Legislature(1999 - 2000)
03/09/2000 08:20 AM House STA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 299-PIONEERS HOME RATES Number 1808 CHAIR JAMES announced the next order of business is HOUSE BILL NO. 299, "An Act relating to rates charged in a Pioneers' Home." REPRESENTATIVE OGAN said he introduced HB 299 because of rate increases at Pioneers' Homes. He noted that HB 299 will remove rate setting power from the administration and give that authority to the legislature. He explained he thinks this is necessary because many people had moved into a Pioneers' Home after having made a lifetime decision that entailed liquidating assets and moving out of their own homes. These people had expected to live out their days under a certain deal agreed upon with the Pioneers' Home, but that deal has changed dramatically. He mentioned that if rate setting is transferred to legislative overview, a consistent policy will emerge because legislators are held responsible for their public policy every two or four years. REPRESENTATIVE OGAN indicated that Pioneers' Homes were set up originally to be homes for Alaskan pioneers, which is the reason for the name. He acknowledged that a number of court cases have ruled that people must be treated equally, therefore, the criteria for the original mission of Pioneers' Homes has dramatically changed to the extent that anyone can move in if that person is a resident of the state. He informed the committee that the court cases created a great demand for services [offered by the Pioneers' Homes], and there seems to be more people who suffer from different forms of dementia who are entering the homes. The focus and mission of Pioneers' Homes has changed from simply a residential facility into a long-term care facility. The change is appropriate; for this reason there needs to be discussion as to whether the Pioneers' Homes are going to remain residential. REPRESENTATIVE OGAN reminded the committee that the state should honor the agreement that was made with those people when they moved into Pioneers' Homes. He has seen their dignity taken away from them, even though many of them had never been on welfare and had provided for themselves their whole lives. As a result of the dramatic rise in rates, some people residing in the homes have literally had their dignity stripped from them. He stated that the legislature has passed legislation assuring Pioneers' Home residents that they will not be put out on the street if they become indigent, and he agrees with that legislation. REPRESENTATIVE OGAN said that he had heard comments from the Department of Law regarding different rates for Pioneers' Home residents even though that would not be treating them equally as current law requires. He suggested perhaps the committee should discuss whether the homes will continue to operate as residential facilities. He noted that residents who agreed upon a certain rate could be phased out by attrition because attrition may be legally acceptable; a shift in focus could then follow. He explained that a good example of attrition being legally acceptable is the longevity bonus program; although that also had been litigated on an equal protection basis, because it was going to be phased out it was legal to continue the program with those who already received a bonus. Number 1502 CHAIR JAMES commented that there is a $1.2 million fiscal note with HB 299. She asked if Representative Ogan would be willing to take that money out of the earnings reserve or the permanent fund. Number 1485 REPRESENTATIVE OGAN answered in the affirmative, as soon as the legislature constitutionally protects the existing dividend program. ALISON ELGEE, Deputy Commissioner, Department of Administration, said that in 1995 the Pioneer Home Advisory Board adopted a policy of raising rates over a defined period of time to the full cost of care in the homes. Those rate increases started effective July 1, 1996, and the last one will be in place in July 1, 2002; over a seven-year period, the department moves from low rates to those that represent the full cost of care. She commented that the fiscal note for HB 299 includes the rate schedule. She mentioned that the administration had publicized rate schedule information so that everybody knew where the administration was headed. MS. ELGEE indicated that the reason the Pioneer Home Advisory Board felt it was important to raise rates is because in 1995 legislation had been introduced to privatize the homes, which were being reviewed primarily due to state budget problems. Also, she added, the state was heavily subsidizing a very few people in a long-term care environment. In addition, as the administration watched the senior population grow, it recognized that the state was never going to be able to meet the majority of the senior population's needs through the services that were offered in a Pioneers' Home. She informed the committee that the Alaska State Hospital & Nursing Home Association (ASHNHA) felt that there was a great unfair competitive advantage. She emphasized that ASHNHA felt that those people who had the good fortune to get into a pioneer home at highly subsidized rates were drawing from those folks who could benefit from skilled nursing care and would otherwise be taken care of in another long-term care facility. MS. ELGEE said that at the same time the rate policy was adopted, legislation was put in place that protected financial assets of [pioneer home] residents, thus removing the danger of impoverishing a spouse by pioneer home rates, retained certain monthly allowances, exempted the permanent fund from collection, placed a prohibition on reviewing financial resources for admission, and precluded putting a person on the street if unable to pay the rate. The department does not ask people about their financial resources until people get to the point where they feel they cannot continue to pay the rate. At that time the department performs an assessment of financial resources, determines an appropriate rate, and subsidizes the balance through the state. MS. ELGEE reminded the committee that HB 299 rolls rates back to the rates in effect July 1, 1999, but HB 299 does represent $1.2 million revenue loss from the administration's current environment. The administration anticipates that revenue loss would be increasing as rates increase until the pioneer home rate reaches full cost of care. She recognized that the administration is dependent upon the receipt of those revenues in its operating budget so the fiscal note shows the trade-off of the revenue collected from the Pioneers' Homes with general funds. Number 1201 CHAIR JAMES asked if the cost of maintaining a person in a Pioneers' Home is $10,000 per month. MS. ELGEE replied that the cost varies, depending on the level of care, and the rates are listed on the attachment to the fiscal note to HB 299. She said that the rates listed at the bottom labeled July 2002 represent the full cost of care. CHAIR JAMES asked where someone came up with $10,000. MS. ELGEE explained there is some confusion between what the Pioneers' Home charges and costs in other long-term care environments. She noted that there are nursing homes throughout the state that charge a variety of rates, and some are as high as $10,000 a month. CHAIR JAMES asked if the [fiscal note] included any capital expenditures. Number 1077 MS. ELGEE answered in the negative. She commented that if the administration were to add a depreciation component to the facility rates, they would definitely be higher than the rates listed on the fiscal note. She mentioned that depreciation itself is not going to take $6500 and drive it to $10,000. The $10,000 figure is a generalization based on averages found in the Alaska long-term care market. CHAIR JAMES said she understood that Ms. Elgee was talking about other nursing homes around the state. She asked if the state subsidizes other nursing homes in any way, and whether they are Medicaid-paid or totally private. MS. ELGEE replied that nursing homes are private for-profit and nonprofit organizations. She noted that residential makeup within a nursing home is running about 82 percent Medicaid clients. Therefore, she added, to the degree that the administration participates in the Medicaid program for long-term care, the administration gets a state match for federal dollars that are going to the nursing homes. She explained that financial protection put in place for Pioneers' Home residents was modeled after financial protections that are in place for the Medicaid program. People looking for state assistance through Medicaid or through Pioneers' Homes are treated comparably. Number 0962 CHAIR JAMES asked if there is a waiting list for people to get into the Pioneers' Homes. MS. ELGEE answered that the administration continues to maintain waiting lists, and it depends on location and level of care. She mentioned that Pioneers' Homes have vacant beds for residential level care identified on the rate list as coordinated services, but people are not interested in that level of care. Without additional staffing the department is unable to upgrade vacant beds to a higher level of care. She indicated that the most prevalent need on the waiting list is for enhanced assisted living or for special Alzheimer disease and related dementia (ADRD) services. CHAIR JAMES mentioned that she has been a strong advocate for eight years of privatizing the homes but has not yet figured out how to make it work. Number 0868 REPRESENTATIVE HUDSON asked if the state still has a provision that allows people who cannot afford the cost of being in the home to remain in the home while the state covers all the expenses. MS. ELGEE answered in the affirmative. REPRESENTATIVE HUDSON asked how many Pioneers' Home residents fit into the category of those who cannot afford to pay. MS. ELGEE replied that there are 220 people on state assistance, and that number can vary based on the population. She observed that does not mean people are not paying anything; people pay what they can afford to pay. For example, if the monthly charge is $2000 and the person can pay $1500, the person pays $1500. The state picks up the difference. REPRESENTATIVE HUDSON asked where the subsidy is listed in the budget. Number 0778 MS. ELGEE answered that a portion of the Pioneers' Home budget is general funds, and a portion is Pioneers' Home revenue, so state assistance is listed in general funds. REPRESENTATIVE HUDSON asked how many people pay the balance of Pioneers' Home revenue. MS. ELGEE replied about 350 people. REPRESENTATIVE HUDSON stated that HB 299 rolls back Pioneers' Home rates to 1998 rates. CHAIR JAMES said she thought that the legislature had fixed the problem by previous legislation. She commented that she sympathizes with and personally knows many of the folks who are going through this problem, and she understands their frustration. She noted that many seniors in the state are having a hard time figuring how to stay in their homes, and at the same time there are not enough assisted-living homes. She mentioned that assisted-living homes are less expensive than Pioneers' Homes, and if more people could be moved into assisted-living homes, the state would probably save a lot of money. Currently, she added, $34.50 per day is paid for "general relief medical folks," but there is legislation before the legislature to raise that to $75 per day. Number 0570 REPRESENTATIVE HUDSON asked the prime sponsor how HB 299 allows for raising Pioneers' Home rates. He said he assumes that under HB 299 the homes cannot raise rates by regulation but must come to the legislature and propose raising rates. REPRESENTATIVE OGAN replied in the affirmative. He said the fiscal note assumes that HB 299 will take effect. He added that he had introduced HB 299 as a point of discussion and is willing to modify the bill. He noted that the department might want to make a policy call to stop providing coordinated services and basic assisted living and to shift the focus to enhanced [assisted living] and Alzheimer[-related services]. He stated that he believed that people suffering Alzheimer's [disease] should pay for services if they can pay, but the discussion needs to be started about what is going to happen; this is why he introduced HB 299. He is willing to sit down with the department and hold a discussion to see if something can be worked out to protect people who have already moved in and do not have other options. Some people simply do not have other options, the deal in the pioneer home changed on them, and he does not think it is fair. Number 0361 CHAIR JAMES reminded Representative Ogan that those people are guaranteed by law that they cannot be removed for lack of ability to pay, and she does understand that they like to pay their own way. Whether they run out of money or not, they are allowed money for personal use, and they are guaranteed permanence in the pioneer home, so she believes they are protected by language in statute. REPRESENTATIVE OGAN observed that the law does not protect their dignity. He noted these people have been self-sufficient all their lives, have never been dependent on anyone, and had moved into a situation that is no longer what they thought it would be because the deal has changed. Number 0254 CHAIR JAMES commented that Representative Ogan would have to find those people specifically and "grandfather" them into the system because she does not think it can be done by blanket legislation. She acknowledged that she thinks people could be "grandfathered in" but is not sure if the rate could be rolled back to when they first moved into the home. REPRESENTATIVE OGAN indicated he would like to have a discussion with the department about "grandfathering in" those people while, at the same time, ensuring that people who move to a Pioneers' Home in the future understand that rates are going to rise. He again questioned the fairness regarding those who moved in with one understanding, only to have the deal change, although he agreed that rates need to rise appropriately so that the homes pay for themselves. Perhaps, he added, people could be "grandfathered in" to the two lower levels of services [coordinated services and basic assisted living] with the understanding that the Pioneers' Homes are getting out of the business of providing those particular services. Number 0113 CHAIR JAMES noted that people who moved to Pioneers' Homes after the law was changed already know what the deal is. She commented that it is great to provide services but the legislature has to figure how to pay for them. She explained that the contract people sign when they move into a Pioneers' Home does not preclude rate hikes, so this issue should have been addressed in past legislation. TAPE 00-20, SIDE A Number 0009 MS. ELGEE verified that Pioneers' Home contracts do not preclude rate hikes. REPRESENTATIVE GREEN said he has talked with people living in the Anchorage Pioneer Home and the complaint they have is that when they moved into the home it was a pioneer home. Then, over several years, the focus has changed to a dementia home to the extent that 85 percent of the people living there do suffer some form of dementia, which is obviously going to run costs up. He noted that the residential people feel that their cost has gone up in support of dementia patients and people who cannot pay. He asked Ms. Elgee whether, if the homes did not have dementia inhabitants, the coordinated services and the original intended use of the homes would be anywhere near as costly as is listed on the rate sheet. Number 0194 MS. ELGEE replied that costs would be the same because what the department has done, in terms of allocating costs to these various levels of care, is to review base costs such as housekeeping and food service, and to adjust rates appropriately to correspond to the kind of staffing needed at various care levels. Therefore, when reviewing the lowest level, coordinated services, no direct-care staff is represented in that rate. REPRESENTATIVE GREEN said he is concerned that there might be an additional need for a dietitian or someone specifically trained that would be calculated in to the base cost, which might not be necessary if it were not for the presence of dementia patients in the Pioneers' Homes. Number 0321 MS. ELGEE answered that the need for dietitians and services like that just come with the care and feeding of hundreds of people; it has nothing to do with dementia. She noted that physical therapy services are not represented in coordinated service rates since pioneer residents are Medicare-eligible and Medicare covers the cost of physical therapy when it is brought into the home to meet individual needs. She explained that medications are separate costs from the Pioneers' Home rate; therefore, things specific to physical and/or mental needs of an individual are not represented in the rates beyond the staffing requirements. REPRESENTATIVE GREEN asked if he understood correctly that in six years the Department of Administration has gone from a significant supplemented cost of $900 to $2135. He commented that Ms. Elgee is saying that back when [the cost] was $900, those costs should have been about $1600 because there is no way that [the cost] could jump that high in the last six years unless the department was trying to pick up a supplemental payment. He asked if that was the reason [the costs] had gone up so high. Number 0451 MS. ELGEE replied that the rates were calculated based on the operating budget in fiscal year (FY) 1997. The rate effective in July of 1996 was a FY '97 cost. She noted that the department had reviewed what its operating budget (various levels of care) was that year and divided it out until reaching 2002. She explained that in the intervening years the operating budget had increased $1.5 million but the department has not adjusted these rates; they are still the same rates that were projected. The department has observed a shift in makeup of Pioneers' Home clientele in that there are more people at the higher levels of care. She mentioned that they are picking up that differential in terms of what the department proposed as an increase to the operating budget. She indicated that the $2135 represented in July of 2002 for coordinated services is what it actually cost the department in July 1996. REPRESENTATIVE GREEN noted that in 1996 it was actually costing the department $2135. Therefore, he stated, he understands that Ms. Elgee is saying the department is paying a $1200 supplement. MS. ELGEE answered in the affirmative. REPRESENTATIVE GREEN remarked that the state was supplementing all of these costs in the range of $1000 per person. Number 0615 MS. ELGEE replied that in some cases the supplement was much more than that when reviewing the higher levels of care. REPRESENTATIVE GREEN said that he had understood that the higher levels of care are taken care of by the differential. MS. ELGEE answered that Representative Green was correct. She said that if the committee reviewed what the department was charging in 1996 for the highest level of care versus the full cost of the highest level care, the supplement is much more than a couple of thousand dollars. REPRESENTATIVE GREEN agreed and noted that the supplement was about $5000. He commented that the difference [in rate] has doubled for comprehensive services in 1996 and tripled in 1999. He asked if all of the difference between then and 2002 is supplemented by the state. MS. ELGEE replied in the affirmative. Number 0679 CHAIR JAMES asked Ms. Elgee if it was correct that the department had to be authorized to bump up [the rate] for Pioneers' Home residents. She explained that the plan had been to get residents paying up to full cost within seven years. She noted that even then residents were not paying anywhere near full cost; therefore, the state had been supplementing the cost of the homes. She indicated that the decision had been to move residents up to full cost. She emphasized that the year 2000 is here and asked if the department is still "bumping up" to arrive at the full cost. She acknowledged that rates listed on the Pioneers' Homes rate history sheet are the charges for services, not full cost. MS. ELGEE answered that the numbers represented on the line labeled July 2002 are what the department is experiencing as full cost of care today. CHAIR JAMES reiterated that the department is still a couple of years behind reaching full-cost level. Number 0783 REPRESENTATIVE GREEN commented that if the legislature abides by these estimates, the 2002 estimated costs will be even higher just because of inflation. He said he is concerned about a large shift toward additional care. He asked whether Pioneers' Homes should be renamed because he agrees with Representative Ogan regarding those people who are not suffering [dementia]. He agreed that the people had anticipated one thing, but that one thing has significantly changed. He asked if there should now be something that recognizes a dementia problem in the state. He emphasized that the legislature and the department should accept the problem and not hide behind the name of Pioneers' Homes. He noted that for him, a pioneers' home is for people who have been in the state for 25 years, for example, and are still fairly healthy. But because the legislature and the department are changing the scope of what is going on in the Pioneers' Homes, maybe a name change is appropriate. Number 0881 MS. ELGEE replied that about three years ago the Pioneer Home Advisory Board had heard this recommendation that perhaps there should be a name change for all the reasons that Representative Green has cited. She said that the Pioneer Home Advisory Board had forwarded that recommendation to Governor Knowles, and the reaction was that people wrote from throughout the state who thought that a name change was a very, very bad idea. Subsequently, the board withdrew its recommendation. MAREL HAKALA testified via teleconference from Fairbanks. He said that HB 299 is the first time in his memory that anything has been done to ease the hardships of residents of Pioneers' Homes since this administration came into power. He commented that he, along with many others, supports HB 299 because it is a move in the right direction. He explained that he does have a problem with a two-tier system and does not approve of it. He mentioned that anybody who enters the homes now or in the future should be covered by the state law. He indicated that HB 299 should be amended to read that all admittance, in the past, now, and in the future should be treated equally. He informed the committee that in making the homes into health care facilities, they will become full health care facilities with no initial residents. He emphasized that he would like to see the homes return to their original concept, where there was only one door to enter. He remarked that the one door was entry as a resident, and as the resident failed in health, the resident received care but it is not that way today. Now there are three doors by which to enter, and a big door is the Alzheimer dementia group. He stated that he felt that all money income from the mental health trust fund should go to the Pioneers' Homes to take care of these people, and he is sure then the rates for remaining residents would be reduced accordingly. Number 1152 IRENE PAYTON said that, as one of the people fortunate enough to be receiving dividends and the longevity bonus, she is very grateful for what the State of Alaska provides. She noted that the whole concept of raising rates came about because Alaska does not have the same amount of money that it had when it built the Pioneers' Homes. She explained that it seems to her that those who are receiving benefits are going to have to start to pay their way a little bit since there is talk about cutting the budget. She commented she is not sure why HB 299 is even needed since the state is paying for those people who cannot pay. Number 1245 CHAIR JAMES announced that she would close the meeting and the committee would discuss HB 299 at a later time. [HB 299 was held over.]
| Document Name | Date/Time | Subjects |
|---|