Legislature(1999 - 2000)
04/08/1999 06:06 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 73(HES)
"An Act relating to assisted living homes; and
providing for an effective date."
SENATOR MIKE MILLER, sponsor of the bill, testified. He
told the committee the main purpose of the bill was to
increase the daily rate paid to the "mom and pop"
facilities around the state that provided a place for
adults that could not provide for their own safety, medical
or emotional and personal care needs. Currently in the
Anchorage area, the state paid the facilities $30 per day
to take care of these adults.
He told of how he became aware of the services the
facilities provided. He spoke of his father's experience
with Alzheimer's disease. His family was able to place him
in a home in the family hometown of North Pole rather then
sending him to the Fairbanks Pioneers Home. While his
family paid privately for the care, he saw first-hand the
services that were provided. The care was good and
provided inexpensively in comparison to other types of care
provided by the Denali Center or a pioneer's home. However,
he felt the state reimbursement rate of $30 per day was
inadequate. Like it or not, Alaska's population was growing
older and there would be more people in these types of
situations. In his opinion, the assisted living homes were
a very cost-effective way to deal with some of the problems
that the state would be faced with in the future. He would
recommend this type of care to others in his situation.
He was sensitive to the fiscal situation in the state. He
noted a rate structure report, released this year, which
stated that assisted living facilities should receive $70-
75 per day. He structured the bill in a three-step phase
that graduated the rate over three years. The rate would
raise to $50 the first year, $75 the second year and $100
the third year.
He believed the facilities provided a good service and if
the state did not raise the rates, many of the facilities
would leave the market. It would then have a negative
impact to the budget because the patients would have to go
to the nursing homes and hospitals at a much higher rate
than what was proposed here. The committee needed to make a
decision whether the facilities should be kept in
operation.
He had the departments break down the fiscal notes in two
different ways. One included a geographic differential and
the other did not. He recommended maintaining the program
with the geographic differences in the rate system. Homes
in Barrow and Kotzebue, for example, would receive higher
compensation than those located in Anchorage. He felt that
was fair. The other fiscal notes were submitted for the
committee's consideration, should it choose to forgo the
differential.
Senator Randy Phillips asked if this would only apply to
licensed assisted living facilities. Senator Mike Miller
was not sure but thought it was because it would only apply
to those facilities that received state-assisted patients.
Senator Loren Leman wanted to know about the geographical
differential and didn't see the numbers listed in the bill
although he did see those reflected in the fiscal note.
Senator Mike Miller deferred to the department. Senator
Loren Leman noticed that the rate for Fairbanks was 15
percent higher. Senator Mike Miller agreed that was correct
and noted the other areas with higher rates. He did not
establish that structure and again deferred to the
department.
Senator Loren Leman then asked about doing only two steps
going up to $75 and then reaching $100 in future
legislation. Senator Mike Miller responded that was a
policy call for the committee. However, he stressed the
rates had not been raised in 15 years and felt the reality
was that the matter would not be addressed again before
another 15 years. He believed that by the third year of the
implementation when the rate would be $100, that would be
the actual recommended compensation amount.
Senator Gary Wilken appreciated the committee hearing the
bill and Senator Mike Miller for sponsoring the
legislation. Senator Gary Wilken said one of the
recommendations of the Long-Term Care Task Force was to
keep the elderly in home environments for as long as
possible and this legislation would help accomplish that.
KAY BURROWS, Director, Division of Senior Services,
Department of Administration, testified via teleconference
from Anchorage in support of the bill. She told the
committee there were Alaskans who spent their adult lives
being the best they could be and where now vulnerable,
alone and at-risk for illness, disability and homelessness.
There were also Alaskans willing to help those fellow
citizens; to provide a home, caring, hope and a chance for
a loving, caring environment where Alaskans could age with
day to day peace. The State Of Alaska needed to help those
Alaskans to find each other and to make it work. This bill
would do that. Most could pay their own way and only
needed help finding each other. Some needed the help
Medicaid provided. However, this bill related to those who
were not able to get Medicaid support immediately or were
too vulnerable to wait the system out before their world
disintegrated into terror, homelessness and despair.
Alaskans who provided those services needed a living wage.
That was what this bill was about. The rate had not changed
since 1986. However, the care needs had greatly increased.
The facilities were now able to care for people in assisted
living homes with much higher needs than before. The
patient's choice was to not live in a nursing home. The
state as public funders should be not to have them in a
nursing home if at all possible.
There had been a significant industry growth in assisted
living facilities. Since 1996, the Division of Senior
Services had seen these homes grow in number from
approximately 65 to 95 licensed homes today. There were 90
to 100 adults each month that would be covered under this
bill. Thirty-eight percent had Alzheimer's disease, 12
percent had other mental illnesses, six percent were adults
with developmental disabilities, 12 percent were chronic
alcoholics, 32 percent were physically disabled or were
vulnerable adults who would be on the street otherwise.
Seventy percent were over the age of 60. Most of them
received this type of general relief funding for one year
or less until other parts of the system could take care of
them. These were truly the most needy.
She referred to the rate study, which was funded by the
Alaska Mental Health Trust Authority and done by the
nationally known Assisted Living Training Institute. The
study reported that 33 homes provided actual financial
information; 20 percent of those were from the Division of
Mental Health. Those figures built the rate the division
believed to be appropriate. The study also showed that the
current rate if it only adjusted 1986 rate for inflation,
the cost of living and social security, would be $68.
Actual costs were $73 per day with higher costs for those
needing extra assistance.
The study had other recommendation, which the division
planned to follow up with regulations. They included
increased training and education requirements for assisted
living administration and staff. The division also planned
to look at separate and additional standards for those
homes that housed 15 and fewer patients and those that
housed 16 and over. The division was very supportive of
this bill.
Senator Loren Leman had a question on the fiscal notes and
wanted to know the source of the geographic differential
factors. He was specifically interested in the Kenai
Peninsula.
DWIGHT BECKER, Protective Services Coordinator, Division of
Senior Services, Department of Administration, testified
via teleconference from Anchorage. He explained the
geographic differential rates were currently in the
Department of Health and Social Services regulations, which
the Department of Administration had been following to
apply to the administration of general medical relief. The
Kenai Peninsula fell within the SouthCentral region, which
had an index of one. There was currently no increase for
that area. He detailed the index breakdown and the
different rates for each area of the state.
The index was consistent with the pay rates for state
service and also for Medicaid rates.
Senator Loren Leman wanted to know how long ago the rates
were revised. Dwight Becker said the last major change to
the general relief regulations was made in 1983 but that
other studies and adjustments were done since then.
Senator Loren Leman felt they did not reflect studies the
committee had seen.
ALISON ELGEE, Deputy Commissioner, Department of
Administration responded to Senator Loren Leman's question.
While they were developed in regulation several years ago,
they were directly tied to differential from AS 39 that
applied to revenue sharing and determined the state
employee pay rates. Co-Chair John Torgerson added
education as well.
Senator Loren Leman asked if the department felt it was
time to analyze those. Alison Elgee replied they did think
it was appropriate and had introduces prior legislation to
amend the schedule for pay differentials. However she felt
that continued differential rates for the rural areas was
necessary to foster the assisted living industry.
Senator Loren Leman was aware of that past legislation and
wanted to ensure consistency. Alison Elgee said the
geographic differential was not in statute but in
regulation and department would revise those regulations
with the passage of this bill.
Co-Chair John Torgerson was concerned with the fiscal note.
Were the only funds available general funds, or could
federal funds or other sources be utilized? Alison Elgee
replied that the program would assist those who were in the
process of qualifying for Medicaid or other assistance.
There were others who would never qualify for Medicaid
because they would never require full nursing home care.
The department pushed the Medicaid process as rapidly as
possible. The department also required patients to utilize
their own resources first. Many of the clientele
represented here were covered by adult public assistance
and social security payments. SSI and APA payments would
cover most of the $30 per day rate and the division only
made up the difference. The Division of Senior Services
budgeted $400,000 to augment the rate to make up the
difference. She explained that was why the fiscal note was
disproportionately higher than the underlying cost of the
present program.
Co-Chair John Torgerson referred to Section 6 that stated
if there was not enough funds for the entire program, the
division would establish by regulation a pro-rata payment
system. However, the other sections dictated that the rate
could never go below $50. Alison Elgee explained there were
two rates, the base rate and the augmented rate. The
augmented rate was designed to pay up to $22 but was very
specific in terms of the needs of the individual that was
treated and was negotiated with the provider. Section 6
allowed for changes to the augmented portion of the rate
only.
Co-Chair John Torgerson asked if this would take away the
department's ability to pro-rate funding if the full
appropriation was not granted to the program. Alison Elgee
believed the intention of the program was to keep the base
rate intact without pro-ration.
JEFF JESSIE, Executive Director, Alaska Mental Health Trust
Authority, testified via teleconference from Fairbanks in
support of the bill. This bill was a high priority for the
trustees. Having funded the rate study and looked at the
information supplied by the Commission on Aging, the Trust
believed that this was an essential component of a long-
term strategy to meet the growing needs of a variety of the
Trust's beneficiaries in the coming millenium.
The elderly population in Alaska was the largest growing
segment. Fully 50 percent of those individuals over the age
of 85 had some degree of Alzheimer's disease or related
dementia.
Increased demands were being placed on the pioneer homes
and other facilities to serve that population in an ever-
increasing degree. Eventually the state would exceed the
capacity to treat these individuals in nursing home
settings. In fact it was not the most efficient or cost
effective options of treatment nor did it meet the desire
to keep people in their homes and in their home communities
for as long as possible.
The trustees had already authorized the expenditure of $
300,000 in Mental Health authorized receipts for FY00 to
assist in the transition to the higher rates. This was not
reflected in the information provided to the committee. The
Trustee's made it clear they were willing to put their
money were their mouth was. They were working closely with
Senator Pete Kelly, the subcommittee chair for the
Department of Health and Social Services budget who was
working with the Trust on the mental health budget bill.
They believed in the long run, this was a cost effective
Co-Chair John Torgerson asked if the $300,000 commitment
was only for one year. Jeff Jessee said the authorization
was currently only for FY00.
Senator Lyda Green wanted to know if that was in addition
to the funds listed in the fiscal note. Jeff Jessee
guessed it was to augment those amounts. Kay Burrows
confirmed that.
Co-Chair John Torgerson clarified that was for the
Department of Health and Social Services, Community Mental
Health Grant fiscal note. Kay Burrows believed the
$300,000 was put into the budget for the Division of Social
Services portion. Jeff Jessee added that the intent of the
trust authority was to support the bill. It was not
important to them which division in particular the funds
went to since they both served the clients.
GINA MACDONALD, Special Projects Coordinator, Division of
Mental Health and Developmental Disabilities, Department of
Health and Social Services, came to the table to explain
that the $300,000 was not currently included in the fiscal
note. It was not important to the department which agency
the funds went to either.
Co-Chair John Torgerson clarified that there were two
fiscal notes, one for Department of Health and Social
Services and the other for Department of Administration.
Gina MacDonald detailed and further explained there were
actually four fiscal notes. Two included the geographical
differential and the other two left that out.
Co-Chair John Torgerson detailed the amounts requested.
Senator Randy Phillips repeated his question of Senator
Mike Miller if this would apply to licensed assisted living
facilities only. Co-Chair John Torgerson pointed out the
language stating that is was. Senator Randy Phillips
wanted it clear on the record. Alison Elgee believed homes
housing one to three patients did not need to be licensed.
Dwight Becker confirmed that. If a non-licensed home
wished to participate, the division would assist them in
becoming licensed.
Senator Randy Phillips stated he had experience with the
non-licensed facilities.
Co-Chair John Torgerson asked if the $300,000 authorization
was currently contained in the $5.1 million figure from the
mental health bill or would he anticipate an amendment to
the bill to increase it. Jeff Jessee responded that it was
his understanding that because the $300,000 was attached to
legislation rather than the Governor's Operating Budget
that it was not currently in the budget bill. However, the
trust authority had obligated the funds.
Co-Chair John Torgerson agreed that if the committee had a
fiscal note before it; they could quantify the details.
MONTA FAYE LANE, President, Alaska Caregivers Association
and owner of two assisted living homes in North Pole,
testified via teleconference from Fairbanks in support of
the bill. She spoke to the services the caregivers
provided. They did all the hands-on care and they needed to
earn a living wage. She did not know where the committee
would find all the money needed for the change, but urged
the members to do so because the State Of Alaska really
needed the assisted living homes. She thanked the committee
for their efforts.
She felt the increase should be $70 per day with the
geographical differential because the cost of electricity,
fuel and food in the Interior, the Northern region and the
Western region. She said that if the homes could not afford
to operate, they would close and the patients would need to
be housed in more expensive nursing home facilities.
She told the committee about the Mary Conrad Assisted
Living Home Center in Anchorage that had raised its base
rates to $295 per day. The rates were higher for those
patients requiring extra care. The monthly rates for these
services were between $9000 and $10,000.
She compared that rate to the Denali Care Center of $345
per day and the hospital rate of $1335 per day.
She earned $34.50 per day for a general relief client. She
had an indigent patient suffering from chronic alcoholism
and yet received none of the $21 million alcohol treatment
funds the state issued. She had another mental health
patient for whom she received only $700 per month - less
than $34.50 per day. She could not evict the patient
because he had no where else to go.
She thanked the committee.
Senator Randy Phillips commented that there was a member of
the committee who worked in and around assisted living
facilities.
LESTER WESTLING, testified via teleconference from
Fairbanks in support of the legislation and the geographic
differential. He thanked the Mental Health Trust Authority
for offering to assist in the funding. He talked about the
benefits of assisted living services and the functions they
performed. The savings to the State of Alaska would be
exponential because of the ability to care for patients
without the need for doctors, nurses and pharmacies on
site.
He stressed that the facilities could not pay employees a
competitive wage. They could not offer benefits either,
which he felt would keep turnover down. "Please help
stabilize our businesses because we're here for you." He
said he didn't want to see homes shut down because they
could not afford to do business or people being warehoused
because they did not have the funds necessary to pay the
rate needed to live in assisted living homes.
CATHY WESTLING, owner of Downtown Care, testified via
teleconference from Fairbanks in support of the bill. She
was greatly concerned with mental illness and alcoholism in
Alaska. The state needed to be very proactive. She spoke of
the difficulties in dealing with alcoholics and their
related behavior problems.
The employees could not be paid well or receive benefits.
There was not a lot of community support. Their only reward
was the feeling of doing something that was good. They saw
very few patients who were financially self-sufficient.
Those that did have funds, ran out after a short period of
time.
Co-Chair John Torgerson ordered the bill held in committee
so the members could work with Jeff Jessee and the sponsor
on the funding issue.
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