities in                                                               
with  WP, when  the  important consideration  was  that the  most                                                               
vulnerable of the  population were properly cared  for, no matter                                                               
who managed the facility.                                                                                                       
3:58:44 PM                                                                                                                    
REPRESENTATIVE FIELDS  expressed that  the issue was  complex and                                                               
said  he  was  aware  of three  bills  all  addressing  different                                                               
aspects of  problems with API.   He  admitted that passing  HB 86                                                               
would not, in and of  itself, solve the problems.  Representative                                                               
Fields said  he appreciated the committee's  hearing another bill                                                               
he introduced  addressing API staffing  and capacity issues.   He                                                               
said the sexual assault and  other safety-related incidences were                                                               
related to  inadequate staffing.  He  said he has a  problem with                                                               
"a profit  motive."  He said  he would not have  the same problem                                                               
with a non-profit running the  facility because the same problems                                                               
did not  exist in terms of  incentives.  He said  the legislature                                                               
must  appropriate sufficient  money "to  run the  facility" while                                                               
recognizing that not having sufficient  funds "creates the public                                                               
safety and  cost ripple effect."   He said he thinks  HB 86 would                                                               
be one  part of a broader  solution.    In the last year,  WP has                                                               
had a chance to fix problems with  API and they have not done so,                                                               
he added.                                                                                                                       
4:00:48 PM                                                                                                                    
JAKE  METCALFE,   Executive  Director,  Alaska   State  Employees                                                               
Association, testified  in support  of HB 86  and said  he agreed                                                               
with Representative Fields' statements.   Mr. Metcalfe shared the                                                               
Alaska  State Employees  Association (ASEA)  experience with  its                                                               
staff at the  facility.  Understaffing and  underfunding had been                                                               
problems for a long time, he  related, including with WP.  One of                                                               
the more concerning  aspects, he shared, were  the discussions of                                                               
outsourcing having  created a high  amount of instability  in the                                                               
workplace:  according  to ASEA calculations, 75  people have left                                                               
in the  last year  for the reason  of uncertainty  regarding what                                                               
will happen at  the facility.  Employees do not  want to work for                                                               
a private contractor;  they want leadership, he shared.   Some of                                                               
those who  have left  had been  at API  their entire  careers, he                                                               
MR.  METCALFE   blamed  the  privatization  for   the  employees'                                                               
departure.   They  had been  told  a feasibility  study would  be                                                               
done,  he related,  at  the  end of  February  when  it had  been                                                               
announced that  WP would come in  as the contractor.   It had not                                                               
been  done, which  resulted  in  litigation.   There  had been  a                                                               
feasibility study scheduled for April  [2019], and then June, and                                                               
then September, and  then December, before the  February date was                                                               
missed, and  [at the time  of Mr. Metcalfe's testimony]  one more                                                               
had been  scheduled for March  9.  The  inability to get  a study                                                               
done, or to  provide the results, has created moral  issue in the                                                               
workplace.      Mr.   Metcalfe    referenced   the   2017   study                                                               
Representative Fields had brought  up, which showed privatization                                                               
would only be  successful by a major cut in  staff.  This created                                                               
safety problems for staff and patients alike, he reiterated.                                                                    
MR. METCALFE  noted there had  been problems not only  with staff                                                               
but with  leadership, as  there had been  between five  and seven                                                               
chief    executive   officers    (CEOs)   during    the   current                                                               
administration,  in   addition  to  another  six   prior  to  the                                                               
privatization  effort.   Leadership had  changed every  couple of                                                               
months, both under state management  and with WP in the facility.                                                               
From ASEA's  standpoint, Mr. Metcalfe  stated, the  situation was                                                               
"privatization by  attrition," both  within leadership  and among                                                               
staff who took  care of people in need.   Among neither group was                                                               
the instability welcome, he said, and  the way to fix the problem                                                               
was to have the state run it and to staff it properly.                                                                          
4:07:28 PM                                                                                                                    
REPRESENTATIVE PRUITT said  that sexual assaults were  due not to                                                               
a lack of funding but to failure  by staff, and since WP has been                                                               
at the helm there has been additional training of staff.                                                                        
4:09:23 PM                                                                                                                    
MR. METCALFE  replied he had been  with ASEA since 2018  and knew                                                               
from experience dealing  with API what the record  was like prior                                                               
to that time.   He said he also knew  from his experience dealing                                                               
with WP  and the privatization issue  he would stand by  API as a                                                               
state-run facility  as opposed  to one  run by  WP.   He admitted                                                               
this stance did  not account for perfection of all  staff, and it                                                               
was  possible  additional  training   may  in  certain  cases  be                                                               
required.   Mr.  Metcalfe  shared some  background  prior to  the                                                               
transition to  WP.  He  said that  in his experience  the problem                                                               
was with the  transition to WP, but API had  been underfunded and                                                               
understaffed  for many  years.   He  said  stable leadership  and                                                               
adequate staff were  needed on all levels, and if  that were able                                                               
to happen,  issues such  as sexual  assault would  be able  to be                                                               
prevented.   He  reiterated  understaffing would  not  work at  a                                                               
hospital that is at full  capacity.  State-run programs implement                                                               
decisions by policy makers that  the funding and staffing will be                                                               
adequate because of the constitutional  obligation to provide the                                                               
service to people, he added.                                                                                                    
4:13:30 PM                                                                                                                    
REPRESENTATIVE PRUITT said  that funding and bed  levels had been                                                               
increased in 2017,  and one of the sexual assaults  was in spring                                                               
of  2018.   Even  when  additional  funding was  given,  assaults                                                               
happened, he stated.                                                                                                            
4:15:38 PM                                                                                                                    
MR. METCALFE said funding had been  increased but it had not been                                                               
enough, as API had been underfunded  for years prior to 2017, and                                                               
the 2017 funding had in  fact been a "Band-Aid funding approach."                                                               
As far  as WP  was concerned,  Mr. Metcalfe  stated 70  staff had                                                               
left  since the  WP takeover,  including six  to seven  new CEOs.                                                               
Mr. Metcalfe repeated that WP  lacked leadership and admitted the                                                               
cause may  be other bills  which addressed wage issues  and other                                                               
changes.   He stated that  privatization had not  been successful                                                               
in psychiatric  facilities; the  state had  made the  decision to                                                               
care properly and  responsibly for its vulnerable  people and not                                                               
"ship them out."                                                                                                                
4:18:52 PM                                                                                                                    
REPRESENTATIVE PRUITT  clarified that the state  still did manage                                                               
the facility with WP as a consultant.                                                                                           
4:19:33 PM                                                                                                                    
REPRESENTATIVE  SPOHNHOLZ  pointed out  API  was  still a  public                                                               
institution.    There had  been  a  contract  last year  for  the                                                               
takeover of the  hospital which had not been awarded.   A look at                                                               
the  records,  she  continued,  showed  Centers  for  Medicare  &                                                               
Medicaid Services (CMS)  citations at API had started  to rise in                                                               
2015 and  coincided with many  years of tough  fiscal situations.                                                               
Costs  had to  be cut  in many  areas and  the budget  had to  be                                                               
managed,  she   imparted,  and  API  had   been  under-resourced,                                                               
especially  when  taking into  consideration  the  high level  of                                                               
training needed  to support  patients.   Representative Spohnholz                                                               
asked whether there was any language  in HB 86 that would prevent                                                               
API from contracting with experts to help improve outcomes.                                                                     
4:21:15 PM                                                                                                                    
REPRESENTATIVE FIELDS replied there was not.                                                                                    
4:21:19 PM                                                                                                                    
CHAIR  ZULKOSKY asked  about the  status of  the new  feasibility                                                               
study  being   conducted  by  API  on   privatization  and  state                                                               
4:21:50 PM                                                                                                                    
CLINTON LASLEY, Deputy Commissioner,  Office of the Commissioner,                                                               
Department   of  Health   and   Social   Services,  replied   the                                                               
feasibility study was due  to DHSS March 9.  He  said it had four                                                               
focal   points:      maintaining  a   state-run   facility   with                                                               
enhancements to try  to get back to the  80-bed capacity; looking                                                               
at  privatization, whether  through  a  for-profit or  non-profit                                                               
organization; providing  an option  for public  corporation while                                                               
remaining  a  state-owned  facility;  and  contracting  out  some                                                               
services, as was currently done.                                                                                                
4:23:24 PM                                                                                                                    
CHAIR ZULKOSKY  asked when DHSS  began the feasibility  study Mr.                                                               
Lasley referenced.                                                                                                              
MR.  LASLEY replied  the  contract had  been  awarded in  October                                                               
[2019] and had  been due to be finalized at  the end of February,                                                               
but the contractor  did ask for some  additional information, and                                                               
an extension had been granted until March 9.                                                                                    
4:23:48 PM                                                                                                                    
REPRESENTATIVE  SPOHNHOLZ   asked  what   DHSS  was   seeking  to                                                               
understand or  learn after a privatization  study which consisted                                                               
of 98 pages had just been done in 2017.                                                                                         
4:24:22 PM                                                                                                                    
MR.  LASLEY replied  there were  now  four options,  which was  a                                                               
different  approach.   Instead of  "just a  typical privatization                                                               
study,"  the  feasibility  study  at  hand  looked  at  the  best                                                               
mechanism to run the hospital, he stated.                                                                                       
REPRESENTATIVE  SPOHNHOLZ   asked  how  many   state  psychiatric                                                               
hospitals in the U.S. were privately run.                                                                                       
MR. LASLEY replied he did not know.                                                                                             
REPRESENTATIVE  SPOHNHOLZ  asked whether  there  was  a model  in                                                               
other places DHSS was trying to follow  or if it was on a general                                                               
fact-finding mission.                                                                                                           
4:25:52 PM                                                                                                                    
ALBERT  WALL, Deputy  Commissioner, Office  of the  Commissioner,                                                               
Department of  Health and Social Services,  regarding why another                                                               
privatization  study  would be  done  in  such quick  succession,                                                               
stated  that the  older study,  began  in 2016  and published  in                                                               
2017, showed  that beginning in 2013  there had been a  series of                                                               
state-run hospitals having the same  problems as API.  There were                                                               
laws  which required  states to  care  for inpatient  psychiatric                                                               
patients in  a timely fashion,  and many states had  been failing                                                               
in  that regard.   Because  of these  failures, many  states were                                                               
experiencing lawsuits.   Mr. Wall related that  in a presentation                                                               
to the  Senate Health and  Social Services Standing  Committee in                                                               
February  2019, new  findings, court  orders, and  rulings across                                                               
different states had  been revealed.  Other  states, through U.S.                                                               
Department  of  Justice  injunctions, had  been  appointed  court                                                               
monitors for  their state-run hospitals,  and DHSS had  wanted to                                                               
take this  into account in a  privatization study to bring  it up                                                               
to date.                                                                                                                        
4:28:03 PM                                                                                                                    
REPRESENTATIVE FIELDS  noted that  in the 2017  feasibility study                                                               
PCG did look at eight  privatization options, and PCG's letter to                                                               
the committee  did address privatization in  different states and                                                               
proclaimed it a "disaster."                                                                                                     
4:28:56 PM                                                                                                                    
BESSE  ODOM,  Staff,  Representative Zack  Fields,  Alaska  State                                                               
Legislature, on  behalf of Representative Fields,  prime sponsor,                                                               
presented  the  Sectional  Analysis for  the  proposed  committee                                                               
substitute (CS)  for HB 86,  labeled 31-LS0623\U,  Marx, 3/26/19,                                                               
[included in  members' packets], which read  as follows [original                                                               
punctuation provided]:                                                                                                          
     Section  1.  This  section  amends  AS  36.30.300,  the                                                                    
     statute  on Single  Source Procurements,  to add  a new                                                                    
     subsection,  (f) that  prohibits creation  of contracts                                                                    
     relating  to   the  ownership   or  management   of  an                                                                    
     inpatient mental health  treatment hospital established                                                                    
     under AS 47.30.660 (c) (see Section 4)                                                                                     
     Section  2.  This  section  amends  AS  36.30.310,  the                                                                    
     statute  on   Emergency  Procurement,  to  add   a  new                                                                    
     subsection,  (b)  that  prohibits   the  use  of  these                                                                    
     statutes to create contracts  relating to the ownership                                                                    
     or management  of an inpatient mental  health treatment                                                                    
     hospital  established  under   AS  47.30.660  (c)  (See                                                                    
     Section 4)                                                                                                                 
     Section  3. This  section amends  AS  47.30.660 (b)  to                                                                    
     correspond with  a new subsection in  AS 47.30.660 (c),                                                                    
     that is established in Section 4.                                                                                          
     Section 4.  This section amends  AS 47.30.660 to  add a                                                                    
     new subsection,  (c), that  requires the  Department of                                                                    
     Health and Social Services  manage an "inpatient mental                                                                    
     health treatment  hospital" in the State.  It prohibits                                                                    
     the  state  from  delegating  or  contracting  for  the                                                                    
     ownership  or management  of such  a facility.  It also                                                                    
     defines  "inpatient mental  health treatment  hospital"                                                                    
     for the purposes of this section.                                                                                          
     Section 5.  This section amends  the uncodified  law of                                                                    
     the State of Alaska to  define the applicability of new                                                                    
     subsections  established  in   Section  1,  Section  2,                                                                    
     Section  3 and  Section 4,  to contracts  entered into,                                                                    
     amended, extended  or renewed after the  effective date                                                                    
     of this Act.                                                                                                               
     Section 6.  This section amends  the uncodified  law of                                                                    
     the State of  Alaska to state if this  Act takes effect                                                                    
     after February 1st 2019, it  is retroactive to February                                                                    
     1st 2019.                                                                                                                  
     Section  7.  This  section provides  for  an  effective                                                                    
     date;  it  would  take effect  immediately  on  passage                                                                    
     under AS 01.10.070 (c).                                                                                                    
4:31:52 PM                                                                                                                    
CHAIR ZULKOSKY removed  her objection to the  [renewed] motion to                                                               
adopt the proposed  committee substitute (CS) for  HB 86, Version                                                               
31-LS0623\U, Marx,  3/26/19, as the  working draft.   There being                                                               
no  further objection,  Version  U was  [once  again] before  the                                                               
CHAIR ZULKOSKY announced that HB 86 would be held over.                                                                         

Document Name Date/Time Subjects
Fiscal Summary for Settlement of 3AN-18-09814CI.pdf HHSS 3/5/2020 3:00:00 PM
Addressing Gaps in the Crisis Psychiatric Response System
Addressing Gaps in the Crisis Psychiatric Response System--2 page overview.pdf HHSS 3/5/2020 3:00:00 PM
Addressing Gaps in the Crisis Psychiatric Response System
HB183 ver M Supporting Document Combined Letters of Support 3.3.2020.pdf HHSS 3/5/2020 3:00:00 PM
HB 183
HB 183 v.S.pdf HHSS 3/5/2020 3:00:00 PM
HB 183
CSHB 86 ver U Letters of Support 3.28.19.pdf HHSS 3/5/2020 3:00:00 PM
HB 86
Addressing Gaps in the Crisis Psychiatric Response System.PDF HHSS 3/5/2020 3:00:00 PM
Addressing Gaps in the Psychiatric Response System
HB 86 Version U Amendment 1.pdf HHSS 3/5/2020 3:00:00 PM
HB 86
HB 183 Version S Amendment 1.pdf HHSS 3/5/2020 3:00:00 PM
HB 183